The Rise and Fall of Harold Backer 1984 1985 1988 1992 2015 Backer’s first Olympics, in Los Angeles. Backer graduates from Princeton. Backer’s second Olympics, in Seoul, South Korea Backer’s third Olympics, in Barcelona, Spain. 1993 – 2001 Following retirement from rowing, Backer starts working at Brentwood College School, founds an information technology business, and becomes a financial advisor. 2000 – 2002 The dot-com crash hits markets. Backer later claims he lost “25% to 45%” of his clients’ money. He admits to falsifying financial statements from here onwards. 2001 – 2015 Clients continue to invest with Backer, with some adding significant amounts of money to their accounts. August – October Capital calls from multiple clients likely led to a liquidity crunch, where Backer didn’t have enough liquid assets to meet redemptions. Backer stops returning calls to clients. November 3 10:30 am: Backer boards Black Ball Coho ferry in Victoria. 12:22 pm: Last image of Backer captured on Port Angeles security camera. Evening: Search and rescue teams begin to search the Galloping Goose trail after Elizabeth Hardy alerts authorities that her husband has not returned from a bike ride. November 3 – 6 The search for Backer, by friends and professionals. November 5 A letter admitting that he is running “a pyramid investment” begins to arrive at the homes of his investors. Some non-investors, including family, also receive letters.

On a Tuesday morning last November, Harold Backer went for a bike ride and disappeared.

His wife, Elizabeth Hardy, would later tell police that he planned to cycle the Galloping Goose Trail, a popular bike path near their apartment in Victoria, British Columbia. Harold often rode the trail, she said. He’d been clear he wouldn’t be long.

When her husband hadn’t returned by nightfall, Hardy called the authorities. Search and rescue teams scoured 40 miles of the trail overnight, aided by unusually warm weather and clear skies. Backer could have been injured, prone in a ditch with a broken leg. But by dawn, searchers found nothing and went home.

At 8:00 am on Wednesday, a police constable approached the local boathouse where the 52-year-old Backer regularly rowed. He asked to speak to one of the coaches alone. Had he heard from Harold that morning or the day before? No, the coach responded. Not since Monday morning, when Backer had arrived, as usual, for a row with three friends on the tidal waters of Victoria’s inner harbor, at the southern tip of Vancouver Island. He had departed quicker than normal afterwards, but the coach hadn’t thought anything of it. The officer left, giving no indication of what the Victoria Police Department may have already suspected.

Harold’s passport, authorities had discovered, was missing. He had not gone for a casual Tuesday ride on the Galloping Goose. Instead, the 6’3”, graying Backer had put on a red jacket and black cycling pants, along with a black skullcap under a silver helmet. He took with him a large backpack, Therm-a-Rest mattress, two waterproof packs that attached to his rear wheel, and a water bottle. On his black Cannondale bike he headed west towards the harbor, just yards from his apartment building’s front door. His passport was checked; he paid the $24.50 fee; then with bike and gear in tow, Backer boarded the 10:30 am Black Ball Coho car and passenger ferry. The boat set off for Port Angeles, a mountain-ringed town on Washington State’s Olympic Peninsula. The trip would take 90 minutes, a southern shot across the Strait of Juan de Fuca.

As morning became midday, Backer sat outside on a lifejacket container near the bow of the ferry. He stared south. Looking up, he could see the Olympic Mountain range towering over the nearing peninsula. He was alone until a friendly couple approached.

“Is this your bike?” Wayne Peterson asked. Backer said it was. How did his phone, one the size of an iPhone 5 or 6 but not an Apple product, attach to the handlebars? Easily, Backer said—but he preferred to use another device, also attached to the bars, for his GPS. But it didn’t matter, Backer said—this was a relatively short trip.

Christine Peterson was more interested in this stranger’s journey than his gear. Backer said he was going to Seattle to stay with a “friend or friends,” but hadn’t picked a route. Perhaps he’d go over Bainbridge Island, he told the Petersons, or maybe via Whidbey Island. Either way, he wasn’t sure he’d make the whole 90-mile-plus trip that day.

“He was very animated and very pleasant,” Wayne would later say.

