By JOSEPH TARTAKOFF
P-I REPORTER

The case of a B.C. investment adviser accused of stealing up to $30 million from his clients landed in a Seattle courthouse this week, as a trustee appointed by the man's creditors questioned him in order to determine what happened to some of the money.

Over the course of more than two years, the investment adviser, Ian Thow persuaded his clients to give him money to invest in securities that did not exist, according to the British Columbia Securities Commission. Thow, who allegedly lived a lavish lifestyle complete with multiple jets and cars, is accused of pocketing the money.

In a scathing report issued Oct. 16, the Securities Commission said, "This case represents one of the most callous and audacious frauds this province has seen."

One of Thow's lawyers, Larry Feinstein, said his client "denies all the allegations."

In 2005, while in negotiations with his Canadian creditors, Thow, an American citizen, moved to Seattle, ending the talks and leading to his automatic bankruptcy there, said Michael Cheevers, the Canadian trustee who was appointed to handle the case.

In Washington, Thow started working in the mortgage business -- at First Magnus Financial and then, until this week, at Flagstar Home Lending in Bellevue, said Brad Ellis, the Flagstar branch manager.

Ellis said that Thow had been hired along with a group of loan officers from First Magnus, which shut down this summer. Ellis said Thursday afternoon he was not sure how Thow's history "slipped past" the hiring process. He said that since Thow had not originated any loans for Flagstar, he was fired earlier this week.

Earlier Thursday, a receptionist at Flagstar transferred a call to Thow. He declined to comment. In a follow-up call, the receptionist said he no longer worked there.

As part of the Canadian bankruptcy proceedings, a U.S. bankruptcy judge in Seattle, Philip Brandt, ordered Thow on Monday to answer questions under oath about his business and financial affairs and to provide financial documents because Thow had "submitted unsatisfactory partial answers" and had not provided any documents in the past.

Cheevers said that while Thow is legally bankrupt, "we have questions as to his financial situation at the moment."

"Mr. Thow has very significant creditors and (a) significant amount of money went through his control and we are trying to establish whether it's accounted for," Cheevers said. "The role of the trustee is to obtain all the assets that are available for distribution and distribute them among the creditors."

Feinstein, Thow's bankruptcy lawyer, said that in court, Thow entered a "wide-ranging" deposition, although neither Feinstein nor Cheevers would comment on what Thow said because his deposition is under seal.

Feinstein said Thow's bankruptcy is "pending in Canada, and they just came down from Canada to the U.S. to talk to Mr. Thow, and they did and there's nothing left pending here."

"He was an investment broker. Investments go bad," said Feinstein, who added that his client was voluntarily cooperating with the bankruptcy proceedings. "We don't have the money."

Cheevers said the next step is that "we are likely to have more questions."

"We are looking for funds," he said. "There is never any end to the questions you can ask." In addition, he said, "The police authorities in Canada are investigating his affairs."

Thow's clients say they were betrayed. Impressed by Thow's apparent wealth -- he told clients he owned two private jets, a helicopter, two Mercedes and a 56-foot yacht -- and his charm and promises of lofty returns, clients gave Thow millions to invest ostensibly for short-term construction loans and preferred shares of the National Commercial Bank Jamaica Limited. Often, the clients would mortgage their homes or borrow money to boost their investments, according to the British Columbia Securities Commission's findings.

"He had all the buzzwords. He was a big deal," said Brad Goodwin, a former pilot who lives on a disability income, whose family invested more than a million dollars with Thow. "It started to really make money. Every time we looked it went up."

Goodwin, who lives in Richmond, B.C., said Thow owes his family $1.2 million.

"He took our life savings, and I have no future to get it back now," he said.

Kirk Wong and his wife, Krista Kleven, invested about $250,000 with Thow -- purportedly in the Jamaican bank.

"We gave him $50,000 checks and money whenever he wanted it because we thought we were doing so well and we could see how well he was doing," said Wong, a 48- year-old commercial fisherman, who lives on a pension since being injured.

He said that when he realized that the investment did not actually exist, "then we went to the authorities."


P-I reporter Joseph Tartakoff can be reached at 206-448-8293 or joetartakoff@seattlepi.com