‘I charged a large amount of money on my credit card to purchase the diamonds…. I never received any diamonds just excuses. I had to sell my company,’ one of 200 victims tells court
Jack Kronis, a prolific career conman and serial fraudster from Toronto, still owes more than $1,720,000 in court-ordered restitution to his victims from previous swindles, unpaid over decades, but this time, he told a U.S. judge at his sentencing for another big fraud, he really means it when he says he’s sorry, and his top priority is to repay his new victims.
Recommended Videos
To do that, however, he cannot be in prison, he needs to be out working, the judge was told.
“He has recognized the error of his ways,” Catherine Meehan, lawyer for Kronis, argued in U.S. federal court in Cleveland.
“He is actively engaging in counseling and is properly medicated for his mental health conditions. He strives to be better and wants nothing more than to help assure the victims are made whole.
“He will work every day to ensure restitution is made, and he offers nothing but the sincerest of apologies for the impact his conduct had on so many people,” Meehan said in her sentencing submission.
“(Kronis) recognizes there is nothing he can say to help the victims gain back the trust that he took advantage of. He can only hope that one day, they may all offer forgiveness for his conduct, which he continues to be ashamed of every day.”
Meehan asked Judge Philip Calabrese to sentence Kronis, 65, at the low-end of the federal sentencing guidelines.
Prosecutor James P. Lewis, however, asked Calabrese to do the opposite, to sentence Kronis at the high-end of the guidelines.
Lewis cited the damage Kronis caused to nearly 200 victims, and Kronis’ long history as a silver-tongued conman who spent most of his adult life swindling and scheming.
Kronis, with his audacious swindles over thirty years in Canada, the United States and Europe, was the subject of an investigation by National Post published in August, in which Kronis was dubbed the Jack of Diamonds because for years he sold over-valued coloured diamonds through lies, tricks and smooth talking manners.
Read more | Jack of Diamonds: A colourful conman’s house of cards comes tumbling down
Their company was called Paragon International Wealth Management and it had a boiler room on Toronto’s Finch Avenue West, where international students arrived by bus to make cold calls, while Kronis arrived in his luxury Bentley sedan to joined the other managers in large offices pumping out diamond investment sales.
“Paragon would often send the victim appraisal certificates that fraudulently inflated the value of the green or yellow diamonds,” Lewis told court. “Paragon also fabricated online auctions to make the victim think that their green or yellow diamonds would be sold for large amounts of money.”
Prosecutors said that Kronis oversaw the fake auctions.
Kronis also made calls to keep victims in the Paragon grinder of ever-increasing buying to chase promises of a big pay day that never came.
“The impact of this crime on Paragon’s victims was profound,” Lewis told the judge. Prosecutors identified about 200 victims.
Victims, identified publicly only by initials, spoke of financial ruin and stress that damaged their health and relationships.
“I charged a large amount of money on my credit card to purchase the diamonds which were supposedly (going to) sell within 30 days and pay off the credit card,” S.S. told court.
“I could not sell the diamonds anywhere to pay what I could because I never received any diamonds just excuses. I had to sell my company using the equity to pay off the debt as my failing health made work difficult. I was going to use the money to help retire with.”
Another victim, identified as A.S., said: “It is an embarrassing thing to be taken advantage of…. I am 79 years old. I continue to work to mitigate the financial effect of the fraud on me and my family … my continued employment at my age cannot be discounted as factors in my illness.”
“This crime has created both financial and mental anguish for not only me but my wife and immediate family,” D.S. said in a victim statement. His wife “has a difficult time trying to believe that I, with my experience and education, got conned by these vicious and greedy scam artists.”
Kronis’s long history of ripping people off with similar schemes was finally raised in U.S. court.
I was going to use the money to help retire
Lewis told the judge of Kronis’s conviction in Buffalo, N.Y., for fraudulently selling obscure metals as if they were rare and valuable, between 1990 and 1993, from a boiler room in Toronto, tricking victims into paying large amounts again and again.
The loss to victims in the metals scam was US$10 million, Lewis said, with Kronis personally making US$3.9 million in fraudulent sales. Kronis was given a 10-month prison term.
He still hasn’t paid US$820,000 restitution that was ordered by court back then, according to court records.
Kronis was also convicted in Canada for selling fraudulent stocks between 1989 and 1990, Lewis said. It was a large investment scandal in Canada at the time because the firm, Durham Securities, was licensed to sell stocks and bonds in Ontario. Kronis was given a six-month sentence then.
He was also ordered to pay $837,081 in restitution, of which $575,000 he still owes, according to court records.
Court was also told of Kronis’s arrest in Belgium in 1995 for his role in a large-scale telemarketing stock fraud based in Amsterdam. European investigators said at the time that $250 million was fleeced from at least 1,227 victims. The U.S. court did not record the outcome of that case, but National Post was told he was convicted in 2000 after cooperating with investigators.
Lewis asked the court to again impose a restitution order on Kronis.
Kronis presented eight letters of support to the judge asking for leniency.
One stands out.
It is from Irving Bielas, of Innisfil, Ont., who writes fondly of his 45-year friendship with Kronis. Bielas does not mention in his letter that he and Kronis were both indicted together in Buffalo in the 1990s metals scam run from a Toronto office tower.
Both men pleaded guilty to conspiracy to commit fraud back then.
Bielas wrote to the judge saying Kronis has been a man of “unwavering integrity, compassion and responsibility throughout our acquaintance” and that the crimes Kronis pleaded guilty to “are uncharacteristic of his true nature.”
A request for comment from Bielas was not responded to prior to publication deadline.
Two letters were from health professionals detailing Kronis’s medical conditions.
Kronis, court was told, suffers from several health complaints — from irritable bowel syndrome, vertigo, lactose intolerance, hernia and osteoporosis to mental health problems, including severe depression that requires antipsychotic medication.
His lawyer, Meehan, told the judge his conditions are linked to his crimes.
“Defendant’s internal issues played a significant role in his commission of the offense. While he is certainly not offering it as an excuse for his behaviour, it is an explanation for his conduct and is something that he is working on addressing every day,” she told the judge.
In the end, Calabrese sentenced Kronis late Thursday to 37 months in prison, followed by three years of supervised release, which, since he will likely be deported back to Canada after prison, will have little impact.
Holding these individuals accountable and having their names publicly accessible and associated to this scheme should reduce the likelihood of them being able to perpetrate another similar investment scheme
Kronis will also be ordered to pay restitution. How much, he doesn’t yet know. The judge agreed to postpone deciding on the amount until after a restitution hearing to be held later.
Kevin Williams, the Toronto fraud detective who first investigated the diamond fraud, which lead to the U.S. prosecution, was satisfied with the outcome.
The other swindlers who pleaded guilty — Michael Shumak and Antonio Palazzolo — have sentencing hearings scheduled for the new year.
Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our daily newsletter, Posted, here.