The 1% Club: the story behind Weizhen Tang—Toronto’s Bernie Madoff

Weizhen Tang told his investors they deserved to be rich and only he could make them so. Even now, after he lost all their money and was charged with running one of the country’s largest Ponzi schemes, his disciples still want him to keep trading. They believe it’s the only way they’ll get their $30 million back By Nicholas Stein, Illustrations by Jeffrey Smith

When Air Canada flight 88 from Shanghai arrived an hour late at Pearson airport last January 13, a group of officers from the Toronto Police fraud squad were waiting to meet it. They were there to apprehend Weizhen Tang, a 51-year-old native of China who had lived in Toronto since the early 1990s. Tang was accused of perpetrating one of the largest investment frauds in Canadian history: a Ponzi scheme involving up to 200 victims in Toronto, the United States and China. Two weeks earlier, he had agreed to surrender to authorities at Pearson, but he never arrived, prompting police to issue a warrant for his arrest. They feared he’d stay in China to evade prosecution.

As the passengers of flight 88 watched from their seats, the officers entered the aircraft and made their way through the cabin. This time, Tang was on board. They handcuffed him, escorted him into a police cruiser, and drove to 51 Division. As the car pulled up, Tang stared forlornly out the window at the media horde gathered to document his capture. Wrapped from the neck down in a dark coat and scarf, his eyes peering from behind wire-rimmed glasses, he looked small and vulnerable. Inside the station, he was stripped and searched.

High-profile fraud arrests are rare in Canada, but it’s not because we have a shortage of fraudsters. This country has a reputation for being soft on corporate crime, a problem often attributed to the dysfunctional and divided patchwork of regulatory bodies that oversee Bay Street and the traders and investment gurus who earn their fortunes there. In fact, Canada is the only G20 nation without a centralized national securities regulator, but Jim Flaherty’s on the case. Last May, Canada’s finance minister unveiled legislation to replace the 13 independent provincial and territorial agencies now charged with policing the country’s financial markets with a single organization akin to the American SEC. The Supreme Court is expected to rule on the constitutionality of the new so-called Securities Act early next year.

Tang’s improbable rise and public fall is a particularly egregious illustration of our flawed system. More than four years before his arrest, the Ontario Securities Commission was concerned about Tang’s activities but did little to stop him. In those years, his investors lost as much as $30 million.

In 2008, at the height of the worst financial crisis since the Great Depression, word circulated within Toronto’s Chinese community about Weizhen Tang’s extraordinary investment returns. As portfolios of even the best money managers plummeted, Tang seemed to defy gravity, soaring above the carnage like a wire-fu acrobat in a martial arts film. During a year in which New York’s benchmark S&P 500 Index dropped almost 40 per cent, Tang’s Oversea Chinese Fund reported results that were an astonishing 80 points better.

The Chinese media referred to Tang as the “Chinese Warren Buffett”—a sobriquet he encouraged through references to the legendary investor in his 2006 autobiography, How the Buffett Way Took Me to Wealth. The book is both a self-reverential hagiography and an instruction manual for aspiring investors, and it established Tang as a financial guru—a five-foot-two Mandarin-speaking amalgam of Suze Orman and Tony Robbins. Tang wrote articles for on-line news sites and investor message boards, addressed university students and businessmen during a speaking tour in China in the fall of 2006, and organized seminars and charity events in Toronto attended by VIPs and such politicians as Olivia Chow and Michael Chan. These included an annual Chinese Lunar New Year’s gala, and the North American Chinese Wealth Summit—a lavish $230-a-plate investment seminar and dinner at the Metro Toronto Convention Centre in January 2009, which attracted dignitaries from the Chinese consulate and speakers from major Canadian banks and universities, including the CIBC senior vice-president John C. Pattison.

To Tang’s followers, many of whom were immigrants from mainland China with little understanding of financial markets, his message spoke to the difficulties of succeeding in the West. In an article on Tang’s Web site entitled “How Can Chinese Become Rich?” Tang wrote, “[The Chinese] work too hard, and they work too much—yet, at least in terms of wealth, they have very, very little to show for it… Us Chinese must learn to depend on each other, in particular, the common resources of other Chinese who have something to offer.”

