TORONTO—A prominent figure in Toronto’s Chinese community has been charged with orchestrating a $60-million Ponzi scheme, preying on ethnic Chinese victims in Canada, the U.S., and Mainland China.
The Ontario Securities Commission (OSC) alleges Weizhen Tang, owner of Weizhen Tang Corporation and Overseas Chinese Fund Ltd. Partnership, “provided investment advice and acted as a portfolio manager” without being registered under the Ontario Securities Act, and illicitly traded in securities.
The OSC froze his assets on March 17 and ordered that all trading activities cease.
Tang’s corporation website compares Tang to Warren Buffet and claims registration under the OSC. Also claiming to be operating “within the framework of the Ontario Securities Act,” the corporation promised weekly profits of one per cent to attract investors, each of whom were required to invest at least $150,000.
The Financial Post reports that an affidavit by OSC investigator Jeffrey Thomson, filed with the Ontario Superior Court of Justice in Toronto, said Tang failed to report to investors that he had lost US $15 million in 2007.
“Evidence obtained by staff demonstrates that recently Tang had been using new funds raised from investors to pay redemptions requested by previous investors,” stated documents filed by the OSC with the Superior Court on March 24.
The practice is also known as a Ponzi scheme, the same scheme used famously by Bernard Madoff, the former NASDAQ chairman who has pleaded guilty to taking tens of billions in what has been called the largest individual investor fraud ever.
Reports suggest victims of Tang’s alleged scheme could number 260.
Mr. Tang gained prominence in the Chinese community for his ardent and vocal support of the policies of the Chinese authorities.
He funded a pro-Beijing rally on Parliament Hill in Ottawa during the Tibetan unrest in March 2008, where he touted the regime’s line that occupation in Tibet had dramatically improved the lives of Tibetan people.
“They [Tibetans] violated the rules of their religion; they peeled the skin off humans, removed eyes, and cut off people's hands and feet. Such things could only happen under the Dalai Lama,” Tang said at the rally in referring to Tibetan life before the communist regime wrested control of the region.
In 2008, Mr. Tang also used his assets to fund a Chinese New Year event in Toronto backed by the Chinese Consulate, where then-Chinese Consul General Zhu Taoying made a lengthy address to the crowd.
For his part, Mr. Tang had been awarded by pro-Beijing associations in Toronto, praised by the consul general, and gained glowing press coverage in Chinese-language media both in Canada and in Mainland China.
The OSC will hold a hearing into Tang’s financial dealings on April 1 in Toronto.