Paul Se Hui Oei, a prominent immigration consultant and philanthropist in Vancouver, B.C., is accused by authorities of running an elaborate fraud scheme. The case, in which he faces only fines, also points to perceived weaknesses in Canada’s justice system.
VANCOUVER, British Columbia — In the tightly knit world of Vancouver’s wealthy Chinese immigrants, Paul Se Hui Oei stood out for his ties to some of Canada’s most powerful politicians and his mastery of cultivating guanxi, or personal relationships, that attracted legions of Chinese clients eager for his assistance in gaining a legal foothold in Canada.
But behind closed doors, the authorities say, Oei, a prominent immigration consultant and philanthropist, ran an elaborate fraud scheme, pocketing nearly $6 million from investors, including many Chinese citizens led to believe their investment would help them secure permanent residency in Canada. Instead, the authorities say, he spent the money on luxury cars, beauty pageants and donations to the British Columbia Liberal Party.
“Everything he said were lies,” said Chen Wei, a Chinese immigrant who testified earlier this year in a case against Oei before a British Columbia Securities Commission panel. Chen’s family invested 1 million Canadian dollars ($782,000) in Oei’s project, according to hearing transcripts.
The case is part of a pattern, experts say, of problems with Canada’s immigration programs, which, like the United States, set aside coveted residency permits for foreign investors. Some also say it underscores a troubling flaw in the Canadian justice system, which often allows white-collar criminals to walk away with little more than a slap on the wrist.
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Oei has denied the accusations, but even if he is found to have committed fraud, he will face financial penalties only, not prison time.
“Canada doesn’t take financial crime seriously,” said Christine Duhaime, a lawyer in Vancouver who specializes in laws dealing with terrorist financing and money laundering.
Oei, who immigrated to Canada in the 1980s, declined interview requests through his lawyer.
The case against Oei was brought by the securities commission, an independent provincial regulatory agency. The panel, appointed by the government, is expected to rule on the case this month. Apart from the financial penalties, Oei faces a possible ban from working in the securities industry.
In Vancouver, Oei owned an immigration consulting and financial services company, and sought to use his connections in the Chinese community to raise money for a recycling startup, Cascade.
But the commission says that from 2009 to 2013, Oei told investors that the project was approved by the British Columbia government (it was not) and that their investments would give Chinese citizens the right to immigrate to Canada, as well as shower them with profits. All they had to do was transfer funds into the trust account of a local lawyer and member of the Canadian Parliament, Joe Peschisolido.
“This made investors feel safe, and that their money would be safe,” Mila Pivnenko, one of the commission lawyers, told the panel. “Of course, Oei was the only person who directed the lawyer where to disburse the funds from the trust account.”
The commission said Oei secretly transferred millions of dollars meant for the recycling company into his own bank accounts and issued shares in companies with no assets to investors in order to avoid detection.
Oei raised about CA$13.3 million from 64 investors, but the commission says he kept CA$6.9 million for himself. When Cascade went bankrupt in 2013, Oei told many investors they could recoup their money if they topped up their investment, without alerting them that more that half the funds he had already raised from investors had never been sent to the project, the commission said.
Jiang Yicheng, 53, a businessman from China’s coastal Zhejiang province, said in a phone interview that during several visits to Vancouver, Oei drove him and other Chinese investors around in a BMW, hosted lavish meals and showed off photos of himself with Canadian officials.
Jiang was sold. He formed a consortium of Chinese investors who transferred more than $3 million for the recycling company, convinced by Oei’s promises that the project was backed by the government and would allow him to immigrate.
Oei “took advantage of our trust to cheat us,” said Jiang, who has also filed a lawsuit in British Columbia against Oei. Jiang said he was successfully sued by the members of his consortium to recover their losses, which has left him penniless.
Jiang said an associate wired payments from Hong Kong to Vancouver while Jiang transferred the equivalent in yuan to the associate’s bank account in mainland China, a form of underground banking that experts say is widely used by wealthy Chinese to evade China’s capital controls and illicitly funnel money overseas.
In an interview at a reception last year at a Vancouver Lamborghini dealership packed with Chinese-Canadian socialites, Oei bragged about his luxury cars and explained why many wealthy Chinese find Canada so attractive. “They want a safe place to put their money,” he said.
Experts say the case against Oei fits a pattern of malfeasance that has tarnished Canada’s immigration programs. In 2014, the Canadian government canceled a federal immigrant investor program popular with Chinese millionaires after finding little economic benefit and frequent abuse. But provinces and territories have their own investor visa programs. Critics say many are rife with abuse and fraud.
In April, three Chinese-Canadian immigration consultants were jailed for 18 months after they pleaded guilty to helping more than 1,600 immigrants, many from China, fraudulently maintain Canadian permanent residency and obtain citizenship.
Bill Boyd, a Saskatchewan legislator, resigned in August after he was found to have violated conflict-of-interest laws for telling Chinese investors at a seminar in Beijing that they could obtain Canadian permanent residency by investing in a company he led. Advertisements for the seminar featured the official Saskatchewan government logo and falsely claimed that Boyd was the provincial economy minister.
Richard Kurland, a former national chairman of the Canadian Bar Association’s citizenship and immigration section, said that lax oversight from the Canadian government and a preference for funding agencies that investigate violent crime and terrorism rather than white-collar crime had added to the difficulties in policing the immigration programs. “White-collar crime is tolerated because it’s not a priority,” he said.
In 2016, a U.S. State Department report labeled Canada a major money-laundering country. A review last year by the Financial Action Task Force, a global body that sets standards for combating money laundering, found that Canadian agencies “generally suffer from insufficient resources and expertise” and that criminal penalties “are not sufficiently dissuasive.”
In an email, Canada’s Ministry of Finance said that the task force’s concerns would be reviewed by a parliamentary committee.