Earl Jones: In Trust: Discussion
He was charming, generous and, when it came to suggesting that friends and family invest with him, he was totally convincing. So convincing, that for more than two decades Earl Jones managed to run a Ponzi scheme that swindled 158 investors out of $50 million. How was he able to get away with the scam for so long, and all the time maintaining a luxurious lifestyle for himself? Hana Gartner talks to the forensic accountant whose task it is to follow the money trail left by Jones. And she talks to two of Jones' victims: one a widow who regarded Jones as a virtual family member, the other, one of Jones' own brothers.
Originally broadcast on February 5, 2010 | Comments 26
I am always amazed that people will put their entire financial resources into the hands of a third party. The potential for malfeasance is clear.
I would recommend that anyone who has a savings account, particularly if they are investing in equity or other financial instruments for retirement takes the time to do their own due diligence and not think for a moment that any financial advisor can be relied upon without some safeguards. After all, this is the sum total of your life!
I don't understand why the Government could not pass a Justice Bill , that would confiscate any and all property and bank accounts and any other thing they can find owned or given away by the convicted Felon . One law to this effect would make that person think twice . Hundreds of people have no income , and he only get a bit of jail time and then he can retire, no , take everything from him and if he gets out of jail , then he will have to collect cans to earn a meal .
Ron Flower Winnipeg
— Posted on February 25, 2010 05:32 PM
This man RUINED the lives of HUNDREDS of lives simply by taking away their retirement and investment funds. Where are those funds, and is any money going back to the rightful owners? If not, why not? While Jones "languishes" in jail I'm sure he isn't in any peril, unlike the thousands who are now impoverished by his deceit, greed, and dishonesty.. Twelve years in jail for something he DID do! He will be out in good time to spend the rest of the ill-gotten dollars he stole from people who will die in poverty, thanks to his dealings. To say nothing of those who will be unable to protect their health without extra money to pay for the protection. Who cares about them? Who is getting them some retribution? Certainly not Earl Jones' family - they are enjoying their lifestyle.
If I bounced a twenty dollar cheque or signed a cheque that wasn`t mine ... RBC would have caught that. I would start looking to see how much money the bankers are making and where they vacation. What`s that saying?! FOLLOW THE MONEY!
— Posted on February 19, 2010 12:36 AM
Re Earl Jones story and identification of who else bears responsibility: Why is there no reference to Revenue Canada's Role? income tax collection and revues/audits. Mr Jones or his company certainly were spending money that had to come from somewhere there are federal regulations that require banks to report money movement over cetain amounts especialy in personal bank accounts ($10,000 now lowered to $5,000 re terrorism concerns). Forensic audits would identify if any T4 T5 documents were issues to Earl Jones or Earl Jones company. Income Tax reports would be required to be submitted and income taxes paid as required to the federal and provincial governments. The Government agencies monitoring these returns are the watch dogs for the canadian tax payer to ensure all appropriate taxes are paid/collected from income subject to tax as define by law.
Given Mr Jones was not earning his money but rather stealing it I wonder why the Federal and provincial governments who received and benefited from the taxes are also guilty of sharing in the proceeds of crime ( money stolen from clients of Earl Jones) and as such be required to compensate the victims ( Earl Jones clients. Is there not a need to investigate the Revenue Canada reports relating to Mr. Jones yearly tax submissions. He admits to committing theft and that the money stolen was used by him as if it were earnings eg paid salaries and purchase items that were used to perpetuate his fraudulant image as a successful investment consultant. If this case were prosecuted as a fraud against the Governments of Canada and the province of Quebec then every asset bought or purchased by the money stolen by Earl Jones would be consudered proceeds of crime and seized as such.
Revenue Canada should have been able to identify Earl Jones criminal activities through audits of his yearly reports, Provincial regulators should also have been auditing these types of files for validity as well as accuracy, We all know that the Government agenies are primarily interested in the accurate and correct reporting of moneies earned and taxes to be paid as the Governments are the direct beneficiaries, interesting that they use the Criminal Code to prosecute those who do not pay required taxes.
Given that Mr Jones never actually earned any of the money he stole over the 20 some years he perpetrated his fraud, then all and any taxes he paid over this period is money that did not constitute income and should be returned to the clients of Earl Jones. The Governments of Canada and Quebec , in my opinion, legitimised Earl Jones when they accepted annual income and provincial taxes in any form that came from his claim of operating a business, for example receipts for any charitable donations made with stolen money from clients submitted on income tax reports imply that the money being donated was legitimate when in fact it wasstolen money to begin with. If nothing else Earl Jones should be investigated for Fraudulantly reporting income that he did not earn to create and support a personal image of legitimacey that he used to "Con " his clients.
