VANCOUVER, British Columbia — In the tightly knit world of Vancouver’s wealthy Chinese immigrants, Paul Se Hui Oei stood out for his ties to some of Canada’s most powerful politicians and his mastery of cultivating guanxi, or personal relationships, that attracted legions of Chinese clients eager for his assistance in gaining a legal foothold in Canada.
But behind closed doors, the authorities say, Mr. Oei, a prominent immigration consultant and philanthropist, ran an elaborate fraud scheme, pocketing nearly $6 million from investors, including many Chinese citizens led to believe their investment would help them secure permanent residency in Canada. Instead, the authorities say, he spent the money on luxury cars, beauty pageants and donations to the British Columbia Liberal Party.
“Everything he said were lies,” said Chen Wei, a Chinese immigrant who testified earlier this year in a case against Mr. Oei before a British Columbia Securities Commission panel. Mr. Chen’s family invested one million Canadian dollars ($782,000) in Mr. Oei’s project, according to hearing transcripts.
The case is part of a pattern, experts say, of problems with Canada’s immigration programs, which, like the United States, set aside coveted residency permits for foreign investors. Some also say it underscores a troubling flaw in the Canadian justice system, which often allows white-collar criminals to walk away with little more than a slap on the wrist.
Mr. Oei has denied the accusations, but even if he is found to have committed fraud, he will face financial penalties only, not prison time.
“Canada doesn’t take financial crime seriously,” said Christine Duhaime, a lawyer in Vancouver who specializes in laws dealing with terrorist financing and money laundering.
Mr. Oei, who immigrated to Canada in the 1980s, declined interview requests through his lawyer.
The case against Mr. Oei was brought by the commission, an independent provincial regulatory agency. The panel, appointed by the government, is expected to rule on the case this month. Apart from the financial penalties, Mr. Oei faces a possible ban from working in the securities industry.
In Vancouver, Mr. Oei owned an immigration consulting and financial services company, and sought to use his connections in the Chinese community to raise money for a recycling start-up, Cascade.
But the commission says that from 2009 to 2013, Mr. Oei told investors that the project was approved by the British Columbia government (it was not) and that their investments would give Chinese citizens the right to immigrate to Canada, as well as shower them with profits. All they had to do was transfer funds into the trust account of a local lawyer and member of the Canadian Parliament, Joe Peschisolido.
DID BC POLITICIAN JOE PESCHISOLIDO KNOWINGLY ASSIST IN FRAUD?
In a mind-boggling first day of testimony in the highly publicized hearing into Paul Oei – staff for the BCSC brought forward various documents “tracing funds from the trust ledgers of Peschisolido and Co., to the various bank accounts of Canadian Manu, to the personal bank accounts of Oei, among other destinations.”
It is so apparent that MP Joe Peschisolido had to have know something was not right – one would think that not too many lawyers would not recognize something was up when they started sending millions of dollars to personal bank accounts?
Joe Peschisolido (Source: Vancouver Sun)
Peschisolido is a lawyer that formally had a business practice in Richmond, BC – and is now a big shot Member of Parliament down in Ottawa. Looking at a October 13, 2016 Vancouver Sun article, we see that Peschisolido seems to flip back and forth between political parties with little to no loyalty to any of them.
Paul Oei’s hearing started on April 10, 2017 and is scheduled sporadically over the next 3 weeks. In day one of the hearing, staff for the BCSC showed investigators discovered several cheques that alerted them something was not right inside the Oei’s companies and payments into their respective bank accounts. The Vancouver Sun writes, “In one example, the panel saw a CIBC cheque that was written to Canadian Manu in the amount of $3 million. Oei told an investigator that the Chinese investor intended $1.5 million of the total to be invested in Cascade, the panel heard. And according to Oei, the investor had intended the remaining $1.5 million “as a gift” for Oei and Oei’s wife, the investigator said in testimony Monday.”
That’s an interesting defense – one in which one would think the Panel of the BCSC has never heard before. Interesting to see if the BCSC will be able to prove their case? Even more interesting will be rather or not any legal recourse will head back at Peschisolido and others inside the BC Liberal Party.
Joe Peschisolido and Paul Oei (Source: Vancouver Sun)
Stay tuned – more to come as always!
“This made investors feel safe, and that their money would be safe,” Mila Pivnenko, one of the commission lawyers, told the panel. “Of course, Oei was the only person who directed the lawyer where to disburse the funds from the trust account.”
