U.S. Arrests ‘Serial Fraudster’ for Heading a $1 Billion Fraud Scheme

Опубликовано: 17 Март 2023

Hacker Pixabay Numbers Hood

Victims lose billions each year due to fraud. (Photo: B_A, Pixabay, License)

A Chinese businessman was arrested on Wednesday in New York for allegedly leading a group that cheated thousands of online followers out of over US$1 billion, the U.S. Department of Justice said.

Ho Wan Kwok and his associate Kin Ming Je are accused of working together to deceive Kwok’s followers by making false claims and asking for investments into various businesses associated with them. Je remains at large.

The defendants operated through a complex web of fraudulent and fake businesses and investment opportunities that connected dozens of interrelated entities, which allowed them to take the money from people and use it for their own benefit.

Various entities, such as GTV, G|CLUBS, G|MUSIC, G|Fashion, and the Himalayan Exchange, among others, were used as part of the illicit activities.

The scheme is said to have enabled them to enrich themselves, their family members, while also funding “Kwok’s extravagant lifestyle.”

The statement by U.S. Attorney Damian Williams says that Kwok used the fraudulently obtained funds to buy luxurious items for himself and his relatives, including a 50,000 square foot mansion in New Jersey worth over $26 million, a $3.5 million Ferrari, and even two $36,000 mattresses, as well as a $37 million luxury yacht.

Kwok and Je transferred the money into and through over 500 accounts held in the names of at least 80 different entities and individuals, in an alleged attempt to hide the illegal source of the funds.

The fraudulent scheme’s earnings, amounting to hundreds of millions, were moved to bank accounts in different countries such as the U.S., Bahamas, and the United Arab Emirates, which were owned or controlled by companies associated with the defendants.

The U.S. government has seized more than $630 million from several bank accounts that are believed to be linked to the alleged fraud. The government plans to forfeit this money. In addition, law enforcement also seized assets that were purchased with proceeds of Kwok’s alleged fraud, including a Lamborghini Aventador SVJ Roads.

Fraudulent investment scams harm innocent people and gradually make the public lose trust in the financial system, said the FBI Assistant Director, Michael J. Driscoll.

Simultaneously, the U.S. Securities and Exchange Commission charged Kwok and Je for their participation in fraudulent offerings that raised over $850 million. The complaint alleges that they misappropriated a significant portion of the funds raised from investors to enrich themselves.

The statement by Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, accuses Kwok of being a serial fraudster who raised hundreds of millions from investors by promising them high returns on investments in crypto, technology, and luxury goods. However, in reality, Kwok allegedly took advantage of the hype around these investments to defraud thousands of investors and fund his and his family’s lavish lifestyle, he added.