October 27, 2021

The Messy Cash Drama Behind Bannon and Guo Wengui’s Propaganda Machine

5 min read

A wild struggle has erupted inside the sprawling finance and propaganda equipment former White House chief strategist Steve Bannon co-founded with a fugitive Chinese billionaire.

The battle entails an organization Bannon inaugurated at the Statue of Liberty final 12 months with Guo Wengui, a Chinese language disinformation kingpin, and hostilities broke out even earlier than the SEC this month charged corporations linked to Guo with unregistered inventory and cryptocurrency gross sales. However a federal probe into the dealings had been underway for months, and a key rivalry in a brand new lawsuit is that cash meant to bankroll the duo’s imaginative and prescient of an unlimited anti-Beijing community as an alternative went towards paying again irate buyers in illicit transactions.

Guo has lengthy been a key financier of Trumpworld ventures, together with the conservative social media app Gettr. When federal authorities charged Bannon final August with defrauding a nonprofit, they collared him on the deck of Guo’s large $28 million yacht. Former President Donald Trump ultimately pardoned Bannon for any wrongdoing.

Neither Bannon nor Guo is a celebration within the lawsuit (simply as neither was charged within the SEC order). As a substitute, the plaintiff is a mysterious entity referred to as Mountains of Spices LLC, whereas the highest defendant is Sara Lihong Wei Lafrenz, co-director of a nonprofit Bannon and Guo began in 2018. The amended grievance filed in Arizona federal courtroom on Sept. 16 reveals the internal workings of the online of professed anti-Communist exiles Bannon and Guo aspired to arrange in opposition to the Chinese language regime, and in help of a shadow authorities beneath their management.

And it suggests the sprawling community is tearing itself aside.

Mountains of Spices, its title borrowed from the biblical Tune of Solomon, is considered one of three companies integrated at a residential deal with within the upscale New York Metropolis suburb of Nice Neck, Lengthy Island. All belong to Qidong Xia, who an individual acquainted with the matter advised The Each day Beast is an in depth affiliate of Guo’s. An legal professional for Qidong Xia didn’t reply repeated questions on his consumer and the lawsuit.

The grievance, and posts to Guo’s GNews website, describe Mountains of Spices as a part of the “Himalaya Supervisory Organization,” the unregistered nongovernmental group Bannon kicked off with Guo in New York Harbor in 2020. The proclaimed objective of that group, and of affiliated “farms” like Mountains of Spices, is to coordinate and finance anti-Beijing actions throughout the USA and across the globe, and help the pair’s “New Federal State of China.”

Mountains of Spices and its sister firm, MOS Himalaya, are listed as regular posters to GNews and to Guo’s video platform, GTV, the place Bannon formerly served as a director. In addition they launched a web site final October devoted to a different of Guo’s and Bannon’s obsessions: conspiracy theories about first son-in-law Hunter Biden.

The Mountains of Spices lawsuit alleges that the New York-based firm wired funds to Lafrenz’s “farm” in Phoenix, which was in flip alleged to lend cash to an unnamed third occasion “to appreciate a return on that funding to help themselves and their anti-[Chinese Communist Party] efforts.” Mountains of Spices studies supplying $4.5 million out of its personal funds, in addition to persuading six different people or corporations to ship Lafrenz a mixed $5,466,846.

The lawsuit solely names two of those six lenders: one is a Queens-based entity additionally belonging to Qidong Xia, whereas the opposite is a producer of backpacks and purses based mostly in China and with retailers in New York and New Jersey.

Though the swimsuit solely seeks to recuperate the just about $10 million these corporations declare to have lent Lafrenz, it posits that her whole haul from the Himalaya farm system and its supporters was “not less than $44 million,” and suggests she may need amassed as a lot as $90 million.

However the swimsuit says that by then, Lafrenz had come beneath scrutiny of federal authorities and complaints from investors over the unlawful inventory scheme. Based on the SEC, Lafrenz’s firm, Voice of Guo Media, Inc.—additionally named within the lawsuit—in 2020 illegally persuaded some 4,500 individuals to present it a complete of $114 million beneath the auspices of buying shares of GTV.

In its lawsuit, Mountains of Spices accuses Lafrenz of attempting to mollify these discontented collectors by paying them again with the Himalaya farm system funds. Additional, it asserts—with out citing proof—that she “went into hiding” earlier this 12 months to keep away from authorized motion from the lenders. Nevertheless, it claims that she admitted in digital communications to diverting the cash to cope with her authorized woes.

“She admitted that she was utilizing funds from the mortgage program to repay people she had defrauded in a securities transaction for which she is being investigated and introduced photos of checking account statements exhibiting funds being paid to people reasonably than the borrower,” the grievance reads.

Reached by telephone, Lafrenz declined to remark for this story. A spokesperson for Bannon stated he couldn’t be reached for remark. Calls and emails to a lawyer for Guo acquired no reply.

The monetary and authorized battle, representing a fissure within the higher echelons of the Guo-Bannon propaganda machine, is simply the most recent headache going through the duo.

Guo, a former Beijing-based actual property developer, has styled himself as a whistleblower and political refugee at the same time as Chinese language officers have sought his extradition on money-laundering and sexual-assault expenses, which he denies. He additionally faces authorized battles on American soil, each from jilted enterprise companions and from diaspora figures, whom the mogul has accused on his media platforms of being double brokers for the totalitarian state. (Critics have additionally leveled such claims in opposition to Guo himself.)

Regardless of his pardon from Trump, Bannon has his personal authorized issues. The Washington Post reported earlier this 12 months that he’s the topic of a joint felony probe by the Manhattan district legal professional and the New York State legal professional common. And on Thursday, he was named in a brand new congressional subpoena in connection with the Jan. 6 riot within the U.S. Capitol.

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