{"id":"court_sdny_834_0","court":"SDNY","case_no":"","doc_number":834,"sub_number":null,"doc_type":"DOC","filed_date":"2026-04-17","title":"SDNY ECF 834","summary_zh":null,"summary_en":null,"body_en":"UNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x\n\n:\nUNITED STATES OF AMERICA\n:\n\n:\n\nv.\n\n:\n\n23-CR-118 (AT)\n\n:\nMILES GUO,\n\n:\n\n:\n\nDefendant.\n\n:\n\n:\n- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x\n\nREPLY SENTENCING MEMORANDUM SUBMITTED\nON BEHALF OF MILES GUO\n\nJohn F. Kaley, Esq.\n\nDoar Rieck Kaley & Mack\n\n217 Broadway, Suite 707\n\nNew York, NY 10007\n\nTel: 212-619-373\n\nJoshua L. Dratel\n\nLaw Offices of Dratel & Lewis\n\n29 Broadway, Suite 1412\n\nNew York, New York 10006\n\nTel: 212-732-0707\n\nMelinda Sarafa\n\nSARAFA ZELLAN PLLC\n\n43 West 43rd Street, Suite 370\n\nNew York, NY 10036\n\nTel: 212-785-7575\n\nAttorneys  for Defendant Miles Guo\n\n---\n\nTABLE OF CONTENTS\n\nINTRODUCTION ...................................................................................................................................... 1\n\nI.\nPRELIMINARY NOTE ON THE GOVERNMENT’S RHETORICAL\nSTRATEGIES................................................................................................................2\n\nII.\nTHE GOVERNMENT HAS NOT ESTABLISHED ANY RELIABLE LOSS\nAMOUNT, AND A FATICO HEARING IS REQUIRED ............................................6\n\nA. The Government’s $1.3 Billion Figure Reflects Transactional Volume,\nNot Actual Loss ........................................................................................................6\n\nB. The Government’s Reliance on Seizure Warrant Affidavits Does Not\nObviate the Need for a Fatico Hearing ...................................................................7\n\nC. The Government’s Position on Restitution Reflects the Challenges\n of Ascertaining Loss ................................................................................................9\n\nIII.\nACQUITTED CONDUCT MUST BE EXCLUDED FROM THE LOSS\nCALCULATION .........................................................................................................10\n\nA. The Government’s Reading of § 1B1.3(c) Would Nullify Amendment 826 ...........10\n\nB. The GTV Private Placement Conduct Does Not “Establish”\nthe Offenses of Conviction .....................................................................................11\n\nIV.\nTHE DISAVOWAL OF VICTIM STATUS BY THOUSANDS OF INVESTORS\nIS DIRECTLY RELEVANT TO LOSS ......................................................................12\n\nV.\nTHE MAGNITUDE OF THE LOSS ENHANCEMENT REQUIRES\nHEIGHTENED SCRUTINY .......................................................................................16\n\nVI.\nTHE GOVERNMENT’S SENTENCING COMPARABLES SUPPORT\nA SENTENCE WELL BELOW 30 YEARS  ..............................................................18\n\nVII.\nTHE GOVERNMENT’S REMAINING ARGUMENTS DO NOT SUPPORT\nA 30-YEAR SENTENCE ............................................................................................20\n\nA. The CCP’s Campaign Against Mr. Guo Is Relevant to Sentencing .......................20\n\nB. The Government’s Claims of Ongoing Criminal Activity Are Unsupported .........22\n\nC. The Government’s Arguments that Mr. Guo Obstructed Justice are\nUnsupported and Unavailing .................................................................................22\n\n---\n\n---\n\nINTRODUCTION\n\nThe Government asks this Court to impose a sentence of at least 30 years’ imprisonment\n— a sentence that would rank among the longest ever imposed for financial fraud in this District,\nexceeding even the sentences imposed in cases involving losses many times greater than those\nalleged here. The Government’s request rests on a foundation of sand: an unverified, wildly\ninflated loss figure of $1.3 billion that conflates gross transactional volume with actual pecuniary\nharm; a legally untenable attempt to include $411 million in acquitted conduct in the loss\ncalculation; and a systematic refusal to account for redemptions and refunds and for the thousands\nof investors who affirmatively deny they were victimized.\nThis all stems from the Government’s stubborn denial of the undeniable: Miles Guo,\nhaving already amassed a tremendous fortune, began his whistleblowing activities in a deeply\nrepressive political environment long before the conduct at issue in this case, prompting the CCP’s\naggressive and well-documented retaliaton against him. That retaliation, which included, among\nother things, social media attacks, pressure to ban Mr. Guo from major media platforms, and asset\nfreezes, did not deter Mr. Guo from his mission to promote democratic reform in China. Had Mr.\nGuo been motivated solely by wealth, as the Government insists, he could have and would have\naccepted any number of offers by the CCP to cease his whistleblowing activities in exchange for\nthe release of billions of dollars in seized assets (see, e.g., Def. Corr. Mem. at 15, 17). To avoid\nconfronting this fundamental flaw in its theory of prosecution, the Government refuses to\nacknowledge the historical and political context of this case, suggests contrary to all evidence that\nMr. Guo’s wealth may have been illusory (while simultaneously arguing that Mr. Guo used his\nwealth to attract followers), and relentlessly attacks Mr. Guo as a cult leader and con man,\n\n---\n\n2\n\nsounding very much like the CCP itself. Taken together, these contradictions and inconsistencies\nare used by the Government to prop up its case and sidestep the weakness of its arguments.\nThis reply addresses the principal arguments in the Government’s Sentencing\nMemorandum (ECF No. 833) (the “Government Memorandum” or “Gov. Mem.”). As discussed\nbelow, the Government’s arguments regarding the loss amount, acquitted conduct, the standard of\nproof, sentencing comparables, and sentence enhancements are each fundamentally flawed. The\nCourt should reject the Government’s request for a 30-year sentence and impose a sentence\ndramatically below the advisory Guidelines range, consistent with the § 3553(a) factors and the\nsentencing practices in this District.\nI.