Toronto businessman Weizhen Tang, who calls himself the "Chinese Warren Buffett," should go to jail for up to 10 years for defrauding 200 investors out of more than $20-million, Crown prosecutors told a Toronto judge this morning.
"This was a major, major fraud," Crown attorney Gavin McDonald told the Ontario Superior Court during a sentencing hearing. Mr. McDonald is also seeking $2.8-million in forfeiture.
A jury convicted Mr. Tang last month of one count of fraud over the collapse of the Chinese Overseas Investment Fund which he launched in 2006. The fund attracted clients from Canada, the United States and China, Mr. McDonald told the court. Mr. Tang raised more than $50-million from investors, sending them daily updates on how well the fund was supposedly doing. Mr. Tang used the money to build up his image in the Chinese community, attract more clients and make several donations. "Mr. Tang considered this money to be completely available to him," Mr. McDonald said.
The fund collapsed in February, 2009, when investors discovered Mr. Tang had barely $1,000 in various accounts, not the $70-million he claimed only a month earlier. Some investors alerted the Ontario Securities Commission, which shut down the fund.
The court also heard excerpts from several victim impact statements, most written in Mandarin. One investor lost $600,000, representing his family's entire savings. Another, Jiong Zhou, lost $115,000 she and her husband had brought with them from China to help set up a business in Canada. When the fund collapsed, Ms. Zhou said all she could think about was "how to die," because her family's only option would be the money they would collect on her life insurance. She added that the loss has crippled the family's business and strained the couple's marriage, because her husband told her not to invest with Mr. Tang. "I hope my husband will forgive me for my mistake," she said in her statement.
Another investor expressed her hatred of Mr. Tang and added that if he had been tried in China "he would have been shot."
Mr. Tang, who conducted his own defence during the trial, made a brief statement before the hearing began, telling the judge that he takes full responsbilities for the investment losses. But he insisted he did not commit fraud and that the fund was simply a victim of the downturn in the economy. "It is not a fraud," he said through an interpreter. "I am not criminally responsible."
He also claimed some of the victims had lied in their victim impact statements.
Mr. Justice Alfred O'Marra is expected to sentence Mr. Tang later this week.