Canwest News Service
MONTREALThe first time Maxine Jones said she ever had a problem paying her bills was five years ago a time fr
Earl Jones routinely handed his wife cheques drawn from an "in trust" account – which contained his clients' money – to pay the household bills four mortgages taxes and utilities.
Mrs. Jones told the trustee handling the bankruptcy of her husband's former company that about five years ago during 2004 to 2005 she would sometimes come up short in her bill paying often just covering the minimum monthly payment on some bills.
"Did you speak to your husband about it?" lawyer Neil Stein asked Mrs. Jones during her deposition.
"No because he would say Well next month maybe we will get some more' … have more money to pay the bills whatever it was" she replied.
It was at this point Mr. Jones who allegedly bilked his clients out of about US$75-million entrusted to him appears to have started an aggressive plan to raise more capital.
Documents collected from the alleged victims of Mr. Jones show that the value of mortgages held for his clients was $200000 for the years 2001-03 but shot up more than 10-fold to $2.38-million in 2004-06 and to $2.7-million in 2007-09.
Mr. Jones encouraged some of his clients to remortgage their homes at low rates of interest and invest the money for a higher return for example by lending it to other clients at a rate higher than what the banks could pay in what he called "bridge loans." The average loan was $200000.
Kevin Curran the son of an alleged victim has been helping others get their papers in order and said there appear to be 12 more mortgages held by clients who have not come forward to the victim's committee which means there is possibly another $2.5 million in mortgages that Mr. Jones recommended.
"This crunch time was five years ago when several of his clients were taking their money out to buy houses they drained several million from him" Mr. Curran said.
With these withdrawals Mr. Jones had to top up his operating fund Mr. Curran said. "Earl needed $200000 to $300000 a month to keep the scheme going. "
Nine mortgages were taken out with Maple Trust Co./Scotiabank and 13 mortgage loans were made through the Bank of Montreal in Blainville between 2001 and 2009.
Mr. Jones himself took a $558750 second mortgage on the couple's jointly owned Dorval condo on Dec. 27 2006 and refinanced his and Maxine's townhouse at ski resort Mont Tremblant for $239000 on Dec. 28 2006.
Maxine Jones said she only found out about the Tremblant transaction about six months after the fact.
Mr. Jones is due to appear for a preliminary scheduling to hear his case on Friday at Quebec Superior Court. He was arrested on July 27 and charged on July 28 with four counts of theft and four of fraud. He is free on $30000 bail.
Two previous such appearances were cancelled because his lawyer Jeffry Boro said he had not received all the documents from the prosecution.
Canwest News Service
