Subpoenas???

[RobSteinmetz]

Guys,

Let's not speculate on who did or did not receive subpeonas. Any posts that mention names of individuals or companies (beyond those shared in public articles), will be deleted.

Thanks,

Rob

[Eric]

Here's another Chicago Tribune story...

Burr Ridge auctioneers subpoenaed in sports memorabilia fraud probe, sources say

Authorities said to be investigating possible 'shill bidding' to drive up prices on collectibles

By Jeff Coen | Chicago Tribune reporter August 5, 2008 There's a lot of money to be made in the sports memorabilia business, as shown by an auction in Chicago late last week in which a single baseball card sold for $1.62 million.

But it's not just collectors who have taken an interest in the buying and selling—federal agents in Chicago are looking into allegations of fraud, sources say.

The sources confirmed Monday that investigators handed out subpoenas to executives of Mastro Auctions at last week's National Sports Collectors Convention in Rosemont.

Authorities are said to be investigating possible "shill bidding" in which bogus bids are submitted to drive up the prices of collectibles.

Mastro Auctions, headquartered in suburban Burr Ridge, handled the $1.62 million auction of a rare 1909 Honus Wagner baseball card Friday evening in Chicago. There was no indication that the card's sale is of interest to investigators.

Spokesmen for both the FBI and the U.S. attorney's office in Chicago declined to comment on the existence of any probe.

Mastro Auctions, one of the biggest auction houses in the sports memorabilia business, did not return a call Monday seeking comment on the subpoenas.

Mastro is led by president Doug Allen and reported revenues of $45 million in 2006. On the company's Web site, Mastro bills itself as a premier choice for those seeking to sell memorabilia at auction.

"The level of ethics, credibility and service you'll receive from Mastro Auctions is second to none in the industry," the Web site says.

The National Sports Collectors Convention, billed as the largest in the country in the sports memorabilia hobby field, was held Thursday and Friday.

As part of the convention, Mastro auctioned off the Wagner card at the downtown Chicago ESPN Zone and sold the 600th home run ball hit by Ken Griffey Jr., who was traded to the White Sox last week.

The FBI exposed fraud in the sports memorabilia industry a decade ago. The nationwide probe, code-named "Operation Foul Ball" and centered in Chicago, resulted in the convictions of more than a dozen people in large part because of the undercover work of a former dealer.

That investigation revealed forgeries of sports stars' autographs on thousands of jerseys, other sportswear and equipment. Distributors were convicted of selling millions of dollars in phony collectibles, including basketballs and jerseys purportedly signed by Bulls great Michael Jordan.

At the time, authorities said the industry itself estimated that forgeries made up as much as 70 percent of the sports memorabilia market.

jcoen@tribune.com
http://www.chicagotribune.com/news/l...tory?track=rss

[Eric]

posted here with permission from our friends at Sweet Spot

FBI: NO CHARGES, NO ARRESTS YET

August 6, 2008 -- Published reports have confirmed that subpoenas were issued last week to at least two auction houses at the 29th Annual National Sports Collectors Convention. The FBI office remains mum on the matter.

In an interview with Sweet Spot Tuesday, Ross Rice, spokesman for the FBI in Chicago, would neither confirm nor deny that subpoenas were served at the National, but added that "no arrests have been made and no charges have been filed in respect to show at Rosemont."

Rice added that "the only time we can discuss a subpoena is when an arrest has been made or charges have been filed." He explained that subpoenas would have a "return date" specifying when an individual is scheduled to appear or when other information is to be presented. No timetable has been made public for Mastro Auctions of Burr Ridge, Ill., and American Memorabilia of Las Vegas to appear before a Chicago grand jury. The nature of the subpoenas has not been disclosed.

However, other FBI sources told Sweet Spot that the federal grand jury can request that a person appear to answer questions or to present requested items, records or other documentation.

"The fact that a subpoena was issued means that prosecutors have discussed an investigation with the grand jury," the source said. Calls to the U.S. Attorney's office in Chicago have not been returned.

The issues that are believed to be the focus of the federal investigation involve "shill bidding" and "card doctoring." Shill bidding takes place when bidding activity is manipulated by someone who seeks to boost the bidding price. Card "doctoring," in the context of the memorabilia marketplace, occurs when the physical representation of a trading card is altered in a way that increases the value of a card. One of the most common ways to do this is to trim a card to give it a sharp, fresh edge or to make an image appear more centered on a card.

