Earl Jones, Bernie Madoff & Financial Fraud

[August1991]

Earl Jones “will never be able to live in Montreal again,” Charlie Washer, one of his alleged victims, said Monday after receiving word that the self-styled financial guru had been arrested at the office of a local defence lawyer and secured behind bars.

“I had figured he ran” to an offshore jurisdiction, Washer said of Jones.

Washer had spearheaded a “most wanted” campaign by email that he estimated had reached “200,000 to 300,000 people” in at least 100 countries – going at the chase full force until Jones’s lawyer, Jeffrey Boro, said last week that Jones was in Canada, in hiding.

Montreal Gazette

Sadly, most of these people won't get more than a few cents on the dollar from this guy - if they get that. So, any punishment may seem to be like closing the barn door on the runaway horse.

I disagree.

I think Earl Jones should get the slammer for life, and I think his wife and children should be stripped of all their assets and left destititute - whether they are guilty, participant or not.

Why? All financial advisors should fear the voice of the Lord in their ears. Their families should fear their actions and keep them in line. The punishment meted out to Earl Jones and Bernie Madoff is not about vengeance, or even justice. It is all about sending a signal. And the signal?

The signal is to current and future financial advisors.

The wives and children of other financial advisors will query and wonder - is my husband or father a crook? Will I go to jail because of what he does? The financial advisor will wonder too. He won't be able to rationalize his actions by pretending that it was for the good of his wife or children. Honest financial advisors, and their families, will sleep peacefully.

Property rights are a fundamental feature of the market system, and they are part of what constitutes the rule of law. The State should help protect these rights, particularly financial claims, assiduously.

[jdobbin]

The wives and children of other financial advisors will query and wonder - is my husband or father a crook? Will I go to jail because of what he does? The financial advisor will wonder too. He won't be able to rationalize his actions by pretending that it was for the good of his wife or children. Honest financial advisors, and their families, will sleep peacefully.

Aren't you being a little light on the families? As a voice of the right wing, don't you think they should go to jail as well?

[Bonam]

I think Earl Jones should get the slammer for life, and I think his wife and children should be stripped of all their assets and left destititute - whether they are guilty, participant or not.

Why? All financial advisors should fear the voice of the Lord in their ears. Their families should fear their actions and keep them in line. The punishment meted out to Earl Jones and Bernie Madoff is not about vengeance, or even justice. It is all about sending a signal. And the signal?

The signal is to current and future financial advisors.

The wives and children of other financial advisors will query and wonder - is my husband or father a crook? Will I go to jail because of what he does? The financial advisor will wonder too. He won't be able to rationalize his actions by pretending that it was for the good of his wife or children. Honest financial advisors, and their families, will sleep peacefully.

The ideas of collective punishment, or punishment of one's family, whether to send a signal or not, have pretty much been rejected in Western civilizations. Financial crime is hardly the worst crime one can commit. If it is to be punished collectively, perhaps so should other serious crimes, murder for example? The argument of additional deterrent if one's family will also face punishment is valid for any number of crimes.

If you want to argue the pros and cons of collective punishment I'm sure that could make for quite a thread though...

Also I find it quite interesting that people get more outraged at these types of paper crime than they do with really disgusting criminals like murderers, rapists, gangsters, human traffickers, etc. Madoff seems to have gotten a longer sentence for stealing money than many of the above types of criminals do.

Edited July 28, 2009 by Bonam

[Machjo]

Also I find it quite interesting that people get more outraged at these types of paper crime than they do with really disgusting criminals like murderers, rapists, gangsters, human traffickers, etc. Madoff seems to have gotten a longer sentence for stealing money than many of the above types of criminals do.

It's a reflection of our values as a society, isn't it?

[Jerry J. Fortin]

The ideas of collective punishment, or punishment of one's family, whether to send a signal or not, have pretty much been rejected in Western civilizations. Financial crime is hardly the worst crime one can commit. If it is to be punished collectively, perhaps so should other serious crimes, murder for example? The argument of additional deterrent if one's family will also face punishment is valid for any number of crimes.

If you want to argue the pros and cons of collective punishment I'm sure that could make for quite a thread though...

Also I find it quite interesting that people get more outraged at these types of paper crime than they do with really disgusting criminals like murderers, rapists, gangsters, human traffickers, etc. Madoff seems to have gotten a longer sentence for stealing money than many of the above types of criminals do.

When the people that can afford to invest money get burned the world comes down hard doesn't it! I get a kick out of this kind of garbage, of course they should throw the book at the dipstick and put him away, that is a given. Now what about all of the slum landlords and real estate speculators that prey on the least affluent of society, nothing personal, just business right? What of the sweat shop owners and all the others that take advantage of the little guys in our society, is it time to look at corporate welfare cases yet?

