(CN) – Investors say the self-proclaimed “Chinese Warren Buffett” duped them out of nearly $3 million in a Ponzi scheme – and that he continued to troll for suckers after he was sued by the SEC and by Canada, claiming he needed another $1 million “to ‘recoup’ investor losses.”
Six investors sued Canadian fund manager Weizhen Tang in Dallas Federal Court, claiming that he and his partners targeted them as members of the Chinese-American community.
The investors say Weizhen Tang, who was arrested in Toronto in January, pitched his “Oversea Chinese” fund to them in 2008, and his partners portrayed him as a “great trader who has not only survived the financial crisis of 2008, but made significant gains for his investors.”
Weizhen Tang promised that 99 percent of the investments would be placed in “very safe investments,” while 1 percent would be put at risk, according to the complaint.
But they say that in 2009 Weizhen Tang admitted that he had posted false profits on account statements to hide “substantial trading losses and to attract new investors to his fund.”
Tang admitted he had used new money to pay off the old, a classic Ponzi scheme, the investors say.
They claim that the defendants have taken from $50 million to $75 from more than 200 victims since 2004.
In March 2009, the Ontario Securities Commission issued a cease trade order against Weizhen Tang and Oversea Chinese, and in the same month, the U.S. Securities and Exchange Commission filed an emergency action to stop the Ponzi scheme in Dallas, according to the complaint.
The six plaintiffs in this case, all from Dallas, say they collectively lost $2.7 million investing with Weizhen Tang. They sued Weizhen Tang, Jiehua “Jay” Yu, Xiaohong “Olina” Peng, Richard Gu, Hong Xiao and Wenyi Tan for securities fraud, saying that the co-defendants continued to sing Weizhen Tang’s praises even after they had taken their own money out of the fund.
The plaintiffs seek exemplary damages. They are represented by J. Michael Weston with Bennett Weston in Dallas.