MONTREAL – After weeks of keeping a low profile, a self-described Montreal financial adviser alleged to have bilked clients out of millions of dollars emerged from hiding and into the waiting arms of police Monday.
Earl Jones, 67, kept his eyes fixed on the ground as police detectives took him into custody.
He stayed silent when questioned by a Canadian Press reporter before being whisked away in handcuffs to provincial police headquarters.
He is expected to appear in court on Tuesday on what his lawyer says will be fraud and theft charges.
Quebec’s financial securities regulator, the Autorite des marches financiers, has alleged Jones may have swindled investors out of between $30 million and $50 million.
Police said Monday they were talking with a man who had turned himself in and “who has been the subject of recent complaints from investors.”
The securities regulator has said the alleged fraud has all the hallmarks of a Ponzi scheme.
A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors rather than from any actual profit earned in the stock market or other investment vehicle.
Such a scheme usually offers abnormally high returns that other investments cannot guarantee to entice new investors. But the scheme usually collapses because the returns require an ever-increasing flow of money from investors to keep the fraud going.
The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903. Ponzi spent some time in Montreal before applying the fraud in Boston.
In such frauds, the victims are often friends, family or members of the same organization.
The Autorite des marches financiers froze Jones’ accounts and those of his company at the beginning of the month, but the accounts were mostly empty.
Alleged victims who have waited for answers for three weeks were hopeful they would get satisfaction when Jones appears in court.
“For the early days, we were just in the dark and we had no idea where he was or what he was up to,” said Joey Davis, whose 78-year-old mother is a Jones client who may have lost as much as $200,000.
“But when he came forward with a lawyer last week, that was a good sign that he was somewhere on the map and I kind of knew then that things would move forward quickly.”
Jeffrey Boro, who is representing Jones, said last week his client was alone, depressed and possibly suicidal. He said Jones left the home he shared with his wife and went underground after he received death threats from irate clients.
A statement issued by Jones’ wife and two daughters last week suggested they knew nothing about the alleged scam and alleges that even they had lost money.
They were not with him on Monday and they didn’t return a call seeking comment.
Nathalie Drouin, a lawyer for the Quebec securities regulator, said the agency is collaborating in what is now largely a provincial police criminal investigation.
Drouin did not rule out the Autorite des marches financiers following up with charges of its own as Jones was unlicensed.
“The priority is on the criminal investigation considering the types of allegations that we’re dealing with here,” said Drouin.
Alleged victims have scheduled a rally at the Montreal courthouse on Wednesday where a bankruptcy hearing will take place.
They are asking for stronger rules governing financial planners and tougher sentences for white-collar crimes.
If bankruptcy is declared by his company, Earl Jones Consultant and Administration Corp., a meeting of creditors would likely be held in mid-August when the value of the assets will be divulged.
Brook Hamilton, whose 75-year-old mother Beverley allegedly lost $350,000, said he’ll be interested to see what Jones faces in terms of charges and whether any money can potentially be recouped.
“Certainly from our family’s perspective, his alleged crimes are pretty horrific and hopefully they are borne out in court and justice is delivered,” Hamilton said.
