Donnie M Smotherman, aka Donnie Smotherman or Mike Somtherman, is the President/Owner of Midwest Public Auction. His address:
1253 Hitt Lane Goodlettsville TN 37072
Midwest Public Auction, and their business operations, are solely the responsibility of Donnie Smotherman. If you contact him about Midwest, and actually get him on the line, ask him direct questions about "absolute price" auctions and what that REALLY means. Ask about how selling at an "absolute price" will effect your $40K Inventory Protection Program.
Ask about Chase Motorsports and why they seem to buy the majority of all items sold in their auctions. Ask him about advertising (will he REALLY be advertising your stuff item by item? And if so, get some real-time examples other than his local newspaper). Ask about Midwest's non-existent on-line auction capability. They sell it, but where is it? Ask about what an "APPROVED" invoice price REALLY means for your items. You will find it means nothing in an "absolute price" auction.
Ask him if you can sell your property based on reserve prices and see how the conversation goes, it will be one negative thing after another.
Ask about references other than those on their every-day flier; especially if you are in the RV and marine industry. Don't be surprised when he can't produce any. Ask to pull out of their auction after signing and faxing back their contract. He will tell you, point blank, that you are contractually bound now and that if you pull out, you will pay Midwest a hefty fee for losses (commissions, freight charges, buyer's premium, court costs, etc.) on the APPROVED invoice price of each item.
Don't be snared into thinking you HAVE to go through with the transaction. You'll lose less by suffering the breach of contract consequences at this stage rather than continuing on with the auction. Ask him about Holly Wagner with Dealernews.com
and why she mentioned his name over and over again with other associated friends of his that have been indicted on criminal charges relating to similar auctions in other states. Ask him about the names Trotter and McGregor and see how he disavows even knowing them when in reality, he knows them quite well. Ask him how many times he has been sued in civil
court from disgruntled dealers throughout the years. He will be quick to tell you he's one every case... Why? Because of their contract (even though it doesn't jive with their telemarketing solicitations).
Ask him about EXACTLY what you were told by his telemarketing team, Melissa, Lisa, and scores of others, and how what they said is different from their contract. Ask him if they will sell your stuff at the invoice price they approved in an "absoloute price" auction. If he says yes, dig further because it's almost impossible. Ask him how many people on
average show up for an auction. He may see hundreds, even thousands, when in reality it is around 20 to 50 people. Ask why they conduct their auctions on a Sunday morning instead of a Saturday afternoon when you'd think there would be more exposure and participants. Ask him about "theft by deception" in general terms and what that means to insurance company claims down the road. Believe me, he knows about this! Ask about how many times Midwest has sued dealers for titles on vehicle that were sold in their auctions. Why would dealers hold their titles from Midwest to start with? Tell him who your
floor plan company is and what they will expect regarding payoffs on your merchandise. Watch how he says they can sell your stuff and get you paid before the bank even finds out about the auction. Ask about REALLY getting paid within 24 hours. How often does this actually happen? They sell it, but is it really possible? Probably not. Ask him why his internet site keeps jumping around every other 6 months or so. Are they trying to stay one step ahead of the complaints posted on
the internet? Finally, ask him about the local FBI office in Missouri and how many times he's had to give them statements about his business operations.
Here's our story below. Look for the 10-points sales process because it may help you in the long run!
On or around February 15, we started getting solicitations over the phone and facsimile by Midwest Public Auction to sell some of our RV inventory at their Missouri auction facility.in July, their telemarketer, Melissa, told our Sales Manager that we couldn't lose by placing our inventory in their auction because items always sell for the invoice amount that we set prior to any sell as long as it is within reason AND they approve the amount. She added that if for some reason it does not sell for the agreed upon amount, their $40,000 Inventory Protection Plan would cover any difference between the sold price vs. The invoice price up to $40K. She pushed the fact that it could all be done within a few days max with payment going out
within 24 hours of the auction. She faxed us a reference sheet that says: Full Payments Available Within 24 Hours of Auction End. Dealer references included:
Chase Motor Sports, Paducah, KY
270-556-2461
Dylan Thompson, Owner
And a bank reference:
US Bank
615-418-9593
Greg Whittaker, VP
Dylan Thompson with Chase Motor Sports was very high on Midewst. He offered a glowing description of how there is nothing to worry about. You always get what you need out of your inventory. You always get paid within 24 hours after the auction too. He also mentioned that the owner of Midwest, Donnie M Smotherman, was a millionaire and that Midwest was a great place to do business. He was quite convincing to say the least; it was in his best interest as you soon will see.
When we called US Bank, we were told that the only information they could divulge was that Midwest Public Auction was a depositor at the bank in good standing and that's it. They would not offer one more word beyond this. We called and spoke to Donnie Smotherman, Midwest's President and Owner. He was very energetic and sold us on their protection program and the auction process. He even admitted to us that he has people in the audience for every auction that whip up the price of every unit.
