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Press Release

Former Washington resident sentenced to 15 years in prison for fraudulent IPO stock scheme

For Immediate Release
U.S. Attorney's Office, Western District of Washington
Posed as British billionaire to defraud investors of millions by claiming he had the ‘inside track’ on stock offering

A former Seattle area resident who defrauded dozens of investors of at least $6.1 million was sentenced today in U.S. District Court in Seattle to 180 months  (15 years) in prison for 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.  At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez told GRACEY:  “You stole much more than money.  You stole their trust.  You stole their futures.  You changed forever their children’s futures.  All for what?  To feed an outsized ego.”

“This defendant is a financial predator who singlehandedly destroyed the lives of honest, hardworking people who did nothing wrong.” said U.S. Attorney Brian T. Moran.  “Gracey callously looted their retirement funds, forced some into bankruptcy, and destroyed the dreams of people who had saved to buy a house or fund their children’s educations.  This sentence will protect the public from his penchant for fraud.”

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 rented expensive cars such as Bentleys and Ferraris and rented expensive homes in Clyde Hill, Mercer Island, and Newcastle, Washington, as well as in Beverly Hills and San Diego, California.  GRACEY told prospective investors that he owned all of these cars and houses.  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.  GRACEY pleaded guilty on August 15, 2019.

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. 

The case was investigated by the FBI and prosecuted by Assistant United States Attorneys Seth Wilkinson, Lyndsie Schmalz, and Michelle Jensen. 


Press contact for the U.S. Attorney’s Office is Communications Director Emily Langlie at (206) 553-4110 or

Updated November 18, 2019

Financial Fraud
Securities, Commodities, & Investment Fraud