The U.S. Department of Justice (DOJ) announced the arrest of HO WAN KWOK, a/k/a “Miles Guo,” a/k/a “Miles Kwok,” a/k/a “Guo Wengui,” a/k/a “Brother Seven,” a/k/a “The Principal,” and KIN MING JE, a/k/a “William Je,” on charges of a twelve-count Indictment, including securities fraud, bank fraud, and money laundering. KWOK and JE allegedly ran an $1 Billion investment fraud scheme between 2018 and 2023. The U.S. SEC also announced charges against the exiled Chinese.
The U.S. prosecutors and the regulator allege that Guo was a serial fraudster, who raised more than $1 billion million by promising investors outsized returns on purported crypto, technology, and luxury good investment opportunities. KWOK and JE misappropriated hundreds of millions of dollars in fraudulently obtained funds. KWOK was arrested on 15 March 2023 in New York, New York. JE is currently at large.
The U.S. Government seized approximately $634 million from 21 different bank accounts. The $634 million constitutes proceeds of KWOK’s alleged fraud, which the Government will seek to forfeit.
As alleged, Ho Wan Kwok, known to many as “Miles Guo,” led a complex conspiracy to defraud thousands of his online followers out of over $1 billion dollars.Damian Williams, the United States Attorney for the Southern District of New York
In connection with a private placement offering of common stock in GTV Media Group, Inc. (GTV), Guo and Je allegedly diverted $100 million of investor funds to a hedge fund for the sole benefit of a company that Guo’s son owns. Additionally, Guo allegedly misappropriated investor proceeds in two other offerings to fund his and his family’s lifestyle, including misappropriating approximately $40 million to purchase and renovate a mansion in New Jersey and $3.5 million to purchase a Ferrari for his son.
The SEC also charged Guo and Puerto Rico and New York-based G Club Operations LLC and New York-based Mountains of Spices LLC with violations of the registration provisions of the securities laws in connection with these offerings. A fourth offering, for which Guo alone is charged, raised hundreds of millions of dollars from investors through a crypto asset security referred to as “H-Coin,” “Himalaya Coin,” or “HCN,” and a related purported stablecoin. Guo falsely stated that 20 percent of H-Coin’s value was backed by gold and that he would personally compensate investors for any potential losses.
In a related matter, in September 2021, the SEC charged GTV and two other entities with conducting an illegal unregistered offering of the company’s common stock and GTV and its parent company with an illegal unregistered offering of a crypto asset security referred to as either G-Coins or G-Dollars.
The SEC subsequently collected over $454 million in disgorgement, prejudgment interest, and penalties, including approximately $70 million previously transferred to the hedge fund discussed above, from GTV and two other charged entities. The SEC is distributing the funds collected to harmed investors.