Guo Wengui / Miles Guo — criminal case · PETITION · ECF #872

UNITED STATES OF AMERICA, Restitution of Seized Funds

HO WAN KWOK, a/k/a “Miles Guo,” NOTICE CONCERNING THE “Miles Kwok,” “Guo Wengui,” “Brother GOVERNMENT--TRUSTEE Seven,” or “The Principal,” PROPOSED AGREEMENT

and REQUEST THAT THE SAME BE KIN MING JE, a/k/a “William Je,” MADE PART OF THIS and CRIMINAL DOCKET FOR

Defendants.

NOTICE CONCERNING THE GOVERNMENT AND CHAPTER 11 TRUSTEE’S PROPOSED AGREEMENT REGARDING FUNDS THAT SHOULD BE RESOLVED ON THIS CRIMINAL DOCKET AND DISPOSED OF BY

Bradford L. Geyer, Esq., of FormerFedsGroup.Com LLC, counsel for the authenticated Himalaya

Exchange (“HEX” or the “Exchange”) customers and third-party claimants previously identified to this

Court (collectively, the “Claimants”),1 respectfully files this Notice to place on this criminal docket, and

to preserve for adjudication by the Special Master this Court has indicated it will appoint, the proposed

settlement between the United States of America (the “Government”) and Luc A. Despins, Chapter 11

Trustee (the “Trustee”) of the estate of Ho Wan Kwok in In re Ho Wan Kwok, Case No. 22-50073 (JAM)

(Bankr. D. Conn.) (the “Bankruptcy Case”).

The Claimants do not appear here to litigate the Bankruptcy Case. They appear because the

proposed Government--Trustee agreement purports to allocate, partition, or otherwise dispose of funds Counsel represents only those HEX members who retained him and whose identities and balances have been authenticated through HEX records and HID matching, as previously described to the Court. This Notice does not purport to speak for every HEX member, or for the criminal Defendants. NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 1

that include, or are traceable to, HEX customer reserves and related accounts seized in connection with

this criminal proceeding--funds already identified as Specific Property in the Preliminary Order of

Forfeiture (ECF No. 720) and, as to other accounts, in the First Supplemental Preliminary Order of

Forfeiture (ECF No. 790-1). Those funds are the subject of third-party petitions, Rule 41(g) applications,

and related filings on this docket. Any private allocation of those funds between the Government and the

Trustee belongs on this criminal docket and should be resolved, in the first instance, by the upcoming

Special Master.

I. The Proposed Government--Trustee Agreement

On or about August 18, 2026, the Trustee filed in the Bankruptcy Case a motion pursuant to 11

U.S.C. § 363 and Federal Rule of Bankruptcy Procedure 9019 seeking approval of a settlement with the

United States dated July 30, 2026 (Bankr. ECF No. 5739) (the “Proposed Agreement”). The Proposed

Agreement does not merely divide cash. It draws a line between so-called “Estate Assets” (Schedule 1:

hundreds of adversary proceedings, cash recoveries of approximately $152.7 million, and foreign

proceedings) and “Forfeiture Assets” (the property listed in ECF No. 720, ECF No. 790-1, and the Wang

forfeiture order). Under the operative terms: the Trustee covenants not to contest forfeiture of the

Forfeiture Assets or their distribution to victims (¶ K); the Government covenants not to forfeit the

Estate Assets and the Trustee preserves alter-ego and avoidance theories against those assets (¶ L); net

proceeds of the Mahwah Property--itself Specific Property at ECF No. 720 item v--are split evenly after

deductions that include Trustee legal fees (¶ M); $2,540,087.05 of Mountains of Spices funds is to be

transferred to the Trustee as an Estate Asset (¶ O); and unidentified “Non-Scheduled Assets” are

allocated to whichever party first commences a proceeding (¶ P). Paragraph S purports to bind any

person who later obtains possession or control of either category of assets. Paragraph T disclaims third-

party beneficiaries. A hearing on the motion was convened in the Bankruptcy Court on August 25, 2026.

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 2

Public reporting describes the split, in substance, as the Trustee retaining more than $170 million

recovered for the estate while the Government retains approximately $642 million seized in connection

with the indictment. That $642 million figure corresponds to the bank-account Specific Property listed in

ECF No. 720, which this Court later treated as forfeitable in connection with an $889 million money

judgment. See ECF No. 858. The Proposed Agreement would resolve, as between the Government and

the Trustee only, the allocation of Specific Property that is already before this Court under ECF Nos. 720

and 790-1 and that is the subject of pending third-party petitions. That allocation cannot determine the

rights of third-party Claimants through a stipulation filed only in the Bankruptcy Case.

