BCSC collects almost $5 million from Bossteam fraud

The British Columbia Securities Commission (BCSC) has now collected $4.8 million of the $14 million in penalties that it levied against the operators of an apparent Ponzi scheme, Bossteam E-Commerce Inc., the regulator said Friday.

In 2015, the BCSC imposed a $14-million penalty against Burnaby, B.C.-based Bossteam and its founders—former fund dealer rep and life agent Yan Zhu (aka Rachel Zhu), and Guan Qiang Zhang—after finding that they committed fraud, illegally distributed securities and misled BCSC investigators. They were also permanently banned from the markets.

The BCSC said the court-appointed receiver in the case, Grant Thornton Ltd., this week paid the commission $3.1 million. The firm had made a $1.7 million payment to the regulator in July 2018.

The commission said the receiver has already paid $6.5 million to 464 victims of the fraud. The remaining creditors, including the BCSC, were paid out of funds left over once investors were compensated.

“Every investor with a validated claim was reimbursed for their total losses, plus 5% interest,” the commission said in a release.

The assets distributed by the receiver come primarily from bank accounts frozen by the BCSC during its investigation. The commission said that it “has not been able to identify any other assets belonging to Zhu and Zhang.”

Zhang was deported to China in 2012, and Zhu was living in Burnaby as recently as 2017, the commission said.

Staff

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