Last month, on March 15, Chinese Billionaire Miles Guo was arrested in New York for $1B in fraud. If you are a business person in America, you need to be paying attention to this case, because it teaches us a lot about what the government can do to business owners. We are going to be looking at the question, “Is Miles Guo innocent?”
Let me start by saying that I am independent on this topic. This channel is not sponsored. No one is paying me to make this video. No one chooses the stories I report on other than me. My only goal here is to bring you the truth, so that you can make the best business decisions in your life. I did not know anything about Miles Guo before this. I was not paying attention to this story until two weeks ago when he was arrested. On this YouTube channel, I cover a lot of fraud and accounting issues. So, when I saw the headline, “Famous billionaire is arrested for $1B in fraud” I decided I needed to look into this story. How have I not heard about this before? What I have uncovered in the last two weeks is shocking to me. There are a lot of strange things about this case.
Let me start with the main issue. Miles Guo is being held in prison in New York without bail. He was arrested on March 15th. He has been in prison for two weeks. In two days, on Tuesday, Miles Guo is scheduled to go in front of the judge, and this judge is going to decide whether to release him on bail or keep him in prison for the rest of the trial. The prosecutors are requesting that he be held in prison and not let out.
This caught my attention, because this is very strange. First, this is happening in New York. I do not know if you are paying attention to what is going on in New York, but they are letting everyone out on bail. They are letting violent criminals out on bail. They are letting murderers out on bail. So why is Miles Guo being held in prison? He is not violent. He is being charged with an accounting crime. Second, white collar criminals are usually not held without bail. Because they are not violent, the prosecutors usually stick an ankle monitor on them, and send them home to prepare for trial. So, what is happening to Miles Guo is very unusual.
So, then I started looking into this case more. Who is this guy? Miles Guo is from China. He made his fortune as a business developer and helped construct some of the buildings for the 2008 Beijing Olympics. Things started to go bad for Miles Guo when he started standing up against Chinese president Xi Jinping. Chinese authorities were going to arrest Miles Guo under allegations of bribery, kidnapping, money laundering, fraud and rape. If you know anything about the Chinese Communist Party (CCP), it is likely that all these charges are made up. The way the CCP deals with people who speak out, is the CCP makes up false charges against them, throws them in jail, and you never hear from them again. Miles Guo fled the country in 2014. He has been living in the United States in exile for the last nine years. He has been labeled as a right-wing conservative, because he knows Steve Bannon, and has funded several conservative causes. But if you look at Miles Guo’s social media, he does not talk about right-wing conservative topics. His issue has always been corruption in China. That is his main issue that he is always talking about.
That brings us to the current case for $1B in fraud. That is a lot of money. What is this $1B in fraud they are talking about? So, I started looking into the fraud case. The fraud case itself is very strange. Here is the typical life cycle of a fraud case. There is some deception of a business person against investors. This is the fraud. Then the fraud usually leads to a business failure. Either a business goes bankrupt or financial promises are not kept. Then investors lose their money and get upset. The investors complain to the SEC or the FBI who make an arrest. Most fraud cases follow this pattern.
A good example of this is the FTX fraud case. We all know the story. FTX recently declared bankruptcy. Millions of people have lost their money. People were furious, and they went to the SEC and said, “You better do something about this.” The head of the company, Sam Bankman-Fried was arrested for fraud.
It is very strange that Miles Guo’s case does not follow the same pattern. First, Miles Guo’s businesses were not failing. The only reason the businesses were shut down, is because the SEC came in and froze all his assets. The SEC shut the businesses down. Second, there are no angry investors. This is very odd. When you research fraud cases, it is usually very easy to find angry investors. They are usually out there screaming at the top of their lungs. In this case, I could not find any. So, I started looking.
I did a test on Twitter. One week ago, I posted a thread on twitter about Miles Guo’s case. I received a flood of messages from investors. A lot. But these investors were not angry with Miles Guo. They were telling me that Miles Guo was innocent, and they were begging for the US government to stop oppressing them. In fact, these investors are attending protests in support of Miles Guo. This really took me by surprise. This is very strange behavior by investors in a fraud case. Do you know how many messages I received from people who were angry with Miles Guo? Zero. Not a single one.
Just to put this in perspective. Compare this to FTX. There are so many angry FTX investors. When I tweet about FTX, I get a string of angry responses. You probably cannot walk down the street and throw a rock without hitting an angry FTX investor.
