MANHATTAN (CN) — Federal prosecutors in New York on Thursday added an expansive racketeering count against Chinese financier Guo Wengui, who is accused of orchestrating a $1 billion fraud conspiracy.
Wengui, an associate of American conservative media strategist Steve Bannon, was arrested in March 2023 at his apartment in the Sherry-Netherland Hotel in Manhattan, where a fire subsequently broke out later that day as FBI agents were still searching it.
Prosecutors in the Southern District of New York have accused Wengui — also known as Miles Guo and Ho Wan Kwok — of carrying out a complex conspiracy to defraud thousands of his online followers out of over $1 billion dollars by lying to prospective investors and promising them outsized returns if they invested, or provided money to his Chinese media platform GTV, and other companies, including Himalaya Farm Alliance, G CLUBS, and the Himalaya Exchange.
Wengui's first indictment included criminal counts of conspiracy, wire fraud, securities fraud, international money laundering and obstruction of justice.
The superseding indictment unsealed Thursday morning adds an additional count of racketeering conspiracy under Racketeer Influenced and Corrupt Organizations (RICO) statute, which carries a 20 year maximum sentence and forfeiture of any ill-gotten gains from the criminal activity.
Prosecutors say that from 2018 through at least March 2023, Wengui and his co-conspirators carried out a criminal enterprise “through a series of complex fraudulent and fictitious businesses and investment opportunities that connected dozens of interrelated entities, which allowed the defendants and their co-conspirators to solicit, launder, and misappropriate victim funds.”
The RICO count includes forfeiture allegations requiring the turnover “any interest in, security of, claim against, or property or contractual right of any kind affording a source of influence over, any enterprise the defendants and their coconspirators established, operated, controlled, conducted, or participated in the conduct of, in violation of Section 1962.”
According to prosecutors, he misled would-be investors in a crypto asset security referred to as “H-Coin,” “Himalaya Coin,” or “HCN,” falsely stating that 20 percent of H-Coin’s value was backed by gold and that he would personally compensate investors for any potential losses.
Last year, U.S. Attorney Damian Williams announced that between September 2022 and March 2023, the feds had seized approximately $634 million from 21 different bank accounts.
New York bankruptcy lawyer Luc Despins was appointed as a Chapter 11 trustee to locate Wengui’s assorted assets.
The federal RICO Act originated in 1970 as a tool to fight organized crime. The law enables prosecutors to target people in upper positions of authority within a criminal organization, not just lower-level people handling the dirty work.
The statute is not limited exclusively to organized crime. The U.S. Supreme Court noted in a 1989 opinion that the law was drafted “broadly enough to encompass a wide range of criminal activity, taking many different forms and likely to attract a broad array of perpetrators.”
Wengui has been detained since his arrest last year, after being denied bail due to his history of obstructive behavior, including “hiding his assets and failing to obey court orders.”
U.S. District Judge Analisa Torres on Thursday denied his renewed motion for bail pending trial, which is set to start April 8.
Wengui left China in 2014 during an anti-corruption crackdown led by President Xi Jinping that ensnared people close to him, including a top intelligence official.
Chinese authorities have separately accused Guo of rape, kidnapping, bribery and other offenses and have sought the return of the self-exiled tycoon.
Guo made headlines in August 2020 when Bannon was taken into custody while aboard Guo's 150-foot yacht off the coast of Connecticut on charges that he defrauded online donors in the name of helping construct then-President Trump's southern border wall.
Bannon pleaded not guilty and was pardoned on the federal charges five months later by Trump in his final days in the White House.
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