Chinese billionaire accused of fraud didn’t need the money, lawyers say
LAWYERS for Guo Wengui, an exiled Chinese billionaire charged with defrauding investors of more than US$1 billion, portrayed him Friday (May 24) as the dedicated leader of an anti-communist movement who did not need the money he is accused of stealing.
In opening remarks at his trial in federal court in Manhattan, Sabrina Shroff, a lawyer for Guo, also argued he would not defraud the thousands of supporters who invested in his various ventures because doing so would undercut his effort to topple the Chinese Communist Party.
That is “not just illogical, it defies common sense,” Shroff said.
Guo, who is also known as Miles Kwok or Miles Guo, has been in a federal detention center in Brooklyn since March 2023, when he was arrested at his US$68 million Manhattan apartment and charged with fraud and money laundering.
Prosecutors say Guo promised investors shares in his media company, or in cryptocurrency, but instead the money was used to finance his luxurious lifestyle. Among his purchases were a yacht, a US$4 million Bugatti sports car and a 50,000-square-foot mansion in New Jersey that cost US$26 million.
Guo “took investors’ money and spent it on himself,” Micah Fergenson, a government prosecutor, said in an opening statement. “Miles Guo ran a single con on a grand scale.”
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In Beijing, Guo rose to become a wealthy property developer, and was allied with a powerful intelligence official. He fled to the United States nine years ago, after that official was detained by the Chinese authorities.
In 2017, Guo started speaking out, on Twitter, YouTube and eventually through his own media company, against some senior Chinese officials. His accusations attracted the enmity of the Chinese government, which said it issued an Interpol “red notice” arrest warrant. He was wanted in China on charges that included bribery and rape.
During the Trump administration, Guo allied himself with members of the American right, including Steve Bannon, a former Trump adviser. Bannon stood at his side in June 2020, when Guo declared the formation of the “New Federal State of China” while aboard a boat in New York Harbor.
His anti-communist stance gained a following of thousands of people worldwide who were excited that a charismatic and wealthy former insider was taking aim at China’s ruling party.
It is those loyal supporters, the government says, whom Guo defrauded, by persuading them to invest their money with him. Some of those who lost money will testify against him. The government’s case also relies on accounts from Guo’s former employees, bank records and videos he made, Fergenson said.
But prosecutors may also have to convince jurors of something less tangible: that Guo can be both a criminal and a celebrated anti-communist crusader at the same time.
To that end, in a filing submitted early Friday, prosecutors asked the judge to bar the defense from arguing that Guo’s treatment by the Chinese government somehow suggested that he didn’t commit fraud. They cited articles this week about the defense strategy in The New York Times and The Wall Street Journal.
“The defense appears to have showed its hand that it intends to offer this evidence for plainly impermissible purposes and in support of improper arguments,” prosecutors from the Southern District of New York wrote.
In response, Guo’s lawyers said Guo was “free to argue that he would not throw away a political movement that he endured considerable hardship to help build for money that he did not truly need.”
As the trial began, Judge Analisa Torres reminded the jury of six men and six women that opening statements are arguments, not presentations of evidence.
Shroff lived up to those instructions, presenting the jury with a selective accounting of Guo’s relationship with Chinese authorities. She said he had left China because “he took on” the Chinese Communist Party “and they were not pleased with him at all.”
In fact, before leaving China, Guo counted as his patron a senior official in one of the most feared organizations in the country, the ministry of state security. It was only when that official, Ma Jian, was detained on corruption charges that Guo left the country. Ma was later sentenced to life in prison.
Guo was in the United States for two years before he spoke out about corruption at the senior level in China. Even then, he was at first careful not to criticize Xi Jinping, China’s top leader. In late April 2017, while meeting with reporters from the Times at his Manhattan apartment, Guo stepped out of the room to take a call.
The reporters were told that the caller was a senior aide to Xi. NYT
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