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Investment firm distances itself from missing fund dealer Harold Backer

The company that last employed missing mutual-fund dealer Harold Backer is further distancing itself from the financial losses Backer caused several of its clients.
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Harold Backer, who worked as an investments dealer in Greater Victoria.

The company that last employed missing mutual-fund dealer Harold Backer is further distancing itself from the financial losses Backer caused several of its clients.

In response to a civil claim filed by the Carr family of Mill Bay this year, Investia Financial is denying it had any responsibility for the losses because the transactions that caused them were carried out by Backer off the books.

“The investments in [My Financial Backer, Backer’s private company] were a private offering of these investments by Backer. The investments in MFB were a private arrangement between Backer and the [Carrs],” the company wrote in its response. “Furthermore, Backer did not disclose to Investia the existence of the outside investments or his activities with respect to any investments in MFB, contrary to [Mutual Fund Dealers Association] requirements and Investia’s policies and procedures.”

Investia claimed Backer told them that My Financial Backer was a personal corporation through which he offered tax-preparation services.

Unfortunately for the Carrs and other clients, that was not the case.

The Carrs — Tony and Yvonne Carr, their son Brian and his wife Leslie — invested with Backer from the early 1990s until November 2015. Yvonne Carr’s mother was a client between 2001 until her death last fall.

Backer had been with Investia since 2005.

Most of the money the family invested went through My Financial Backer Corp. According to court documents, Backer’s last financial statements suggested they had a combined $1.2 million invested through My Financial Backer.

But that appears to have only been on paper.

Shortly after Backer disappeared on Nov. 3, 2015, the Carrs and other clients received letters from Backer expressing remorse for decisions he made that cost them money. He also took responsibility for the financial losses.

In the letter, he admitted to running a pyramid scheme and said there was no way he could ever pay back the losses his clients experienced.

Backer’s letter said he started his own firm — My Financial Backer Corp. — in 1996. He wrote that market-based funds he sold lost as much as 45 per cent of their market value during the dot-com crash in 1999-2000.

Instead of telling clients about the losses, Backer wrote that he hoped to make the money back by forgoing future fees until the losses were covered.

The letter said he maintained the investment values at their 1999 levels and “grew them on paper at a general market rate of return.” However, he wrote, he could not keep up to the pace of growth required.

It is unclear how much money all of his clients lost.

The Carrs have filed suit alleging Investia owed a duty of care to its clients to ensure Backer was properly supervised.

They said Investia should have “supervised, monitored and reported” all of Backer’s transactions, whether they involved Investia funds or My Financial Backer funds.

In their claim, the Carrs point out Backer was supposed to have been monitored closely after the Canada Revenue Agency won a judgment against him for more than $200,000 in 2004.

Investia countered that they had been monitoring him closely, but could not monitor the My Financial Backer accounts as they were not associated with Investia.

A court date has not been set.

Backer remains missing and Victoria police are investigating.

The B.C. Securities Commission and Mutual Fund Dealers Association are also reported to be investigating, though neither body comments on ongoing investigations.

Backer turns 54 this month.

A witness has said she saw him on Nov. 5 last year in Port Angeles. But the last known image of him came from a security camera in the Washington state town showing Backer riding his bike away from the Coho ferry terminal in the early afternoon two days earlier, on Nov. 3.

aduffy@timescolonist.com