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Keelan Harris gets 10-year prison sentence for role in Warren Ponzi scheme
By Ed Runyan
CLEVELAND
A federal judge Thursday sentenced Warren native Keelan Harris to 10 years in prison for his role in a Warren-based Ponzi scheme.
Judge Christopher A. Boyko also ordered Harris, 38, to pay restitution of $15,596,345 to more than 300 victims of the scheme, which Harris and his brother, Kevin Harris, carried out from the former electrical workers union hall on Parkman Road Northwest from 2006 to 2008.
A Toronto, Canada, woman, Karen Starr, has been indicted as another of the principal offenders in the case, but she has not been located.
In a sentencing memorandum, Keelan Harris’ attorney argued that Kevin Harris was the “mastermind” of the enterprise and that Keelan Harris only carried out minor functions for his brother.
Atty. Mark H. Allenbaugh of Wickliffe asked Judge Boyko to find that Keelan Harris was responsible only for the $120,000 in fraud related to the money his brother paid him, not the entire $15.8 million lost by investors.
“Mr. [Keelan] Harris played a minimal role in the conspiracy; he never solicited any investors and was simply a ‘go-fer’ his brother,” Allenbaugh said, adding that “scarce [federal] prison space should be reserved for those people we are afraid of and endanger us, not those who are patsies in nonviolent, non-drug-related economic offenses.”
The government, however, said Keelan Harris played a crucial role in the enterprise, wiring funds to investors and banks and operating the office of Complete Developments LLC (CDL) and Investments International Inc. (I-3) on a day-to-day basis, along with others.
“As the person responsible for banking activities of both companies, [Keelan Harris] knew that CDL and I-3 were fraudulently obtaining investors’ money,” the filing says.
Kevin Harris, 50, was sentenced to seven years in prison in 2012 for his role in the scheme. Keelan Harris was eligible for a longer prison sentence in part because of two previous federal convictions — in 1998 and 2004. He served more than three years in prison on the second offense, which involved a theft at the Champion License Bureau and use of equipment there to make driver’s licenses.
Authorities said CDL and I-3 offered investors foreign-exchange and currency-trading programs paying interest of 7 to 12 percent per month. Investors, mostly from Toronto, Canada, were promised that 80 percent of their principal would be secure and would be returned at the end of their program — in three to 12 months.
But, as in most Ponzi schemes, the only money coming into the program was from investors, and some of that money was used to pay phony “profit” checks to earlier investors until the money ran out, the government said.
“[He] knew that investor funds were not being placed in corporate foreign- exchange trading accounts as investors were promised,” Lauren Bell, an assistant U.S. attorney, said in a court filing.