On a Denver stage last June, former Pittsburgh Steelers team doctor Julian Bailes – the renowned neurosurgeon who had helped shift how the NFL deals with head blows, and was portrayed by Alec Baldwin in the movie Concussion – delivered some big research news. The non-profit Society of Nuclear Medicine and Molecular Imaging, Dr. Bailes told his rapt audience, had struck a partnership with Michael Savage, a long-time venture capitalist from British Columbia.
The US$25-million deal was a win for both the medical and sports communities. The funding from Mr. Savage and his startup, Nucleus Bio, would pay for vital research on traumatic brain injury and chronic traumatic encephalopathy (CTE), the degenerative brain disease for which evidence has been found in more than 100 deceased NFL players.
The partnership also represented a coup for the Virginia-based SNMMI, which, in its six decades of operation, had never before secured such a large financial commitment from a donor. “It’s with great anticipation, great hope and great collegiality that we appear before you this morning,” Dr. Bailes proclaimed to thousands of physicians, scientists and technologists gathered for the society’s annual meeting.
Next to him onstage was Mr. Savage, his greying hair shorn in a crew cut. His conference bio touted him as a successful entrepreneur who specialized in investment management and startup strategies. “Nucleus Bio’s goal,” Dr. Bailes continued, “is to detect mental-health issues and neurodegeneration diseases early, when they can be understood and, hopefully, prevented or cured.”
The Canadian businessman, who had in previous incarnations dealt in everything from explosives manufacturing and gold mining to mortgage lending and LED lighting, had accomplished a stunningly rapid ascent into the rarefied realm of neuroscience. In a matter of months, he had cultivated positive relationships with several prominent brain-injury experts – relationships that had helped him pull off a remarkable feat in the early weeks of 2017: Mr. Savage, a man with zero experience preserving and transporting brains for research, had persuaded the grieving parents of B.C. champion bull rider Ty Pozzobon to give him their son’s brain.
Mr. Pozzobon had been only 25, and a newlywed, when he ended his life on Jan. 9, 2017 – and his parents, Leanne and Luke, wanted his brain examined for CTE, which can result from multiple concussions and has been linked to depression and suicidal behaviour.
Enter Mr. Savage, who offered to get it to the Seattle-based University of Washington, where doctors were keen to study the brain of a high-profile athlete – and eager, as well, to do more work with the venture capitalist, who had already been dangling big research dollars before them. “I would certainly want you to see your resources go as far as they can,” U of W neurologist Christine MacDonald wrote in one of many e-mails to Mr. Savage.
On a promise and a prayer, Mr. Savage had won the confidence not merely of the Pozzobons but of some of America’s best and brightest minds. In a field grounded in doubt and proof, Mr. Savage strode in, fearless.
And fooled them all.
The brain broker
It was just before Christmas 2016 that Mr. Savage first met with Dr. MacDonald and her colleague Paul Crane, taking them for lunch at a sushi restaurant in Seattle’s International District. He had been reaching out to experts all year, talking up his plans to revolutionize brain-injury research through his venture-capital firm, M1 Capital Corporation. (The firm is not connected to the New York-based real estate financing company by the same name.) Dr. Crane’s Alzheimer’s studies had piqued Mr. Savage’s interest, and he e-mailed him a proposal to create something Mr. Savage called the “M1 Capital Neuroimaging Centers of Excellence.”
“With your guidance, we can short-circuit the learning curve,” he had written in his pitch, “and move forward with a ‘Violence of Action’ only the private sector can bring.” Dr. Crane forwarded the proposal to Dr. MacDonald, who had been studying battlefield concussions.
Over lunch, Mr. Savage told the doctors that he had made a fortune from real estate and “classified work with munitions,” and now wanted to use that money to spur medical breakthroughs by building five to 10 neurological research hubs and funding studies to pinpoint better therapies, and ultimately a cure, for CTE and Alzheimer’s. He claimed his firm had access to a pool of patients and would pay for clinical trials in exchange for study results and intellectual property.
Mr. Savage had started M1 Capital a dozen years earlier, locating it most recently in the Vancouver suburb of Port Coquitlam. He was M1’s chairman, CEO and sole director, and told the doctors he planned to use M1 to finance his Nucleus Bio dream. Mr. Savage also offered them consulting contracts, telling Dr. MacDonald he would pay her US$300 an hour plus expenses.
