Summary

In a shocking ruling from the British Columbia Supreme Court, a Vancouver man has been found guilty of defrauding two Chinese development companies out of over $500,000, relating to a failed real estate financing scheme for a project on Hainan Island, China.

Background of the Case

Justice Neena Sharma's decision, made public this week, holds Christopher Lee accountable to Hainan Dehong Real Estate Development Corporation and Hainan Kinghouse Real Estate Development Corporation for committing acts of fraud and fraudulent misrepresentation. The case centered around Lee's deceptive efforts to secure financing for what was touted as a $100 million land development project that envisioned a shopping center and recreation complex on Hainan Island.

Introduction of the Project

The development opportunity was introduced by Julie Fu, the daughter of Cexen Fu who manages the two family-owned companies. In 2014, Julie Fu had collaborated with mortgage broker Frank Lee (no relation to Christopher) to purchase a substantial piece of commercial property in Richmond, British Columbia, for $65 million. In early 2015, she sought Frank Lee's help once more for financing the ambitious Hainan project, leading to Christopher Lee's involvement.

Fraudulent Activities

Christopher Lee claimed to represent Westbay Partners Services Ltd. and persuaded Julie Fu to enter a 'syndicated' loan agreement with them, expecting to raise the crucial $100 million from various private equity sources. However, he requested a hefty $500,000 commitment fee upfront, which he promised would be refunded if financing did not secure.

Failure of Financing and Legal Actions

In November 2015, Westbay abruptly informed the Fu companies that it could not obtain the financing and committed to return the fee. But instead of refunding the amount, bank records revealed that the money was quickly funneled into personal accounts linked to Christopher Lee. This discrepancy prompted legal scrutiny and allegations of fraudulent activity.

Court Findings

Sharma's ruling pointed out the inconsistencies in testimony from both Julie Fu and Frank Lee, but most notably ridiculed Christopher Lee's accounts, labeling them as illogical and lacking credibility. The court found it suspicious that Christopher Lee had claimed ownership of the bank account holding the commitment fee, but no documentation supported this assertion.

Conclusion of the Ruling

The ultimate conclusion reached by Justice Sharma was damning: "I find on a balance of probabilities that at all material times, Christopher Lee owned and controlled both Roxschild and the Roxschild account," she stated, implicating him as the mastermind behind a scheme designed to mislead the plaintiffs into relinquishing their funds.

Liability and Future Implications

He was ordered to pay the entire amount of $500,000 plus additional interest. However, the court dismissed allegations made against Frank Lee and his brokerage for negligence, clarifying that they were not liable for the fraudulent acts committed by Christopher Lee.

Investor Caution

This case spotlights the importance of due diligence and transparency in property investment, especially when international parties are involved. As the real estate market continues to evolve, investors must proceed with caution to avoid similar pitfalls.