The Government and the Trustee may settle their competing claims as between themselves, but

they cannot by agreement adjudicate, subordinate, or extinguish superior interests asserted by third parties

in property subject to this Court’s criminal forfeiture orders. Congress prescribed the mechanism for

adjudicating those interests: the ancillary proceeding under 21 U.S.C. § 853(n), implemented through

Federal Rule of Criminal Procedure 32.2(c). Section 853(k) channels third-party claims to property subject

to criminal forfeiture into that statutory process.

Accordingly, whatever effect the Proposed Agreement may have between the Government and the

Trustee, it cannot determine Claimants’ title to Specific Property listed on this docket, or defeat their

asserted superior interests in that property, outside the § 853(n) ancillary process. The Forfeiture Assets

include HEX-related accounts into which Claimants deposited their own funds and maintained HDO

reserves represented to be backed 1:1 to the U.S. dollar. Those accounts, seized on warrants issued in this

District in 2022 and 2023, are listed as Specific Property in ECF No. 720 as follows:

i. $4,643,744.70, FV Bank Acct. 7801000590, Himalaya International Reserves, Ltd. (Sept. 20, 2022

seizure);

j. $14,599,257.25, FV Bank Acct. 7801000254, Himalaya International Clearing, Ltd. (Sept. 20, 2022

seizure); NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 3

l. $10,008,284.04, Mercantile Bank Int’l Acct. MBI10133-0000, Himalaya International Clearing

Ltd. (Oct. 16, 2022--Mar. 10, 2023);

n. $272,350,429.22, Mercantile Bank Int’l Acct. MBI10138-0000, Himalaya International Reserves

Ltd. (Oct. 16, 2022--Mar. 10, 2023);

o. $310,594.31, Mercantile Bank Int’l Acct. MBI10139-0000, Himalaya International Financial

Group Ltd. (Oct. 16, 2022--Mar. 10, 2023);

r. $7,715.00, FV Bank Acct. 7801000589, Himalaya International Financial Group, Ltd. (Sept. 20,

s. $176,983.37, Mercantile Bank Int’l Acct. MBI10183-0000, Himalaya Currency Clearing Pty Ltd.

(Oct. 16, 2022 seizure).

ECF No. 790-1 adds other accounts (G Club Operations Banco Popular funds and Barclays

accounts in the names of Kin Ming Je and Sin Ting Rong). Claimants do not by this Notice assert those

supplemental items as HEX customer reserves. They identify them so the Court and the Special Master

can keep HEX customer Specific Property distinct from G Club and Je-related property that the Proposed

Agreement also sweeps into the same Estate Asset / Forfeiture Asset bargain.

II. The $37 Million HIFG--HK USA Loan Is Traceable to Listed HEX Property--and Is Reached

The record in this Court and in the Bankruptcy Case establishes a specific outflow from HEX-

related entities that the Proposed Agreement would lock onto the estate side of the ledger. On or about

April 19, 2022, Himalaya International Financial Group Ltd. (“HIFG”)--the account-holder of ECF No.

720 items o and r--made a $37 million loan to HK International Funds Investments (USA) Limited, LLC

(“HK USA”), the entity that held nominal title to the yacht Lady May. The funds were sourced from

Himalaya International Clearing Ltd. (“HIC”)--the account-holder of ECF No. 720 items j and l--and were

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 4

wired to HK USA’s counsel to be placed into escrow as security for return of the yacht. Indictment ¶

19(g); Trustee Omnibus Alter Ego Complaint ¶ 120 (HIFG transferred $37 million “sourced from

Himalaya International Clearing Limited” to Zeisler & Zeisler for the Lady May escrow).

Neither the $37 million escrow nor the yacht itself is listed as Specific Property in ECF No. 720

or ECF No. 790-1. The Trustee recovered those loan proceeds in HK Int’l Funds Invs. (USA) Ltd. v.

Despins, Adv. Pro. No. 22-05003 (Bankr. D. Conn.), after rulings that HK USA was Kwok’s alter ego and

that the escrowed funds were estate property. Those recovered proceeds now sit among the cash recoveries

and adversary proceedings that Schedule 1 of the Proposed Agreement labels “Estate Assets.”

