Millions in fraud proceeds seized
The U.S. government has seized $634 million in alleged fraud proceeds from 21 different bank accounts, as well as assets purchased with the proceeds of the alleged fraud, including a Lamborghini Aventador SVJ Roads, prosecutors said.
The U.S. Securities and Exchange Commission also separately filed a parallel civil complaint against the two men Wednesday, accusing them of involvement in unregistered and fraudulent financial offerings.
Guo, who made money in real estate and securities, is a controversial figure. He is an exiled Chinese businessman who has lived in the United States since about 2015 and has amassed a “substantial online following,” prosecutors said.
He's named in ongoing lawsuits, including one alleging he raped a former employee, a charge he has disputed, and another alleging he defamed a former aide to Donald Trump, which he has denied.
He is also a business associate of Bannon, who was arrested on his yacht in a fraud case in August 2020.
The fraud scheme took place from 2018 through this month, with Guo at the helm, prosecutors said.
In 2018, he founded two “purported nonprofit organizations" — the Rule of Law Foundation and the Rule of Law Society. He then allegedly used those organizations to gain followers “who were aligned with his purported policy objectives in China," prosecutors said. Those followers were "inclined to believe Guo’s statements about investment and money-making opportunities," officials said.
Bannon at one point was on the board of directors of the Rule of Law Society, CNBC reported.
One instance of fraud involved Guo posting a video on social media in April 2020 announcing the unregistered offering of common stock in the media company GTV Media Group, Inc. via a private placement and he directed people to contact him.
Between then and June 2020, $452 million worth of GTV common stock was sold to more than 5,500 investors, with investors believing their money would be invested in GTV to develop and grow the business, prosecutors alleged. But days after the GTV private placement closed, Guo and his co-conspirator allegedly directed $100 million of funds raised from that to be invested in a high-risk hedge fund for the benefit of GTV’s parent company —whose owner was Guo's close relative.