“Very relaxed,” Christine would add.

The ferry docked at Port Angeles on schedule. Backer disembarked. He quickly cleared US Customs and mounted his bike. Border security footage would show him peddling east onto Railroad Avenue, easily navigating between automobiles and pedestrians. At 12:22 pm, a streetlight camera caught him continuing in that direction. He was just yards from the intersection of a scenic 130-mile bike path and Highway 101, which heads both east towards Olympia, and west, down the Pacific coast.

That security footage from November 3, released to the public by the Port Angeles police in the following days, is the last known image of Harold Backer. He has not been heard from since.

Backer is not your casual Monday morning paddler or someone who cycles to enjoy the scenery. He is a three-time Olympian, a key member of the elite Canadian rowing team in Los Angeles in 1984, Seoul in 1988, and Barcelona in 1992. He graduated from Princeton (Class of ’85), where he was a member of the school’s formidable and tight-knit crew team. After receiving a Masters in Business Administration from the University of Western Ontario and winding down his rowing career following Barcelona, he moved back home to Vancouver Island.

The Island, as locals know it, is a mecca for athletes past and present looking to escape central Canada’s cold winters. It is common for the local paper, the Times Colonist, to hail the achievements of 10 hometown summer Olympic medalists every four years, a remarkably high number for a city of 350,000. These men and women are generally middle class: They are rowers and triathletes, not hockey millionaires. It was into this community that Backer returned to raise a family with Brenda Colby, a fellow Olympic rower. The couple would eventually have three children before divorcing in 2003; Harold would marry Elizabeth Hardy, a local nurse, in 2007. Meanwhile, Backer started an internet service provider, became a financial advisor (firm name: “My Financial Backer”), and joined the staff at the elite private Brentwood College School—the high school north of Victoria he had once attended as a golden boy bound for academic and Olympic glory.

All of Backer’s communities—Olympians, elite education, and Island celebrities—converged on Port Angeles to help find their missing friend, drawn in by ties to Backer and by a now-deleted Facebook post from his wife. Put online early Thursday, November 5, Hardy’s message read in part:

It is with a heavy heart I write to all of you. My purpose of this communication is that you all please share this post with everyone you know. I need your help to find my husband Harold Magnus Backer.

Harold left on the 10:30 Coho Ferry to Port Angeles, Washington, with his black Cannondale road bike. Possibly with pannier packs. He did not take his iPhone or iPad mini with him. We have no means of communication with him. We do not know his destination. I thought Hurricane Ridge but it is closed off with snow. There is the 101 route or the Olympic Discovery Trail. These are only possibilities.

By Thursday afternoon, as the police began questioning those who knew him, four of Backer’s friends followed his trail south. John Wallace, Pat Walter, and Steve Frisch had all met Harold through national team rowing in the 1980s and ’90s and had remained friends as they settled on the Island. Pat Desjardin was a more recent friend. Alerted to his disappearance, the four men had “busted their assess” to get on the 4:00 pm ferry.

Ninety minutes later, they drove to Hurricane Ridge, a challenging cycling route 17 miles south and a steep climb above the ferry’s dock. They learned the trail had in fact been closed when Backer passed through. Nevertheless, a worried Wallace and Frisch scaled the gate and searched on foot for miles in the snow before turning around at midnight. They found nothing.

Back in Port Angeles on Friday morning, another member of Backer’s circle had joined the effort. Don King had been a Brentwood classmate of Backer’s in the late 1970s and had reconnected when his son had enrolled at the school. King had settled near the Peninsula, and when he heard that his old friend was missing he took action.

King’s first task of the day was to meet another group of Backer’s rowing and Island friends coming down on the morning ferry. Simon Whitfield—a minor Canadian celebrity after winning both gold and silver in the triathlon at two separate Olympics—had lent his large van to a group led by David Calder, a four-time Olympic rower and, like Whitfield, a 2008 silver medalist. This search group planned to join those already there, sleeping in the van to save money and time.

Waiting for their arrival, King spoke to the border patrol agents. Did they remember seeing Harold on Tuesday? In fact they did, they said. Backer had been making the trip quite regularly in the past month, and they had come to recognize him.

