The US Justice Department accused Guo Wengui and still-at-large British co-conspirator Je Kin Ming of stealing funds from participants in an investment scheme so they could buy luxuries, including a yacht, a 50,000 square foot (4,645 square meter) mansion and a $3.5 million Ferrari.
A court official said late Wednesday that Guo pleaded not guilty but consented to detention in an initial arrest hearing.
Hours after his 6:00 am arrest at his Manhattan penthouse apartment overlooking Central Park, a fire broke out in his building, raising suspicions the two could be linked.
Guo's arrest came nine years after the one-time property billionaire fled China in 2014, having faced charges of fraud and corruption even as he became an outspoken critic of graft inside the Chinese government.
Using his Cantonese name, Ho Wan Kwok, the Justice Department said Guo leveraged his prominence as a critic of Chinese leader Xi Jinping's government while exiled in New York to build a large following of supporters online.
Those supporters were encouraged to donate to, or invest in, Guo-controlled non-profits and businesses, including GTV Media group, of which Bannon was a director.
That activity spread into other avenues to raise hundreds of millions of dollars, including a luxury club, the Himalaya Exchange cryptocurrency issuer, and the Himalaya Farm Alliance, which promised investors discounted shares of GTV.
But the Justice Department said Guo and Je diverted funds for their own use, including for Guo's New Jersey estate and yacht, a custom-built Bugatti sports car, and two mattresses that cost $36,000 each.
In 2021, US financial authorities called GTV's investment solicitation an illegal public offering and forced Guo to repay investors nearly $500 million and pay nearly $40 million in fines.
Since then, in successive actions, authorities have seized around $634 million in funds raised by Guo and Je, and on Wednesday charged the two with multiple counts of securities fraud, wire fraud, money laundering and obstruction.
"Fraudulent investment scams make victims out of innocent people, ultimately harming the public's confidence in the integrity of financial systems," said FBI Assistant Director Michael Driscoll.
- Fled crackdown on billionaires -
Guo arrived in the United States in 2015 after fleeing a crackdown on China's racy billionaires and corrupt officials by Xi's administration.
He was accused of paying hefty bribes to a powerful state intelligence and security chief.
But he claimed he was the victim of a business dispute with a former top Communist Party official.
Later he claimed to have details of business dealings by Wang Qishan, Beijing's all-powerful anti-corruption czar and later China's vice president.
He made a splashy arrival in the United States, buying a $67.5 million Manhattan penthouse and promoting himself as persecuted by the Chinese government, applying for political asylum.
In 2017 at Beijing's request Interpol issued a red notice -- a non-binding warrant -- seeking Guo's arrest and extradition.
It sent security services officials to New York to pressure him to return. And it recruited sympathetic US businessmen with ties to Trump to persuade him to deport Guo.
- Alliance with Bannon -
But Trump's Washington didn't take action, and in late 2017 Bannon, having left his White House job, began working with the Chinese tycoon.
Together they built heavily political media operations including Guo's broadcasts to China and Bannon's "War Room" podcast, which remains strongly pro-Trump and anti-China.
Bannon was meanwhile reportedly paid a million dollars as a consultant by Guo, whom he promoted on his podcast.
In early 2020 they formed a lobby group opposed to the Chinese Community Party, called the New Federal State of China.
When Trump lost his 2020 reelection bid, the two combined to support the unfounded claim that massive voter fraud caused his defeat.
By then both were under federal investigation.
In 2020 Bannon was arrested for defrauding donors while he was aboard Guo's $35 million, 150-foot yacht anchored off Connecticut.
One year later Guo's use of his network of non-profits and investment schemes to raise hundreds of millions ran into trouble when they were forced to settle allegations of fraud from the US Securities and Exchange Commission for $539 million.
In 2022 Guo violated a court order and moved his yacht out of the United States to avoid it being seized.
When a judge ordered him to pay a $134 million fine for doing so, he filed for bankruptcy to protect his assets.
pmh/mlm
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