U.S. judge ‘troubled’ by Alex Jones’ bankruptcy evasion

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(Reuters) – A U.S. bankruptcy judge said on Monday he was “troubled” by right-wing conspiracy theorist Alex Jones’ recent effort to shift advertising revenue away from his bankrupt company Free Speech Systems, saying he was on high alert for other signs of misconduct.

U.S. Bankruptcy Judge Christopher Lopez, at a hearing in Houston, said the payments appeared to ignore existing court orders that limit Jones’ ability to withdraw money from his bankrupt company.

“I’m troubled by what I see now, I hope it’s not a pattern,” Lopez said.

Jones had claimed that the killing of 20 students and six staff members in the 2012 Sandy Hook elementary school massacre in Newtown, Connecticut, was staged with actors as part of a government plot to seize Americans’ guns.

Jones and his company filed for bankruptcy protection in July and December last year, respectively, after parents of the children killed accused him and FSS of profiting off lies about the shooting for years and won two defamation judgments totaling about $1.5 billion. The parents of a slain 6-year-old have asked Lopez to allow a third defamation trial to proceed.

Jones has since acknowledged the shooting occurred.

FSS’s court-appointed chief restructuring officer discovered by reviewing Jones’ bankruptcy filings that Jones personally took more than $157,000 in advertising revenue that otherwise would have gone to the company, FSS attorney Ray Battaglia said Monday.

Battaglia said Jones and his newly founded advertising company Mountain Way that received the payments had agreed to return all the money and cease selling ads for Jones’ online show, Infowars.

Kyle Kimpler, an attorney for the families, said the Mountain Way disclosure raised concerns that Jones could make further efforts to evade bankruptcy rulings.

“I’m a little bit concerned at the idea that there is ‘no harm, no foul’ here,” Kimpler said.

Lopez said he would wait for more information from an ongoing investigation into Jones’ finances, but warned that he would take action if he saw evidence that the Mountain Way payments were more than a “one-off.” 

Jones’ attorney Vickie Driver said Jones “is not making enough money” from FSS, but noted that he would be more careful about complying with bankruptcy rules.

“He understands that he is not allowed to do anything of this sort,” Driver said.