Aug. 16-- Aug. 16--Keenan Alexander Gracey, a former Newcastle resident charged with defrauding Seattle-area residents and others of around $5.8 million while pretending to be a British billionaire, pleaded guilty to wire fraud and money laundering Thursday.
A plea agreement between the U.S. Attorney's Office and Gracey's defense calls for him to spend more than 12 years in prison.
Dozens in Washington and California, from wealthy investors to a car broker, gave Gracey as much as $745,000 for what he called "pre-IPO" stock in companies that had not gone public yet. He claimed to have millions of shares that would produce 60 times the investment when, in fact, he owned no such stock, prosecutors said.
Tall, muscular and sporting a British accent, he managed to collect almost $6 million over a two-year period, pretending to be a billionaire and a graduate of Oxford University and the London School of Economics. He showed off expensive homes in local areas like Clyde Hill and Mercer Island, as well as Beverly Hills, California. He drove Ferraris and Bentleys.
An investigation later revealed Gracey was from Canada, and had rented the expensive cars and homes. Gracey also falsified bank statements to appear wealthier than he was to potential investors.
His facade as a wealthy British investor and athlete -- one victim was told he was trying out for the Seattle Seahawks -- crumbled last May. Victims alerted the Securities and Exchange Commission after Gracey promised a handful of investors a public stock offering, which never took place. The SEC issued a temporary restraining order against him that same month.
But that didn't stop Gracey from continuing to defraud dozens, and it wasn't the last time he was investigated by the Federal Bureau of Investigation. Even in December, Gracey was working on another scheme that would defraud more people before he was arrested five days before Christmas.
The sentencing is set for mid-November.
Material from The Seattle Times archives is included in this report.