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.
Quebec officials are working with Canadian police and U.S. regulatory authorities to search for the investment advisor.
Editing by Peter Galloway