The United States Securities and Exchange Commission (SEC) has leveled charges against Miles Guo otherwise called Brother Seven – a Chinese businessman who has been living in exile – and his financial advisor, William Je over allegations of their involvement in a fraudulent scheme involving over $850 million.
According to the SEC’s press release, the duo is alleged to have raised the funds through unregistered offerings, while diverting a significant portion of the investors’ money for personal gain since April 2020.
The complaint further accuses them of utilizing the diverted funds to finance opulent lifestyles, which included purchasing a luxurious mansion and a Ferrari, among other items.
SEC nails Guo with charges
The SEC also brought securities law violation charges on Guo and two companies affiliated with him, namely G Club Operations LLC and Mountains of Spices LLC, both based out of New York.
The agency claims the entities failed to register the offerings as securities.
The complaint discloses one of the offerings, for which only Guo is facing charges, pertained to a crypto asset referred to as “H-Coin” or “Himalaya Coin.”
Guo purportedly raised hundreds of millions of dollars from investors and made false statements about the asset, including that it was backed by gold. He also 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.
Speaking on the development, the SEC’s Director of Enforcement, Gurbir S. Grewal called Guo a “serial fraudster” who took advantage of investors’ interest in crypto and other investments to deceive them and benefit himself and his family.
On the same day, the U.S. Department of Justice (DoJ) also filed a 12-count indictment against Guo and Je with charges including money laundering, investment fraud, securities fraud and wire fraud schemes.
The DoJ also charged Je with obstruction of justice. The agency noted that they had arrested Guo, having seized $634 million from 21 banks associated with the Chinese billionaire.
According to the SEC, the charges against Miles Guo and William Je highlight the agency’s unwavering commitment to protecting investors from unregistered and fraudulent offerings, particularly in the rapidly-evolving crypto space.
The watchdog placed charges on BKCoin and Kang over fraud allegations earlier this year.