Now I do not give up that easily, so I kept looking. And I did find four investors who were upset with Miles Guo, but they were also very strange. For the first one, there is video of one investor who filed a complaint with the SEC and FBI against Miles Guo. In a video, this investor gives a speech where he takes back his complaint and confesses that he was forced to make a false report by the Chinese Communist Party. So, this investor is now in support of Miles Guo.
For the other three, I found three investors that filed a civil lawsuit against Miles Guo in Arizona. These three people have a total investment of $160,000. In the lawsuit they are claiming Miles Guo committed fraud by making false statements and they want their money back. Their general argument is that they gave their money to Miles, the SEC froze the assets, so Miles did not fulfill his promises. There are a couple of strange things about this lawsuit. First, there are only three investors. Out of $487M of investment, only $160,000 are complaining? Where are all the rest? Just think about this. That means that only .03% of all investors are unhappy. That is a 99.97% track record of happy investors. That is incredible. How is this even a case? Second, this Arizona lawsuit gives more details on the timeline of events. It explains that the SEC started stepping in and freezing bank accounts as early as August 2020. By the end of 2020, Miles Guo was already telling investors of his deal with the SEC to refund the investors their money. So, these investors filed this lawsuit on June 21, 2021, already knowing that they were going to get their money back. They already knew that the SEC had their money, not Miles. It is very strange they would even file this lawsuit. It is going to cost them more money in legal fees than they are going to get back from their investment, which they were already getting back without the lawsuit. It would be like someone declaring bankruptcy, and then an investor suing demanding their investment back, after it was already coming to them through the bankruptcy proceedings. It makes no sense that someone would file this lawsuit. Is it possible that these three investors are being forced to file the lawsuit by the Chinese Communist Party, just like the other investor who already confessed?
But I want to keep an open mind here. I am still looking for angry investors. There could be more out there that I do not know about. If you are an investor with Miles Guo, leave a comment down below this video and let me know if you think Miles is innocent. I would love to find more people complaining, but I just can’t. It seems like this is a fraud case without any victims.
The strange thing about comparing the Miles Guo case against FTX, is that Sam Bankman-Fried is out on bail. He is lounging around his parent’s estate waiting for trial. So why is Miles Guo in prison when Sam Bankman-Fried is allowed out on bail?
This is all very strange. This is unlike any fraud case I have ever seen. Miles’ businesses did not fail on their own. The investors are not angry. But it gets even more strange.
Before I go on… Just as a side note, it is hard to find the video of the investor admitting he was forced by the Chinese Communist Party. That video is being censored in Google search results. If you go to Google and type in “witness forced to testify by CCP against Miles Guo” nothing comes up. But if you type the same thing into the search engine DuckDuckGo, the video was the third link that showed up for me. What possible reason could Google have for hiding this person’s testimony? What is going on here? This is very strange.
Let us get into the details of the case. What exactly is the government accusing Miles Guo of doing? It starts with a company Miles Guo started called GTV Media Group which was proposed as a social media website. He started the business and opened it up to investors and raised $487 Million in private placement. Let me explain private placement. Private placement is different than stock that is traded on the public stock market. Private placement is when a business goes to a private individual and gives them some ownership in the company in exchange for their investment. Just so you understand, businesses do private placements all the time. It is an easy way to raise money for your business without going through the whole process of issuing publicly traded stock. But there are specific rules you have to follow. Well, the SEC came in and told Miles Guo that he was not doing it properly. They seized all his assets. This was announced in a press release by the SEC in 2021, two years ago.
The press release was titled “Companies to Pay More Than $539 Million in Settlement for Distribution to Investors” So the majority of the $1B in fraud that is currently being alleged today, is from this one situation from two years ago. But this is very strange. In the press release from 2021, there is no mention that there was any fraud involved. None. Here is the main statement from the release: “Without admitting or denying the SEC’s findings that they violated Section 5 of the Securities Act of 1933, GTV and Saraca agreed to a cease-and-desist order, to pay disgorgement of over $434 million plus prejudgement interest of approximately $16 million on a joint and several basis, and to each pay a civil penalty of $15 million.” There is no allegation of fraud or deception. It sounds like there is disagreement whether Miles Guo did anything wrong in the first place. But he came to an agreement with the SEC to just give the investors their money back. This happened two years ago. So, this situation was resolved and agreed to with the SEC two years ago, and now they are changing their story.