\nPRELIMINARY\nNOTE\nON\nTHE\nGOVERNMENT’S\nRHETORICAL\nSTRATEGIES\n\nBefore we directly turn to the substantive sentencing arguments, we must take a moment\nto identify and address the rhetorical strategies employed throughout the rather histrionic\nGovernment Memorandum. Legal discourse typically is grounded in fact-based argument\nsupported by binding or persuasive legal authority. In this case, however, the Government\nMemorandum adopts a tenor so extreme that its building blocks must be deconstructed to facilitate\na fair and accurate assessment of the Government’s position.\n\nThe rhetorical strategies used throughout the Government Memorandum include the\nfollowing:\n1.\nEmphasis on emotion rather than fact or reason. The Government\nMemorandum repeatedly references Mr. Guo’s wealth (e.g., Gov. Mem. at 2, 59, 62) and “lavish\nlifestyle” (id. at 10, 12, 71) as suggestive of criminal activity, without regard to when or how\nspecific assets, such as his Sherry-Netherland apartment, Greenwich, CT, residence, or Brioni\nsuits, were acquired. Lines such as “he destroyed the lives of people who believed he could free\n\n---\n\n3\n\nthem from an oppressive Communist regime so he could buy more than $700,000 worth of bespoke\nBrioni suits” (id. at 59) deliberately – and unfairly – obscure the fact that Mr. Guo acquired vast\nwealth and its trappings long before the alleged conduct in this case. In so doing, the Government\nrelieves itself of any accountability for factual precision in favor of rhetorical flourish.\n2.\nFact laundering. The Government repeatedly cites its own version of the offense\nconduct, supplied to the Probation Department in connection with the Presentence Investigation\nReport (“PSR”), as neutral third-party “findings” whose Government origins are effectively\nmasked. By relying on the PSR’s intermediation and bold use of the word “finding” in its\nparentheticals, the Government bolsters its own language with the veneer of independent\nfactfinding. See, e.g., Gov. Mem. at 5, 42, 43, 48.\n3.\nGratuitous repetition. The Government incessantly repeats its key themes (e.g.,\nextraordinary wealth, unrestrained fraud, countless victims, astronomical loss), including casual\nrepetition of disputed facts – such as the scale of the alleged fraud – as if undisputed. For instance,\nthe Government references “thousands” of victims no fewer than 17 times, when only a handful\nof self-professed “victims” testified at trial and thousands of investors affirmatively disclaim\nvictim status. Similarly, while itself unrestrained by factual rigor, the Government speaks of\n“unrestrained fraud that [Guo] perpetrated against thousands, so he could buy himself million-\ndollar chandeliers and surround himself in luxury” (id. at 58), a “gargantuan global fraud that has\ninjured thousands” (id. at 63), “the billion dollars Guo stole from innocent victims through fraud\nafter fraud” (id. at 66), “[Guo]’s truly offensive and blatant fraud” (id. at 67), “this massive fraud”\n(id. at 69), “fraud on a global scale” (id.), “a fraud as massive as Guo’s” (id. at 70), “global, billion-\ndollar fraud schemes” (id.), “the five-year, billion-dollar fraud scheme” (id. at 71), “a years-long\nfraud scheme” (id. at 75), “Guo’s fraud empire all over the world” (id. at 79), “a mass-scale fraud”\n\n---\n\n4\n\n(id. at 82), “a years-long fraud” (id.), and “the complexity, duration, and manipulation brought to\nbear by Miles Guo in his execution of the five-year, $1.3 billion G Enterprise fraud and\nracketeering conspiracy” (id. at 83), to cite just some of the Government’s repeated stylistic\nassertions about the scale of the alleged fraud.\n4.\nReliance on speculation for baseless allegations. In support of its argument for\nspecific deterrence, the Government contends that Mr. Guo “and his enterprise” have “continued\ncriminal activities” throughout Mr. Guo’s three years of incarceration, without citing a single\nspecific crime. Gov. Mem. at 67-68. The Government relies on two sources for these assertions.\nThe first is Mr. Guo’s phone calls from the MDC during the period immediately after his arrest,\nduring which he did nothing more than encourage continuation of ongoing business operations,\nincluding a potential investment in the burgeoning Himalaya Exchange by the United Arab\nEmirates sovereign wealth fund. Any suggestion of criminal activity is purely speculative. The\nsecond is letters from purported victims, who make vague, unfounded, and unproven allegations\nthat Mr. Guo is directing criminal activities while incarcerated. Id.\n5.\nQuoting material out of context to suggest malevolence. In its excruciating\nefforts to saddle Mr. Guo with an enhancement for obstruction of justice, the Government offers\nan ominous video still framing two presenters from the New Federal State of China (“NFSC”) and\nan English subtitle stating “these individuals will all have to bear the consequences[.]” Gov. Mem.\nat 27. The Government states that the reference to “these individuals” refers to the 126 individuals\nwho provided victim impact statements to the Government, and characterizes the video as evidence\nthat “Guo’s enterprise continues to harass and threaten those that oppose it.” What the Government\ndoes not offer, however, is the presenter’s full statement that it is false statements - whether to the\ngovernment or other attorneys – that inevitably lead to legal consequences. This is presented in\n\n---\n\n5\n\nthe video as a caution to all. With respect to any falsehoods in the 126 victim impact statements,\nthe presenter states: “As time goes on, as evidence emerges, these individuals will all have to bear\nthe consequences, the legal consequences they must bear – that is the consequence of lying.” ECF\nNo. 832, Stmt. 206-B.\n6.\nGuilt by association. The NFSC video discussed above is but one of numerous\ninstances in which the Government seeks to discredit Mr. Guo based on the actions or statements\nof his supporters, even without evidence of Mr. Guo’s direction or participation. See, e.g., Gov.\nMem. at 21 (citing actions of William Je and unnamed supporters), 23-25 (citing supporter protests\nagainst the bankruptcy Trustee), 27-28 (citing actions of supporters following Mr. Guo’s arrest).\n\nIn addition to the above, the Government mischaracterizes defense arguments in order to\ndiminish them (e.g., characterizing CCP targeting of Mr. Guo as offered solely for mitigation) (id.