The US government says that a Chinese property tycoon who lives in New York is behind a $1 billion scam.
Guo Wengui and Kin Ming Je, one of his business partners, are charged with wire fraud, securities fraud, bank fraud, and laundering money.
Stephen Bannon, who used to be the chief strategist at the White House, knows Mr. Guo. Mr. Guo is against the Chinese government.
Hours after Mr. Guo was arrested, a fire broke out in his penthouse apartment in Manhattan.
The city’s fire department said that the fire was put out, no one was hurt, and the cause is still being looked into.
Guo Wengui said earlier in an online post that he was put in handcuffs and questioned for more than an hour.
Later, he went to a federal court in Manhattan and said he wasn’t guilty. On Wednesday, he was ordered to be held without bail.
Mr. Guo is also known as Miles Guo, Miles Kwok, and “Brother Seven,” among others. He was called Ho Wan Kwok in the indictment that was made public on Wednesday.
The indictment says that Guo Wengui and Mr. Je got $1bn (£830m) from his online followers who thought they were funding media ventures and an exclusive membership club.
They are also said to have used a cryptocurrency called Himalaya Coin to siphon millions from investors.
Mr. Guo’s opposition to the Communist Party and his ties to well-known right-wing politicians and activists in the US helped him gain hundreds of thousands of online followers, most of whom were Chinese people living in Western countries.
Prosecutors say he used his large online presence to get money for his business plans. But instead of investing the money in businesses, Mr. Guo and Mr. Je are said to have put the money into their bank accounts.
The money was used to buy a 50,000 sq ft mansion in New Jersey, sports cars like Lamborghinis, Bugattis, and Ferraris, and Chinese and Persian rugs worth almost $1 million.
Prosecutors say that $100 million was invested into a volatile hedge fund, and other money was spent on luxury items like a $140,000 piano, a $62,000 TV, and a $53,000 fireplace log cradle holder.
The US government took about $634 million from 21 different bank accounts in September of last year.
The indictment says that Guo Wengui gained support from people who didn’t like the Chinese Communist Party by starting two groups that didn’t make money.
Who is Guo Wengui?
Guo Wengui was a real estate developer who reportedly became one of China’s wealthiest people before leaving the country in 2014.
In 2017, he asked for political asylum in the United States, saying Communist Party officials were after him.
Mr. Guo has been the target of social media campaigns that support the Chinese government. He has also been accused of spreading false rumors on his social media accounts and websites about Covid and other topics.
His open opposition to China’s leaders led him to work with Mr. Bannon on several projects. They have been in many online videos together, and in 2020, they started a movement called the New Federal State of China to get rid of the Chinese Communist Party.
In the fall of that year, Mr. Bannon was arrested in Connecticut while he was on Mr. Guo’s yacht. In a separate case, Mr. Bannon was charged with fraud for allegedly trying to trick people who gave money to a non-profit company to build a wall along the US-Mexico border.
He has said he is not guilty in that case, and Mr. Guo and Mr. Je were not named in the indictment against them.
Last year, Mr. Guo’s company, GTV Media Group, settled a lawsuit with the US Securities and Exchange Commission for $539 million. The lawsuit said that the company misled investors in a cryptocurrency investment scheme. The company did not say that it had done anything wrong.
In the indictment, Mr. Je, also named William Je, was called Mr. Guo’s money man. Authorities said he has citizenship in both Britain and Hong Kong. He lives in London and has yet to be caught.
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UK Companies House says he is the director of ACA Capital and Hamilton Investment Management, both financial services companies based in west London.
US authorities took money from bank accounts linked to Gettr and Hamilton, an alt-tech social media platform that Mr. Guo partially helped pay for.
In a statement, Mr. Guo’s foundations referred to the accusations against him “false and unjustified.” It also said that the Chinese Communist Party controls the US justice system but didn’t give any proof.