Feds seize bank accounts and cars in alleged Kansas City development agency fraud scheme
Federal agents now control several accounts and two cars that they say were funded or bought with misappropriated funds by former Economic Development Corporation of Kansas City controller Lee Brown.
Federal authorities seized bank and brokerage accounts that they said contain proceeds from an embezzlement scheme committed by the former controller of the Economic Development Corporation of Kansas City.
Agents also took control of two cars — a 2021 Mercedez Benz and a 2021 Ford F-150 pickup truck — that they said the late Lee Brown bought with money he stole while he controlled the EDC’s finances.
A civil forfeiture case filed in federal court Wednesday by the U.S. Attorney’s Office in Kansas City revealed the seizures.
The filing does not name Brown — it refers only to an “Employee 1” of the EDC — but the bank account number of a Wells Fargo account listed in Wednesday’s forfeiture case corresponds with one described in a lawsuit filed against Brown by the EDC in January.
The EDC oversees and administers several public agencies involved in granting tax breaks and other assistance for development projects in Kansas City. It’s an important agency — its board of directors includes elected officials and prominent business figures — but in recent years it has struggled with budget cuts and turmoil among leadership.
The EDC accused Brown of lying about almost every aspect of his professional life when he applied for a job as the agency’s controller in 2015.
Brown claimed law and accounting degrees that he never earned. He said he held jobs he never worked. He gave a certified public accountant license number that belonged to someone else. And he supplied an address for a house he didn’t live in for his background check.
Red flags surfaced during that background check. A closer look at his past would have revealed that Brown served time in prison for financial crimes on two separate occasions. One resulted from his unauthorized use of a company credit card while he briefly worked for Union Station as its controller in 2007. He also served time for forgery in Johnson County.
T’Risa McCord, the chief administrative officer for the EDC at the time, later became the agency’s interim chief executive. She recommended Brown’s hiring, the lawsuit said.
The EDC accused Brown of wiring agency funds to himself or otherwise diverting $2.4 million. Add in the amount of money the EDC paid Brown as controller after misrepresenting himself to get his job, the agency claimed Brown caused the agency to lose $3.1 million.
Brown died in April 2022. The EDC fired McCord, who is also a defendant in the EDC’s lawsuit against Brown, in 2021 for loaning herself EDC funds without board authorization and for paying her family members after deleting anti-nepotism rules from the EDC’s policies and procedures.
Court records show that neither McCord nor Brown’s estate has been served with the lawsuit. McCord did not respond to a letter with detailed questions and a copy of the lawsuit left at her house by a reporter last month. Brown’s widow said in January that she was just starting to learn about the circumstances of the lawsuit and declined to comment further.
The EDC has also filed a claim on Brown’s estate in Jackson County probate court.
Those lawsuits, and Wednesday’s forfeiture case, seek to claw back money the agency contends was stolen.
The forfeiture filing said that the Wells Fargo account belonging to Brown took in about $1.8 million worth of embezzled EDC money and had a balance of $124,707 at the time federal agents took control of it.
It said another $1 million that agents traced to Brown’s alleged fraud scheme were deposited in a CommunityAmerica Credit Union account belonging to Brown and his wife. That account had a $117,164 balance, representing what prosecutors said were proceeds from embezzlement and money laundering activity.
Brown’s widow opened several investment accounts with Ameriprise Financial Services in August 2022, about four months after Brown died, according to the forfeiture filing. The Ameriprise accounts were funded by two separate deposits from Brown’s CommunityAmerica account totaling $758,685.
Brown also opened two Charles Schwab brokerage accounts with a total of $32,000 that prosecutors said resulted from fraud.
The balance in all the accounts seized and now controlled by the U.S. Marshals Service adds up to $1,178,135.
Brown and his wife also bought the Mercedez and Ford pickup truck for $59,578 and $62,922, respectively, using accounts that received money stolen from the EDC, according to Wednesday’s forfeiture filing.
U.S. Marshalls also now have custody of those cars.