Let us compare this to the press release from the SEC two weeks ago. The stories do not match up. Now the SEC is now claiming that the incident from two years ago was actually fraud. What is the fraud they are alleging? Here is what they say: “We allege that Guo was a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities.” So, if I understand this correctly, they are accusing him of making false statements. They are also accusing Miles of misusing investor money and failing to register the securities with the SEC. But all these allegations are based on the supposed false statements made by Miles Guo. Let us be very specific about this. What is the false statement they are accusing him of making? They are saying that he promised “outsized returns.” But the only reason he was unable to make those returns was because the SEC shut his business down. Who is the SEC to decide, what is too great of a Return on Investment? Shouldn’t he have been allowed to at least try to generate that Return on Investment? Let us be very specific here. What is the specific number that the SEC has determined is too great of a return on investment? If we look at the indictment that was filed in this case, they give a specific example of one of Miles Guo’s false statements. He made a video on social media in 2020 where he proposed that the value of GTV was “$2B US dollars.” They then provide the explanation that this statement could not have been true, because GTV was a new business that generated no revenue.
I find the government’s statement in the indictment ridiculous on its face. Anyone in business knows, that technology startups achieve high valuations all the time, even with no revenue. In addition, Miles Guo had done his due diligence. It turns out, that he hired a third-party valuation report from Alvarez & Marsal, a global professional services firm that valued his company at $2.6B, 30% higher than Guo proposed. Alvarez & Marsal is a huge company with offices in 32 countries around the world. So, Miles Guo was actually being conservative.
Let us also look at the $2B amount. Miles Guo raised $487M. Let us assume he is going to build his company over ten years, and then sell it for $2B. To achieve that result, he would have to grow his business 15% each year. That is not unheard of for a technology startup. So what the SEC is saying in this press release, is that if a American company has a business plan where they are predicting they are going to grow 15% a year, the SEC is going to step in, and shut your business down because you are being too aggressive. This is insane. I am shocked that the SEC has the legal authority to do this.
Now I am guessing the SEC criminal complaint is probably based on the contents of the civil lawsuit in Arizona. But there is no more evidence presented in this civil complaint other than the identities of these three investors. They also repeat the same allegation that Miles made a false statement by promoting his business as being worth $2B. It all comes back to whether this is a false statement by Miles Guo. Unfortunately, we will never know because the SEC shut down the business.
What are the other charges? If we look at the DOJ press release, there are twelve different charges. Charge 2 Wire Fraud and Charge 3 Securities Fraud are the two related to the private placement that I have already discussed. These are the main two. The other ones relate to Miles Guo’s other businesses including exclusive membership clubs called G-clubs, and a crypto currency called the HCoin. So when you look through the charges for all his online businesses, they basically all come down to the allegation that Miles Guo was making false statements. But in every case, the SEC came in and froze the assets before the business could do anything. The SEC caused the businesses to fail, not Miles Guo.
So, is this just me? Or does this all seem very strange? The two SEC press releases do not even agree with each other. First, there was no fraud. Now there is fraud. I do not understand what is going on here. But it gets worse.
I found this next part shocking. In the new press release from the SEC in 2023, they go on to say, “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…” So, here they are referencing their 2021 press release. Then they go on, “The SEC is distributing the funds collected to harmed investors.” Excuse me, what? The SEC still has not distributed the funds yet? That was two years ago. Why does the SEC still have everyone’s money frozen? I thought that was the deal Miles made with the SEC two years ago. The SEC was going to give everyone’s money back. Why are they still holding any of it, two years later? What is going on?
I did not even know this was possible in the United States. How is this legal? In this case, the SEC has shut a business down, because they do not like the return on investment shown in a due diligence report. They have frozen, half a billion dollars in assets, and they have refused to give the money back to investors for the last two years. And now they are holding the CEO in prison and will not let him out on bail. What is going on here?
I need to emphasize this point. What Miles Guo did, by offering a private placement to investors, was not unusual in American business. A good example is if we look at Facebook (now Meta).
When Facebook first started, it was not traded on the stock market. They raised money through private placements. This is an article from 2009. “Russian Firm invests $200M in Facebook.” This was a private placement based on a company valuation of $10B. Specifically, they received money from Russian Oligarchs. Specifically, the Russian Oligarch named Yuri Milner, who has close ties to Putin. At this same time, Facebook received a large investment from one of the richest men in the world, Hong Kong billionaire, Li Ka-Shing.
