Earl and Maxine Jones pocketed up to $70,000 a month right up until Mr. Jones's investment company collapsed, bankruptcy officials say.
But the forensic accountant heading the search for $50-million in vanished investor capital says Mr. Jones knew his financial house was crumbing long before the money disappeared.
The Joneses lived a high-flying lifestyle, spending $30,000 a month on air fare, meals and hotel rooms, according to Gilles Robillard, the accountant investigating the collapse of Mr. Jones's company. They also made substantial charitable donations, he said yesterday.
Mr. Robillard described Maxine Jones, who has denied knowledge of the scheme, as Mr. Jones's "best-paid employee," although he has yet to confirm that she worked there. She was a regular recipient of $10,000 cheques written from the same account used to pay supposed interest to investors, he said.
Ms. Jones did not respond to interview requests yesterday.
A judge declared Earl Jones Consultant and Administration bankrupt yesterday, a formality that will allow Mr. Robillard, acting as bankruptcy trustee, to obtain search warrants and question witnesses under oath.
Mr. Jones faces eight charges of theft and fraud - the first of many charges expected out of a provincial police investigation.
Mr. Jones appeared to be preparing the ground for the collapse of his business, cashing in his assets long before the money ran out.
In 2006, Mr. Jones borrowed $800,000 against his already mortgaged homes, records show.
In January, 2009, he liquidated a long list of personal investments, including his RRSP, equity investments and a life insurance policy, Mr. Robillard said after the court proceeding.
"He's been seeing this coming for quite a while," he said.
Mr. Jones opened bank accounts in Ireland and Bermuda, two popular offshore destinations to hide money, according to Neil Stein, a lawyer acting for investors.
Half of the 60 bank accounts linked to the Joneses have been examined, and less than $50,000 found, Mr. Robillard said.
Instead of proper corporate records, Mr. Robillard said he found balance sheets riddled with "all kinds of false representations."
"There are two things that could have happened. Either the money was stolen and it's sitting somewhere, or it was spent. He was paying returns of 10 or 12 per cent. If he wasn't investing the money, he was draining capital."
Mr. Robillard, whose firm, RSM Richter Inc., is the bankruptcy trustee, said he's pieced together a rough sketch of the firm's final year.
The balance in the company's bank accounts hovered near $200,000 as Mr. Jones covered payments to some 150 investors. Every month, he made deposits from undisclosed sources to cover the cheques. The bulk of investor capital was already gone.
New clients, whose fresh deposits allow payments to investors and are the lifeblood to Ponzi schemes, were rare, Mr. Robillard said.
Mr. Robillard has confirmed that the Joneses own at least two condominiums, but a record search links them at least four properties valued at more than $1.6-million.
Ms. Jones is listed as trustee or co-owner with her husband on all four properties.
One condo on Lakeshore Drive in Dorval, in Montreal's West Island, is listed in the deed under Mr. Jones and Ms. Jones's maiden name, Maxine Heayberd. The couple bought the property for $370,000 in 1999.
They also bought a condo in the resort town of Mont-Tremblant, north of Montreal, in 2003 for $334,640.
Both Quebec properties are heavily mortgaged.
The couple took out a $230,000 mortgage to buy the Dorval condo. They re-mortgaged it in 2000 for another $230,000, then again in 2006 for $558,750.
The Mont-Tremblant condo was also mortgaged in 2006, for $239,000.
The Joneses are also linked to two properties in the United States, one in Palm Beach County in Florida and the other in the Cape Cod area.
In 1992, they spent $140,000 (U.S) to become co-owners of a condo unit at the Newth Gardens Condo Association in Boca Raton, Fla.
In addition, in 1997, Ms. Jones bought a condo on behalf of a trust for $162,000 (U.S.) in Hyannis, Mass. The home is part of a residence for adults with learning disabilities where the couple's eldest daughter, Kimberly, lives.Report Typo/Error
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