Bertram Earl Jones (born June 24, 1942) is a Canadian unlicensed investment adviser who pleaded guilty to running a Ponzi scheme that CBC News has reported cost his victims "a conservative estimate of about $51.3 million taken between 1982 and 2009". After pleading guilty to two charges of fraud in 2010, he was sentenced to 11 years in prison. After serving four years of his sentence, Jones was released on March 20, 2014.
Early life
Jones was born in Montreal on June 24, 1942, and was raised in the neighbourhood of Notre-Dame-de-Grâce. In his twenties, he worked at Montreal Trust Company, where he was trained in handling estate planning and wills. Beginning around 1979, he started his own investment advising business, though he did not register as a financial adviser with any securities regulator.
Ponzi scheme
The Montreal Gazette reported Jones promised modest, steady returns on investment similar to the scheme by American fraudster Bernard Madoff. However, Jones never invested any of the $50.3 million he raised. He spent $13 million to finance a lavish lifestyle and paid back $37 million to maintain the illusion of the 8% return he had promised. The 158 victims included his own brother and sister-in-law, who lost $1 million.
From July 9 to 26, 2009, he disappeared. CBC Radio One reported on July 16 that unless Jones returned, Quebec authorities would proceed with the insolvency proceedings of his firm in his absence. On July 27, Jones surrendered to police. Earl Jones Consultant and Administration Corporation and Earl Jones, personally, were declared bankrupt on July 29 and August 19, 2009, respectively. The Trustee reported Earl Jones and his wife Maxine (Heayberd) Jones had acquired four properties during the fraud: a lakefront Dorval, Quebec, condominium, a condominium on a golf course in Mont Tremblant, Quebec, and two properties in the United States.
On December 3, 2009, CBC Radio One reported that his Dorval, Quebec condo was for sale for $950,000 as part of the bankruptcy proceedings to partially pay off creditors. All properties were eventually sold, the proceeds paying for the Trustee and legal services. In fact, the creditors did not recover any money through bankruptcy proceedings, as Jones had heavily mortgaged three of the properties to keep his Ponzi scheme afloat.
On January 14, 2010, Global TV Montreal reported that Jones admitted in court filings to having engaged in a Ponzi scheme for at least twenty years. On January 15, Jones pleaded guilty to two counts of fraud. and on February 15, he was sentenced to 11 years imprisonment.
Throughout Jones’ career he developed a vast network of professional and financial liaisons, which included lawyers and notaries, mortgage and insurance brokers, and banks. By his own admission, Jones was an unregistered financial advisor and relied on these business relationships to perpetrate his fraud. While the Crown Prosecutor and Sûreté du Québec investigators could not find sufficient evidence of criminal complicity, pending legal action in the Civil Courts has sought compensation for the victims in the far-reaching fraud.
At the Ponzi scheme’s most basic level, Jones collected money from individuals and estates and then returned some of that money as monthly interest payments. The fraud could only work for as long as Jones kept getting what forensic accountants call "fresh money". The so-called fresh money schemes required Jones to leverage the participation of his professional and financial relationships. Evidence produced in criminal and civil courts indicates Jones obtained the vast majority of fresh money by fraudulently liquidating his clients’ investment accounts and by coercing his clients to obtain mortgages on their homes.
Earl Jones Victims Organizing Committee
Soon after Jones’ fraud was uncovered, the Earl Jones Victims Organizing Committee was formed to assist Jones' mostly elderly former clients. The committee consisted of eight sons and daughters of the former clients and their efforts would receive the backing of Stephen Harper, Prime Minister of Canada. Committee member Joey Davis would go on to be a key spokesperson for the victims, launching a Canada-wide "National Coalition against White-Collar Crime" and play a key role in passing Bill C-59, Abolition of Early Parole Act, ensuring a more lengthy prison term for Jones' crimes. Another committee member, Virginia Nelles, would eventually represent all victims in a class action lawsuit against the Royal Bank of Canada, the primary bank where Jones operated his Ponzi scheme.