The Supreme Court of British Columbia has certified a proposed class action against the operators of an alleged Ponzi scheme.
In a decision issued on April 2, a class action has been certified against the operators of Letan Investments Management, Virginia and Patrick Tan, and their son, Marcus, along with related companies.
Certifying the case means the proposed suit can proceed as a class action. It doesn’t represent the court’s view on the merits of the case, which alleges fraud, fraudulent conversion and conspiracy.
“Based on a generous review of the notice of civil claim, I am satisfied that if the facts stated by [the proposed plaintiff] are true, the pleadings disclose causes of action in fraud, fraudulent conversion and fraudulent conspiracy,” the court said in its decision.
“Virginia and Patrick Tan are alleged to have operated an investment scheme that involved soliciting and receiving investments into a non-existent enterprise, in exchange for promissory notes that they failed to honour,” the court noted, adding that they haven’t filed any reply to the proposed lawsuit.
Back in 2017, Virginia Tan admitted that the scheme, which raised $30 million from investors between 2011 and 2015, was fraudulent in a settlement with the B.C. Securities Commission (BCSC). In that settlement, she agreed to be permanently banned and to pay $3 million to the commission.
The representative plaintiff in the case, Jastram Properties Ltd., claims that it invested $6.6 million in the alleged scheme, losing $4.8 million of that total; making it one of the biggest investors.
The court notes that the class action will cover about 165 investors, many of whom haven’t filed their own lawsuits. “For these investors, a class action may provide them with access to recourse for recovery that they are otherwise not able to seek of their own accord,” the court said.