Subpoenas???

[Eric]

Dave Grob is reporting over at mearsonline.com that subpoenas were served at the National yesterday July 31.

What have people heard about this? For those on the floor at the National, what the heck is going on?

[otismalibu]

Re: Subpoenas???

In keeping with the true spirit of the hobby, I would assume there were quite a few fake subpoenas mixed in with the legit offerings.

[godwulf]

Re: Subpoenas???

Do you try to get your subpoenas autographed, or do you like to keep them "as is"?

[worldchamps]

Re: Subpoenas???

You could get them graded, but it is so hard to get a 10, why bother

[ironmanfan]

Re: Subpoenas???

I can only imagine the "names" of those who received them.....

[cohibasmoker]

Re: Subpoenas???

Dave Grob is reporting over at mearsonline.com that subpoenas were served at the National yesterday July 31.

What have people heard about this? For those on the floor at the National, what the heck is going on?

Eric,

Please don't tease us. Any names? You're at ground zero so you have to know something. It would be interesting to know who doesn't open or is absent from their booth over the weekend.

Jim

[Eric]

Re: Subpoenas???

I am in NY, not at the show unfortunately. I wish I was there to find out what is happening firsthand. Perhaps we have to wait for people who are there today (or yesterday) to get back to their computers to hear something.

I would imagine that if something went down, the story would shoot around the national...

[godwulf]

Re: Subpoenas???

http://www.nydailynews.com/sports/more_sports/2008/08/01/2008-08-01_feds_crash_national_sports_collectors_co-2.html

Feds crash National Sports Collectors Convention, hand out subpoenas

BY TERI THOMPSON AND MICHAEL O'KEEFFE
DAILY NEWS SPORTS WRITERS
Friday, August 1st 2008, 5:35 PM
Federal investigators crashed the National Sports Collectors Convention in Rosemont, Ill., on Thursday and Friday, delivering subpoenas to several hobby executives to appear before a grand jury that is hearing evidence about fraud in their industry.

Agents from the FBI and United States Postal Service also questioned other dealers and authenticators at the National, the hobby's largest annual memorabilia show.
"This is part of an active federal investigation," said 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."

As the Daily News first reported in July 2007, the Chicago division of the FBI, whose "Operation Foul Ball" smashed a multi-state autograph forgery ring during the 1990s, last year initiated an investigation into Illinois-based Mastro Auctions, sports memorabilia's largest auction house.

"The FBI has been walking the convention floor," said American Memorabilia president Victor Moreno. "You can feel the tension."

The visits from federal agents came as Mastro Auctions officials were preparing for the big live auction the company conducts in conjunction with the National.
"No more business as usual," said Chicago collector Michael Gidwitz, who was interviewed by the FBI several months ago. "An unregulated business like this, it brings in a lot of unscrupulous people. This needed to be done a long time ago."

Gidwitz, who became the first person to sell a baseball card for more than $1 million when he sold a T206 Honus Wagner once owned by NHL legend Wayne Gretzky to collector Brian Seigel in 2000 for $1.27 million, said he was victimized several times by one-time friend Bill Mastro, Mastro Auctions chairman. Those allegations first appeared in "The Card," a book about the T206 Wagner by two Daily News reporters that was published last year.

The Gretzky T206 Wagner, known in hobby as "the Holy Grail," was "discovered" by Bill Mastro in the 1980s. It was graded PSA-8 (on a scale off 1-10) by Professional Sports Authenticators, a card-grading service, even though one of the original authenticators acknowledged the company knew the card had been altered, a major violation of vintage card protocol. The book apparently hasn't affected the price: The Wagner was sold to an anonymous collector last year for $2.8 million through SCP Auctions, which owned a minority stake in the card. SCP, however, has never produced evidence that a transaction actually took place.

Mastro and auction house president Doug Allen did not return phone calls for comment. Nor did Randy Mastro, Mastro's brother and attorney who was a deputy mayor under Rudy Giuliani. A Justice Department spokesman in Chicago said he could not confirm or deny an investigation had been initiated.

Hobby executives who have talked to the agents in the past year say the agents have asked about "shill bidding," when an aucton house or a consignor enters fake bids on an item in order to drive up the price.

Investigators have also expressed interest in a North Carolina warm-up shirt sold at the live auction Mastro's company held at the National last year. The shirt was advertised as a Michael Jordan-owned item, even though Memorabilia Evaluation and Research Services, a leading authentication firm, concluded another player's name - Ranzino Smith - had been ripped from the back and repaced with "JORDAN."

The shirt sold for $11,000 and although Mastro Auctions eventually voided the sale, it renewed calls for greater regulation of the dog-eat-dog world of sports memorabilia and attracted attention from the FBI.

