U.S. judge denies bail to exiled Chinese businessman Guo Wengui in fraud case

6:12 pm Thursday, April 20th, 2023

By Jonathan Stempel

NEW YORK (Reuters) – An exiled Chinese businessman charged by U.S. prosecutors with leading a more than $1 billion fraud will remain in jail after a federal judge in Manhattan on Thursday rejected a proposed $25 million bail package.

U.S. District Judge Analisa Torres said prosecutors had shown it more likely than not that Guo Wengui was a serious flight risk, and shown by clear and convincing evidence that he would pose a risk of economic harm to the community if released.

Torres also said Guo’s “obstructive behavior” in the criminal case–including a false claim he had just $10,000 of assets–and in civil and bankruptcy proceedings left her with no “reasonable assurance” he would comply with any bail conditions.

Guo had also proposed 24-hour guard, and being subjected to detention with GPS monitoring at his wife’s Connecticut home.

The 52-year-old defendant, whose other names include Ho Wan Kwok and Miles Kwok, is a prominent critic of China’s Communist Party.

He had also been a business associate of former Donald Trump adviser Steve Bannon, who was arrested in a 2020 fraud case while aboard Guo’s yacht. The former U.S. president later pardoned Bannon.

In seeking bail, Guo’s lawyer Stephen Cook said Guo would remain in the United States if released on bond “because the risk to his life is simply too great for him to leave.”

Cook did not immediately respond to requests for comment.

U.S. prosecutors charged Guo last month with defrauding thousands of followers since 2018 by promising “outsized” investment returns, and diverting much of their money to fund lavish lifestyles for himself and his family.

Authorities said Guo’s purchases included a $37 million yacht, a 50,000 square-foot mansion and two $36,000 mattresses, and that they have seized $634 million of his alleged fraud proceeds from 21 bank accounts.

The defendant has pleaded not guilty to 11 charges including securities fraud, wire fraud and concealing money laundering.

Guo left China in 2014 during an anti-corruption crackdown under President Xi Jinping.

Officials there have accused Guo of crimes including bribery and money laundering. Guo has denied wrongdoing.

(Reporting by Jonathan Stempel in New York; Editing by Daniel Wallis)