\nat 56-57), brushes aside or ignores important facts (e.g., assertions of non-victim status), describes\ninvestors as “brainwashed” to discredit them (id. at 2, 40, 59) and Mr. Guo as a “cult” leader to\ndiscredit him (id. at 1, 50, 53, 58), baselessly refers to Mr. Guo’s personal history as “mythology”\n(id. at 56, 58-59), and frames the CCP’s persecution of Mr. Guo and seizure of his assets solely as\nmotives for criminal conduct, with no recognition whatsoever of these facts as foundational\ncontext for political resistance.\n\nHaving relieved itself of accountability for many of the assertions upon which it relies to\njustify the extraordinary sentence it seeks, and having elected not to seek a special verdict from\nthe jury, the Government usurps the role of factfinder as it proclaims loudly and repeatedly that\nMr. Guo caused a $1.3 billion loss and inflicted harm on thousands of victims. We respectfully\nsubmit that a high degree of rhetorical awareness is warranted when reviewing the Government\nMemorandum.\n\n---\n\n6\n\nII.\nTHE GOVERNMENT HAS NOT ESTABLISHED ANY RELIABLE LOSS\nAMOUNT, AND A FATICO HEARING IS REQUIRED\nA. The Government’s $1.3 Billion Figure Reflects Transactional Volume,\nNot Actual Loss\n\nThe Government’s loss calculation suffers from a fundamental methodological defect: it\nequates the total amount of money that “flowed into bank accounts associated with the racketeering\nenterprise” (Gov. Mem. at 32) with “loss.” But inflows are not loss, and the jury made no finding\nof such. The Guidelines define “actual loss” as “the reasonably foreseeable pecuniary harm that\nresulted from the offense.” U.S.S.G. § 2B1.1(b)(1), n. (C)(i). The Government’s own financial\nanalyst, Paul Hinton, testified that his work “was the result of summing up the value of all the\ntransactions in the database” according to “categories that the government gave us.” Tr. 4330. He\nperformed no tracing, no detailed flow-of-fund analysis, and no investor-level accounting of\ndeposits, withdrawals, redemptions, or value received. Tr. 4356, 4430, 4458.\nThe Second Circuit has recognized that where the precise amount of investor loss is\ndifficult to determine, a sentencing court may — and should — use alternative measures rather\nthan defaulting to gross inflows. In United States v. Illarramendi, 642 Fed. Appx. 64 (2d Cir.\n2016), for instance, the court affirmed a sentence where the district court declined to use the\nestimated investor loss of $275 to $380 million and instead relied on the defendant’s gain of over\n$20 million to calculate the Guidelines range, as permitted by U.S.S.G. § 2B1.1 cmt. n. 3(B). The\ncourt imposed a sentence of 156 months — effectively a below-Guidelines sentence — which the\nSecond Circuit affirmed. Id. at 65.\nHere, the Government has not even attempted to calculate Mr. Guo’s actual gain from the\nalleged fraud. Instead, it asks the Court to treat every dollar that entered any bank account\nassociated with any entity in the alleged enterprise as “loss” — regardless of whether those funds\nwere returned to investors, used for legitimate business purposes, or moved between accounts (and\n\n---\n\n7\n\nthus counted multiple times). This approach is not a “reasonable estimate” of loss; it is entirely\nspeculative and an abdication of the Government’s burden.\nIn so doing, the Government also ignores entirely the settled case law, in the Second Circuit\nand elsewhere, establishing recognized principles for offsetting loss. These are set forth in Mr.\nGuo’s initial sentencing submission (“Def. Corr. Mem.”) at 63-66, and they are indeed integral to\ncalculating “loss” for Guidelines purposes. See, e.g., United States v. Byors, 586 F.3d 222, 226 (2d\nCir. 2009) (applying Guidelines Application Note 3(D), which “provides that the loss should be\nreduced, or offset, by ‘[t]he money returned, and the fair market value of the property returned and\nthe services rendered, by the defendant . . . to the victim before the offense was detected’”) (quoting\nU.S.S.G. § 2B1.1 cmt. n. 3(D)(i)).\nB. The Government’s Reliance on Seizure Warrant Affidavits Does Not\nObviate the Need for a Fatico Hearing\n\nThe Government argues that because it seized $634 million pursuant to court-authorized\nseizure warrants, the loss amount “plainly exceeds $550 million” and no Fatico hearing is needed.\nGov. Mem. at 35. This argument conflates seizure with loss and ignores the adversarial process.\nSeizure warrant affidavits are ex parte submissions prepared to establish probable cause — a\nstandard far lower than the preponderance of the evidence standard required at sentencing, let alone\nthe enhanced standard that the magnitude of the enhancement warrants here. While the\nGovernment now attempts to rely on the affidavits to support its loss calculation, the Government\nnotably did not offer the supposed tracing analysis contained therein during trial, nor did it offer\nany detail in its sentencing submission. The defense has never had the opportunity to cross-\nexamine the FBI agents who prepared these affidavits, to challenge the tracing methodology, or to\npresent evidence of offsets, redemptions, and non-victim investors. The Court’s prior reliance on\nthese affidavits for purposes of entering a preliminary forfeiture order does not establish the loss\n\n---\n\n8\n\namount for Guidelines purposes, because the seizure warrant proceedings involve different issues\nand legal standards and different procedural protections than are required when determining loss\nfor Guidelines purposes.\nThe seizure warrant affidavits, moreover, confirm the double-counting problem. The FBI\nagent who prepared the affidavits acknowledged that “Investment Scheme Funds” were “layered”\nthrough multiple accounts — transferred from one entity’s account to another, and then another,\nin a manner the agent described as “indicative of money laundering.” ECF No. 716-2 ¶ 55(b). But\nthe same layering that the Government characterizes as evidence of money laundering also means\nthat the same dollars were counted each time they moved. Further, in the purported tracing analyses\nin some of the affidavits in support of the seizure warrants, it is apparent that money from the GTV\nPrivate Placement – of  which Mr. Guo was acquitted – was commingled with other monies, so it\nis not at all clear which money was moved to which account. See id. ¶ 34(c). On this point also,\nthe analyses provided in the affidavits in many instances fail to provide for an account “starting”\npoint. As a result, the source of any money transfers is not at all clear, particularly if there was\nmoney from other sources in the account to begin with or money from other sources were deposited\ninto an account along the way.