Article content continued

In an announcement Wednesday, the B.C. Securities Commission said an investigation found that Tan raised about $30 million between 2011 and 2015 from investors to whom she issued promissory notes. The notes stated the investments were for short-term financing.

However, Tan did not use the money for short-term financing, and made interest and principal payments to investors from money she raised from other investors, and with a small amount of her own funds, the securities commission stated.

This is an example of a Ponzi scheme, named after Charles Ponzi, who ran such a scheme in the 1920s in the United States in which investors are paid by other investors’ money, not from profits from a business venture.

The $30 million that Tan raised from investors between 2011 and 2015 was about the same amount she paid investors in principal and interest payments during the period, said the commission.

However, many investors suffered substantial losses as a result of their investments with Tan, said Doug Muir, director of enforcement for the securities commission.

“As typical with Ponzi schemes there is what we would call net winners. There are some people, often ones who get in early, that end up sometimes making money off these things,” Muir said in an interview.

He said their investigation did not determine how much investor money was outstanding, or how many investors were part of the Ponzi scheme or had lost money.

Tan could not be reached on Wednesday. The phone at her business, Letan Investments, is out of service. She did no reply to email inquiries.