Sentencing again delayed for CFS's Jones
Friday, April 4th 2003, 12:00 am
By: News On 6
TULSA, Okla. (AP) _ Sentencing for the former executive vice president of collapsed Oklahoma credit company Commercial Financial Services was delayed Friday for the third time.
Jay Lowell Jones pleaded guilty Sept. 14 to one count of conspiracy to defraud investors and launder money. He will now be sentenced May 9.
U.S. District Judge Sven Erik Holmes requested more details on whether Jones was a leader or a follower in CFS executives' scheme to profit from misled investors.
Holmes also asked for a list of properties Jones' family owns. The government agreed in his plea deal not to seize any of those properties for fines or restitution.
Jones' attorney, Robert Nigh, said his client was surprised that Holmes didn't sentence him Friday while all the parties and Jones' family were assembled in U.S. District Court in Tulsa.
Jones, 61, faces up to five years in prison, a $250,000 fine and three years probation for the conspiracy to commit wire, bank and mail fraud, which began in September 1997. He also must forfeit about $5 million in assets. Jones, of Tulsa, remains free on $100,000 bail.
If Holmes decides Jones helped devise the scheme, he could give the former executive more prison time under sentencing guidelines.
Jones is cooperating with federal investigators. An indictment charging CFS founder and chief executive officer Bill Bartmann with 57 counts of conspiracy, fraud and money laundering was unsealed in December. Bartmann pleaded innocent.
CFS investors lost more than $1 billion, and 3,900 workers in Oklahoma City and Tulsa lost their jobs when the company collapsed in 1999.
Jones admitted in September that he and other executives sought to inflate the company's performance and used money from new bond issues to pay off maturing ones.
CFS purchased long overdue accounts from credit card companies and then sold bonds based on its ability to collect those debts.
Jones formed Dimat Inc. to secretly purchase accounts that CFS was unable to collect. The sales enabled CFS to report a higher collection rate, preventing a downgrade by credit rating agencies that would have made its bonds less attractive to investors and more expensive to CFS.
Jones also admitted that money from new bond sales was secretly diverted to Dimat for more account purchases from CFS, so CFS could pay principal and interest to previous bondholders.
CFS sold more than $2 billion in bonds and earned more than $800 million in net profits before its June 1999 closing, Jones' criminal complaint says.
Sentencing has been delayed twice previously as the federal probation office, which compiles factual pre-sentencing reports for judges, needed more time to determine appropriate restitution for Jones.