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.
The government is seeking forfeiture of Sellers’ former residence at 6009 N. Cosby Court in Kansas City, Mo. Also included in the complaint is a 2014 Porsche 911 and 77 pieces of jewelry that were seized by law enforcement officers, as well as the proceeds of five life insurance policies that have been cashed with death benefits totaling $6 million.
Investment Fraud Scheme
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.
Financial records indicate Sellers expended approximately $9.9 million of investor funds in the following ways:
Approximately $343,343 in mortgage payments for his personal residence;
Approximately $931,384 on remodeling, upgrading, and maintaining his personal residence (included kitchen remodeling and installing landscaping, tile and granite, new cabinets and windows, and fencing, as well as installing and maintaining an in-ground swimming pool);
Approximately $701,102 at Tivol jewelry store;
Approximately $253,641 at Aristocrat Motors and Thoroughbred Ford to purchase luxury vehicles for him and his wife;
Approximately $260,131 at Midwest Trust Company;
Approximately $7,461,116 to credit card companies.
Credit Card Bust Out Scheme
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.
Events During the Investigation
On July 18, 2016, Kansas City police officers were called to the Sellers’ residence for a possible homicide/suicide. Upon arrival, officers found Sellers incoherent in his bedroom lying next to his wife, Sandra Sellers, who was deceased. Sandra Sellers had been shot in the head, and Sellers had attempted to overdose on medication. Sellers was taken to an area hospital for medical attention and evaluation.
On Aug. 2, 2016, law enforcement officers executed a search warrant at Sellers’ residence. Sellers was not home at the time the warrant was executed. At approximately 8:33a.m., Sellers arrived in his Ford Explorer. When Sellers realized he was not able to turn onto N. Cosby Court because law enforcement had blocked the intersection (to prevent Sellers from approaching the residence), he accelerated past the intersection. At that time, law enforcement officers stopped the vehicle, which was occupied solely by Sellers. Sellers stopped his vehicle and shot himself in the head with a .22-caliber revolver. Sellers was transported to an area hospital where he later succumbed to his self-inflicted gunshot wounds.
This case is being prosecuted by Assistant U.S. Attorney Curt Bohling. It was investigated by the FBI.