Keith W. Dominick was cracked at light speed.

No sooner had a reporter started looking into complaints that Dominick had been running a securities scheme on the side from his office at a Lorain mortgage company than U.S. Attorney Gregory White hit Dominick with a securities fraud charge in January, alleging that Dominick had fleeced 17 investors out of $1.6 million. His victims included fellow members at the Church on the North Coast in Lorain and members of the Church on the Mount in Brecksville.

Before the charge could even be time-stamped in U.S. District Court in Cleveland, White had Dominick's signature on a plea agreement in which he admitted guilt in exchange for a prison sentence not to exceed 20 years, a fine of not more than $5 million and an understanding that White wouldn't charge him in connection with other facts in the case that prosecutors knew.

Dominick pleaded guilty during his arraignment on March 17 and his sentencing is set for June 22. He remains free on $25,000 bond.

Helping to speed things along was Dominick's 1996 federal conviction for his role in defrauding 70 investors in five different states out of nearly $6 million, as detailed in the plea agreement. He had been sentenced to 37 months but served only 28 months in a prison near Youngstown.

The new charge against Dominick was triggered by an eight-month investigation by the Elyria office of the FBI and the Division of Securities in the Ohio Department of Commerce, according to FBI Agent Bob Hawk.

Dominick, 51, a heavyset, bespectacled and bearded man, is described by former clients as slick-talking and financially savvy.

In 2002, while employed as vice president of commercial lending at Mortgage One Banc Financial Services in Lorain, Dominick incorporated KNR Marketing, which prosecutors said he used to sell unregistered securities and for ''day trading.''

Several of his former clients said they discussed investment deals with Dominick in his office at Mortgage One, and the back of his Mortgage One business card, which he gave to KNR Marketing clients, advertised him as dealing in mutual funds, IRAs, commercial lending, purchases, refinancing, VA loans, home equity, college and financial planning and insurance services.

From late 2001 to early 2004, Dominick was selling clients fraudulent investments while promising returns from 20 to 100 percent, according to court documents.

Rather than invest all of the clients' funds, prosecutors say Dominick used the money to pay interest and principal to other clients, to pay off clients to dissuade them from contacting law enforcement, to pay business expenses for promoting his scheme, and to pay his own personal expenses.

Dominick would falsely represent that the investors were achieving high returns on their investments, causing most investors to ''roll over'' their existing investment and lull them into the belief that their investments were making money, prosecutors said.

None of the investors ever received a written statement reflecting actual trading activity occurring on their behalf or in the KNR accounts.

''I accepted money from people giving them a promissory note and traded in the stock market,'' Dominick said at his arraignment. ''Once I lost a major portion of the monies, I continued to spend it and made false representations that the profits were coming in order to try to buy time to replenish the money to pay them back.''

During the time Dominick ran his scheme, he handled approximately $1.5 million from investors while paying out approximately $675,868 to them, according to court documents.

Dominick used a checking account at Lorain National Bank as part of the scheme, according to court documents, and he maintained an online brokerage account at Schwab and Co. in Westlake that he occasionally used to execute trades for KNR investors and himself.

''Wholly appropriate,'' said attorney Brent English of Cleveland of Dominick's plea. ''They had him so far right, he couldn't do anything but plead guilty. They got him.''

English has said he is preparing to hit Dominick and other ''liable'' defendants with a civil lawsuit seeking more than $1 million for damages to a client who claims he lost $27,000 he invested with Dominick between 2002 and 2004.

Prosecutors and federal regulators say they can't understand how Dominick was hired by a financial institution soon after completing a prison sentence for violating securities laws.

Randy Bevins, the president of Mortgage One, confirmed in late January that Dominick worked for him, but wouldn't comment further.

Lorain National Bank began negotiations to acquire Mortgage One in early 2004, completed a deal to buy the company in June and closed the deal in September.

''Lorain National Bank has no comment on the matter regarding Keith Dominick, a former employee of Mortgage One Banc Financial Services,'' said James Kidd while he was still the bank's president in January. ''All of that happened before Lorain National Bank acquired Mortgage One, so Lorain National Bank is not liable. Anything prior to Lorain National Bank owning Mortgage One, Randy Bevins would have to answer to.''

On March 3, The Morning Journal submitted a list of questions about Dominick and the case to Bevins and John Fuller, a spokesman for Lorain National Bank and LNB Bancorp, the parent company.

The questions covered Dominick's dates of employment, his resume and background check, the reason for his departure, what company officials knew about Dominick as the bank was acquiring the mortgage company and whether investigators had questioned company officials about the case.

The next day Fuller issued a statement.

''Due to pending legal matters regarding a former employee of Mortgage One, it would be inappropriate for us to comment on his employment history with Mortgage One or any additional information related to this individual,'' Fuller said.

''Randy personally has no further comment on this matter,'' Fuller said.

While working at Mortgage One, Dominick was involved in arranging a loan for the purchase of The Silos Ministries by Gary McNaughton, who is at the center of an unfolding financial scandal at the Church of the Open Door in Elyria, and he later was named with McNaughton in a suit when the property used by several local churches for youth activities had to be repossessed.

McNaughton has said in a deposition that payments on the loan stopped after the U.S. Securities and Exchange Commission filed a complaint to halt his investment activities and froze his Haven Equity account from which the payments were made.

A lawyer for Mortgage One has acknowledged that McNaughton brought a commercial loan request to the firm and that it played a part in finding an eventual lender.

Dominick had been permanently banned from dealing in securities in 1996 after being indicted and convicted on fraud charges.

The indictment stemmed from an eight-count, anti-fraud enforcement action filed by the Commodity Futures Trading Commission in June 1994 against Dominick and Main Street Investment Group Inc., alleging that they defrauded commodity pool investors.

The commission charged that Dominick benefited from a fraudulently operated church-based commodity pool from 1992 to 1994, according to court documents.

In 1996, U.S. District Court Judge G. Kendall Sharp of the Middle District Court in Orlando required Dominick to pay $4.5 million in restitution and barred him from the futures industry, among other sanctions.

Attorney Charlie Stutts of Orlando, Fla., was appointed receiver for the money that Dominick was ordered to repay, but he said only a small amount was repaid and he hasn't heard from Dominick in about three years.

''My job was to get the money back that he owed to the investors who were defrauded out of their money.'' said Stutts. ''Keith Dominick paid a little bit in restitution, but nowhere near the amount that was owed. Keith Dominick was supposed to get me a list of all the names and addresses of people he owed money to, but he never did.''

Article © Anywhere Communications All Rights Reserved