TORONTO — Financial adviser Weizhen Tang — who’s accused of orchestrating a Ponzi scheme that allegedly defrauded investors of tens of millions of dollars — was arrested Wednesday night upon his return to Toronto from China.
Toronto police Staff Sgt. Edward Tymburski said two officers from the fraud squad took Tang into custody aboard the plane when his Air Canada flight arrived at Pearson International Airport.
Wearing a dark coat, Tang was whisked away from the airport out of the glare of media cameras. He was taken to Toronto’s 51 Division where he was to spend the night in jail pending an arraignment in court on Thursday morning, he said.
“He arranged to surrender himself and he flew from Shanghai tonight and turned himself in to fraud squad officers,” said Tymburski.
Toronto police had issued a Canada-wide arrest warrant for Tang, 51, who has been charged with fraud over $5,000 related to defrauding the public.
The charge of defrauding the public covers all the victims of the alleged fraud, said Tymburski.
“He’s been co-operative,” said Tymburski, who added Tang appeared to be in good physical shape and was calm.
“He expected to step into custody when he got off the plane,” said Tymburski.
Some passengers on the plane said they had seen a man arrested on the flight but didn’t see handcuffs used. They said that the pilot told them over the intercom to stay calm and remain in their seats for a couple of minutes while Tang was taken off the plane.
“I saw two police come over for one guy, before we get off, everybody was seated,” said passenger Daisy Dong, who had arrived on the same Air Canada flight.
The fraud warrant is in addition to 12 counts of breaching the Securities Act laid against Tang last June by the Ontario Securities Commission in connection with the hedge fund Tang administers, the Oversea Chinese Fund Limited Partnership.
It’s alleged that between January 2006 and March 2009, more than 100 victims were defrauded of approximately $30 million through an online trading Ponzi scheme. Toronto police allege there were victims in the United States, China and Canada, including one Toronto-area resident who allegedly lost $2.4 million.
Police launched their investigation in April 2009 after a number of people walked into a Toronto police division to complain that they’d been defrauded.
Arrangements had initially been made between police and Tang’s lawyer Loftus Cuddy in November to bring the suspect back to Canada on Dec. 29, but he did not return at that time and police and his lawyer said they believed he was trying to raise money for his defence in Asia, which Tang later confirmed.
“I am innocent and welcome any investigations and respect the legal process very much,” Tang writes in a letter addressed to police that was posted just a few days ago on his website.
“To be honest, I have nothing to do with fraud and have most of investors and public support, a fraudster could not ever dreamed to have,” Tang wrote.
Tang is being represented by a lawyer, said Tymburski.
However earlier in the day, Cuddy had said he had been asked to represent Tang but they couldn’t agree on a retainer because Tang was broke and that Tang might have to apply for legal aid.
A native of mainland China, 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, Cuddy said.
A well-known figure in Toronto’s Chinese community, Tang helped fund the Chinese Lunar New Year Show and put on investment summits that featured economists from China and the United States.
The Ontario Securities Commission alleges Tang committed securities fraud. He’s also accused of unregistered trading in securities and illegal distributions of securities. His trial in provincial court in that case is scheduled to begin April 19.
Earlier this month, the commission put out an investor warning that said Tang may be soliciting residents of Ontario for investment purposes and that previous Oversea Chinese Fund investors, their family or friends may be targeted.
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 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.
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.