Penalty in fraud case doesn’t come close to covering losses, victim says

BCSC bans Paul Se Hui Oei from trading in province in connection with $15 million swindle

A BCSC panel ruled that Paul Se Hui Oei and three companies under his control must pay administrative penalties of $5.5 million, and repay victims about $3.1 million | FIles

The BC Securities Commission (BCSC) has permanently banned a Metro Vancouver man - a central figure in a high-profile, multimillion-dollar fraud case involving overseas investors - from trading within the province.

A BCSC panel also ruled that Paul Se Hui Oei and three companies under his control, including Canadian Manu Immigration and Financial Services Inc., must pay administrative penalties of $5.5 million combined, in addition to repaying victims approximately $3.1 million.

One of Oei’s victims, however, said while the ruling gives him ammunition to go after Oei in a civil suit – and potential cause to pursue a criminal suit – he remains skeptical that he will see any compensation stemming from Wednesday’s panel decision.

“From me alone, Oei took $4 million,” said Jiang Yicheng, who has a civil suit against Oei that’s scheduled for June 2019. “And I’m not sure how that $3.1 million will be distributed to the victims, but it’s not enough even if it’s just to compensate me for my losses. The BCSC’s focus is punishing Oei, so I don’t hold out much hope on compensation.”

The BCSC panel found that Oei began soliciting investors - most of whom are from China and hope to immigrate to Canada - to invest in two startups that plan to recycle organic waste for producing topsoil and fertilizer. BCSC officials said Oei did not direct all of the investment towards the costs of the two startups, Cascade Renewable Carbon Corp. and Cascade Renewable Organic Fertilizer Corp.

The BCSC found Oei and his companies committed fraud estimated at more than $15 million, the panel decision said.

“Oei was clearly the mastermind of the fraud perpetrated on the investors,” the panel decision said. “He made the representations to investors about the investment structure. He made the decisions with respect to the flow of funds that led to the diversion and misappropriation of investor funds.”

It is unclear how the BCSC will collect the penalties and fines levied against Oei and his companies.

Investors in the case also alleged Oei touted his links to government – he was a donor to both the federal and provincial Liberal parties - to secure Chinese investors’ trust, with at least one investor saying he was told to wire the investment into a legal trust fund at Peschisolido & Co. - a law firm then directed by Liberal MP Joe Peschisolido. (The MP has denied wrongdoing in legal filings.)

Jiang, who is receiving medical treatment in St. Louis, Missouri, after a serious car accident in Saskatchewan last year, said the case has “reduced him to utter financial ruin,” contributed to the end of his marriage and clouded his hopes for  his future with his two young sons.

“We are truly living day-by-day,” Jiang said, noting he is being supported by friends who live in North America, since he is himself facing lawsuits stemming from the case in China, meaning he cannot return. “That’s why I’m still pursuing my legal options in Canada - I have nowhere else to turn.”

A full copy of BCSC’s panel decision can be read at https://www.bcsc.bc.ca/Enforcement/Decisions/PDF/2018_BCSECCOM_231/.