Please E-mail suggested additions, comments and/or corrections to Kent@MoreLaw.Com.

Help support the publication of case reports on MoreLaw

Date: 08-19-2019

Case Style:

United States of America v. Keenan A. Gracey

Case Number: 2:19-cr-00001-RSM

Judge: Ricardo S. Martinez

Court: United States District Court for the Western District of Washington (King County)

Plaintiff's Attorney: Seth Wilkinson, Lyndsie Schmalz, and Michelle Jensen

Defendant's Attorney: John M. Cyr and Philip P. Pitzer


Need a criminal defense lawyer in El Reno? Call: 888-354-4529 and we will help you for free.




Description:




Seattle, WA - Former Washington Resident Pleads Guilty to Wire Fraud and Money Laundering in Fraudulent IPO Stock Scheme
Defrauded Investors of Millions of Dollars by Posing as a British Billionaire with Inside Track on New Companies

A former Seattle area resident who defrauded dozens of investors of at least $5.8 million pleaded guilty today in U.S. District Court in Seattle to wire fraud and money laundering, announced U.S. Attorney Brian T. Moran. KEENAN A. GRACEY, 28, formerly of Newcastle, Washington, defrauded Seattle-area investors and others out of millions of dollars by pretending to sell them stock that GRACEY did not own and had no right to sell. Under the terms of the plea agreement, both the prosecution and the defense will recommend a prison term of 153 months in custody when GRACEY is sentenced by Chief U.S. District Judge Ricardo S. Martinez on November 15, 2019.

According to records in the case, between 2016 and 2018, GRACEY posed as a British billionaire with degrees from the London School of Economics and Oxford University. He drove expensive cars such as Bentleys and Ferraris and claimed to own expensive homes in Clyde Hill, Mercer Island, and Newcastle, Washington, as well as in Beverly Hills and San Diego, California. GRACEY also used falsified bank statements to make it appear he had hundreds of millions of dollars of cash on hand. The investigation revealed that GRACEY is Canadian, not British, and rented expensive homes and cars to make it appear he was wealthy.

GRACEY told potential investors he had special access to millions of shares of “pre IPO” stock that would produce returns of as much as 60 times the initial investment. Some investors gave GRACEY as much as $745,000, believing that they were purchasing stock. In fact, GRACEY did not own any of the stock he was pretending to sell and simply stole the victims’ money. In all, GRACEY collected $5,894,676 from dozens of investors.

The Securities and Exchange Commission filed a civil suit against GRACEY in May 2018 and obtained a temporary restraining order barring him from selling securities. In September 2018, the order was made permanent, and GRACEY was ordered to disgorge $4.4 million in cash and wire transfers that he had fraudulently obtained from investors. However, even after the SEC order, GRACEY continued to try to defraud investors by claiming he owned shares in a gene editing company. Between June 2018 and December 2018, GRACEY collected $2.2 million for shares of stock he did not own.

GRACEY’s fraud ended when he was arrested by the FBI on December 20, 2018. A federal grand jury charged him with wire fraud on January 3, 2019. On July 25, 2019, the grand jury returned a superseding indictment asserting additional charges, including money laundering charges.

On March 29, 2019, the United States seized $603,840 of fraud proceeds that GRACEY had paid to rent a luxury mansion in Beverly Hills, California. According to court pleadings, the government intends to forfeit this money and request it be used to compensate GRACEY’s victims.

Money Laundering and Wire Fraud are each punishable by up to 20 years in prison.

The case is being investigated by the FBI.


Charge:


Wire Fraud - 18:1343 and 2
(1-10)
Wire Fraud - 18:1343 and 2
(1s-4s)
Wire Fraud - 18:1343 and 2
(5s)
Wire Fraud - 18:1343 and 2
(6s-10s)
Promotional Money Laundering - 18:1956(a)(1)(A)(i) and 2
(11s-12s)
Promotional Money Laundering - 18:1956(a)(1)(A)(i) and 2
(13s)
Promotional Money Laundering - 18:1956(a)(1)(A)(i) and 2
(14s-16s)
Aggravated Identity Theft - 18:1028A and 2
(17s-18s)

Outcome: 08/15/2019 45 NOTICE OF RESCHEDULED HEARING TIME as to Keenan A Gracey (cc: USPO, PTS, USMO)
The Hearing time has been changed: Change of Plea Hearing set for 8/15/2019 at 04:00 PM in Courtroom 12B before Hon. Michelle L. Peterson. (AE) (Entered: 08/15/2019)
08/15/2019 46 NOTICE OF RESCHEDULED HEARING TIME as to Keenan A Gracey (cc: USPO, PTS, USMO)
The Hearing time has been changed: Change of Plea Hearing set for 8/15/2019 at 02:00 PM in Courtroom 12B before Hon. Michelle L. Peterson. (AE) (Entered: 08/15/2019)
08/15/2019 47 Minute Entry for proceedings held before Hon. Michelle L. Peterson- CRD: tfarrell; AUSA: Seth Wilkinson, Lyndsie Schmalz; Def Cnsl: Philip Pitzer; Court Reporter: Digital Recording; Time of Hearing: 2:00pm; Courtroom: 12B; CHANGE OF PLEA HEARING as to Keenan A Gracey held on 8/15/2019. Defendant present in custody. Defendant placed under oath and advised of rights/charges/penalties; Defendant executes Consent to Rule 11 Plea in a felony case before a U.S. Magistrate Judge; Defendant age = born 1991; Education = 11th grade; Court reviews the plea agreement; Keenan A Gracey (1) pleads GUILTY to Counts 5s,13s. Remaining Counts to be dismissed at sentencing. Court finds the Defendant is competent to enter a guilty plea; Court signs the Report and Recommendation and Counsel have fourteen days to file objections; Court orders the preparation of a Presentence Report. Defendant remanded to custody. Sentencing set for 11/15/2019 at 09:30 AM before Judge Ricardo S. Martinez. (TF) (Entered: 08/15/2019)
08/15/2019 48 CONSENT TO RULE 11 PLEA in a felony case as to Keenan A Gracey (TF) (Entered: 08/15/2019)
08/15/2019 49 PLEA AGREEMENT as to Keenan A Gracey (cc: USPO, FLU, AFU) (TF) (Entered: 08/15/2019)
08/15/2019 50 REPORT AND RECOMMENDATION re Plea of Guilty as to Keenan A Gracey by Hon. Michelle L. Peterson. Noting Date 8/30/2019. (Attachments: # 1 Proposed Acceptance of Plea)(TF)(cc: USPO) (Entered: 08/15/2019)
08/15/2019 51 NOTICE OF ATTORNEY APPEARANCE Michelle Jensen appearing for USA. for the Purpose of Forfeiture (Jensen, Michelle) (Entered: 08/15/2019)

Plaintiff's Experts:

Defendant's Experts:

Comments:



Find a Lawyer

Subject:
City:
State:
 

Find a Case

Subject:
County:
State: