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Warren man to be sentenced Nov. 6 for role in Ponzi scheme
By Ed Runyan
CLEVELAND
A Warren man pleaded guilty Tuesday in federal court here to 12 counts of wire fraud and money laundering for his role in the $20 million Ponzi scheme he and his brother carried out in 2007 and 2008.
Keelan Harris, 38, will be sentenced for his crimes at 2 p.m. Nov. 6, but it’s unclear how many years in prison Judge Christopher A. Boyko will give him.
Harris was essentially a “clerk” who got the mail, took out the trash and helped his brother with certain technology issues, Atty. Mark H. Allenbaugh said by telephone after Tuesday’s hearing.
But Judge Boyko indicated in an earlier filing relating to whether Harris was eligible for bond that Harris faces a possible prison term of more than 15 years.
Allenbaugh says Harris’ sentence will be determined by what role Judge Boyko believes Harris played in the scheme, which operated out of the Complete Developments office on Parkman Road Northwest in Warren.
Allenbaugh says Keelan Harris’ brother, Kevin Harris, 49, who began serving a seven-year prison term in March 2012 for his role, was the “silver-tongued” mastermind of the scheme.
Prosecutors say Keelan Harris is responsible for the same amount of financial loss as his brother — about $15.7 million — but Allenbaugh plans to argue that the real amount is “under $150,000.”
Allenbaugh said Keelan Harris will have served about 15 months in federal custody by this November, and Allenbaugh believes that should be enough punishment for a “back-office clerk getting the mail,” while his brother, Kevin Harris was the “Bernie Madoff of Youngstown.” Madoff is the Wall Street executive sentenced to 150 years in prison in 2009 for operating a Ponzi scheme that took billions from investors.
A Ponzi scheme is one in which phony “profits” are paid to investors with the money from later investors, until the scheme collapses.
Allenbaugh added, “I feel it’s too bad [Keelan Harris] is having to atone for the sins of his brother.”
None of the victims testified at Tuesday’s hearing, Allenbaugh said. The U.S. attorney handling Tuesday’s hearing for the government did not return a phone call seeking comment.
Karen Starr of the Toronto, Canada, area, who also is charged in the scheme, is said to be in hiding. About 400 customers, most of them in the Toronto area, were defrauded by Complete Developments and a sister company Investment International Inc., for which Keelan Harris was president, prosecutors said.