Calder’s group never arrived. Unbeknownst to King, Wallace’s search party in Port Angeles had called Calder in Victoria. Don’t come, they said. Something has come to light.

“I was baffled,” King would later say about the no-shows. “If my friend or family member was missing, hundreds of people would be looking for him. But nobody was there.” He would call Elizabeth Hardy twice before the day was over. “In retrospect, the two conversations were odd—like she was willing to talk, but I got the sense that she knew we wouldn’t find him. I got the sense that the family wasn’t even looking for him. It pretty quickly felt like something else was going on.”

What King did not yet know was that at 1:00 pm on the previous afternoon, the first of Backer’s financial advisory clients had opened a letter—one that Backer mailed to each of them before mounting his bike Tuesday morning. The letter’s contents, and what it would conveniently leave out, would come to shatter the faith of all those who believed in the myth of Harold Magnus Backer.

“I got the sense that the family wasn’t even looking for him. It pretty quickly felt like something else was going on.”

I believed in that myth. I met Harold Backer in the late 1990s, when I was a newly obsessed prep school rower. He was one of the rival school’s crew coaches, a taciturn three-time Olympian and Ivy League graduate. When I began my collegiate rowing career in the US, his picture hung above the stretching mat in our boathouse, a trophy of Harvard’s victory over Backer’s great Princeton crew of 1985. I would see him at the occasional Christmas party during trips home to the Island. He was a quiet and private man, and I knew little about him beyond his résumé. That alone earned my respect.

He had been missing for a few days when word reached me by text message. By then, the details had emerged. They didn’t add up. Who goes on a short bike ride, but takes his passport and leaves his phone—or at least the phone his wife and family knew about? So when the letter came to light, it began to make more sense.

Dated only “October 2015” and bereft of greeting, the letter started with a brief explanation of why he founded My Financial Backer. He continued:

The funds had some very good years, in part due to rising technology markets. Rather than spending the fees payable to me for exceptional investment returns, I started an internet/computer business, which, if I had made the decision in 1999, could have sold for $500,000. That was an expensive timing mistake, but another mistake has had a far greater effect since that time.

I will never be able to fix the colossal mistake I made when my market-based funds lost between 25% and 45% of their market value in the dot-com crash. My mistake was not telling my investors about the loss. I decided instead that I would be able to make the money back by forgoing any future fees until the losses were covered. I took it on as a personal debt and kept my investors’ fund values at their 1999 levels and grew them on paper at a general market rate of return.

Since then, some years have been net gains, but others have not, because my fees could not keep pace with the growth I had to maintain. Compound growth is inexorable, whether it’s positive or negative.

Moving forward to today, I am aware that I am running a pyramid investment. I will not keep doing it.

At the bottom of the two-page letter was a list of the 15 individuals invested in his funds. Together, later estimates of their initial investment would suggest, they lost somewhere in the ballpark of C$3 million (US$2.2 million). They include former co-workers and coaches, longtime friends, social acquaintances, and his brother. Harold Backer executed a fraud not upon faceless strangers—but on those closest to him.

I knocked on Tony and Yvonne Carr’s front door on Sunday, December 13. It had been just over a month since Tony stood in his kitchen, overlooking an inlet, and opened the letter from Harold Backer.

Tony had been the legendary rowing coach at Brentwood, now semi-retired in his mid-70s. Yvonne had been my preschool teacher. My father, another former Canadian rower, is their lawyer, and has been for years.

The Carrs had known Backer for four decades. He entered Brentwood in the mid-1970s, following his two brothers from the family home in South America, where their father worked for the Southern Peru Copper Corporation. Boarding at Brentwood, Backer joined Carr’s world-class rowing team, and thrived. “He wasn’t a great worker in the weight room, and didn’t have a wonderful physiology, but technically he was very good—maybe even superb,” Carr recalled.

Elite American colleges steeped in rowing history launched recruiting campaigns for Backer. Princeton won out. Carr was proud of “a young man who we considered to be almost family.” He and Yvonne watched as Backer made his way through college and the national team, and they—as well as Brentwood College School—welcomed him back with open arms after his final Olympics in 1992. For the next two decades he held various positions at the school, from rowing coach alongside Carr to house parent to admissions officer.

