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Sandy Hook Families Are Fighting Alex Jones and the Bankruptcy System Itself

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HOUSTON — The Infowars conspiracy broadcaster Alex Jones, who faces greater than $1.4 billion in legal damages for defaming the families of the Sandy Hook shooting victims, has devised a recent strategy to taunt them: wriggling out of paying them the cash they’re owed.

Mr. Jones, who has an estimated net price as high as $270 million, declared each business and private bankruptcy last yr because the families won historic verdicts in two lawsuits over his lies in regards to the 2012 shooting that killed 20 first graders and 6 educators at Sandy Hook Elementary School in Newtown, Conn.

A Recent York Times review of economic documents and court records filed over the past yr found that Mr. Jones has transferred thousands and thousands of dollars in property, money and business deals to family and friends, including to a recent company run by his former personal trainer, all potentially out of reach of creditors. He has also spent heavily on luxuries, including $80,000 on a non-public jet, bodyguards and a rented villa while he was in Connecticut to testify at a trial last fall.

“If anybody thinks they’re shutting me down, they’re mistaken,” Mr. Jones said on his recent podcast last month.

The families now face a stark reality. It just isn’t clear whether they are going to ever collect a good portion of the assets Mr. Jones has transferred. So their ability to get anything remotely near the jury awards is inextricably tied to Mr. Jones’s capability to make a living because the purveyor of lies — including that the shooting was a hoax, the parents were actors and the youngsters did not likely die — that ignited years of torment and threats against them.

Lawyers for Mr. Jones said in a filing late last yr that “any argument that Jones must surrender his public life, or discontinue public discourse, is contrary to supporting his ability to fund a plan and pay creditors.”

Mark Bankston, the families’ Texas lawyer, doesn’t disagree. “There’s a likelihood we’re going to be forced right into a situation where we’re going to be checking to see how Infowars is doing every month to work out if our clients are getting paid or not,” he said.

Earlier this month, Mr. Jones offered to pay the families and his other creditors a complete of $43 million over five years as a part of a bankruptcy plan, which lawyers for the families immediately dismissed as laughable and riddled with financial holes. The judge ordered Mr. Jones to fill within the gaps in his financial disclosures by the tip of the month.

But Mr. Jones’s continued obfuscation about his net price has given him leverage over the families, who’re also fighting an American bankruptcy system that makes the survival of companies a priority and has thus far given Mr. Jones a bonus in court.

Although Infowars has estimated revenues of some $70 million a yr — hardly a mom-and-pop shop — Mr. Jones was in a position to file for Chapter 11 under the more lenient bankruptcy rules of the Small Business Reorganization Act, generally known as Subchapter V. The law first took effect in early 2020, but was soon broadened to help small businesses struggling in the course of the pandemic.

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Unlike in a standard Chapter 11 bankruptcy, Subchapter V gives creditors just like the Sandy Hook families virtually no say in a restructuring plan, nor can they file a competing plan. They will challenge Mr. Jones’s approach, but an impasse in talks could end in liquidation of the corporate, putting them in line to gather a fraction of the damages.

A liquidation would end Infowars, but Mr. Jones could be free to start out one other company identical to it.

“We’re doing well in Chapter V,” Mr. Jones said on Infowars in September, misstating the name of the rule. “Whatever judgments they’ve can’t shut us down. Whatever profit there’s in the long run these jerks get, but who cares, we’re still on air.”

Last month, Mr. Jones’s lawyers submitted an announcement of his personal financial affairs prefaced by five pages of disclaimers saying that Mr. Jones didn’t fully remember where he holds bank accounts, what number of trusts he had arrange over the past decade and the whereabouts of his 2022 W-2 form documenting his wages. He has not filed a federal income tax return since 2020.

Mr. Jones continues to appeal each day to his audience to purchase more of the food plan supplements and other products he markets on air and to donate to Infowars, saying the Sandy Hook families are “puppets” in a plot by his political enemies to bleed him dry. His lawyers have said in court that Infowars’ business is booming.

Mr. Jones and a dozen members of his legal team didn’t reply to questions from The Times about his funds or his bankruptcy cases.

Earlier this month, the families asked the judge to order Mr. Jones to pay them the complete jury awards, with no possibility for settlement over a lesser amount — in legal terminology, to make Mr. Jones’s debts to the families “non-dischargeable” through bankruptcy. The judge has yet to rule.

The families have declined to talk publicly in regards to the case, but lawyers say their filing suggests they’ve concluded that Mr. Jones may never be put out of business, and so they are demanding the complete amount owed if he’s to stay on the air.

“In the beginning, the purpose of it was to do away with him,” Mr. Bankston said. “And it’s such as you realize you possibly can’t do away with him. He’s like a foul penny. He’ll just keep coming back.”

Mr. Jones founded Infowars in Austin, Texas, around 1999. He broadcast his theories from his house and started producing feature-length, conspiracy-themed videos he sold by mail or gave away. He was bankrolled by his father, a successful dentist who later helped establish Infowars’ food plan supplements business, still its most lucrative revenue stream.

In December 2012, only days after the Sandy Hook shooting, Mr. Jones began claiming on air that the massacre was a plot by the federal government to confiscate Americans’ firearms. Traffic to his website surged. Lenny Pozner, the daddy of Noah Pozner, a 6-year-old who died at Sandy Hook, had to maneuver a dozen times after conspiracy theorists repeatedly posted his home address on the web.

