Thow saga continues unresolved

Barry Critchley
Thursday, January 08, 2009

Yogi Berra is famous for many things, but the former Baseball Hall of Fame catcher is mostly remembered for his sayings, including the immortal: "I never said most of the things I said."

One of his other notable quotes -- it ain't over till it's over -- applies to the country's securities enforcement business. In short: Why haven't the authorities been able to arrest Ian Thow, who was charged with 25 counts of fraud last June following a two-year investigation by the Vancouver RCMP Integrated Market Enforcement Team? Those charges were laid against Thow -- the former Victoria-based senior representative of Berkshire Investment Group, once part of AIC Ltd. and now a unit of Manulife Financial Corp. -- after a panel of the B. C. Securities Commission found Thow committed fraud.

The BCSC panel reported its findings in October, 2007, saying the "case represents one of the most callous and audacious frauds this province has seen. Thow preyed on his clients by offering them non-existent securities and instead using the funds to support his lavish lifestyle. He took their money and betrayed their trust. He has left a trail of financial devastation and heartbreak," said the panel, noting that "Thow befriended his clients and built trust with them through his high-profile support of charitable and community causes, his show of wealth, and his apparent close relationship with Michael Lee Chin, the principal of Berkshire. Thow helped clients borrow money to make the investments through his relationships with loan officers at Scotiabank and the Bank of Montreal."

Later, Thow, who moved to the United States in 2005, was banned for life from participating in the securities business and fined $6-million.

But amid reports he may be in the United States or has been to Jamaica, he hasn't been brought back to Canada, though last June IMET said that "for the sake of the victims, [we're] pleased that we're moving forward with the court process."

So what's going on?

No one is sure, though the BCSC said that from its perspective, the matter is concluded. "We had a hearing and we handed down sanctions," said Ken Gracey, a BCSC spokesman.

Calls to the RCMP in Ottawa (who referred us to the RCMP in Vancouver, who then referred us to IMET in Vancouver) yielded limited information. Sammy Wu, IMET's acting sergeant, said, "We are working on the proper steps to apprehend him to bring him back to Vancouver to answer the charges." Wu declined to comment on whether IMET knew Thow's whereabouts or whether there are any negotiations to bring him back to Canada.

One of Thow's former clients said: "Thow's activities have hurt the savings of a number of people, but there seems to be no one who will go and get him. It's an indictment of the industry and the country."

Other regulatory organizations were also involved. For instance:

The MFDA, a self-regulatory body set up a decade back, and which focuses on the distribution side of the mutual-fund industry, reached a settlement agreement in a December, 2007, hearing whereby Berkshire paid a $500,000 fine and $50,000 in costs concerning Berkshire's failure to conduct reasonable supervisory investigations of Thow over the period September, 2004, to June, 2005.
OBSI. Some of Thow's clients were told to seek the help of the Ombudsman for Banking Services and Investments because that body can extract compensation. It's not known how many were helped.