Canadian police seek man accused of running Ponzi scheme, say he is apparently in Hong Kong

Canadian police seek man accused of Ponzi scheme

TORONTO — Canadian police have issued an arrest warrant for a Canadian man who dubbed himself a “Chinese Warren Buffett” and is accused of masterminding a Ponzi scheme that has left millions of dollars unaccounted for.

Toronto Constable Tony Vella said Wednesday that Weizhen Tang, 51, of Toronto, made arrangements to surrender to authorities in December, but did not show up.

Tang is apparently in Hong Kong and is claiming he needs to make more money to build his defense before he returns to Canada, Vella said. Police are working with authorities there to bring him back to Canada to face a fraud charge.

Canadian police allege that between January 2006 and March 2009 more than 100 victims were defrauded of about $30 million through an online trading Ponzi scheme. Tang also faces federal charges in the U.S.

Authorities say victims were scammed in the United States, Canada and China, including one resident in the Toronto area who allegedly lost more than $2.3 million.

Tang’s lawyer, Loftus Cuddy, said he received a text message from his client Wednesday asking for advice after police announced the warrant.

“Mr. Tang is overseas, I don’t know where. Hong Kong is a logical guess,” Cuddy said. “I know that he is over there trading because he wants to make money to return to investors who lost money.”

Tang was originally supposed to return to Canada on Dec. 29, said Cuddy, but he was doing well in online trading and sought a monthlong extension from police.

“Mr. Tang has maintained his innocence throughout. (He) has not given me any instructions to plead otherwise. He intends to mount a defense,” Cuddy said.

“There have been losses in the millions, but whether those loses are the result of fraud is very much an issue,” he said.

A native of mainland China, Tang came to Canada in the 1990s and obtained citizenship. He is well known in Toronto’s Chinese community for helping fund the Chinese Lunar New Year Show and putting on investment summits.

Vella said a number of people walked into a Toronto police division in April 2009 claiming they were defrauded and an investigation was launched.

Tang raised between $50 million and $75 million from about 200 investors for his Canada-based hedge fund, Oversea Chinese Fund Limited Partnership, and operated a Ponzi scheme with the hedge fund since at least 2006, the U.S. Securities and Exchange Commission said.

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

Tang defended himself on his company Web site last year. He vowed to clear his name, calling the charges “an undesired thing” that he will face “with a positive attitude.”

However, the SEC complaint alleges Tang has already told investors of the Ponzi scheme.

In February, the SEC 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 $8 million in fake profits to earlier investors.

The Ontario Securities Commission, Canada’s main stock market regulator, warned investors Wednesday that Tang or his associated companies may be soliciting Ontario residents for money, including previous Oversea Chinese Fund investors, their family or friends.

The OSC has also ordered Tang not to trade in any securities and has also filed charges alleging that Tang ran a Ponzi scheme. Investors have complained they have been unable to withdraw their money from Tang’s companies.