Weeks later, they were discussing details of the contract when Mr. Pozzobon’s death began receiving media attention. “I do not know if you have heard of the death of our local professional bull rider,” Mr. Savage wrote in an e-mail to Dr. MacDonald, the day after Mr. Pozzobon died. “How do I go about asking his family for his brain or is that something that’s too late to do? You have so much to share and teach me as we move forward.”
The neurologist began guiding Mr. Savage through the intricate process.
Mr. Pozzobon had grown up riding calves, steers and bulls on his family’s ranch in Merritt, B.C., and by age 15 was beating adults in amateur competitions. A year later, he was knocked unconscious and diagnosed with his first concussion. During his short life, he experienced at least 15 head injuries – five in one year alone. After taking time off to rest his battered brain, he returned to the sport full-time in 2016, and had his best year ever.
But in the six months before his death, Mr. Pozzobon became reclusive and erratic, and suffered paralyzing panic attacks. Within hours of his suicide, his parents decided they wanted his brain examined, and contacted the coroner’s office in Kelowna for advice. His mother said she was told there was no connection between concussions and depression and suicide, and that her son’s brain wouldn’t be accepted for research. (In any case, the B.C. Coroners Service has no legal authority to conduct research probes.) “I was distraught,” she said. “You have no idea.”
By happenstance, Mr. Savage called the Pozzobons at just the right time. “Would you be interested in donating your son’s brain?’” Leanne Pozzobon recalled him asking. “We said, ‘We are so interested. What can we do?’”
Mr. Savage talked about his new venture, Nucleus Bio, and proposed to get the brain to the University of Washington. He seemed to know a lot about head injuries, and met with the family that day. Even now, the Pozzobons remain grateful for his aid. “He got my son’s brain to the University of Washington,” said Ms. Pozzobon. “He delivered when nobody else would.”
Certainly Mr. Savage helped put to rest a question that had vexed the bull rider’s parents: Eight months after receiving Mr. Pozzobon’s brain, U of W neurologists would reveal that the rodeo star had CTE in his frontal orbital lobe, an area responsible for emotions, judgment, impulse control and memory. His is the first confirmed case of CTE in a professional bull rider.
There is no photo of Mr. Savage on his Twitter account. Instead, he has pasted an image of a lion, bloodied from a kill, with a quote: “Being alpha isn’t the cleanest job.” He calls himself a “philanthropist, entrepreneur, activist, abstract thinker,” and a disruptor who is leading change in mental health and neuroimaging. He tweets mostly on U.S. politics, and a bit on the military and football. Recently, he weighed in on Prime Minister Justin Trudeau’s trip to India: “Now more than ever I appreciate the steady hand & actions of @realDonaldTrump versus the walking embarrassment @JustinTrudeau.”
Mr. Savage, now 57, has always played the alpha role. Tall and broad-shouldered, he can command a room, exuding passion for whatever business idea he’s promoting, whether it be digital imaging or online gambling and porn.
His interest in the brain took hold in 2008, when he heard Garrett Webster talking on the radio about the death of his father, former Pittsburgh Steelers stalwart (Iron) Mike Webster, who helped the Steelers win four Super Bowls in the 1970s. Before his 2002 death from a heart attack at age 50, the football legend had been suffering with depression, dementia and chronic pain. An autopsy revealed he’d had CTE. The disease had never before been diagnosed in an NFL player.
The death of Iron Mike stirred an awakening that continues to ripple through pro and amateur sports. In 2016, the NFL agreed to a US$1-billion settlement in a class-action suit involving thousands of former players; ongoing litigation against the NHL alleges the hockey league engaged in a decades-long plan to conceal the risks of concussions. In a conversation with The Globe and Mail last April, Mr. Savage said his interest in the issue is also deeply personal. “I’ve suffered numerous concussions,” he claimed, noting that he’s played football, and also been “in combat fights, martial arts.”
Mr. Savage has been communicating with The Globe for a year, almost entirely through e-mail. He first reached out to the newspaper after hearing that Globe reporters were inquiring about him. Yet, except for an initial, 27-minute phone call on April 26, 2017, he has not granted the newspaper an interview.
In that call, the venture capitalist spoke at a fast clip as he delved into his plans for Nucleus Bio, which he said would kick-start a concerted effort to diagnose the disease – before death struck. “The problem is we can’t detect it right now. The medicine, the science, the technology, the fMRI, the PET, the MRI, the equipment just isn’t there,” Mr. Savage explained. “The brain is really the frontier of science. We just don’t know enough about it. So, what I have done, with my initiative and my hypothesis, is put it out to the community as to how do we approach this, preferably.”
