Tuesday, January 16, 2018

Trudeau Liberal MP Geng Tan Spoke To Chinese Government On Behalf Of Businessman Arrested For Fraud





A Canadian flag flies on Parliament Hill in Ottawa, on Aug. 2, 2015.
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Liberal MP Geng Tan hand-delivered a letter to a top official at the Canadian embassy in Beijing and personally spoke to Chinese authorities on behalf of a Liberal Party donor who has been charged with money laundering and the fraudulent sale of hundreds of millions of dollars in securities to Chinese citizens.
Chinese-Canadian businessman Xiao Hua Gong, also known as Edward Gong, was arrested in Toronto last week and the Ontario Securities Commission (OSC) has charged him with fraud over $5,000, possession of property obtained by crime, laundering proceeds of crime and uttering a forged document. None of the allegations have been proven in court.
On June 1, Mr. Tan acted as an intermediary for Mr. Gong, who at the time was under criminal investigation by the RCMP, Ontario Securities Commission [OSC] and China's Ministry of Public Security in connection with a $466-million pyramid scheme.
The rookie Liberal MP delivered an unsigned letter from Mr. Gong to Cindy Termorshuizen, the deputy head of mission at Canada's embassy in Beijing, according to an OSC affidavit filed in a Toronto court.
Related: Police arrest Toronto businessman charged with securities fraud by OSC
Read more: China accuses Canadian-Chinese tycoon of major role in pyramid scheme
Ms. Termorshuizen turned the letter over to the RCMP liaison officer in China, who forwarded it to investigators in Canada, the document says.
The affidavit said Mr. Gong denied in the letter that he was running a pyramid scheme and promised to co-operate with investigators in both countries.
He claimed he was "running a legitimate marketing and sales method called multilevel marketing and direct sales" of health-care products in China. A former Canadian ambassador to Beijing, David Mulroney, expressed surprise that the Liberal MP would approach the embassy on behalf of Mr. Gong, and praised Ms. Termorshuizen for giving the letter to the Mounties.
"It suggests a pretty shocking misunderstanding on the part of the MP on how our system works," Mr. Mulroney told The Globe and Mail on Thursday. "It is the kind of thing you do in China … when you try to use your prestige or connections to smooth something over. It is not how things are done in Canada."
The MP did not respond to written questions from The Globe about why he did not take the letter to the RCMP in Canada, what was his relationship to Mr. Gong and who paid for his trip to China.
"I simply transported a piece of correspondence on behalf of a fellow member of the Toronto-North York Community," Mr. Tan said in an brief e-mail on Thursday. "I was unaware of any Canadian investigation into this individual. Any inference of influence in this matter is simply wrong."
His office later confirmed that the MP also raised Mr. Gong's case with Chinese authorities.
"Mr. Tan communicated his hope to local officials that due process will be followed," the MPs' office told The Globe in an e-mail.
The Prime Minister's Office had no comment on Mr. Tan's actions.
"This would seem to be a serious example of very poor judgment and improper behaviour," Conservative ethics critic Peter Kent said in an interview. "One has to wonder whether this was a misguided favour on behalf of a financial contributor [of the Liberal Party]."
Mr. Gong is not a constituent of Mr. Tan and does not live in the MP's Don Valley North riding.
His home in Toronto's Bridle Path area, which authorities raided in December, is in Don Valley West, held by Liberal MP Rob Oliphant.
Mr. Gong has donated $7,000 to the Liberal Party over the past few years, and was at a Liberal fundraiser involving Prime Minister Justin Trudeau and Chinese-Canadian business people in Toronto in May, 2016.
Mr. Gong was in a widely circulated photo of the Prime Minister making dumplings for his donors at the event.
The picture was part of The Globe's coverage of cash-for-access fundraisers that prompted the Liberals to usher in legislative reforms on political donations.
Since the 2015 election, Mr. Tan has travelled frequently to China, where he has met Communist Party officials whose goal is to win overseas support for the authoritarian government's political agenda.
In April, he accepted a free trip to Hunan province paid for by Toronto businessman Kai Wu, who runs an an immigration investment and eduction enterprise.
Mr. Tan said he accepted the trip to help Mr. Wu "attract more international students to Canada to study."
The OSC affidavit said the investigation of Mr. Gong involved the New Zealand Police and China's Ministry of Public Security and as well as the RCMP and Canada's FinTRAC, a federal agency that tracks the movement of money offshore.
The OSC alleges that at least $190-million obtained from the pyramid operation was directed to Mr. Gong's bank accounts in Canada and used to buy hotels, residential property, luxury cars and a boat.
This money was in addition to $63-million in New Zealand accounts that investigators have frozen.
Attempts to reach Mr. Gong were unsuccessful, and his lawyer, Glen Jennings, did not respond to requests for comment.
The entrepreneur has rejected the allegations and proclaimed his innocence. In July, when the allegations were raised in China's media, Mr. Gong told reporters he uses the internet to sell health products in China and engaged in multilevel marketing, as other companies do in Canada or the United States.
The OSC charges against Mr. Gong stem from the alleged fraudulent sales of securities in two companies, O24 Pharma PLC, a health supplement firm, and Canadian National TV Inc., from Jan. 1, 2012, to Dec. 20, 2017.
The OSC alleges Mr. Gong controlled both companies and orchestrated the sale of their securities from the Toronto area. The scheme was allegedly run out of a private high school in Toronto that caters mainly to students from China. The school is in the same building as O24.
The OSC said Mr. Gong was "selling worthless shares of O24, an empty company that did not produce any products in-house" and promised big gains to shareholders of CNTV.
Chinese Public Security officers told the OSC and RCMP investigators 11 people were imprisoned and fined in connection with the alleged pyramid scheme in Shaodong county of Hunan Province.
Mr. Gong was not named among them, but the Ministry of Public Security alleged he "remotely developed" staff in China who were involved in the pyramid scheme, which reaped 2.3 billion yuan, about $466-million Canadian.
The Chinese embassy in Canada declined to comment on Mr. Gong's case or whether Beijing might seek his extradition. Mr. Gong was an opera director before he moved to Canada in 2002 and assembled a business empire.

