Andrew A. Duffy

Saturday, June 30, 2007

Ian Thow is being dragged back to a Seattle court by the trustee overseeing his bankruptcy because he did not satisfactorily answer questions about where he was living and working or what he was earning.

The disgraced former Berkshire investment adviser had until the end of business yesterday to provide written answers to a series of questions posed by bankruptcy trustee Michael Cheevers.

The only answer Thow gave to the 13 questions was to invoke his Fifth Amendment right under the U.S. Bill of Rights, which means he refuses to testify under oath on the ground the answers given could be used as evidence to convict him of a criminal offence.

"So now we go to court and ask the court to find him in contempt," said Cheevers, noting there has been no date set for the appearance. "We would like it sooner rather than later."

Cheevers said the court probably has two options in dealing with Thow -- either impose a financial penalty or send him to jail.

"It's not something we come across; this is really new territory," Cheevers said, noting bankrupt people usually comply with the first court order requiring them to answer questions.

The questions are part of Cheevers' search for more than $32 million former clients and creditors claim they are owed by Thow, who left the country and settled in Seattle in the summer of 2005 after declaring bankruptcy.

A Seattle court already ruled Thow had to answer the questions, giving Cheevers hope he will eventually get the answers he's looking for.

Cheevers admits the Fifth Amendment is not "black and white" and is open to some interpretation, but he maintains the questions are fairly banal.

"The legal advice I have is that there are no reasons why he shouldn't be required to give that information and clearly the court thought that when we were there last time," Cheevers said. "We believe the information requested is so relatively bland, like where have you lived? Where are you working? And what are you earning?

"It's not ... where have you hidden the money in Jamaica?

"Once you've signed up for the bankruptcy process, my understanding is you can't say, 'well I'm not going to answer those questions because I don't want to and it might impact me on a criminal level.'"

Some of those same questions were asked of Thow's wife, Alyssa, in a September 2006 examination done by John McLean on behalf of Cheevers.

The answers provided then didn't shed much light on Thow's income, either.

When asked where Ian was living, Alyssa Thow answered that they were in separate apartments in the same building, that she was in No. 709 and he was on the fourth floor. When asked what number Ian lived in she said she didn't know, but knew how to get there.

When she was asked where her husband was working, she answered: "He says that he is a mortgage broker."

But she didn't know the name of the company, or if Thow worked out of an office.

If Cheevers does eventually get the answers he seeks it may clear up why two former Thow clients have been allegedly sending him money.

Two of the questions posed to Thow ask him to describe his relationship with Nanaimo car dealer Tom Harris and Alberta farmer Kevin Prins, and to detail the amount of funds he has received from them and what goods, services or consideration, if any, he provided in return for that money.

Cheevers has said he has bank statements proving the men provided funds to Thow.

Yesterday also marked the deadline for B.C. Securities Commission prosecutor Doug MacKay to hand in his written argument summing up the case against Thow, which was laid out over the course of three weeks in Vancouver.

MacKay is also expected to provide an oral submission and answer any questions from the commission panel July 6 before the panel retires to consider sanctions.

aduffy@tc.canwest.com