By: Toh Han Shih

There is probably nothing Chinese authorities would like more than getting their hands on Guo Wengui, a fugitive and business associate of ex-Trump whisperer Steve Bannon, who was arrested by US authorities on March 15 for securities fraud.

With Guo, once listed as China’s 74^th richest person, arrested in New York, they are likely to again ask for his extradition after being rebuffed in 2017 during Trump’s administration. Guo, a darling among Trump conservatives who has been living in the US since 2015, has fashioned himself as a dissident. Whether the Biden administration has less sympathy remains to be seen.

A fugitive from Chinese as well as US justice, Guo, who also goes by the names Miles Kwok and Ho Wan Kwok, faces the possibility of 20 years or more in a US prison, said a US Department of Justice press release. Also arrested was his financier, William Je Kin Ming.

On the same day, the US Securities and Exchange Commission (SEC) announced charges against Guo and Je for their involvement in unregistered and fraudulent offerings that raised more than US$850 million. On March 14, the FBI announced it was seeking information from victims of alleged crimes committed by Guo and Je, a Hong Kong resident and British citizen.

Guo is a top target of a global operation called Operation Fox Hunt to reel in financial fugitives who have fled the country to escape arrest after stealing million. In 2017, the Trump administration snubbed Sun Lijun, a now-disgraced former Chinese Public Security Vice Minister, during his trip to the US to try to extradite Guo, Asia Sentinel reported on September 5, 2020.

The Chinese authorities are seeking to put Guo on trial for financial and sexual crimes. But since fleeing China in 2014, Guo has styled himself as an activist against the Chinese Communist system. A mantra on GTV, a US-based video platform launched in 2020 by Guo and Bannon, was “Take down the CCP (Chinese Communist Party).”

On the Internet and social media, Guo has made unproven allegations of corruption and sexual impropriety against former Chinese anti-graft czar Wang Qishan. Guo publicly made corruption allegations against other senior Chinese officials like Sun, which appear to be at least partly true, given Sun is now serving a life sentence in a Chinese prison.

Despite rejecting China’s attempt to extradite Guo, the US authorities arrested Guo because they could only ignore evidence for so long, an investigator told Asia Sentinel.

“Steve Bannon was financially supported by Guo and his relationship to Trump was a great security blanket for Guo,” said the investigator who declined to be named. Bannon is credited with helping Donald Trump win the US Presidential election in 2016.

“Whilst hiding out in America, Guo was useful for the Americans. He provided valuable information, even intelligence, on the inner workings of the CCP at a high level. As his knowledge was sucked out of him, his future value depreciated in tandem. In short, he has essentially outlived his value and usefulness,” a consultant who declined to be named told Asia Sentinel. “He served a purpose, regardless of how ludicrous some of his outlandish allegations were. This was tolerated as he could be weaponized against China.”

“The FBI had him, but waited for the right time to bust him. They aren’t in a hurry as Guo won’t run back to China,” an ex-banker told Asia Sentinel.

Fundraising schemes

From 2018 through March 2023, Guo, the leader of the conspiracy, Je and others defrauded thousands of victims of more than $1 billion in a complex conspiracy, alleged the Justice Department. In 2018, he allegedly founded two purported nonprofit organizations ironically named the Rule of Law Foundation and the Rule of Law Society. Guo used these organizations to amass followers who were aligned with his purported dissident objectives on China and believed his promises of money-making opportunities, according to the Justice Department statement.

“Miles is a consummate snake oil salesman so it would not be surprising if he engaged in hyperbolic fundraising tactics. I assume he has exhausted his useful value to the US government and therefore there is no longer any reason to protect him from creditors or complainants,” alleged a source.

In connection with this case, US authorities seized overUS$634 million of proceeds, including US$278 million from bank accounts and Guo’s superyacht called “Lady May” worth US$37 million, said the Justice Department.

In August 2020, Bannon was arrested on board the Lady May off the coast of Connecticut and accused of fraud related to the construction of a wall to keep out illegal immigrants who have thronged the US-Mexican border, creating a major political problem. During the elections in 2016, Trump vowed to build that wall. Bannon is due to appear in a US court on May 25 to face charges of fraud and money laundering related to money allegedly diverted from construction of the wall for his personal use.

About US$2.3 million of funds misappropriated by Guo and Je were used for maintenance of the Lady May, alleged the Justice Department. This is part of more than US$150 million fraudulently obtained from a loan program of the Himalaya Farm Alliance, a collective of people in various cities around the world organized by Guo, the Justice Department alleged.

Guo directed US$81 million of the proceeds from the loan program to be transferred to a bank account in Abu Dhabi in the name of a Hong Kong company owned by Je, alleged an SEC complaint filed in the US District Court of the Southern District of New York on March 15.

From April 2020 to June 2020, Guo and Je launched a private placement of GTV stock which raised US$452 million, said the SEC complaint. According to the private placement memorandum, GTV’s mission was “to build the most popular and safest social media and transaction platform independent of the Chinese government’s censorship and monitoring, allowing the people of China and the world to realize the freedom of speech and trade.”

Guo and Je claimed that investor funds obtained from the placement would be used for GTV’s business. In fact, just days after the placement, Guo and Je misappropriated US$100 million of investor money for the benefit of a company owned by Guo’s 36-year-old son who lives in London, Qiang Guo, alleged the SEC complaint. GTV has been inactive since March 2022.

The SEC is also suing Qiang Guo as well as Guo Wengui’s 34-year-old daughter Mei Guo who lives in New York, his wifeNgok Hing Chi who lives in Greenwich, Connecticut, and Je’s wife Rong Sin Ting who lives in London.

Since October 2020, Guo Wengui, Je, and others fraudulently obtained more than US$250 million from people through G|CLUBS, whose website claimed to be “an exclusive, high-end membership program offering a full spectrum of services,” alleged the Justice Department.

“G|CLUBS provided nothing close to “a full spectrum of services” and “experiences” to its members. Most of the money G|CLUBS members paid did not fund the business of G|CLUBS. Rather, the defendants misappropriated a substantial portion of the victim funds using, among other things, a complex web of entities and bank accounts to do so,” the Justice Department alleged.

For example, Guo and Je used G|CLUBS funds to purchase Guo’s 50,000 square foot mansion in New Jersey and a custom-built Bugatti sports car, the Justice Department alleged.

Guo raised hundreds of millions of dollars from investors through a crypto asset security known as “H-Coin,” “Himalaya Coin,” or “HCN” and a related purported stablecoin, said the SEC. Since October 2021, Guo allegedly has made misrepresentations to prospective investors in H-Coin, falsely stating 20 percent of H-Coin’s value was backed by gold and he would compensate investors for any potential losses, the securities watchdog added.

“We allege that Guo was a serial fraudster, who raised more than US$850 million by promising investors outsized returns on purported crypto, technology, and luxury good investment opportunities,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family’s lavish lifestyle.”

Toh Han Shih is chief analyst of Headland Intelligence, a Hong Kong risk consultancy

Asia Sentinel

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