Chinese developer took $2.68-million cash loan in Richmond coffee shop, legal filings show

Chinese developer took $2.68-million cash loan in Richmond coffee shop, legal filings show



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Paul King Jin, the B.C. Lottery Corp.-banned lender at the centre of an investigation into alleged transnational money laundering in B.C. casinos, claims that he delivered a $2.68-million cash loan to a Chinese real estate developer in a Richmond coffee shop.
In B.C. Supreme Court filings, Jin says that on Dec. 24, 2015, he met a man named Xiao Bing Liu at a coffee shop on Richmond’s No. 3 Road to deliver “a significant amount of money.”
Liu, however, claims that he only signed a document in exchange for gambling chips at an illegal casino in Richmond, and that he does not owe Jin any money.
The case appears to shed light on elements of the RCMP’s E-Pirate investigation. In 2015, the RCMP targeted an alleged organized-crime network accused of delivering cash loans sourced from drug traffickers to VIP gamblers at Richmond’s River Rock Casino, and also running illegal casinos in Richmond attended by so-called “whale” gamblers from China.
In late August, at a Vancouver conference attended by law enforcement officials, RCMP Insp. Bruce Ward outlined the details of E-Pirate.
Without naming the suspect he was talking about, Ward said that in late 2015 E-Pirate targeted a number of residences and several illegal casinos in Richmond.
“These are some of the illegal casinos he was setting up. He thought he could double-end it,” Ward said. “Not only loan the money, but then run the casino and take the profits.”
Ward explained the complex methods by which organized criminals run illegal casinos without having any cash on premises.
“The way our laws are written, now when they build the illegal casinos, there is no cash,” Ward said. “You go to another place of business and you sign a loan. You (gamble in the illegal casino, and) record what you lose, or what you win. Then you go back to the place of business and pay off your debt, from the loan you took out.”
Paul King Jin. B.C. LOTTERY CORP. / PNG
Jin’s claim that Liu has not repaid a $2.68-million loan is supported by an affidavit from “housewife” Jian Qiu Rong. Rong’s statement says that both she and Liu are from Shenyang, and she had heard of him “through my circle of friends in China.”
Rong says she met Liu socially in Richmond, and she learned that he was looking for a loan of up to $3 million, for an unknown purpose.
“When we first met, Xiao Bing Liu introduced himself to me as someone who started out doing real estate development in China,” Rong’s statement says. Rong says that she knew Jin “was in the business of lending money, (so) I introduced Paul King Jin to Xiao Bing Liu.”
Rong says that she was asked to attend a meeting between Jin and Liu and to act as a witness. The meeting took place at an unidentified coffee shop on No. 3 Road, near Liu’s 6300-block Buswell Street residence.
According to Rong’s affidavit, on Dec. 24, 2015, “At the meeting, Paul King Jin provided a bag containing cash to Xiao Bing Liu — I was able to see the content of the bag through its opening.”
A promissory note filed with the B.C. Supreme Court. PNG
Rong’s affidavit includes a translated Chinese language promissory note which says: “Today, I borrowed CAD $2.68 million from Mr. Paul King Jin for a term of one month.”
Rong claims that Liu signed the promissory note, and she signed as well.