Tang’s path to the moneyed corridors of Bay Street was circuitous. Raised in humble circumstances in China’s Hunan province—his father was a carpenter at a local farming machinery plant; his mother worked as a commercial tofu maker—Tang moved to Canada at 32 to earn a masters degree in biology from the University of Waterloo. His first foray into the world of finance came at a Toronto branch of Canada Trust. It was 1993, and Tang was working as a biomedical researcher at the Toronto General Hospital. His wife, Hong Xiao, and daughter, Wenyi, had recently joined him from China (his son Wensi was born a year later), and he wanted to open his first RRSP account. The bank representative asked if he had ever considered investing on his own. “The idea was utterly alien to me,” he writes in his book. “Prior to that, I had never touched stocks; indeed, at the time, I saw little difference between buying stocks and reckless gambling.”

Enticed by the roaring bull market of 1993, Tang soon changed his mind. He transferred his limited savings from safe, low-yielding government bonds to riskier, higher-yielding equities, and when his portfolio grew by 40 per cent in the first year, he developed the zeal of a convert, proselytizing about the merits of the market. Witnessing his success, some of Tang’s colleagues approached him to invest on their behalf. In 1996, although he hadn’t obtained a trading licence from the Investment Dealers Association of Canada or the OSC, he left his research career to focus on investing full time. Over the next year, his clients grew to more than 100 and his assets under management to $4 million. He claimed to have an average return of 30 per cent, and to have never lost his investors a penny.

Even at this early stage of his new career, there were troubling signs. In the late ’90s, the IDA launched an investigation into Tang’s activities with one of his clients, a 42-year-old hotel housekeeper identified in legal filings as YZ. On Tang’s advice, YZ had opened a trading account in February 1999 at Gorinsen Capital, a brokerage firm where Tang’s wife had recently started working as a sales trainee. Until then, Tang had executed trades through his clients’ bank accounts. Mutual funds are designed as long-term investments typically held for months or years; Tang was trading them daily. The banks eventually refused to accommodate him, so he began trading for YZ through her Gorinsen account. When YZ attempted to redeem some of her investment four months later, she discovered that her $50,000 account had decreased dramatically. Tang guaranteed in writing that he would reimburse her in six months if he couldn’t trade her balance to its original level. But soon after, he stopped returning her calls. By mid-October, YZ’s account had dropped to $11,000. She also discovered Tang had executed 356 trades on her account, incurring $25,258 in commission charges. Unlike the banks, which didn’t charge commissions, Gorinsen charged $51 to $99 per trade; YZ was aware of this and had expressly instructed Tang to reduce his trading volume when she opened the account.

The IDA’s investigation concluded that Tang had ignored his client, was a reckless trader and, because of the cost and frequency of his trades, could never have made a profit. In 2004, the IDA fined Tang’s wife $45,000 and imposed a 10-year suspension from the industry. (Because Tang was not registered with the IDA, he was not subject to sanctions.)

Just as Bernard Madoff preyed on the Jewish community, Weizhen Tang appealed to the Chinese diaspora

Many of Tang’s clients deserted him after the banks curtailed his short-term trading of mutual funds. He also suffered significant losses during the market downturns of 1998, 2000 and 2001, which angered his remaining investors—prompting some to harass Tang’s family and friends to get their money back. Nearly destitute, Tang mortgaged his modest, two-storey house near Bayview and Steeles, lived off credit card loans, and rented out his basement to a boarder.

In 2004, however, he devised the slogan that would transform his fortunes. In a promotional campaign spread through the Chinese media, he rebranded himself as “The King of 1% Weekly Returns”—a seemingly innocuous claim that would result in a gargantuan 52 per cent annual return. Even better, his new strategy promised to involve minimal risk. “Tang keeps 99 per cent of the total investment pool outside the market for safekeeping, while amplifying the remaining one per cent with certain leverage,” he explained. “In this way, Tang is able to put a cap on the maximum loss while generating steady and continuous returns.”

Tang’s articles and marketing materials read like scripts for TV infomercials. But instead of sculpted abs or a clear complexion, Tang offered the ultimate self-help product: wealth. The viral marketing power of the Internet allowed him to publicize his new identity and investment strategy. He posted stock tips and investing advice on the DaQian Stock Forum, an on-line message board. In May 2005, Shanghai’s Dragon TV interviewed Tang in an episode of Meeting the Financial Community entitled “Chinese Elite Challenging Buffett,” and the legend of the Chinese Warren Buffett was born. Tang, a relentless self-promoter, soon created his own blog on his corporate Web site, where he posted hyperbole-filled articles trumpeting his genius. He also gained credibility through his close association with people such as Daniel Xu, an economics professor at the University of Western Ontario, who wrote the preface to Tang’s book and spoke at a Tang event.