That labeling does not break the tracing chain for a § 853(n) petition. Claimants’ interest is not in

the yacht. It is in the HEX customer funds that left HIC, passed through HIFG, and were transferred to

HK USA. The listed assets to which that interest attaches on this docket are:

(1) the remaining HIFG balances actually seized and listed--ECF No. 720 items o ($310,594.31,

MBI10139-0000) and r ($7,715.00, FV Bank 7801000589), the lender’s own accounts;

(2) the remaining HIC balances actually seized and listed--ECF No. 720 items j and l--as the source

accounts from which the $37 million was drawn; and

(3) the HDO reserve account--ECF No. 720 item n ($272,350,429.22, MBI10138-0000, Himalaya

International Reserves Ltd.)--as the reserve corpus that was supposed to back customer HDO 1:1 and

as to which Claimants assert a constructive trust and superior ownership interest, and from which

unauthorized outflows, including the HK USA loan, should never have been made.

A petition under 21 U.S.C. § 853(n)(6)(A) must identify a legal interest in specific property

ordered forfeited. The $37 million itself cannot be pleaded as a standalone line item of Specific Property

because it is not on either order. It can and should be pleaded as the tracing fact that (a) proves diversion

of HEX customer-sourced funds from listed HIC/HIFG accounts, (b) explains why the residue of those NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 5

same accounts remains customer property rather than Kwok proceeds, and (c) shows why the Trustee’s

recovery of the escrow cannot, by a 9019 stipulation, convert customer-sourced funds into “Estate Assets”

free and clear of Claimants. If the Special Master or this Court later treats the recovered $37 million as

forfeitable substitute property or as property traceable to items j, l, o, or r, Claimants expressly preserve

their claim to it as well.

The Preliminary Order itself supplies the catchall. ECF No. 720 recites the indictment forfeiture

allegations under 18 U.S.C. §§ 981(a)(1)(C), 982(a)(1), and 1963, and 28 U.S.C. § 2461(c), reaching “any

and all property … involved in the offenses … or any property traceable to such property, including but

not limited to” a money sum. The same Order enters a money judgment of approximately $1.3 billion--

later reduced to $889 million at ECF No. 858--and finds that proceeds cannot be located upon due

diligence except for the listed Specific Property. That finding is the statutory predicate for substitute

property under 21 U.S.C. § 853(p). Paragraphs 8 and 9 of ECF No. 720 authorize discovery to identify

additional forfeitable property and retain jurisdiction to amend the Order pursuant to Rule 32.2, including

Rule 32.2(e). The Supplemental Order, ECF No. 790-1, is the Government’s own use of that amendment

path for later-added accounts.

Claimants therefore give notice that their interest extends to all property traceable to ECF No.

720 items j, l, n, o, and r, including the approximately $37 million transferred on or about April 19, 2022

from Himalaya International Clearing Ltd. through Himalaya International Financial Group Ltd. to HK

International Funds Investments (USA) Limited, LLC, and to any substitute property or later-added

Specific Property brought within this Order under 21 U.S.C. § 853(p) or Rule 32.2(e). The Government

cannot have it both ways. If the recovered $37 million is property traceable to the HIC/HIFG Specific

Property--or property reachable as substitute property--it is property that must be addressed through this

Court's forfeiture process--including, if necessary, amendment of the forfeiture order under Rule

32.2(e)--before it can be treated as forfeited property free of Claimants' asserted interests. If it is outside

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 6

the forfeiture order, the Government cannot rely upon that order to characterize the same customer-

sourced funds as forfeitable Kwok proceeds.

III. The Proposed Agreement Belongs on This Criminal Docket and Should Be Disposed of by the

The Trustee's own Rule 9019 papers recognize the statutory forum for third-party claims. He states

that any party asserting a superior interest in a Forfeiture Asset “must assert, and litigate, that interest in

an ancillary proceeding filing in, and adjudicated by, the District Court,” and that “instead of commencing

and litigating an ancillary proceeding, the Trustee and the Government have settled their dispute.” Bankr.

ECF No. 5739 ¶ 20 (citing 21 U.S.C. § 853(n) and Fed. R. Crim. P. 32.2(c)). The Government and the

Trustee may resolve their dispute without litigating an ancillary proceeding against one another; they

cannot thereby resolve the claims of third parties who did not join their settlement and whose asserted

superior interests Congress directed to the § 853(n) ancillary proceeding. See 21 U.S.C. §§ 853(k), (n);

Fed. R. Crim. P. 32.2(c); DSI Assocs. LLC v. United States, 496 F.3d 175, 183-84 (2d Cir. 2007); De

Almeida v. United States, 459 F.3d 377, 381 (2d Cir. 2006). The Second Circuit has likewise held that

due process does not permit a third party to be bound by a determination that property belonged to

someone else when that determination was made in a separate proceeding in which the third party was not

permitted to participate. United States v. Daugerdas, 892 F.3d 545, 557 (2d Cir. 2018). Thus, Bankruptcy

Court approval of the Proposed Agreement may settle the Government's and Trustee's competing

positions, but it cannot adjudicate, release, subordinate, extinguish, or otherwise prejudice Claimants'

asserted interests in property subject to this Court's forfeiture process. This Court has already found

restitution impracticable and authorized remission, while recognizing that third-party claims to specific

property are to be assessed under § 853(n) and Rule 32.2(c). ECF No. 858. The Court has indicated that a

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 7

Special Master will make preliminary recommendations on those ancillary issues. ECF No. 870

contemplates claims before a Special Master.