\nAs an example, as discussed in Mr. Guo’s initial sentencing memorandum , at least $95\nmillion in G Club membership payments were made using HDO or HCN — funds that had already\nbeen counted as Himalaya Exchange inflows. See Def. Corr. Mem. 53-54. The Government has\nnever addressed this double-counting, and its analyst was never asked to parse it. Tr. 4458.\nMoreover, the amount seized is not equivalent to the amount of loss. The Government\nseized funds from accounts held in the names of Hamilton, Himalaya Exchange, G Club, and other\nentities. But many of those funds belonged to investors who affirmatively deny they were\n\n---\n\n9\n\ndefrauded — including the 6,512 Himalaya Exchange customers who have filed § 853(n) petitions\n(ECF Nos. 759, 761) and the 324 Hamilton investors who assert that their funds have “no nexus\nto the conduct charged” (ECF No. 756 at 4). The seizure of their funds does not transform those\nfunds into “loss.” As a result, the Government’s reliance on the seizure affidavits requires\nresolution through a Fatico hearing before it can be considered sufficiently dependable to form the\nbasis for any loss amount.\nDue process requires that Mr. Guo have the opportunity to challenge the Government’s\nloss calculation through an evidentiary hearing. See United States v. Fatico, 579 F.2d 707 (2d Cir.\n1978). The Government’s position – that the Court should simply adopt the Government’s number\nwithout adversarial testing – is inconsistent with the fundamental requirements of fair sentencing\nand does not satisfy Second Circuit or the Guidelines’ standards of reliability.\nC. The Government’s Position on Restitution Reflects the\nChallenges of Ascertaining Loss\n\nThe Government has moved for a finding that restitution is “impracticable” because it\ncannot quantify specific victim losses – including amounts invested in G Series entities and any\nrefunds from those entities or compensation provided through the SEC or other means – with the\nprecision required by the Mandatory Victim Restitution Act. ECF No. 785 at 4-5. Yet the\nGovernment simultaneously asks the Court to find, for Guidelines purposes, that the loss exceeds\n$1.3 billion.\nIf the Government cannot quantify victim losses for restitution purposes, it cannot credibly\nclaim to have established a $1.3 billion loss for Guidelines purposes. The Guidelines require a\n“reasonable estimate” of loss “based upon the evidence.” U.S.S.G. § 2B1.1, cmt. n. 3(B). An\nestimate that the Government itself concedes it cannot support with victim-specific data is not\nreasonable.\n\n---\n\n10\n\nIII.\nACQUITTED CONDUCT\nMUST\nBE EXCLUDED\nFROM\nTHE\nLOSS\nCALCULATION\nA. The Government’s Reading of § 1B1.3(c) Would Nullify Amendment 826\nThe Government argues that the $411 million it attributes to the GTV Private Placement\nshould be included in the loss calculation under the exception in U.S.S.G. § 1B1.3(c) for acquitted\nconduct that “also establishes, in whole or in part, the instant offense of conviction.” Gov. Mem.\nat 36. The Government’s reading of this exception would swallow the rule.\nUnder the Government’s expansive interpretation, any acquitted conduct that was also\ncharged as part of a broader conspiracy would automatically qualify for the exception – because\nconspiracy counts, by their nature, encompass all alleged objects. If that were the law, then\nAmendment 826 would be a nullity in virtually every multi-count case involving conspiracy\ncharges. The Sentencing Commission could not have intended such a result when it unanimously\nadopted Amendment 826 with the express purpose that, as Commission Chair Judge Carlton W.\nReeves declared, “Not guilty means not guilty[.]” See Sentencing Commission News Release,\n“Commission Votes Unanimously to Pass Package of Reforms Inlcuding Limit on Use of\nAcquitted\nConduct\nin\nSentencing\nGuidelines,”\nApril\n17,\n2024,\navailable\nat\nhttp\nThe Commission’s Application Note 10 to § 1B1.3 does not support the Government’s\nposition. That Note states that “the court is in the best position to determine whether such\noverlapping conduct establishes, in whole or in part, the instant offense of conviction and therefore\nqualifies as relevant conduct.” U.S.S.G. § 1B1.3, cmt. n. 10. This is a limiting instruction – it asks\nthe Court to make a particularized, fact-specific determination, not to accept the Government’s\nblanket assertion that everything is connected. The Note’s reference to “overlapping conduct”\ncontemplates situations where the same specific acts underlie both the acquitted charge and the\n\n---\n\n11\n\nconvicted offense, not situations where the acquitted conduct is merely part of the same broader\nscheme.\nB. The GTV Private Placement Conduct Does Not “Establish”\nthe Offenses of Conviction\n\nThe jury’s acquittal on Counts 5 and 6 – the GTV wire fraud and securities fraud counts –\nwas a specific determination that the Government failed to prove those charges beyond a\nreasonable doubt. The GTV Private Placement was a discrete offering that occurred from April to\nJune 2020, involved a separate set of investor funds, and was the subject of a separate SEC\nenforcement action that resulted in a settlement involving payment of more than $539 million in\ndisgorgement, interest, and penalties, along with the return of approximately 92% of investor funds\nthrough a Fair Fund. Tr. 708, 1358, 2377; see also Def. Corr. Mem. Ex. 10 at 8-9.1\nThe Government’s assertion that the GTV Private Placement was “connected with and\nintegral to the other arms of the G Enterprise” (Gov. Mem. at 37) proves too much. Under that\nlogic, every component of a multi-scheme enterprise would “establish” every other component,\nand no acquittal on any individual scheme would have meaning. The exception in § 1B1.3(c)\nrequires that the acquitted conduct itself establish the convicted offense — not merely that it be\npart of the same narrative.