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Linguistically handicapped Chinese investors in trouble

Lost in translation: The strange tale of two Chinese investors, their friends and a disappearing fortune

 | April 18, 2015 | Last Updated: Apr 18 12:31 AM ET
More from Adrian Humphreys | @AD_Humphreys
Chunxiang Yan, left and Zhenhua Wang celebrate their purchase of a 334-acre estate near Tweed, Ont., at a lavish banquet on Feb. 25, 2013.

FacebookChunxiang Yan, left and Zhenhua Wang celebrate their purchase of a 334-acre estate near Tweed, Ont., at a lavish banquet on Feb. 25, 2013.

Not too long ago, Chunxiang Yan and Zhenhua Wang were fêted by politicians, diplomats and business leaders at a seven-course banquet in Belleville, Ont., where the wealthy couple, recently arrived from China, was lauded as bold entrepreneurs for a plan to create a lavish resort on a 334-acre estate.

“They have big aspirations with ideas such as a golf course, spa, cottages and a winery,” the municipal economic development officer enthused to the local press.

“I really like this country, I extremely like Canada,” Yan, who was then living north of Toronto, told the gathering through a Chinese interpreter. “It is a beautiful land and I am planning, if all of you accept, I will be a permanent resident here.”

That was in 2013.

A year later, as Yan arrived at the York Regional Police headquarters to lodge a complaint against partners in that land deal, she was received not with plaudits but with warrants for the couple’s arrest.

In China, her husband Wang is wanted for an alleged fraud — involving between $180 million and $220 million from about 60,000 investors.

ccbtimes.ca

ccbtimes.caJessica Chen says she and her husband, Louie Szeto, are victims of a fraud by Chunxiang Yan and Zhenhua Wang.

Although facing no criminal charge in Canada, both have been in prison for immigration concerns since. From behind bars, they have waged a fierce fight against deportation and issued a blizzard of lawsuits.

Rather than being fugitive fraudsters, they claim, they are really victims of a massive manipulation in Canada, conned at every turn by supposed friends.

And then, they claim — when Yan, 49, and Wang, 50, realized they had been duped out of millions of dollars — they were ratted out to immigration authorities for false documents they had no idea were filed on their behalf, likely robbing of them of their ability to remain in Canada.

That claim is disputed by Yan and Wang’s nemesis as vociferously as it is made: “Those are all lies; that’s their revenges,” said Jessica Chen, who, along with her husband, Louie Szeto, is the couple’s former business associate.

(…)

“There is some evidence to support both sides of the allegations, which is the essence of a good lie,” said Detective Ward Taylor, a fraud squad investigator with York police.

(…)

———-

Wang was pitching an investment scheme at Hong Kong’s Kowloon Bay exhibition centre on March 6, 2012, when Louie Szeto met him.

Wang tapped into the nascent capitalist hunger in China and Szeto, along with many others, lined up to buy in. Szeto and his wife, Chen, say they invested $7.5 million of their savings into Wang’s and Yan’s fund.

(…)

Yan and Wang were named as directors. However, in corporate filings with the U.S. Securities and Exchange Commission they declare there is “no family relationship between any of the company’s directors.” InZon has since had its registration revoked by the SEC.

Wang’s pitch offered a multi-level marking operation, a system often derisively called a pyramid or Ponzi scheme.

China Canada Business Times

China Canada Business TimesLouie Szeto

Wang had already drawn unwanted attention from Chinese authorities. In January 2012, he was called to a police station in Guanxian, 450 kilometres south of Beijing, where he was questioned, photographed and fingerprinted over his investment business.

Whether he was fleeing China or merely looking for a better life is not yet known. What is accepted fact is that Yan and Wang wanted to leave China but could not speak, read or write any English.

Szeto introduced them to his wife, Chen, offering her services as a translator and trusted assistant. He also, Yan and Wang claim, said he was an immigration lawyer with extensive connections to Canadian officials and was paid $2 million for immigration help. (Szeto denies the claim.)

The two couples reconnected in September 2012 in Canada. Arriving on visitor’s visas, ostensibly to visit their children who are enrolled in schools here, Yan and Wang relied heavily on Szeto and Chen. They referred to them as “family.”

Yan and Wang gave the other couple the passwords to their email accounts and keys to their mailboxes so they could read their English correspondence, they claim. They gave them the keys to their home and to their Land Rover and Mercedes, told them the combination to their safe. And they gave them signing authority on many of their bank accounts.