Fresh from his MBA, by 1993 Backer also launched the financial advising business. “I have a brochure from ’93,” Tony Carr said. “He did a financial plan, showing us what would lead to a retirement for me.” A copy of a similar plan provided to another client shows Backer’s modus operandi: He advised clients to max out their tax-advantaged retirement accounts, and any excess money should go into mutual funds selected on their behalf by Backer.

The documents provided to Tony Carr and others in the mid-1990s point toward amateurism rather than fraud. In one document, he claimed that he could beat a client’s current stock portfolio by 1.5 percentage points a year and the result, displayed in a simple lined chart, would be a rapid increase in their investment return. To a layman, the documents paint a comforting picture while being largely indecipherable. To an expert, they seem more like wishful thinking. The consequences, however, were anything but casual.

By 1995, documents reveal that Backer was already having issues. “It has become increasingly clear to me that my original goal of 250 clients is far too high,” he wrote to one investor. “Last year, I revised it to 150, and I still found that I had difficulty with 70 clients.” The documents also show a man already questioning the value of investment advisors and their fees. While he “guarantee[d] that the expected benefit to you of my services will be at least 10 times the cost,” he was chaffing at what he perceived to be conflicts in the traditional advisor compensation model. He preferred to work as a “consultant.” The reason, he wrote, “is that I do not want to be caught in a conflict of interest that must exist when someone makes a living solely from selling investment products for commission.”

At the beginning, Backer was not selecting individual stocks and bonds for clients. Instead, he was investing the money from retirement accounts and My Financial Backer in respectable mutual funds. However, by 1999—with the stock market booming and his continued problem with compensation—Backer made a move that would eventually lead to his ruin.

“The next day, I remember Tony saying, ‘this is strange— Harold is having trouble with electronic transfers, and he will send us a check.’” It never arrived.

In a letter sent in September 1999, he pitched an existing client a new service: the My Financial Backer funds. The funds were, in essence, stocks and bonds handpicked by Backer. “The difference between my funds and almost any others is that the management fees for my funds are based entirely on performance and not on a percentage of assets,” he wrote. “Unless my skills are greater than average over the long term, I do not make any money.” Backer would take 33% of anything made beyond, on average, a 10% yearly return.

This is an extraordinary difficult hurdle for any money manager to clear. The payoff would be high if he succeeded, but Backer was now competing with the best investors in the world as the dot-com bubble reached its peak. As he would later admit in his final letter to clients, his downfall came almost immediately. His attempt to cover it up would continue for nearly a decade and a half.

The end, like for many pyramid schemes, arrived when investors asked for money Backer no longer had.

“My mother, Anna Peach, died on October 8,” said Yvonne Carr as she sat beside her husband in their living room. The elderly Peach had been Backer’s client, having sold her home and put the proceeds into My Financial Backer funds. “After she died, we went to Victoria. We met with Harold. I said, ‘I’ll be talking to you later, because I need some money to pay for the funeral and the lawyer.’”

The request totaled less than $10,000, a small sum compared to the $320,000 Anna Peach had originally invested with Backer. “He said, ‘Yvonne, not a problem. I’ll email it tomorrow.’ The next day, I remember Tony saying, ‘this is strange—Harold is having trouble with electronic transfers, and he will send us a check.’” It never arrived.

By mid-October of 2015 Backer had stopped meeting redemption requests. His social calendar, however, was unusually active.

The Head of the Charles is the New York City Marathon of rowing, attracting world champions and amateurs alike. This past year, and for many years before that, Harold Backer traveled from Vancouver Island to Boston to compete as one of thousands. He rowed, as he always did, as a Fat Cat.

‘Fat Cats’ is the moniker for Princeton Tiger alums competing in the Head of the Charles. By all accounts, Backer was the “head Fat Cat”—the man who organized the various crews for the two-day regatta. This past year, Backer and his middle-aged boat of nine placed a respectable 8th out of 56 in the over-50 category before heading to the annual Fat Cats banquet alongside hundreds of other Princetonians.