\nMoreover, as discussed in Mr. Guo’s intial sentencing submission, the principle established\nin Griffin v. United States, 502 U.S. 46 (1992), counsels that when a jury convicts on a multi-\n\n1 The Government contends that the approximately 8% of GTV Private Placement funds that\ninvestors did not receive back through the SEC Fair Fund is attributable to the $30 million loss\nfrom the $100 million hedge fund investment. Gov. Mem. at 33 n.14. This is absurd. In addition\nto disgorgement of nearly $487 million, the SEC collected more than $52 million in interest and\npenalties alone, the latter far exceeding the $30 million hedge fund investment loss. Per a\nSeptember 18, 2023, order, moreover, the SEC expressly reserved $19,919,250 for taxes and\nadministrative expenses, along with $82,000,000 for a future disbursement. See In re GTV Media\nGroup, Inc. et al., Release No. 98415 (Sept. 18, 2023).\n\n---\n\n12\n\nobject conspiracy but acquits on a substantive count, the jury is presumed to have returned its\nverdict on the objectives for which there was sufficient evidence. Def. Corr. Mem. at 60. The jury’s\nacquittal on the GTV counts precludes any conclusion that the GTV Private Placement served as\na predicate for the RICO or conspiracy convictions. The same is true for money laundering. The\nmoney allegedly laundered must come from “specified unlawful activity.” Here, the GTV Private\nPlacement funds cannot constitute the proceeds allegedly laundered because the jury determined\nthat the GTV Private Placement was not specified unlawful activity.\nAgain, as with other portions of Mr. Guo’s initial sentencing memorandum that the\nGovernment is unable to confront, the Government Memorandum inexplicably ignores Griffin\naltogether.\nIV.\nTHE DISAVOWAL OF VICTIM STATUS BY THOUSANDS OF INVESTORS IS\nDIRECTLY RELEVANT TO LOSS\nThe Government argues that whether an investor “subjectively regards oneself as a ‘victim’\nis irrelevant to the Guidelines calculation” because materiality is an objective standard. Gov. Mem.\nat 38. This mischaracterizes the defense position.\nThe defense argument is not about the subjective materiality of misrepresentations. It is\nabout actual loss – specifically, whether “pecuniary harm . . . resulted from the offense” as to\ninvestors who affirmatively deny they were harmed. U.S.S.G. § 2B1.1(b)(1) n. (C)(i). If an investor\nstates that the alleged misrepresentations were not material to their decision to invest – that they\ninvested for reasons unrelated to the representations the Government identifies as fraudulent – then\nno pecuniary harm “resulted from” the offense as to that investor. This is a question of causation,\nnot subjective materiality.\nThe Government attempts to distinguish United States v. Miller, 997 F.2d 1010 (2d Cir.\n1993), cited by the defense, by noting that in Miller the court couched its decision in terms of the\n\n---\n\n13\n\nlack of “property” and/or an “agency” relationship. See Gov. Mem. at 39-40. Yet that wholly\nmischaracterizes the factual context in Miller, which is entirely relevant here in evaluating any\nloss amount.\nIn Miller, which was a case centered on omissions rather than misrepresentations, the\nreason the apartments the defendants obtained surreptitiously – without offering them to their\ninvestor clients – and/or the investors’ deposit money that funded defendants’ purchase of\napartments for themselves did not constitute “property” for mail or wire fraud purposes (and why\nan “agency” relationship was not established), was because of the subjective expectation of the\ninvestors that the government denominated as victims.\nFor example, the Court in Miller pointed out that the investors’ representative “testified\nthat the purchase of the Apartments by [defendants and the cooperating witness] was never\ndisclosed to him; his consent to that purchase was never requested; he never saw a list of the 122\napartments prior to the investigation that resulted in the Indictment; the [investor] Group had ample\nfunds to have acquired the Apartments; and the Group would have been interested in acquiring\nthem had he been apprised of their availability.” 997 F.2d at 1014 (emphasis added).\nThe investors’ representative “also testified, however, that he never asked to invest more\nmoney in the Philip Howard than that expended for the 114 apartments purchased by the Group;\nthere was nothing wrong with [the cooperating witness and one of the defendants] making a\npersonal investment in the Philip Howard apartments; he had no expectation regarding the\npossibility of such a personal investment by [defendants]; and ‘it was very much within Mr.\nMiller's cards to do a deal, and if it wouldn't be with my group, it would be with a European group\nout there.’” Id. (emphasis added); see also id. at 1013 (investors’ representative “testified that the\nsize of [defendants’] fee was immaterial to him”) (emphasis added); Def. Corr. Mem. at at 45-46\n\n---\n\n14\n\n& n.43. Because the purported “victims” disavowed any expectation of an agency relationship that\nwould have precluded the allegedly fraudulent investment, the government’s fraud theory\ncollapsed. 997 F.2d at 1020.\nIn this case, the scale of investor disavowal of victim status is unprecedented. More than\n6,500 Himalaya Exchange customers have filed § 853(n) petitions asserting their funds are not\nfraud proceeds. ECF Nos. 759, 761. Three hundred twenty-four Hamilton investors have filed\npetitions asserting their investments have “no nexus to the conduct charged.” ECF No. 756.\nSeveral investors wrote to the Government disclaiming victim status. See, e.g., USAO_00112534-\nUSAO_00112564. And more than 1,200 individuals have sent letters of support for Mr. Guo to\ndefense counsel, of whom 1,192 expressly disclaim victim status.2\nAs made clear by the 100 representative statements provided in full in the Supporter\nSupplement filed in conjunctin with this memorandum, the investors who have expressly\ndisclaimed victim status are not nameless, faceless victims of brainwashing or manipulation, as\nthe Government self-servingly – and offensively – suggests. See Gov. Mem. at 1, 2, 51, 59, 82, 83.\nTo the contrary, the statements submitted represent individuals from a vast range of personal and\nprofessional backgrounds who offer detailed, thoughtful perspectives on their decisions to invest\nin various G Series entities. The Government has never attempted to quantify the investment\namounts attributable to these non-victim investors, or to exclude those amounts from its loss figure.