While Tang showed few outward signs of his newfound prosperity, he did relocate his investment firm from his home to an office tower at the corner of York and Adelaide. Occupying half of the 33rd floor, the spacious new premises signalled to investors that Tang’s stature on Bay Street was rising.

Chinese immigrants had witnessed first-hand their native country’s economic boom, where double-digit returns were common­place. They were attracted to Tang’s burgeoning reputation and the promise of steady, one per cent weekly returns, and they clamoured to deposit their funds. Between 2006 and 2008, Tang’s Oversea Chinese Fund raised an estimated $60 million.

In 2006, a middle-aged man I’ll call Hui Chan (he spoke on condition of anonymity) began to notice promotional articles about Weizhen Tang in the free Chinese community newspapers at his local grocery. Chan had immigrated to Toronto from mainland China in 1989. Through a succession of jobs as a cashier, restaurant cook and auto assembly-line worker, he had saved $150,000—the minimum investment required for Tang’s fund. He attended one of Tang’s seminars in the auditorium of a Scarborough high school and came away impressed with both the man and his investment strategy. “Tang gave the impression of being a real expert,” says Chan. “The one per cent weekly return was very compelling.” In the spring of 2007, Chan invested his life savings with Tang. Previously, he had bought mutual funds, which fluctuated with the market. Now, he was encouraged to see his balance growing at a steady daily rate of one per cent every time he logged onto his account on Tang’s Web site. Emboldened, Chan invested another $100,000, financed through a home equity loan on his North York condo. By the end of 2008, the balance in his account had more than doubled to $550,000.

Every three months, Tang arranged catered get-togethers for his investors. He told them to ignore the negative reader comments that followed articles about him posted on Chinese Web sites as the jealous ramblings of people without the resources to invest. “You know what I can do,” he told Chan and the others. “You see your account statements.” But as questions and criticisms continued to build, the Toronto-based Chinese community Web site 51.ca published an editorial challenging him to answer his critics by holding a live, real-time display of his trading ability.

Tang complied, announcing a special five-day event at his offices from January 26 to 30, 2009. A dozen or so people gathered each day to watch Tang trade, including reporters from Toronto Star affiliate Sing Tao Daily and other Chinese media. He began with $1 million in a trading account and proclaimed that he would generate a $700,000 profit—one per cent of the total value of his fund, including supposed profits he’d generated to that date—over the course of the week. The demonstration began promisingly, and after the first day, according to witnesses, the account was up $310,000. By the end of the third day, Tang’s profits had reached $650,000. But his luck ran out, and Tang lost $430,000 over the final two days, leaving a return of just 0.3 per cent.

For Chan, what was more troubling was that the account value fluctuated wildly from one day to the next. The event’s results looked nothing like the steady daily returns he was accustomed to seeing in his account. Immediately after the demo ended, Chan asked to withdraw his entire investment. Tang’s wife tried to convince him to keep some of his money in the fund, but he could not be dissuaded. He filled out an on-line redemption request on the spot, using a computer in Tang’s office. He never received the funds. Other investors, already anxious about the collapse of the global economy, attempted to redeem their money, too, but to no avail. When investors contacted Tang’s office, his staff explained the delay was caused by the sheer volume of requests. Investors formed a committee under the leadership of Peter Lin, a business owner and an early investor who spoke English better than many others. In a series of heated meetings, they discussed whether newer investors should get back their principal before the older investors—who in many cases had already redeemed their initial investment.

Under relentless pressure from the investor group, Tang agreed to a meeting in a conference room at a Markham Holiday Inn. On February 27, more than 120 investors showed up to hear him out. The mood was tense, and reporters in attendance were instructed to leave the room. Tang’s wife, an attractive woman with shoulder-length black hair, stylishly attired in a houndstooth coat, took the microphone first. Speaking in Mandarin, she gave an emotional apology to investors. Soon after, Tang entered the room and sat placidly behind the table as investors confronted him about his failure to honour their withdrawal requests. His answer took everyone by surprise: all of their money was gone. Of the $60 million invested in the Oversea Chinese Fund, only $1,400 remained. Tang told them he had paid out $30 million in redemptions and profits to some investors and had lost the remaining $30 million in trading. A wave of emotions swept over Chan, who at the time still believed Tang had kept 99 per cent of his fund outside the market. “I was very angry, very upset,” he says. “My whole life savings were gone. I didn’t know how I am going to go on.” An investor—the only Caucasian in the room—stood up and confronted Tang. He said he had given Tang $170,000 less than a week earlier and wanted it back. How was it possible, he asked, that Tang had nothing left.

