The criminal trial of Chinese businessman Guo Wengui, who is currently in exile overseas, officially began at the Southern District of New York Federal Court this past Friday (24th). Guo is accused by prosecutors of defrauding thousands of investors and supporters, totaling over 1 billion US dollars.
Assistant Prosecutor Micah Fergenson stated in his opening statement to the jury on the 24th that Guo Wengui was a real estate developer in China before he moved to New York in 2015. Starting in 2017, he began releasing numerous videos exposing scandals of the Chinese Communist Party, amassing a large following on the internet. By displaying wealth and openly opposing the Chinese Communist leadership, he garnered popularity, enraging the Chinese government which led to the seizure of his assets.
Fergenson claimed that after Guo’s assets were confiscated by Chinese and Hong Kong authorities, he started selling fraudulent investments to his followers. From 2018 to 2023, Guo, facing financial constraints, raised funds through various projects including a fictional cryptocurrency scheme, an exclusive members club, a social media company, and a loan program for Himalayan farms. Fergenson stated that Guo’s followers trusted him wholeheartedly, resulting in a continuous flow of funds.
According to the prosecution, investors put over 400 million US dollars into purchasing shares of the social media platform GTV Media Group through illegal private equity issuance. Guo Wengui is alleged to have misappropriated 100 million US dollars from this, investing it into a hedge fund for high-risk speculation, ultimately resulting in a 30 million US dollar loss. Guo also deceived investors through G Clubs, a private members club with a minimum membership fee of 10,000 US dollars. Investors were told that becoming a member would entitle them to GTV shares and other benefits, including discounts at G Fashion which sells expensive clothing such as 800 US dollar sweatpants.
The prosecutor claimed that Guo diverted funds from these schemes to purchase a mansion in New Jersey, yachts, multiple luxury cars, and other extravagances including two 36,000 US dollar mattresses. Additionally, Guo’s family owns various assets including a 70 million US dollar apartment near Central Park, a 30 million US dollar yacht, and a 4 million US dollar Ferrari.
However, Guo Wengui’s defense attorney, Sabrina Shroff, refuted the charges, emphasizing that Guo has been innocent of all charges since his arrest in March 2023. She assured the jury that the progress of the trial will be “surprising and eye-opening” and cautioned them not to let Guo’s wealth influence their judgment. She pointed out that Guo and his seven brothers in China had amassed wealth through real estate long before the alleged crimes, and his luxurious lifestyle was in place before the accusations.
Shroff stated, “Guo Wengui enjoys luxury items such as super yachts and tailor-made Italian suits, but this is not illegal behavior. Superficiality or wealth does not equate to criminality.”
She urged the jury not to be biased by Guo’s consumption habits facilitated by his massive wealth from the real estate industry. “The government wants you to prejudge a person who spends thousands on television or mattresses. Understand these consumption behaviors in a broader context.”
She pointed out that Guo threw himself into the disclosure revolution, becoming a target due to his anti-Communist stance, paying a significant price as his phone and computer were hacked by the Chinese Communist Party. His wife and daughter were detained in China for two years, and an Interpol arrest warrant hangs over him. He even fell into traps, such as someone intentionally transferring money to his bank account under the name of sanctioned individuals by the US, leading to the freezing of his account.
“The Chinese Communist Party has a thousand ways to deal with Guo, trying to stop a political movement to which he has devoted his life,” she said, in this context, many of Guo Wengui’s actions such as using multiple phones and bank accounts were acts of common sense for self-protection.
She argued that Guo’s businesses were legitimate, not gambling, not scheming, nor a scam. Guo Wengui’s financial advisor, William Je, a British citizen with Hong Kong/UK dual nationality, is a seasoned wealth management expert. Guo has faced investment failures, but there was no intentional loss of money nor criminal intent.
Guo Wengui, also known as Ho Wan Kwok (Miles Kwok), has been detained in Brooklyn since his arrest in March 2023. If convicted, he could face decades of imprisonment. He is currently 57 years old.
The trial is expected to touch upon sensitive areas, with prosecutors seeking to prevent Guo Wengui from citing confidential information in his defense. Witnesses will include individuals who trusted Guo and lost their life savings in the fraud.
The trial is presided over by Judge Analisa Torres of the Southern District Federal Court, reportedly with 70 witnesses, expected to continue until July.
On May 3rd this year, Guo Wengui’s former chief of staff, Yvette Wang, pleaded guilty to conspiring to commit telecommunications fraud and money laundering, which may strengthen the prosecutors’ case against Guo Wengui. Her sentencing is scheduled for September 10th.