Law enforcement and Richmond casino insiders have informed Postmedia that some businesses in the several city blocks near No. 3 Road and Westminster Highway are believed to be the centre of underground banking linkages between China and B.C.
This is the location of Silver International Investment, an alleged illegal money services business targeted in an October 2015 E-Pirate raid. The RCMP raid captured piles of alleged drug cash, according to Insp. Bruce Ward’s presentation, and a massive cache of evidence linking Silver to over 600 bank accounts in China.
Lenders operating in or around River Rock Casino were using Silver as a “cash house” to deliver bags stuffed with $20 bills to VIP gamblers recruited from Macau, according to E-Pirate allegations. B.C. Lottery Corp. documents obtained by Postmedia suggest the so-called ‘whale’ gamblers could pay back these loans in China with “little or no interest.”
“So far, BCLC has been able to determine that for a number of players they readily admit to not knowing the source of their cash, and that they pay back in suspicious circumstances using suspicious methods with little or no interest,” a September 2015 BCLC document regarding the ‘Jin investigation’ states. “This would indicate transnational money laundering rather than loan sharking.”
The ‘Jin investigation’ document also makes the troubling claim, that “there are likely people involved in the regulated B.C. gaming industry that are involved in facilitating proceeds of crime for players. Although cash is still the main instrument of choice for … ‘whales’ it will not be acceptable in the public eye if more player due diligence is not taken around receiving cash.”
Criminal money laundering charges have since been laid against Silver.
In the case allegedly involving an illegal casino and a $2.68 million cash loan, Rong’s affidavit states “I was advised by Paul King Jin that Xiao Bing Liu had defaulted on repaying the loan to him, and that he could not locate Xiao Bing Liu.”
Liu denies Jin’s version of events.
Liu’s response says that in December 2015, he “attended at an unlicensed and illegal common gaming house or casino in Richmond and was provided by the illegal casino with a quantity of its own gambling chips to be used in the illegal casino.”
Liu says that he “was asked by a female employee of the illegal casino to sign a document, which was written in the English language, which the defendant cannot read or understand, and which she described to him orally in the Chinese language as a receipt for the gambling chips.”
Liu says that he received gambling chips and later returned them to the illegal casino. Liu claims he never received money or a loan from Jin, and he did not intend to enter into a loan agreement.
“The original of the receipt document was kept by the illegal casino and the defendant was not given a copy,” Liu’s response says. Liu’s B.C. lawyer did not respond immediately to a request for comment.
According to a legal letter sent to Postmedia by Great Canadian, the operator of River Rock Casino, Paul Jin conducted 50 large cash transactions from May 2012 to September 2012 at the casino, and Great Canadian filed reports on these transactions.
After that, BCLC made the decision to bar Jin from B.C. casinos, according to Great Canadian’s legal letter.
“After Jin was barred, River Rock staff were the first to uncover the lending activities of Jin and his group near River Rock,” the legal letter from Great Canadian says. “In Jin’s case, after numerous reports filed by Great Canadian with both BCLC and (B.C.’s gaming enforcement branch) between 2012 and 2014, the RCMP eventually agreed to investigate Jin in 2014.”

