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A federal judge has entered a civil judgment against two Warren brothers and a Toronto, Canada, woman for their role in operating a Ponzi scheme in Warren
By Ed Runyan
AKRON
Federal Judge David D. Dowd Jr. has entered default judgment against imprisoned former Warren electrician Kevin L. Harris, his brother, Keelan Harris, their Toronto business partner, Karen Starr, and several companies connected with a Ponzi scheme they ran out of a Warren office from 2006 to 2008.
The judgment, based on a complaint filed by the U.S. Commodities Futures Trading Commission, orders the three to pay civil penalties of about $2.5 million each, turn over about $1 million diverted from investor accounts to corporate accounts and never again deal in the commodities industry.
Those orders are on top of the $15.7 million another federal judge ordered Kevin Harris in March 2012 to pay as restitution to 286 investors owed money from the companies Complete Developments LLC and Investment International Inc.
Judge Dowd’s entry says the restitution is owed not just by Kevin Harris, but also by Keelan Harris, Starr and the corporations used to operate the Ponzi scheme.
“Because each of the defaulting defendants participated in the solicitation scheme to defraud these investors, the defendants should be jointly and severally liable” for the $15.7 million restitution award, the entry says.
Harris, 49, was sentenced to seven years in prison by Judge Lesley Wells for being president and CEO of Complete Developments, the first of the companies created to run a foreign- currency trading company out of the former electrical workers union hall on Parkman Road Northwest in Warren starting in late 2006.
The companies defrauded investors by misrepresenting their ability to invest foreign currency, promising that 80 percent of investments were protected from loss and failing to disclose the criminal history of the Harris brothers and Starr, the government said.
With the help of Starr, who is from the Toronto, Ontario, Canada, area, the companies recruited more than 400 investors, mainly from Toronto, to invest $23 million with the promise of returns of between 5 percent and 12 percent per month on their investment.
The operation folded in 2008 when the scheme, which involved using the money from later investors to pay “interest” payments, ran out of money.
Keelan Harris, 37, of Warren, and Starr were never charged by the government.
Judge Dowd’s order is a default judgment because none of the defendants answered the complaints the Commodities and Futures Trading Commission filed against them.
The judgment says the Harris brothers, Starr and the companies, which also had a Toronto office, never registered with the Commodities Futures Trading Commission in any capacity. They also didn’t have a trading account at Interbank FX, a registered futures commission merchant, as they told investors.
Kevin Harris, a 1983 Warren G. Harding High School graduate, also went to prison for a short time for his role in a 1995 Warren arson and was sued or charged criminally in Warren more than 55 times starting in 1994.
Judge Dowd’s entry mentions that he also was convicted of receiving property under false pretenses in North Carolina in 2007.
The entry says Starr is believed to be living in the United Arab Emirates in the Middle East. She was convicted of fraud in Canada in 1997, the entry says.
Keelan Harris is believed to be living in South America, the entry says, though he’s been seen in the Warren area in recent months.
Keelan Harris went to prison after he broke into the Champion License Bureau in 2003 and took equipment used to make driver’s licenses.
The entry says Majestic Enterprises Collision Repair Inc., which is an auto-repair shop Kevin Harris operated at 1036 Parkman Road NW, received $302,277 from Complete Developments and Investment International and must pay the money back.
UCAN Overseas Corp. S.A., a Panamanian company the Harris brothers and Starr operated from the Warren office, marketed construction materials. It received $768,000 and must also pay that money back, the entry says.
Atty. Harry Wise of New York City, who represents the defrauded investors, said the judgment means “any money found is now ordered to go to the victims,” and he believes the Commodities Futures Trading Commission will make efforts to recover it.