Of course not, those poor folks just don't have anything to say, or anyone willing to listen to them.

[Bonam]

It's a reflection of our values as a society, isn't it?

Not sure what you mean. That we value money more than life? Perhaps so. That would explain why those who steal money apparently now get punished more harshly than those who steal life. Backwards to my values though.

When the people that can afford to invest money get burned the world comes down hard doesn't it! I get a kick out of this kind of garbage, of course they should throw the book at the dipstick and put him away, that is a given. Now what about all of the slum landlords and real estate speculators that prey on the least affluent of society, nothing personal, just business right? What of the sweat shop owners and all the others that take advantage of the little guys in our society, is it time to look at corporate welfare cases yet?

I agree criminals definitely should be punished, whether they are "white collar" or otherwise. I'm just quite perplexed by the way people seem more outraged by crimes to do with money than crimes that are, in my view, far more vile.

[Machjo]

Not sure what you mean. That we value money more than life? Perhaps so. That would explain why those who steal money apparently now get punished more harshly than those who steal life. Backwards to my values though.

Bang on! That's exactly what I meant. And I share your sentiments on it.

[jbg]

Montreal Gazette

Sadly, most of these people won't get more than a few cents on the dollar from this guy - if they get that. So, any punishment may seem to be like closing the barn door on the runaway horse.

I disagree.

I think Earl Jones should get the slammer for life, and I think his wife and children should be stripped of all their assets and left destititute - whether they are guilty, participant or not.

Why? All financial advisors should fear the voice of the Lord in their ears. Their families should fear their actions and keep them in line. The punishment meted out to Earl Jones and Bernie Madoff is not about vengeance, or even justice. It is all about sending a signal. And the signal?

The signal is to current and future financial advisors.

I think that people like him and Madoff should be released, after extensive public announcement, either in Toronto, Palm Beach or Wall Street on their own recognizance. They should be made available to the victims for direct justice.

[Remiel]

Also I find it quite interesting that people get more outraged at these types of paper crime than they do with really disgusting criminals like murderers, rapists, gangsters, human traffickers, etc. Madoff seems to have gotten a longer sentence for stealing money than many of the above types of criminals do.

"Paper crimes" can easily be the kind that steal lives, just as some of the above do. The guy stole 50 billion dollars. That is a lot of pain he caused to a lot of people. On that scale, in some ways I think it is closer to treason than it is to simple theft.

[Jerry J. Fortin]

"Paper crimes" can easily be the kind that steal lives, just as some of the above do. The guy stole 50 billion dollars. That is a lot of pain he caused to a lot of people. On that scale, in some ways I think it is closer to treason than it is to simple theft.

So you folks see his crime as a big deal to society, I guess it was. Many people were harmed by his actions. Much pain and suffering was experienced and he was in fact responsible for these things.

What of the banks who through their own actions become insolvent or the other corporations that become insolvent due to their own actions and cause harm to their investors and clients?

[myata]

My, my let's remember that nobody has yet been injured, or worse still, lost their lives over this, so would a life sentence be really justified to even think of in this context? Dough could be safely kept in the bank (with unlimited default protection by the state now), but these folks wanted a few more %% and as everybody learned in high school, that comes with a bit of an extra risk, i.e no free lunch. It actually played a positive role in bringing the truth home for millions of other investors.

As a matter of fact, having heard some of these stories, I'm starting to think that perhaps the psychology of this crime is not as simple as get the dough and run away. It appears that some of these businesses operated over many years and have good relations with customers and the communities. Maybe over the years the finansists come to think of themselves as unfallable, and when a wrong market strikes they couldn't / wouldn't accept the truth, and run into illusions (or delusions) that would keep the familiar reality going. A very common human behaviour.

Making dough out of dough was never an obvious and safe business, and thanks to these stories, private investors may just come to realize that.

[Jerry J. Fortin]

My, my let's remember that nobody has yet been injured, or worse still, lost their lives over this, so would a life sentence be really justified to even think of in this context? Dough could be safely kept in the bank (with unlimited default protection by the state now), but these folks wanted a few more %% and as everybody learned in high school, that comes with a bit of an extra risk, i.e no free lunch. It actually played a positive role in bringing the truth home for millions of other investors.

As a matter of fact, having heard some of these stories, I'm starting to think that perhaps the psychology of this crime is not as simple as get the dough and run away. It appears that some of these businesses operated over many years and have good relations with customers and the communities. Maybe over the years the finansists come to think of themselves as unfallable, and when a wrong market strikes they couldn't / wouldn't accept the truth, and run into illusions (or delusions) that would keep the familiar reality going. A very common human behaviour.