Former Liberal government staffer engaged in partisan politics in Quick Wins scandal: Crown

Former Liberal government staffer engaged in partisan politics in Quick Wins scandal: Crown


Brian Bonney, who was employed as a communications director for the government and at the same time had close ties to the B.C. Liberal party, in October pleaded guilty to one count of criminal breach of trust. 


A former Liberal government employee used his public job to engage in partisan political activities [ eg: collusion with Chinese Canadians to procure their votes] in connection with the so-called Quick Wins scandal, a judge was told Tuesday.
Brian Bonney, who was employed as a communications director for the government and at the same time had close ties to the B.C. Liberal party, in October pleaded guilty to one count of criminal breach of trust.
RCMP launched an investigation following a complaint by the NDP in 2013 that Liberal government resources had been used inappropriately to reach out to ethnic communities for support in the election. Part of the scheme included devising historical apologies to specific ethnic groups as “quick wins” to garner goodwill for the Liberals.
In sentencing submissions Tuesday, special prosecutor David Butcher said that while Bonney was receiving directions from others and was not the mastermind of the scheme, he nonetheless played an essential role and was a “very experienced political operative.”
Bonney, who was a regional director of the B.C. Liberal party and on the party’s executive at the time, used his paid time as a public servant for improper purposes, including directing the work of “community liaison workers” to target ethnic communities to get votes for the Liberals, Butcher told B.C. provincial court Judge David St. Pierre in Vancouver.
“In all of these activities, he was sharing confidential government information with people not authorized to receive it,” said Butcher. “And all of these activities were undertaken with the goal of targeting ethnic groups for the purpose of garnering their support for the then-premier Christy Clark and the B.C. Liberal party.”
After hearing those submissions, the judge asked Ian Donaldson, a lawyer for Bonney, whether he agreed with Butcher’s description of the crime committed by his client.
Donaldson said that some of the communications and actions of Bonney implemented a strategy conceived by others to get others to be involved in the electoral process in a proper fashion and in some of the communications in a partisan fashion.
“That’s the essence of what I’m conceding. As a public servant, he ought not to have authored communications or taken part in any actions which had a partisan tinge to it, that is to say not in the public interest.”
Donaldson added that what had happened was a breach of his client’s employment terms without “pecuniary” benefit or corruption.
Butcher said he was seeking a conditional sentence of 12 to 23 months incarceration to be served in the community, including house arrest conditions.
Donaldson told the judge that he should consider a discharge for Bonney but that if he agreed incarceration was warranted, the conditional sentence should be served in the community for a “modest” duration. 
Butcher said he was not suggesting that Bonney did not carry out his public duties but that he was attempting to juggle that work with the partisan political work and was doing the partisan work on a daily basis.
One of the community liaison workers who was hired and directed by Bonney to contact ethnic groups was paid $2,000 a month, which was paid for by a numbered company controlled by Bonney, said Butcher. The numbered company was in turn reimbursed by the B.C. Liberal party, he added.
The liaison workers were directed to reach out to ethnic organizations and find out if they were Liberal supporters, to write partisan op-ed pieces in newspapers and to contact ethnic radio shows.
In one email, Bonney told a worker that there were 16 months to “capture the hearts and minds of Chinese Canadians” and deliver their votes.
“Be pushy and persistent, but likable and friendly,” he says in the email.
The accused did all his activities while a government employee and “had this been purely a (Liberal) party activity,” there wouldn’t have been a criminal prosecution, said the prosecutor.
Two former Liberal cabinet ministers whose names featured prominently during the sentencing proceeding were Harry Bloy and John Yap, who were at different times the minister for multiculturalism.
Butcher quoted from email communications between Yap and Bonney.
NDP MLA Ravi Kahlon, who was in court for the sentencing hearing, said outside court that the case gave a glimpse into how the B.C. Liberal party operated with government resources to woo ethnic voters.
He said some of the details had come out previously but added that the fact that there were “so many players” involved was disturbing to him.
Donaldson is expected to begin his full sentencing submissions Wednesday.