Exiled Chinese billionaire and Himalaya Exchange supremo Ho Wan Kwok, also known as Miles Guo, Guo Wengui, and Miles Kwok, has been charged with racketeering-related charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The charges against Kwok now include racketeering conspiracy, conspiracy to commit wire fraud and bank fraud, money laundering conspiracy, conspiracy to commit securities fraud, wire fraud, securities fraud, unlawful monetary transactions, and obstruction of justice.
King Ming Je — also known as William Je and Yu Jianming — and Yanping Wang, both also behind the Himalaya Exchange, were charged alongside Kwok for their role in the conspiracy. Je is described in the indictment as “the financial architect and key money launderer for the Kwok Enterprise.”
The indictment alleges that funds raised for this enterprise were used for a $100 million investment in a hedge fund, a $36.5 million mansion, a $62,000 TV, a $53,000 firewood holder, a $3.5 million Ferrari, a $4.4 million Bugatti, a $27 million yacht, and almost a million dollars worth of rugs.
Kwok promised to compensate Himalaya Exchange users
The Himalaya Exchange claimed to be a ‘cryptocurrency’ ecosystem that included the Himalaya Dollar stablecoin and the Himalaya Coin. However, the system was not a true cryptocurrency system, relying on an internal database instead of a public blockchain. Furthermore, the only place where it was possible to trade these coins was through the Himalaya Exchange.
Kwok personally promised that he would compensate any user who lost money and made the claim that every coin had 20% gold backing, securing its value.
Furthermore, the principals allegedly misrepresented activities using the token. This included claiming that a Ferrari was purchased using Himalaya Dollars when it was actually bought using a bank wire and allegedly misappropriated funds.
Furthermore, following the example of the industry-leading stablecoin, the conspirators continued to represent that the stablecoin was fully reserved even when significant portions of the reserves had been seized by law enforcement and regulators.
Kwok also used the ‘Himalayas’ association for other projects including the Himalaya Farm Alliance. This was a scheme that involved Kwok and co-conspirators allegedly forming groups in cities around the world and then directing investors to send money to these groups under the auspices of “loans” that would eventually be convertible to equity in Kwok’s GTV project.
Funds collected in this manner were used to maintain the yacht and the private jet, and millions were transferred to personal bank accounts.
GTV was charged by the SEC
In collaboration with Trump strategist Steve Bannon, Kwok founded the media outlet GTV. GTV was previously charged by the SEC with issuing unregistered securities. These included G-Coins and G-Dollars which it was claimed would be used for a “blockchain payment system,” however, no blockchain appears to have existed.
Besides the unregistered digital securities, the indictment also alleges that GTV raised $400 million through an illegal private placement. Specifically, the indictment claims that the Himalaya team used intermediary entities to pool investments from non-accredited investors as part of this raise.
The indictment further alleges that $100 million of the funds raised were diverted into a hedge fund, almost certainly Kyle Bass’ Hayman Capital.
Read more: Chinese tycoon accused of secretly controlling Gettr to promote crypto
Crypto-friendly banks among those used by Kwok
The indictment alleges that this interrelated money laundering scheme relied on “approximately 500 accounts held in the names of at least 80 different entities or individuals.” These include entities that are part of the Kwok enterprise.
Hundreds of millions of dollars of the fraudulent scheme’s proceeds were transferred directly or indirectly to bank accounts in the US, the Bahamas, Switzerland, and the United Arab Emirates.
The indictment doesn’t list any of the bank accounts they may have relied on, but a fee statement from Kwok’s recent bankruptcy does indicate some of the entities that he has interacted with. The monthly fee statement for November details how one lawyer spent 3.8 hours at a rate of $400/hour to “analyze subpoenas, proof of service, due dates and productions from banks to ascertain compliance, construct list of banks in which action may need to be taken, update trackers.” The list of banks was:
- “BNY Melon”
- “Barclays”
- “Citibank”
- “JPMorgan”
- “Standard Chartered PLC”
- “UBS”
- “BoA”
- “Cap One”
- “TD Bank”
- “Firstbank PR”
- “Seacoast”
- “Israel Discount”
- “M&T”
- “Dime”
- “Starling”
- “First Abu Dhabi”
- “Santander”
- “Silvergate”
- “DBS”
- “First Bank of Greenwich”
- “Bank of China”
- “US Bank”
- “Bank of Princeton”
- “Metropolitan”
- “Medici”
- “Deltec”
- “Open bank”
- “First Republic”
- “HSBC”
- “Prime Trust”
- “Axos”
Several banks important to the cryptocurrency ecosystem appear on this list, including Deltec, the Bahamas-based bank that used to hold the majority of Tether’s reserves. Prime Trust, a now-bankrupt payment processor that served the cryptocurrency industry, also makes the list alongside Silvergate and First Republic.
The Kwok enterprise appears to be another example of cryptocurrency being used to dress up another multi-million dollar fraud scheme and money laundering.