Making dough out of dough was never an obvious and safe business, and thanks to these stories, private investors may just come to realize that.

Usury, the lending of money at interest used to be a crime. Now the criminals are running the show, is it any wonder that the behavior has escalated?

[madmax]

. Financial crime is hardly the worst crime one can commit.

[Moonbox]

My, my let's remember that nobody has yet been injured, or worse still, lost their lives over this, so would a life sentence be really justified to even think of in this context?

No offense but I think this line of thought is idiotic. Excuse me if I'm being rude, but how do you NOT think stealing people's LIFE savings is not worth having the criminal spending the remainder of his life in prison? If stealing $50 million dollars only put you away to jail for 5 years or something, a lot of people would probably consider doing it.

Dough could be safely kept in the bank (with unlimited default protection by the state now), but these folks wanted a few more %% and as everybody learned in high school, that comes with a bit of an extra risk, i.e no free lunch. It actually played a positive role in bringing the truth home for millions of other investors.

An utterly incompetent argument. Not only does this show a complete lack of understanding of ANYTHING money related, but it's almost as if you're blaiming the VICTIMS of FRAUD. When you keep money safely in the bank you're generally going to BARELY cover inflation costs. A GIC or savings account will net you little more than preserving the value of your money. Relative to inflation, it's not really going to grow.

Equity investors generally know they are taking a risk when they purchase an investment, that's true, but when they do so criminal fraud is NOT one of the risks they should have to weigh against their fortunes. That sort of risk should be no more relevant to equity investments than it is for your meagre term deposit savings. You're an idiot if you think otherwise.

Making dough out of dough was never an obvious and safe business, and thanks to these stories, private investors may just come to realize that.

Nobody ever said it was a safe business. That being said, if intelligent and informed people want to make balanced decisions and invest their money in ventures they believe will be profitable, they should be free to do so without having to worry overmuch about having their life savings squandered to finance criminal lifestyles.

Saying they're at fault because they didn't give their money to a bank like an idiot to sit around and do nothing is about the stupidest idea possible.

Edited July 28, 2009 by Moonbox

[Jerry J. Fortin]

No offense but I think this line of thought is idiotic. Excuse me if I'm being rude, but how do you NOT think stealing people's LIFE savings is not worth having the criminal spending the remainder of his life in prison? If stealing $50 million dollars only put you away to jail for 5 years or something, a lot of people would probably consider doing it.

An utterly incompetent argument. Not only does this show a complete lack of understanding of ANYTHING money related, but it's almost as if you're blaiming the VICTIMS of FRAUD. When you keep money safely in the bank you're generally going to BARELY cover inflation costs. A GIC or savings account will net you little more than preserving the value of your money. Relative to inflation, it's not really going to grow.

Equity investors generally know they are taking a risk when they purchase an investment, that's true, but when they do so criminal fraud is NOT one of the risks they should have to weigh against their fortunes. That sort of risk should be no more relevant to equity investments than it is for your meagre term deposit savings. You're an idiot if you think otherwise.

Nobody ever said it was a safe business. That being said, if intelligent and informed people want to make balanced decisions and invest their money in ventures they believe will be profitable, they should be free to do so without having to worry overmuch about having their life savings squandered to finance criminal lifestyles.

Saying they're at fault because they didn't give their money to a bank like an idiot to sit around and do nothing is about the stupidest idea possible.

A very well reasoned post. Having said that, it was for the most part rich people, or at least people who had enough money to invest it that got hurt. These folks carry a lot more weight than those without the money to invest. Therefore the crime was a big deal.

My question remains, what of the crimes perpetrated upon the poor by slum landlords and real estate speculators? What of the "predatory lenders" and the financial industry? It would seem that we have one set of laws and level of protection from crime for the rich and another for the poor.

Edited July 28, 2009 by Jerry J. Fortin

[Moonbox]

My question remains, what of the crimes perpetrated upon the poor by slum landlords and real estate speculators? What of the "predatory lenders" and the financial industry? It would seem that we have one set of laws and level of protection from crime for the rich and another for the poor.

This really isn't a good comparison. Stealing is stealing, no matter how you cut it. The reason you can't put away a financier for stealing a poor person's life savings is because the poor person has little/nothing to steal and hence you'd probaby at worst be looking a petty theft.

Additionally it's a pretty weak argument to say that outright stealing is the same thing as the intelligent and well-informed profitting off the stupid/ignorant, providing no laws are broken.

