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Wednesday, July 5, 2023

Feds: former Frisco auto dealership exec raided company accounts for his lavish lifestyle - The Dallas Morning News

Fenton Motors Group ran a successful chain of about 20 auto dealerships in five states when Mark Exposito joined the company as a top executive, federal court records say.

The Frisco-based company was in financial ruin by the time he left in 2019. The dealerships that hadn’t closed were sold. Fenton Motors had dealerships in Mesquite and Rockwall as well as in Oklahoma, Missouri, Kansas and Tennessee.

But it wasn’t Exposito’s business strategies that caused the company’s rapid collapse. Prosecutors say he and an accomplice raided the company’s bank accounts and stole more than $8 million he and his wife used to support a lavish lifestyle.


Exposito, the 56-year-old stepson of a former U.S. senator, now faces about two-dozen wire fraud counts in connection with an alleged embezzlement scheme. He was arrested in late March.

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Prosecutors call him a prolific fraudster who employed a variety of schemes over 40 years, including forgery. His Twitter account describes him as an entrepreneur “who loves democracy, his family, horses and a lot of technology.”

Prosecutors say he faces another federal indictment in Maryland for allegations he created fake businesses to defraud $2.5 million from the Paycheck Protection Program. Congress passed the financial aid program during the COVID-19 pandemic to help businesses survive.

Mark Exposito(Collin County Sheriff)

Exposito was initially denied bond and held as a flight risk and a danger to the community.

“Defendant has shown an ability to commit a large number of fraud schemes with a variety of methods,” said U.S. Magistrate Kimberly Priest Johnson following the detention hearing.


However, his lawyers appealed that decision, and he was freed in mid-June. A trial date has not been set. Exposito could not be reached for comment.

An FBI agent said during an April detention hearing in Plano that Exposito is the stepson of Claire McCaskill, a former U.S. senator from Missouri who left Congress in 2019.


The agent, Jennifer Lapiano, said Exposito’s wife told the defendant in jail phone calls that McCaskill would use her political connections to try to win Exposito’s release.

“And so, other than moving money around, the very first thing these folks are doing is trying to … use political influence to influence these proceedings?” Assistant U.S. Attorney Matthew T. Johnson asked the agent.

“That was what it sounded like, yes,” she said.

Claire McCaskill, a former Democratic senator from Missouri, said she would support her stepson financially as his North Texas wire fraud case proceeds. (Jeff Roberson / The Associated Press)

The prosecutor argued Exposito’s hopes for “an outside political influence campaign by his stepmother on his behalf” displayed a “propensity to obstruct justice.”

But Robert R. Smith, an attorney for Exposito, said at the hearing that McCaskill told him such a move would be counterproductive.

“I’ve talked to her myself, and she would not do anything like that,” Smith said, adding that McCaskill and her family would support Exposito financially.

Johnson, the judge, said at the hearing that the conversation in question reflected Exposito’s motivations.


“Defendant and Ms. Exposito discussed his stepmother using her political connections to influence this case,” she said. “Defendant’s discussion, regardless of whether his stepmother in fact agreed to do so, shows a willingness to undermine court proceedings.”

McCaskill, a TV political analyst and former prosecutor, could not be reached for comment. McCaskill divorced Mark Exposito’s father, who is deceased.

Scott H. Palmer, one of Exposito’s current attorneys, said in a statement Exposito “sought guidance and understanding from the woman he has known as his stepmother since he was a teenager — and nothing more. Mrs. McCaskill undertook no action on Mark’s behalf, there was no impropriety, and the Court recognized as much.”


Palmer declined further comment on the case.

The magistrate judge ruled Exposito’s money transfers to Dubai, his travel to the Middle East, his Dubai-based oil trading business, and his ability to forge documents made him a flight risk.

The indictment also charged Fenton Motors’ former chief financial officer, William Lavin, with fraud, alleging he stole from Fenton and helped disguise the withdrawals from company accounts by recording them as legitimate business expenses.

Lapiano, the FBI agent, described Lavin’s last day of work at Fenton Motors.


When confronted about questions of impropriety in the company books, Lavin grabbed his work laptop and ran out of the building never to return, she testified.