While they knew nothing of his crime at the time, Backer’s Princeton cohort would eventually become his most vocal defenders. Former Princeton teammate Michael Vatis, now a lawyer in New York City, would tell reporters that their “friends around the world… would do anything they can to help him fix whatever the problems are that exist because of his financial decisions.” Tom Herschmiller—who followed Backer to Brentwood, Princeton, and the national team and is now a doctor—stated, “It seems to me he went to great lengths over many years to make things right.” Larry Gluckman, Backer’s college coach, said, “Let’s put it this way: In the boat he rowed with at Princeton, there were some people that make what he lost in a year.” None had invested money with their friend.

The day after the Fat Cats gala in Boston, Backer continued to ignore his clients back home. He instead drove south towards New York with a college friend. The ride was slow; the conversation was nothing out of the ordinary. Backer dropped his friend in New York City before continuing onto New Jersey. His eldest daughter Adelaide, who rowed at Harvard, works at an elite private school in the state. It would be the last time he saw her before he fled.

Once home, Backer continued to stonewall clients. Yet according to a family friend, he was more active than usual in reaching out to old acquaintances. He continued to row in the mornings—“The day before he left, he was out rowing with one of the guys he screwed,” Tony Carr noted. On Sunday, November 1, he ate dinner with his elderly parents. On November 3, he boarded the ferry.

By the following day, word of his disappearance was spreading. “David Calder came and told us Harold was missing,” Carr remembered. “That was Wednesday morning.”

“When David told me Harold was gone, I knew he was gone with my money,” Yvonne Carr admitted. She hoped that her mother’s savings of around $590,000 on paper, which she’d recently inherited, were safe.

On Thursday afternoon, Backer’s final letter had reached Tony. “I thought it was the check,” he said. “I opened it right here, in my kitchen.”

Yvonne was out when the letter arrived. “I came home from my volunteer work, and he was gray. God love him, he was gray. I asked, ‘Did you get the check?’ And he said, ‘No. Our money’s gone.’”

“She said, ‘But not Mom’s,’” Tony added. “And I said, ‘Yes. Your mother’s too.’”

Similar scenes were unfolding across the Island.

Down the road, the Carrs’ daughter-in-law Leslie—along with her husband Brian, both teachers at Brentwood—learned that she had been taken. “He has hurt my children’s and Brian’s future lives enormously,” she wrote before declining to say anything further.

On the mainland, in Vancouver, Boris Klavora opened a letter addressed to his daughter Tina. Boris, Tina, and her sister Teya were all investors. Boris had been Backer’s 1984 Olympic coach before retiring to run an exercise equipment repair business. He had funneled more than $600,000, nearly all his savings, into My Financial Backer funds. “We thought it was the quarterly report, so we opened it up,” the 74-year-old remembered. “But instead there was a letter. We read it, and read it again, and I said, ‘Shit, this isn’t good.’” Like the Carrs, Boris had been trying to redeem money—$130,000 for a down payment on a house for Teya, due November 2—but for the previous weeks had “only been getting Harold’s answering machine.” The same letter, addressed to Boris and his wife Betty, arrived a few days later.

Gerald Backer opened his letter at his home in Detroit. He saw his youngest brother “every two or three years,” but considered him “a caring father and devoted husband, a very busy man and an entrepreneur.” He was “deeply shocked by the news from my family,” but, to him, the letter “sounded sincere.”

“‘If I’m successful in one area,’ a lot of con artists think, ‘I’ll be successful in all areas. If I’m good at rowing, I’ll be good at financial planning.’ And some people can’t tolerate the fact that they’re not very successful at something.”

“I don’t envy his last 15 years,” Tamar Frankel told me in early January. “He must have suffered a great deal.”

Frankel, a professor at Boston University Law School since 1968, is the author of The Ponzi Scheme Puzzle: A History and Analysis of Con Artists and Victims. She had reviewed the letter, financial statements, and Backer’s biography. Frankel knew his type.

“This man must have had a very hungry ego that needed feeding,” she said. “For some, it’s never enough.”

