|Storm clouds are gathering|
Ian Thow's facade of conspicuous consumption continues to crumble. An RCMP investigation is underway; his yacht and two of his airplanes have been seized; more civil suits have been filed and his former employer has taken out full-page newspaper advertisements hoping to create distance from Thow and the gathering legal storm.
We are reviewing what information we have, to determine if there is a crime that we should be investigating," said Sgt. Sandy Smith of the Royal Canadian Mounted Police's Integrated Market Enforcement Team in Vancouver. We are currently aware of what has been in the media and we are looking at some other stuff to determine whether there is enough to go to the next step of opening up a criminal investigation."
Meanwhile, creditors continue forming a queue.
The Bank of Montreal has filed a statement of claim against Thow, his former wife Teresa Thow and numbered company 611276 B.C. Ltd., demanding repayment of $1.37 million.
Thow recently relocated his Berkshire Investment Group Inc. office from St. Andrew's Square to The Reef" building at #120-21 Erie St. The brand new space underwent major renovation. Now vacated, it has become the focus of litigation. In a statement of claim filed at the Victoria Courthouse, Reef Condominium Development alleges Thow has defaulted on the mortgage and is seeking $522,785.57. In a separate suit, Ashcore Building Corporation is suing for $252,398.64 to recover costs for renovation work performed on the office space.
On July 13, Katherine Ducey, a lawyer with Vancouver's Campbell Froh May & Rice, obtained an injunction freezing Thow's worldwide assets. As reported last edition, Ducey is representing a group of former Thow clients.
The British Columbia Securities Commission has also filed a lien against Thow's 8338 West Saanich Rd. estate. According to BC Assessment Authority rolls, the waterfront property's 2005 assessed value is $4,656,000. BCSC spokesman Andrew Poon said the lien is a mechanism available under the Securities Act and is meant to freeze Thow's property to protect the public's interest."
While the BCSC was filing at the Victoria Land Registry, on July 7, process servers were attempting to serve Thow with court documents. A phone call from Thow's house reporting a break and enter brought the Central Saanich police. The police left after the identity and purpose of the process servers was established. According to Vancouver Sun business columnist David Baines, as of July 7, Thow was holed up in the waterfront mansion.
Baines also reported that some of Thow's oft-heralded philanthropy produced little. At least three charitable foundations and donation pledges resulted in little more than the requisite grin-and-grab photo and press release. These include: a commitment to Royal Roads University Foundation to coordinate $1.1 million in donations for a fund in the name of Thrifty Foods president Alex Campbell Sr.; a personal $500,000-donation to the Greater Victoria Hospitals Foundation in memory of his mother; a commitment to raise $100,000 in donations for the Greater Victoria Police Foundation. Of these, only the Royal Roads University Foundation saw any money - $77,000 on pledges totaling $141,000. However, a source close to the Greater Victoria Police Foundation says federal red tape - not Thow - was to blame for a lack of funding. Introduced prior to 9/11, the GVPF submitted its charitable organization application to Ottawa to allow for the issuance of tax receipts.
Soon after, Revenue Canada and then Canadian Customs and Revenue Agency were scouring charitable organization rolls to weed out those charities with possible affiliations with terrorist organizations. The Foundation's application languished for almost a year by which time the impetus had been lost.
Thow's former employer also bought newspaper ads in the Globe and Mail, National Post and Vancouver Sun stating that Thow's alleged sale of shares in the National Commercial Bank of Jamaica Ltd. was done unilaterally and without the knowledge of Berkshire Investment Group Inc. The Burlington, Ont.-based brokerage also stated that when it learned of the allegations against Thow, it contacted securities regulators and police. Berkshire is named a co-defendant in the civil suits filed against Thow and his Victoria holding company A.Y.G. Investments Inc.
However, the crisis control appears to have been fumbled from the outset. As reported in the last edition of the Business Examiner, when first contacted about the Thow affair on June 22, Berkshire's first reaction was to demand information on how the Business Examiner found out about the yet-to-be reported scandal. A day later a communications officer refused to answer questions and instead read from a prepared statement. As well, as of June 23, Berkshire claimed to have no knowledge of the June 20 lawsuit filed by five Lower Mainland investors and a Delta-based company against Thow and Berkshire. According to lawyer Ducey, Berkshire had been served days earlier.
A high-profile member of Victoria's investment community and long-time Thow acquaintance expressed amazement at how long Thow had been able to maintain his high-flying image.
In April, Ian [Thow] was bragging how he just missed making the [Canadian Business magazines'] annual list of Canada's 100 Wealthiest individuals," the investment advisor told the Business Examiner. It was always about money and bragging. He [Thow] bragged about having Alex Campbell [Sr.] as a client. And forget about small talk and asking about the family; he always wanted to know how much I made last year."
Rumors about Thow's business practices and grand displays had been water cooler fodder for years. The fact he gave his former wife Teresa a six-carat diamond ring in 2003 and maintained a fleet of Cessna Citation jets and a $1.5-million, 56-foot yacht (since seized by Vancouver's M&P Mercury Sales) on the salary of a mutual fund and insurance salesman out of a relatively small Victoria branch office never ceased to amaze or titillate. According to associates and based on information contained within the lawsuits filed so far, it appears Thow was always ready and willing to discuss the promise and potential of NCBJ and the wonders the investment had done to his own bottom line. Thow even flew clients, friends and investors to Jamaica to visit NCBJ.
Whether the flush display by Thow piqued the interest of Berkshire Investment Group Inc. - sponsor of Thow's mutual fund license through Mutual Fund Dealers Association of Canada and registration as a company officer" through the BCSC - is not known.
Berkshire maintains that, Mr. Thow had no business relationship with Mr. [Michael] Lee-Chin [president, of Berkshire parent AIC Ltd.] in relation to the National Commercial Bank of Jamaica."
Thow was still accepting investments in NCBJ as late as 19 days before he
quit or was fired by Berkshire - Gary Sartorio of Calgary, alleges he
invested $300,000 on May 10, 2005. In a May 29 letter to his clients, Thow
wrote that he was terminating" his employment with Berkshire to pursue
other business interests."
Since last edition of the Business Examiner, and as of July 13, three more NCBJ-related suits by former clients had been filed. Derek Stimson, a businessman from Coaldale, Alta., is seeking to recover US$200,000; George Thomson, a businessman from Nanaimo, is seeking to recover $686,000; and as aforementioned, Sartorio and his auto dealership Shaganappi Motors (1976) Ltd., is seeking to recover approximately $1 million. These lawsuits join the lawsuit filed June 20 by five Lower Mainland investors and a Delta-based company. Plaintiffs Daryl Goodwin, Bradley and Gina Goodwin, Don and Anna Goodwin and Goodwin Development Corp. are seeking the return of $1,052,646.
More lawsuits may follow, including some from prominent Vancouver Island business figures. Baines reports that Tom Harris, owner of the Tom Harris Chevrolet dealership in Nanaimo, is in discussion with Berkshire. Thrifty Foods refuses to comment on whether founder Alex Campbell Sr. invested in Thow's scheme.
In the July 5 Financial Post, columnist Barry Critchley estimates that the
entire affair may end up costing investors at least $30 million.
Thow, through his Vancouver lawyer Roderick Anderson of the firm Harper
Grey LLP, has filed a response to the Goodwin suit.
Calls to Anderson were not immediately returned.
By Lyle Jenish