Andrew A. Duffy
Saturday, December 15, 2007
Ron Black wonders whether he would have lost everything to investment
adviser Ian Thow if Berkshire Investment Group had done its job
Black lost his life savings, about $600,000, as Thow pilfered his money
and used it to pay off some of his other clients or to fuel his lavish
lifestyle, which included personal aircraft, luxury yachts and expensive
Some of Black’s money was taken in the weeks before Thow resigned from
Berkshire, seven months after Berkshire got its first indication its
vice-president in Victoria was operating as a maverick.
This week, the Mutual Fund Dealers Association concluded after a
Vancouver hearing that a reasonable supervisory investigation by
Berkshire would have brought Thow’s activities to light and likely have
prevented a number of his former clients from losing more of their
In the settlement agreement released Thursday, Berkshire was fined
$500,000, plus $50,000 to cover the investigation and hearing costs
incurred by the MFDA.
Black echoed the response of other Thow victims when told of the fine.
“What the hell is $500,000 to the millions that were lost?” he said,
noting he is also frustrated with the time it’s taking the Crown to lay
charges in the case and have Thow extradited to Canada to face trial.
The provincial Crown is still doing a charge assessment and going
through the reams of documents provided by the RCMP’s Integrated Market
“It’s frustrating,” said Black, who has tried to move on with his life,
having reached a mediated settlement with the company for a fraction of
what he lost. Black was one of 29 former clients who got a share of $4.1
million from Berkshire. “But yes, I gave Thow money in April or May of
2005.” He wasn’t the only one. According to the settlement agreement
between Berkshire and the Mutual Fund Dealers Association, Thow managed
to squeeze $510,000 plus $30,000 US from clients and friends between
April 20, 2005, and June 1, 2005.
And that was a drop in the bucket compared to the $5.8 million he
managed to get out of clients and friends from the time the first
complaint was lodged with Berkshire in September 2004.
That money was a portion of the $32 million former clients and creditors
claim to have lost to Thow.
They claim Thow convinced them to invest in schemes that ranged from a
Jamaican bank to loans for Vancouver developers and seed shares with his
former employer. After resigning from Berkshire, Thow filed for
bankruptcy in Canada and the U.S., left Victoria and has been living in
Seattle since August 2005.
The settlement between Berkshire and the MFDA left a bad taste in some
former clients’ mouths because of the narrow scope of the investigation
— the association investigated Berkshire’s response to the first
complaint, lodged Sept. 16, 2004, and a subsequent complaint April 20,
Black is one of them, though he understands Berkshire wasn’t apprised of
what was going on, and he admits his frustration probably has more to do
with the fact he and the other victims trusted Thow.
“I know a lot of people would say the same thing, ‘We trusted him, so we
didn’t ask for any documentation,’” he said. “[Thow] would say ‘Do you
trust me?’ and of course we’d say yes, and he’d say, ‘Then don’t worry
“We never knew there was anything to complain about.”
If Thow had been able to placate a couple of big-time investors, he
might have been able to carry on.
According to details included in the settlement agreement, the first
complaint came from a wealthy businessman identified only as LV who had
given Thow $1.2 million to invest in the National Commercial Bank of
He had complained to a friend about getting information on his
investment — when he asked Thow for documentation, Thow gave him $1.2
million in travel vouchers for his aircraft company. LV’s friend passed
the information on to Berkshire.
When Thow was alerted that a complaint had been made, he told Berkshire
it was a misunderstanding — that the investor had bought aircraft time
and now wanted his money back and was trying to pressure him to return
it by making up a story about the National Commercial Bank of Jamaica
Thow then convinced the investor to call Berkshire and tell them the
same thing, promising he would return the $1.2 million.
The second complaint came from an investor identified as DS, who
invested $200,000 with Thow for shares in the same bank.
The story was similar to LV’s tale, with Thow claiming DS bought
aircraft time, not shares in the bank, and he wanted Berkshire’s help in
getting his money back.
In DS’s case, however, the cheque to Thow included the phrase “NCB bank
shares” on the memo line.
Thow tried to convince DS not to meet with Berkshire at its head office
in Burlington, Ont., claiming the money was ready for him if he
cancelled the meeting.
While DS was in transit to the meeting, his lawyer called to tell him
Thow had the money in place. As a result, the meeting was cancelled, but
DS was never paid and eventually sued Thow.
On May 5, Thow met with Berkshire, submitted a letter of resignation and
refused to answer most of the questions about his dealings with DS.
Thow denied having sold shares in the National Commercial Bank of
Jamaica. When confronted with the cheque, Thow said his copy did not
include the phrase: “NCB bank shares.”
That kind of response would not come as a surprise to Thow’s victims,
who as a group are used to hearing his lies.
“How many times did he say to me, ‘Trust me.’ ?” Black said.