The Claimants therefore give notice of the Proposed Agreement and respectfully request that it be

made part of this criminal docket--by requiring the Government to file the settlement papers, schedules,

and any implementing stipulations here--and that the Special Master, once appointed, be directed to

consider:

(a) whether any portion of the funds the Government and the Trustee propose to keep, split, or

assign--including ECF No. 720 items i, j, l, n, o, r, and s, and the $37 million HIFG--HK USA loan

proceeds, and of any property reached by the Order’s “traceable to,” § 853(p), and Rule 32.2(e)

catchall now parked as Estate Assets--is HEX customer property held in constructive trust, reserve,

or otherwise subject to a superior third-party interest;

(b) whether the Proposed Agreement prejudices Claimants by treating customer reserves, or

recoveries traceable to those reserves, as estate property or as forfeitable proceeds before those

interests are adjudicated;

(c) whether Paragraphs S and T, the Mahwah proceeds even-split, the Mountains of Spices carve-out,

and the Non-Scheduled Assets race-to-the-courthouse rule should be stayed, conditioned, or held

inapplicable to HEX customer funds;

(d) whether any Bankruptcy Court approval of the Proposed Agreement may be treated as dispositive

of title to Specific Property listed on this docket; and

(e) a protocol that returns identifiable HEX customer funds to the persons who deposited them, rather

than commingling those funds into a general estate distribution or an undifferentiated remission pool.

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 8

The Special Master is the proper first-line decisionmaker on this docket as to Specific Property

listed in ECF Nos. 720 and 790-1 and property traceable thereto. HEX customers--overwhelmingly non-

U.S. persons contractually barred from using the Exchange if they were U.S., Canadian, or Japanese

residents--should not be forced to litigate title in a Connecticut bankruptcy case they did not commence

in order to recover money seized from a BVI exchange under warrants issued here. Kwok held no formal

office or title at HEX. A personal bankruptcy filing does not convert other people’s deposits into estate

assets, and a settlement between the Government and the Trustee cannot accomplish by agreement what

neither party owned. That is precisely the function of the ancillary proceeding: to provide the statutory

forum in the forfeiture case for persons who contend that property swept into the forfeiture belonged to

them rather than to the defendant. See 21 U.S.C. § 853(n)(6)(A). The Second Circuit has expressly

recognized that a constructive trust may constitute a “legal right, title, or interest” cognizable under §

853(n)(6)(A), because property properly subject to such a trust “was never truly the defendant’s property”

and therefore is not subject to forfeiture as his property in the first instance. Willis Mgmt. (Vt.), Ltd. v.

United States, 652 F.3d 236, 244-45 (2d Cir. 2011); see United States v. Schwimmer, 968 F.2d 1570,

1581-83 (2d Cir. 1992).

Claimants therefore do not proceed merely as general unsecured creditors asserting an

undifferentiated claim against HEX or against a defendant’s estate. Cf. United States v. Ribadeneira, 105

F.3d 833, 836-37 (2d Cir. 1997). They assert an ownership interest in identified reserve property

maintained specifically to provide the represented 1:1 backing for authenticated customer HDO balances,

together with property traceable to that reserve corpus. Whether Claimants can establish that asserted

interest is an issue for the ancillary proceeding; it cannot be resolved against them merely by allocating

the disputed property between the Government and Trustee before that adjudication occurs.

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 9

IV. Continuing Objection to the Seizures on Jurisdictional Grounds; Claims Preserved

Separately, and independently of the request that the Proposed Agreement be placed before the

Special Master, Claimants continue to object to the seizures themselves on jurisdictional grounds. They

have raised these objections with each filing on this docket--beginning with the Rule 41(g) motion of

December 6, 2023 (ECF No. 186) and continuing through the replies, renewed motions, notices of

supplemental authority, and third-party petitions that followed--and they hereby reassert and preserve any

and all claims that arise therefrom. Claimants do not ask the Court through this Notice to re-adjudicate

those preserved objections; they identify them to make clear that participation in the ancillary process and

opposition to the Proposed Agreement do not waive them.