Investigators have also questioned Bill Brandt, the president of Development Specialists Inc., the company hired by the state of Ohio to liquidate coins and collectibles purchased with state money by Tom Noe, the Republican Party official convicted in 2006 of stealing from a $50 million workers compensation fund and sentenced to 18 years in prison. Noe had purchased thousands of dollars worth of memorabilia from Mastro, Brandt and Ohio law-enforcement officials have said. Mastro Auctions repurchased the memorabilia back from the state of Ohio in December for $2.5 million.

Leon Luckey of Brockelman and Luckey Auctions said he is believes allegations of wrongdoing have unfairly bruised what he calls "a good hobby." Luckey, who also moderates Network 54, a popular vintage card Web forum, said he hosted a dinner Thursday night for 135 collectors and dealers attending the show.
"We had a great time, laughing and telling stories," Luckey said. "If someone has done something wrong, they should be prosecuted to the fullest extent of the law but it is a shame that it casts a negative light on the hobby. I love baseball and I love cards, but this hobby is all about the people you meet."

[godwulf]

Re: Subpoenas???

The primary target would appear to be Mastro.

[godwulf]

Re: Subpoenas???

Sorry, no...I read the article too quickly the first time. The Mastro investigation the article went on about at such length seems to be a separate issue.

[cohibasmoker]

Re: Subpoenas???

http://www.nydailynews.com/sports/mo...tors_co-2.html

Nice find. I really liked the paragraph that read,

"This is part of an active federal investigation," said 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."

Jim

[Eric]

Re: Subpoenas???

O'Keeffe made reference to the UNC Michael Jordan shooting shirt at Mastro. For those who don't remember, here is O'Keeffe's story about it from a year ago...

There is only one Jordan

Auction jersey revealed as fraud

BY MICHAEL O'KEEFFE
DAILY NEWS SPORTS WRITER

Sunday, August 19th 2007, 4:00 AM

It was a hell of a party, according to the press release issued by Mastro Auctions. About 300 sports collectible movers and shakers, many in town for the National Sports Collectors Convention, bid on 83 coveted pieces at Mastro's inaugural live auction, held Aug. 3 at the House of Blues in Cleveland.

A collection of rare T215 Pirate cigarette cards sold for $960,000, a record for a set of cards. Yankee manager Miller Huggins' 1927 World Series ring went for $204,000. One collector even spent $192,000 on a T206 Honus Wagner card in poor condition. But the event wasn't just about conspicuous consumption; Mastro Auctions also raised $20,000 for the Lance Armstrong Foundation.

"It's a terrific exclamation point to an already spectacular evening," Mastro Auctions president Doug Allen said in the press release.

The hangover from the event, however, just won't go away. One item, advertised as a Michael Jordan North Carolina warm-up shirt, sold for $11,000 even though questions had been raised about its authenticity well before the auction took place. Collectors cried foul on Game-Used Forum.com, a memorabilia Web site, and began investigating the shirt. Mastro Auctions voided the sale and sent the jersey back to the authentication service that raised the initial doubts for further review.

But the controversy over the "Jordan" shirt appears far from over: It has added new pressure to calls for greater regulation and standards for the dog-eat-dog world of sports memorabilia. The shirt has also attracted the interest of the FBI, which as the Daily News reported last month, has already begun an investigation into business practices at Mastro Auctions, sports memorabilia's largest auction house.

To prepare for the live auction, Mastro employees sent the shirt and other items to Memorabilia Evaluation and Research Services, one of the hobby's leading authentication services. MEARS examined the shirt on July 1, and concluded that while it appeared to be a North Carolina shooting shirt from the 1980s, it did not belong to Jordan.

When the shirt was placed over a light table, it was apparent that another name had been removed from the back and replaced with "JORDAN." The letters also seemed to be made of different materials than other patches on the piece, according to the MEARS work sheet.

"The Michael Jordan shirt we evaluated did not start its life as a Michael Jordan shirt," MEARS authenticator Troy Kinunen said.

MEARS' opinion was seconded by the University of North Carolina; officials there told the Daily News that Jordan still has his warm-up shirt.

Mastro Auctions, however, submitted the shirt to another authenticator, Lou Lampson; the auction catalogue said the shirt was accompanied by a letter of authenticity from Lampson but made no mention of MEARS' evaluation or opinion. In the days before the auction, Game-Used Forum members posted numerous comments about the conflicting opinions; one member said he E-mailed Mastro's Allen about the jersey but Allen did not respond. The shirt received seven bids and sold for $11,000, according to Mastro Auctions Web site.

"If Mastro did not inform the winning bidder of MEARS' findings, then, that is damn shady," one forum member wrote.

A week after the auction, another Game-Used Forum member said he had been contacted by an ACC basketball fan who said stains on the "Jordan" shirt looked remarkably similar to stains on a shirt he owned for several years. The ACC fan, a collector named Jim Reed, told the Daily News he had purchased the shirt from Ranzino Smith, who joined the Tar Heels in 1985, the year after Jordan left school and was drafted by the Chicago Bulls.

