It’s been a year since financial adviser and mutual funds dealer Harold Backer disappeared without a trace after stealing millions from his clients.
This time has done little to take the sting from Tony Carr’s words and thoughts when it comes to his former investment adviser.
On the first anniversary of the mutual fund dealer’s disappearance, Carr, who has known Backer for nearly 40 years, said time hasn’t tempered his anger. His thoughts of distaste and annoyance have crystallized.
“Within a week of him disappearing I felt a little sorry for him. I felt the darkness he might have been feeling,” Carr said. He had been Backer’s client since 1993 and was the three-time Olympic rower’s high school rowing coach at Brentwood College School in the 1970s.
However, looking back now on the events of November 2015, Carr believes Backer wasn't feeling the walls closing in on him when he decided to disappear. Instead he believes Backer felt little more than the need to run and never look back.
Backer, who turns 54 this month, disappeared November 3, 2015.
The last known image of him came from a security camera in Port Angeles, Washington, showing Backer riding his bike away from the Coho ferry terminal in the early afternoon.
Before he disappeared, Backer wrote a letter to several of his clients expressing remorse for decisions he made that cost them money and taking responsibility for the financial losses. In the letter, which some initially thought sounded like a suicide note, he admitted to running a pyramid scheme and said there was no way he could ever pay back the losses his clients experienced.
The letter was sent to 15 clients and arrived at their homes within a day or two of his disappearance. While it’s unclear how much money his clients lost, it is easily in the millions given just two of the families are out a total of more than $2 million.
Carr has always dismissed the idea Backer would consider suicide. “At the time [he disappeared], I was thinking of the young kid I knew and I was feeling sorry for him, but I have lost all of those feelings,” he said. “And I’m quite sure he had no intention of ever doing any harm to himself.
“Rather, I think he was carefully laying aside a goodly sum so he could live princely in his new existence wherever and whatever it is.”
Carr said during a follow-up call with Victoria Police, an investigator implied that Backer had significant resources to hand, which would have improved his chances of disappearing.
“It was a calculated move ... he practised going on that ferry [Coho from Victoria to Port Angeles] and cycling,” said Carr, who along with his wife Yvonne lost about $750,000. Carr said their day-to-day life hasn’t changed as a result of the financial loss, but he said “it changes the things we cannot do now, it was the icing on several cakes.”
Victoria Police have been tight-lipped about the Backer case since he disappeared.
Despite repeated requests for interviews and updates, the Victoria Police have said little more than the investigation continues.
The department has never answered media questions about what they are doing to locate Backer, where they may be looking and what agencies, if any, they have contacted to help in the investigation. They have refused to comment on whether or not the case has been re-classified as a fraud investigation instead of a missing person case.
Carr said he has not been impressed by the pace of the investigation, noting that, like many cases of fraud, it seems to be low on the police priority list.
Neither the Mutual Fund Dealers Association nor the BC Securities Commission would comment on whether they are investigating Backer. The BCSC did say it had an “ongoing interest in the matter.”
The FBI in Washington State maintains it is ready to assist Victoria Police if they are asked.
Investia Financial, the firm where Backer was a registered dealer, cut ties with Backer two weeks after he disappeared. The company told the Times Colonist it terminated his registration in the wake of the fraud investigation.
A number of Backer’s long-time friends contacted for this story refused to comment.
“Harold’s disappearance remains a mystery. My impression is that the rowing community has mixed feeling toward his disappearance,” said former Olympic rower Adam Kreek. “Harold was responsible for losing people’s savings and family fortunes. That hurts.
‘‘Old rowing teammates are missing a friend. That hurts, too.”
The vanishing: last seen November 3, 2015
November 3, 2015: Harold Backer is last heard from in the morning when he told his wife he was going for a bike ride.
November 3: Backer gets on the Coho ferry in Victoria’s Inner Harbour at 10:30 a.m.
November 3: Backer is last seen on security camera in Port Angeles riding away from Coho ferry terminal around 12:20 p.m.
November 3-5: Friends travel to Washington state to search for Backer who they believe may have gone cycling on Hurricane Ridge or the Olympic Discovery Trail.
November 5: Former clients start receiving letters from Backer telling them their money is gone.
November 9: Victoria Police announce they are working with authorities in U.S. to find Backer.
November 10: Times Colonist publishes story reporting Backer has left the country as a result of mismanaging his clients’ money.
November 11: The Times Colonist publishes story with excerpts from letter Backer wrote to clients where he takes responsibility for losing their money
November 18: Investia, the company for which Backer worked, cuts ties and revokes his mutual fund dealer registration.
Dot-com crash started a pyramid scheme that went out of control
There’s nothing unusual about the way mutual funds dealer Harold Backer cost his clients millions of dollars, despite the fact he disappeared without a trace, according to the BC Securities Commission (BCSC).
While he would not comment on Backer’s situation, Doug Muir, director of enforcement for the BCSC, said dealers and advisers that commit fraud share plenty of common traits and characteristics.
In describing the kinds of frauds the BCSC sees regularly, Muir hit close to home when he pointed out there are times frauds don’t start out as frauds.
“Sometimes these fraudsters start with what they think may be a legitimate idea. They may try and fail and then they turn to fraud to keep the scheme going or keep up appearances of success,” Muir said.
That, in part, sums up what Backer appears to have done.
In a letter he sent to clients before he disappeared November 3, 2015, Backer said he started his own firm — Financial Backer Corp. — in 1996. He wrote that market-based funds he sold lost as much as 45% 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 noted 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.
“I am aware that I am running a pyramid investment,” he wrote, adding he couldn’t keep it up and there was no way he could pay back the losses to his clients.
Muir said fraud victims are very often friends or family members and trust is a major component fraudsters need. Both long-time friends and members of his family say he defrauded them.
Muir said fraudsters tend to portray themselves as successful and will try and endear themselves to their clients, becoming as close as family.
Backer again seems to fit that bill.
“My investors have been my friends and I have done a terrible thing to my friends. My choice at this point is to do anything in my power to cover the investment losses I have created,” he wrote in what was his farewell letter. “If admitting to fraud would help restore the losses, I would accept the criminal penalty.”
