Prominent Businessman for Private Consulting Group Pleads Guilty to Wire Fraud and Money Laundering
Elderly victim bilked for $1.1 million in scheme
PORTLAND, ORE. – Robert L. Keys, 65, an Oregon resident, pled guilty today to two counts of wire fraud, two counts of money laundering, and one count of bankruptcy fraud, based on an indictment returned by a grand jury on June 27,2012, against him and two co-defendants.
Keys was a prominent businessman who ran a company called Private Consulting Group, which at one time, had assets of $400 million and managed investments for high net worth individuals from around the country.
The maximum sentence for the two counts of wire fraud is 20 years per count and a fine of $250,000. The money laundering charges carry a 10-year sentence per count, and the bankruptcy fraud charge has a five-year term of prison. Pursuant to a plea agreement entered into with the government, the government will be recommending a sentence of 70 months and a money judgment and order of restitution of $1.1 million. Sentencing is scheduled to take place on January 20, 2015.
At the change of plea hearing, the government contended that in 2008, as Keys’ business ventures were failing, he turned to one of his long-term clients, a widow in her mid-80s, and persuaded her to loan $1.1 million to co-defendant William Kearney, a Florida businessman who died recently. The indictment alleges, and the government stated at the September 2 hearing, that Keys lied to his client about the terms of the loan, such as the existence of treasury bonds as collateral for the loan and failed to disclose important facts to her in order to fraudulently obtain the money for his benefit and that of the late co-defendant, Kearney. This transaction resulted in the two wire fraud counts to which Keys pled guilty.
During the plea hearing, the government stated that Keys failed to disclose he was receiving over $100,000 in kickbacks as part of the scheme to defraud his long-time client. Those kickbacks were wired to him by co-defendant Kearney the day after he persuaded his client to loan Kearney the $1.1 million. The kickbacks form the basis of the two money laundering charges.
In 2010 Keys, along with his wife, filed for bankruptcy. The indictment charges Keys with fraudulently attempting to discharge $148 million in debt by lying to the Bankruptcy Court, concealing assets and income, and filing false documents the Court. Brenda Carper, 63, his long-time bookkeeper, was also charged with bankruptcy fraud. She previously pled guilty to one count of lying to the bankruptcy court and is scheduled to be sentenced on October 22, 2014.
Keys also pled guilty to one count of lying to the Bankruptcy Court regarding a company that he had transferred to Mrs. Carper but which he continued to control for his personal benefit.
This case was investigated by the Internal Revenue Service, Criminal Investigation, and the United States Trustees’ Office. The case is being prosecuted by Assistant United States Attorney and Senior Litigation Counsel Allan M. Garten.