Reed said he sold the shirt to Eric Inselberg, a New Jersey dealer/collector, late last year, but he is convinced it is the same item Mastro sold this month. "This thing was in my display room for three years," Reed said. "I know my shirt."

Inselberg told the News he sold the shirt at a Westchester memorabilia show in January. Inselberg claimed he didn't know the buyer and since the buyer paid cash, he had no way to contact him.

Allen told the Daily News before the auction that he was not aware that MEARS had doubts about the jersey; he did not return calls last week. But in an e-mail to Kinunen that was posted on the Game-Used Forum, he said Inselberg was not the consigner. The shirt was one of the last items sent to MEARS and Allen blamed deadline pressures for the screw-up.

"I had gotten the message from my guys that you 'were not comfortable signing off on it' so I told them to go ahead and run it with the Lou Lampson letter since he was comfortable issuing an LOA on the shirt. Unfortunately we never received your 'letter' which explained the details of the name change and the reason you were not comfortable opining on the shirt. If I had known this I would have immediately pulled it from the auction," Allen wrote.

"The first time I had been informed about potential issues with the shirt was on August 2nd when a reporter inquired about the letter you issued. At the time I was not aware a letter detailing findings had been issued and I notified him of that fact. When I got back to the office after the National I was finally able to review your letter and review the concerns expressed on the Game-Used Forum."

But by the time Allen's E-mail had been posted on the Game-Used Forum, the FBI had already begun investigating the sale of the jersey. The bureau's Chicago office - whose "Operation Foul Ball" smashed a multistate autograph forgery ring in the '90s - has already interviewed an authentication-service executive and two collectors about the jersey, according to sources.

As the Daily News reported in July, Chicago-based investigators have already questioned Bill Brandt, the president of Development Specialists Inc., the company hired by the state of Ohio to liquidate coins and collectibles purchased with state money by Tom Noe, the Republican Party official convicted last year of stealing from a $50 million workers compensation fund and sentenced to 18 years in prison. Noe had purchased thousands of dollars worth of memorabilia from Mastro, Brandt and Ohio law-enforcement officials have said. The investigators have also questioned two hobby executives who asked not to be identified.

An FBI official said he could not confirm or deny an investigation is underway, but regardless of what happens, the incident has left a bad taste in some collectors' mouths.

"I saw this warm-up at the National and thought it was awesome," one collector wrote on the Game-Used Forum. "I was gonna have a friend bid on it for me ... thank goodness that I didn't."

[mvandor]

Re: Subpoenas???

One quote worth quoting:

"This needed to be done a long time ago.""

[trsent]

Re: Subpoenas???

Do the Feds think they can convict an auction house such as Mastro for selling item they know are not genuine? Won't they have to prove they knew of issues with the item or accepted a bad item or altered an item? I know they also brought up shill bidding, but won't the Feds have to prove Mastro knowingly did something wrong?

At the same time, if the Feds were looking for a company who has openly has bought "game issued" items and sold them as game used, isn't there an auction house out there that would fit this description and would be easily prey for them? Maybe an auction house that has a history buying on eBay and then altering an item to make it better or even game used for sale?

I know, Mr. Okeeffe has his lists who he doesn't like in our industry, but I think Mastro may be the wrong target if the Feds want to make a point there are better subjects.

[jdr3]

Re: Subpoenas???

Joel,

It appears from your post that perhaps you are not familiar with the Mastro controversy from last August. If you had read the article Eric had added just a few posts before yours, you would have a better understanding of the situation. Here is an excerpt:

To prepare for the live auction, Mastro employees sent the shirt and other items to Memorabilia Evaluation and Research Services, one of the hobby's leading authentication services. MEARS examined the shirt on July 1, and concluded that while it appeared to be a North Carolina shooting shirt from the 1980s, it did not belong to Jordan.

When the shirt was placed over a light table, it was apparent that another name had been removed from the back and replaced with "JORDAN." The letters also seemed to be made of different materials than other patches on the piece, according to the MEARS work sheet.

"The Michael Jordan shirt we evaluated did not start its life as a Michael Jordan shirt," MEARS authenticator Troy Kinunen said.

MEARS' opinion was seconded by the University of North Carolina; officials there told the Daily News that Jordan still has his warm-up shirt.

So here we have conclusive proof that Mastro did know that what they were selling was not what it was purported to be, which answers your first question, that the FBI DOES KNOW Mastro had fore knowledge that one of their items had been altered and still tried to cover this up and sell the jersey in question for $11,000. If defrauding someone out of that much money is not a crime, I don't know what is.

You mention that there are others the FBI should be going after. Can you name them, or have you tried to help fellow collectors by alerting the FBI to this situation?

-Jim Reed