WEST VANCOUVER — A series of civil claims filed this spring allege a West Vancouver couple are at the centre of a fraud and Ponzi scheme that pulled in more than $40 million over two decades before collapsing last year.
The 11 civil claims involve nearly 50 investors from the Lower Mainland, Victoria, the Gulf Islands and as far away as Singapore and the United Kingdom, according to a Vancouver Sun analysis of documents filed in B.C. Supreme Court.
Investors allege their money was not invested, as promised, in a payday loan business and other similar finance investments. As a result, investors allege they did not receive payments from profits from these businesses, but from their own funds or money from subsequent investors, according to court documents.
This type of fraud is normally called a Ponzi scheme, named after Charles Ponzi, who ran such a scheme in the 1920s in the United States.
The British Columbia Securities Commission is also investigating the alleged scheme.
The commission declined to discuss its investigation, but in an April 19 ruling, a commission panel denied an application to release funds from two frozen bank accounts linked to the West Vancouver couple.
The couple named in the civil claims are Virginia Mary Tan, 64, and her husband Patrick Eng Tien Tan, 73. Their son Marcus Soon-Keen Tan, in his late 20s, who lives with his parents in West Vancouver, is also named in some of the claims.
Virginia and Patrick Tan were pushed into bankruptcy April 29 by one of the civil cases, a move that automatically stayed other civil actions seeking payment of investment losses, which will now be determined by a trustee. However, civil actions against Marcus Tan continue. And all three Tans are named in the securities commission ruling.
The hundreds of pages of court files paint a detailed picture of the alleged scheme.
The Tans have denied the allegations and also said they do not owe money in responses to a handful of the civil claims.
The Tans did not respond to requests for interviews by phone or through emails.
The Tans’ lawyer, John Whyte, said it is not appropriate for the Tans to comment because of the civil actions and the securities commission investigation.
“In the circumstances, there’s nothing properly they can say at this time,” said Whyte.
The investors that filed claims were also reluctant to discuss the alleged Ponzi scheme.
But documents filed in the 11 claims, including affidavits from a handful of investors, show the alleged investment dealings began among close friends and circulated among relatives and acquaintances including a circle of people in the congregation of Christ The Redeemer Catholic Church in West Vancouver.
Among the investors are businesspeople, retirees, university students and at least one accountant. The investors put in amounts ranging from $50,000 to several million dollars. New investors came on board as late as 2014 and 2015, an analysis of court documents shows.
Four priests invested their life savings, the documents show. And at least one couple has put up their home for sale because of their investment losses, according to the court filings.
The civil claims filed in B.C. Supreme Court allege that starting in the late 1990s, investors put money into what they believed was a payday loan business, and later for short-term loans to businesses that could not obtain credit.
Investors also allege they were told their money was used to buy debt owed to companies at a discount and then collect on it, a practice they say Virginia Tan described to them as factoring accounts receivable.
Investors were promised high rates of return, 12 or 16 per cent, and in one case 24 per cent, the interest to be paid through promissory notes, according to court documents.
Most promissory notes paid interest monthly, with the principal due after six months or one year. Often, investors rolled over their promissory notes when they came due and investors were often told their investments were secure, according to court filings.
But beginning in 2015, interest payments began to stop when post-dated interest cheques bounced and investors were unable to collect their principal, show court documents.
West Vancouver couple Laurence Lau and Chui Han Wong were the first to become involved with Virginia Tan’s proposed investments in 1997 through a private company they owned, RSC Enterprise Canada Inc., according to court filings.
They met the Tans around 1996, became friends and then developed a business relationship, according to an affidavit filed by Lau in March.
Lau, a former Singapore military pilot who moved to Canada in 1991 and settled in West Vancouver, said he and his wife invested savings of $5.535 million.
In addition, Lau said his sons invested $790,000 with Tan and the wife of one of his sons invested $1.53 million.
Relatives of Lau, most of whom live in Singapore, and close friends invested another $9.39 million, according to the court documents.
As a result of their investment losses alleged with the Tans, they are selling their West Vancouver home of 25 years.
Lau and Wong’s lawyer, Michael Hewitt, declined to comment because he said the matter is a part of a legal action.
Another early investor, North Vancouver resident Rina Teo, described in court documents as a financial controller, said in an affidavit filed in March she first met Virginia Tan about 1998 at Christ the Redeemer Church.
Teo declined to talk to a Sun reporter when reached by phone.
The two women became close friends, and sometimes Tan introduced her as her sister, Teo’s affidavit states. Between 2002 and October 2015, Teo invested $7.405 million with the Tans, according to court documents.
In the affidavit, Teo also noted that friends of hers and Jastram, the company for which she worked, invested another nearly $10 million.
In her affidavit, Teo stated that four priests had also invested their retirement savings, totalling $446,000.
One of the priests told Teo that he sent Virginia Tan $6,000 in February 2016, after Virginia promised higher interest, according to her affidavit. Teo advised the priest not to give any more money.
Thetis Island residents Lenka Helen Pelikan, listed as an accountant, her husband Malcolm Bruce Brophy, and a company they own invested more than $1.4 million between 2000 and 2015. Pelikan also declined to comment. “We’ve been instructed not to talk to anybody, not to jeopardize the process,” she said.
Vancouver resident Irene Richards, who made investments of $1.2 million between late 2010 and 2015. In response, Virginia Tan and Marcus Tan denied they owed any money.
It is unclear to investors where all the money went.
Some of the civil claims allege money was used without their knowledge to purchase property.
