A Yellowknife businessman has pleaded guilty to one count of fraud related to the use of a loan intended for a theatre and virtual reality gaming business.
Liang Chen pleaded guilty in Territorial Court last month to one charge of defrauding the Business Development Bank of Canada.
He is also accused of defrauding Shengteng “Tony” Wang of more than $5,000.
Chen had helped Wang start Northern Sky Films, a Yellowknife company that opened in 2020, offered a 360-degree dome theatre and virtual reality arcade, and marketed itself to tourists.
RCMP announced in 2023 that they had arrested one person as part of a fraud investigation related to the business. Police alleged at the time that one business partner had funnelled $250,000 from a Business Development Bank of Canada loan, intended to support Northern Sky Films, into a personal account.
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The business permanently closed a month before Chen’s arrest.
A final post published to Northern Sky’s Facebook page in September 2023 alleged it was closing as “a bad guy used the company” to “take a big loan from a certain bank for enriching himself.”
Chen is scheduled to be sentenced on the fraud charge on July 25.
Wang has filed a victim impact statement that has been sealed by the court until the sentencing hearing.
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Civil lawsuits
Chen is separately facing a lawsuit from the Business Development Bank of Canada, which alleges he defaulted on the terms of the $250,000 loan for Northern Sky. In response to that suit, Wang has claimed he was unaware that Chen had taken out the loan.
Wang, who initially hired Chen to help him immigrate to Canada from China, previously sued Chen related to that work.
Wang alleged Chen failed to repay a $50,000 investment deposit and the equivalent of $75,000 in Chinese currency he had agreed to exchange for Canadian dollars. Chen filed a countersuit and statement of defence in response to those claims, but told the CBC he was unable to find a lawyer to defend him and pursue the counterclaim.
In 2021, the NWT Supreme Court awarded a judgement to Wang in the case.
Another client of Chen’s former immigration consultancy and two Yellowknife businesses have also previously successfully sued Chen related to a high-end gift shop that never opened.
Correction: May 2, 2025 – 17:27 MT. This article initially stated Chen had pleaded guilty to defrauding Wang and not guilty to defrauding the BDC. In fact, his guilty plea related to the BDC count. Our report has been updated accordingly.
