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Guo Wengui
Billionaire businessman Guo Wengui speaks during an interview in New York City, U.S., April 30, 2017. Picture taken April 30, 2017. REUTERS/Brendan McDermid


U.S. law firm Paul Hastings and one of its lead restructuring lawyers, Luc Despins, are seeking sanctions against a group of plaintiffs they claim are involved in an alleged campaign of harassment waged by Chinese businessman and media entrepreneur Guo Wengui.

A group of Chinese-born U.S. residents sued Despins and Paul Hastings in Manhattan federal court in November, claiming they are violating the U.S. Foreign Agents Registration Act by acting as unregistered foreign agents for the Chinese government and the Chinese Communist Party.

The FARA lawsuit is baseless and part of a "larger campaign of harassment" against Despins, who is the Chapter 11 trustee overseeing Guo's bankruptcy estate, Despins and the firm countered in their Thursday motion for sanctions.

The lawsuit claims Paul Hastings violated FARA when it advised Jinshang Bank, a Chinese bank, in connection with its listing on the Hong Kong Stock Exchange. The law firm said the accusations are "frivolous" because its "alleged work in connection with the Jinshang Bank global offering" would fall within a commercial exemption to the foreign agent statute.

Despins and the firm asked the court to order the plaintiffs and their attorneys to pay their fees and costs from the case.

For months, Despins and the firm have described in court papers an in-person and online campaign, allegedly orchestrated by Guo, that has portrayed them as puppets of the Chinese Communist Party and supporters of genocide.

Last week U.S. Bankruptcy Judge Julie Manning in Connecticut, who is overseeing Guo's bankruptcy, called him "the leader of a social media and protest campaign" against Despins and others, including "their counsel, and their relatives, at personal homes and workplaces."

Manning ordered Guo, also known as Miles Guo and Ho Wan Kwok, and his agents to stop protesting outside the homes of Despins and others and restricted what they can post on social media.

Manning's Jan. 11 ruling identified Beile Li, one of the plaintiffs in the FARA lawsuit, as one of Guo's "friends, employees, servants, associates, followers, and/or colleagues."

Despins and the firm said it is "undeniably evident that at least seven of the ten named plaintiffs in this action are active participants in the larger harassment campaign."

Despins and Paul Hastings are also seeking sanctions against the plaintiffs' counsel, Chicago-based Yongbing Zhang and New York-based Richard Freeth, arguing they "are also part of the harassment campaign, or at the very least, fully aware of and complicit in it."

Freeth, in an email to Reuters, called the sanctions motion a "red herring" that is irrelevant to his clients' claims.

Despins and the firm have also argued that the plaintiffs' lawsuit should be dismissed because FARA does not allow private actors to sue under the statute. Freeth said he wants the court to give "real teeth" to FARA by allowing the case to move forward, arguing "the U.S. is virtually inundated with CCP agents, spies and collaborators."

Zhang did not immediately respond to a request for comment. A spokesperson for Despins and Paul Hastings also did not immediately respond to a request for comment.

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