Liberal MP Geng Tan acted as intermediary for businessman now accused of fraud

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Liberal MP Geng Tan hand-delivered a letter to a top official at the Canadian embassy in Beijing and personally spoke to Chinese authorities on behalf of a Liberal Party donor who has been charged with money laundering and the fraudulent sale of hundreds of millions of dollars in securities to Chinese citizens.

Chinese-Canadian businessman Xiao Hua Gong, also known as Edward Gong, was arrested in Toronto last week and the Ontario Securities Commission (OSC) has charged him with fraud over $5,000, possession of property obtained by crime, laundering proceeds of crime and uttering a forged document. None of the allegations have been proven in court.

On June 1, Mr. Tan acted as an intermediary for Mr. Gong, who at the time was under criminal investigation by the RCMP, Ontario Securities Commission [OSC] and China’s Ministry of Public Security in connection with a $466-million pyramid scheme.

The rookie Liberal MP – the first Canadian born in Mainland China to be elected to Parliament – delivered an unsigned letter from Mr. Gong to Cindy Termorshuizen, the deputy head of mission at Canada’s embassy in Beijing, according to an OSC affidavit filed in a Toronto court.

Ms. Termorshuizen turned the letter over to the RCMP liaison officer in China, who forwarded it to investigators in Canada, the document says.

The affidavit said Mr. Gong denied in the letter that he was running a pyramid scheme and promised to co-operate with investigators in both countries.

He claimed he was “running a legitimate marketing and sales method called multilevel marketing and direct sales” of health-care products in China. A former Canadian ambassador to Beijing, David Mulroney, expressed surprise that the Liberal MP would approach the embassy on behalf of Mr. Gong, and praised Ms. Termorshuizen for giving the letter to the Mounties.

“It suggests a pretty shocking misunderstanding on the part of the MP on how our system works,” Mr. Mulroney told The Globe and Mail on Thursday. “It is the kind of thing you do in China … when you try to use your prestige or connections to smooth something over. It is not how things are done in Canada.”

The MP did not respond to written questions from The Globe about why he did not take the letter to the RCMP in Canada, what was his relationship to Mr. Gong and who paid for his trip to China.

“I simply transported a piece of correspondence on behalf of a fellow member of the Toronto-North York Community,” Mr. Tan said in an brief e-mail on Thursday. “I was unaware of any Canadian investigation into this individual. Any inference of influence in this matter is simply wrong.”

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