The commission said Mr. Oei secretly transferred millions of dollars meant for the recycling company into his own bank accounts and issued shares in companies with no assets to investors in order to avoid detection.
Mr. Oei raised about 13.3 million Canadian dollars ($10.5 million) from 64 investors, but the commission says he kept 6.9 million Canadian dollars for himself. When Cascade went bankrupt in 2013, Mr. Oei told many investors they could recoup their money if they topped up their investment, without alerting them that he had never sent more that half the funds he had already raised from investors to the project, the commission said.
Jiang Yicheng, 53, a businessman from China’s coastal Zhejiang Province, said in a phone interview that during several visits to Vancouver, Mr. Oei chauffeured him and other Chinese investors around in a BMW, hosted lavish meals and showed off photos of himself posing with Canadian elected officials.
Mr. Jiang was sold. He formed a consortium of Chinese investors who transferred more than $3 million for the recycling company, convinced by Mr. Oei’s promises that the project was backed by the government and would allow him to immigrate.
Mr. Oei “took advantage of our trust to cheat us,” said Mr. Jiang, who has also filed a lawsuit in British Columbia against Mr. Oei. Mr. Jiang said he himself was successfully sued by the members of his consortium to recover their losses, which has left him penniless.
Mr. Jiang said an associate wired payments from Hong Kong to Vancouver while Mr. Jiang transferred the equivalent in renminbi to the associate’s bank account in mainland China, a form of underground banking that experts say is widely used to evade China’s capital controls by wealthy Chinese to illicitly funnel money overseas.
In an interview at a reception last year at a Vancouver Lamborghini dealership packed with Chinese-Canadian socialites, Mr. Oei bragged about his luxury cars and explained why many wealthy Chinese find Canada so attractive. “They want a safe place to put their money,” he said, reclining in the driver’s seat of his black Bentley Mulsanne.
Experts say the case against Mr. Oei fits a pattern of malfeasance that has tarnished Canada’s immigration programs. In 2014, the Canadian government canceled a federal immigrant investor program popular with Chinese millionaires after finding little economic benefit and frequent abuse. But provinces and territories have their own investor visa programs. Critics say many are rife with abuse and fraud.
In April, three Chinese-Canadian immigration consultants were jailed for 18 months after they pleaded guilty to helping more than 1,600 immigrants, many from China, fraudulently maintain Canadian permanent residency and obtain citizenship.
Bill Boyd, a Saskatchewan legislator, resigned in August after he was found to have violated conflict of interest laws for telling Chinese investors at a seminar in Beijing that they could obtain Canadian permanent residency by investing in a company he led. Advertisements for the seminar featured the official Saskatchewan government logo and falsely claimed that Mr. Boyd was the provincial economy minister.
Richard Kurland, a former national chairman of the Canadian Bar Association’s citizenship and immigration section, said lax oversight from the Canadian government and a preference for funding law-enforcement departments that investigate violent crime and terrorism rather than white-collar crime added to the difficulties in policing the immigration programs. “White-collar crime is tolerated because it’s not a priority,” he said.
In 2016, a United States State Department report labeled Canada a major money-laundering country. A review last year by the Financial Action Task Force, a global body that sets standards for combating money laundering, found that Canadian law-enforcement agencies “generally suffer from insufficient resources and expertise” to pursue complicated cases, and that criminal penalties “are not sufficiently dissuasive.”
In an email, Canada’s Ministry of Finance said the task force’s concerns will be reviewed by a parliamentary committee.
Since its incorporation in 1995, the British Columbia commission says it has collected less than 5 percent of assessed sanctions in its cases. Of the total $374 million outstanding, only about $78,000 is probably collectible, the commission has said.
In the meantime, those who say they were defrauded by Mr. Oei have seen their lives turned upside down. In his testimony, Yang Baoxi, a Chinese immigrant in Vancouver, said his wife made two suicide attempts after they lost $1.3 million to Mr. Oei’s project.
In the meantime, those who say they were defrauded by Mr. Oei have seen their lives turned upside down. In his testimony, Yang Baoxi, a Chinese immigrant in Vancouver, said his wife made two suicide attempts after they lost $1.3 million to Mr. Oei’s project.
“In the last few years,” he said, “I have been living in nightmare.”
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