Douglas Todd: Offshore investor of $45 million in Vancouver housing claims fraud
Opinion: The lawsuit illustrates numerous trends involved in the way global capital pours into Metro Vancouver real estate.
Tong Zhang also alleges that Hang Yin, his Canadian partner in the purchase of almost a dozen properties in Richmond, Vancouver, Burnaby and Surrey, has disappeared.
Zhang’s suit claims that even though Yin cannot be found, his wife and daughter have been conspirators in his elaborate fraud. They are said to live at 1160 Queens Ave. in West Vancouver, in a mansion with a view of English Bay.
Zhang’s lawsuit, which has not yet been heard or proven in court, illustrates numerous trends involving the way global capital pours into Metro Vancouver real estate, including the use of numbered companies and proxies to disguise the true owners of properties.
The lawsuit states the plaintiff in 2015 began transferring large sums of money out of China to Yin, so Zhang could become a key partner in numerous numbered companies buying up Metro Vancouver residences and strata complexes.
Between 2015 and 2018, while Zhang was in China, the suit alleges, “Mr. Yin developed a scheme to convert the plaintiff’s funds in whole or in part to his own use … the plaintiff entrusted Mr. Yin with the equivalent of approximately $45 million for the purpose of investment in real estate.”
One venture involved buying five bungalows around West 41st Avenue and Alberta Street, near Oakridge. The suit says Yin accepted 60 million Chinese yuan (the equivalent of $11 million Canadian) from Zhang for the $20-million land assembly.
Three of the bungalows were later sold in 2017 for $25 million. “The plaintiff received nothing” from the sale, according to the lawsuit. The sold properties have since been developed into a six-storey apartment complex, which is under construction.
The lawsuit, filed in October, says the adjacent Vancouver dwellings, at 408 West 41st and 426 West 41st, remain under the control of Yin, his wife Yan Chun Liu, and daughter, Yu Yin.
In 2016, Zhang also transferred the equivalent of $29 million out of China so that Yin could buy a strata development in Richmond at 6840 and 6860 No. 3 Rd. The suit says Yin and his family were “unjustly enriched” by the plaintiff’s contribution to the property.
Zhang also claims he funnelled the equivalent of more than $5 million through Yin to help buy a property at 3208 140th St. in Surrey, in a plan to turn it into an extended-living facility, plus a house at 4826 Buxton in Burnaby.
Zhang claims he did not realize he had been defrauded until last year — after he “immigrated from China to Canada” in August 2018 and “briefly lived at the Queen’s Avenue property,” now inhabited by Yin’s wife and daughter.
The actual identity of the plaintiff, Zhang, who also goes by the first name Tony, is hard to determine.
The lawsuit lists his current address as the same as that of the Harper Grey law firm in downtown Vancouver. The lawyer who filed his claim in B.C. Supreme Court, Daniel Yaverbaum, said Wednesday his “clients are not interested in responding as they do not wish to comment on matters connected with ongoing litigation.”
Zhang’s lawsuit does not stipulate how he was able to transfer tens of millions of dollars out of China beginning in 2015, given that the country’s leaders have officially allowed Chinese nationals to transfer overseas only $50,000 a year. China has stepped up enforcement of currency transfers in recent years, but its wealthy citizens continue to be leading buyers of properties in desirable foreign cities.
Nevertheless, Zhang’s civil suit claims he “has suffered losses, including more than $7 million of his original investment, his entitlements to profits from the transactions, and losses of opportunity associated with the loss of those funds, as well as losses incurred to locate and recover his losses.”
Zhang claims he deserves millions in compensation because of his ongoing interest in Metro Vancouver properties held in part by Yin, his wife and daughter at: 1160 Queens Ave. in West Vancouver, 2185 Westhill Wynd in West Vancouver, 4826 Buxton in Burnaby, 3208 140th St. in Surrey, as well as at 408 West 41st and 426 West 41st Ave. in Vancouver.
The plaintiff alleges he has been a victim of “fraud, breach of fiduciary duty, breach of trust, misrepresentation, non-disclosure, breach of contract, unjust enrichment, fraudulent conveyance and conversion.”
The lawsuit gives the defendants 35 days to respond.