Yan and Wang transferred about $30 million to Szeto’s and Chen’s control over the next year to fund business ventures, they claim.

There were plans for a gold mine in British Columbia and a development in Quebec. They started a Chinese-language magazine called China Canada Business Times,dominated by ads from politicians appealing to Chinese-Canadian voters.

(…)

———-

Tawlia Chickalo had been trying to sell the sprawling, rustic property in Marlbank for five months when the Chinese investors arrived at the start of 2013.

“When they showed up they were very hot and fast to buy. They wanted me to close the deal in three weeks and move out in 30 days,” Chickalo said.

The deal closed Feb. 25, 2013, for a purchase price of just over $4 million, court documents say.

The purchaser was Yan, but all of her dealings were through Szeto and Chen, who translated everything between English and Mandarin, Chickalo said.

(…)

——-

Yan and Wang were travelling in the Caribbean in November 2013 when bank officials called to confirm a transfer of $4.5 million to a company registered in the British Virgin Islands. The couple claims they didn’t know of the company and stopped payment.

They looked closer at their affairs.

Several transfers from their accounts had already gone to the British Virgin Islands firm, which, as it turns out, was controlled by Szeto. There were other payments they questioned, including $168,000 to Chen’s mother.

Yan and Wang called police and Szeto and Chen were arrested. They offered an alternate explanation, claiming legitimate use of the car and house. They told police — and immigration authorities — that Wang was wanted in China.

“We had grave questions as to the information we had been given (by Yan and Wang), so much so we didn’t feel comfortable laying the charge,” said police detective Taylor.

Chen and Szeto have a different version of their breakup with Yan and Wang. They learned in May 2013 that InZon was a scam when they read SEC notices online. They confronted Yan and Wang about it, Chen said, but were assured of their innocence. Then, at a corporate meeting, Chen claims, Wang produced a passport in a different name, that of Changzhi Xie.

China Canada Business Times

China Canada Business Times
Although facing no criminal charge in Canada, Zhenhua Wang and Chunxiang Yan have been in prison for immigration concerns since 2014.

“We then realized they never tried to do any legal business, they wanted to make use of us,” Chen said.

Just as York police were wading into these competing claims, the court was asked to do the same. On Dec. 6, 2013, Yan and Wang sued Szeto and Chen in Ontario court. It was the start of an immense amount of litigation, both in Canada and in Hong Kong.

The court has now frozen most of the assets.

Justice David Brown, during pre-trial motions, said there are enough concerns over Szeto and Chen’s handling of the money to warrant further hearings.

As Yan and Wang pushed their complaint against Szeto and Chen with police, the fraud detective, Taylor, invited them to police headquarters to explain their version of events. It was a set up. On March 7, 2014, Yan arrived with a Chinese-Canadian lawyer. Waiting for them were officers with the Toronto Police Fugitive Squad and Canada Border Services Agency.

Officers arrested Yan and her lawyer, Wen Wu — mistaking him for Wang. Yan was “wailing and almost collapsed,” according to a description filed in court. Police found she was carrying $7,500.

Yan and Wang were arrested not for any criminal offense, but for immigration allegations. The couple, however, say their documents were prepared by Szeto and Chen and submitted without them being able to read any of them.

———

For more than a year, Yan and Wang have remained in prison, separated both from each other and from their life of luxury.

They have filed lawsuit after lawsuit against the government for their treatment in prison, against former lawyers and former employees, against Ms. Chickalo who sold them the estate, the town’s economic development officer, their former realtor and others they did business with.

And against Chen and Szeto.

The same day they were confronted with confirmation of an arrest warrant from China, court filings say, they claimed for refugee protection and asylum in Canada, making their immigration proceedings secret affairs. The Immigration and Refugee Board has ruled the couple must remain in jail until their immigration issues are sorted out saying: “The likelihood of Ms. Yan and Mr. Wang appearing voluntarily for removal is low to non-existing… They have the willingness and financial means to do whatever is necessary to avoid removal.”

And while Yan and Wang remain in Canada to avoid authorities in China, Szeto and Chen are in China and have missed court deadlines in Canada.

“I have ongoing litigation with Wang and his wife. I just flew from Canada,” Chen said in a recent telephone interview. She said she is “temporarily staying here,” but will “definitely return to Canada” to deal with the court matters.

For Yan and Wang’s part, despite their lawsuits suggesting they have plenty of grievances to air, none of the lawyers acting on their behalf would speak about the case.

National Post

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