Investors Scrutinizing the Regulators

Home Page


Securities Regulation In CanadA

Fox Guarding the Hen House


'So this thing isn't dying down up there?'

Andrew A.Duffy

Sunday, January 15, 2006

Ian Thow is on the phone. He sounds surprised, even confused.

"So this thing isn't dying down up there?" asks the former Berkshire investment adviser, who left Victoria under a cloud this summer to set up home in Seattle.

Asked whether he is surprised his high-profile bankruptcy -- 73 former clients and unsecured creditors claim Thow owes them in excess of $32 million -- is still news, he answers quickly. "I am, yeah."

Thow has not been charged with any criminal offences. However, creditors have many unanswered questions, including what happened to money they believed they invested in everything from a Jamaican bank to loans for Vancouver developers and seed shares in Berkshire.

In a series of brief phone interviews since October, when the investment adviser first spoke to the Times Colonist in Seattle, Thow comes across as nonchalant, sometimes cavalier, but always jocular and constantly trying to establish control.

He sets parameters for questioning. When they are crossed or questions get sticky, he suggests meeting in Seattle to "yak" face- to-face, then quickly gets off the phone.

Before Christmas, despite having initially agreed to a broader interview, he decided he didn't want to talk.

"I'm going to take a pass on it this time around," he said, after joking he thought the phone call was to wish him a belated happy U.S. Thanksgiving. "I just talked with my attorney and he says, 'Shut up on it.'"

He did not elaborate, although he had just found out that senior Berkshire executives were in Victoria in November to interview creditors to determine the extent of the scandal.

Whether it stemmed from the Berkshire probe or the ongoing RCMP investigation into his affairs, Thow's "no comment" response was uncharacteristic -- in previous interviews he has been forthright, though often terse.

He has lashed out at Michael Cheevers, the Canadian trustee overseeing the bankruptcy, for spending creditors' money chasing him in Seattle. He has taken some creditors to task, accusing them of jumping on the bandwagon in hopes of getting money out of Berkshire. And he has denied doing anything wrong.

He paints a picture of himself as a man driven into a corner and eventually out of the country.

Asked whether he would still be in Victoria doing business if one group of former clients hadn't filed suit, he answered, "Absolutely."

That suit was the first of four involving an investment deal in the National Commercial Bank of Jamaica, where clients wrote cheques to Thow or his numbered company in return for shares in the bank. Those shares appear never to have been purchased.

Responding to one of those lawsuits, Thow said the cheques were actually written to buy block air time on his private jet.

He denied wrongdoing when it came to that investment scheme, but stopped answering questions when asked about other deals, including a short-term loan plan that saw clients taking out lines of credit to offer loans to Vancouver developers, and an offering of seed shares in Berkshire, which some clients say he proffered with the information Berkshire was planning to go public.

In a later interview, after Berkshire founder Michael Lee-Chin met former Thow clients in Victoria last November, Thow even appeared angry at some of the creditors, suggesting they saw an opportunity to exploit Berkshire to get back money they had lost on legitimate investments.

Thow's former clients say they're used to being ignored by him, but they are still amazed by his gall.

"He always said, 'I just love you two ladies, you're my favourites,'" recalled Shirley Garwood, 67, who along with her sister Helena Kells, 78, says Thow bilked them for $455,000. "How many ladies did he say that too? Probably all of them."

He said it to Olga McColl, who says Thow took her and husband Douglas for a combined $500,000.

"He said, 'I'll look after you. You've been like a second mother to me,'" she recalled. "But he just stripped me clean and then he ignored us when we wanted to talk about it."

Some former clients say they find themselves trying to laugh about the situation.

"What else can we do? We're all cried out," Kells said.

"He has absolutely devastated our lives. At this point in our lives, this is not exactly what we expected. We can barely sleep at night."

As for Thow, there are rumours he is working in Seattle at a Mercedes dealership. There are also reports that he has been spending time in Las Vegas, shopping for luxury cars and looking at property on upscale Mercer Island, although that claim could not be substantiated.

A quick property search of three Seattle real-estate offices showed the cheapest home available on Mercer Island was listed at $500,000 US and the most expensive at $40 million US.

Thow has not returned calls from the Times Colonist for more than a month.

As for Thow's lengthy list of creditors, they are waiting for word from Berkshire on the situation -- a step they hope will be the first on the way to some kind of settlement -- while urging Cheevers to continue to search for assets they believe Thow has hidden.



Ian Thow