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Burnaby couple accused of running Ponzi scheme
A Burnaby couple is being accused by the B.C. Securities Commission (BCSC) of running an Internet-based Ponzi scheme.
The executive director of the securities regulator has issued a temporary order and notice of hearing against Yan Zhu (also known as Rachel Zhu) and her husband Guan Qiang Zhang, and an unregistered Burnaby company, said a BCSC press release.
The BCSC received two anonymous complaints that Bossteam E-Commerce Inc. was operating a Ponzi scheme through a website registered to Zhu, a Bossteam director, registrant and life insurance agent, and her husband.
The notice of hearing states the website offered two types of securities to B.C. residents, who paid $2,000 to $5,000 for a membership.
Zhu’s husband told investigators that the company had no real source of income, and that funds paid to investors came from the investment monies of other investors, the release said.
In October and November 2011, Bossteam opened two bank accounts in the name of Zhu and her husband, both Burnaby residents. From October 2011 to January 2012, the accounts received numerous deposits for $2,000 to $5,000, totalling about $1.3 million.
The commission alleges that Zhu lied to its investigators when she denied involvement with another website registered to her and her husband, and that she falsely claimed she had told her employer, a mutual fund dealer, about her outside business activities with Bossteam.
"Based on the evidence gathered to date, the notice alleges that Zhu, Zhang, and Bossteam E-Commerce appear to have illegally distributed securities and perpetrated securities fraud. The investigation is ongoing."
The temporary order prohibits trading in Bossteam E-Commerce securities and orders Zhu and Zhang to stop all investor relations activities on behalf of Bossteam. The order expires on May 15, when the commission will apply to set dates for a hearing into the allegations before a panel of BCSC commissioners.