Guo Wengui is a Chinese billionaire. He was previously convicted in New York on July 16 of fraud and other charges for allegedly defrauding investors of more than $1 billion. Judge Analisa Torres will sentence him on November 19th.
On March 15, 2023, Guo Wengui was arrested by federal authorities in New York on charges of conspiring to defraud his online followers of more than $1 billion. This included $452 million in unregistered offerings and a $150 million GTV loan, in addition to a $250 million membership program and a $262 million cryptocurrency project for the Himalayan Exchange. He faces 12 criminal charges, including wire fraud, securities fraud, bank fraud and money laundering. Nine of these charges were found to be substantiated, and when he is sentenced on November 19, Guo could face up to 20 years in prison.
During a prior trial in this case, Manhattan’s top federal prosecutor, Damian Williams, noted that defendant Guo Wengui promised his followers via social media that they would not suffer financial losses if they participated in his investment and cryptocurrency schemes. This promise allowed Guo to quickly and illegally raise more than a billion dollars between 2018 and 2023. In addition, Guo committed a series of interrelated fraudulent acts to defraud his loyal supporters of their funds. These funds were used for ostensibly legitimate corporate activities, but in reality the company was a start-up with no profitable operations or revenues. Guo misappropriated these funds for lavish spending by himself, his partners, and his family. Guo’s spending included the purchase of a 50,000-square-foot mansion in New Jersey, a million-dollar red Lamborghini sports car, and a $37 million luxury yacht.
According to prosecutors, a range of evidence was provided to show that Guo Wengui transferred funds provided by investors through a series of accounts. In an audio recording secretly made by a cooperating witness. Guo Wengui yelled at his subordinates for refusing to transfer $100 million as quickly as possible into accounts he controlled. The funds came from investors in a membership company called G|Clubs, which Guo Wengui publicly claimed he did not control. When a subordinate suggested that Guo obtain board approval to make the transfer look more legitimate, Guo told the subordinate, “You bastard, get the hell out of here.” The prosecutors have also named Bannon and a host of other associates of Guo Wengui as co-conspirators in the case, although they have not been charged. Bannon helped Guo start some of the companies involved in Guo’s fraudulent scheme, publicly promoted them, and even advised Guo on how to set them up to avoid SEC scrutiny.
Victims had been promised a handsome return on their investments. In addition, Guo promised investors a variety of lavish perks, such as discounts on vacations and access to exclusive events. Despite a steady stream of huge sums of money flowing into Guo’s companies and his foundation, he declared bankruptcy last year with less than $100,000 in personal assets, and Guo’s network came crashing down. “We had complete trust in him, but gradually realized that he never fulfilled his promises,” the victims said.
In response to this case, we connected with Andrea Boggio, JSD of Stanford Law School. Dr. Andrea noted that Guo’s actions are undoubtedly outrageous. In this case, federal prosecutors mixed traditional business crime charges (mail and security fraud) with less-often charged crimes (money laundering and bank fraud). The target with multiple charges is typical of federal prosecutors. The goal is to contest various crimes so that the case can still be brought if some are lost due to lack of evidence. Multiple charges also give prosecutors leverage and flexibility in negotiating plea bargaining because some charges may be given up in exchange for a guilty plea on the remainder. Finally, the publishment for each cumulates with others independently, adding weight to the prosecution.
Dr. Andrea further noted that Guo’s active promotion of his criminal scheme on his YouTube channel provided impeccable video evidence for the prosecution’s case. In addition, DOJ’s Elizabeth has also spoken in previous interviews about the importance of justice, which is a matter of rights for all citizens. The significant jail time that Guo will face, along with the forfeiture of all of his assets located in the United States, is intended to reaffirm the commitment to investor protection and the checks and balances in place to preserve a critical engine of the American economy: investment in private and public companies. A single case is insufficient but still indispensable to clean the ecosystem of bad apples.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.