(Bloomberg) -- Exiled Chinese tycoon Guo Wengui likes the finer things in life, like superyachts and custom-made Italian suits, but that isn’t against the law, his lawyer told the jury in his billion-dollar fraud and racketeering trial.

Being “shallow or rich does not make for a criminal,” defense attorney Sabrina Shroff said in her opening statement Friday at Guo’s trial in New York. 

The case involves the intriguing background and wealth of a businessman who amassed a strong online following criticizing the Chinese Communist Party and was an associate of former Donald Trump adviser Steve Bannon. Also known as Miles Guo and Ho Wan Kwok, he is accused of stealing more than $1 billion from investors after tricking them into funding four bogus schemes. He has pleaded not guilty to 11 charges. 

Federal prosecutors in Manhattan allege that Guo spent the funds on lavish gifts for himself and his family, including a $26 million New Jersey mansion, a $37 million yacht and a $60,000 TV. Kicking off the openings, Assistant US Attorney Micah Fergenson told the jury Guo gained popularity showing off his wealth and speaking out against the Chinese leadership, provoking it to seize his assets. 

Fraud Spree

Short of cash, Guo embarked on a fraud spree, turning to his loyal support base to invest millions in a crypto scheme, an exclusive members-only club, a social media platform and a farm loan program between 2018 and 2023, the US claims.

“The defendant’s followers trusted him,” Fergenson told the jurors. “And money poured in.”

US District Judge Analisa Torres has taken the unusual step of ordering that the jury be anonymous and be escorted to the courthouse by US Marshals each day. The government expressed concerns about Guo’s supporters, while Guo, a sharp critic of the Chinese government, says it’s the Communist Party that poses the threat.  

Read More: Chinese Tycoon Faces US Trial Over $1 Billion Investor Swindle

Investors spent more than $400 million buying stock in social media platform GTV Media Group through an allegedly illegal private stock offering, the US says. Guo skimmed $100 million off the top and placed it in a Kyle Bass hedge fund for a high-risk bet against the Hong Kong dollar, the government says. The wager led to a $30 million loss. 

The next alleged scam was G Clubs, an exclusive private members club with a minimum $10,000 buy-in. Investors were told the membership could earn them stock in GTV and other perks, including a discount at G Fashion, “which sold expensive clothing to the defendant’s followers,” according to the government.

$800 Sweatpants

In his statement to the jury, Fergenson rattled off a list of Guo’s more extravagant purchases, including a Lamborghini worth almost $1 million, a $4 million Ferrari for his son, even a $35,000 mattress. The US claims he bought these assets with investor funds. Fergenson also cited “an $800 pair of sweatpants” Guo sold through his fashion brand. 

But his lawyer told the jury that Guo, one of eight children in a family that amassed a fortune in Chinese real estate, lived that life long before he was alleged to have committed these crimes. 

“The government would like you to draw many negative inferences about a person who spends thousands on a TV or a mattress,” Shroff said, urging the jurors to put the indulgences in context. 

Guo had devoted his life to a whistleblower movement, Shroff said, and it came at a cost. His phones and computers had been hacked by the Communist Party, his wife and daughter had been detained for two years in China, and he had an Interpol arrest notice against his name, she said. The party had also deposited money into Guo’s bank accounts under the names of people subject to US sanctions, triggering banks to close his accounts, she said.  

Messing With Guo

The Chinese Communist Party “had a thousand different ways to mess with Guo and stop a political movement that was really the essence of his entire being,” Shroff told the jury. 

Since his arrest at his penthouse in the Sherry-Netherland hotel in March 2023, Guo’s court appearances have attracted a steady throng of supporters and detractors. Outside the courthouse on Friday morning, a woman stood next to a speaker playing sound bites about regulators seizing the assets of Guo, who was a billionaire at the time of his arrest.

Since then he has been held at Brooklyn’s Metropolitan Detention Center.

The case is US v. Ho Wan Kwok, 23-cr-00118, US District Court, Southern District of New York (Manhattan).

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