Chinese businessman Miles Guo, also known as Brother Seven, and his financial advisor William Je have been charged by the United States Securities and Exchange Commission (SEC) for their alleged involvement in an $850 million fraudulent scheme.
The two are accused of raising funds through unregistered offerings and diverting a significant portion of the investors’ money for personal gain. The SEC also brought securities law violation charges against Guo and two affiliated companies, G Club Operations LLC and Mountains of Spices LLC.
The SEC alleges that Guo and Je utilized the diverted funds to finance opulent lifestyles, including purchasing a luxurious mansion and a Ferrari, among other items. The complaint also discloses that Guo raised hundreds of millions of dollars from investors for a crypto asset called “H-Coin” or “Himalaya Coin”.
He made false statements about the asset, including that it was backed by gold and guaranteed reimbursement to investors for any losses incurred.
The SEC is requesting permanent injunctions against Guo and Je, as well as civil penalties. The agency is also demanding forfeiture of all profits obtained from the scheme and an officer and director bar, which puts an end to Guo and Je’s public entities.
More problems for the duo
Meanwhile, the US Department of Justice (DoJ) has also issued a 12-count indictment against Guo and Je, charging them with money laundering, investment fraud, securities fraud, and wire fraud conspiracies. The FBI announced that they had detained Guo and confiscated $634 million from 21 banks connected to the Chinese billionaire. He has been accused of obstructing the administration of justice.
Gurbir S. Grewal, the SEC’s Director of Enforcement, described Guo as a “serial fraudster” who took advantage of investors’ enthusiasm for cryptocurrency and other investments to defraud them and profit himself and his family. The allegations against Guo and Je demonstrate the SEC’s unrelenting commitment to safeguarding investors from unregistered and fraudulent offers, particularly in the quickly growing crypto area.
