Cannon Beach Art Dealer Arrested in Multimillion-Dollar Investment Ponzi Scheme
Donald Dean Seybold Charged with Fraud Losses of Approximately $3.2 million.
| U.S. Attorney’s Office May 14, 2009 |
Portland, OR—U.S. Attorney Karin Immergut, announced today the arrest and indictment of Donald Dean Seybold on charges stemming from the operation of an alleged Ponzi scheme. Seybold was the owner of the Ernst and Ernst Collectors Gallery, which had locations in Cannon Beach, Oregon and Seaside, Oregon. The indictment alleges that Seybold defrauded investors by falsely representing that he was buying and reselling art on their behalf for a profit.
“Prosecuting those who defraud investors is a top priority of the U.S. Attorney’s Office in Oregon and the U.S. Department of Justice,” U.S. Attorney Karin Immergut stated. “I want to commend the Federal Bureau of Investigation and Cannon Beach Police Department for their hard work on this case, and their efforts to recover assets for the victims.”
The indictment alleges that, beginning in about 2004, Seybold falsely represented to investors that they could purchase and resell art for a profit to buyers who had already secured the sale when, in fact, the art and buyers were fictitious. Seybold knowingly charged investors’ credit cards, or otherwise obtained money from them, to invest in these fraudulent deals. In order to lull investors and delay discovery of the fraud, the indictment further alleges, Seybold falsely represented to investors that he would reinvest the fictitious profits in other art deals to make more money. Instead, the indictment charges that Seybold used money obtained from later investors to pay off earlier investors. Further, the defendant falsely represented to later investors that he was investing their money in art, and falsely represented to earlier investors that the money was profit from the purchase and resale of art. Seybold is also charged with lying to artists and investors who consigned art through the galleries. It is alleged that Seybold’s fraud caused losses of approximately $3.2 million to over 100 investors.
Seybold, 36, was arrested this morning in Seaside, Oregon. Seybold is charged with nine counts of wire fraud, each of which carries a maximum sentence of 20 years in prison and a fine of $250,000. Seybold appeared in federal court today, and pled not guilty to all charges. Trial is set for July 14, 2009 before U.S. District Judge Anna J. Brown.
The FBI has established a hotline to provide information to those who believe they were affected by this alleged investment/Ponzi scheme. Those who believe they are victims, or who have art on consignment with one of the galleries, can call (503) 273-5812 or e-mail cindy.dugan@ic.fbi.gov for instructions as to how to file claims.
A criminal indictment is only an allegation and not evidence of guilt. The defendant is presumed to be innocent unless and until proven guilty.
The charges stem from a continuing investigation by the FBI and the Cannon Beach Police Department, with assistance from the Seaside Police Department. The case is being prosecuted by Assistant U.S. Attorney Hannah Horsley.