Joey Davis and his committee need to be informed that they may have a criminal/civil case against governments at all levels that allowed Earl Jones to operate for such an extended period of time as a fraudster while accepting / legitimising him as a bonefide business man through their collection/receipt of taxes, fees etc.
The Fifth Estate could have/ should have presented the perspective that Government at all levels had a significant responsibility in this case and any others like it.
Hana mentioned that the widow of his former boss now has to manage on a $500/mo government pension.
Assuming that the widow is already a senior, would she not also be eligible for a combination of CPP/QPP (her own and/or survivors' pension) on top of OAS? And if not, wouldn't the GIS then kick in?
I wouldn't want someone to unwittingly live in poverty.
— Posted on February 15, 2010 05:23 PM
I was extremely disappointed in the quality of this report. Why was nothing mentioned about the three finacial scams in Quebec. Norbourg, Norshield and Earl Jones. Where were the Provincial Regulators? Should this not be their role to ensure such scams do not occur? What a disappointment, the lack of research on the part of "The Fifth Estate", very unusual of your program.
— Posted on February 9, 2010 10:02 PM
Overly sensationalistic. Too much emphasis on glitzy photo shots of unrelated retail stores, cars and homes; too short on substance. Pillar of the English community?..not...other than his close friends and clients, nobody had heard of him before this scandal broke. The Royal Montreal Golf Club is not the most expensive, nor the most exclusive golf club in North America. These types of sensational misstatements put the rest of the article's veracity in question. Particularly bothersome was the vast array of forensic accountants and lawyers, complete with flashy Rolexes, who will get their $500/hour paid from the proceeds, long before any of the bilked investors. Overall impression C-
@ Gary Thomas. If it was your life savings, you would probably revise your comments. Earl Jones was doing this ponzi scheme for over twenty years. He bilked friends, the widow of his long-time boss and even his own brother. He (Jones) doesn't have any regard for anyone but himself. I'm no Freud, but Jones sure seems to have some traits of a sociopath.
— Posted on February 8, 2010 12:56 AM
People really need to investigate the credentials/references of financial advisors. Most operate under an umbrella financial house that does offer insurance protection and has compliance officers and checks in place. He is no different from the flim flam man of the old west. Banks go by their rules from the forms to open the accounts and are not in the business of policing individual accounts unlesss it is going to cost the bank some money. Also they went along with his character who obviously fooled them. It comes down to old fashioned buyer beware because this is not going to be the last ponzi scheme to surface. I feel bad for the investors but you should never hand over complete control to one person or put all your eggs in one basket.
As a seasoned professional(CA,CFA, CA, CIM) who specializes in protecting clients from making the wrong choices as it relates to the management of their affairs, assisting them in the due diligence of selecting highly qualified advisors (i.e. verifying experience, professional credentials, references, etc) and then monitoring the performance, fees, etc. I would love to see you do an indepth segment on how clients can protect themselves from being taken in by other 'Jone's'. The professional self-regulating organizations are making inroads with a goal of protecting the public. But the media can help investors become better informed about why they should work with accredited professionals - perhaps explaining the credentials is a good start, including a discussion of who is a fiduciary and who is not. RFP, CFP, CFA charterholders, CA and other accredited professionals in the financial sector must abide by codes of conduct & ethics and mandatory professional development. If the public was better informed about these and were aware of other resources to help them select advisors perhaps they would be less vulnerable to crooks and dishonest advisors. It would also help to educate the public about what they should expect from an advisor with regard to business structure, reporting, access to funds, qualifications, services, etc. The more we talk about this the better. There will be more Jone's,I fear. Just as an aside, i have reported unregistered advisor to a regulator and was told that they can't do anything (other than send a letter to request that they register) until someone losses money! So, it really is so important that the public is educated. Thank you.
— Posted on February 6, 2010 08:05 PM
Those victims were greedy on the first place. And Hana Garther and her team failed to stress this part of the story. There were several other false statements in the story as well.
I am not defending Earl Jones, I am just stressing that this was again not balanced reporting.
— Posted on February 6, 2010 12:44 PM
I would like to thank the CBC and the Fifth Estate journalists who managed to prove on National Television that the RBC is lying through its teeth when it comes to its blatant negligence and laissez-faire.
The actors/victims you interviewed are out to scam the RBC bank. I do not believe a word. THEY ARE ALL SCAMMERS NOT VICTIMS.
M. Diva Montreal
— Posted on February 6, 2010 07:52 AM
Lets not now start blaming RBC full out, lets not start glamorizing Earl and remembering how charming he was once upon a time. This is just alleviating any remote feeling of wrong doing Earl might be feeling and re-fueling a sociopath's flame.
