A fire broke out inside a penthouse on Manhattan's Upper East Side as FBI agents were conducting a search of the home following the arrest of the billionaire Chinese businessman who lives there.
Agents and other residents had to be evacuated from the 18th floor of the famed Sherry-Netherland Hotel on Fifth Avenue when the fire erupted just hours after the arrest of controversial billionaire Guo Wengui on Wednesday.
The NYPD bomb squad joined FDNY fire marshals in the investigation into the blaze in the $32 million apartment. Investigators are looking into what may have caused the fire, including whether it started behind a light in the ceiling.
Guo is accused of pulling off a $1 billion fraud, ripping off thousands of investors in a scheme that allegedly started in 2018 and lasted into 2023. The FBI arrested Guo at the ritzy hotel Wednesday morning, alleging he set up bogus crypto and media investment schemes to line his own pockets, duping online followers with promises of outsized investment returns.
In addition to the luxury Fifth Avenue penthouse across from Central Park, the FBI was also seen searching a mansion Guo owns in Mahwah, New Jersey. Prosecutors said he used stolen millions to buy fancy sports cars, mattresses worth $36,000 each and a $37 million yacht.
That yacht was in the news in Aug. 2020, after the FBI went to arrest a certain guest on board: One-time Trump White House advisor Steve Bannon, who was charged in a separate alleged fraud scheme. Feds arrested Bannon off the coast of Connecticut on charges related to siphoning off money for the "We Build the Wall" fundraising campaign. Months later, shortly before Trump left office, he pardoned Bannon in that case.
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Prosecutors seized more than $650 million in alleged fraud proceeds from 21 different bank accounts and assets that included a Lamborghini Aventador SVJ Roadster automobile as part of the case against Guo and his financial advisor William Je in Manhattan federal court.
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The Securities and Exchange Commission separately filed a related civil complaint against Guo and the 56-year-old Je, a resident of the United Kingdom and Hong Kong who remains at large. The SEC accuses Guo and Je of involvement in unregistered and fraudulent financial offerings. The SEC separately accused Guo of making misrepresentations in raising hundreds of millions of dollars from investors through a cryptocurrency asset known as H-Coin.
U.S. Attorney Damian Williams said that in addition to stealing cash for himself, Guo sent millions to relatives and a business associate — all while boasting to investors of future big returns, and often using social media to plug his businesses.
Guo — who is known by multiple different names, including Miles Guo and Miles Kwok, Brother Seven, and The Principal — has lived in the United States since 2015 after fleeing China, accused of corrupt business dealings and massive frauds there.
In 2018, he founded two nonprofit organizations, the Rule of Law Foundation and the Rule of Law Society, which engaged in a public relations campaign against the Chinese Communist Party.
Guo "used the nonprofit organizations to amass followers who were aligned with his purported policy objectives in China and who were also inclined to believe [Guo's] statements regarding investment and money-making opportunities," the U.S. Attorney's Office for the Southern District of New York said in a statement on the criminal case.
In June 2021, Guo's two nonprofits hosted a private party in New York attended by Bannon, former Trump lawyer Rudy Giuliani, former Trump national security advisor Michael Flynn, and the Trump ally and conspiracy theorist Mike Lindell, CEO of MyPillow.
Last month, a lawyer for Hunter Biden, the son of President Joe Biden, sent Guo a letter demanding he retain any records related to Hunter Biden. The letter was sent two months after Mother Jones magazine detailed how Bannon, while working with Giuliani, had "arranged for Guo and his followers to spread salacious videos and pictures from Hunter Biden's laptop," which was obtained from a Delaware computer repair shop.
The U.S. began seizing hundreds of millions in assets in recent months and they moved in to make the arrest Wednesday morning.
The fire at the posh Manhattan building was put out within a couple hours, but the investigation is ongoing into how it happened to start after Guo left in handcuffs — and just as FBI agents were seizing his electronics and financial records.
Gurbir Grewal, director of the SEC's enforcement division, called Guo "a serial fraudster, who raised more than $850 million by promising investors outsized returns on purported crypto, technology and luxury good investment opportunities."
"In reality, Guo took advantage of the hype and allure surrounding crypto and other investments to victimize thousands and fund his and his family's lavish lifestyle," Grewal said.
Guo appeared relaxed before a judge Wednesday afternoon, and pleaded not guilty. He was being held without bail. His attorney had no comment after the hearing.
Both Guo and Je face possible sentences of up to 20 years in prison if convicted in the criminal case.
CNBC'S Dan Mangan contributed to this report.