As a consequence of Melissa's verbal sales presentation of their Inventory Protection Plan trigger, along with the guarantee of selling our units for potentially even more than the invoice amount, we decided to engage with them by offering up 5 recreational vehicles for their upcoming auction. They reviewed every single unit and stamped each one as APPROVED
for their $40K Inventory Protection. The original contract had been for 9 units and was signed by our sales manager on August 6th. We subsequently modified the number of units to be sold down to 5 on Friday, August 10th. This
voided the original contract. We asked for a new contract but they did not send one to us to execute. Their drivers were waiting in our showroom Friday morning so we let them pick up our RV units which were to be sold at their auction
facility in Poplar Bluff, MO on Sunday, August 10th.
Seeing that we were not under contract with Midwest, we had an employee attend the auction on that Sunday to make sure the process was in our best interest. He was very surprised to see that the auctioneer did not have any information on us, our units being sold, or APPROVED invoice amounts that Midwest had authorized prior to the auction's start. Our first unit sold
for less than half the agreed upon invoice amount. At that point, our employee told the auctioneer to HALT any more sales of our property. He was then escorted inside the office to make a cease and desist request known to Midwest management. While our employee was in the office, away from the action, the auctioneer broke from the printed selling schedule and sold all but one of the remaining units for pennies on the dollar. They purposely deceived our employee by tricking him into moving to another part of the premises while they auctioned off our property behind his back. Our property quickly disappeared to destinations unknown by drivers that were waiting in the wings to haul off the sold items.
And who was it that bought the units that disappeared? Chase Motor Sports... Mentioned above.
From a criminal perspective, we are alleging theft by deception and fraud by Midwest Public Auction which culminated in a total loss of $118,663. They acted in such a manner that we lost considerably under false pretenses resulting from Midwest Public Auction's verbal misrepresentations and deceptive actions during their auction process. Now that our units have been
transported to destinations unknown and presumably across state lines (according to Midwest management), we are asking the Federal Court to consider criminal proceedings against them. We've also asked for Missouri's State Attorney General to commence with an immediate investigation into their business practices. The FBI was notified as well at 573-335-2511. We were encouraged to discover that the FBI was firmly aware of Mr. Smotherman and Midwest Public Auction.
From the Civil side, we are in communication with over 20 motorsports, marine, and RV dealers from around the country that feel they have been scammed by Midwest Public Auction.in fact, Dealernews.com penned an in depth article about Midwest Public Auction and its owner, Donnie M. Smotherman, and other accomplices that have been indicted for criminal actions in other states as it relates to scam auctions.
We have asked for our property back but Midwest has declined any assistance. They are withholding all our money at the time of this writeup. Moreover, we have been allowed only $5,000 from their $40,000 Inventory Protection Plan. Since the Protection is not underwritten by a 3rd party insurer, as they would want you to believe, but rather by Midwest themselves,
they can divvy and parse the $40K as disclosed in the small print of their contract.
Be extremely cautious with Smotherman and Midwest Public Auction. They have, what others term The Perfect Scam and have hurt many business owners in the process. Millions of dollars have been lost by dealers using their auction services according to the dealers we've talked to. They are considered a predator and scam artist on many blogs and complaint forums on the web as well. Any search for Midwest Public Auction in Google will yield such conclusions.
If after searching through the net for information, and you still want to use their auction services, this is a 10-step process of what you should expect:
1. They will entice you up front via telemarketing and fax advertising with their $40K Inventory Protection Plan. That is their hook. It will make you think you are protected from any loss, or a substantial loss. Understand this: it's not an
insurance policy for loss or damages! There is no policy. It is a Midwest program not overseen or administered by a 3rd party. And worst of all, it is a rebate program that comes with limitations and teared constraints.
2. Once you believe their Protection hook above, they will then casually ask you to send them a list of items you think could sell in one of their auctions. They will then see if the items will qualify for their $40K Inventory Protection Plan.
3. They will send back a sheet with the majority of your units stamped APPROVED for the protection. Don't be surprised when the cheaper items are declined. They do not want to deal with cheaper items because of small commissions.
4. When you see APPROVED stamped all over the place, it will look like you are privileged that your inventory actually qualifies. There is no way you can loose, right? So you decide
to proceed.
5. Then comes their contract via fax; no original documents sent thru FedEx. Take heed, their contract is incredibly deceptive and worded to protect themselves from all kinds future litigation with disgruntled dealers. It looks like a simple
2-page, 17 point contract. But beware, there's all kinds of creative language and monetary structures that you need to pay close attention to. See other complaints in this forum and others for a copy of their contract.
6. Once the contract above is signed by you, and it is faxed back, you are now stuck in a business transaction from their perspective. If you modify the terms in any way, make sure you get a new contract. They will point back to the original but
demand a new one.
7. They will coordinate shipping with a 3rd party. These drivers inspect all the units and will very quickly load your property for immediate departure. From this point, if you do not go to the auction yourself, the rest of the transaction is in the hands of Midwest.
8. If you elect to go to the auction, and you see your stuff being sold for way less than the APPROVED invoice price, good luck stopping them from selling what they can. They will misdirect you through a bureaucratic maze while they sell your property behind your back if possible.
9. If you try to stop buyer's from hauling off your property, good luck with that too. The buyers, especially if they are insiders to Midwest like Chase Motor Sports supposedly, will quickly move the units off the lot and to destinations
unknown.
10. You will be left with nothing from this point except litigation which will most likely falls in the jurisdiction of Missouri, in the same county as Midwest's auction house.
Hope this helps you make an informed decision.
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