In some ways Backer’s scheme was typical. That he would end up defrauding those closest to him is not unusual, according to Frankel. “What I found is that Ponzi schemes usually start with friends, with family,” she said. Charles Ponzi, whose name is now synonymous with pyramid schemes, “started with family and then friends, and then attempted to retain that fiction for as long as possible.” Ponzi’s lasted just months, but some pyramid schemes—where old investors are paid out with new investors’ money—can endure for decades, such as Bernie Madoff’s. Madoff also preyed on those close to him, focusing much of his efforts on the Jewish community. He created an aura of exclusivity into which potential clients begged to be included. “Madoff made people feel special,” Frankel said. “He had small groups. People wanted into those groups, and he made it difficult. So when you made it in, you were special too.” Over 4,500 clients would eventually be let into Madoff’s “special” circle.

In Backer’s case, “he had all the people he needed,” Frankel continued. Brentwood, the school of his youth, was happy to have an Ivy League graduate and three-time Olympian on campus. Because so many of them also settled in the area following their rowing careers, Backer and his then-wife Brenda naturally socialized with other rowers. (The most famous of Canadian rowers, Silken Laumann, is godmother to Backer’s eldest daughter). His résumé, plus his natural fortitude, made him seem a pillar of the community. As in most Ponzi schemes, “the trusting—especially if it’s family or old friends who have shared a lot together—drop the need to verify,” Frankel said.

Yet Backer’s scheme was also atypical. Charles Ponzi and Bernie Madoff lived large while promising fantastical returns to investors. There is no evidence that Backer did. The statements he provided clients, while fabricated, show imaginary annual returns closer to 7% than the remarkably consistent 10% to 12% promised by Madoff. Backer also lived a life void of the trappings of wealth—a Princeton man without Princeton wealth. “He tried to make it back for them,” Frankel said. “There must have been enormous internal conflict.”

He was an Olympian, a Princetonian, the founder of multiple businesses, and a respected member of the community. Failure was not his currency.

“‘If I’m successful in one area,’ a lot of con artists think, ‘I’ll be successful in all areas,’” Frankel said. “‘If I’m good at rowing, I’ll be good at financial planning.’ And some people can’t tolerate the fact that they’re not very successful at something.”

This is an all-too-common problem faced by ex-athletes. The financial travails of former professional athletes are well known: One recent study asserted that one in six draftees in the National Football League between 1996 and 2003 has gone bankrupt.

What’s less well known is the emotional turmoil that follows athletic retirement—the loss of purpose and community that has been called “Post-Olympic Stress Disorder.” Another symptom, one former Olympic medalist told me, is “drowning in people’s expectations of me—or what I thought their expectations were. People expect you to be so good at everything right away, and they don’t understand that things that help in sports—ego and a lack of patience, for example—do not translate well into the real world.”

It is, by all accounts, extremely humbling to be forced back to square one after reaching such lofty heights.

The solution, many former athletes say, is to quickly move onto other projects while maintaining your social base as best you can. Backer apparently followed this advice: He settled in a known community where he could start his post-rowing career alongside other athletes doing the same. He kept busy with his multiple projects. He started a family.

The shared sacrifice, pain, and success of 15 years of rowing had provided Backer with a natural community, one that both held him to a lofty standard and fully expected he would meet those standards. Saving face with that community was paramount. When a man who had been successful his entire life failed, he couldn’t face it. When reality dictated that he finally must, he ran.

“Physically, he was a high achiever, but I think he struggled with the tedium of a normal working life,” remembered Don King, Backer’s high school classmate. “At Brentwood, I got the impression that his job with admissions was kind of a token thing. He seemed uncomfortable, and a little lost.”

“My investors have been my friends, and I have done a terrible thing to my friends.”

As the reality of the situation hardened in the weeks following his disappearance, Backer’s clients studied their letters. What they were reading, many came to believe, was not the work of a despondent man coming entirely clean.

