Like most financial predators, Paul O’Connor was a wolf in sheep’s clothing.
From 1995 to 2001, the
56-year-old stockbroker worked at a sub-branch of DPM Securities Inc. in Parksville, B.C. Among his roster of 300 clients were several elderly residents, including 80-year-old Eileen Townsley.

At Christmas, he sent her a note: “Eileen, you have been an insperation [sic] for me over the last several years. You are a wonderful person. I am glad I met you. I will be over for tea shortly. Paul.”

Parksville and its sister community, Qualicum, are located on the east coast of Vancouver Island, about halfway up the island. The temperate climate, spectacular scenery and languid pace of life has been a huge draw for retirees from other parts of Canada, particularly Alberta. The average age of the city’s more than 10,000 residents is 59, making it the oldest community in Canada with a population of more than 2,000 people. The average income is slightly less than the provincial average, but that is not surprising given only 52% of Parksville’s population is in the labour force, and it belies the fact that many residents have substantial net worth.

With so many people and so much money flooding into the region, it is no wonder it has become a drawing card for financial service providers, and for financial predators such as O’Connor. “The Parksville and Qualicum Beach region is one of several hot spots around the province,” says Wayne Armistead, the B.C. Securities Commission’s manager of intelligence and assessment. “The bad guys follow the money and they gravitate to these communities of wealthy retirees.”

In the mid-1990s, Townsley, like so many retirees, was feeling the pinch of low interest rates and commensurately low returns provided by bonds and GICs. She was introduced to O’Connor, who invested her savings in mutual funds. Initially, the funds performed well. Her September 1997 account statement showed a balance of $363,490.

But by late 2000, the value of Townsley’s funds sagged and she cut her monthly withdrawals from $1,000 to $750, scrimping on “luxuries” such as getting her hair done.

O’Connor, however, was doing well. From January 1996 to February 2001, DPM and Assante Capital Management Ltd., which acquired DPM in 2000, paid him slightly more than $1.5 million in commissions. But in June 2001, O’Connor suddenly left Assante. He told clients he had a heart problem and had to quit immediately.

Early the next year, Townsley became ill, and on Feb. 22, 2002, she passed away.
O’Connor gave one of the eulogies at her funeral.

By this time, Townsley’s daughter, Sharon
Kirkham, was smelling a rat. She obtained her mother’s account statements for March 2002. They showed a balance of $187,846 — about $176,000 less than the September 1997 statement.

Kirkham obtained a complete set of account records and was stunned by what she found. Since September 1997, O’Connor had been liquidating her mother’s mutual funds and siphoning large amounts of money, typically $10,000 at a time. In total, she says, he embezzled slightly less than $200,000 from her mother.

She alerted the commission, which conducted an investigation. In February 2004, it cited O’Connor for defrauding Townsley and two other elderly clients — Gordon Halls, 90, and Edith Smithers, 85 — out of $163,500 in total. (Kirkham said the commission could not capture all the losses because it could only go back six years.) By the time of the hearing, two of these three clients had died and one was suffering from dementia, so they could not testify against O’Connor. But the documentary evidence was so overwhelming that O’Connor didn’t bother to show.

On April 4, the hearing panel released its decision. Noting that O’Connor’s clients “were particularly vulnerable due to their age and lack of knowledge and experience,” the panel permanently banned him from the B.C. securities market, fined him $200,000 and assessed $48,368 in investigation costs.

Kirkham, an occupational therapist who works with seniors, says the fraud has been a “transforming event.” She has dedicated herself to protecting seniors. “I see how vulnerable they are. I see seniors who are lonely. These predators sense that. They are experts at manipulation.”

Michael Bernard, who runs the BCSC’s Education Fund, is also plowing resources into protecting seniors. “Seniors are a target audience for us because they are a trusting group. And when fraud strikes, they have little or no time to recover losses.”