Early bird tickets for Baltimore’s BEST party on sale now!

Ex-stockbroker in Howard pleads guilty to fraud charges


A former Howard County stockbroker and investment adviser pleaded guilty in federal court yesterday to fraud charges related to his role in a scheme that cheated investors out of more than $43 million by diverting their money to pay off other clients.

Michael P. Keating's plea to charges of conspiracy and securities fraud in U.S. District Court in Cleveland was the latest conviction among several players who were involved in a long-running operation that authorities said victimized more than 600 investors, mainly from Ohio and Maryland.

Federal authorities said they believe Keating's actions during five years ending in 2000 caused losses of more than $5 million.

Keating, 44, of Woodstock, is likely to receive several years in prison. But lawyers said any cooperation with authorities in their investigation may affect his sentence. Sentencing for Keating, who is in federal custody, is scheduled for April 30.

"He was an important figure in this scheme," said Assistant U.S. Attorney Christian H. Stickan, who prosecuted the case in Ohio. "Without his help, this scheme couldn't have continued."

In a two-count charging document filed last month, prosecutors accused Keating of conspiring with several people -- including Akron-based Andrew Bodnar, who is serving more than 11 years in federal prison -- to sell securities and other investments as part of what officials called a Ponzi scheme. Bodnar, described by authorities as a central figure in the case, and Keating worked for the same broker-dealer, according to court papers.

Those involved would not invest their clients' money but would use the funds to make promised payoffs to other investors, pay off clients who threatened legal action or cover business and personal expenses, according to the document.

Many of the investors were elderly or close to retirement age, and many had been assured that their investments were secured by assets, the document said.

Yesterday, Keating's Ohio attorney, John S. Pyle, said his client's involvement ballooned as he tried to fix losses from bad investments that he initially thought were good.

"Michael feels badly about what happened to the investors," Pyle said.

The charges against Keating were the latest in a long series of legal proceedings filed by securities officials and private citizens over the past few years.

Maryland securities officials took Keating to court years ago, saying he had violated a 1999 order that barred him from selling securities or working as an investment adviser. Keating served more than two months in the Howard County Detention Center in late 2001 after Howard Circuit Judge Lenore R. Gelfman found him in contempt in that case.

And investor lawsuits in Maryland courts involving Keating have resulted in millions of dollars in judgments, as well as several confidential settlements.

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad