VICTORIA â€” An investment dealer and former Olympic rower who disappeared for nearly 18 months faces a civil lawsuit from investors alleging he ran a pyramid scheme with their money.
A notice of civil claim was filed in Duncan, B.C., on July 7, 2016, on behalf of six people who say they were Harold Backer’s clients. It names Backer, his former employer Investia Services Financiers Inc., and a private investment firm operated by Backer, My Financial Backer Corp., as defendants.
The suit filed in B.C. Supreme Court claims damages for breach of contract, negligence and fraud “arising from an unauthorized, fraudulent, pyramid or ‘Ponzi’ scheme operated by the defendants, Backer and MFB (My Financial Backer Corp.) with funds received from the plaintiffs.”
The suit claims damages for negligence against Investia, which employed Backer since 2005 but terminated his employment after his disappearance.
Backer, 54, told his family on Nov. 3, 2015, he was going for a bike ride but never came back, police have said.
Backer appeared at Victoria Police Department headquarters on April 14. He was charged with two counts of fraud over $5,000.
The three-time Olympian appeared in court on Tuesday and was remanded until May 2.
None of the allegations in the civil or criminal cases have been proven in court.
The civil suit names Anthony Carr, Mary Carr, Leslie Carr and Brian Carr as the plaintiffs, as well Mary Carr, the executrix of the estate of Anna Peach, who is deceased.
The suit does not include a damage amount, but seeks restitution and interest “for all funds delivered by the plaintiffs to Backer and MFB.”
Backer has yet to file a response to the civil suit and the lawyer who represented him in court on Tuesday could not be reached for comment.
Investia filed a response last September, denying claims of negligence.
“At all times, Investia properly supervised the activities of Backer,” says the court document. “Backer concealed his activities with respect to MFB from Investia. As a result, Investia denies that it is liable to the client plaintiffs in negligence.”
The Vancouver legal firm representing Investia could not be immediately reached for comment.
Investia spokesman Pierre Picard said in a statement in November 2015 that Backer was required to disclose all outside business activities. At the time, he said Investia launched an investigation after some of Backer’s clients say they received a letter about their money days following his disappearance.
The civil claim includes quotations from an alleged letter that the plaintiffs assert in the court document was written by Backer and that they received after he went missing.
The court document quotes the letter as saying Backer allegedly told his clients that market-based funds he managed had lost between 25 per cent and 45 per cent of their market value in “the dot.com” crash and the investors were allegedly not told of the loss, which is referred to as “my personal debt.”
“My investors have been my friends and I have done a terrible thing to my friends,” says the statement of claim, quoting from the alleged letter. “I am eternally sorry for my financial decisions.”
The statement of claim alleges that the letter refers to a life insurance policy worth $1.5 million and “this amount should be divided among my investors in a pro-rated fashion.”
The statement of claim also quotes the alleged letter as saying Investia was not connected to any losses.
“Investments through Investia Financial Services are not connected to this in any way. If you have invested through me through Investia in any mutual fund company, your RRSP/RIF/RESP money is absolutely safe.”
In its statement of defence, Investia says Backer was required to comply with the rules, policy and bylaws of the Mutual Fund Dealers Association.
The company also says Anthony, Mary, Leslie and Brian Carr held various accounts with Investia starting in October 2005. It says Leslie and Brian Carr transferred out of Investia in February 2016, while Tony and Mary Carr were still with Investia.
The statement of defence says Anna Peach was never a client of Investia and never had accounts with Investia.
“The investments in MFB were a private arrangement between Backer and the plaintiffs,” the court document says. “Backer advised Investia that MFB was a personal corporation, and subsequently that MFB was the entity through which he offered tax preparation services.”
Dirk Meissner, The Canadian Press
Note to readers: This is a corrected story. A previous version said Harold Backer appeared in court on Monday.