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 exist.

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% to 192% 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.