The Rule of Law is there is not there to protect the stupid, it's there to protect basic property rights. When it all boils down to it we are talking about laws and regulations. I never believe that clients, rich or poor, should suffer because their advisors/bankers/agents etc acted in bad faith and deliberately lied to them, mislead them or omitted important details.

At the same time, I don't necessarily think that it's wrong that the smart and informed profit off the weak and the stupid. It's a fundamental part of our economy that you make money by knowing more than the other partner in a transaction. Retail stores can make huge profits through customer ignorance. If you've ever bought a computer from Future Shop or Best Buy you'd know that you could have probably had a better system built by a small computer store for less money. If you didn't know that it will cost you money. It's the same with real estate, landlord and tenants and investment speculation at large.

One good example that I can provide of this is how when I was at university years ago my landlord tried to get my friends and I to sign another full-year lease on our rental house after our first year long lease expired. Knowing a little about the Landlord-Tenant Act, I told him that we can continue to live there without signing anything providing we continue paying the rent monthly. He tried to tell me that we HAD to sign another lease, and I told him legally I did not and unless he was selling the property or moving in himself he couldn't kick us out.

If he'd have tried to kick me out, I would have been protected by law. If I had not known this, I would have signed another year-long lease and wasted money. At the same time, however, I don't think it was necessarily criminal for him to have wanted to make sure he had renters for another full year. It was a little shady yes, but it's also a little shady for People's to want to sell me a 0.75 carat I2 yellow diamond for $4000 and tell me it's a 'great deal' and a 'beautiful diamond'. I know better and I don't pity the sucker who falls for that.

[Jerry J. Fortin]

The laws are written to protect the rich. The rich can nearly always buy their way out of trouble. Look at O.J.! Listen this isn't what I was getting at. What I was getting at was that there is a class based society here, one set of rules for the rich and one for the poor. Look at taxation for instance, there are loopholes that can reduce your tax load but you need the capital to exploit them. There is more here than meets the eye. Look at the banking industry, and how society which once rejected it has now embraced it. Witness the reality of corporate welfare and the cost to the public.

We have forgot that the individual is the paramount concern. We have legislated against the freedom of the individual, but allowed rights to legal citizens. We have created a society of two classes, those of the natural citizens who are the living breathing kind, and that of the legal citizens who are the kind designed to serve us in the manner of systems and efforts. We are creating a world of privileges which outweigh the rights of citizens.

Within each class of citizens there are structures to both limit and elevate class members. In both cases, money is involved. Money is the most common and the most limiting factor. Knowing this we have to wonder why the money supply is controlled in the way that it is. We have to wonder why the entire question of wealth creation is now dependent upon financing instead of production. We have to wonder why production and consumption are not a major focus of political efforts. We have to wonder why, politicians concern themselves at all with marco-economic policies twice removed from the control of the consumer. We have to wonder why the consumer is unable to define the demands of production. We have to wonder what the relationship between politics and production is when the consumer is left without the means employment and yet retains the needs of consumption. All of these things lead to questions about the true meaning of sovereignty and capitalism.

Our society must come to grips with the "new world order" and what it really means to citizens.

[Moonbox]

Listen this isn't what I was getting at. What I was getting at was that there is a class based society here, one set of rules for the rich and one for the poor. Look at taxation for instance, there are loopholes that can reduce your tax load but you need the capital to exploit them. There is more here than meets the eye. Look at the banking industry, and how society which once rejected it has now embraced it. Witness the reality of corporate welfare and the cost to the public.

I can't really disagree with any of this. It's yet another example of how the informed and the intelligent take advantage of the dumb/ignorant.

More so than ever in the history of man we are of sheep being led by wolves. The reason the rich are so entitled and looked after is because the poor and middle class are too apathetic and unconcerned to care. If people REALLY understood the economy and laws of our nation, and actually made an ELECTION issue out of making the economy fair for everyone (NOTE: This does not mean increased social spending, but rather fair market and tax laws) we'd reverse the whole situation in an instant.

Instead, we have a blissfully ignorant electorate that continuously votes away its future in favour of our politicians and corporations. The alternative to our recent and current governments is a bunch of bed-wetting simpletons proposing a nanny-state to sell out our economic future to baby-sit our nation's morons.

Both choices make me sick but one is better than the other. Personally, I'd prefer Canada in general just got smarter and more interested in politics, but unfortunately I don't see that happening anytime soon.

[Jerry J. Fortin]

I can't really disagree with any of this. It's yet another example of how the informed and the intelligent take advantage of the dumb/ignorant.

