Bail unresolved for accused in alleged $30M scam

Date: Tuesday, January 19, 2010
Author: CBC News

A Toronto financial adviser accused of operating a multimillion-dollar Ponzi scheme had to spend another night in jail Monday pending the resumption of his bail hearing Tuesday.

Weizhen Tang, 51, is accused of defrauding about 100 investors of $30 million through his hedge fund, the Oversea Chinese Fund Limited Partnership, between January 2006 and March 2009.

Tang returned to Canada from China last week to face the charge of fraud over $5,000.

Tang's wife, Hong Xiao, his longtime friend Tao Jie and his hairdresser, Jing Qing Tao, told court Monday that they were willing to act as his sureties.

Speaking through an interpreter, they said they were willing to use the equity in their homes to guarantee Tang's bail and to supervise him to ensure he didn't solicit more investors or engage in day trading.

But Crown prosecutor Warren Thompson said outside court that the Crown opposes bail, fearing Tang could flee or commit further offences.

Xiao, an insurance broker, told court she and Tang have $80,00 to $100,000 equity in their house.

Thompson asked Xiao if she knew anyone with assets of $250,000 that could be used. She said she did.

Outside court, Thompson said he floated the $250,000 figure to determine how much money Tang's supporters could put up to secure bail.

Jie said that she has known Tang for about 10 years and that they came from the same town in China. She said she doesn't believe Tang would violate bail by trading.

"I trust Mr. Tang won't disappoint me," she said.

Tao, who said she'd only known Tang for three years, said she trusts "he is a good person" and she trusts his wife.

"I believe they want to face this case and finish this case," she said.

Crown and defence lawyers will make their submissions Tuesday to justice of the peace Paul Mushinski, who said a careful review of the evidence is needed before he can make a ruling.

'Mr. Tang likes publicity'

Neither the Crown nor the defence asked for a publication ban on the hearing.

When asked why outside the courtroom, defence lawyer Loftus Cuddy said, "Mr. Tang likes publicity."

Earlier, Det. Gail Regan of the Toronto fraud squad outlined how she was handed the case in May 2009 after citizens went to police, claiming Tang had taken their money.

Thompson asked Regan if Tang was licensed to deal with mutual funds and other investments and she said no.

Regan testified she took out a local arrest warrant for Tang on Nov. 19 after he'd left the country. She said he didn't think he knew of the plans to arrest him.

It became a Canada-wide arrest warrant Jan. 6, when Tang didn't return Dec. 29 as arranged, Regan said.

Cuddy said in a voicemail that Tang had gone to China and would be staying there a little longer, Regan said. Tang, who is well known in Toronto's Chinese community, returned voluntarily from Shanghai on Jan. 13.

Toronto police allege that victims of the financial scheme are in Canada, the U.S. and China.

Tang faces trial April 19 on 12 counts of breaching the Securities Act. The Ontario Securities Commission filed the charges last June in connection with the Oversea Chinese Fund Limited Partnership.

Last April, a U.S. federal judge granted emergency relief for U.S. investors, freezing the assets of Tang and several of his businesses and appointing a receiver to take control of the assets.

The U.S. Securities and Exchange Commission alleges Tang told investors of the Ponzi scheme in a letter in February 2009.