Andrew A. Duffy
Friday, June 08, 2007
VANCOUVER -- How Ian Thow managed to keep his records straight is a
thing of wonder.
The disgraced former vice-president of Berkshire Investment Group had a
mind-boggling 63 bank accounts, lines of credit and credit cards under
his control -- and those are just the ones the B.C. Securities
Commission knows about.
This week the commission, which is in the midst of a hearing into Thow's
activities, brought in a forensic accountant to testify about what Thow
did with his clients' money.
For many of Thow's former clients, like Brad Goodwin, who has been
attending the hearing, accountant James Blatchford merely confirmed what
they had suspected all along -- that Thow took their money and spent it
on a lifestyle that included expensive cars, boats, airplanes and an
ostentatious waterfront home in Victoria.
The 1,500-page report Blatchford prepared for the commission after
looking over Thow's accounts cites reams of examples of clients handing
over money to Thow, only to have it funnelled to personal accounts,
credit cards, car dealers and even to pay off other clients.
"He purposely used the proceeds he received from investor clients in an
effort to support personal, family and corporate financial obligations,"
Blatchford told the BCSC panel.
Commission counsel Doug MacKay asked Blatchford to go through only a few
examples of these kinds of transactions during his appearance on
But there are 19 separate schematic charts in the massive report showing
how the money was used.
Though they don't go into great detail -- there are a number of cash
withdrawals made by Thow that are not traced beyond the withdrawal
transaction -- they paint a picture of a man borrowing from Peter to pay
Paul while enjoying a lavish lifestyle.
One of those charts shows Thrifty Foods founder Alex Campbell, who
claims he lost $12 million through investing with Thow, and Nanaimo car
dealer Tom Harris, who has lost $820,000, giving $200,000 each through
Thow's numbered company 657594 B.C. Ltd. That money was then withdrawn
by Thow in four separate transactions totalling $332,000. Another
$22,526 was paid to one of his Visa accounts.
One chart shows that same numbered company taking in $750,000 from
Nakamura Farms. Thow used that money to pay an $86,000 bill at West
Coast Fishing as well as paying $20,000 towards his Visa balance, an
$11,000 Visa bill for his second wife, Alyssa, and sending $200,000 to
Harris, among other transactions.
On another chart, Blatchford shows Thow paying clients Kirk Wong $7,458
and Don Goodwin $100,000 out of a $175,000 cheque he received from
Yet another chart shows $549,000 from the Goodwin family, who claim they
are owed $1.4 million, going to Thow, only to be turned into a $500,000
payment to GE Capital as partial payment for an aircraft, with another
$3,200 being paid out to either Thow or his first wife, Teresa.
Clients who got a taste of what was happening to their money during
Blatchford's testimony reacted with disgust, though they admit it didn't
come as a surprise.
Thow's former clients and creditors claim he owes them in excess of $32
million. He settled in Seattle after his bankruptcy in 2005.
The former clients claim he cost them millions by having them invest in
a series of schemes that included buying shares in the National
Commercial Bank of Jamaica (JNCB), an initial public offering for
Berkshire and providing short-term loans to developers.
The money went to Thow, but as Blatchford pointed out in his report,
none of it appears to have made it anywhere close to these investment
There is no mention of Berkshire or any of these kinds of investments on
any of the 19 money-flow charts included in the report.
"In my opinion, Mr. Thow did not manage or control funds received from
investor clients in a manner consistent with the expectations of the
investor clients," Blatchford told the panel. "He transferred or
otherwise depleted investor client funds contrary to their desire [to
purchase] shares in the JNCB or the mortgage development [scheme]."
Because of the time and cost of tracing the money Thow is alleged to
have bilked from investors, the commission had Blatchford trace just $6
million of it.
The hearing has been adjourned until June 14 and 15, when MacKay expects
to call more clients to testify.