Weizhen Tang, accused in Ponzi scheme, arrested upon return to Toronto

Date: Thursday, January 14, 2010
Author: Joel Tiller, The Globe and Mail

Weizhen Tang – a Toronto money manager accused of allegedly operating a multimillion-dollar Ponzi scheme – was taken into police custody Wednesday after arriving at Pearson International Airport from China.

Mr. Tang, the self-proclaimed “Chinese Warren Buffett,” arrived at 51 Division around 8:30 p.m., Constable Brent Bennett said.

A Canada-wide arrest warrant was issued for Mr. Tang, 51, after police allege he was the mastermind behind a Ponzi scheme that cost more than 100 investors $30-million, including one Toronto resident who allegedly lost $2.4-million.

Mr. Tang was a fixture in Toronto’s Chinese community after he founded Oversea Chinese Fund LP in 2001. But when his firm ran out of money last spring, investors began demanding their money back, and, subsequently, regulators launched an investigation.

In addition to a charge of fraud over $5,000, the Ontario Securities Commission has filed charges against him in Provincial Court. The commission alleges Mr. Tang committed securities fraud. He is also accused of unregistered trading in securities and illegal distribution of securities. His trial is expected to begin April 19.

Mr. Tang had been in Shanghai since last November, where he says he went to work to earn back the money lost by people who invested in his company.

A native of mainland China, Mr. Tang came to Canada in the 1990s. He is a Canadian who lives in Toronto with his wife and children and his company is based in the city, his lawyer, Loftus Cuddy, said.

Mr. Tang had planned on returning to Canada on Dec. 29, but asked for an extension that was later denied.

Last April, a federal judge in Dallas granted a request by the U.S. Securities and Exchange Commission for emergency relief for investors, freezing the assets of Mr. Tang and several of his businesses, including the Texas-based WinWin Capital Management LLC. The judge appointed a receiver to take control of Tang assets, which also include WinWin Capital Partners LP and Bluejay Investment LLC.

The U.S. complaint alleges Tang has already told investors of the Ponzi scheme.

In February, the U.S. commission said, he acknowledged in a letter to clients that he tried to conceal trading losses and attract new investors to his hedge fund by posting false profits on account statements and using funds from new investors to pay at least US$8-million in fake profits to earlier investors.