U.S. Department of Justice

United States Attorney
Northern District of Ohio

May 17, 2010

Owner of DJ Harriett Inc. Charged with $7 Million Ponzi Scheme

CLEVELAND - David J. Harriett, age 60, has been charged with one count of mail fraud for executing a Ponzi scheme that defrauded approximately 200 investors of approximately $7 million, announced Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. Harriett, a resident of Warren, Ohio, was the owner and President of DJ Harriett Inc

It is alleged that from August 1996 through January 2010, Harriett represented to more than 200 investors that he and his company, DJ Harriet Inc., were approved “project managers” for the construction of new McDonalds and Pioneer Chicken franchise restaurants in the Northeast Ohio, New York, Indiana, Pennsylvania and Florida.

It is further alleged that Harriett solicited investors for DJ Harriett and, in exchange for their investment, provided investors with promissory notes that purportedly guaranteed the return of their investment, plus significant interest.

It is alleged that Harriet sent numerous letters through the mail to investors which falsely represented the success and growth of the company as well as the existence and success of franchise construction contracts. It is also alleged that that Harriett knew that neither he nor his company had any contracts with McDonalds or Pioneer Chicken, let alone franchise construction contracts. Moreover, it is alleged that Harriett also knew the investor money was not being put to any legitimate use, but rather was being used to make Ponzi payments to other investors, to operate DJ Harriett and for his own purposes and personal use.

As a result of Harriett’s alleged fraudulent conduct, approximately 200 investors have sustained a combined loss of approximately $7 million.

“Fraud in the market place is a significant problem that negatively affects consumer confidence and, ultimately, economic recovery,” said U.S. Attorney Dettelbach. “For these reasons, we will continue to vigorously prosecute Ponzi schemes.”

This case is being prosecuted by Assistant U.S. Attorney Bridget M. Brennan after an investigation by the Youngstown Office of the FBI.

This prosecution is sponsored by President Barack Obama’s Financial Fraud Enforcement Task Force.

President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

An information is only a charge and is not evidence of guilt.

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What is Financial Fraud?
What is Financial Fraud?

Financial Fraud encompasses a wide range of illegal behavior - from mortgage scams to Ponzi schemes, credit card theft to tax fraud. Everyone is affected by financial fraud.