Backer of Oakridge-area condo complex sues developer after bankruptcy

A lawsuit filed by Coromandel part-owner Junchao Mo and his sons was filed in 2023 against Coromandel Properties CEO and co-owner, Jerry Zhong. Photo by Jason Payne /PNG

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Behind the spectacular collapse in 2023 of Vancouver developer Coromandel Properties — leaving $700 million in debt spread over 16 properties — lies allegations of a massive fraud by Coromandel’s CEO against a Chinese investor he befriended.

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In 2023, Coromandel part-owner Junchao Mo and his sons filed a lawsuit against Coromandel Properties CEO and co-owner, Jerry Zhong.

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Mo and his sons allege Zhong enticed them to invest in his various Vancouver-area real estate projects through five family trusts and three B.C. numbered companies and then misappropriated those millions to purchase houses and condos, pricey art from Vancouver galleries and expensive life insurance policies, and to provide a large slush fund to Zhong.

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Zhong’s denies all the allegations and the lawsuit has not been tested in court.

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The lawsuit filed by the Mo family alleges a story of a long friendship that ended in betrayal and collapse of 82 Coromandel companies.

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The lawsuit alleges the Mos put up and lost more than $151 million and are on the hook for $358 million in guarantees on the company debt because of years of deliberate fraud by Zhong and more than two dozen relatives, senior company employees and lawyers.

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The lengthy lawsuit, still alive in B.C. Supreme Court, listed several west side Vancouver mansions and downtown condos worth $50 million that it alleges Zhong purchased with the money. It also lists million-dollar life insurance policies and almost $7 million in art from two Vancouver art galleries, including four paintings by Jean-Michel Basquiat and four by Javier Calleja.

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Mo alleges Zhong purchased the art while the company was in financial difficulty and used several paintings and two sculptures as collateral to take on more debt.

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The lawsuit alleges Zhong transferred money out of the company to him and other family members, the greatest single amount of which was $20 million to him.

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Zhong and most of the other defendants have filed responses denying all allegations, including that senior employees cooked the company’s books to deceive Mo about company finances and that a lawyer forged Mo and his wife’s signatures to secure more loans against them.

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Zhong, in his response, said he “did not engage in a conspiracy designed to embezzle, misappropriate or conceal investment funds, as alleged or at all.”

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The case was in court recently when one of the defendants, lawyer Jason Wang and his law firm, asked to have three lawsuits against him, including this one, heard together. The judge granted his request.

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The original lawsuit alleges Mo, who lives in Macau, met Zhong through Zhong’s father, whom Mo had known for a long time as a friend and business partner. He and the younger Zhong became friends.