PORTLAND, Ore. — The former chief executive of a Portland firm that provided investment services to the wealthy was sentenced Tuesday to almost six years in prison for defrauding a widow out of more than $1 million.
The prosecution said in its sentencing memorandum that “desperate men will resort to desperate measures,” and Robert Lee Keys was desperate when his investments tanked during the 2008 economic collapse.
To help save his business and lifestyle, Keys persuaded the widow, Mary Fax, to lend $1.1 million to a businessman from Gulf Breeze, Florida.
Keys didn’t tell the elderly woman that he was getting a $150,000 kickback, or that the businessman was supposed to rescue Keys from failed real estate deals.
The businessman, Bill Kearney, ended up using the money for a car and other personal expenses. He, too, was charged in the case, but died in November 2013.
Defense attorney Ronald Hoevet, in seeking a sentence of less than five years, tried to draw a distinction between the actions of Keys and Kearney. Keys deceived Mary Fax to save his business, Hoevet said. Unlike Kearney, he did not intend to cheat her out of $1.1 million.
“(Keys) did not intend that she would never get her money back,” Hoevet said.
But U.S. District Court Judge Marco Hernandez said Kearney wouldn’t have got the money without Keys serving as the connection, and Keys got a healthy kickback for making it happen.
“While he may have at some level believed in his own heart that she was going to be repaid, he was personally benefiting from this scheme,” the judge said.
Keys, 66, pleaded guilty last summer to wire fraud, bankruptcy fraud and money laundering. When it was his turn to speak Tuesday, he apologized for betraying the widow. Keys had been a financial adviser to Fax and her late husband, a wheat farmer, for three decades.
In a letter submitted to the judge last week, Keys said Kearney had promised to save a condominium project from foreclosure in exchange for an immediate loan of $1 million.
“I hid the truth about the loan and the borrower from Mary,” he wrote. “She made the loan to Kearney because she trusted me, and for no other reason.”
Mary Fax died last September after a fall at her farm in The Dalles. She was 90.
The judge ordered Keys to pay $1.1 million restitution to Fax’s estate. Hoevet said in court documents that Keys has no assets, his wife is divorcing him and old friends have abandoned him.
“Bob Keys is still chasing rainbows,” Hoevet wrote. “Recently, he has been conned by a phony gold deal promoted out the Republic of Mali in West Africa. He is in a bad place.”
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