Property of Deceased KC Business Owner Seized as Proceeds of $10 Million Fraud Scheme

https://www.justice.gov/usao-wdmo/pr/property-deceased-kc-business-owner-seized-proceeds-10-million-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Western District of Missouri

FOR IMMEDIATE RELEASE

Friday, April 14, 2017

Property of Deceased KC Business Owner Seized as Proceeds of $10 Million Fraud Scheme

KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that a civil forfeiture complaint has been filed in federal court for property acquired and maintained by Mark Sellers, a Kansas City, Mo., business owner who was under investigation by the FBI for a $10 million investment fraud scheme before he shot and killed himself on Aug. 2, 2016.

The forfeiture complaint alleges that the property is subject to federal forfeiture because it was derived from the proceeds of an investment fraud scheme in which Sellers stole approximately $10 million from approximately 100 investors through his firm, Selden Companies, LLC, from December 2007 through at least 2015. The complaint, filed under seal on Thursday, April 13, 2017, and unsealed today, alleges that Sellers committed mail fraud, wire fraud and bank fraud. The Department of Justice provides a process by which victims who suffer losses from a fraud scheme may seek relief once any assets have been forfeited.
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According to the complaint, the FBI began investigating Sellers on June 6, 2016, after receiving a complaint from an investor. Sellers fraudulently misrepresented to investors in the Kansas City area as well as Georgia, Alabama and elsewhere that he would use the funds to purchase companies and turn them around to sell at a profit. Sellers hid from investors, the complaint says, the fact that he and his wife spent almost all of the invested funds to maintain their own lavish lifestyle.

Sellers’ primary source of income from 2008 through 2016 was investor funds he used for his own personal benefit. Sellers’ bank records show approximately $9.9 million of investor funds were utilized for his own personal use and benefit to fund his lifestyle, vehicles, life insurance policies, homes, jewelry and credit card purchases. Sellers allegedly laundered the invested funds through multiple bank accounts.
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In addition, the complaint says, when Sellers had depleted the investors’ funds, he defrauded several financial institutions by running a large credit card “bust out” scheme in a final effort to maintain his and his wife’s lifestyle. A bust out scheme is a type of credit card fraud in which an individual establishes a normal usage pattern and solid repayment history, then racks up numerous charges and maxes out the card with no intention of paying the bill. The consumer establishes the card issuer’s trust and a strong credit profile with the goal of opening numerous accounts and receiving credit line increases so that more funds are available.

Sellers opened approximately eight credit cards with JP Morgan Chase over several years, ran up large credit card balances, increased the credit limit available on the credit cards, and then paid the bill with ACH transfers backed by insufficient funds. This type of activity occurred on one credit card 92 times in a five-month span. J.P. Morgan Chase Bank was left with an outstanding balance on Sellers’ credit cards of approximately $557,000. Commerce Bank sustained a loss of approximately $33,000 caused by Sellers depositing several insufficient funds checks into his bank accounts.
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