$1 Billion Fraud Case

DOJ Filing: Steve Bannon Is a “Co-Conspirator” in a $1 Billion Fraud Case

Prosecutors identified the former Trump adviser as part of a massive criminal conspiracy allegedly orchestrated by Chinese tycoon Guo Wengui.

DAN FRIEDMAN

In a little-noticed court filing earlier this month, federal prosecutors described Steve Bannon as a “co-conspirator” in a massive criminal fraud and racketeering case against a flamboyant, far-right Chinese fugitive, compounding the legal headaches of the former Donald Trump adviser.

FBI agents in March 2023 arrested Guo Wengui, a self-styled anti-Chinese government activist Bannon once advised, charging him and two associates with using a series of fraudulent investment opportunities to defraud thousands of Guo’s supporters in the Chinese diaspora of more than $1 billion.

Guo used the proceeds to fund a lavish lifestyle for himself and his family, including a $3.5 million Ferrari, a $26 million mansion, a $140,000 piano, and two $36,000 mattresses, the Justice Department alleges. Guo, who also goes by the names Miles Guo and Ho Wan Kwok, has pleaded not guilty. He has claimed his prosecution was the result of Chinese government pressure on the Justice Department. Deemed a flight risk, Guo has been denied bail and jailed since his arrest.

Bannon worked as an adviser for Guo from 2017 until at least 2020, helping Guo launch a series of media companies, nonprofits, and other ventures. In June 2020, Guo and Bannon founded a group dubbed the New Federal State of China, which they claimed was a government in waiting preparing to replace the Chinese Communist Party.

Guo paid Bannon at least $1 million and also gave Bannon use of a private plane, a Connecticut home, and a $30 million yacht, where Bannon was living when he was arrested on unrelated federal fraud charges in 2020.

This January, federal prosecutors issued a new indictment of Guo and his co-defendants, which added racketeering conspiracy, or RICO, to the list of charges. That charging document named numerous Guo businesses and organizations, including the New Federal State of China and other entities associated with Bannon, as part of the alleged scheme.

Bannon was not mentioned in the indictments of Guo and his associates and has not been charged in the case. But in an April 9 filing submitted ahead of Guo’s trial, which is scheduled to start next month, prosecutors for the first time said Bannon was part of the alleged criminal conspiracy.

In that document, federal prosecutors argued that during the trial they should be allowed to cite records from a bank in Abu Dhabi, where they allege Guo stashed more than $130 million that he “misappropriated” from investors. Prosecutors contend that in 2020 and early 2021 money in the account was steered to Guo’s family and associates. The motion said the records also include evidence of a “$1 million transfer to a company associated with Steve Bannon, a co-conspirator.”

Attorneys for Guo did not respond to inquiries this week. Nor did Bannon. An attorney representing him, Harlan Protass, declined to comment. A spokesperson for the US Attorney for the Southern District of New York, which is prosecuting Guo, also declined to comment. 

The federal filing does not elaborate on Bannon’s alleged role in the conspiracy. Former federal prosecutors said that the government’s reference to Bannon as a co-conspirator is likely aimed at ensuring evidence related to the former Trump adviser can be admitted during trial. Out of court statements that would otherwise be barred as hearsay can be used as evidence if they come from an alleged co-conspirator, even if that person is not charged, these lawyers explained. 

The Justice Department probably identified Bannon as part of the alleged criminal scheme to ensure prosecutors can use evidence linked to him against Guo, said Joshua Naftalis, a former assistant United States attorney in the Southern District. “Being labeled a co-conspirator is not something anyone is looking for obviously, but it’s tough to say if Southern District will bring charges” against Bannon, Naftalis, said. “It is unlikely they will do it before the main trial.”

Still, the co-conspirator tag is the latest legal problem for Bannon, the onetime Trump 2016 campaign chief who now hosts a popular far-right podcast, War Room. Bannon was convicted in 2022 of contempt of Congress for ignoring a subpoena from the House January 6 committee. His four-month sentence is on hold pending an appeal. Bannon also faces criminal charges in New York for allegedly defrauding donors to a campaign to use private funds to build a wall on along the Mexican border. He has pleaded not guilty in that case and has argued he is a victim of political persecution.

Guo fled China in late 2015, just before he was charged there with a slew of financial crimes, and settled in a spacious apartment in Manhattan. In 2017, he began issuing allegations of corruption and other malfeasance against Chinese Communist Party leaders, winning a wide following among Chinese emigres and the embrace of China hawks like Bannon, who Trump ousted from a White House job in 2017. Bannon helped Guo launch nonprofits supposedly aimed at combating corruption in China, along with for-profit media companies that the men claimed were also part of their anti-CCP crusade.

The fraud case against Guo is based on his efforts to sell shares in some of those companies. This includes a 2020 “private placement” in which Guo offered his fans the chance to buy shares in GTV, a Chinese-language streaming site he launched with Bannon’s help. Prosecutors later charged that Guo defrauded many would-be GTV investors. And the offering was eventually blocked by the SEC, which said it was illegal.

According to prosecutors Guo then “continued to trick followers into sending money” through other supposed investment opportunities. Those included G|Clubs, which marketing materials described as offering “concierge services,” but which Guo also said would allow its members to invest in his other financial ventures at discounted rates. Prosecutors have said club members who paid tens of thousands of dollars to join received “few to no discernable membership benefits.” Instead, Guo and his codefendants “used G|Clubs as a mechanism to continue fraudulent private placement stock offerings” and pocketed the proceeds, prosecutors alleged.

Bannon regularly touted the Guo offerings cited in the prosecution’s case as sound investments, lending his prominence and voice to Guo’s efforts to draw money from his fans. “All these things you see popping off has been such successes really in such a short period of time,” Bannon said in a November 2021 video, referring to various ventures, including GTV, for which Guo was seeking investments.

In addition to public promotion, Bannon also privately advised Guo on the launch of GTV and G|Clubs, audio recordings obtained by Mother Jones show. Prosecutors have alleged that both ventures were central to Guo’s fraud scheme.  

While working as a paid consultant for Guo, Bannon in 2020 took part in meetings with Guo and others where the former Breitbart executive and Goldman Sachs banker offered advice on how to sell stock in GTV. On August 2, 2020, Bannon also counseled Guo on how to raise money for GlClubs. Bannon argued that the company could avoid having to comply with “the strictures of securities laws” by pitching itself as selling varied member services, even though, as meeting participants acknowledged, the club would give Guo fans a way to buy shares of his companies.

“All I’m trying to do is get around securities law,” Bannon said during the meeting. By offering memberships “you don’t maybe have to sell securities,” Bannon said later. “You’re selling a service.”

Bannon did not advocate violating the law in this meeting. Rather he urged ways to sidestep SEC regulations on selling stock. He also suggested that Guo advisers should consult securities lawyers before proceeding. And the recording of this meeting does not show that Bannon knew that that G|Clubs would, as prosecutors charge, offer no actual services.

Still, Bannon’s advice for G|Clubs does appear linked to the fraud scheme in which Guo is charged. According to people contacted by investigators, prosecutors, who possess the same recordings of Bannon’s meetings, questioned witnesses about his role in Guo’s financial ventures. Bannon, as prosecutors’ April 9 motion notes, was later paid at least $1 million in funds that were allegedly the product of the prosecuted fraud. The Guo trial is expected to reveal more details on Guo’s financial schemes, and likely will also shed new light on Bannon’s possible role in them.