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John Jaffey was a Toronto wills and real estate lawyer. He had a wife and three children; his father was a Canadian Forces surgeon. Then one day, with no real warning, he just vanished – to Australia – with a fake passport and a pocketful of money that did not belong to him.
Jaffey sent his law partner a letter from down under, suggesting that angry clients go after the compensation fund for return of the stolen money. Unfortunately, the fund is not set up to compensate investors who have had their money stolen, and there is no coverage for clients who are victims of thieving attorneys.
As near as investigators can determine, the scam began in 1989. Jaffey was in financial trouble, brought about by over-speculation in real estate. To extricate himself, he convinced a number of clients to invest their mortgages in a 12-percent guaranteed-return fund. The fund turned out to be a bank account controlled by Jaffey, and he began paying the old investors’ interest earnings with the money of new investors. It was akin to a Canadian Ponzi scheme.
There were other opportunities that Jaffey didn’t pass up during the same time frame. When widower Warin “Bud” Lepper died in 1993 at the age of 86, he left his estate to four charities and an Ontario church. Instead, the money ended up in a confusing web of bank accounts controlled by Jaffey. The money still hasn’t reached Lepper’s intended beneficiaries.
Dozens of innocent people became tangled in Jaffey’s financial web, including his own mother, who entrusted him with the proceeds from the sale of her house – for investment.
The authorities located Jaffey in Sydney and extradited him back to Toronto. He was tried and sentenced to five years in prison, though much of his sentence has been spent at a fenceless minimum-security facility. And after just a portion of the original sentence was served, the parole board has begun to release him on day parole. Only $600,000 of the missing $2.9 million has been recovered, and even though the sentencing judge ordered Jaffey to pay compensation to his victims, Jaffey responded that he is “Impecunious” because his assets have all been frozen.
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