Thow slapped with seizure writ
Transport Canada fine places Ottawa on list of creditors

 

Andrew A. Duffy

 

April 26, 2007

Ian Thow may be living in Seattle and unlikely to return to Canada anytime soon, but that hasn't stopped the federal government from slapping him with a writ of seizure and sale.

Transport Canada was recently granted an order to seize and sell at public auction enough of the former Berkshire investment adviser's goods to satisfy a $5,900 fine for contravening two sections of the Canadian Aviation Regulations.

According to a Transport Canada official, the regulations Thow contravened concern flying a helicopter without a licence and not filing proper flight logs between Dec. 19, 2004, and June 16, 2005.

Transport Canada joins a long line of creditors and former clients with claims against Thow.

They claim Thow fled the country amid allegations he owed in excess of $37 million to clients and creditors after convincing them to invest in schemes that ranged from a Jamaican bank to loans for Vancouver developers and seed shares with his former employer.

The former vice-president of Berkshire Investment Group left the company at the end of May 2005. He filed for bankruptcy in Canada and the U.S., fled Victoria and has been living in Seattle since August 2005.

News that Thow was being slapped with the writ of seizure was greeted with a laugh from former client Brad Goodwin who had been telling people two years ago that Thow's flying without a licence was symptomatic of a man who created his persona based on deceit.

Goodwin said this latest news is at least something new in the Thow affair which he said has basically ground to a halt.

"Yeah it's a concern, everybody has forgotten about it now, it's who cares," he said. "People who did care a long time ago, you no longer hear from and Berkshire has taken care of people they wanted to."

After mediation, Berkshire struck a deal with 27 of Thow's former clients who were participants in a mortgage-investment scheme in which Thow allegedly convinced them to open lines of credit with Scotiabank, with the intent of using the funds for investments.

Those clients say they were lent a total of nearly $5 million. Their stories vary in detail, but all end with a line of credit or loan with Scotiabank from which funds were transferred to Thow and his numbered companies.

Goodwin said clients who invested millions in the Jamaican bank scheme have heard no news from Berkshire other than the company intends to fight.

Still he hopes the creditor group can manage to stir up some momentum and get their dispute with Berkshire and Thow back on track in May when the B.C. Securities Commission's hearing into Thow's actions is slated to start.

"This thing needs to be shaken up and maybe that takes laying charges," said Goodwin. "We need the BCSC to come down on him and (the investigation by the RCMP's Integrated Market Enforcement Team) to result in charges under the Criminal Code -- that may be enough momentum so these other people get their money back."

Goodwin said at this point they haven't heard much about the Mutual Fund Dealers Association investigation into Berkshire's role in the Thow affair.

"The MFDA have said they are coming down with a ruling but we haven't heard anything yet," he said, adding they tend to hear "the investigation is ongoing" via letter every three or four months.

According to Shaun Devlin, vice-president of enforcement for the MFDA who was in Vancouver this week, they won't discuss the status of the investigation publicly.

He did say they intended to communicate within the next week with those who have complained about Berkshire's role.

If the MFDA's investigation finds wrongdoing they will proceed to a hearing stage like the BCSC is doing next month.

The BCSC has set dates for its hearing -- May 29-31, June 4-6, June 8 and June 13-22 -- to determine if it is in the public interest to take action against Thow.

The BCSC's notice of hearing states that from January 2003 to May 2005, Thow is alleged to have made false representations in telling clients he was able to invest money for them in various securities. It is further alleged he used some or all of the clients' money for his personal use.

The notice alleges Thow breached the Securities Act and related rules by failing to deal fairly, honestly and in good faith with his clients; trading in non-mutual-fund securities for which he was not registered; and making misrepresentations in the selling of securities.

Thow is not expected to attend the hearing since, if he crosses the border into Canada, he may be arrested, stemming from a breach of the Bankruptcy and Insolvency Act: He allegedly removed items from his home after his assets had been frozen and an interim receiver was appointed.

aduffy@tc.canwest.com

see: 

 

Ian Thow takes flight