Chinese business tycoon Ho Wan Kwok Arrested by U.S. DOJ for $262m Cryptocurrency Fraud

In a major development on March 15, 2023, Ho Wan Kwok, also known as “Miles Guo,” was arrested in New York City for his alleged involvement in a $1 billion fraud conspiracy.

The United States Attorney for the Southern District of New York, Damian Williams, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (FBI), announced the unsealing of a twelve-count indictment charging Ho Wan Kwok and Kin Ming Je, also known as William Je, with various charges such as wire fraud, securities fraud, bank fraud, and money laundering.

Ho Wan Kwok

According to the charges in the indictment, Ho Wan Kwok, along with Kin Ming Je, solicited investments in various entities and programs through false statements and representations to hundreds of thousands of Kwok’s online followers. The indictment claims that Kwok and Je misappropriated hundreds of millions of dollars in fraudulently obtained funds during the course of their conspiracy.

The charges also allege that Kwok lied to his victims and promised them outsized returns if they invested or provided money to GTV, his so-called Himalaya Farm Alliance, G|CLUBS, and the Himalaya Exchange. Kwok is further charged with laundering hundreds of millions of stolen funds to conceal the conspiracy’s illegal activities and continue the fraud’s operations.

Kwok and his accomplices are accused of obtaining over $262 million in victim funds through the Himalaya Exchange, which claimed to be a cryptocurrency “ecosystem.” The exchange featured a stablecoin called the Himalaya Dollar (HDO) and a trading coin called Himalaya Coin (HCN). Kwok touted the exchange’s prospects and valuation through social media, falsely stating that HCN was backed by 20% gold and promising to compensate anyone who lost money.

The initial coin offering of HCN and HDO occurred on or about November 1, 2021. HCN’s value skyrocketed by 26,900% in two weeks, reaching a total value of approximately $27 billion. Kwok’s associate, JE, falsely claimed to media outlets that a €3.5 million Ferrari was purchased through the Himalaya Exchange, but in truth, a Himalaya Exchange employee sent the Ferrari broker an international bank wire to cover the cost, while creating the false appearance that the purchase was made using HDO to promote the exchange.

Mr. Williams announced that the U.S. government seized approximately $634 million from 21 different bank accounts between September 2022 and March 2023. The $634 million constitutes proceeds of Kwok’s alleged fraud, which the government will seek to forfeit. Today, law enforcement also seized assets that were purchased with proceeds of Kwok’s alleged fraud, including a Lamborghini Aventador SVJ Roads.

Kwok was arrested on March 15, 2023, and will be presented in court. On the other hand, Kin Ming Je, who is Kwok’s financier, is currently at large.

According to the indictment unsealed in Manhattan federal court, Kwok is an exiled Chinese businessman who has resided in the United States since 2015 and garnered a substantial online following. In 2018, Kwok founded two purported nonprofit organizations, namely, the Rule of Law Foundation and the Rule of Law Society.

Kwok used the nonprofit organizations to amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe Kwok’s statements regarding investment and money-making opportunities.

JE is a dual citizen of Hong Kong and the United Kingdom who principally resided in the United Kingdom. JE owned and operated numerous companies and investment vehicles central to the scheme and served as its financial architect and key money launderer.

In a statement, Mr. Williams said, “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.” He further added, “My office and our law enforcement partners will continue to do all that we can to protect the community from the devastating consequences of pernicious fraud schemes.”

FBI Assistant Director Michael J. Driscoll said, “The indictment today alleges the defendants were behind an elaborate scheme that defrauded thousands of individuals of over one billion dollars.” He also reiterated that the FBI continues to make investigating complex financial crimes a top priority.

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