Weizhen Tang, who ran the Oversea Chinese Fund Ltd. Partnership faces 11 charges,

Weizhen Tang, who ran the Oversea Chinese Fund Ltd. Partnership faces 11 charges, including unregistered trading in securities and illegal distribution of securities, the OSC said in an e-mail. Today’s criminal charges follow a complaint the OSC, Canada’s main stock market regulator, filed in Ontario court March 23. In the civil complaint, the regulator said 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. Each of the criminal charges carries 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. Hugh Lissaman, Tang’s lawyer in earlier proceedings, said he no longer represents him. Telephones at Weizhen Tang Corp. in Toronto were disconnected and Tang couldn’t be reached for comment. It’s the first allegation of a Ponzi scheme in Canada since a slump in North American stock markets began a year ago. In the same period, the U.S. Securities and Exchange Commission has filed more than a dozen lawsuits to freeze money raised in alleged Ponzi schemes, including a $65 billion scam run by New York financier Bernard Madoff. In a May 31 posting on his Web site, an article attributed to Wang says people have called him the Chinese Madoff, which, according to the article, “is the worst slander.” “I am most probably a Chinese Donald Trump,” the article said. “Donald Trump shook free from $9 billion in debt to rise to prominence again.” The author of the article couldn’t be independently confirmed, although Lissaman and Tang’s associates had confirmed he wrote earlier letters to investors on the Web site.
In a 2006 Chinese promotional video available on YouTube, Tang is shown driving around Toronto in a Mercedes-Benz and being interviewed on Chinese television. His goal, he said, was “no greed” and by trading stocks, foreign currencies and futures he sought minimum weekly returns of 1 percent, which after commissions would result in a return to investors of 43.5 percent annually. Another May 31 posting attributed to Tang blamed the collapse of his company on “the enormous financial meltdown of 2008.” According to the article, people who accuse Tang of running a Ponzi scheme and “denying his investment ability” are “short-sighted and selfish.” Tang had said his fund invests in stocks, foreign exchanges, futures, options and mutual funds on Wall Street and stock markets in China and Hong Kong. The minimum investment was $150,000, U.S. or Canadian.