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March 21, 2011

As I stated in court, I believe that the report of Mr. de Verteul is neither complete nor objective. It also appears to display his clear expertise in forensic accounting, but in my case, the report seems dedicated to excusing both the Ontario Security Commission as well as the police of any wrong-doing.

The court and I were informed that Mr. de Verteul began his work in April, 2009, and finished it over a year later, in July, 2010. As you know, I was first charged with $60 million in fraud in June, 2009, and by the police, later that November. I had been charged with fraud far earlier than your current report had been completed! This sounds strange to me, and possibly to many others. Mr. Larry Lancefield, a senior forensic accountant of my acquaintance, labelled the O.S.C. forensic accounting in my case “a joke,” because “they had nothing in their possession at the time that the commission charged” me.

Once the O.S.C. charged me, Weizhen Tang, with 12 counts, including the accusation that I was “a Ponzi schemer,” and warned me that I could be fined $60 million if convicted, it also invited other government investigations, including one by the United States Securities Commission.

Mr. de Verteul spent fifteen full months to finish a simple report which found nothing illegal in my possession, which hurt my name, my business, and my investors. A meaningful forensic accounting demands only a few weeks, a month at the most, yet large amounts of government money and resources were wasted in attempting to learn and analyze my business and its accounting for well over a year. One would assume that any senior forensic accountant should be able to find missing money and secure his expenses, but this has not been the case. Were these purportedly-stolen funds taken by the police, without benefit of any trial or judgment? Where on earth are they, then?

This report found no money stolen or hidden, because there was none. Nothing supported the charges against me, as the long-delayed report by Mr. de Verteul managed to accomplish nothing except damage my business in particular and the Canadian economy in general. How can this man and the O.S.C. fine a legitimate businessman like myself the giant fee of $60 million? I, who had no lawyer in court and have been forced to go on welfare because of these cruel, endless actions? The case against me, far from being proven, has profoundly injured me, and more important, my several dozens of clients—who were eager to continue to use my skills to return to investing on their parts (something unimaginable on the part of those deliberately and viciously cheated by Madoff, the True Ponzi King, in the nation to the south). Everyone has been losing a fortune because of these actions of the O.S.C., the police, and the forensic accountants, which makes no business, economic, legal or moral sense.

