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Chinese Affinity Fraud (Variation on the Madoff Theme)

Written: April 6, 2009

By Bill Singer

http://BrokeAndBroker.com

SUMMARY: Weizhen Tang, the self-described "Chinese Warren Buffet" recently admitted to investors that since at least 2006 his Toronto-based hedge fund, Oversea Chinese Fund Limited Partnership (the "Hedge Fund"), operated as a Ponzi scheme. In February 2009, Tang told investors that he and the Hedge Fund posted false profits on investors' account statements for the purpose of concealing substantial trading losses, and, more insidiously, to attract new investors to his fund. Tang further admitted that he used funds from new investors to return principal and payout purported profits to other investors. Tang admitted to investors that the Hedge Fund paid out at least $8 million in purported profits in 2006, 2007, and 2008 - despite significant trading losses incurred during that time. Since at least as early as 2004, more than 200 investors have collectively invested between $50 and $75 million in the Hedge Fund.

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