Those objections include, without limitation, the following. HEX is organized under the laws of

the British Virgin Islands. It is not a U.S.-registered exchange or ATS. Its Terms and Conditions and

AML/CTF Policy expressly prohibit access or use by U.S. persons and U.S. residents; the United States

is an excluded jurisdiction. Claimants are foreign customers who completed KYC/AML onboarding,

including identity verification, source-of-funds review, and a declaration that they were not residents of

the United States, Canada, or Japan. The Government’s extra-territorial reach to seize reserves held for

those customers, in accounts of BVI and other foreign entities listed at ECF No. 720 items i, j, l, n, o, r,

and s, is challenged as exceeding the jurisdictional and extraterritorial limits applicable to the Exchange’s

operations and to the customer property seized.

The seizures also inverted the customer-protection rationale the Government advanced. The HDO

reserve was maintained and externally audited at a 1:1 backing. Claimants experienced no

misappropriation of their balances by the Exchange. What collapsed redemptions, froze reserves, and

devalued HCN was the Government’s taking of the reserve itself--and, as to the $37 million HIFG--HK

USA loan, the prior diversion of HIC-sourced funds into an escrow the Trustee now claims as an Estate

Asset. Having seized extra-territorial customer property from a non-U.S. platform that barred U.S. users,

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 10

the United States cannot now, by stipulation with a bankruptcy trustee appointed in Kwok’s personal case,

ratify that asserted jurisdictional overreach or convert disputed title through an estate that Claimants

contend never owned the funds.

Claimants therefore continue to object, on jurisdictional and related constitutional and statutory

grounds--including due process, the asserted absence of a sufficient jurisdictional nexus to reach HEX

customer property and the limits on the extraterritorial application of the forfeiture statutes, 21 U.S.C. §

853(k), 28 U.S.C. § 1355, and the insufficiency of notice to non-English-speaking persons abroad facing

retaliation risk--to every seizure, restraint, preliminary forfeiture order, supplemental forfeiture

application, and proposed disposition that reaches HEX customer funds, including any implementation of

the Proposed Agreement. Those objections have been timely and repeatedly raised. They are not waived.

They are preserved for this Court, for the Special Master, for any appellate review, and for any other

proceeding in which title to the seized funds is placed in issue.

Nothing in this Notice constitutes consent to the Proposed Agreement, consent to Bankruptcy

Court adjudication of HEX customer title, waiver of any Rule 41(g), § 853(n), CVRA, or constitutional

claim, or an admission that any HEX customer fund is property of the Defendants, property of the estate,

or proceeds of the offenses of conviction.

For the foregoing reasons, Claimants respectfully request that the Court:

1. Take notice of the Government--Trustee Proposed Agreement filed in In re Ho Wan Kwok, Bankr. ECF

No. 5739, and of the August 25, 2026 hearing thereon;

2. Direct the Government to file on this criminal docket the Proposed Agreement, Schedule 1, any term

sheet, and any implementing stipulation or proposed order, so that the Estate Asset / Forfeiture Asset

allocation is of record here;

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 11

3. Refer the Proposed Agreement, including its treatment of ECF No. 720 items i, j, l, n, o, r, and s, of the

$37 million HIFG-HK USA loan proceeds, and of any property reached by the Order’s “traceable to,” §

853(p), and Rule 32.2(e) catchall, to the upcoming Special Master for recommendation with the pending

ancillary petitions;

4. Hold that any Bankruptcy Court approval of the Proposed Agreement shall not adjudicate, release,

subordinate, extinguish, or otherwise prejudice Claimants’ asserted interests in HEX customer funds or

recoveries traceable thereto pending determination of those interests pursuant to 21 U.S.C. § 853(n) and

Federal Rule of Criminal Procedure 32.2(c); and

5. Note Claimants’ continuing jurisdictional objections to the seizures, which have been raised with

each filing and are preserved as to all claims arising therefrom.

FormerFedsGroup.Com LLC N.J. Attorney No. 022751991

Counsel for Authenticated Himalaya Exchange Claimants

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 12

I hereby certify that on August 28, 2026, I caused a true and correct copy of the foregoing Notice to be filed with the Clerk of Court using the CM/ECF system, which will send electronic notification of such filing to all counsel of record registered for electronic service in this action.

Bradford L. Geyer, Esq.

NOTICE RE GOVERNMENT--TRUSTEE AGREEMENT Page 13