In six weeks in 2020, approximately $452 million worth of GTV common stock was sold to 5,500 investors in the United States and abroad, the indictment says. But most of that money didn’t go toward developing and expanding the business, prosecutors said. For example, GTV’s parent company and its owner, Mr. Prosecutors said $100 million was invested in a high-risk hedge fund for the benefit of a close relative of Guo’s.
In another scheme included in the charge sheet, Mr. Guo and others are accused of inducing people to invest more than $250 million in something called G|Clubs, which it described on its website as a “comprehensive, high-end membership program. Spectrum of services.” To join, prospective members paid a one-time fee of $10,000 to $50,000.
In fact, most of the money collected did not fund the business, and G|Clubs “did not provide anything close to a ‘full range of services’ and ‘experiences’ to its members,” the indictment said.
On the contrary, Mr. Guo and his co-defendant, Qin Ming Jie, were accused in the indictment of misappropriating much of the money. The indictment alleges that $26.5 million in G|Clubs funds were distributed to Mr. Went to buy Guo’s mansion; There they went on lavish renovations, including furniture and furnishings, including about $1 million worth of Chinese and Persian rugs, a $62,000 television and a $53,000 wooden mantel for a fireplace.
The Securities and Exchange Commission, in a parallel civil action, ruled that Mr. Kuo was sued.
“Guo is a serial fraudster,” Gurbir S. Grewal, the SEC’s director of enforcement, said in a statement. “Kuo used the hype and glamor surrounding crypto and other investments to prey on thousands and fund his and his family’s lavish lifestyle.”