More so than ever in the history of man we are of sheep being led by wolves. The reason the rich are so entitled and looked after is because the poor and middle class are too apathetic and unconcerned to care. If people REALLY understood the economy and laws of our nation, and actually made an ELECTION issue out of making the economy fair for everyone (NOTE: This does not mean increased social spending, but rather fair market and tax laws) we'd reverse the whole situation in an instant.

Instead, we have a blissfully ignorant electorate that continuously votes away its future in favour of our politicians and corporations. The alternative to our recent and current governments is a bunch of bed-wetting simpletons proposing a nanny-state to sell out our economic future to baby-sit our nation's morons.

Both choices make me sick but one is better than the other. Personally, I'd prefer Canada in general just got smarter and more interested in politics, but unfortunately I don't see that happening anytime soon.

You make an excellent point. I for one would like to see an informed electorate, one better able to exercise their democratic rights in a manner that would serve to improve our society. You see, I hold the elected representatives responsible for this lack of information. I mean how often do you get government propaganda and how often does it solicit an opinion from you. Usually the partisan representative TELLS us how they will proceed with an issue instead of ASKING us how to respond. This is the basic issue as far as I am concerned, it is the root of the apathy we find so detrimental to society.

What I believe is needed is independent representatives accountable to the people. Now we all know these folks cannot legislate effectively, but they can attempt to force debates and they can make known the citizens voices from their own ridings. They can present private members bills, and they can garner media attention in those efforts. In time this could serve to promote the interest of citizens. I for one may even take the steps required to run as an independent at some point not far into the future.

The nanny state is a reflection of partisan desire to retain power by vote buying. The reality of taxation is a mere paradigm in the greater scheme of things. Paradigm shifts are the key, and a very powerful political tool not willingly utilized by partisan efforts because the impacts are rarely beneficial to their isolated agendas. Those impacts are exactly what would favour independent representation.

There are ways to improve our economy at both the provincial and federal levels that would serve the purpose of providing the opportunity of improving the human condition of our citizens. Things like health care, education, and pensions could be addressed in a manner that would be seen as revenue neutral in terms of taxation. Crown corporations utilized as non-profit partnerships of cooperatives are one simple and effective means of creating productive capacity and meeting consumption demands on a more focused local level. Helping citizens achieve economic viability within local economies will go a long way toward industrial development and creating secondary industry. Part of our problem as I see it is the focus on exportation of raw material instead of value added manufactured products. To exploit this economic issue, we will need to use advanced technologies and automated production.

[jbg]

My, my let's remember that nobody has yet been injured, or worse still, lost their lives over this, so would a life sentence be really justified to even think of in this context? Dough could be safely kept in the bank (with unlimited default protection by the state now), but these folks wanted a few more %% and as everybody learned in high school, that comes with a bit of an extra risk, i.e no free lunch. It actually played a positive role in bringing the truth home for millions of other investors.

How is $50,000,000,000 in thefts from hundreds if not thousands of people different from burglaries into their houses (assuming the house is empty)? There is similarly no risk of injury, but the devastation and violation of people is no less real.

[jbg]

The laws are written to protect the rich. The rich can nearly always buy their way out of trouble. Look at O.J.!

1. OJ was probably innocent; and
   
2. Bernie Madoff and Mark Dreier did not succeed in buying their way out of trouble. Both are serving lengthy sentences. Sentences which, unlike Canadian sentences, will likely be served.
   

Edited July 29, 2009 by jbg

[Jerry J. Fortin]

1. OJ was probably innocent; and
   
2. Bernie Madoff and Mark Dreier did not succeed in buying their way out of trouble. Both are serving lengthy sentences. Sentences which, unlike Canadian sentences, will likely be served.
   

Sentencing in Canada is three square meals a day, an assortment of perks like movies and swimming pools and of course bringing your girl friend over to the trailer a couple of times a year. Many Canadians call our prisons "Holiday Inns".

As to the probability of innocence of Mr. Simpson, that was up to a jury of his peers in LA, they had the last word. My opinion on the matter is not relevant, yet I myself was convinced based on the evidence that he did commit the crime.

[Smallc]

Many Canadians call our prisons "Holiday Inns".

I wonder how most people would feel about living in a Holiday Inn for a decade and not being able to leave...for any reason?

Edited July 29, 2009 by Smallc

[Jerry J. Fortin]

I wonder how most people would feel about living in a Holiday Inn for a decade and not being able to leave...for any reason?

Hotel California?

Seriously though, those folks are there for a reason. They are treated fairly well in Canada, unlike the treatment they receive in other places.

[Smallc]

That' true, and I say that's a good thing on our part.