The Department of Justice on Wednesday unsealed a 12-count indictment against an exiled Chinese businessman for a $1 billion alleged fraud scheme.
Ho Wan Kwok, also known as "Miles Guo," is accused of leading a complex conspiracy to defraud thousands of his online followers out of over $1 billion.
"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," Damian Williams, U.S. attorney for the Southern District of New York, said in a statement Wednesday.
Kwok was arrested by the FBI in New York Wednesday on various money laundering and wire, securities and bank fraud charges, while his financier, Kin Ming Je, remains at large while facing a charge of obstruction of justice.
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Between September 2022 and March 2023, the U.S. government seized approximately $634 million from 21 different bank accounts – all proceeds from Kwok's alleged fraud.
According to the 12-count indictment, Kwok lied to his victims and promised them outsized returns if they invested, or provided money to, GTV, his so-called Himalaya Farm Alliance, G|CLUBS, and the Himalaya Exchange.
Kwok is further charged with laundering hundreds of millions of stolen funds to conceal the conspiracy’s illegal activities and continue the fraud’s operations.
"The indictment today alleges the defendants were behind an elaborate scheme that defrauded thousands of individuals of over one billion dollars," FBI Assistant Director Michael J. Driscoll said in a statement. "Fraudulent investment scams make victims out of innocent people, ultimately harming the public’s confidence in the integrity of financial systems. The FBI continues to make investigating complex financial crimes a top priority, and anyone attempting these crimes will be made to face the consequences in the criminal justice system."
Kwok, an exiled Chinese businessman who has resided in the United States since about 2015, garnered a substantial online following, according to the Justice Department.
In or about 2018, he founded two purported nonprofit organizations, namely the Rule of Law Foundation and the Rule of Law Society. Kwok used the nonprofits to amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe Kwok’s statements regarding investment and money-making opportunities, the indictment alleges
Je, a dual citizen of Hong Kong and the United Kingdom who principally resided in the latter, allegedly owned and operated numerous companies and investment vehicles central to the scheme and served as its financial architect and key money launderer. Their fraud relied on at least four interrelated parts: the GTV Media Group Inc. ("GTV") Private Placement, the Farm Loan Program, G Club Operations LLC ("G|CLUBS"), and the Himalaya Exchange.
For example, G|CLUBS was marketed as "an exclusive, high-end membership program offering a full spectrum of services" and "a gateway to carefully curated world-class products, services and experiences." Instead of using membership payments to provide any services, the men are accused of pocketing the funds to purchase a 50,000-square-foot New Jersey mansion, various furniture and decorative items, including Chinese and Persian rugs worth approximately $978,000, a $62,000 television, and a $53,000 fireplace log cradle holder, and to purchase a custom-built Bugatti sports car for approximately $4.4 million.
The Himalaya Exchange included a purported stablecoin called the Himalaya Dollar ("HDO" or "H Dollar") and a trading coin called Himalaya Coin ("HCN" or "H Coin"). In videos distributed via social media, Kwok trumpeted the prospects and valuation of the Himalaya Exchange and both HCN and HDO, which he publicly described as cryptocurrencies, the indictment says.
Je also falsely claimed to media outlets that a €3.5 million Ferrari was purchased via the Himalaya Exchange.
