Warrants issued for Midwest Public Auction officials

POPLAR BLUFF, Mo. -- The office of Missouri Attorney General Chris Koster is seeking the arrests of two Midwest Public Auction executives in Poplar Bluff, alleging each of five counts of felony deceptive business practices.

The 36th Judicial Court has issued arrest warrants for MWPA owner Donnie Smotherman, 49, of Henderson, Tennessee, and sales manager Leon B. McGregor, 35, whose last known address was in Lebanon, Tennessee.

Butler County Judge John Bloodworth was assigned to the case, setting bond at $10,000 cash or surety.

A probable-cause statement filed by the Consumer Protection Division of Koster's office states Smotherman and McGregor allegedly misrepresented agreements that caused victims to lose hundreds of thousands of dollars over several years.

Investigators stated Midwest Public Auction, in the 1500 block of Cravens Road, made "cold" calls to dealers of vehicles and equipment, soliciting excess inventory to be sold at auction. Under the suspected direction of McGregor, the victim/equipment dealers were misled by reps of the auction service to believe they would garner prices above or equal dealer cost, and if not, the victims would be compensated.

Many of the verbal agreements made by auction reps were not in the contract. McGregor hired, managed and trained all the sales reps, according to Koster's office. From April 2011 to February 2014, the auctions were held and the equipment was sold far below promised values and Midwest Public Auction allegedly earned the proceeds.

According to the probable-cause statement, as the scheme unraveled, a new company, USA Services was created. USAS used different phone numbers and created other entities -- Auction Pro Services, Auction Stars, Recreational Complete and more -- to further deceive victims.

Midwest Public Auctions allegedly provided victim/dealers with references of sellers who actually turned out to be buyers.

The Better Business Bureau issued a warning against Midwest Public Auctions in 2012 stating: "Consumers have told the BBB that these representatives have used misleading sales tactics to obtain business. In some cases, customers say they lost tens of thousands of dollars when their items sold for prices that were much lower than promised."

Despite the BBB warning, the alleged scams continued. A Marine supply company lost just less than $150,000 in August 2013, an RV Dealer lost $41,618 in October 2013, a Harley Davidson dealer lost $96,052 in January, among others.

Pertinent address:

Poplar Bluff, Mo.