Banking on his reputation

By Martin Patriquin - Wednesday, October 28, 2009 at 9:40 AM - 1 Comment

For years, disgraced financier Earl Jones kept his alleged scam operating on little but the force of his reputation. He knew nearly all of his clients personally, rarely missing a birthday or a funeral, and was pleasant and reassuring even as he allegedly bilked them out of their life savings. Many of his former clients are still discovering the extent of the damage. “It’s absolutely incredible that he didn’t get caught,” says Susan Brown, a six-year Jones investor who lost $300,000. His clients included his brother and godson, among many others, as well as his son-in-law, from whom Jones coaxed $150,000 earlier this year—and, as Maclean’s recently learned, legendary hockey writer Red Fisher, who often wove tales of Jones’s prowess into his columns. Jones, he wrote, was a “matchless money manager” and a “superstar investment guru” who “always has been blessed with a talent of knowing a sure-thing investment when he sees one.” (Fisher won’t discuss the matter, but records show he lost a sizable amount of money.)

Jones’s personal and business assets, seized by bankruptcy trustees in August, won’t come close to covering the losses of his alleged victims, thought to be upward of $86 million. So his former clients are parsing the mountains of what they allege are forged cheques, falsified documents and fudged powers-of-attorney, and have found another target: the banks with whom Jones did business over the years. By not paying heed to numerous irregularities in Jones’s financial activities, say lawyers for the former clients, the banks essentially allowed the fraud to continue. “His bankers seemed to trust him as his clients trusted him,” says Ginny Nelles, one of the more outspoken former clients. Continue…

Champagne wishes

By Steve Maich - Thursday, July 2, 2009 at 9:20 AM - 119 Comments

The experts will tell you that most frauds start small—maybe a few hundred bucks pocketed here, a little accounting fudge there—and get gradually bigger over time as the thief warms to the task, and gains confidence. That’s the way it almost always goes.

But Paul Champagne was not your typical fraudster. For one thing, Champagne had no particular expertise in finance. He was a computer engineer, brought in to manage maintenance contracts at Canada’s Department of National Defence in 1992. He was a technical authority, who could tell the bureaucrats how to buy, operate and maintain their computer systems more efficiently, and to save the taxpayer money in the process. For most of his time at DND, he wasn’t even an employee, but an outside contractor. And, up until the day he was fired in 2003, most of his colleagues thought he was doing a great job. Even when he was fired, it was for exceeding his authority in approving contracts that were beyond his position. Continue…

A Textbook Scam

By Andrew Potter - Friday, July 11, 2008 at 9:42 AM - 0 Comments

For years, it has been standard practice in the college-textbook biz to churn out “new editions” of textbooks, even in such slow-moving fields such as formal logic or metaphysics. In fact, in order to even get a textbook contract with most publishers, profs have to agree to produce x-number of new editions within a set period of time — typically, something like three editions in five years.

Everyone knows it is bogus, that the sole purpose of the new edition is to undercut the used textbook market; it’s effectively a tuition surtax on students (or their parents) that gets paid directly to profs and publishers.

Now some colleges in the US are going one better: Continue…