A U.S.-based exiled Chinese businessman with ties to former Trump White House adviser Steve Bannon has been arrested on charges of bilking thousands of social media followers out of more than $1 billion.
Ho Wan Kwok, who goes by Guo Wengui on social media, was arrested earlier Wednesday in New York and charged with wire fraud, securities fraud, bank fraud and money laundering, the Justice Department announced on Wednesday.
A co-conspirator in the case, Kin Ming Je, who is a dual citizen of Hong Kong and Britian, remains at large.
A 12-count indictment unsealed in New York says Kwok and Je “took advantage of Kwok’s prolific online presence and hundreds of thousands of followers” to solicit investments in various ventures with promises of inflated financial returns.
One of the ventures, known as GTV Media Group Inc., was reportedly formed in partnership with Bannon.
The indictment says Kwok, Je and others fraudulently obtained more than $400 million through an illegal stock offering in GTV in 2020, and then used much of the money for their personal benefit.
“Kwok is charged with lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000-square-foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht,” U.S. Attorney Damian Williams said in a statement.”
Williams said that as part of its investigation, the Justice Department has seized about $634 million from 21 different bank accounts and a Lamborghini Aventador SVJ Roadster, and is seeking their forfeiture.
In a related action, the Securities and Exchange Commission filed civil charges against Kwok and Je on Wednesday, accusing them of participating in “unregistered and fraudulent” stock offerings that raised more than $850 million.
In a statement, the securities watchdog said the men “misappropriated a large portion of the funds raised from investors to enrich themselves and their family members,” including diverting $100 million generated through the GTV stock offering to a hedge fund for the benefit of a company owned by Kwok’s son.
In 2020, the SEC charged GTV and two other media entities with conducting an illegal stock offering, eventually collecting $454 million from the companies as part of a settlement.
A self-styled dissident, Kwok fled to the United States in 2015 and bought a penthouse apartment at a New York City hotel for about $67.5 million.
The indictment says that starting in 2017, Kwok, claiming to be a billionaire, “garnered a substantial online following.”
“Kwok granted numerous media interviews and posted on social media, claiming to advance a movement against the Chinese Communist Party,” the indictment says.
The businessman allegedly used two nonprofits — the Rule of Law Foundation and the Rule of Law Society — to amass followers who were “aligned” with his purported anti-communist stance and would fall for his investment and money-making pitches.
In addition to GTV, Kwok and Je allegedly swindled investors through three other ventures, including a farm loan program, a series of clubs known as G/CLUBS and a cryptocurrency “ecosystem” called the Himalaya Exchange.
The G/CLUBS, described on its website as “an exclusive, high-end membership program offering a full spectrum of services,” generated about $250 million in funds.
Among other lavish spending, Kwok and Je allegedly used the funds to purchase Kwok’s $26.5 million New Jersey mansion, Chinese and Persian rugs worth about $978,000, a $62,000 television and a $53,000 fireplace log cradle holder, according to the indictment.
“Fraudulent investment scams make victims out of innocent people, ultimately harming the public’s confidence in the integrity of financial systems,” FBI Assistant Director Michael J. Driscoll said in a statement.
Kwok and Bannon are longtime associates.
In August 2020, Bannon, who served as Trump’s senior White House strategist, was arrested on federal fraud charges on a yacht owned by Kwok off Westbrook, Connecticut.
Bannon and three others were charged with defrauding thousands of donors seeking to help finance part of a wall along the U.S.-Mexico border.
Bannon was pardoned by Trump before the former president left office.
In September 2022, however, New York state prosecutors charged Bannon in connection with the We Build the Wall fundraising scheme.