By Amy Chen

Investors in US and Canada who thought they were investing in a tech company but were tricked into joining an alleged real estate Ponzi scheme have been scammed out of millions, court documents show.

So far, four investors have filed claims alleging that Istuary Investment Group CEO Yi An “Ethan” Sun and his wife Yulan “Amy” Hu have defrauded them of $4.2 million, most of which was allegedly used by Sun and Hu for speculating in real estate in the lower mainland^[1]https://drive.google.com/file/d/0B-G2xjXkuEpCM0RLY3MwMVJBMHM/view?usp=sharing^[2]https://drive.google.com/file/d/0B-G2xjXkuEpCaktBbk9fZDdiUE0/view.

All of the investors allege that Ethan Sun promised to return them five times the investment amount within two years.

One of the investors involved is Joe Carangi, a prominent real estate lawyer who once ran as an NPA candidate for the City of Vancouver municipal election.

Meanwhile, the employees of Istuary Innovation Group are complaining that they have not been paid since May ^[3]https://www.linkedin.com/feed/update/urn:li:activity:6317362533829353472/, and the ones we talked to allege that CEO Ethan Sun and CFO Brian Chen ^[4]https://www.linkedin.com/in/brian-chen-mba-cpa-cma-cpa-illinois-626b034/ have fled the country.

While corporate filings show that Istuary Group companies have received more than $10 million dollars from investors in the US and Canada^[5]http://www.bcsc.bc.ca/ViewDocument.aspx?DocNum=V7B4O6XBL7R5N7NAM6J5K7H9B7X3^[6]https://bcsc.bc.ca/About_Issuers/Issuer_Information/?partyid=R7SBF6TBC7GAY7UBF6F4G7S0, the cases filed against the company put the number much higher.

It’s little surprise that the investors fell for Sun’s scheme as Istuary Group seems to have had the full blessing of politicians at all levels and all stripes.

Canadian Minister of Citizenship and Immigration designated Istuary Idea Labs Inc, part of the Istuary Group, as a designated incubator for the startup visa program on August 19, 2017, even while litigation against the company was pending^[7]http://www.gazette.gc.ca/rp-pr/p1/2017/2017-08-19/html/notice-avis-eng.php.

Former Premier Christy Clark personally thanked CEO Ethan Sun in a hand-written note for the support he gave her during a trade mission to China.

“It’s great to watch your company grow and thrive,” Clark wrote.

The company also joined BC’s former trade minister Minister Teresa Wat’s trade junket to China at the taxpayers expense^[8]https://archive.news.gov.bc.ca/releases/news_releases_2013-2017/2015MIT0013-000363.htm.

Istuary also seems to have had the support of HQ Vancouver President, Yuen Pau Woo, who was appointed as a senator by Prime Minister Justin Trudeau last year^[9]http://www.hqvancouver.ca/istuary-innovation-group-announce-the-opening-of-their-hq-in-vancouver/.

“We are delighted to support their expansion in Canada and plans for further growth into Asia,” Woo said in a 2015 press release. “Istuary’s expansion demonstrates why British Columbia is a natural choice for companies looking to benefit from the strong business support ecosystem and our close ties with Asia.”

The fallout from the Istuary scandal may soon start hitting Canadian banks who lent money to the company and the CEO, especially the Royal Bank of Canada, which is listed as a mortgage holder of the properties mentioned in the lawsuit.

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