First allegation of a Ponzi scheme in Canada

The Ontario Securities Commission charged a Toronto fund manager Weizhen Tang, who ran the Oversea Chinese Fund Ltd. Partnership, with fraud and accused him of running a C$40 million ($36 million) Ponzi scheme, reports Bloomberg. Tang who claimed to be the Chinese Donald Trump, faces 11 other charges, including unregistered trading in securities and illegal distribution of securities.

Current criminal charges come after the OSC, Canada’s main stock market regulator, submitted a filing in Ontario court March 23. In the filing the regulator claimed that Tang, who also ran Weizhen Tang Corp., told investors the company had no assets to pay requested redemptions. A judge froze Tang’s assets in March at OSC’s request.

“Tang had been using new funds raised from investors to pay redemptions requested by previous investors,” the OSC said in the civil filing. That is the classic definition of a Ponzi scheme, named after Charles Ponzi, who was charged with fraud in 1920. 

Under the federal law for each of the criminal charges he faces a maximum fine of C$5 million or a maximum jail sentence of five years, or both. Tang is scheduled to appear in court June 24, the OSC said.

According to Bloomberg Hugh Lissaman, Tang’s lawyer in earlier proceedings, said he no longer represents him.