Kevin Harris and several co-defendants are facing charges of fraud and misappropriation related to a multi-million dollar foreign currency (forex) Ponzi scheme, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on October 7, 2010, in the U.S. District Court for the Northern District of Ohio. The scheme allegedly operated from November 2006 until October 2008.
The CFTC alleges that Harris, along with his brother Keelan Harris, and their companies Complete Developments LLC (CDL) and Investment International Inc. (I3), fraudulently solicited funds from hundreds of individuals under the guise of professionally managed forex trading accounts. Instead of trading on behalf of their customers, the defendants are accused of operating a Ponzi scheme, using money from new investors to pay existing investors and misappropriating funds for personal use.
The complaint details false representations made to customers, including promises of guaranteed monthly interest rates between 5 and 12 percent, a return of at least 80 percent of invested funds, and segregation of customer funds from corporate accounts. Defendants Kevin Harris, Keelan Harris, and Karen Starrof, a director of I3, allegedly concealed prior fraud convictions from potential investors.
The CFTC alleges that funds were transferred to a joint personal trading account held by Kevin Harris and Starrof, and used to cover personal expenses such as mortgages, car leases, cell phone bills, travel, and rental cars. Patrick Cole, President of Global Strategic Marketing Inc. (GSM), CDL’s marketing agent, is also named as a defendant, accused of knowingly contributing to the violations through GSM.
The CFTC has also identified several relief defendants – Majestic Enterprises Collision Repair, Inc., UCAN Overseas Corporation S.A., and RAK Palace Rent-A-Car – alleging they received customer funds as a result of the fraudulent scheme and have no legitimate claim to them.
The CFTC is seeking disgorgement of ill-gotten gains, restitution for defrauded customers, civil monetary penalties, permanent injunctions against further violations of commodities laws, and trading and registration bans. The investigation received assistance from the Federal Bureau of Investigation, the Internal Revenue Service’s Criminal Investigation Division, U.S. Immigration and Customs Enforcement, and the U.S. Attorney’s Office for the Northern District of Ohio, as well as the Ontario Securities Commission and the Ohio Department of Commerce.
Source: CFTC.gov
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