By Adele Wickett

THE B.C. Securities Commission wrapped up a three-week hearing into the Ian Thow fraud case  July 6.

Thow is accused of scamming more than $32 million from clients while he was a senior vice president of Berkshire Investment Group in Victoria.  In October the group plans to release its decision.

The high-profile investigation has shaved an estimated tens of millions off the price paid for Berkshire when it was bought recently by Manulife Financial Corp.

But that figure doesn’t begin to tell the pain Thow’s fraud victims experience.

Living in Victoria, Thow presented himself as a benevolent Christian who just wanted to help people with their finances. Instead, dozens of clients and creditors claim their involvement in Thow’s schemes has left them distressed and poor.

Thow reportedly used his clients’ cash to surround himself with mansions, boats and private aircraft. Some victims have been reimbursed by Berkshire, but Thow himself fled to Seattle after declaring bankruptcy in 2005.

A year ago he was put on probation there on domestic assault charges.

Amazingly, reports have emerged that some of Thow’s victims still send him money, apparently because they want to ‘help’ him.

Such scenarios occur with alarming frequency.

Here’s an all-too-common story: A likeable fellow moves into a church.  Before long his talent and apparent devoutness propel him into positions of leadership. He befriends widows and supports missions.

Not only that, his financial savvy breathes reliability. He offers confidential help to those desiring to improve their finances. They entrust their money to him.

They never see it again. The guy splits. Unfortunately, sometimes the church does too, as people take sides for and against the fellow.

Often, the scam victims are so ashamed they won’t talk about their experience, or report it to the police. So the con man goes on to rack up more victims – and we hear more sorry stories.

Last March Brian David Anderson was arrested in Spain, suspected of supporting terrorist training camps.

The B.C. and Ontario Securities Commissions and the FBI were also investigating the former White Rock pastor for defrauding investors of millions in two schemes called Frontier Assets and the Alpha Program. Anderson apparently ran these as Ponzi schemes.  

In such arrangements, early ‘investors’ receive fantastic returns on their money. They then help to sell the program to their friends. But those ‘returns’ come out of the pockets of later investors, and eventually the ‘profits’ dry up and the perp takes the money and runs.

Sometimes the scammers work for bona fide companies, but carry on illegal investment schemes on the side. Kurt Johnson was licensed with Canadian Global Investment, but was fired in l998 when the company received complaints from clients he had sold risky investments to.

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For a time, Johnson’s office was inside Ladner’s Crossroads Faith Centre, where he was part of the leadership team. His line of, “We are Christian businessmen looking out for widows like you” was successful in creating a clutch of elderly clients who no longer have their money.

Johnson was charged with six counts of fraud. He pleaded guilty, and was sentenced to three years in prison, in 2005.

Almost everyone by now has received emails of the ‘Nigerian scam’ type. These typically report a large amount of money that sits in a Swiss bank. The owner just needs you to help out a bit with some cash so the money can be sprung, and shared with you.

A Victoria variation on this story was the fictional Andrew Fuller, a naughty heir who had run up some debts which must be paid off before he could access his fortune.

Naturally, if you could help Andrew out with a hundred thousand or so, you could make an unbelievable profit. Unfortunately, a number of Christian people were duped into this scam.

Narvin Edwardson also worked his island church connections in the course of a long career which has left a trail of complaints about his shady deals in Canada and the U.S.

In fact the B.C. Securities Commission created a video on what they call ‘affinity fraud,’ named Preying on Those Who Pray. It featured Edwardson.

Robert Palm, a Victoria man who sometimes represents himself as a Pentecostal minister, has been associated with a dizzying network of fuzzy financial fiascos.

In January 2003 the B.C. Supreme Court ordered him to pay more than $37 million U.S. for defrauding thousands of poor Polish farmers.

He became a wanted man in Poland, but that country does not have an extradition treaty with Canada; Palm remains free in Canada and the Polish farmers are unlikely to see their money.

His partner, Jason Dallas, was extradited from Switzerland and spent over four years in a Polish jail for fraud.

How can you protect yourself from affinity fraud?

The basic rule of protection from scams is, ‘If it sounds too good to be true, it usually is.’ Treat a ‘guaranteed’ promise of an unusually high rate of return with great suspicion.  

Scammers play on the desperation of people on the financial edge. They utilize greed, and the fear of losing out. They exploit good people who want to have more money to give to charities. They often ask for secrecy. They abuse the trust and hospitality that are normal in a Christian community.

Dishonest people often try to hide themselves among the good folk in a group of believers.  Jesus warned about wolves disguising themselves as sheep in order to destroy them.  

Church members need not unduly distrust those who share their pews. But if your seat-mate offers you a really good deal, just check it out carefully and with a healthy dose of skepticism.

August 2007