Finance Minister Chrystia Freeland has alleged Chinese Communist Party (CCP) agents have infiltrated Wealth One Bank of Canada and coerced shareholders. The news comes just two months after a special committee confirmed there are 11 spies on Parliament Hill who have worked for or cooperated with CCP operatives. Toronto-based Wealth One was established in 2016 as a federally chartered, exclusively digital, Schedule One bank. In Canada, a Schedule One bank is considered a domestic operation that is authorized to conduct financial business such as granting mortgages and accepting deposits — it is not allowed to act as a subsidiary of a foreign entity. Freeland in federal court documents alleged three principal shareholders, Shenglin Xian, a Toronto-based insurance executive, Yuangsheng Ou Yang, a Toronto-based grocery executive and Morris Chen, a property developer based in Vancouver were subject to Chinese communist coercion and may have succumbed to Beijing’s money laundering schemes, the Globe & Mail reported. The finance minister specified China’s consul-general in Toronto had told Chinese Canadians to bank with Wealth One, “a statement likely intended to be interpreted as a Beijing command among Canadians of Chinese descent.” She also alleged the three founders were involved in money laundering benefiting Beijing, reasoning due to the combined control of almost 75% of the bank’s shares, they could be allowing the CCP to funnel money through Wealth One. In April 2023, Freeland ordered Wealth One to comply with a litany of unusual national security requirements, including erecting a firewall to block the three founders from accessing its operations and severing all communications with the shareholders in question. She also ordered the three businessmen to divest from the bank. Their lawyers, however, sought a judicial review of Freeland’s order. At first the lawyers sought a confidentiality order on the case, but later withdrew it. It was revealed in a May 2023 filing the three shareholders collectively hold 73.4% of Wealth One. The bank is worth an estimated $94 million. Freeland in December 2022 wrote letters to the three shareholders, which were obtained through court proceedings by the Globe, where she warned “Chinese Communist Party and the government of the PRC may use Wealth One Bank to further objectives that are detrimental to Canada’s national security.”Freeland accused Xian to be guilty of “persistent structuring of cash deposits over five years which is indicative of a deliberate attempt to circumvent financial institutions reporting requirements to FinTRAC (anti-money laundering agency).” Further, she said Xian was the “primary subject of numerous suspicious transaction reports (STRs) by Canadian financial institutions” during a seven-year period prior to 2016, but acknowledged he had not been a primary subject since the bank opened. In writing to Ou Yang that December, Freeland alleged “nearly two dozen employees of (his) Yuan Ming Supermarket engaged in suspicious transactional activities involving the structuring of cash deposits where each of the employees engaged in consistent structuring techniques to one another.” Freeland alleged he had “direct and personal” business connections said employees. As for her letter to Chen, Freeland said she knew he had “been identified on the periphery of multiple (STRs).”“For example, Chen’s company, Mei-Jia Antiques, was a counterparty in an STR regarding a real estate company. The economic purpose of the transactions between Chen’s antique company and this real estate company was unclear,” wrote Freeland. “Given the activities among the named individuals that may be related to PRC foreign interference, it is also possible that these activities are for the purpose of obfuscating the flow of funds relating to PRC foreign interference in Canada,” Freeland wrote in each of the three letters. All three men in court documents in response to Freeland’s letters said they had never been “involved in or taking any such actions” and demanded to see the alleged STRs to address in detail the concerns raised. They denied Freeland’s allegations and said due to the fact the Canadian government has experienced a “rise in geopolitical tensions with China,” the finance minister brought “an unwarranted challenge to their loyalties to Canada.”The bankers hired two private firms to conduct a private investigation based on Freeland’s allegations, both came up dry. Back in May 2016, the Globe reported the Liberal Party of Canada invited Xian and 32 other business executives to attend a private fundraiser where Prime Minister Justin Trudeau was the guest of honour.Xian at the time was waiting on final approval to launch Wealth One. Permission from federal bank regulators was granted soon after the fundraiser. Xian, however, told the publication he did not discuss Wealth One with the newly elected prime minister.
