The Scam at the Heart of the Mysterious Epoch Times
Five years ago, a niche newspaper called The Epoch Times made a big bet on Donald Trump. The outlet, associated with the exiled Chinese spiritual movement Falun Gong, never gained too many readers by handing out its free broadside condemning the policies of the Chinese Communist Party. But when Trump came into office, its editors found a hitmaker: pro-Trump stories and conspiracist clickbait. In 2019, as his reelection campaign warmed up, The Epoch Times increased its efforts to cover Trump favorably. It also extended its ad budget, spending more on pro-Trump advertising on Facebook than any group except the campaign itself.
The paper was eventually banned from Facebook for trying to obscure its pro-Trump ad buys, but the bet paid off. The Epoch Times was scoring interviews with Cabinet members. Former Trump advisers such as Steve Bannon were teaming up with its parent media company for documentary projects. In one suspicious instance, an Epoch Times photographer got into a restricted area in the White House and handed Trump an unmarked folder; the matter was never fully explained by the administration except for a statement saying it had been “dealt with.” In 2020, Trump’s press secretary invited The Epoch Times into the White House press-briefing room. As the pandemic raged, the paper leaned into the opportunity to distribute viral misinformation, calling COVID the “CCP virus.” Today, it is entrenched in the conservative media landscape, particularly for its health coverage. Last week, a Republican senator published an Epoch Times op-ed on the pandemic response. Robert F. Kennedy Jr. said last year that he is a daily reader.
Tax records showed the expansion strategy was successful. The Epoch Times Association, the nonprofit behind the paper, pulled in $70 million in revenue in 2020 — tens of millions more than in the nine previous years combined. When banks asked about the surge in money coming in, the chief financial officer, Weidong “Bill” Guan, said the influx came from an increase in “online donations.”
“I always assumed there was some type of underwritten donor, but the management never really let us into that side of it,” says Steven Klett, a politics reporter on the paper’s digital team for the 2016 election. “They were very cagey if we ever brought it up.”
This week, the Justice Department suggested the growth in 2020 had been fueled by another source of revenue: On Monday, federal prosecutors in Manhattan charged Guan with bank fraud and conspiracy to commit money laundering for allegedly running a yearslong scheme to launder at least $67 million in illegally acquired cryptocurrency through the company.
Little is known about Guan, a 61-year-old executive living in a modest New Jersey duplex, who was arrested on Sunday morning and pleaded not guilty. (Through a federal public defender, he has declined requests for comment.) But prosecutors say Guan ran a money-laundering operation out of one of the newspaper’s foreign offices. He was direct with his goals, calling the alleged fraud the “Make Money Online” team.
In early 2020, Guan and his team allegedly bought tens of thousands of prepaid debit cards that were loaded with illegal funds obtained “through various frauds,” according to the indictment. Prosecutors provided little detail on the origins of the ill-gotten cash but did allege that Guan had laundered fraudulently obtained “unemployment-insurance benefits” — suggesting a laundering connection to the rampant unemployment fraud in the first pandemic year. After obtaining the funds, Make Money Online allegedly cashed out on a crypto exchange for 70 to 80 cents on the dollar, then placed the clean funds in bank accounts associated with The Epoch Times.
The plan was not complicated; prepaid cards are commonly used by crypto scammers. And soon enough, prosecutors say, banks were flagging the Make Money team’s transactions. In June 2020, one bank marked The Epoch Times’ surge in income as suspicious. This was when Guan replied that it was just “online donations” for which it happened not to have an invoice. In December 2020, a second bank flagged the increase in funds as suspicious; Guan replied by email that the company was simply getting “more and more donations from our supporters because more and more people like our media.” That month, Guan was also warned outright by a prepaid-debit company that all their transfers had been made with “stolen/fraudulent funds, which leads us to believe these are all money-laundering attempts.”
According to former Securities and Exchange Commission official John Reed Stark, these schemes inevitably attract federal attention. “Any time you’re using a prepaid debit card with other anonymizing techniques, you’re going to raise anti-money-laundering concerns,” he said. Prosecutors claim the scale of the alleged scam can be seen in The Epoch Times Association’s tax documents. After the banner year in 2020 — when Guan allegedly began his laundering operation — The Epoch Times raked in over $120 million for each of the next two years. Prosecutors say the alleged scam was ongoing until last month when Guan was indicted.
Hours after the arrest was made public on Monday, The Epoch Times announced that Guan would be suspended “until the matter is resolved.” His next appearance in court is scheduled for June 21. During the trial, former employees like Klett hope more information will come out about the newspaper’s international operations and its connections to the secretive Falun Gong movement — and its dance company, Shen Yun — which are run out of a complex south of the Catskills. “It leaves more questions than answers somewhat,” Klett says. “I was expecting something more to do with human trafficking and labor exploitation, just based on my experience.” In previous interviews, Klett has claimed The Epoch Times employed Falun Gong followers on tourist visas; they then lived together in a complex in New Jersey and worked long hours, six days a week, without pay — allegations the paper has denied. Based on what he saw there eight years ago, Klett described the charges this week as “pedestrian.”
“This is a really stupid scam,” he says. “It leaves a massive paper trail. And why you would think you would get away with that to begin with? I don’t quite get it.”