The unlicensed financial adviser accused of fleecing his clients out of tens of millions of dollars through an alleged Ponzi scheme has been freed from police custody, after a brief court appearance on Tuesday afternoon.
Earl Jones, 67, was taken into custody on Monday after he surrendered to Quebec police at his lawyer's office in Old Montreal.
He had been in hiding for several weeks, since allegations surfaced that he may have defrauded financial clients out of as much as $50 million.
After spending the night in a holding cell, Jones appeared in a Montreal court wearing handcuffs and was arraigned on four counts of theft and four counts of fraud.
A few investors in Jones' firm attended his court appearance. He didn't enter a plea but was freed from police custody on $30,000 bail, and ordered to appear in court next on Sept. 28.
There are several conditions to Jones' release. He's barred from leaving the province of Quebec and must surrender his passport. He also can't speak to former clients or oversee anyone else's money.
Further charges may be laid against Jones as the criminal investigation into his investment business, Earl Jones Consultant and Administration Corp., proceeds.
Earlier on Monday, Jones' lawyer said the police may not be prepared yet to file additional charges.
"They can believe it, they can see it, but until they have that paperwork ready I don't believe that my client will be charged" with further counts, Jeffrey Boro said.
A number of families began complaining in early July that they couldn't access funds they had entrusted to Jones' investment company. One of them was the Nelles family, which had a longstanding relationship with Jones and had invested much of their life savings with his firm.
"I don't feel very optimistic about us recovering the money," Ginny Nelles told Canada AM. "The moment that I learned that Earl had vanished and had vanished with the money, my feeling was that's it, it's gone."
A statement issued by Jones' family last week claimed they knew nothing of an alleged scam and that they had lost money as well.
There may be more than 200 victims of the suspected fraudulent scheme.
Quebec's financial securities regulator (the Autorite des marches financiers) has alleged that Jones operated a Ponzi scheme in which investors were paid by their own money or money from other investors, rather than from profit earned in the stock market or other investment vehicles.
"Tracking down the money is very difficult," in such cases, forensic accountant Al Rosen told Canada AM. "Pursuing the cases are usually very expensive. Most of the investors shouldn't have high hopes of recovering much."
Earl Jones Consultant and Administration Corp. is expected to be declared bankrupt in a Quebec courthouse on Wednesday, paving the way for the company's assets to be seized.
Alleged victims have also scheduled a rally for Wednesday outside the Montreal courthouse where the bankruptcy hearing will take place.
Organizers of the rally say they are asking for stronger rules governing financial planners and tougher sentences for white-collar crimes.
With files from The Canadian Press