A source, speaking on the condition of anonymity, described numerous situations in which a card went into a grading company with a rating of a 6 out of 10 and came out as a 10. "I've seen cards graded as a 1, 2 or 3 mysteriously become improved and suddenly show the appearance of a 4, 5 or 6," the source said. "The difference in dollars in the marketplace can be tremendous when in fact the integrity of the card has been damaged."

The source claimed that Bruce McNall and Wayne Gretzky, owners of a rare, perfect Honus Wagner T-206 card from 1909 "knew the card was trimmed" when they paid $1.26 million for it in 1991. It subsequently sold for $2.35 million and again last year for $2.8 million.

The FBI's "Operation Foul Ball," dealing with fraud and the sale of forged autographs originating in Chicago, led to "Operation Bullpen," which led to the arrests of forgers, dealers and distributors out of the San Diego area. The scope of both investigations extended well beyond the field offices.

Other FBI activity led by Tim Fitzsimmons involved tax issues and fraudulent activity perpetuated by sellers on the Internet.

Fitzsimmons discussed the work of subpoenas as they pertained to the Bullpen. "We did some wiretaps in the Bullpen investigation," Fitzsimmons told Sweet Spot. "A precursor to obtaining a wiretap was a thorough analysis of the phone line we were trying to tap. This information ¿ the number of calls to whom and from whom, the length of those calls, as well as the time of those calls ¿ is what is typically obtained through a subpoena.

During the years Operation Bullpen culprits were investigated and prosecuted, the FBI was outspoken in giving consumers guidance in participating in a business often driven by impulse. Of course, it promoted caveat emptor, buyer beware, the maxim of all trade activity.

Fitzsimmons recalled the major points consistently made to the public. "When you purchase or sell merchandise that is not an authenticated item, in the sense that it was a witnessed signed item, the provenance, history, chain of custody, or however you wish to characterize it, is something that is extremely important and that information should be provided or asked for by the consumer.

"That's not to say that third party authentication doesn't have a place in the industry. We've been concerned, however, that when items are sold exclusively on third party authentication, without any provenance, we recommend that dealers provide that information. In Operation Bullpen, we prosecuted people setting up bogus authentication companies so they wouldn't have to provide provenance for the item. When you get serious about looking for that information that's how you're going to be able to tell what's real or fake."

Readers will find more about this topic in the October/November 2008 issue of Sweet Spot.
http://www.sweetspotnews.com/

[metsbats]

The FBI is taking another look at possible fraud in the sports collectibles industry.
The Chicago Tribune reported Monday that federal investigators have issued subpoenas to officials at Mastro Auctions as part of an FBI investigation into shill bidding – the practice of an auction house or a consignor entering fake bids on an item in order to drive up the price – in the sports memorabilia field.

Meanwhile, the New York Daily News reported that investigators from the FBI and the U.S. Postal Service interviewed a former Mastro Auctions employee who has been suspected of doctoring trading cards to enhance their condition and appearance, thus making them more valuable. The paper also reported agents spent time at last week’s National Sports Collectors Convention speaking with representatives of PSA.

According to both publications, federal agents spent several days at the National, issuing subpoenas to a variety of individuals, requiring that they appear before a grand jury investigating fraud in the memorabilia business.

“This is part of an active federal investigation,” the Daily News quoted a source familiar with the probe. “I think they came to the National because they knew everybody would be here, all under one roof. It’s like shooting ducks in a barrel.”
Scott Fragale
Website Editor

Got this from the Tuff Stuff site via email to day.

FBI investigating Mastro for shill bidding and card cutting.


-David

[Eric]

The blog "Sports Card Info" sent an email to Mastro about the recent news stories. Here's what they had to say
---------------------------------------------------------------------------------------------------------------------
Mastro Auctions Responds
Posted on August 11, 2008 by rosschrisman2003
A few days ago I sent an e-mail to the customer service department of Mastro Auctions. I asked them, “What does Mastro Auctions have to say about what happened at the 2008 National and the FBI showing up?” Today I got this response, “Andrew, At this time no comment, a statement will be made later this month.” I wonder what they will say in their statement? I can imagine that I’m not the only person that has sent them an e-mail asking what is going on.

http://sportscardinfo.wordpress.com/...ions-responds/