In 2016, Mr. Savage began increasing his overtures to brain-injury experts, including Frank Conidi, director of the Florida Center for Headache and Sports Neurology, who said the two men spoke by phone something like 10 times that year. “I had always talked about putting a centre of excellence together, like the Department of Defence has,” said Dr. Conidi, who is also a neurologist for the NHL’s Florida Panthers. “He said it was something that he could put together funding for. So I said, ‘Show me what you got.’”
Dr. Conidi told Mr. Savage that such a research hub would cost about US$60-million to develop and about US$10-million a year to operate. “I think he is sincere about what he wants to do. I think he does want to help,” Dr. Conidi said. But he was never able to pin down whether the businessman had the funds to underwrite such a massive endeavour.
Undeterred by such details, Mr. Savage kept making the rounds with medical and technology specialists. In the summer of 2016, he contacted Advanced Cyclotron Systems, a firm in Richmond, B.C., that makes multimillion-dollar cyclotrons used to produce isotopes for positron emission tomography (PET), a powerful imaging tool in nuclear medicine. Mr. Savage said he was looking to buy several cyclotrons.
“One of the questions I asked him a few times is, ‘How are you going to fund all this?’” said Joe Huser, who, at the time, worked in business development for the Richmond firm, but left last year for another job. “He would always shrug it off or say something like, ‘If you don’t have it, you go out and get it.’”
In a bid to drum up such funding, Mr. Savage turned in October of 2016 to the Society of Nuclear Medicine and Molecular Imaging. Rebecca Maxey, the society’s director of communications, said Mr. Savage asked the non-profit – which has about 17,000 members in nearly 80 countries – to help finance his clinical research. But, in a brash move worthy of the entrepreneur himself, SNMMI asked him to instead consider financing its scientific work.
The following month, he met with the group’s reps in Chicago. There, according to a document later released by the SNMMI to its members, he promised that his M1 Capital firm would provide multimillions over several years to a research program to investigate traumatic brain injury and CTE.
The partnership cemented the Canadian venture capitalist as the real deal, a man intent on shaking up brain-injury research. Mr. Savage was feeling on top of the world, and soon reached out to Dr. Crane. Finally, his startup was truly born.
A stunning debut
The day after the Pozzobons agreed to donate their son’s brain to the U of W, Mr. Savage wanted to put out a press release that gave M1 Capital top billing in brokering the deal.
Dr. MacDonald was on board – mostly. “Just need to be careful here because we don’t have any official agreement signed and in place between M1 and UW yet,” she wrote to Mr. Savage on Jan. 12, 2017, before adding that she well understood “the opportunity to set the stage for future endeavors.”
The opportunities that Mr. Savage was proposing in e-mails and conversations with U of W doctors were bountiful. He wasn’t just offering consulting jobs to Dr. MacDonald, Dr. Crane and Dirk Keene, who was chief of neuropathology at U of W’s School of Medicine. He said he wanted to pay for the cost of examining Mr. Pozzobon’s brain, about US$6,000. Mention was also made of an additional donation to the university, along with potential funding for clinical trials, and spots for the doctors on Nucleus Bio’s “steering committee.” In a note to a director in the university’s fundraising office, Dr. MacDonald advised that she had spoken with Mr. Savage “on countless occasions” and believed he was “highly motivated to move forward” along several lines.
When communications staff with the School of Medicine nixed the M1 Capital press release – signed consent from the Pozzobon family was not yet in hand – Mr. Savage’s outward charm quickly gave way to impatience. “We need to make a statement,” he told them, “and I need your focus and attention on this matter.”
As for the donation of Mr. Pozzobon’s brain, Dr. MacDonald described the process as “chaotic” in an e-mail to Dr. Keene and Allison Beller, the U of W’s lead brain-procurement official, and noted that “nothing about how this has gone has been ‘normal.’” At one point, Mr. Savage mistakenly gave the Pozzobon family the wrong consent papers; they were for Washington University in St. Louis, Mo.
Mr. Savage himself acknowledged he was out of his depth. In a message to Dr. MacDonald and Dr. Keene, he said that “my life and that of my companies has taken on dynamics one could not anticipate or plan for and this is one example of Ty’s celebrity that we found ourselves being thrust into a situation way beyond our scope or knowledge base or comfort zone.”