At the end of the meeting, Tang signed what amounted to a confession—a transcript, written mainly in Chinese, of his admissions during the meeting. “The daily investment account statements and the annual statements for the years 2006, 2007 and 2008, as produced by Weizhen Tang, are all falsified and forged,” states the document, which was witnessed by Peter Lin and two others. “Weizhen Tang’s conduct amounts to fraud, contrary to the Canadian laws.” Tang would later state that he feared for his safety and was coerced into signing the confession.

The collapse of the Oversea Chinese Fund coincided with what has come to be called the Year of the Ponzi. In 2009, 150 such schemes collapsed in the U.S., with losses totalling more than $16.5 billion. Canadian investors were bilked by Montreal’s Earl Jones, who pleaded guilty to a $50-million Ponzi scheme. Toronto’s Tzvi Erez is awaiting trial for an alleged $27-million fraud. Calgary’s Gary Sorenson and Milowe Brost are accused of stealing as much as $400 million. Named after Charles Ponzi, an Italian-born con artist who plied his trade in North America in the 1920s, the scheme involves using funds from new investors to pay out redemptions and supposed profits to earlier investors. In many cases, the crimes are also affinity frauds, which target members of a particular ethnic group. Just as Bernard Madoff preyed on members of the Jewish community, Tang appealed to the Chinese diaspora.

In some of the recent Canadian cases, the authorities suspected fraud years before the schemes unravelled, yet the fraudsters managed to swindle hundreds of additional investors before they were busted. And when the schemes finally did collapse, it was the fallout of the economic crisis that precipitated their demise—not the proactive efforts of law enforcement.

In Canada, the responsibility for investigating white collar crime falls under multiple agencies, including the municipal police, the provincial police, the RCMP, or some combination of the three, depending on the crime and the jurisdictions in which it was committed. If the public markets are involved in the fraud, one or more of the 13 regulatory commissions join the investigation, as well. “White collar crime is the responsibility of so many agencies that it has become increasingly unclear within each jurisdiction who is responsible for what,” says Larry Ritchie, a vice-chair of the OSC now serving as executive vice-president and senior policy advisor to the Canadian Securities Transition Office—the government entity preparing for the establishment of a national securities regulator. “That’s where the system falls short.”

In 2003, in an attempt to streamline investigations, the federal government created specialized units within the RCMP dedicated to corporate crime. Known as Integrated Market Enforcement Teams, or IMETs, they were composed of RCMP officers, forensic accountants and experienced securities fraud investigators. Seven years into its mandate, however, the IMET program has been universally panned. Cases have dragged on for years, only 26 individuals have been charged, and just five convicted by the end of 2009. Some experts blame its failure on the structure of the RCMP itself. “IMET didn’t work in part because the RCMP is a largely unaccountable, highly bureaucratic organization,” says Edward Waitzer, a partner at the Bay Street law firm Stikeman Elliott and a former chairman of the OSC.

The OSC was aware of Tang four years before his fund collapsed but did little to stop him

IMET’s mandate is small. It was set up with only nine teams—three based in Toronto—and designed to investigate a handful of cases at a time. The burden to detect white collar crime continues to fall on municipal organizations like the Toronto Police, which are neither equipped nor motivated to deal with it. Lincoln Caylor is a partner at law firm Bennett Jones who is currently involved with five different Ponzi schemes, including Tang’s. “Rob a convenience store of $500, the police will chase you down, the Crown will prosecute you, and you will go to jail,” he says. “But defraud hundreds of seniors of their life savings and it will take years to investigate, the Crown will give it a low priority, and chances of going to jail are zero.”

The cases that do manage to reach the courts are often shepherded by prosecutors with little interest or experience in corporate crime. In the U.S., prosecutors use the district attorney’s office as a stepping stone to high political office (Eliot Spitzer, Rudy Giuliani) or to a lucrative job at a corporate law firm. But the same career paths aren’t available in Canada. “If you go and work for the Crown, there’s no place for you in corporate law,” says a former OSC attorney, now a partner at a major Bay Street firm. Consequently, Crown attorneys focus on personal crimes, such as murder and sexual assault. “I’ve had to teach prosecutors how the stock market works,” says RCMP Superintendent John Sliter, the former national director of IMET. “They were dealing with murder and rape cases, and suddenly they got handed a securities fraud case, which is much more complicated, many more documents. Once they do a securities case, they often never want to do another.”