I was glad to see this episode but it left me wondering; even if RBC made Earl's Ponzi scheme easier to carry out or not, what is 50 million to this bank corporation as a whole?? NOTHING.
— Posted on February 6, 2010 03:08 AM
As a former Banker, I am dismayed as ever by the continuing evidence of Bank malpractice in RBC accepting third party checks for Deposit to this Con Man's account.
Good luck to the litigants.
Disappointed that HG did not ask that hard Question of the RBC rep interviewed. Makes the piece all hyp for the Media.
Banks have been sub-contracting so much of their process as to make a complete mockery of the profession and their
recent pre-occupation with management & spinning of dollars a disservice to Society
— Posted on February 6, 2010 01:34 AM
I feel CBC has totally missed the story here. Your whole approach is completely lazy and predictable, and boring I must say. This story is not about a cheater. At the very least it's about someone who was deluded, who didn't understand how things work but was very high functioning and thought he did.
There's a lot more to this: about how the banking and investment system is killing Canadians. Ponzi scheme? Not different essentially from how Canadian banks operate. They take your money, use it and charge you to at every turn to make withdrawals or do anything else. The trickle back of interest is a joke. It's ridiculous.
As our national public media, CBC should be focusing on the banking system, why Canadians are so in debt, why nobody can effectively save and who is to blame. I strongly feel its a fundamental failure of the banking system.
Earl Jones was working with the talent and tools God gave him, making (albeit stupid, perverted) sense out of a totally screwed up system. Don't get me wrong, Jones made a mess and a lot of people got hurt. I feel bad for them. We all do. It shouldn't have happened. But I sincerely don't believe Mr. Jones was malicious intended like you are saying. He was caught up in something that made a certain kind of sense in a world where, let's be honest, everything financial thing is pretty well fd up. Come on CBC, you are smarter than this. You can really help Canadians sort this out, but it's going to take some very hard, smart work on your part. Peter Gzoski and Barbara Frum are pitching for you from on high. We are all. Don't let us down.
I consider Ms Gartner's piece on Earl Jones' to be a biased, incomplete, and over-simplified report. Mr Jones' obvious guilt aside, I take issue with Ms Gartner's reliance on the all-too-convenient and popular conclusion that big business, a.k.a. the big bad banks, are as villainous as those individuals who commit these (sadly) increasingly common financial frauds. This demonstrates a lack of journalistic effort, courage, and integrity. It takes courage to challenge conventional wisdom, even when this means that sometimes you must point out the consumer's role and responsibility in their own demise. This is the epitome of laziness and unoriginality and this piece amounts to nothing more than a one-sided, cliched, hapless victim story.
Did any of Mr Jones' clients bother to ask for proof of his credentials? Did they bother to ask for quarterly/annual statements (provided by all financial advisors)? Presumably Mr Jones was offering different types of securities to his clients - did anyone check with the provincial securities regulators to see if Mr Jones was in fact registered and licensed to sell securities? A few precautionary and simple measures taken on the part of his clients may have prevented the eventual outcome.
Ms Gartner either neglected to ask these questions during her interviews, or if she did, the answers provided by Mr Jones' clients didn't fit into the theme of her story - Mr Jones knowingly bilked his clients out of millions of dollars, and the big bad banks sat idly by and watched it happen. And to suggest or imply that RBC KNEW that their client (Mr Jones) was committing fraud based on his account activity, and then CHOSE to do nothing because RBC itself wasn't a victim of this fraud is not only completely absurd, but hinges on slanderous and irresponsible. In that moment, it became clear that Ms Gartner's intention was to malign and indict RBC for the sake of sensationalizing the story.
Implying that RBC was negligent in not verifying cheques written for large amounts is ridiculous given the disclosure in the piece that Mr Jones was using the alleged "personal trust account" as a business account. Transactions on business accounts can be in the millions .... a $60,000 cheque is potentially an everyday event that would not be flagged under normal circumstances. A forensic auditor in the story goes on to state that verifying each and every cheque is simply not common practice by ALL financial institutions, not just RBC.
During this story, Ms Gartner had an opportunity to interview Mr Jones' brother and sister-in-law and during the piece Ms Gartner says, "it never occurred to them to question what Earl Jones was doing with their life savings". Mr Jones' sister-in-law then goes on to give some details of the investment - an opportunity to earn a GUARANTEED 8% rate of return. This didn't sound too good to be true? No one asked any questions about this?? She then says near the end of the piece, "I should've been more diligent, but I wasn't. I just trusted Earl completely ..."
