= Guilty plea ends Jones fraud case By J. Eric Eckard Rocky Mount

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Guilty plea ends Jones' fraud case

By J. Eric Eckard
Rocky Mount Telegram

Tuesday, April 03, 2007

NASHVILLE — White collar crime apparently doesn't pay all the time either.

Former Rocky Mount financial adviser Joe Jones on Monday admitted in court to conning hundreds of
people out of millions of dollars during a seven-year period.

Judge Ben Alford of New Bern sentenced Jones to at least 20 years in prison as part of a plea agreement
between Jones and prosecutors.

But prosecutors said the majority of the $8.6 million given to Jones went back to early investors in what
authorities call a Ponzi scheme, a type of pyramid scam, in which new investors' monies were used to
pay dividends to previous investors.

"All that money went back into paying the original investors," Assistant District Attorney Keith Werner
said. "Some of the first in got their money back, but the last in didn't get anything.

"There's really no way to pay these victims back. Some might say 20 years is not enough, and some
might say it's too much. But the state feels justified in this plea."

Jones, who was indicted in 2005 on 100 counts of fraud, agreed to plead guilty to 41 counts of securities
fraud and five counts of obtaining property by false pretense. The plea bargain also stipulated that Jones
would be sentenced on three of those violations – 80-105 months for each to run consecutively.

The deal also calls for Jones to testify against his co-defendant, 51-year-old Charles Harrison of
Charlotte, who also faces the same charges Jones did. His trial is set to begin "as soon as possible,"
Werner said.

Dozens of investors were in court Monday, and many told Alford that they'd lost their life savings and
retirement accounts.

Mary Henderson, a 60-year-old Abbott Laboratories retiree, told the judge that she had to go back to
work because of Jones.

"He has destroyed a lot of lives, and I hope he pulls every day of that time so he knows what he did to
us," said Henderson, who reportedly lost $180,000.

After Alford listened to almost a dozen victims, the judge said he wished he had their money to return to



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them.

"I've sentenced a lot of mean people almost on a weekly basis, but this crime just strikes fear," the judge
said. "One day, you're doing pretty well, and the next day, you're looking to your church or the welfare
system to pay your bills."

Jones also spoke to the judge before sentencing, apologizing to the investors and his family for the
ordeal.

"I will continue to do anything I can to rectify the situation," he added.

But many investors considered his apology insincere, considering he didn't face his accusers during his
statement before sentencing.

"He did not apologize – he did what his attorney told him to do," Henderson said.

The N.C. Secretary of State's office began investigating Jones in 2004 after receiving information that
Jones was selling investments without a license. He was ordered to stop selling investments for BAB
Productions, a Charlotte-based concert promoter.

Investigators then discovered a web of investments that led to deals in Detroit, Texas and an online day
trading account.

Nancy Vecchia, an attorney with the secretary of state's office, was in court Monday and outlined the
securities fraud cases against Jones to the judge. Werner said the secretary of state's office was
instrumental in prosecuting Jones because the District Attorney's office didn't have the resources to put
together such a case.

Vecchia told the judge that Jones and Harrison used BAB Productions as a front so they could use
investments to fund other business deals, including a $50 million time-share project in Detroit, an
energy enterprise in Texas and day trading through an online account.

In addition to both the Detroit and Texas projects falling through, Jones lost nearly a half-million dollars
with the online trading account, Vecchia said.

"Their money was never invested into concert promotions," Vecchia said. "He spent that money on other
schemes.

"They believed he had gone to school, and they trusted him with their investments."

Donald Brown, a Charlotte attorney representing Jones, said that his client was "deeply sorrowful."

"He panicked," said Brown, who portrayed Jones as a man who was desperate to repay his investors.
"He went down the wrong road, and he never intended to get rich.

"He's broken spiritually, and he's broken financially."

And while Jones heads off to prison, many of his former investors are returning to jobs following their
retirements.




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"I've gone back to work at 62 years old," said Lillie Greene, who lost a $158,000 Abbott retirement
fund. "And I feel like he should have gotten more time."

Jessie Parker's loss reached $250,000, and she said Jones should have contacted them early on if he was
having trouble repaying investors instead of developing an elaborate con.

"He done us wrong," she said. "I need to (go back to work).

"I've got bills I can't pay."

Although many of the investors probably won't see any compensation for their losses, attorney Howard
Prossnitz is seeking restitution for some of the victims through Investors Capital, a Massachusetts-based
securities firm that Jones worked for from 1998 to 2001. Prossnitz's civil claim is for $1.5 million for 12
alleged victims in the case.

The next hearing is scheduled for later this month in Raleigh.



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