Canada
investment adviser swindled investors $50 million
Canada investment adviser accused
of Ponzi scheme
Mon Jul 13, 2009 5:05pm EDT
By Pav Jordan
TORONTO (Reuters) - More investors said on Monday they were victims
of an investment advisor whom they allege ran a so-called Ponzi
scheme similar to the one that landed U.S. fraudster Bernard Madoff
in jail for life.
Bertram Earl Jones, who won clients through word of mouth and was
not registered with securities authorities, allegedly swindled investors
out of as much as C$50 million ($43.5 million), according to one
of Canada's top securities regulators, Quebec's Autorite Des Marches
Financiers.
Most of the investors were from the French-speaking province of
Quebec, although others were from elsewhere in Canada and the United
States, the regulator said.
The alleged scam was discovered only last Wednesday, after investors
alerted authorities that checks were bouncing and Earl Jones was
not answering his phone or his e-mails.
"If you are calling regarding your account at Earl Jones Consulting
and Administration Corporation, the company is not in a position
to emit your funds at this time. You will hear from them within
30 days," the message on the answering machine says. "In
the meantime phone calls and mail cannot be answered. This message
was registered on 10 July 2009."
Quebec regulators have frozen Earl Jones's accounts and say they
believe he is on the run. Earl Jones had no apparent legal representation
making statements on his behalf.
The allegations against him have not been proved in court.
"He's not in Montreal, he's not at his condo in (resort) Mont
Tremblant," said Sylvain Theberge, a spokesman for Autorite
Des Marches Financiers in Quebec, the securities regulators in the
province.
"This morning we discovered new accounts and we already asked
the authorities to freeze them. I received a call just this morning
from somebody in Vancouver."
Regulators said there was little money left in the accounts they
have discovered so far.
Investors who contacted Quebec regulators described a scheme in
which Earl Jones allegedly used funds from one investor to pay guaranteed
minimum returns to another.
Arch swindler Bernard Madoff was sentenced late last month to 150
years in prison -- the maximum penalty the judge could give him
-- for "extraordinarily evil" crimes in Wall Street's
biggest and most brazen investment fraud.
Madoff, the former nonexecutive chairman of the Nasdaq stock market,
is believed to have bilked investors worldwide out of as much as
$65 billion. He pleaded guilty to 11 charges including securities
fraud, money laundering and perjury.
Theberge, of the Quebec regulator's office, said Earl Jones' alleged
victims were mostly elderly investors who depended on his monthly
checks for their income.
"It's not clear what exactly led to the start of all these
calls, but we had nothing on the case before (Wednesday), and the
police also received calls. From that moment we could tell that
something very strange was happening," Theberge said. http://www.reuters.com/article/domesticNews/idUSTRE56C65620090713
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