In the meantime, he kept pressuring the university to sign off on an announcement. This time, he wanted to state that Nucleus Bio – which wasn’t yet a registered company – was partnering with the U of W to study Mr. Pozzobon’s brain. One prominent voice pushing back was Tina Mankowski, the medical school’s director of strategic communications and associate V-P of medical affairs. “We are a state agency and it looks like we are endorsing Nucleus and we can’t do that,” she wrote to Dr. MacDonald, Dr. Keene and several others on Jan. 24, 2017. “We are not an official partner with Nucleus – and even if we were, we could not do an endorsement of their work.”
Undaunted, Mr. Savage sent out the erroneous press release the very next day, and several media outlets reported the false information. A Vancouver Sun headline blared: “Brain of late bull-rider Ty Pozzobon donated to concussion research led by B.C. firm.”
Frustrated, Ms. Mankowski sent a revised press release to Mr. Savage’s executive assistant, Tricia Esworthy, that removed all references to Nucleus Bio and Mr. Savage.
The entrepreneur lashed out over the changes in a message to several people at the U of W, telling them his business was a “for profit corporation.” He also underscored their debt to him. “This is HUGE, let me be clear, ‘A HUGE DEAL,’ and you’ve achieved a Coup in getting Mr. Pozzobon’s brain,” Mr. Savage scolded.
With the prospect of research dollars at stake, Dr. Keene apologized to the businessman “for the challenges you have encountered with UW” and said he hoped they could continue working “toward our common goal.” Dr. MacDonald told him she wanted to be an adviser and to support his efforts “to further programmatically develop the landscape of Nucleus Bio.”
In the end, such behind-the-scenes fallout remained just that: No one corrected the public record. For all the world but those most in the know, Nucleus Bio had made a stunning debut.
And it caught many in Canada’s medical community by surprise. Among them: Lili-Naz Hazrati, a neuropathologist with Toronto’s Hospital for Sick Children and the Krembil Neuroscience Centre. She looked at the website of Nucleus Bio and noticed that, although the company planned to embark on “one of the largest clinical trial programs ever pursued in neurological medicine and mental health,” not a single doctor was listed as part of the enterprise.
Also puzzled was Charles Tator, director of the Canadian Concussion Centre at Toronto Western Hospital, who received an e-mail from Sandy Price, a consultant hired by Mr. Savage, letting him know that Nucleus Bio was securing Ty’s brain for research. “It’s the first time I’ve become aware of a company inserting itself in the process” of a brain donation, Dr. Tator told The Globe, adding that research centres normally deal directly with families.
While questions about Nucleus Bio were surfacing in Canada, Mr. Savage kept making inroads south of the border. Although he had been caught misrepresenting his relationship with the U of W, the school and its doctors kept talking to him. In mid-March, 2017, he asked Drs. MacDonald, Crane and Keene to outline their wants and needs, which could even include cyclotrons. In response, Dr. Crane put together a two-and-half-page submission on behalf of the trio, prompting Mr. Savage, in turn, to promise the doctors that he would build their program “into an international powerhouse.”
His burgeoning partnership with SNMMI was also moving along. In May, he helped the society put on a brain-research symposium in Dallas and even had Mr. Pozzobon’s widow, Jayd, share her story at the event.
It all seemed so promising. Until it all fell apart.
The real Michael Savage
To this day, only the name, spelled Nucleus.Bio, has been proposed for business registration in Canada. No incorporation has moved forward here or in Delaware, where Mr. Savage has registered numerous companies over the decades. He has attempted to raise money from investors for his neuroscience venture, but The Globe doesn’t know whether he was successful. Neither the U of W nor SNMMI has received any research funding from Mr. Savage.
It is, it turns out, a familiar script.
The Globe began investigating Mr. Savage’s business history after his involvement in the Pozzobon brain donation attracted widespread attention. Reporters spoke to three dozen people who worked and dealt with him during his numerous reinventions, from converting film X-rays into digital images at Vancouver-based Savage Technologies in the early 1990s to running a web-design business, IP Delta Networks, from the basement of a rental house in Oshawa, east of Toronto, in 2004.
Reporters also pored over court documents from three provinces and the United States, dug into two cases against Mr. Savage undertaken by provincial securities regulators, and obtained his e-mail correspondence with U of W doctors and communications staff through the state’s public-records law.