So, how is what Miles Guo did, different from what Facebook did in 2009? Who would have looked at this Zuckerberg guy and thought that he was a good investment? Why was Facebooks $10B valuation okay, but Miles Guo’s $2B valuation is not okay? Was it a good idea to let Putin control a large percentage of Facebook? I would think that was worse. Regardless, it is not the job of the SEC to make these judgement calls.
In America, we do not make fun of other people’s crazy business ideas. We say, “Go out and make it happen.” Because you never know, who is going to be the next Facebook. That is the point of capitalism. We want people to come to this country and try and make their dreams come true.
Do you know how much Facebook is worth today? $536B. What right does the SEC have to say that Miles Guo’s company is not worth $2B? It might have been worth that much, if the SEC had not shut it down.
Who is to say that Miles Guo is not going to be the next Mark Zuckerberg? What do we know about him? We know he is willing to stand up against a tyrannical government. We know he is a freedom fighter. In fact, he might be the perfect person with the backbone necessary to run the future metaverse. Now, I am not pitching this guy’s investments. I do not know that much about him. All I am saying, is why is this guy being held in prison without bail? Something is not right here. But it gets even worse.
A $1B fraud case usually does not go forward without the approval of the head of the SEC. The head of the SEC is Gary Gensler, and he would likely have been personally involved in this. Let me give you some backstory, because a lot of people do not know who Gary Gensler is. He was the former CFO of the Hillary Clinton campaign for President in 2016. This is important because the Democrat party has a history of connections with the Chinese Communist Party. One of the major criticisms of Hillary Clinton when she was running against Donald Trump, is that she accepted numerous donations from foreign countries to her non-profit, the Clinton Foundation. According to CBS news, Hillary Clinton raised $42M from foreign governments and $170M from foreign entities and individuals. One specific donor was a Chinese company named Rilin Enterprises who gave Clinton $2M in 2013. This is the same construction company that built the Chinese embassy in Washington DC, and was closely connected to the Chinese Communist Party.
The donations from China go back even earlier than that. Before Bill Clinton became president, Bill and Hillary ate frequently at a Chinese restaurant in Little Rock, Arkansas called Fu Lin Chinese Restaurant. They became friends with a fry cook in that restaurant that later started donating hundreds of thousands of dollars to the Democrat party. Under later investigation, the funds were being sent from bank accounts in Hong Kong and Macau. The fry cook pled guilty to federal campaign finance violations in 1999.
Just to be clear, Federal law prohibits foreign money being used for campaign finances.
Next, when Donald Trump became president in 2016, he held his first meeting with President Xi Jinping. Xi Jinping asked Trump to arrest and deport Miles Guo back to China. Out of all the things in the world for these two people to talk about, Xi Jinping is asking about Miles Guo. After the meeting, casino owner, Steve Wynn allegedly lobbied Trump on behalf of China to convince Trump to deport Miles Guo. Steve Wynn’s casinos in Macau account for more than 60 percent of the company’s net revenues in 2016. Shortly before Steve’s actions on behalf of China, the government restricted the number of gaming tables in the casinos, and his licenses were soon going to be renegotiated. We know all of this because the Department of Justice brought a complaint against Steve Wynn requiring him to register as a foreign agent of the Chinese Communist Party. For the record, Steve Wynn denies these allegations and claims that he is not an agent of the Chinese Communist Party.
The reason why this is important, is because in the legal complaint against Steve Wynn, it provides notes of the meeting between Xi Jinping and Trump, and it is shocking. Many people do not know this. Newsweek reported two months ago, there is over 200 Americans being held hostage in China right now. The US considers these people as wrongfully detained and political prisoners. The lucky ones are in prison. The unlucky ones are forced to work in concentration camps. Xi Jinping offered Trump a deal. He would return certain American hostages in exchange for Miles Guo. On top of that, he would give assistance with North Korea. That is how much Xi Jinping wants Miles Guo. Trump refused his request.
But Trump is no longer President. A few months after Biden became president, the SEC issued their first press release against Miles Guo in 2021. Fast forward to just last month, Congress released bank records showing that members of the Biden family received over $1M from Chinese companies.
