By David Baines
Wednesday, July 13, 2005
There are many decent stockbrokers out
there, but there are also some indecent ones who have cast their clients
into lives of quiet, and no-so-quiet, desperation.
One of those indecent brokers is Phillip Thow, who sorely abused his
position as regional manager of Investors Group in Vancouver during the
mid-1990s. His victims are still trying to recover from the havoc that he
wreaked upon them.
"I trusted him like a brother," one of those victims, Barry Samuels of
North Vancouver, said in a court affidavit. "It turned out to be the
mistake of a lifetime."
If the name "Thow" rings a bell, that's because Phillip Thow's brother is
Ian Thow, who has made headlines in recent weeks.
Ian Thow, while working as senior vice-president of Berkshire Investment
Group Inc. in Victoria, lived an extravagant lifestyle with three jet
airplanes, a 17-metre Sea Ray yacht and a $4.6- million waterfront home.
On May 31, he resigned from Berkshire. Since then, four groups of clients
have filed lawsuits claiming he induced them to invest millions of dollars
in the National Commercial Bank of Jamaica.
In some cases, they claim, Thow persuaded them to mortgage their homes to
finance the share purchases. They also claim that, if he ever bought any
shares, he didn't deliver them or return the money.
Thow has denied the allegations. Berkshire -- which has been named a
co-defendant -- claims it knew nothing about Thow's share dealings and
denies any responsibility.
Ian Thow's career appears to have many parallels with that of his brother,
Phillip. In 1987, both were working as mutual fund salesmen at Investors
Group, Ian in Victoria and Phillip in Vancouver. Both were effective
salesman and quickly promoted to regional managers. But under this rosy
exterior, there were some strange dealings.
In April 1994, Phillip Thow asked Barry Samuels, who was then a colleague
at Investors, to lend him $40,000 to help clear up some debts. Samuels
agreed "because of our friendship and my confidence and faith in
[Phillip's] ability to continue to earn a substantial income," according
to court documents.
In ensuing months, Phillip asked to borrow more money, first to buy a
condo for his in-laws, then to buy a house for him and his family. Samuels
obliged. By October 1994, Samuels had remortgaged his home and loaned him
a total of $250,100.
But Phillip didn't buy a house. When Samuels questioned him, he said he
had instead invested the money in heritage properties that were being
refurbished and resold.
Little did Samuels know, but Phillip was counselling some of his clients
to do the same thing. Two of those clients, Lorraine and Forrest Johnson,
borrowed $200,000 against their home and loaned the proceeds to Phillip,
ostensibly for him to invest in heritage properties.
Lorraine Johnson told court that Phillip and his wife "lived well beyond
their means, but it was all on other people's money. And how I found out
is they said, 'Let's go on a holiday together to Los Angeles.'"
She said that when they arrived in Los Angeles, Phillip said, "'Let's rent
a limo,' and we are thinking, 'Phil, we can't afford this. We have a young
They drove around Los Angeles and then Phillip's wife said: "Oh, I feel
like red shoes." Johnson said Phillip double-parked the limo on Rodeo
Drive "while she whips in and buys red shoes."
She said that, after buying the shoes, Phillip said, "'I know, let's go to
Vegas.' We said, 'Oh, we can't afford that, we can't afford the airfare
for that.' [And he says], 'Don't worry about it. I'll hire a limo and I'll
pay for it.'"
She said they drove to Las Vegas, checked into Caesar's Palace and went to
the casino, where Phillip won $26,000.
"I thought, $26,000, he could pay me back, but he didn't. He got his room
comped, he got every meal comped and we paid for the meals every second
day and some of those meals were, like, $800 per meal."
Little did the Johnsons know, but Phillip had also persuaded another
client, Carol Brett, to borrow $250,000 against her home and lend him
$175,000 of the proceeds, ostensibly to invest in heritage homes in
Samuels, meanwhile, noticed that Phillip was living an extravagant
lifestyle. He was paying $2,500 a month to rent a fancy home, he bought
designer clothes and he gave his wife expensive jewelry and clothes.
But Samuels assumed that Phillip, who had been promoted to regional
manager, was financing these items from his income. "At no time did it
occur to me that Thow was enjoying his lavish lifestyle with borrowed
money," he said in a court affidavit.
In July 1995, a senior official at Investors Group called Samuels and
other staff members together and conveyed some grave news: the firm had
discovered that Phillip owed more than $1 million to various creditors,
including Samuels and two other clients.
Samuels learned that Phillip had never bought any heritage properties.
Rather he had frittered the money away, mainly at the casinos in Las Vegas
where, by his own admission, he once lost $100,000 in a single sitting.
Phillip was drummed out of the firm, and in August 1996, he filed for
bankruptcy, declaring $82,500 in assets against $1.14 million in
liabilities. Then he moved to Washington state, where he racked up more
debts and once again declared bankruptcy.
He applied last fall for an absolute discharge in Canada, but both Samuels
and the Johnsons objected. He got only a conditional discharge, subject to
repaying $75,000 US to Samuels and $50,000 to the Johnsons.
So far, Johnson has recovered only about $30,000 of the $250,100 he loaned
him. Whether Ian Thow's clients meet a similar fate remains to be seen.