The Globe found a troubling track record that includes defrauding investors, evading taxes, lying about credentials, ignoring court judgments and fines, and failing to pay numerous employees, landlords and businesses. The long list of creditors includes the B.C. Securities Commission and the Canada Revenue Agency.
Many former associates told The Globe that Mr. Savage is prone to making false promises and telling tall tales. He left several people with the impression that he used to be in the military, and has stated online that he was once on the advisory board of the American College of Cardiology and that he attended a business program at the University of Toronto’s Rotman School of Management. No records exist to back up these claims.
“He’s a silver-tongued devil,” said Brian Corkum, who worked as a graphic designer for several of Mr. Savage’s B.C. ventures intermittently from 1988 to 2001. “He is not to be trusted with other people’s money.”
Lauri Choi, who joined Mr. Savage’s Calgary-based mortgage-lending operation as an office manager in the mid-2000s, said she still feels trepidation when talking about her former boss. “He is a dangerous man. Extremely intelligent, but incredibly manipulative,” said Ms. Choi. “I want others to be able to learn from our misfortune.”
What follows are tales of two of Mr. Savage’s ventures: his forays into the telecom business and into mortgage lending, which placed him in the crosshairs of securities regulators in B.C. and Alberta, respectively. Both stories contain striking similarities to the machinations, half-truths, bait-and-switch tactics and sheer moxie that have characterized almost every aspect of his Nucleus Bio startup. They also stand as graphic lessons in the wisdom of “Buyer, beware.”
‘Those were the go-go days’
In mid-1997, at the start of the dot.com boom, Mr. Savage proclaimed to employees and investors that he was going to be the next Bill Gates. He had just launched Savage Tele.com, whose purported goal was to become one of the 10 largest independent internet service providers in the United States. He set about assembling a small team in Vancouver to develop his idea and sell it to investors. Between $1.5-million and $2.5-million was raised from about 125 people, including US$765,000 from Calgary entrepreneur Mark Maier and seven others whom Mr. Maier encouraged to come on board. Among them was Mr. Maier’s own father and Joe MacLean, then a vice-president with Goldman Sachs in New York City.
“He told a good story,” Mr. Maier recalled of Mr. Savage’s pitch. “Those were the go-go days. You could do Bananas.com and you were going to make money.”
Investors were told that George Best, the former president and CEO of Fonorola, was going to be CEO of Savage Tele.com. A high-profile advisory board was also supposedly in place. It included Juri Koor, once the head of Call-Net Enterprises; Harry Truderung, who had been president of Telus’s wireless arm and would go on to become president and COO of AT&T Canada; and Jack Hubley, who had held senior positions at Bell Canada and AT&T Canada.
Although their names were mentioned to investors, the advisory board had no substantive contact with Mr. Savage or involvement in his project, Mr. Maier later learned. Mr. Best, meanwhile, didn’t stay on as CEO, because he had a falling out with Mr. Savage, according to Dianne Oslund, who was the telecom’s COO and had worked alongside Mr. Savage for nearly a decade.
While president of Savage Tele.com, Mr. Savage collected an annual salary of US$150,000, Ms. Oslund would testify to a B.C. securities investigator in May, 2004. Mr. Corkum told The Globe that Mr. Savage also billed the business for expensive hotel rooms, luxury car rentals and bar tabs that ran as high as $900. When Mr. Corkum and others challenged him about the lavish expenses, he said they were necessary to woo potential partners and investors.
“It was at a point where nobody’s opinion or anybody’s statements made any difference except for Michael’s,” Ms. Oslund testified. “It was, ‘It’s my way, and if you don’t do it my way, you know where the door is.’”
Concerns about Mr. Savage soon migrated to investors. Some became suspicious when they received subscription agreements for shares in a business other than Savage Tele.com. On June 6, 2000, Mr. Maier and Mr. MacLean flew to Atlanta to confront Mr. Savage and demand their money back. “It was right after the meeting in Atlanta we retained counsel. And right after that, Michael became hard to find,” said Mr. Maier, now president and CEO of the Aurum Group of Companies, which produces dental supplies and implants.
The next day, Mr. Savage withdrew US$530,000 from a company bank account and later moved the investors’ funds into personal accounts in the name of his sister and his fiancée, records from the B.C. Securities Commission show.