Not only that, two months ago, in February, Miles Guo received a letter from Hunter Biden’s lawyer requesting that he preserve any evidence he has related to the Hunter Biden laptop. What? How does Miles Guo have information about Hunter Biden’s laptop? One month later, Miles Guo was arrested. You have to admit that the timing of all of this is very suspicious. The FBI raided his home. Hours after Miles was taken away and there was only FBI agents in his home, his home caught fire and a number of things were destroyed. What? What was the FBI destroying? Was it evidence of Hunter Biden’s laptop? I do not know. But this all seems very strange. But it gets worse.
On March 15, the FBI took Miles Guo from his house, they brought him in front of a judge for an arraignment hearing where they charged him with fraud. At the hearing, the prosecutors admitted they had “worked a lot with China” in preparing the case. What? What does China has to do with the fraud case of an American business person who has lived in the United States for nine years? Miles was charged at the hearing and taken away to prison where he has been held without bail ever since.
Given all these facts, I do not see how the Department of Justice can ever win a fraud case against Miles Guo. It at least appears like massive government corruption. Is it possible that the prosecutor’s office in New York is corrupt? Here is their problem. It is actually hard for the government to win a fraud case. They have to prove beyond a reasonable doubt that Miles intended to commit fraud. So, if there is reasonable doubt in the jury’s mind, they are going to let Miles go free. Just the fact that the SEC’s own press releases contradict each other gives me some doubt. Not only that, Miles will put investor after investor on the stand that will testify that they were not defrauded and beg for the government to stop oppressing them. Now I do not know all the facts, but from the information included in the indictment, I do not see how the SEC wins this case. If that is true, they are just abusing this man.
The reason I am making this video is I am sick and tired of the government attacking business owners in this country. I am sick of it. This is the land of the free and the home of the brave. We need to give people the freedom to run a business. I for one will not stay silent, while the Chinese Communist Party hi-jacks our justice department to attack their number one enemy. Miles Guo is going in front of the judge in two days and we are going to find out what happens. I hope they let him out on bail. But in my opinion, I think the judge should throw out this case for prosecutorial misconduct and malicious prosecution.
SOURCES
Miles Guo arrested https://www.cnbc.com/2023/03/15/doj-charges-guo-wengui-steve-bannon-associate-in-1-billion-fraud.html
Miles Guo Wikipedia https://en.wikipedia.org/wiki/Guo_Wengui
Litigation Hold Letter for Hunter Biden Laptop https://www.newsnationnow.com/politics/hunter-biden-attorney-asks-giuliani-bannon-to-preserve-evidence/
SEC Press Release (2021) https://www.sec.gov/news/press-release/2021-175
SEC Press Release (2023) https://www.sec.gov/news/press-release/2023-50
DOJ Press Release (2023) https://www.justice.gov/usao-sdny/pr/ho-wan-kwok-aka-miles-guo-arrested-orchestrating-over-1-billion-dollar-fraud-conspiracy
Indictment https://www.justice.gov/usao-sdny/press-release/file/1574491/download
Russia’s funding of Facebook https://www.theguardian.com/news/2017/nov/05/russia-funded-facebook-twitter-investments-kushner-investor
https://www.sfgate.com/business/article/Russian-firm-invests-200M-in-Facebook-3229727.php
Clinton’s history of Chinese donations https://www.dailymail.co.uk/news/article-4252946/Clintons-befriended-Chinese-cook-got-illegal-donations.html
Steve Wynn letter to Trump https://www.cnbc.com/2017/10/23/steve-wynn-delivered-trump-a-letter-from-the-chinese-government.html
Court filing against Steve Wynn https://www.justice.gov/opa/press-release/file/1506786/download
200 American Held Hostage in China https://www.newsweek.com/china-us-citizens-wrongful-detention-kai-li-david-lin-henry-cai-1778415
Congressional report on Chinese payments to Biden family https://oversight.house.gov/wp-content/uploads/2023/03/Bank-Records-Memo-3.16.23.pdf
Letter to Miles Guo about Hunter Biden Laptop https://www.documentcloud.org/documents/23606937-20230209-letter-to-g-wengui-re-litigation-hold-notice1266
Presecutors admit to working with China https://www.thegatewaypundit.com/2023/03/sdny-prosecutors-warned-by-judge-after-admitting-working-with-china-to-prosecute-miles-guo-ccps-most-wanted-man/
Arizona lawsuit https://www.scribd.com/document/532495992/GTV-Media-June-2021-Class-Action-Filed-in-AZ#
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Neither Zach De Gregorio or Wolves and Finance shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.