Investors authorized to launch class action lawsuit against Ponzi scheme
Posted April 4, 2019 11:46 pm.
Last Updated April 5, 2019 6:33 am.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – A BC Supreme Court judge has approved a class-action lawsuit against a BC couple and their adult son, for carrying out what has been characterized as Ponzi scheme.
Investors were bilked out of $30 million.
Two years ago Virginia Tan admitted to the BC Securities Commission that her investment scheme was fraudulent.
Between 2011 and 2015 she collected money from 240 investors and funnelled the money through six companies, including Letan Investments Management and Letan 88 Enterprises Inc.
She was promising returns of 16 and 21 per cent.
But by 2015, she was unable to make payments to investors, and filed for bankruptcy.
“Since Tan earned no business income, she made interest and principal payments to investors with funds raised from other investors. Tan also comingled a relatively small amount of her personal funds with investor funds in her bank accounts, and used these accounts to make payments to investors,” says a BC Securities Commission settlement agreement in 2017.
“Tan was ultimately unable to raise sufficient new funds from investors, or to inject enough of her own funds, to continue making the interest payments owing under the promissory notes. By late 2015, Tan was insolvent and she ceased to make further interest payments to investors.”
The settlement also said Tan agreed to pay $3 million to the commission.
Two other people are named in the class action application: Patrick Tan, Virginia’s husband, and Marcus Tan, their adult son. Patrick and Marcus are each officers and directors of Letan 88 Enterprises Inc.
Marcus is alleged to have used the invested funds to buy six properties in Surrey and another 24 properties in Fort St John.
According to the court document, a forensic accounting report concluded that “more likely than not that the Tans ran a Ponzi Scheme during the operative period leading up to [their] bankruptcies.”
Of the 240 investors, about 75 of them have received more in return than they invested as principal.
That leaves 165 investors who could join the class action.