Neglecting white collar crime comes at a steep cost. Canadians have $1 trillion invested in our capital markets. We rely on these markets to raise funds for new business and to spur economic growth and job creation. The perception that we are soft on white collar crime has a noticeable effect on the value of our holdings. “We are hailed for having one of the world’s most stable banking systems,” says Poonam Puri, an associate professor at Osgoode Hall Law School who specializes in corporate fraud. “Meanwhile, when Canadian companies attempt to raise outside funds, they are forced to pay a premium because of concerns over our ineffective enforcement.”

After the debacle at the Holiday Inn, Tang begged investors not to go to the authorities. He promised to pay them back within a year and threatened to exclude anyone who didn’t remain loyal from future returns. While many investors retained a cult-like devotion to Tang—or a desperate hope that they would get some of their money back—a handful reported him to the OSC and the Toronto Police. On March 12, 2009, an OSC senior investigator named Jeffrey Thomson interviewed Tang at the Queen Street offices of the commission. Tang admitted that in 2006 and early 2007, even as he promoted his one per cent plan in articles and speeches—and claimed annual returns of more than 40 per cent—he had actually lost $15 million in the stock market. To cover his tracks, he falsified the statements purporting to show the daily value of each investor’s account and, in classic Ponzi style, used deposits from new investors to pay withdrawals and supposed profits to earlier investors.

Five days after the interview, the OSC issued a temporary order barring Tang from trading securities. On June 9, they accused him of operating the Oversea Chinese Fund as a Ponzi scheme and charged him with 12 counts of securities fraud and other related offences. Each count carries a fine of up to $5 million, or up to five years in prison.

Meanwhile, the SEC had discovered that Tang had raised $17.3 million from approximately 75 investors in Texas and California through an American subsidiary called WinWin Capital—a feeder fund managed by a woman named Jiehua “Jay” Yu, whose sole purpose was to invest in the Oversea Chinese Fund. On April 3, the American SEC filed separate civil charges against Tang in a U.S. district court in Texas for operating a Ponzi scheme.

As it turns out, the OSC had investigated Tang’s operations between September 2005 and February 2006, soon after he launched the Oversea Chinese Fund. (They declined requests for an interview, stating their policy of not commenting on ongoing cases.) At the time, OSC investigator Michael Ho expressed concern over the wording on Tang’s Web site and directed him to delete claims that the fund was registered with the OSC. Ho also asked Tang to refrain from selling units in his fund to unqualified Ontario residents. Historically, hedge funds have been subject to less stringent regulation than other investment funds on the assumption that their investors are wealthier and thus more savvy. To qualify, investors must earn at least $200,000 per year and have a net worth of at least $1 million, or invest a minimum of $150,000.
When the OSC concluded its first investigation, Tang’s fund had raised less than $6 million. The real damage happened in the years that followed.

While most accused criminals maintain a low profile after their schemes are exposed, Tang has continued to seek the spotlight. Since his arrest, he has portrayed himself as the victim of an overzealous and unwarranted prosecution—even charging that the case against him was racially motivated. On September 9, he made an announcement: he was running for mayor of Toronto. “Before a hostile hovernment…conspired to destroy both my name and business, I, Weizhen Tang, was the most prominent community leader in our hundreds-of-thousands-strong Chinese community,” he wrote in the press release announcing his candidacy. “I am the one who can combine political wisdom, insight and experience with the financial expertise which Toronto and Canada need.”

Tang rebuffed my initial requests to interview him, but a week after he launched his campaign, he invited me to his home at Bayview and Steeles. The red brick house is unassuming, except for two large “Tang for Mayor” banners hanging conspicuously outside.

Tang, dressed in a black suit and striped grey tie, sat at his dining room table, which he’d covered with award plaques, press clippings and cheaply printed campaign posters. On the wall beside him, a giant flat screen TV was tuned to CNN. “I am the anti-fraud,” he told me in fluent though heavily accented English. “If you elect me as the mayor, I will get rid of all the fraud.” Sounding like the kind of man who believes his own spin, he insisted that unlike Madoff and other Ponzi schemers, he didn’t set out to defraud investors. His hedge fund, he said, wasn’t really an investment fund at all. His clients’ investments were loans, he claims, “seed capital” he’d committed to repay. Even though his investors’ account statements didn’t reflect the true value of their investments, he considered them to be “future” values—akin to accrued interest—which he fully intended to repay. But the OSC stepped in and took away his livelihood. “I gave all my money to investors,” he says. “I looked after them much more than my own family.”