Savage Tele.com, it turned out, wasn’t even a registered corporation, the regulator determined. A legally required prospectus had not been submitted to the commission, either. The regulator accused Mr. Savage and Ms. Oslund of selling shares in a company that didn’t exist and of drafting a business plan that contained several false statements. No other employees were implicated.
Ms. Oslund admitted to defrauding investors and settled with the regulator in October, 2005. Mr. Savage, however, fought the allegations, representing himself at a B.C. securities hearing in March, 2007.
There, he blamed his troubles on a lawyer he said had been hired to register the company, but didn’t. He contended that Savage Tele.com had been a credible business – with real employees, shareholders and industry titans who were eager to get involved. He also testified that he was now $20-million in debt and facing eviction from his Toronto-area rental home. He declared the regulator’s prosecution of him “malicious.”
The commission begged to differ. In February, 2008, it imposed a $100,000 fine against Mr. Savage for committing fraud and breaking other securities laws. It also banned him from engaging in investor relations and from acting as a manager or consultant in connection with the province’s securities market for 10 years.
Although the 10-year mark has just passed, the ban remains in place because Mr. Savage has yet to pay his fine.
On Nov. 27, 2017, after numerous inquiries from The Globe about Mr. Savage’s case and unpaid penalty, the B.C. Securities Commission filed a notice of civil claim against Mr. Savage in the B.C. Supreme Court, in a bid to collect the payment. Mr. Savage has launched a $480-million countersuit, claiming that he was wrongfully convicted and even that his Charter rights were violated. The commission is asking the court to dismiss Mr. Savage’s claim, calling it an “abuse of process.“
Mr. Maier and his group of investors were successful in their lawsuit against Mr. Savage, but they never got their money back. Neither did many small-time investors – including Mr. Corkum’s mother-in-law, who put about $2,500 into the startup.
Members of Mr. Savage’s telecom team professed they had no clue where he was as they were left to handle disgruntled investors, lawyers and securities investigators. He seemed to have disappeared.
In fact, he was simply rising, once again, from the ashes.
The lending business
In 2003, the real estate market was booming in many parts of North America, and interest in non-traditional and subprime mortgage lending was growing fast.
Along came Mr. Savage, an aspiring national mortgage-lending operator.
As he worked to set up his newest venture, Mr. Savage reached out to Toronto-based branding specialist Ted Heighington, who had started a consulting business after serving as senior director of corporate marketing for the Bank of Montreal. “I watched him in action. He was dealing with major banks and major shareholders and investors who were very smart people, who get dozens of presentations every year, and their eyes were wide open,” recalled Mr. Heighington, who met with Mr. Savage weekly for about six months. “And they opened their chequebooks after opening their eyes.”
Mr. Savage was also in talks to acquire two businesses in Calgary: Gecko Mortgage Capital and Pinnacle Mortgage Investment. He had called a Gecko director out of the blue in late 2003 and subsequently made a lucrative offer for the two companies, outbidding other suitors.
After sale agreements were reached in July, 2004, Mr. Savage – who had yet to fork over a penny for the two businesses – pushed to take over day-to-day operations and banking control of Gecko and Pinnacle, according to an Alberta Securities Commission document. He branded his new business Mortgage 1, incorporating it as a subsidiary of his other new firm, M1 Capital.
The Gecko director stayed on for the expansion, and a large staff was hired. Prominent players in the mortgage industry were enticed to jump on board. The entire 17th floor of a downtown Calgary office tower was rented. By all accounts, no one working with Mr. Savage in Calgary was aware of his investment-fraud troubles in B.C. – despite the fact that Mr. Maier was among those fighting to get their money back from the telecom scheme.
In February, 2005, Mortgage 1 began seeking money from investors: At least $700,000 was raised from more than 50 Albertans. But employees had stopped receiving wages; soon, phone, power and other bills weren’t getting paid. To tide the company over, several workers lent Mortgage 1 tens of thousands of dollars.
Then one morning in June, Ms. Choi arrived at Mortgage 1’s office to find all the desks, chairs and computers gone. A few pens and highlighters were left, scattered across the floor. Also missing in action was Mr. Savage – and all the mortgage files. “It was the most surreal moment of my life,” she recalled. “I felt ashamed for being so trusting and naive.”
