Earl Jones admits to fraud, weeps in court
Published Friday, January 15, 2010 1:48PM EST
Disgraced financier Earl Jones wept in the prisoner's dock Friday after admitting that he bilked 158 people, including his own brother, of more than $50 million in one of the largest fraud schemes in Canadian history.
Jones was handcuffed and taken into custody at the Montreal courthouse after admitting to two counts of fraud dating back to 1982.
He pocketed $13 million from his clients and paid them investment cheques with their own money rather than investing the cash as promised. Many people lost their life savings.
Defence lawyer Jeffrey Boro said Jones had no defence for what he did. The lawyer added that Jones had to plead guilty since he had admitted to the crimes from the day he was arrested last summer.
"It would have been an impossible task for me to win this case in a significant way," said Boro.
The lawyer read a letter of apology from Jones, who quietly wept in the prisoner's box.
"To clients, friends and family: There are no words I know that can truly express how sorry I am," read the letter.
"I have ruined your lives, as well as the lives of my family and myself, and will forever live with this terrible tragedy."
Prosecutors and Jones' lawyers are both recommending Jones be sentenced to 11 years in prison. Since his crimes didn't involve physical violence, he would be eligible for parole after just 22 months.
Prosecutor Pierre Levesque said Jones deserved less time because fraudster Vincent Lacroix received 13 years for a larger and much more sophisticated scam. Lacroix had bilked 9,200 investors of more than $100 million.
Justice Helen Morin will rule on the joint sentencing recommendation on Feb. 15.
Some of Jones' clients were present in court Friday and were quick to express their fury at the outcome.
"I would like to see him (get) 20 years in prison with no possibility of parole," said Christiane Jackson.
Kevin Curran, whose mother lost $400,000 after investing with Jones, says victims may look at pursuing the banks in court.
"Now we go after the financial institutions and those that were involved to enable this to persist for so many years and for all of those people to lose their savings."
But Boro said Jones has already paid a heavy price for his crime, describing him as a broken, penniless man.
"The only thing he has left is his pension plan and his old age pension," said Boro.
"Other than that he has no money, to the best of my knowledge."
Prosecutors provided more details Friday as to how Jones was able to maintain his house of cards for nearly 30 years.
"It appears that Jones, when his business started going sour in mid 80's he figured 'maybe I can sort of bridge myself to a recovery by dipping into my clients' accounts'," said CTV's Stephane Giroux.
"He just fell deeper and deeper into the hole to the point where he was not even reinvesting the money."
The Crown said Jones kept $13 million to maintain his lifestyle and returned $37 million to clients instead of investing it.
Boro said Jones delivered an 8 per cent return.
"When you gave him $10,000, the next year you got $800 back of your own money," said Boro.
"So it's not hard to figure out that yes, he did take some of the money but the majority of the money went back to the victims until there was no more money."
Boro suggested that some of Jones' clients might have actually made a profit from the Ponzi scheme, though he didn't provide details.
Scheme fell apart
Jones was charged at the end of July with four counts each of fraud and theft involving former clients.
His wife Maxine, who has claimed she had no prior knowledge of his financial misdeeds, has filed for divorce. His brother and other relatives were not present in court Friday, and they no longer talk to him.
Both he and his financial-services company have been declared bankrupt. Jones had been largely underground since his initial court appearance.
Some of Jones' former clients have helped found a fraud victims' rights association.
The group has been lobbying all levels of government for tougher laws governing white-collar crime.