\nNor has the Government attempted to address the arguments set forth in Mr. Guo’s initial\nsentencing memorandum with respect to this subject.\n\n2 A master list of supporter statements received by defense counsel is included in a sealed\nsupplement (hereinafter “Supporter Supp.”) filed in conjunction with this reply memorandum.\n\n---\n\n15\n\nThe Government’s attempt to dismiss these investors as victims who have been\n“successfully convinced” they are not victims (Gov. Mem. at 40, 68) is both condescending and\ncircular. At best, the Government proved at trial that some investors (the handful who testified)\nwere defrauded. It did not prove – and the jury was never asked to find – that all investors were\ndefrauded, or that the total loss was $1.3 billion. The existence of thousands of investors who deny\nvictimization is powerful evidence that the Government’s aggregate inflow figure vastly overstates\nthe actual loss.\nIndeed, the Government’s refusal to acknowledge the existence, much less the scope, of\npurported “victims” who disclaim that status, provides an additional reason why a Fatico hearing\nis necessary.\n\nThe Government, moreover, wholly ignores its own admonition at trial about extrapolating\nfrom the testimony of a single witness. See Def. Corr. Mem. at 54-55. At trial, the Government\nobjected strenuously to allowing the defense to argue and the jury to infer based on the testimony\nof one defense witness who had been coerced by the CCP to submit false accusations against Mr.\nGuo that it was reasonable to assume that others (possibly even the prosecution victim witnesses)\nhad also been coerced. The Government called this type of inference “speculation” and\n“extrapolation.” Tr. 5568, 5852. The Court agreed and precluded the defense from making such\nan argument. Tr. 5571, 5855.\n\nIn our initial sentencing submission, we maintained that by the same logic and reasoning,\nany losses beyond those testified to by the Government’s victim witnesses are also speculative and\nshould not be allowed. Def. Corr. Mem. at 55. In its 85-page responsive submission, however, the\nGovernment neither addressed this point nor put forward any reason why it should be permitted to\n“speculate” and “extrapolate” for purposes of establishing a loss amount. As the Court stated with\n\n---\n\n16\n\nrespect to an objection made during trial, “What’s good for the goose.” Tr. 1219. There is no reason\nwhy that rationale should not apply now.\n\nThe Government cannot have it both ways. It cannot curtail the defense from arguing a\nbroader inference based on the testimony of its witness while at the same time arguing that the\nGovernment can prove a $1.3 billion loss amount by a preponderance of the evidence based on the\ntestimony of only five alleged victims. If it would be speculation or extrapolation for the defense,\nthen it must likewise be speculation and extrapolation for the Government.\n\nFurther, the Government’s argument rests on the unproven assumption that all investors\nheard all of Mr. Guo’s broadcasts and ignored the Farm Loan documents, the Himalaya Exchange\nwhite papers, and the G Club documents, all of which speak for themselves and were available to\nall investors. Numerous investors – including trial witness Lai Dai and many more who sent\nstatements to defense counsel – have emphasized their reliance on these written materials and their\nexercise of independent judgment.\nV.\nTHE MAGNITUDE OF THE LOSS ENHANCEMENT REQUIRES\nHEIGHTENED SCRUTINY\nThe Government dismisses the doctrine set forth in United States v. Cordoba-Murgas, 233\nF.3d 704 (2d Cir. 2000), as “foreclosed by long-settled precedent” and claims that Cordoba-\nMurgas itself “rejected the use of a higher burden of proof.” Gov. Mem. at 40. This is a misreading\nof the case.\nThe Second Circuit stated in Cordoba-Murgas that “the enhancement of a sentence based\nupon a defendant’s ‘relevant conduct,’ if done without regard to the weight of the evidence proving\nthe relevant conduct, may result in a total term of incarceration which is excessive, inappropriate,\nand unintended under the Sentencing Guidelines.” 233 F.3d at 708.\n\n---\n\n17\n\nThe court authorized downward departures when the appropriate standard of proof was not\nsatisfied, and provided that “under the combination of circumstances that may be present here,\nincluding (i) an enormous upward adjustment (ii) for uncharged conduct (iii) not proved at trial\nand (iv) found by only a preponderance of the evidence, (v) where the court has substantial doubts\nas to the accuracy of the finding, the Court would be authorized to depart downward.” Id. at 708.\nIn this case, the 30-point loss enhancement constitutes an enormous upward adjustment in\nMr. Guo’s offense level, accounting for more than half of the total points. It is based in significant\npart on acquitted conduct (the GTV Private Placement), as well as on conduct that was not proven\nat trial (causing losses to thousands of investors who deny victimization). Again, the jury made no\nfinding as to loss amount and, as demonstrated above, there are substantial grounds to doubt the\naccuracy of the Government’s figure.\nThe Government’s fallback argument – that even a loss of $3.5 million would yield an\noffense level of 43 due to other enhancements (Gov. Mem. at 41) – actually undermines its\nposition. First, the Government has not established even a $3.5 million loss, because certainly that\nwas not proven at trial. 3\nSecond, if the loss amount is truly immaterial to the ultimate Guidelines calculation, then\nthe Government should have no objection to a Fatico hearing to determine the actual loss. The\n\n3 A loss of $3.5 million is not supported by the trial testimony of the Government’s alleged\nvictim witnesses, even if fully credited and accepted. At best, the prosecution’s five witnesses’s\nalleged “losses” (even including the GTV Private Placement investments on which Mr. Guo was\nacquitted) total less than $1.5 million. Further, and not surprisingly, the Government never asked\nits witness Ya Li whether she lost money on her investments in the various G Series ventures. The\nlogical inference from this omission is that Ya Li profited from her investments; had she actually\nlost money and not made money, the Government surely would have been quick to elicit her “loss”\namount during direct examination.