Wednesday, August 19, 2009

Alleged Ponzi schemer Jones declared bankrupt

To be found a bankrupt a Court must find the debtor owes $1,000 or more and has committed an act of bankruptcy -- basically, failing to pay debts in the ordinary course. It is unusual for creditors to petition a debtor into bankruptcy -- usually you get more money outside of bankruptcy -- but here I assume they acted to try to grab hidden money, perhaps overseas.

Alleged Ponzi schemer Jones declared bankrupt


Alleged Montreal Ponzi schemer Earl Jones was declared personally bankrupt in a Quebec court Wednesday morning.

Jones, who is accused of bilking more than 100 investors out of as much as $50 million, appears to have few assets left to protect.

Documents show Jones owns three condominiums, including two in Quebec.

Bankruptcy lawyer Neil Stein said he will subpoena Jones, who was not present in court.

Jones' company, Earl Jones Consultant and Administration Corp., was declared bankrupt last month.

At a meeting Tuesday with investors at a suburban Montreal hotel, the company's interim receiver said Jones used $12.3 million from his company's account to support a lavish lifestyle, which included homes and cars.

In a report, accounting firm RSM Richter said Jones took payments worth about $4.3 million for himself and his wife, according to records dating back to 1987.

The report also shows Jones took:

$912,000 for real estate
$593,000 for his children's education
$530,000 for credit card payments
$497,000 in cash transfers to Bermuda
$170,000 for cars
It also appears that Jones cashed in his RRSPs, an insurance policy and other investments earlier this year.

Investors say they started getting suspicious about Jones' activities earlier this summer when cheques he issued began to bounce.

1 comment:

Stephen Downes said...

What I would like to see is a system of government and criminal law that is rather more interested in arresting these shysters well before their theft amounts into the millions of dollars.

Excuses about non-interference in the free market are getting tired. It's rather like allowing piracy because to do otherwise would interfere with the operations of marine craft.

The problem, from my perspective, is that the people in the financial community who are still getting away with their mechanisms have rather too much sway over government.

As the Schreiber affair illustrates, their influence reaches to the very top. And people who should be doing something about it depend instead on their campaign contributions.