A Canadian investment adviser who went missing from Victoria, British Columbia, on November 3, is now under investigation for fraud, according to the CBC.
Harold Backer wrote a letter to his clients in late October, before he disappeared, admitting that he was operating a “pyramid” scheme and writing, “My path through these decisions is unconscionable, and I am deeply and truly sorry for the effects of my poor decisions.” The letter was published with the Victoria Times Columnist.
Backer was said to tell his wife that he was going for a bike ride on the Galloping Goose trail in Victoria on the morning of November 3. She has not seen or heard from him since, according to the National Post.
HAVE YOU SEEN ME? Harold Backer, 52, of Victoria, BC has been missing since Nov. 3rd & may be headed to Seattle. pic.twitter.com/2XCv7GgvuF— KIRO 7 (@KIRO7Seattle) November 6, 2015
Backer competed for the Canadian Olympic men’s rowing team in 1992, 1988, and 1984. When he first went missing, many people took to social media with pleas for those with more information to come forward. A Facebook page, “Finding Harold Backer” was started and has over 700 likes.
However, what appeared to begin as an outpouring of concern, may quickly be turning to an outpouring of anger from Backer’s clients, at his seeming betrayal for orchestrating what he describes as a “pyramid” investment and “fraud.”
One of Backer’s clients, Boris Klavora, who coached the former Olympic rower in the 1980s, is said to have lost close $800,000 by placing his trust with someone he considered his friend. The Victoria Times Columnist was also reported to have received statements from several other Backer clients, claiming to have lost “substantial sums.”
“I didn’t know anything about investing. Our portfolio grew, and it was about $830,00,” Boris Klavora was quoted. “The worst part, looking at my own heart and soul, is Harold’s deceit. He was our personal friend.”
In Backer’s letter, he describes holding a belief that investors should not be charged fees unless their manager is beating general market averages. Through the early 90s, Backer reported doing just that. Then, with the bursting of the dot-com bubble, several of his clients’ positions dropped 25 to 45 percent. Too ashamed to tell his clients the truth, Backer reported that he lied on future client statements, hiding the loss. Backer’s customers were sitting on large losses, but he was producing fraudulent statements which tricked them into believing they were, in fact, making money.
He wrote that he pledged to himself to make up for investor losses with future fees for investment performance, as well as a tax scheme named “Synergy,” all apparently to no avail. No matter what Backer tried, he could not recoup the losses, plus the capital that investors would have earned, had they still been fully invested.
Mysterious, and perhaps troubling, is that Backer describes a $1.5 million life insurance policy in his letter. He states that the proceeds be “divided among my investors in a pro-rated fashion.”
Further, Backer describes the capital structure of his company, Financial Backer Corp, and states, with seeming finality, “I own all of the voting shares, which will become part of my estate.”
Backer’s now former employer, Investia Financial Services, reported that they have terminated his employment as well as his registration as an investment adviser for failing to “follow our policies and procedures which required him to disclose all outside business activities.”
Backer reportedly began working with Investia in 2005 and had worked for as many as five other mutual fund dealers as far back as the 1990s.
Security footage found by investigators has lead them to believe that Harold Backer may have taken the Coho ferry to Port Angeles in Washington State. However, other than the one fleeting piece of footage, no other evidence with regard to Backer’s whereabouts appears to have been found. The investigation is ongoing.
[Harold Backer Screenshot via Finding Harold Backer/Facebook]