\n\n---\n\n18\n\nGovernment’s resistance to a hearing suggests it recognizes that its $1.3 billion figure cannot\nwithstand adversarial scrutiny.\nVI.\nTHE GOVERNMENT’S SENTENCING COMPARABLES SUPPORT A\nSENTENCE WELL BELOW 30 YEARS\nThe Government’s sentencing comparables are carefully selected to inflate expectations,\nbut they actually demonstrate that a sentence well below 30 years is appropriate.\nWhile specific other cases present facts and postures that render them difficult for\ncomparison (as opposed to the entirety of a data set with a similar profile; see Def. Corr. Mem. at\n92-96), the Government’s reference to United States v. Bankman-Fried, No. 22-CR-673 (LAK)\n(S.D.N.Y Mar. 15, 2024), and the 25-year prison term to which he was sentenced, prove\ninescapably that particular aspects of that case demonstrate that a much lower sentence is\nappropriate herein.\nFor example, while the Government cites Bankman-Fried  as a comparable, the defendant’s\nfraud in that case involved $8 billion in customer funds — more than six times the Government’s\nalleged loss here — and included the misappropriation of customer deposits from a regulated\nexchange. In addition, Bankman-Fried testified falsely at trial (ECF No. 410 at 31-32), and the\nGovernment was required to extradite him to gain personal jurisdiction over him (id. at 18-22)\n(Bankman-Fried also used the Rule of Speciality to eliminate certain counts against him).\nIn addition, Bankman-Fried spent millions of dollars leveraging his financial success into\npolitical influence, attempting to achieve bipartisan corruption through his extensive political\ncontributions. Id. Morover, even with a 25-year sentence, “good time” and other programming\ncredits will result in Bankman-Fried’s release from custody at an age 15 years younger than Mr.\nGuo is right now.\n\n---\n\n19\n\nAccordingly, reference to Bankman-Fried only strengthens Mr. Guo’s positon that his\nsentence should be dramatically shorter than 25 years.\nThe cases the Government conspicuously omits are more instructive. In United States v.\nMoseley, 980 F.3d 9 (2d Cir. 2020), the Second Circuit affirmed a 120-month sentence where the\nGuidelines called for life imprisonment based on a $49 million loss. In United States v. Rivernider,\n828 F.3d 91 (2d Cir. 2016), the Second Circuit affirmed a 144-month sentence – a significant\ndownward variance from a Guidelines range of 324 to 405 months – where the district court found\nthat the loss amount “overstated the seriousness of the offense.”\nIn this District, courts repeatedly have imposed sentences dramatically below the advisory\nGuidelines level in high-loss fraud cases: Adelson (42 months, $260 million loss, Guidelines level\n46, affirmed by the Second Circuit); Gupta (24 months, insider trading, affirmed); Ferguson (one\nto four years, $500 million fraud, Guidelines life); Faibish (63 months, Guidelines life). See Def.\nCorr. Mem. at 72-75. While the amount of loss in those cases does not reach the dollar amount\nthat the Government alleges here, those cases occurred years and even decades ago, when the\nnumbers in those cases were functionally equivalent to those alleged herein.\nThe Sentencing Commission’s own data confirms that the norm in this District is\nsentencing below the Guidelines range. As detailed in Mr. Guo’s sentencing memorandum, only\n23.8% of sentences in SDNY fall within the advisory Guidelines range. Def. Corr. Mem. at 94.\nThe mean sentence for money laundering convictions in SDNY in 2024 was 34 months, not even\nclose to the 360 months the Government suggests is appropriate here. See Def. Corr. Mem. at 95.\nFinally, the Government’s reference to Yvette Wang’s guilty plea (Gov. Mem. at 78) does\nnot bind either Mr. Guo or the Court in making the individualized sentencing determination that\nthe Fifth Amendment guarantees to Mr. Guo. As Courts regularly instruct juries, one defendant’s\n\n---\n\n20\n\ndecision to plead guilty is personal, and should not have any impact on deliberations with respect\nto a defendant at trial. Also, while the Federal Rules of Evidence and certain trial-oriented\nconstitutional protections do not necessarily apply at sentencing, it is noteworthy that in Crawford\nv. Washington, 541 U.S. 36 (2004), the very practice of introducing a co-defendant’s guilty plea\nto establish a conspiracy and its scope was among the tactics that the Court expressly found\nviolated the Sixth Amendment. Here, reliance on Ms. Wang’s guilty plea – which all persons\nfamiliar with the federal legal system know is the product of a negotiation in which the\nGovernment exercises extraordinary leverage in dictating terms – would violate the Fifth\nAmendment in the sentencing context.\nVII.\nTHE GOVERNMENT’S REMAINING ARGUMENTS DO NOT SUPPORT A 30-\nYEAR SENTENCE\nA. The CCP’s Campaign Against Mr. Guo Is Relevant to Sentencing\nThe Government devotes barely three pages to the CCP’s targeting of Mr. Guo,\nmischaracterizes it as nothing more than a mitigation argument, and dismisses it as “irrelevant.”\nGov. Mem. at 56-58. The Government does not even acknowledge the CCP actions against Mr.\nGuo that its own Department of Justice saw fit to prosecute criminally in the cases of Elliot Broidy,\nPrakazrel Michel, George Higginbotham, Nicki Lum Davis, and the thirty-four defendants in Bai,\nand civilly in the case of Steve Wynn. See Def. Corr. Mem. at 17-22. To do so would mean\nreckoning with the implications of the CCP’s aggression against Mr. Guo, which is directly\nrelevant to sentencing in at least two respects.\nFirst, the CCP’s coercion of investors to file false complaints – testified to at trial by Jianhu\nYi (Tr. 5042-59) and corroborated by the Declaration of Wansheng Cheng (Def. Corr. Mem., Ex.\n3) and other statements discussed in the Supporter Supplement – directly undermines the reliability\n\n---\n\n21\n\nof the Government’s loss figure. If an unknown number of “victim” complaints were fabricated\nby CCP agents, then the Government’s loss calculation is built on a contaminated foundation.