Exiled Chinese tycoon Guo Wengui, whose crusade against the Communist Party attracted allies including Donald Trump associate Steve Bannon, was convicted for duping investors out of US$1 billion to fund his luxury lifestyle.

After a trial in Manhattan that lasted almost two months, Guo was found guilty on Tuesday of fraud and racketeering conspiracy. Convicted on nine of the 12 counts against him, he faces as many as 20 years in prison on the most serious charges when he is sentenced on Nov. 19.

Guo “brazenly operated several interrelated fraud schemes, all designed to fleece his loyal followers out of their hard-earned money so that Guo could spend his days in his 50,000-square-foot mansion, driving his US$1 million Lamborghini, or lounging on his US$37 million yacht,” Manhattan US Attorney Damian Williams said in a statement after the verdict.

A lawyer for Guo declined to comment, but Guo is almost certain to appeal the verdict.

Guo smiled at his lawyers as the jury walked out, hugged attorney Sabrina Shroff and shook the hands of other members of the defense team. The outspoken businessman, also known as Ho Wan Kwok or Miles Guo, was tried before jurors whose names were kept secret - an unusual move designed to shield them in a case that has drawn intense interest.

Appealing to a huge online following, Guo raised money from investors for seemingly legitimate businesses but diverted the funds to spend on himself and his family. The trial involved weeks of testimony from investors drawn to Guo through his public critique of the Chinese Communist Party, as well as from luxury car dealers who sold him rare vehicles and a managing director at Kyle Bass’ hedge fund Hayman Capital Management, which ran a hedge fund that the government said Guo invested $100 million of the stolen funds in.

Neither Bass, Hayman nor Bannon was accused of wrongdoing in the case.

Videos From His Superyacht

Guo amassed his social media following through videos recorded from his penthouse at the Sherry-Netherland hotel overlooking New York’s Central Park or from the deck of his 152-foot superyacht. Guo claimed his fortune came from his wealthy real estate developer family in China. But a portion of his wealth, federal prosecutors said, also came from stealing US$1 billion through bogus investment opportunities he hawked online.

The jury began its deliberations Thursday but was forced to start over with an alternate juror after a member of the panel admitted to Googling the name of a co-defendant, who is still at large.

The defense urged the jurors not to let Guo’s expensive tastes cloud their judgment, claiming he flaunted his wealth as a form of protest against the Communist Party.

The prosecution had its own framing. “Is Miles Guo a real political activist?” Assistant US Attorney Juliana Murray said Thursday during closing arguments. “I don’t know and I don’t care, because that’s not what this trial is about.”

Mysterious Background

The case explored Guo’s mysterious background, including fleeing persecution in China, his ties to Bannon and how he came to pour millions into Hayman Capital’s high-risk wager against the Hong Kong dollar.

Bannon was on Guo’s yacht off the coast of Connecticut in 2020 when the political adviser was arrested on charges he conspired to siphon hundreds of thousands of dollars from a campaign to finance a wall on the US southern border. Trump pardoned Bannon just before leaving office.

In 2020, Guo transfered US$100 million raised through an illicit stock offering in his GTV Media Group to the Hayman Hong Kong Opportunities Fund, which held a position that the country’s currency peg to the US dollar would collapse, according to prosecutors. Bannon introduced Guo and Bass, a longtime China skeptic. Bannon himself was paid US$1 million as a consultant to GTV’s parent company Saraca Media Group, evidence presented at the trial showed.

After Hayman received the investment, Bannon emailed Bass.

‘Congrats on Miles Deal’

“Congrats on miles deal,” Bannon wrote, according to an email presented as evidence. “He thinks u r biggest superstar in finance.”

A month later, the US Securities and Exchange Commission contacted Hayman to inquire about the source of the funds. When Bass asked Guo’s financial adviser for an explanation, he got no reply, evidence showed. By that point, close to US$30 million had been lost in the unsuccessful currency wager.

The remaining US$70 million was eventually handed over to authorities.

Guo was acquitted on Tuesday of fraud related to the stock offering in GTV and of unlawful monetary transaction in connection with the $100 million transfer to the Hayman hedge fund.

US$539 Million SEC Settlement

In 2021, three Guo-linked companies, including GTV, agreed to pay US$539 million to settle the SEC’s investigation into unregistered stock offerings.

According to prosecutors, other Guo scams involved an exclusive private members-only club with a minimum US$10,000 buy-in, a crypto platform called the Himalaya Exchange and a farm loan program.

The government alleged Guo also peeled off investor funds to spend on luxuries including a red Lamborghini, a $4 million Ferrari for his son and a US$26 million New Jersey mansion.

The case is US v. Guo, 23-cr-00118, US District Court, Southern District of New York (Manhattan).

  - Bloomberg