Douglas Todd: A wealthy family insists it’s the rightful owner of more than seven Metro properties being claimed by the family of a man they allege is under investigation in China for corruption and money laundering.
Warring trans-Pacific families are in B.C. Supreme Court accusing each other of multimillion-dollar fraud, corruption, identity deception, contempt of court, coercion, money laundering and threats.
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The convoluted B.C. lawsuit pits the estate of property investor Tony (Tong) Zhang, who died in 2022, against Hang Yin, his wife and daughter, who are the owners of four numbered B.C. property companies.
The Zhang estate’s civil suit maintains that Hang Yin and his family fraudulently misappropriated $45 million worth of Zhang’s investment money.
It alleges Hang Yin diverted the money to his own use to purchase more than seven Metro Vancouver properties, which Yin and his wife and daughter either now live in or from which they receive rental income.
At least two of the properties in question are bungalows that are part of a land assembly in the 400-block of West 41st Avenue, adjacent to the mammoth, under-construction Oakridge Park luxury residential-office complex.
Two other homes are in West Van, including one at 1160 Queens Ave., with a view of English Bay.
The lawsuit has taken several twists, especially last year when Hang Yin admitted he had been under house arrest in China, unable to leave the country because he was being investigated for corruption and money laundering.
Several years after the case began, Yin also claimed last year that the late Tony Zhang wasn’t acting on his own when the more than seven properties were purchased. Yin says his property deals were primarily made with Zhang’s father, Chunli Zhang.
Furthermore, Yin alleges that Zhang senior is currently “under investigation by the Chinese government for ‘corruption in public office’ and ‘money laundering.’ ”
According to the judge, Yin maintains the “investigation in China includes allegations that Mr. Chunli Zhang was laundering the proceeds of his crimes into B.C. real estate.”
As a result of China’s allegations of wrongdoing against Chunli Zhang, Yin claims he terminated his business relationship with him in 2019, dividing the assets.
Yin maintains Zhang’s family has launched the lawsuit against him, his wife, Yan Chun Lui, and daughter, Yu Yin, for “improper purposes.”
According to the judge, the family said last year that Zhang began the civil proceedings in 2020 to discourage Yin from “co-operating in the investigation into Mr. Chunli Zhang that is underway in China.”
The B.C. Supreme Court case is set to go to trial in May. It’s scheduled for 45 days.
The thorny litigation highlights continuing worries, in both Canada and China, that some wealth used in transnational property investments in Canada is obtained through crime or other illicit means.
B.C.’s Cullen Commission was launched in 2019 to examine the extent to which money laundering, foreign and domestic, was a factor in B.C.’s expensive housing market and casino industry.
Former B.C. Supreme Court justice Austin Cullen concluded in his 1,800-page report that billions of dollars of criminal and illicit funds flowed annually through B.C. casinos and real estate in the absence of effective federal law enforcement.
Houses, condos and commercial property, Cullen said in 2022, are highly vulnerable to money laundering, particularly when numbered companies are used. Cullen said many in the real estate industry are frustrated by the lack of guidance on how to comply with vague federal anti-money-laundering obligations.
Although the People’s Republic of China has long had a $50,000 limit on how much wealth can be taken out of the country in one year, D’Eathe said Canadian governments and banks have largely not been asking how offshore investors are able to exceed China’s currency restrictions.
One was to create a special B.C. police unit for financial intelligence investigation. The other was to establish an independent office of the legislature to probe money laundering, particularly in real estate.