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Millions of invested dollars unaccounted for
Former CGA disappears from the scene
Tags: Hofman Case Investigation
VANCOUVER, BC - A former certified general accountant has gone into hiding, leaving dozens of (Dutch-born, Dutch-descended and non-Dutch) investors in many types of 'investment schemes' wondering what has become of their money. The offices of the former CGA have been cleared out and are presently for lease. Clients of the man received their tax-papers only days before the compulsory filing deadline. While the RCMP commercial fraud section refuses to disclose anything about their investigation, it has been confirmed by some affected individuals that officers have been working on the case for about a year. A meeting of creditors, meanwhile, has instructed a steering committee to attempt to put Fred S. Hofman Sr. and his companies into bankruptcy.
Dutch-born Fred Siebold Hofman in the past has been investigated several times by different authorities. One such investigation resulted in a $50,000 fine for trading securities without a license. Hofman was indefinitely barred from trading at the Vancouver Stock Exchange in April 1989. Complaints from unhappy clients caused him to quietly 'surrender' his CGA-certificate last year.
Documentation poorly done
In addition to operating an accounting practice, Hofman offered wide-ranging 'investment and management services.' Almost systematic seems to be the poor method of documentation which accompanied these 'services'. Very few investors insisted on being issued official receipts, with many reportedly barely instructing the man how their 'investments' should be directed. Many of those dealing with Hofman had done so for twenty years or more, and fully trusted him as business associate and friend. Those of his clients who proved to be fussy about receiving receipts and issuing instructions, seem to have been accommodated with such requests. Only those investors who wanted to move funds in and out their high interest-earning accounts (in the 12 to 16% range) seem to have been alerted to problems: the 24-hour notice of withdrawal often required days and sometimes weeks before the pay-out could take place. Not everyone was alarmed when this problem occurred: Hofman explained or gave a reason which often allayed any further suspicion.
Family and friends
Among those who would like to have a word with Hofman about missing funds, are a circle of (close) relatives. Although the circumstances are not totally clear in all these cases, only two of them have launched legal action before the Supreme Court of B.C., and are claiming over $1.6 million. So far there are six cases filed with the Supreme Court, claiming a total of $4.5 million. A US-group reportly has frozen a number of Swiss bank accounts, claiming a loss of US$3.2 million. Some affected Dutch-Canadians have returned to a better regulated The Netherlands, where they hope to regroup and re-establish their lives. Two others are considering the same option.
Rumor-mill works overtime
The disappearance of Hofman, who was reportedly sighted in different localities - the most likely is the one in Amsterdam - and the downfall of his 'investment vehicles' has met with disbelief by many who knew him, and sent shockwaves through the (Dutch-Canadian) community. It has taken several weeks before some affected parties started to take action. Meanwhile, the amount of the losses (rumored to be anywhere from $3 to $150 million) and the number of people involved (from 60 to over 400) grew by leaps and bounds in the rumor-mill.
By the time the affected people met in a creditor's meeting, organized by an ad-hoc steering committee, 75 people attended and over 70 cases had been documented. At the meeting, it was resolved to attempt to file bankruptcy, and attempt to locate Hofman and request his assistance to clean-up the debacle. The burning question which begged an answer, but received none, was how and where Hofman lost the money. Many 'investors' who at first were very embarrassed about their losses, now realize that it may be extremely difficult to recoup any of it. Many also discovered, that they were not the first ones to suffer losses with Hofman.
Over the years, there have been several failed investment and tax-shelter schemes, each causing substantial losses. The earlier failings have attracted very little public attention. The steering committee appointed by the creditors has advised every one to check documents and wills and appoint a new confidant where the name of Fred S. Hofman Sr. appeared as a director, trustee or executor. The new steering committee consists of B. Norden, S.M. Oosterhuis, N. Von Meyenveld, and advisors accountant D. Pel (CGA), and lawyer T.J. Van Popta. The creditor's meeting was organized by S.M. Oosterhuis and B. Norden.