Mr. Savage never did pay to acquire Gecko and Pinnacle. The Alberta Securities Commission went after him and the former Gecko director in 2008, alleging they had both illegally distributed Mortgage 1 securities. His partner admitted to breaking the rules and was reprimanded by the regulator. But the commission dropped its action against Mr. Savage after he failed to show up for his hearing. Instead, it reciprocated the B.C. securities ban against him, saving costs for the Alberta regulator.
Mr. Savage maintains that Mortgage 1 was poised to challenge Canada’s top five banks. In an e-mail to The Globe, he said he had obtained a $460-million secure line of credit to grow the operation. He also claimed he had uncovered irregularities at Gecko and Pinnacle, but that the Alberta Securities Commission wasn’t interested in pursuing his evidence.
“I cannot even begin to describe how this confluence of events destroyed my life and career,” Mr. Savage said in a nine-page chronology of his business history, which he sent to The Globe. A note at the bottom of each page states: “Excerpts from: Spook – My life from Counter Terrorism & Hostage Rescue Operations to the Boardroom.”
Nucleus Bio disappears
M1 Capital didn’t have much of a track record when Mr. Savage went peddling his brain-research startup to doctors south of the border. The company’s website, M1Capital.com, which he included in e-mail correspondence to potential medical and business partners, contained only a single page.
“We launch high growth businesses & equip them for dramatic success. Be ready … Lion’s and Tiger’s and Dragon’s, oh my!” the page proclaimed, adding that the firm would be hiring soon. Since last March, The Globe has repeatedly requested an interview with Mr. Savage to discuss his business history. Aside from that 27-minute call in late April, he has not granted the request, instead sending responses via e-mails and text messages to some of The Globe’s questions.
On several occasions, Mr. Savage portrayed himself as a victim. “I’ve paid my debts, suffered the consequences and I am rebuilding my life and career and 10 years have passed,” he wrote on April 4, 2017. In a later message, he added: “I built real companies, had real products and services that had customers and revenue.”
Five months ago, The Globe sent Mr. Savage a list of 23 questions. Among them: Why did an earlier version of his Nucleus Bio website contain nearly identical material to content posted on Grail, a San Francisco-based biotech startup that is seeking to raise US$1-billion to develop a blood test that could identify cancer before symptoms emerge? Grail has attracted some big-name financial backers, including Amazon founder Jeff Bezos, Microsoft co-founder Bill Gates and Google Ventures.
Two days after The Globe sent its questions to Mr. Savage, Nucleus Bio’s website was taken down. The address now leads to a promotion for GoDaddy, the domain-name registrar that had hosted the Nucleus Bio site. M1 Capital, meanwhile, remains an active corporation.
On the web-based platform EquityNet, M1 Capital and Nucleus Bio had been trying to secure at least $5-million from investors by promoting their relationship with the Pozzobons, the University of Washington and the Society of Nuclear Medicine and Molecular Imaging. Chris Cook, then a “business-development employee” for M1, also sought to raise funds for a health-care initiative on DealStream, and on a website for Chinese investors. Mr. Savage maintains that those two ads were not for M1.
All three investment postings were removed after The Globe sent its questions to Mr. Savage. In a message to the newspaper on Dec. 20, he wrote: “We have not raised, solicited or taken any public funds for the M1 Capital and Nucleus Bio initiatives.”
Mr. Cook also told The Globe he did not raise any capital on behalf of M1, was never a paid employee and no longer has “business communication” with Mr. Savage, whom he described as a “friend.” Mr. Cook had, however, at one time listed his position with the firm on his LinkedIn profile, which has since been changed.
After The Globe requested Mr. Savage’s correspondence with the U of W through the state’s public-records law, the school’s brain experts distanced themselves from him. Dr. MacDonald, who had received approval from the university’s Office of Research to consult for M1 Capital, terminated her agreement with Mr. Savage in July.
No consulting work had been done for him and no money was ever exchanged, said associate V-P Mankowski. Mr. Savage was not given any money from the university for Mr. Pozzobon’s brain, she added, and Dr. Keene and Dr. Crane did not ultimately pursue Mr. Savage’s offer to hire them as consultants. All three doctors declined to be interviewed by The Globe. The school’s attorney-general’s office now plans to review how Mr. Savage portrayed his relationship with the institution.
The Society of Nuclear Medicine and Molecular Imaging, meanwhile, has been ambiguous about the status of its US$25-million grant-funding program with Mr. Savage. Ms. Maxey, its director of communications, told The Globe that the organization has “no open projects with him at this time,” but repeatedly declined to clarify what that means for the program announced with great fanfare by Dr. Bailes on that Denver stage. The neurosurgeon himself declined to comment, referring questions to SNMMI.
