Yellowknife theatre closes as RCMP make arrest in business-loan fraud investigation
CBC
A Yellowknife movie theatre and virtual reality gaming business has closed, while RCMP have arrested one person in connection with a fraud investigation involving the company.
Last week, Northern Sky Films Inc. made a post on Facebook saying it was shutting its doors after a "bad guy" used the company to take out a large bank loan and enriched himself with that money.
Then on Tuesday, the RCMP announced that a person who was involved with Northern Sky had allegedly misappropriated money from loans from the Business Development Bank of Canada (BDC).
Police allege that $250,000 in loans were taken out to support Northern Sky, but that the money was "funnelled into a personal account before being further dispersed."
That money never went to developing Northern Sky, say RCMP, and responsibility for repaying the loans was put onto another business partner.
RCMP spokesperson Cpl. Matt Halstead said police aren't naming the suspect as the charges of fraud over $5,000 and laundering the proceeds of crime have yet to be laid.
The arrest comes a few months after Northern Sky claimed in court documents that the company, its sole director Shengtang Wang (also known as Tony) and the BDC are all the victims of fraud perpetrated by Northern Sky's former director, Liang Chen, and Chen's business, C.L. Pacific Immigration Consulting Ltd.
The allegations haven't been proven in court.
Wang said the BDC is suing his company, and he's on the hook to pay back a loan that he didn't even know about.
"After BDC told me [Northern Sky] owes BDC a lot of money, I cannot see any hope in the future [of the company]," he said.
Last November, the BDC filed a statement of claim in the Supreme Court of the Northwest Territories. Northern Sky, along with Chen and Pacific Consulting, are named as defendants.
The BDC claims that in 2018, the bank agreed to give Northern Sky a $250,000 loan, and to secure the loan against Northern Sky's property.
The bank says Northern Sky defaulted under the terms of the loan, and that the company, Pacific Consulting and Chen now owe the BDC more than $269,000.
Northern Sky denies the BDC's allegations, and wants to be excluded from the bank's lawsuit.
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