Canadian $17M Ponzi settlement reached

March 6, 2012 at 1:43 PM

MONTREAL, March 6 (UPI) -- Some 158 investors will divide up $17 million in damages from the Royal Bank of Canada in an out-of-court Ponzi fraud agreement announced by the bank Tuesday.

The settlement relates to the conviction of former financial adviser Earl Jones, who used a Montreal-area RBC branch to run his fraud of paying old investors with new investors' money.

Jones was convicted of theft and fraud and sentenced to an 11-year prison term in February 2010, The (Montreal) Gazette said.

The investors who lost money are mostly elderly and originally sought $40 million from the bank, which was alleged to be aware of Jones' criminal activities since 2001.

To avoid a class action trial, RBC offered the victims $12.5 million in July, which was refused.

Despite increasing the settlement to $17 million, the bank said in its brief statement it wasn't admitting to wrongdoing.

"RBC has closely examined its role in providing Earl Jones with a bank account and is satisfied that it was not negligent," the statement said.

The offer and acceptance are scheduled to be formalized in a Quebec Superior Court hearing March 14, the Canadian Broadcasting Corp. said.

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