Prior to Tang’s arrest, some investors seemed to share this belief. In November 2009, dozens of them petitioned the OSC to lift the trading ban against Tang, and when their petition failed, they sponsored his trip to China so he could resume trading there and recoup their losses. Indeed, Tang claims he didn’t go to China to evade prosecution; he went to trade stocks.

There may have been another purpose to Tang’s trip: fund­raising. Before he was arrested, his reputation in his native country remained intact: in 2007, the managing director of the $200-billion state-owned China Investment Corporation had supposedly asked Tang to draft a proposal for how the newly established fund should be invested; and the Chinese government presented Tang with a credibility award during an elaborate ceremony in December 2008 honouring “wealthy and intelligent” citizens at Beijing’s historic Diaoyutai State Guesthouse.

It appears that Tang viewed the Chinese fund as his salvation—the means to keep his scheme afloat. “I use the investor’s money as a bridge…not as a Ponzi,” he told the OSC. “I was trying to talk to the Chinese government fund…There’s $200 billion.”

So what really happened to the nearly $60 million invested in his fund? One answer may be found in a series of candid, confessional letters Tang posted on his Web site after the second OSC investigation began. Combined with court records, the letters reveal that Tang lost most of his investors’ money chasing risky, short-term returns. In one typical blunder in 2007, he bought thousands of Dow Jones Index futures contracts and lost millions on them. These investments had nothing in common with the philosophy of the man to whom he was being compared. Buffett, a value investor, preaches the idea of searching for undervalued companies and investing in them for the long term.

Tang held a barbecue and a garage sale to raise money for his defence. His victims suspect he’s hiding millions offshore

Following his arrest, Tang spent three months in jail before being released on $150,000 bail. Tang claims he’s destitute and can no longer even afford a lawyer; last summer, he held a barbecue and a garage sale to raise money for his defence. But some investors believe Tang may still have substantial holdings. At the Holiday Inn meeting, they confronted him about a brief trip he made with his wife and son to Bermuda shortly before his fund collapsed. There is speculation among the victims that Tang may have hidden several million dollars offshore. (Tang’s wife denies this, saying that the trip was related to her job at Aimity Financial Group, where she is a “top producer.”)

Tang’s criminal trial will likely go to court next year. In addition, he must defend himself in civil suits from several of his victims, including a wealthy industrialist who invested $500,000 with Tang in October 2008. The industrialist successfully won a court order to seize Tang’s Toronto home, but officials were unable to sell it, granting Tang a brief reprieve.

Meanwhile, the American SEC, which reached a partial settlement with Tang in 2009, has been trying to locate what’s left of his money. Tom Tong, a receiver appointed by the Texas court, froze $1 million in bank accounts that belonged to Tang’s Texas subsidiary, WinWin. In an aggressive maneuver, Tong convinced the Ontario court to recognize his receivership so that he could attempt to recover a $300,000 payment wired from WinWin’s Jay Yu to Toronto investor Peter Lin shortly before the SEC filed charges.

Some of Tang’s victims are considering a class action in Canada in an attempt to recover some of their funds. After Tang’s arrest, they believed the police would fulfil this role but have discovered that law enforcement in Canada has neither the resources nor the inclination to focus on recovering the proceeds of fraud. (The OSC declined to appoint its own receiver in the Tang case, although it has the authority to do so.) Canadian victims intend to challenge the U.S. receiver’s claim in Ontario civil court. If they lose, only Tang’s American investors will get access to WinWin’s remaining funds.

Behind a cloak of anonymity, Tang’s investors vent and commiserate with one another at 4just.ca, a blog set up by a couple of tech-savvy victims. “Wei Zhen Tang’s cynical ways ruined our Chinese community,” reads one post. Another features an image of a man kicking another man off a tall building. Tang’s face is superimposed on the face of the falling man.

Soon after his fund collapsed, Tang sent a letter to his investors. “To a certain extent, the markets of the world often seem like a casino, where any gambler is subject to loss, including myself,” he wrote. “I have learned my lessons, and I profoundly believe that I can make hundreds of people wealthy once more.”