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Man pleads guilty in Ponzi scheme
By Ed Runyan
YOUNGSTOWN
The Warren man federal officials say ran a $20 million Ponzi scheme out of his Parkman Road Northwest office building pleaded guilty Wednesday to three charges that could result in a federal prison term of about eight years.
Kevin L. Harris, 45, appeared in federal court here before Magistrate Judge George Limbert, pleading guilty to conspiracy to commit wire fraud, wire fraud and money laundering.
He was represented by Atty. Gil Rucker III of Warren.
The person who attended the hearing on behalf of the more than 100 victims of the scheme said the proceedings also give him hope that some of the money Harris took will be returned.
“The order of restitution that could come from this could be just as good as the judgment we are seeking in our civil suit,” Atty. Harry Wise of New York City said after the hearing.
Harris offered a rate of return of between 7 percent and 12 percent per month for investments in his foreign-currency exchange business, known as Forex, federal officials said.
Most of the investors were from the Toronto, Ontario, area, though some were also from northern Ohio and elsewhere in the United States.
Harris, a 1983 Warren Harding High School graduate, operated the investment scheme from 2006 through 2008 through his company, Complete Developments LLC, which was headquartered in the former electrical workers union hall on Parkman Road Northwest in Warren.
Wise said he believes that about $3 million of the money Harris and his associates collected was invested in real estate in the Middle East and might still be recoverable.
Wise said he also hopes the federal government brings charges against Harris’ associates — Harris’ brother, Keelan Harris, 34, also of Warren, and Karen Starr, of Ontario.
During the hearing, Kevin Harris answered all of the questions posed to him by Magistrate Judge Limbert and eventually entered his guilty plea.
Limbert set sentencing for 10:30 a.m. Jan. 13 before Judge Lesley Wells in Cleveland Federal Court. Harris remains free on $50,000 bond. Harris surrendered his passport and is ordered to continue to live at his Warren residence and remain in northern Ohio while he awaits sentencing.
Wise has said Harris’ companies took in $42 million and paid out $29 million in purported interest, though only $1 million was actually traded in the Forex market. The rest was spent on such items as automobiles, travel and salaries, federal prosecutors say.
According to charges, Harris and his associates “paid some investors purported ‘interest’ payments for a period of time so as to give the false impression that there were actual investments, when, in truth ... as part of a classic Ponzi scheme [Harris] and others well knew, any ‘interest’ payments came from other investors’ funds,” federal prosecutors said.