A woman who ran a “predatory” investment fraud under the guise of helping Chinese students and tourists has been to pay almost $3.3 million to the BC Securities Commission (BCSC).
Meiyun Zhang has also been permanently banned from the investment market, with some limited exceptions.
A BCSC panel ordered Zhang, who was earlier found to have defrauded investors in Richmond and Vancouver of about $1.7 million, to pay an administrative penalty of $2.5 million and $791,642 in disgorgement, which represents the traceable amount of funds she got from the fraud, according to BCSC.
Any disgorgement funds collected can be distributed to her victims.
Between 2014 and 2016, Zhang raised money from three B.C. investors using a variety of pitches calibrated to each victim, the panel said.
She told them they would earn returns by exchanging foreign currency for Chinese students and tourists visiting Canada, or by helping students immigrate to Canada to study, or by providing loans to Chinese students to obtain Canadian visas.
She told them their money would generate monthly returns of six to 10 per cent without risk.
Instead, the panel found the funds were used for Zhang’s personal purposes, including making retail purchases, gambling in casinos and paying utility bills.
Although the investors got some of their money back, they lost a combined $1.7 million.
“Zhang’s high-pressure tactics and predatory conduct demonstrate a character lacking in integrity,” the panel wrote. “Zhang showed a complete disregard for compliance with applicable laws and for markets that are honest and fair.”
The panel also noted that the victims’ financial losses led to deferred retirements, severe health problems, the need to sell properties, as well as depression, anxiety or suicidal thoughts.
Zhang's liability and sanctions hearings were conducted in writing, due to her health issues, and she did not participate in either one.
She is permanently banned from the investment market, but she can trade securities and derivatives for her own account.
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