The British Columbia Securities Commission ruled Wednesday that former mutual fund salesman Ian Thow took advantage of friendships with dozens of trusting investors to defraud them of at least $6 million. 

The total money lost could be as high as $30 million. 

In the cases the regulator reviewed, Thow — who at the time worked as a salesman for Berkshire Investment Group — persuaded 26 clients to give him a total of $8.7 million to invest in a variety of securities that didn't actually exist.

'One of the most callous and audacious frauds this province has seen.'—BCSC

Instead, he used the money to fund a lavish lifestyle that included a personal jet, a yacht, and luxury cars.

About $2.7 million has been recovered.

"This case represents one of the most callous and audacious frauds this province has seen," the BCSC panel said in its ruling. "Thow … has left a trail of financial devastation and heartbreak."

Some clients lost everything. A pair of retired sisters gave Thow $455,000 by collapsing their RRSPs and setting up a line of credit. They recovered almost nothing. One sister has since had a heart attack.

Another retired couple gave him $475,000 to invest in "short-term construction loans"  — $375,000 of that through a mortgage on their house. They have received no interest or repayment since.  

The clients, most from B.C., were attracted by the high returns Thow was promising — anywhere from 32 to 192 per cent on an annualized basis.

Clients were convinced he was acting entirely above board, in part because of his apparent close friendship with Michael Lee-Chin, the billionaire founder of AIC Ltd. and the man who controlled Berkshire. Thow personally introduced clients to Lee-Chin at the firm's investor meetings. 

Faces maximum fine of $250,000

A B.C. Securities Commission panel will decide on penalties later. Under the law in effect at the time of the offences — 2003 to 2005 — Thow faces a maximum fine of $250,000 and a lifetime ban on selling securities in British Columbia.

A spokesperson at the BCSC said the regulatory body typically does not collect fines in cases like these so investors can recover as much as possible. 

Clients and other creditors claim Thow owes them $32 million. Thow has declared bankruptcy and is believed to be living and working in Seattle.  

Several lawsuits have been filed against Thow and the Berkshire Group, which is now part of Manulife Financial. Berkshire has claimed in the past that it was not aware of Thow's fraudulent investing activities. 

Next week, the Mutual Fund Dealers Association holds a hearing into a tentative settlement reached with Berkshire over allegations that it failed to adequately supervise Thow.