Sandy Hook families sued Alex Jones — then he started moving money around

Alex Jones was losing in court. Parents of children killed at Sandy Hook Elementary School had sued him and his media company for defamation after he repeatedly claimed the 2012 massacre in Connecticut was a hoax. Fans of the Infowars host had harassed and threatened grieving families. By the summer of 2020, two of the lawsuits weren’t going his way.

As the potential for damages mounted, Jones began moving millions of dollars out of his company, Free Speech Systems, and into companies controlled by himself, friends or relatives, according to a Washington Post review of financial statements, depositions and other court records. The transfers potentially put those funds out of reach of the Sandy Hook plaintiffs.

Between August 2020 and November 2021, Free Speech Systems signed promissory notes - essentially IOUs - for $55 million to cover what it said were past debts to a company called PQPR Holdings that Jones owns with his parents, according to financial records filed in court by Jones’s attorneys. PQPR, which is managed by Jones’s father, a dentist, had bought tens of millions of dollars in supplements for Jones that he then sold on his show, the records say. A lawyer for Free Speech systems has said in court that the debt accrued unnoticed due to sloppy bookkeeping.

This year, Jones started paying his personal trainer $100,000 a week to help ship supplements and other merchandise, a Free Speech Systems attorney said in court. A company managed by Jones’s sister and listed as a “supplier or vendor” was paid $240,000, financial records show.

Courts have awarded the Sandy Hook families nearly $1.5 billion in damages against Jones, including $45.2 million in a Texas case in August and $965 million in a Connecticut case two months later. On Nov. 10, the judge in the Connecticut case ordered Jones to pay an additional $473 million in punitive damages, including $323 million for legal fees. Jones has said on his show that he plans to appeal.

The IOUs and other recent transactions helped tip Free Speech Systems into bankruptcy in July, according to Jones’s court filings. An accountant hired by Jones calculated that Free Speech Systems had $79 million in liabilities at the end of May and only $14 million in assets, court records show. As a result, the Sandy Hook families could be left vying with other creditors - including the companies tied to Jones himself to collect.

The bankruptcy court will ultimately determine which creditors are paid and how much. It is examining whether the promissory notes to PQPR and other transactions are legitimate. Attorneys for PQPR have argued in court that it should be paid before unsecured creditors, a category that would include the Sandy Hook plaintiffs.

Attorneys for the Sandy Hook families contend in a separate suit filed in April in Texas state court that PQPR is “not actually an independent business” and that Jones has engaged in fraudulent transfers to shield his wealth. They have argued in bankruptcy court that Jones began moving money out of Free Speech Systems only after he began to face legal setbacks in the defamation cases.

“In the middle of this lawsuit, they started documenting debts that had no evidence of existing beforehand,” Sandy Hook attorney Avi Berkowitz said in an interview.

A Justice Department trustee whose role in the bankruptcy case is to ensure the integrity of the process also has criticized the agreement to pay PQPR. “We, the U.S. Trustee, we do have concerns with the underlying transaction,” attorney Ha Nguyen told the court, according to a transcript. An agency spokeswoman declined to comment.

Alex Jones, his personal attorney, and attorneys for Free Speech Systems and PQPR did not respond to requests for comment or to detailed lists of questions from The Post. David Jones, Alex Jones’s father, and an attorney representing him also did not respond to requests for comment.

Jones and his father have said in court proceedings that PQPR was created in 2013 for liability protection as Jones got into the supplement business and as his father took on a management role. The accountant hired by Jones told the bankruptcy court that PQPR was a legitimate business that shared responsibility with Jones’s main company for “setting up supply chains, obtaining required governmental certifications, negotiating with vendors, procuring and paying for product, and overhead.”

Raymond Battaglia, a lawyer for Free Speech Systems, has said that as the Infowars brand ballooned, and millions of dollars poured in, the family-run business never adopted “appropriate management and accounting controls,” and so it failed to note the debt that had built up to PQPR.

“This is kind of like the garage band that became the boy band overnight, and had his girlfriend running the books, and the head roadie being the business manager,” Battaglia said in August in the bankruptcy case.