Bonnie Clarke, the society’s director of clinical trials, was more direct, saying the organization did some online checking of Mr. Savage, but did not perform a full vetting. “We haven’t received any funds from him and it seems unlikely that that will ever come through,” she said.
Mr. Savage also hasn’t provided funding for the brain-research symposium held in Dallas in May, even though he told the SNMMI he would cover the cost of the event, where he drummed up further contacts and promotion for Nucleus Bio. The non-profit had to pick up the bill.
Mr. Savage remains active on Twitter, but he has been hard to find in person. His last-known address is a bungalow clad in blue siding on a street lined with evergreens in Port Coquitlam. The house is registered in his sister’s name. M1 Capital only had a postal box in a nearby strip mall – the bill for that box hasn’t been paid in months. Governments and businesses that have attempted to collect on court judgments and penalties against Mr. Savage have not found any substantial assets in his name.
The purported venture capitalist was angry when he learned that The Globe had requested his correspondence with the U of W. He called the request “a gross intrusion and violation of privacy” and “morally reprehensible.”
“I am proud of what I am doing, the work I am leading, the focus and movement in mental health and neurological disorders,” he wrote in an e-mail to The Globe last year, before he began erasing traces of Nucleus Bio. “I am doing something no one has ever undertaken before.”
With reporting from Marty Klinkenberg in Edmonton.
The many businesses of Michael Savage
Michael Savage has been involved in numerous ventures over the decades, including forays into the telecom business and mortgage lending that put him in the crosshairs of securities regulators in B.C. and Alberta, respectively. He has also registered more than 100 internet domain names, including hashtageasymoney.com, combatbarbie.com, and beingmichael.com. Among his many other enterprises:
1988: He was involved in International Hydro Cut Technologies, a B.C. firm that specialized in making explosive devices that could blast holes through walls, doors, even planes with surgical precision. He was no longer with the company when its U.S. arm got into hot water with the American government in 2002. The founder was accused and later acquitted of stockpiling warheads for shoulder-fired missile systems.
Early 1990s: Mr. Savage had a digital-imaging company called Savage Technologies Corporation that captured the attention of John Mancini, then chair of medicine at the University of British Columbia. Dr. Mancini introduced the businessman to the renowned Mayo Clinic in Rochester, Minn., and to Kodak, the film and camera giant, but Dr. Mancini said there was little interest in Mr. Savage’s technology. “The long and the short of it was no one thought much of this idea, to be frank,” Dr. Mancini said.
1995: Late that year, Mr. Savage acquired a controlling interest in American Pacific Minerals Limited from American Resource Corporation, which owned a gold mine in Goldfield, Nev. Legal action ensued and APML filed for creditor protection on Nov. 22, 1996. That very night, Mr. Savage took six armed security guards to the mine and tried to shut it down. A riot nearly broke out when local residents rushed out of a bar to confront Mr. Savage, according to an article in the Las Vegas Review-Journal. Police stepped in and Esmeralda County officials seized the mine due to environmental concerns. During bankruptcy proceedings in Nevada, the court found that Mr. Savage had improperly ousted officers and directors, violating his stock-sale agreement with American Resource Corporation.
1999: Mr. Savage established Savage Entertainment Corporation and eyed several internet opportunities, including potentially starting a soft-porn website and getting involved in the online gambling industry, according to B.C. Securities Commission documents.
2004: He briefly ran a web-design business called IP Delta Networks out of the basement of a rental house in Oshawa, east of Toronto. Danielle LeBlanc, who was a recent college graduate, left a full-time job to work for Mr. Savage. “He’s a real good talker. He made the job sound amazing,” she said. But after a month or two, Mr. Savage stopped paying her and four other employees. The Ontario Ministry of Labour went to court in an effort to recover $15,628 in wages from Mr. Savage, but he never paid. Mr. Savage also owes more than $10,000 in wages to an employee of his B.C. venture-capital firm, M1 Capital, while his former company, Mortgage 1, was ordered to pay nearly $70,000 in wages to 13 employees in Alberta. The money has not been recovered.
2013: He incorporated an LED lighting business called The Haus of Lights. According to a five-year marketing plan published online, the company’s objectives included opening 300 stores. The company’s federal corporation status was dissolved in November, 2016.
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