This irresponsible report is predicated on the assumption that financial institutions are the only ones capable of recognizing red flags, and are therefore the only ones culpable. We are further yet to believe that NOT ONE of the 200+ clients that chose to invest with Mr Jones had ANY suspicions at ANY time?? Come on! All assumed that they had individual trust accounts with individual account numbers, and yet no one asked for individual statements of these accounts? Financial statements are a key component in unlocking the details of any fraud, yet no mention of the victims' statements was made in this story.
Holding victims accountable means you no longer have a sensational victim story, and I guess that just doesn't sell. What does sell is to vilify financial institutions - the same Canadian financial institution that is globally top-rated, and managed to weather the storm of the recent global melt-down.
When someone is ready to address some of the statements made by Mr Jones' clients that started with, but not limited to:
"I never realized ... ", "I never thought ...", "I assumed ..." etc, then I'll consider this investigative journalism. Until then, I'll chalk this up to irresponsible reporting by someone who clearly had a deadline to meet in light of Mr Jones' Feb 15th sentencing.
R. B. WPG
— Posted on February 5, 2010 11:56 PM
What licensing and regulatory controls were in place in Quebec at the time Mr. Jones operated his Ponzi Scheme? As well, did auditors prepare his corporation's financial statements? I would like to see the Fifth Estate investigate these questions. Who else, besides the bank, could have or should have known things were not right?
Abby Bushby Toronto
— Posted on February 5, 2010 11:36 PM
I thought the episode was very good, especially the comic relief at the end where his former employee Nancy Wynands explains how his own family and friends suspected nothing so why would she have??? Duhh Nancy - you were working for the guy! You had access to his files, you were making deposits and collecting huge bank drafts, you were fielding calls from clients with bounced cheques! Amazing!!!!
— Posted on February 5, 2010 10:45 PM
I have been following this story somewhat and looked forward to the report. Was so dissapointed, no factual evidence in terms of pictures or statements other than the ones from his brother.
The show was boring and did not reflect much of the victims outcome.
RBC should be held accountable for the terms and usage of the business account and should perhaps monitor transactions more closely. Had the bank done their job, maybe there would of been fewer victims and the fraudster here could of been caught earlier.
— Posted on February 5, 2010 10:29 PM
I am wondering why there was little to no mention of this person's wife and children and their role and responsibility in his illegal actions. They should also be held accountable for perpetrating this crime. How could they not know something was going on ?
As well... I also believe that the Royal Bank should be investigated thoroughly and to the full extent of the law.
I also believe that this "person" should be forced to face those who he wronged and he should be publicly shamed.
I would further investigate and or probe THE ROYAL BANK because all bank branches have to meet their revenue targets. Since he did his business through a small RBC branch, that specific branch could have easily let things slide especially if they were struggling with meeting their targets or lack of. THIS RAISES A BIG RED FLAG!
I've been following the story of this fellow since it broke last year. Few people know that most if not all of the investors actually were receiving high interest payments on their 'investments' on a regular basis like clockwork. The bulk of the fifty million dollars actually went back to the investors themselves...I believe the figure was something like 35 million dollars, according to the lawyer representing Mr Jones.In fact, many made out in the end with more than their initial investments paid out over time in those payments, but if your principal investment has been pilfered I suppose it's little solice.
It doesn't excuse this guy in the least, but it does bring to light how perhaps he began spending a little here and there intending to pay it back, then more, and more, and finally spiraled out of control to the point where he was "doomed anyway" so why not keep going?
It's a pity that he wasn't reigned in earlier so these people's savings could have been protected. But I'm not of the mind he's an inherantly evil person. Witch hunts and mob mentality can really shape a story too far to one side. Seeing this guy physically mobbed outside the court house is disgraceful.
Gary Thomas Montreal
— Posted on February 5, 2010 06:46 PM
The problem of alleged thieves like Jones is they use weaknesses in the system and it needs to be approached from mostly the regulatory but, the consumer side, as well.
Quebec authorities say they did nothing about Jones because he wasn't registered as a financial advisor but, he was in the Yellow Pages and easily found if they had made the effort to do so.
In many industries there is an underground economy including financial where there are people operating in the grey areas; home renovators, ghost immigration consultants, bloggers calling themselves journalists.
Regulators need to apply their powers more.
Consumers can help by asking the "Mike Holmes" question: can I see your licence?...or professional association membership?...or E&O insurance?
B. Jackson Ottawa
— Posted on February 5, 2010 08:02 AM
Can't wait to watch the whole episode. Thanks to CBC for covering this story from day #1.
Joey Davis Montreal
— Posted on February 3, 2010 06:22 PM
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