As Tony Carr, Boris Klavora, and others reviewed their financial statements, Backer’s explanation—“ my funds lost between 25% and 45% of their market value in the dot-com crash… my mistake was not telling my investors”—seemed lacking. Yes, Backer lost money and lied with fabricated financial statements while trying fruitlessly to recoup the deficit. But glossed over in the letter is that he also did what every pyramid schemer ultimately does: He asked his victims for more money.

By 2001, dot-com mania had turned dot-com bust. According to his letter, this was the moment of sin.

Yvonne Carr’s mother would argue otherwise, for Anna Peach had only begun investing with Backer after the 2001 sale of her home.

It would be news for the Klavoras. Records kept by Betty show, for example, that Backer was still aggressively seeking new money in 2004. In October of that year, Boris emailed Backer, questioning an apparent mistake in their financial statements. “On July 13, 2004, I mailed to you a cheque for $20,000,” Boris wrote. “Since I do not notice any significant increase on any of my accounts, could you please let us know as to where did you invest this money?”

Backer replied twice. “I got your cheque,” he wrote in the first. “Put it into the Short-Term Money Fund, and I didn’t give it a new account number, so it didn’t show up on your statement.” He promised to send a revised version. His second response was more pointed. “Betty, did you have another lump of money to invest? I remember discussing it with you.” It’s unclear whether that solicitation worked, but Betty’s records show that as late as September 2008, the Klavoras were sending checks worth $30,000 to Backer. Others went further: By some accounts, clients were encouraged to borrow “hundreds of thousands” from banks as late as 2013 to invest with Backer. Correspondence shows Backer comforting investors about the security of their money until the very end.

Backer’s final client letter also made an absurd request, given his admission: He wanted victims to stay quiet about his fraud. Alongside the illegitimate My Financial Backer funds, he had been selling legitimate investments to clients for their retirement accounts under the banner of Investia Financial Services, a full-service investment firm within which he worked. Investia asserts he had been under “close supervision” by the firm, despite working out of his own offices. Nevertheless, the company claims it had no knowledge of Backer’s side business. He wanted to keep it that way. “If Investia learns of my activities with Financial Backer Corp, they will have to report them to the BC [British Columbia] Securities Commission,” Backer wrote. This would “create a news event and would affect any insurance payout, as proceeds would have to run through an investigation. It makes no sense for lawyers to get investors’ money.”

The reason Backer was mentioning life insurance quickly became obvious. “I realize there is no way in my lifetime that I could pay it back to my investors,” he wrote, and continued:

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. If admitting to fraud would help restore the losses, I would accept the criminal penalty.

I have a Transamerica Life insurance policy, payable to Financial Backer Corp., with a face value of $1,500,000. This amount should be divided among my investors.

Those who had been lied to assumed they were being lied to again. “This letter is a series of lies. If there is no money, he’s admitting to a criminal offense. He’s told so many lies. One of the lies could be that this is a Ponzi scheme,” said Tony Carr. “But I don’t think that’s going to happen. I don’t think Santa Claus is going to come down the chimney, either.”

He also didn’t believe that Backer had killed himself. “If he’s been cycling [in Port Angeles] on a regular basis, he probably had a place to crash. He probably had a place to stash money. He’s alive somewhere.”

Panama was their hunch. “I think he’s there,” said Yvonne, noting that Backer spoke some Spanish and had gone there on vacation a few years ago. “When he came back from taking the kids and Elizabeth, he said he’d really like to go down there and set up a business. He said he loved it and loved the people. You’d never find him there, with all the little islands. So how the hell would we ever find him?”

Boris Klavora also didn’t believe Backer’s insinuation of suicide. “If the question is whether he killed himself, I’d say no. He’s smart enough: If he wanted to do it, he could do it in Victoria.” No body likely meant no insurance payout—“and Harold knew this too.”

As December turned into January, the river of activity became a trickle. Local reporter Andrew Duffy had initially published a torrent of articles in the Times Colonist, including a complete copy of the client letter. Then the stories stopped. “Finding Harold Backer,” a Facebook group quickly established and flooded with information, went quiet. No one searched the roads of the Olympic Peninsula anymore.

“If he’s been cycling [in Port Angeles] on a regular basis, he probably had a place to crash. He probably had a place to stash money. He’s alive somewhere.”