\nContrary to the Government’s contention, CCP coercion was directly related to the scope\nof the offense conduct and the loss amount, and reinforces the need to attempt some verification\nof the integrity of the complaints through a Fatico hearing because it appears the Government has\nnot attempted any of the vetting that the peculiar facts in this case require.\nIndeed, of the 225 victim impact statements submitted by the Government with its\nmemorandum, at least 45 appear to be duplicates or supplements submitted by individuals\notherwise represented in the collection, bringing the number of unique “victims” closer to 180 than\n225. This raises questions about both the provenance of the letters and the Government’s\nunquestioning reliance on them.\nThe Government stipulated that the CCP targeted Mr. Guo (DX STIP 1), and the DOJ’s\nown prosecution in United States v. Bai et al. confirmed a massive CCP social media campaign to\ndiscredit Mr. Guo using thousands of fake online personas. Def. Corr. Mem., Ex. 2. The Court\ncannot ignore this context when evaluating the Government’s specious claim that every dollar\ndirected toward a G Series entity represents “loss.”\nSecond, the CCP’s targeting of Mr. Guo is directly relevant to the § 3553(a) factors,\nincluding the “history and characteristics of the defendant” and the “nature and circumstances of\nthe offense.” 18 U.S.C. § 3553(a)(1). The conduct in this case cannot fairly be assessed outside of\nits personal, historical, and political context, all of which are entangled with the CCP’s oppressive\nregime and targeting of Mr. Guo. A lengthy prison term would validate the CCP’s campaign\nagainst Mr. Guo, satisfy the CCP’s goal of silencing Mr. Guo, and embolden further efforts by the\n\n---\n\n22\n\nCCP to eliminate Chinese dissidents from public life — a result that is contrary to the geopolitical\nand national interests of the United States.\nB. The Government’s Claims of Ongoing Criminal Activity Are Unsupported\nThe Government’s assertion that Mr. Guo has “continued criminal activities for the three\nyears that Guo has been incarcerated” (Gov. Mem. at 67) is based entirely on unsworn victim\nstatements repeating hearsay about what NFSC presenters allegedly said on broadcasts. The\nGovernment offers no direct evidence that Mr. Guo personally directed any post-arrest criminal\nactivity from the MDC.\nThe continuation of the NFSC as an organization – which has its own elected leadership\nstructure – is not evidence that Mr. Guo has directed any criminal conduct while detained. Again,\nthe Government’s unsupported allegations regarding this subject demand a Fatico hearing before\nthey can be considered.\nThe Government’s reliance on a March 10, 2026, video (Gov. Mem. at 27) in which an\nNFSC presenter stated that individuals who provided victim statements “will all have to bear the\nconsequences” is not only taken entirely out of context, as discussed in Part I above, but more\nimportantly proves nothing about Mr. Guo’s personal involvement. The Government does not\nallege that Mr. Guo directed this statement, and the statement itself is not evidence of ongoing\ncriminal activity by Mr. Guo.\nC. The Government’s Allegations that Mr. Guo Obstructed Justice are\nUnsupported and Unavailing\n\nThe Government devotes eight pages to arguing that Mr. Guo engaged in a range of\nallegedly obstructive conduct. Gov. Mem. at 20-28. None of the allegations withstands scrutiny.\nFirst, the Government’s attempts to cast the supposed “complexity” of the investment\n“schemes” as inherently obstructive is preposterous. Id. at 20. Likewise, characterizing the\n\n---\n\n23\n\nsupposed “evolution” and “relocation” of various investment opportunities as obstructive is\nentirely speculative and ignores longstanding business relationships that predate the alleged fraud,\nincluding those tied to the UAE.\nSecond, the Government repeatedly and improperly attributes the conduct of others to Mr.\nGuo. This is true with respect to alleged conduct of William Je as well as of supporters of Mr.\nGuo. Id. at 21, 23-24, 27-28. Efforts to cast Mr. Guo as the orchestrator of certain conduct fall\nshort; for instance, the existence on a cell phone belonging to Mr. Guo of a photo identifying\nrelatives of an individual whose home protestors visited is a far cry from an order directing\n“harassment” or “targeting” of such individual or the relatives. Id. at 25-26. The attenuation\nbetween this photo and any supposed obstructive conduct that could be attributed to Mr. Guo\nunderscores the Government’s strained efforts in this regard. In other instances, such as the\nsupposed “threats” issued in the NFSC video discussed in Part I, the Government does not even\nattempt to attribute the (ultimately benign) conduct to Mr. Guo, relying entirely on supposition\nand innuendo. Id. at 27.\nThird, the Government attempts to characterize as “obstruction of justice” for purposes of\nthis case events in wholly unrelated litigation (id. at 22) and other conduct that took place prior to\nMr. Guo’s arrest (id. at 28 n. 11), which cannot constitute obstruction in this proceeding.\nFor these reasons as well as those addressed in Mr. Guo’s intial sentencing submission\n(Def. Corr. Mem. at 81-82), Mr. Guo maintains that any enhancement of his sentence based on\npurported obstruction of justice is unwarranted.\nD. The Government’s Wealth Argument Is Internally Contradictory\nThe Government argues that Mr. Guo’s “purported” billionaire status is an aggravating\nfactor because he used it to lure victims. Gov. Mem. at 71. But this argument is in tension with the\nGovernment’s own theory of the case. If Mr. Guo was already a billionaire – which the\n\n---\n\n---\n\n25\n\n---\n\n---\n\n27\n\nRespectfully submitted,\n\n           /s/\n\nJohn F. Kaley\nDoar Rieck Kaley & Mack\n\n217 Broadway, Suite 707\n\nNew York, New York 10007\n\nTel: 212-619-3730\n\n           /s/\n\nJoshua L. Dratel\n\nLaw Offices of Dratel & Lewis\n\n29 Broadway, Suite 1412\n\nNew York, New York 10006\n\nTel: 212-732-0707\n\n           /s/\n\nMelinda Sarafa\n\nSARAFA ZELLAN PLLC\n\n43 West 43rd Street, Suite 370\n\nNew York, NY 10036\n\nTel: 212-785-7575\n\nTo:\nAll Counsel via ECF","body_zh":null,"key_entities":[],"ecf_references":[],"word_count":7670,"status":"published","published_at":"2026-04-17 00:00:00","created_at":"2026-04-17","updated_at":"2026-07-06 20:57:20"}