Montreal adviser ran C$50m Ponzi scheme, regulators say

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Dominique Jackson, a student at the Community College of Denver, says Montreal financial adviser Earl Jones persuaded her to invest her inheritance with him and sell US stocks. Now she wonders if she’ll ever see the money again.

Canadian regulators say Jones may have operated a Ponzi scheme that defrauded at least 50 clients including Jackson of as much as C$50m ($45m) before he disappeared.

“This has all the hallmarks of a Ponzi scheme,” said Sylvain Theberge, a spokesman for the Autorite Des Marches Financiers, the Montreal-based securities regulator for Quebec.

Jackson, 34, joined relatives of other clients at a hearing in July in a Montreal court room. Jackson’s money, an inheritance from her father once worth several hundred thousand dollars, may have disappeared along with Jones, leaving her with mortgage and car payments and unpaid credit card bills, she said.

“I’m p****d off,” said Jackson, an Oregon native who was visiting family in Montreal. Her mother, Christiane, had cash accounts worth more than C$2.5m with Jones, according to a petition filed with a Quebec court.

Jackson, who is job hunting, relied on regular cheques from Jones to pay her bills. She’s still waiting for last month’s payment. “I didn’t get my cheque, and it was a chain reaction.”

Jones ran his unlicensed business from an office in Pointe-Claire, a municipality of Montreal, said Theberge. The regulator announced on July 10 it was freezing Jones’s bank accounts after receiving complaints from investors in Montreal and other parts of Canada and the US.

Other cases

The Montreal clients, many of them retirees who knew Jones for decades, say they may wind up like hundreds of US investors who lost money after trusting long-time financial advisers.

Bernard Madoff is serving 150 years in prison for defrauding investors by using money from new ones to pay off old ones. Prosecutors said Madoff told investors they had as much as $65bn with Bernard L Madoff Investment Securities.

Financier R Allen Stanford has been accused of swindling investors in a $7bn fraud. Stanford has denied wrongdoing.

“There were some funds in a bank account, but we’re talking nothing major,” Gilles Robillard at Montreal-based RSM Richter, the court-appointed interim receiver, said in an interview.

“As opposed to what people are owed right now, in the bank accounts there was an insignificant amount.”

Robillard is trying to determine if Jones had any other accounts at banks or other assets, and is taking a document inventory. Jones’s general ledger — the list of offsetting credit and debit accounts — is missing, said Robillard.

Not returning calls

Calls to Earl Jones Consultant and Administration Corporation weren’t returned. A voice message said: “If you are calling regarding your account with us, we are not in the position to remit your funds. You will hear from us after 30 days. In the meantime, phone calls and mail will not be answered.”

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