I have many thoughts about my present situation: 1. In Mr. de Verteul’s report, how could he find a “negative opening balance” when all my accounts were with banks and brokerages in good standing, none of which allow such things? 2. In describing the sources of funds, the total deposit was nearly $60 million, yet the O.S.C. has only $52 million. And in my sister company in the United States, Winwin Capital Inc., a total of $17 million was found, yet Mr. de Verteul’s report showed only $9 million! A table I willingly presented for forensic work showed all the deposits and withdrawals, the latter displaying a total of $35-40 million in withdrawals during the financial crisis of 2008. These facts could have been confirmed in a few days, yet over a year was wasted in coming up with the wrong answer: $52 million in total deposits and $25 million in withdrawals, making this long-overdue report incomplete and inaccurate, useless and misleading. 3. In the report’s application of funds, it noted that $35.6 million went to brokerage accounts, proving that a very significant amount had been invested, and showing considerably active business activities. (We all know now how little dealings were performed by the evil Madoff.) Sadly, money lost in the market is normal business, and in my case, nothing was ever stolen or hidden. It has always been obvious that mine was a case of money lost in legitimate investing actions, and never in criminal ones. (I recall that the revered Warren Buffett lost billions during this same volatile period in the world’s financial history.) Why were the O.S.C. and the police not ever notified that they were mistaken about me, and to call off their attacks, imprisonment, legal proceedings against me? 4. In the portion of Mr. de Verteul’s report on Application of Funds, every penny transferred to my companies and to me were only withdrawals, never deposits. All my own money was used for business, promotion, and for my investors, with nothing ever taken or stolen. It was misleading by the court and the judge to report otherwise. My company had always been family-owned, and was a private, responsible, and trusted firm, built up over fifteen years of struggle, survival and considerable success. Most of my firm’s money was used to pay office rent and its employees, with almost nothing going to my personal use: there was never any lavish lifestyle on my part, as seen in 99% of deliberate fraudsters. The O.S.C. and Mr. Verteul must be well aware of how much an entrepreneur like myself in the financial industry could charge my fund, having raised $60 million over three years: the management fees of, say, 2% and commissions of 5% would have meant millions into my coffers, but where is this money? I took nothing for myself or my family! By refusing to charge my investors anything over those three years, I set a new industry standard, suggesting that the government owes me money now, and not the opposite. Why do the O.S.C. and the police ignore the misconduct of so many public companies that brought on the financial collapse of 2008, and choose, instead, to go after a single private business such as mine, dedicated to innovation and honest entrepreneurship in the investment field? 5. Regarding my U.S.-based company, the money came from the United States and was handled in Canada. I find it informative that the very experienced Securities and Exchange Commission (S.E.C.), did their own investigation and had no problems with my actions, and settled with me. Why, I ask, did Canada’s O.S.C. use incomplete information, and Mr. de Verteul’s opinions, to mislead the court? 6. Did Mr. de Verteul’s investigation go too far in its investigating and collection of my client’s financial information without their consent? Were the rights and privacy of my clients violated? My investors had done absolutely nothing wrong, yet the actions taken with them, most of them Chinese-Canadians, were aggressive and destructive. The O.S.C.’s massive intrusion into the lives of the investors in my Oversea Chinese Fund Limited Partnership terrified them, and was detrimental to their interests, which has led many of them to now feel that Canada is not safe. Yet the O.S.C. ignored their written pleas—none of them initiated or pursued by me—to let me continue to invest on their behalf. They are now planning to file a lawsuit against Mr. de Verteul and the O.S.C. 7. It seems clear that the O.S.C. has not only caused economic and financial damage to my many clients, but also psychological and political harm as well. Our country’s large Chinese-Canadian population has long had a high opinion of the Canadian people and its institutions, like most immigrants to this great land: that this country respects its citizens’ rights and privacy; that its people are essentially good and fair. The actions of the O.S.C. in my case has scared away tens of millions of dollars in present and future investments by Chinese people around the world, which is distressing and extremely unfortunate. 8. An independent study of the actions of the O.S.C. and Mr. de Verteul’s report would find that everything they have deliberately looked for has been negative, with little objectivity about noting the many positive aspects of the case and my career until then. My business and strategy analysis suggested no criminal activity, yet your case against me continues on, month after month after year. 9. The O.S.C.’s accounting and analysis will cost the government countless hours and millions of dollars without proving anything against me and my companies. My own accounting and analysis are dynamic, focused, efficient and result-oriented, which is why I made millions of dollars for my clients over nearly 15 years in the financial field. My accounting showed results within a day or two, costing me only the salary of my computer programmer for a day or two. True, I lost money in the first 18 months of my firm, but what young company does not? I promptly stopped losing money after that, and even during the dreadful financial crisis of 2008, I presented transparent, live exhibitions before dozens of clients, proving that I could turn $1-million into $5-million in five weeks, and similar dramatic achievements. 10. I must underline this fact: losses in investing and in business are not crimes; only stealing is. It is interesting that Mr. de Verteul’s report chose not to mention that I gave over a million dollars of my own, personal money, to help them out during the financial tsunami of 2008; money which I had made from the market on my own. Fraudulent business people take the money of their investors; I did the opposite. 11. Investment losses in the past and an investor’s earning report are totally different things, and the Crown cannot “correct them” to incriminate me. I have never falsified any document or report in my life. I kept my information up-to-date, since I was making investments on behalf of my many clients to make them money. I had a conscious, intelligent, well-thought-out-and-proven strategy of making money on behalf of my clients. Determination, honesty, justifiable promises and successful delivery are business and investment strategies. No examples of thievery means that that no crime was committed, which has always been true in my business dealings, my life, my actions. 12. My investments and trading in the market were massive and huge in volume, as can be plainly seen in the records of E-Trade (the Scotia Bank’s brokerage arm which is now called “I-Trade.”) The SEC in the United States must chuckle when they see the O.S.C. put me on trial as a “Ponzi Schemer.” There is no proof that I ever even considered such a thing, or was even aware of the concept.

It is tragic that the financial industry of Canada has lost millions of dollars in commissions over the past two years, because of the Ontario Securities Commission and the surprisingly lengthy wait for Mr. de Verteul’s report. It follows that the Canadian economy also suffered more than was necessary, in our climb back to financial stability. And what about Weizhen Tang, Private Citizen? I receive phone calls nearly every day from collection agencies, the Minister of Labour, and even the Canada Revenue Agency. It is said that “justice delayed is justice denied.” I have seen no justice in the ways my clients and myself have been treated over the past two years, and I look forward to complete exoneration as soon as possible. –Weizhen Tang March 21, 2001