NYDN: Doug Allen To Plead Guilty

[Eric]

Former Mastro Auctions president Doug Allen to plead guilty in sports-memorabilia fraud case

Allen, who founded Legendary Auctions immediately after Mastro Auctions went out of business in 2009, will become the third executive from the defunct company to plead guilty to fraud.

BY MICHAEL O’KEEFFE NEW YORK DAILY NEWS Friday, August 1, 2014, 2:56 PM

Former Mastro Auctions president Doug Allen, indicted on 14 counts of mail and wire fraud in July 2012, is scheduled to plead guilty when he appears in Chicago federal court on Aug. 11.

Allen, who founded Legendary Auctions immediately after Mastro Auctions went out of business in 2009, will become the third executive from the defunct company to plead guilty to fraud.

Founder Bill Mastro pleaded guilty to fraud in October and faces up to five years in prison. Former Mastro executive Mark Theotikos, indicted on six counts of fraud two years ago, is expected to plead guilty when he appears in Chicago federal court on Tuesday.

Allen, who pleaded not guilty to the charges shortly after the indictment was unsealed, was scheduled to go to trial on the criminal charges in September. Court records filed late Thursday announcing the change of plea hearing do not specify a possible sentence for Allen.

Allen did not return a call for comment.

William Boehm, Mastro Auction’s former director of information technology, was also named in the 2012 indictment and is scheduled to go to trial next month. Boehm is accused of lying to federal investigators.

Mastro agreed to cooperate with investigators and will be formally sentences after the cases against his former business associates are completed, faces up to five years in prison.

The indictment alleges that Allen and his colleagues routinely defrauded customers by rigging its auctions through shill bidding.

Mastro, once one of the most powerful executives in the sports-memorabilia industry, has acknowledged that he engaged in shill bidding and also admitted trimming the world’s most expensive baseball card, the T206 Honus Wagner once owned by NHL star Wayne Gretzky that Arizona Diamondbacks owner Ken Kendrick purchased in 2007 for $2.8 million.

Mastro Auctions, known for providing collectors with unique and expensive baseball cards and collectibles, was sports memorabilia’s most important company as the hobby evolved from a sleepy pastime into a multi-billion industry in the 1990s and 2000s.

But it all began crashing down in 2007, as the Daily News first reported, when the FBI’s Chicago office launched an investigation into sports-memorabilia fraud. Mastro Auctions went out of business in 2009.
In January, the FBI raided the Arkansas home and office of an investor in Legendary Auctions, John Rogers, the owner of a photo archive company.


Read more: http://www.nydailynews.com/sports/i-team/ex-mastro-auctions-exec-plead-guilty-memorabilia-fraud-case-article-1.1888759#ixzz39CEMJMS3

[allstarsplus]

I wonder how much CASH restitution will be made back to the victims.

[rufusandherschel]

I wonder how much CASH restitution will be made back to the victims.
:D Good one!

[Birdbats]

From today's Chicago Tribune:

http://www.chicagotribune.com/news/local/breaking/chi-auction-house-exec-pleads-guilty-to-fraud-in-sale-of-baseball-memorabilia-20140811-story.html

[Eric]

Here's the text from the article. The details are kind of amazing…

Auction house exec pleads guilty to fraud in sale of baseball memorabilia

By Jason Meisner,
Tribune reporter

Feds: Former auction exec tipped off associate that he was wearing a wire
The former president of a suburban auction house tipped off an associate that he was wearing an undercover wire and that federal agents were about to raid the associate’s home as part of an ongoing investigation into fraud involving sports memorabilia, prosecutors said today.

The development was revealed as Doug Allen, the former president and CEO of Mastro Auctions, pleaded guilty to one count of mail fraud while admitting he took part in a wide-ranging scheme to rig auctions and falsely inflate prices on items ranging from rare baseball cards to a purported lock of Elvis Presley’s hair.


According to the 28-page plea agreement, Allen told prosecutors after he was charged in 2012 that he wanted to cooperate in its ongoing investigation in hopes of obtaining a break in his sentence.

While he was supposedly cooperating, Allen told an associate that he was wearing an undercover recording device for the feds and that the FBI had “asked logistical questions regarding Subject A’s home,” including whether he had any dogs, according to the plea deal. As a result of the disclosure, the associate was prepared when law enforcement agents executed search warrants at his home and business, the agreement revealed.

The associate was identified in court records only as Subject A, but Allen’s lawyer, Valarie Hays, confirmed to the Tribune he is John Rogers, a wealthy Arkansas collector whose home and offices in Little Rock were raided in January by a law enforcement team that included agents from Chicago. Rogers has not been charged with any wrongdoing.

According to Allen’s plea deal, Rogers then began wearing a wire for the FBI and recorded meetings with Allen in which Allen coached the associate on how to throw off investigators. The associate also asked Allen to swear he would never tell the feds that he had tipped the associate off about the raid.

Allen replied that both of them could face obstruction charges, according to his plea agreement.

“I know for me, OK, talk about protecting myself…under no circumstance could I ever tell them that,” Allen was quoted as saying in his plea deal.

“As long as you don’t say sh-- that you were tipping me off,” the associate reiterated.

“Never,” Allen replied.

According to the plea agreement, Allen faces 10 to 12 years in prison under federal sentencing guidelines, but his attorneys said they intend to dispute the amount of the fraud at his sentencing, a key factor in determining his prison term.

Allen marks the third former executive of Mastro Auctions to plead guilty to an eight-year scheme to rig auctions to drive up prices on rare baseball cards, game balls and other collectors’ items. Last week, Mark Theotikos, the former vice president of acquisitions at Mastro, pleaded guilty to one count of mail fraud.

The company owner, William Mastro, of Palos Park, once known as the “King of Memorabilia,” pleaded guilty last year to mail fraud and is cooperating with the government, according to prosecutors. He is scheduled to testify in the September trial of co-defendant, William Boehm, the former director of information technology at Mastro Auctions who was arrested in Missouri on a charge of lying to the FBI.

Mastro’s company often made headlines when a quirky item sold. But it was Mastro's dealing with the 1909 cigarette pack card depicting Pittsburgh Pirates Hall of Famer Honus Wagner that garnered him the most attention.

With only a handful ever released, the "T206" card has become known as the most expensive trading card in the world. Wagner himself contributed to the card's rarity by demanding the American Tobacco Co. pull it from distribution.

When Mastro bought his Wagner card in 1986, it had bowed borders, rendering it far less valuable. Mastro "personally cut the side borders ... using a paper slicing machine," then sold it without disclosing the alterations, according to his plea agreement.

The card was last sold in 2007 for $2.7 million.

According to a 2012 indictment, Mastro Auctions also put up for sale a purported 1869 Cincinnati Red Stockings' trophy ball even after lab tests had shown a material in the paint on the ball hadn't been used until after World War II. After refunding the original purchaser’s money, Mastro resold the ball to another buyer for about $62,000 without disclosing the results of the paint test, according to the charges.

The indictment also alleged that executives of Mastro also sold a lock of hair they claimed was from the late Elvis Presley without disclosing DNA tests raised questions about its authenticity.

[Phil316]

I can only imagine the stuff they got away with or that is so small compared to the Wagner card. It's a scary collecting world out there let me tell you.

[Eric]

I would love to know exactly how much they would bid up items. And if/how much I was affected.

[Chess2899]

Well, I paid $3500 for a Maddux game used jersey at that time while paying an average of $1000 everywhere else.