Sandy Hook victims' families have asked a US federal bankruptcy court to order Infowars conspiracy broadcaster Alex Jones to relinquish control over his company, saying he has "systematically transferred millions of dollars" to himself and his relatives while claiming to be broke.
In a filing in the bankruptcy court inHouston on Thursday, the families of nine Sandy Hook victims said they sought to have a bankruptcy trustee who is already monitoring the case take control of Free Speech Systems, the parent company of Jones' misinformation-peddling media outlet. The families are also seeking a court-appointed oversight committee to restrict Jones' ability to control Infowars' finances.
Jones' claimed insolvency is at the heart of his efforts to avoid paying for the damage done by his Sandy Hook lies. This month, a Texas jury ordered him to pay the parents of a child killed in the 2012 Sandy Hook school shooting nearly US$50 million (NZ$80.5m) in compensatory and punitive damages for spreading the falsehood that they helped stage the massacre.
"Alex Jones is not financially bankrupt; he is morally bankrupt, which is becoming more and more clear as we discover his plots to hide money and evade responsibility," said Kyle Farrar, a lawyer for the Sandy Hook families. "He used lies to amass a fortune, and now he is using lies and fictions to shield his money."
"We will be filing a response soon," R.J. Shannon, one of Jones' lawyers in the bankruptcy matter, said on Thursday. He declined to comment further.
The families said in their filing that Jones had siphoned nearly US$62m from his business into financial vehicles benefiting himself and his family beginning in 2018, when the Sandy Hook families first filed suit.
At the core of his bankruptcy claim is Jones' assertion that Free Speech Systems owes US$54m to PQPR Holdings, a company owned and operated directly and indirectly by Jones and his parents. The debt is fictional, the families' lawyers said in Thursday's filing, and "a centerpiece of Jones' plan to avoid compensating the Sandy Hook families".
Alex Jones, conservative conspiracy theorist host of Infowars, in his studio in Austin, Texas on February 17, 2017. Photo / Ilana Panich-Linsman, The New York Times
For years, Jones broadcast lies on his show that the shooting that killed 20 first graders and six educators in Newtown, Connecticut, was staged by the government as a pretext for gun control and that the victims' families were "actors" in the plot. Conspiracy theorists tormented the victims' families online, defaced and stole memorials to their murdered loved ones, confronted them on the street and threatened their lives.
In 2018, the families of 10 Sandy Hook victims filed four defamation lawsuits against Jones in Texas and Connecticut. Jones, an avid supporter of former president Donald Trump, is also under scrutiny for his role in organising events surrounding the January 6 Capitol insurrection.
Late last year, shortly before Jones lost all four Sandy Hook lawsuits by default after refusing to submit business records and testimony ordered by the court, he began transferring up to US$11,000 per day and up to 80 per cent of Infowars' sales revenue to PQPR, the families' filing said. Infowars' explanation for the payments has shifted over time, with the company's representatives most recently saying that the money was payment on debts to PQPR for merchandise.
The families' sweeping victory in the four suits set the stage for three trials in which juries would decide how much he must pay the families in damages. Shortly before the end of the first trial, which resulted in the award of nearly US$50m in damages to the Sandy Hook parents, Jones put Free Speech Systems into Chapter 11 bankruptcy.
A makeshift memorial for victims of the shooting at Sandy Hook Elementary School in Newtown, Connecticut, January 3, 2013. Photo / Fred R. Conrad, The New York Times
The families say the payments are "fraudulent transfers designed to siphon off the debtor's assets to make it judgment-proof" — in essence, an effort by Jones and his family to be the first party paid in any liquidation of his empire. The families are also pursuing a fraudulent transfer of assets lawsuit against Jones and his companies in Texas.
Contrary to Jones' company's claims, the new filing said, "PQPR performs no services, has no employees and has no warehouse", adding that "money that Free Speech Systems pays PQPR ends up in Alex Jones' pockets".
Jones has continued to parlay his Sandy Hook lies and the Texas jury award into a boon for his business. Like the former president, Jones claims he is being pursued by deep state enemies, and the Sandy Hook lawsuits are part of a sweeping conspiracy to silence him.
His audience has responded by buying more Infowars diet supplements and survivalist gear. Infowars' sales have increased about 50 per cent since the trial in Austin, Texas, to nearly US$1m per week, Jones' representatives told the bankruptcy court, projecting sales could reach US$450,000 a day by the end of August. Jones' online pleas to his followers have also resulted in millions of dollars in donations, including US$8m in cryptocurrency that he pocketed before the trial, the families' lawyers said.
Jones has repeatedly refused to provide business and financial records ordered by the courts. But the records he did supply indicated that business surged on the days Jones spoke about Sandy Hook, telling his audience that his political enemies aimed to shut Infowars down. Jones said in court testimony this month that he earned US$70m in revenues in 2012, the year of the shooting.
