Exiled Chinese tycoon Guo Wengui, whose crusade against the Communist Party has attracted allies including Donald Trump aide Steve Bannon, was convicted of defrauding investors of $1 billion to fund his lavish lifestyle.
Guo was found guilty of fraud and racketeering on Tuesday after a nearly two-month trial in Manhattan. He was found guilty on nine of the 12 counts and faces up to 20 years in prison on the most serious charges when he is sentenced on November 19.
Guo Wengui “blatantly perpetrated several interrelated fraud schemes, all designed to defraud his loyal followers of their hard-earned money so that Guo could spend his days in his 50,000-square-foot mansion and drive his worth $1 million Lamborghini, or hanging out in his $37 car.
Guo’s lawyers declined to comment, but Guo will almost certainly appeal the verdict.
As the jury walked out, Guo smiled at the lawyers, hugged attorney Sabrina Shroff and shook hands with other members of the defense team. The outspoken businessman, also known as Ho Wan Kwok or Miles Guo, was tried before jurors whose names were kept secret – an unusual move designed to generate intense interest protect them in cases.
Guo has attracted a large online following, raising money from investors for seemingly legitimate businesses but diverting the funds to expenses for himself and his family. The trial involves investors who were openly critical of the Chinese Communist Party, luxury car dealers who sold him rare vehicles and Kyle Bass, a managing director at hedge fund Hayman Capital Management. Weeks of testimony.
Bass, Hyman and Bannon have not been charged with wrongdoing in the case.
Video of his superyacht
Guo has amassed a following on social media through videos recorded from the penthouse of the Sherry-Netherland Hotel overlooking New York’s Central Park or from the deck of his 152-foot superyacht. Guo claims his wealth comes from his family of wealthy property developers in China. But federal prosecutors say part of his wealth also came from stealing $1 billion through fake investment opportunities he peddled online.
The jury began deliberating Thursday but was forced to restart deliberations with an alternate juror after one member of the jury admitted to searching Google for the name of a co-defendant who is still at large.
The defense urged jurors not to let Guo’s expensive taste cloud their judgment, claiming he flaunted his wealth as a protest against the Communist Party.
The prosecution has its own framework. “Is Guo Wengui a true political activist?” Assistant U.S. Attorney Juliana Murray said in closing arguments Thursday. “I don’t know and I don’t care because that’s not what this trial is about.”
mysterious background
The case explores Guo’s mysterious background, including fleeing persecution in China, his relationship with Bannon and how he invested millions of dollars in Hyman Capital’s high-stakes bet on the Hong Kong dollar.
In 2020, Bannon was arrested aboard Kuo’s yacht off the coast of Connecticut on charges of conspiring to embezzle hundreds of thousands of dollars from an effort to fund the construction of a wall along the U.S. southern border. Trump pardoned Bannon before leaving office.
Prosecutors said that in 2020, Guo transferred $100 million raised through an illegal stock offering of his GTV Media Group to the Hyman Hong Kong Opportunities Fund, which took a position that the country’s currency peg to the U.S. dollar would collapse. Bannon introduced Guo Wengui and Bass, a long-time China skeptic. Evidence presented at the trial showed that Bannon himself was paid $1 million as a consultant for Saraca Media Group, the parent company of GTV.
After Hyman received the investment, Bannon emailed Bass.
“Congratulations on closing the mileage deal”
“Congratulations on the miles deal,” Bannon wrote, according to an email presented as evidence. “He considers us the biggest superstars in finance.”
A month later, the SEC contacted Hyman to inquire about the source of the funds. Evidence shows that when Bass sought an explanation from Guo’s financial adviser, he received no response. By then, the unsuccessful currency bet had cost nearly $30 million.
The remaining $70 million was eventually turned over to authorities.
Guo was acquitted on Tuesday of fraud related to the GTV stock offering and illegal currency transactions related to the transfer of $100 million to Hyman’s hedge fund.
SEC settlement for $539 million
In 2021, three Guo Wengui-related companies, including GTV, agreed to pay US$539 million to settle the U.S. Securities and Exchange Commission’s investigation into unregistered stock offerings.
Guo’s other scams involved an exclusive private members club with buy-ins of at least $10,000, a crypto platform called Himalaya Exchange and a farm loan program, according to prosecutors.
The government said Guo also deprived investors of funds to purchase luxury goods, including a red Lamborghini, a $4 million Ferrari for his son and a $26 million New Jersey mansion.
The case is United States v. Guo, 23-cr-00118, United States District Court, Southern District of New York (Manhattan).