Anniversaries and small tragedies passed. Backer’s daughter Adelaide turned 23 on November 13. A week later, he turned 53. “HBD [Happy Birthday] to my main homie Harold,” wrote his youngest son Harrison on Instagram. “I’ll love you forever, wherever you are.” On December 31, Backer’s father passed away. The obituary listed Harold as a surviving son.

Backer’s internet company, Cowichan Valley Net, went offline. (“He took my money and my email address,” said Yvonne Carr.) His office in downtown Victoria was searched by police and cleared out, its only remnant a discarded wooden sign, leaning against the window, for the “Financial Backer Corporation: Financial Strategies.”

Investigators moved slowly—excruciatingly so. The Victoria Police Department would only say that the investigation was ongoing. Investia, which quickly announced it was terminating Backer’s registration following his disappearance, commented no further. The British Columbia Securities Commission, which he warned his clients about, stayed quiet. By early February, despite admitting to running a pyramid scheme, Backer had not been charged with a single crime.

In this news vacuum, overlooked details took on outsized significance. Adam Kreek, a Canadian 2008 Olympic champion who rowed with Backer in Victoria, noted that he seemed “kind of depressed” in October. The revelation that Backer owed hundreds of thousands in unpaid taxes dating back to 2004 only added to the intrigue, and rumors spread. Some said that Backer had left his son “holding the bag” on heavy debt, for example.

“That’s not true,” Harrison Backer told me in late January. I had reached out to the family to confirm some details. The 19-year-old, to my surprise, responded. “Here’s how it is: After I graduated, I wanted to be financially independent from my parents. I started a vacation rental business,” he said. He had delayed college to do so, instead staying in his hometown. “So him leaving only affected me emotionally, not financially.”

Like his middle sister Emma, he received a letter from his father. “It basically said, ‘I’m proud of what both of you have become, and I’m sorry for the poor business decisions that have led me to this point.’” The police took a copy of the short letter. Harrison has not looked at it since.

On June 9, 2008, hedge fund manager and fraud Samuel Israel III stood outside his car on the Bear Mountain Bridge, 45 miles north of New York City. Inside were the car’s keys and a bottle of pills. In the dust lacing the hood, he wrote a message: “Suicide is painless.” One hundred and fifty feet below were the waters of the Hudson River.

Israel did not jump. Instead, he made his way to a motorhome stashed nearby. He then headed north to Massachusetts, hiding from the law and losses nearing $450 million. He lasted four weeks before turning himself in, encouraged to do so by his mother.

Harold Backer didn’t lose nearly that much money and, if alive, he has lasted much longer on the run. The trauma for his victims, however, is similar for so many victims of financial crimes. And, like the ripples left behind by the rowing shells Backer once excelled in, this trauma lasts long after the boat has gone past.

To the Carrs, the money is only part of it. “Of course I’d love our money back,” Tony Carr said. To Backer, he wanted to say, “you’ve lost our money, you can give that back. You’ve lost your integrity—I don’t think you can ever get that back.”

To Boris Klavora, the pain of betrayal runs deep. “As a friend, I’d say to Harold, ‘How could you? You were our family.’ My daughter Teya, when she heard, asked, ‘Don’t you know you shouldn’t put all your eggs in one basket?’ I said that’s true, but a very close friend can be one basket. I can’t even get mad at him. It just hurts. That son of a bitch, you know?”

To Adam Kreek and other locals who were neither family nor clients but who still felt close to Backer, a more concrete sentiment has emerged. “At the end of the day, money is just money,” Kreek said. “The broken trust and human relationships are far more harmful than lost money.” He had recently met with two other Olympic medalists and former teammates. All three, like Backer before them, had settled in this small corner of Canada, intent on building a successful life after sport. “We agreed that Harold, regardless, is dead. His personality is dead. He’s somewhere in Panama; he’s had plastic surgery; he’s changed his name; he’s living a different life. And Harold Backer will be no more.”

Kip McDaniel is the founding editor of Chief Investment Officer and a former member of the Canadian national rowing team. You can reach him at kmcdaniel@assetinternational.com or 646-308-2748.

