Former Berkshire Investment Group salesperson Ian Thow committed fraud

    VANCOUVER, Oct. 17 /CNW/ - A British Columbia Securities Commission panel
has found that Ian Gregory Thow, a former mutual fund salesperson with
Berkshire Investment Group Inc., perpetrated a multi-million dollar fraud
between January 2003 and May 2005 when he took money his clients gave him to
invest and instead spent it on himself.
    The commission panel found that Thow perpetrated a fraud, made
misrepresentations, traded in securities without being registered, and failed
to deal fairly, honestly and in good faith with his clients when he took
millions of dollars from his clients to invest in securities that did not
    Thow had hundreds of clients. The panel considered the evidence of 26 of
them - 24 from B.C. and two from Alberta. Thow convinced the 26 clients to
invest $8.7 million primarily in construction loans and shares of a Jamaican
bank, advising some to sell their mutual funds and to mortgage their homes to
raise the money to do so. The panel found that neither the construction loans
nor the shares existed. The clients lost most or all of their money -
$6 million in total.
    Thow used the clients' money to buy personal items, including luxury
cars, a yacht, and a personal business jet. He also paid off business loans,
and paid other business expenses.
    "This case represents one of the most callous and audacious frauds this
province has seen," the panel said. "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."
    The panel found 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.
    Thow offered the construction loans to clients whose mutual funds had
fallen in value in response to market conditions. He presented the loans as a
way for the clients to recoup their losses. Thow told the clients they could
expect returns ranging from 32 per cent to 192 per cent and that the
investments were safe because they were secured by mortgages. The panel found
no evidence that the loans existed.
    Thow offered clients shares in National Commercial Bank Jamaica Limited.
He promoted the investment as "a very good investment" because, he said,
Michael Lee Chin was a controlling shareholder of the bank and was actively
promoting its business. The investment "was going nowhere but up," he told
clients. The preferred shares did not exist.
    Thow offered one client shares in an upcoming initial public offering by
Berkshire. Berkshire had no plans for an IPO.
    The panel found that as a result of investing with Thow, retired couple
clients lost their retirement funds, and other clients find themselves in
financial difficulty. Clients continue to suffer stress, anxiety, depression
and other health problems.
    The panel said Thow's contravention of rules requiring him to deal with
his clients fairly, honestly and in good faith "was as blatant a contravention
of these rules as one could imagine," finding that Thow dealt "unfairly,
dishonestly, and in bad faith with his clients."
    The panel directed the parties to make submissions on sanctions according
to the schedule set out in the findings.

    The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the province.
You may view the decision on our website by typing in the
search box, Ian Gregory Thow or 2007 BCSECCOM 627. If you have questions,
contact Ken Gracey, Media Relations, 604-899-6577.

    Learn how to avoid investment fraud at the BCSC's investor education

For further information:

For further information: Ken Gracey, (604) 899-6577, or (B.C. & Alberta)

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