“He can rot in hell,” said Bevan Jones of his brother Earl Jones who today was sentenced to 11 years in prison for his $50 million Ponzi scheme. And his brother’s emotional remarks were the only ones heard today as the verdict was handed down.
Jones never invested a cent of the money he collected from his former clients, the Quebec court heard during the criminal proceedings against him. Rather, in classic Ponzi form, Jones used some of the proceeds to continue the illusion that he created so well and in which many people their life savings. None of the money has been recovered.
Today, I received a call from a reporter with the CBC regarding Jones sentencing. Her questions centered around what Jones might have been thinking and if he ever saw an end game other than prison. She posed those questions of me because, I, like Jones, (not proud of what I’m writing next) too created a Ponzi scheme which left a trail of victims. (Today, some 24 years later I am a business ethics and fraud prevention expert - helping businesses and individuals connect the dots between choices and their consequences).
While what I did in the mid-eighties pails in comparison to Jones and Madoff, the reality is fraud is fraud and theft is theft. One cannot justify victimizing someone else. Yet, as evidenced over the past two years…this fraud has come to the forefront almost daily now. So, her questions were appropriate – like, what was Jones thinking?
Three things come into place for a fraud to occur: NEED, OPPORTUNITY and RATIONALIZATION.
Now, I can’t begin to predict what Jone’s NEED was, but I suspect that somehow his NEED was beyond the simple NEED for money. Rather, I suspect that his need was emotionally based. Madoff, for example, didn’t need the money…he legitimately could earn a handsome income from his legitimate investment advice. Rather, Madoff seemed to have the need to be RIGHT. He could not admit that he was fallible. To Madoff admitting that his investment didn’t always “pay off” would be too difficult to swallow. Hence his need was emotionally based. Take to the bank, Jones was likely feeling something that triggered an emotional need when his fraud began.
A report today states:
Some of the victims included Jones’s own relatives, who are no longer speaking to him.
“None of us will ever be the same,” said Bevan Jones who, along with his wife Frances Gordon, was fleeced out of $1 million by his brother. Jones said he would never forgive him for what he’d done.
Both Jones and his financial-services company have been declared bankrupt. He’s been shunned not only by his friends and relatives, but his wife Maxine has also filed for divorce.
Jones saw OPPORTUNITY by taking advantage of his close friends and family. In my earlier discussion the reporter asked about how or who typically was defrauded. My answer, those closest to the fraudster. Most of the time OPPORTUNITY is found in those closest to you – those who trust you! Now, as a word of caution, if you’re considering investing your retirement…don’t do it with those whom you know best. Rather, invest with those with whom you have a professional relationship and healthy skepticism.
So, she asked me, “Who did you victimize?” Unfortunately, my response was typical of those who have defrauded others – “I victimized those clients who were closest to me and trusted me the most.” As I spoke those words I still feel pain today for what they endured at my hand. Now…to set the record straight, I did make complete restitution plus interest, but that does not justify what I did and will never erase the memory and feeling that those friend and clients felt when I had to tell them that I, their trusted advisor, was nothing more than a liar and a thief.
Jones once lived in the lap of luxury, with several high-end homes in trendy locales. He was a pillar of the community, active in the church, local charities and amateur sports.
The most difficult part for most people to comprehend is the question, “what did you think would happen?” To rational individuals who clearly see the difference between right and wong…it is clear that Jones choices could lead to no where but prison. Yet, when one begins to RATIONALIZE one’s behavior, the very act of RATIONALIZATION creates and illusion and the longer the deviant behavior goes undetected the stronger the illusion becomes until eventually the ILLUSION becomes REALITY.
The reporter asked, “What did you think would be the outcome?” Fair question. As I thought back for a moment, the answer became crystal clear. At first I convinced myself that I was borrowing money, not stealing it. (We all know that money taken from someone without their consent and knowledge isn’t borrowing!) What I did was theft…! Yet, at the time, I went to great lengths to create the illusion that it was a loan. When I put the stolen money back – gave it back to its rightful owner, I solidified the illusion by RATIONALIZING that my actions were consistent with that of borrowing money – a loan. The illusion was set and RATIONALIZATION established. Therefore, as time passed and I stole more, I could more easily convince myself that I was “only borrowing”. A lie, but one that I believed till…
One of her last questions, “So when did you know?” Each of us…Madoff, Jones and yes, Gallagher, had to face the day when the illusion burst and reality came blindly into view. In most every case, it is when someone (or perhaps a group) want their funds and you come to realize – you don’t have the funds…in fact, you never did. That’s reality…
Today…Jones faced what I faced now some 16 years ago. I now what it’s like to spend time in federal prison. Jones is now experiencing the consequences of his choices. And, while the Canadian legal system would have Jones eligible for Parole in 2011, his life has changed forever…although I doubt enough for those he victimized to feel any comfort.
Crown prosecutors and Jones’s lawyer jointly recommended a sentence of 11 years, which Judge Hélène Morin handed down.
“The accused not only robbed the victims of their money, he robbed them of their freedom and self-esteem and of a decent life they expected in their retirement,” Morin said in her comments before delivering the sentence.