Lavin, 63, who lived in Frisco, was expected to turn himself in but committed suicide on April 2, two days before the detention hearing, according to court records.

The agent said Exposito expressed sympathy briefly but had other worries.


“He seemed concerned that the whole case would now fall on him,” she said.

Exposito blamed the theft on Lavin in phone conversations recorded from jail with his family, prosecutors said.

Brad Fenton, the chief executive whose family owned the auto dealerships since 1950, could not be reached for comment.

Looting accounts

The FBI’s investigation began in 2019, court records show.


Exposito, a Missouri native, lives with his wife on an 18-acre Arizona cattle and horse ranch, court records said. It’s about a two-hour drive north of Phoenix. After his arrest, Exposito told court officials he was self-employed as the owner and operator of Circle E Ranch in Arizona.

Authorities said in court records he bought the ranch in 2018 with money he stole from Fenton Motors.

Exposito served as Fenton Motors’ chief operating officer from April 2016 to December 2018, with an annual salary of $240,000, according to the indictment, filed in the Eastern District of Texas.

A chief operating officer is considered the second in command over a company who runs day-to-day operations. Prosecutors said Exposito was fired in 2019.


Lavin was the company’s chief financial officer from 2014 to December 2018, earning the same salary.

“In private, Exposito and Lavin blamed the cash shortage on Fenton and accused him of embezzlement and poor management,” the indictment says.

In reality, Exposito and Lavin drained the company’s bank accounts of more than $28 million beginning in 2016 and later returned about $20 million, authorities said.

The feds took control of Mark Exposito's horse and cattle ranch in northern Arizona that they said was bought using stolen money.(Google)

“As the dealerships began to suffer they would, you know, return the stolen money to keep the dealerships afloat,” said Lapiano, the FBI agent.

They then took credit for saving the dealerships with “fake loans,” the indictment said.

The defendants used the stolen money to pay off personal credit cards and buy real estate, vehicles, jewelry, designer clothing, high-end goods and first-class air travel, the indictment said.

Exposito’s purchases included about $20,000 for “LS Performance Horses,” and $100,000 worth of airline tickets from Emirates airlines and American Airlines. The men also used stolen funds to pay about $300,000 for a private car service, the indictment said.


“Exposito and Lavin’s actions of repeated wire transfers and money maneuvers … placed the financial health of the victims in dire jeopardy on numerous occasions,” the indictment says.

Federal authorities seized Exposito’s Arizona ranch home and at least 10 acres he owned in the state, along with jewelry and other valuables in a forfeiture action as part of the indictment, court records show.

In arguing for his client’s release, Palmer noted that Exposito had been cooperative since learning of the investigation against him in early 2022.


Palmer said in court filings that the government made “flagrant mischaracterizations” in claiming that Exposito tried to transfer or hide assets.

“He owns substantial property in the United States, which he is pledging as collateral, and there was no evidence whatsoever that Mr. Exposito has either the resources — both financial and personal — to flee the country,” Palmer wrote.

Other schemes

Prosecutors say Exposito committed a similar theft on a smaller scale when he worked for another auto dealership.


Lapiano said he was charged with theft in 1998 for transferring about $50,000 from a Toyota dealership into his bank account to pay for his car repairs and his wife’s cellphone bill. He was convicted and given probation for the offense, court records show. Exposito was the general manager of a Phoenix dealership from 1998 to 2015, court records show.

“Sounds familiar, doesn’t it?” the prosecutor asked at the April hearing.

“It does,” Lapiano said.

The FBI agent said Exposito forged checks and money orders after the collapse of Fenton Motors, in an attempt to pay off his credit cards. Prosecutors said investigators still didn’t know as of May how he created those “sophisticated” forgeries.


In June 2020, Exposito opened five business accounts and applied for and received eight fraudulent Paycheck Protection Program loans, authorities said.

And in November 2020, Exposito used false documents to apply for about $104,000 from the U.S. Department of Agriculture’s Seafood Trade Relief Program, court records said.

Prosecutors said Exposito, when interviewed by pretrial services, failed to disclose the PPP loans as well as an oil trading business he said under oath (in an unrelated lawsuit) that he set up in Dubai.

Palmer in a court filing criticized the government for making “ominous sounding allegations” about business connections to the Middle East.

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