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The Messy Money Drama Behind Steve Bannon’s Propaganda Machine

·5-min read
Don Emmert/Getty
Don Emmert/Getty

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

The battle involves an organization Bannon inaugurated at the Statue of Liberty last year with Guo Wengui, a Chinese disinformation kingpin, and hostilities broke out even before the SEC this month charged companies linked to Guo with unregistered stock and cryptocurrency sales. But a federal probe into the dealings had been underway for months, and a key contention in a new lawsuit is that money intended to bankroll the duo’s vision of a vast anti-Beijing network instead went toward paying back irate investors in illicit transactions.

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

Neither Bannon nor Guo is a party in the lawsuit (just as neither was charged in the SEC order). Instead, the plaintiff is a mysterious entity called Mountains of Spices LLC, while the top defendant is Sara Lihong Wei Lafrenz, co-director of a nonprofit Bannon and Guo started in 2018. The amended complaint filed in Arizona federal court on Sept. 16 reveals the inner workings of the web of professed anti-Communist exiles Bannon and Guo aspired to organize against the Chinese regime, and in support of a shadow government under their control.

And it suggests the sprawling network is tearing itself apart.

Mountains of Spices, its name borrowed from the biblical Song of Solomon, is one of three companies incorporated at a residential address in the upscale New York City suburb of Great Neck, Long Island. All belong to Qidong Xia, who a person familiar with the matter told The Daily Beast is a close associate of Guo’s. An attorney for Qidong Xia did not answer repeated questions about his client and the lawsuit.

The complaint, and posts to Guo’s GNews website, describe Mountains of Spices as part of the “Himalaya Supervisory Organization,” the unregistered nongovernmental organization Bannon kicked off with Guo in New York Harbor in 2020. The proclaimed purpose of that group, and of affiliated “farms” like Mountains of Spices, is to coordinate and finance anti-Beijing activities across the United States and around the globe, and support the pair’s “New Federal State of China.”

Chinese Disinfo King Guo Wengui’s Network Claims He Hired MAGA’s Fave Mercenary

Mountains of Spices and its sister company, MOS Himalaya, are listed as regular posters to GNews and to Guo’s video platform, GTV, where Bannon formerly served as a director. They also launched a website last October dedicated to another 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 company wired funds to Lafrenz’s “farm” in Phoenix, which was in turn supposed to lend money to an unnamed third party “to realize a return on that investment to support themselves and their anti-[Chinese Communist Party] efforts.” Mountains of Spices reports supplying $4.5 million out of its own funds, as well as persuading six other individuals or companies to send Lafrenz a combined $5,466,846.

The lawsuit only names two of these six lenders: one is a Queens-based entity also belonging to Qidong Xia, while the other is a manufacturer of backpacks and handbags based in China and with outlets in New York and New Jersey.

Although the suit only seeks to recover the almost $10 million these companies claim to have lent Lafrenz, it posits that her total haul from the Himalaya farm system and its supporters was “at least $44 million,” and suggests she might have amassed as much as $90 million.

But the suit says that by then, Lafrenz had come under scrutiny of federal authorities and complaints from investors over the illegal stock scheme. According to the SEC, Lafrenz’s company, Voice of Guo Media, Inc.—also named in the lawsuit—in 2020 illegally persuaded some 4,500 people to give it a total of $114 million under the auspices of purchasing shares of GTV.

In its lawsuit, Mountains of Spices accuses Lafrenz of trying to mollify these discontented creditors by paying them back with the Himalaya farm system funds. Further, it asserts—without citing evidence—that she “went into hiding” earlier this year to avoid legal action from the lenders. However, it claims that she admitted in electronic communications to diverting the money to deal with her legal woes.

“She admitted that she was using funds from the loan program to repay individuals she had defrauded in a securities transaction for which she is being investigated and presented images of bank account statements showing funds being paid to individuals rather than the borrower,” the complaint reads.

Reached by phone, Lafrenz declined to comment for this story. A spokesperson for Bannon said he could not be reached for comment. Calls and emails to a lawyer for Guo received no reply.

The financial and legal battle, representing a fissure in the upper echelons of the Guo-Bannon propaganda machine, is just the latest headache facing the duo.

Guo, a former Beijing-based real estate developer, has styled himself as a whistleblower and political refugee even as Chinese officials have sought his extradition on money-laundering and sexual-assault charges, which he denies. He also faces legal battles on American soil, both from jilted business partners and from diaspora figures, whom the mogul has accused on his media platforms of being double agents for the totalitarian state. (Critics have also leveled such claims against Guo himself.)

Despite his pardon from Trump, Bannon has his own legal problems. The Washington Post reported earlier this year that he is the subject of a joint criminal probe by the Manhattan district attorney and the New York State attorney general. And on Thursday, he was named in a new congressional subpoena in connection with the Jan. 6 riot in the U.S. Capitol.

Read more at The Daily Beast.

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