A former broker convicted of running a Ponzi scheme and accused in a separate state case of murdering a client is back in appellate court, challenging a 60-year prison sentence after his original life sentence was overturned.
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Keith Todd Ashley, barred from the industry in 2022, was arrested in late 2020 amid allegations that he had killed a former client and defrauded that one and eight others. In 2022, a federal jury convicted Ashley of 17 counts of wire fraud, mail fraud, bank fraud and carrying a firearm in relation to a crime of violence. The following summer, a judge sentenced him to life in prison.
That sentence did not stand.
After Ashley appealed, government prosecutors conceded at least one of the charges underpinning the life sentence shouldn’t have been invoked and sent the case back to the original district court. In June, Judge Amos Mazzant of the Eastern District of Texas handed down a new sentence of 60 years in federal prison.
Ashley has now appealed again, arguing that the revised sentence is excessive and retaliatory.
The Hobbs Act and the vacated life sentence
Ashley’s original life sentence was tied in part to allegations that he had violated the Hobbs Act, which makes violent robbery a federal crime if it affects interstate commerce. But that charge was unwarranted, prosecutors conceded in Ashley’s first appeal, because he hadn’t met one of the act’s prerequisites: using violence or threats “in the presence” of a victim to steal property or money.
That concession stemmed from allegations tied to the early 2020 death of one of Ashley’s former clients, James Seegan of Carrollton, Texas. Prosecutors alleged that Ashley had transferred $20,000 of Seegan’s money into his own accounts roughly two days after Seegan’s death. Because that transfer wasn’t done in Seegan’s presence, prosecutors acknowledged the Hobbs Act could not apply.
The alleged murder of James Seegan
Separate from the federal fraud case, Ashley faces state murder charges in Texas related to Seegan’s death.
Prosecutors allege that in early 2020, Ashley visited Seegan at his house in the Dallas suburb of Carrollton under the pretext of taking a blood sample. Ashley, a trained nurse, is accused of injecting Seegan with an anesthetic that caused him to lose consciousness, and then shooting him.
Just weeks earlier, Ashley had persuaded Seegan to change the beneficiary of a $2 million life insurance policy from his wife to a trust controlled by Ashley.
Seegan’s wife later found his body with a gun in his left hand and a note next to his body stating, “my last friend Keith Ashley will help you.” She told investigators Seegan was in fact right-handed.
A Dallas County grand jury indicted Ashley in 2021 on murder charges.
Ashley’s lawyer in the federal case, James Whalen of the Frisco, Texas-based Whalen Law Office, said Tuesday the prosecution for murder is now practically on hold while Texas state officials await the outcome of Ashley’s appeal of his fraud conviction.
Whalen said he thinks the murder case will be dismissed if Ashley’s heavy prison sentence in federal court is upheld.
“My guess is they will drop it,” Whalen said.
Ashley’s first appeal and his 60-year prison sentence
Ashley is now faced with 60 years in federal prison for bilking Seegan and eight other clients out of more than $1.9 million.
Ashley has appealed that sentence to the Fifth Circuit of Appeals and unsuccessfully sought intervention from the U.S. Supreme Court. Whalen said that both the prosecution and defense in the case will submit briefs in coming months and wait to see if the appellate judges will want to hear oral arguments. Whalen said Ashley’s appeal of the 60-year sentence is grounded mostly in assertions that the punishment was unreasonably harsh and the result of prosecutorial vindictiveness.
The alleged Ponzi scheme
Law enforcement officials have said Ashley’s Ponzi scheme started in 2016 and lasted until shortly before his arrest. They allege that Ashley solicited money from clients on the pretext that he would invest it in financial products. Instead, prosecutors say, he used it to pay other clients, support a struggling brewery called Nine Band Brewing and pay bills and lavish expenses.
During part of that period, Ashley was registered as a broker at Parkland Securities, a firm in Ann Arbor, Michigan. The firm fired him in 2020 after he failed to disclose “outside business activities.”
Despite his arrest on murder charges, Ashley managed to keep his brokerage license for nearly two years. He was finally barred from the industry in November 2022, after failing to respond to Financial Industry Regulatory Authority inquiries into the reasons for his firing from Parkland Securities.