By 2018, the families had filed three separate defamation lawsuits against Mr. Jones, who refused to submit court-ordered evidence. But as court sanctions piled up and the cases began to show against him, Mr. Jones undertook a series of bizarre financial transactions.

“There’s an excessive amount of money coming in” for Mr. Jones to be as broke as he claims, Mr. Bankston said.

In February 2020, Mr. Jones traveled to the Cayman Islands, an offshore tax haven, in response to text messages that surfaced during considered one of the trials, even though it is unknown if he conducted any business on the trip. The next yr, as judges in two states threatened Mr. Jones with default for stonewalling within the Sandy Hook cases, he forged the primary of a series of business partnerships with associates.

In October 2021, he made an agreement with a recent company, Auriam Services, founded the previous month by Anthony Gucciardi, a wellness and lifestyle blogger who’s a friend of Mr. Jones and considered one of his earliest supplements partners. The corporate was to be an intermediary for bank card processing.

In February last yr, Mr. Jones transferred a $3 million home overlooking the Barton Creek Greenbelt in Austin to his current wife, Erika Wulff Jones.

Mr. Jones struck a contract in July with one other recent company, Blue Ascension, founded only a couple of months earlier by Mr. Jones’s former personal trainer and assistant, Patrick Riley.

On July 29, a parent company Mr. Jones fully owns, Free Speech Systems, filed for Chapter 11 bankruptcy. On the core of the claim was $54 million that Mr. Jones said Free Speech Systems — with claimed assets of only $14.6 million — owed to PQPR, an organization controlled by Mr. Jones and his parents.

The Sandy Hook families responded with a lawsuit claiming that Mr. Jones was fraudulently moving his assets outside his business, beyond the reach of creditors, and was transferring between $11,000 a day and $11,000 per week, and as much as 80 percent of his supplements sales revenues, to PQPR.

Mr. Jones’s lawyers have defended his actions as a strategy to keep Infowars afloat when other vendors refused to do business with him.

In early August, Mr. Jones’s financial empire began to unravel. The Texas jury ordered Mr. Jones to pay the parents of the victim nearly $50 million, and two months later a Connecticut jury awarded the families of eight Sandy Hook victims a rare nearly $1 billion. A judge awarded them almost $500 million more. In December, Mr. Jones declared personal bankruptcy.

Each Chapter 11 cases went before a federal bankruptcy judge in Texas, Christopher Lopez, who replaced Mr. Jones’s chief restructuring officer for the Infowars case and expanded the powers of a Justice Department-appointed trustee, Melissa Haselden, to analyze Mr. Jones’s funds. A recent chief restructuring officer ended the contracts with Auriam and Blue Ascension, but late last yr Infowars asked the court to approve contracts tied to an entrepreneur who had sold products through Free Speech Systems prior to now, Charles Cicack.

When a Times reporter called Mr. Cicack to ask about his work with Infowars, he claimed ignorance of the connection after which deleted references to Infowars from his social media accounts.

On Thursday, Ms. Haselden subpoenaed Mr. Gucciardi and Auriam, demanding that they produce documents detailing financial dealings with Mr. Jones.

It stays unclear how much Mr. Jones is definitely price. Recent court documents indicate that he is continuous to transfer real estate to his family, including an adult son.

In late January, under pressure from the bankruptcy court, Mr. Jones submitted a private balance sheet detailing only about $5.6 million in total assets, including $368,899 in bank accounts, $682,899 in something called “inventory platinum,” and a $2.2 million homestead.

Within the February statement of Mr. Jones’s financial affairs, the one prefaced with disclaimers about its accuracy, his property was valued at a complete of $10 million, including a house, lake house and rural acreage price $5.4 million. The statement said Mr. Jones owned two cars and two boats valued at $274,000, but listed as “unknown” the worth of his premarital agreement, eight limited liability firms and several other trusts. His stated monthly income was $129,000, but $104,000 of that was from sources that weren’t disclosed.

“The financial reporting and records are incomplete and the accuracy is uncertain,” Ms. Haselden, the Justice Department monitor, said in a court filing.

This past week, Ms. Haselden filed a subpoena for documents showing Mr. Jones’s cryptocurrency transactions and other financial dealings. The Southern Poverty Law Center has tracked thousands and thousands of dollars in cryptocurrency donations last yr to accounts tied to Mr. Jones.

Last month, the families retained an asset tracing firm to attempt to unearth more of Mr. Jones’s money, a process expected to take months.

Thus far, the one money Mr. Jones has paid within the Sandy Hook matter has been to his lawyers and the courts, as he has run up thousands and thousands of dollars in legal fees and sanctions for abusing the judicial process. One other trial for damages — potentially on top of the greater than $1.4 billion Mr. Jones owes — is slated for this yr.

“Without query, Jones is pushing the bankruptcy system to its limits,” said Avi Moshenberg, considered one of the families’ lead bankruptcy lawyers.

A court ruling that Mr. Jones must pay the complete amount owed would send a powerful public message, he added: “What a jury said is unforgivable mustn’t and can’t be forgiven by a bankruptcy court.”

Elizabeth Williamson reported from Houston, and Emily Steel from Recent York.

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