Mastro-Shill Bidding-FBI Investigation

[sammy]

JULY 8

[Eric]

Here is the text and the link.
http://www.nydailynews.com/sports/mo...honchos-1.html
FBI probes hobby biz honchos


BY MICHAEL O'KEEFFE
DAILY NEWS SPORTS WRITER
Posted Sunday, July 8th 2007, 4:00 AM
The Chicago division of the FBI, whose "Operation Foul Ball" smashed a multistate autograph forgery ring during the 1990s, has initiated an investigation into Mastro Auctions, sports memorabilia's largest auction house.
At least two hobby executives have been questioned about Mastro Auction's business practices in recent weeks by the FBI, the Daily News has learned. So has 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.
"We have talked to the Chicago office of the FBI about their investigation and we are deferring some of our activities in deference to their investigation," DSI president William Brandt said.
FBI spokesman Ross Rice said he could not confirm or deny an investigation into Mastro Auctions was underway. Mastro Auctions president Doug Allen said he was not aware of the FBI investigation.
"We have not been contacted by the FBI or by the police," Allen said. "I have not heard anything about it."
Indiana memorabilia dealer Bill Daniels, one of the hobby executives questioned by the FBI, said he provided information about "shill bidding," when an auction house or a consignor enters fake bids on an item in order to drive up the price.
"I gave them the name of a consignor who bid on his own lots in Mastro Auctions," said Daniels, who was interviewed by an agent about 10 days ago. "I think this is a big problem. It is not ethical for a consignor to bid on his own lots."
Daniels sued Mastro Auctions last year over a collection of 2,000 autographed photos he purchased in a December 2004 Mastro sale. Daniels claims the lot includes numerous forged autographs, as well as damaged photos and smeared signatures. An Indiana judge reviewed evidence from both sides this spring and is expected to issue a ruling this month.
"One thing I discussed with the FBI is the fact that during discovery, Mastro could produce no records about the lot," Daniels said. "They could not produce records about who the runnerup was or whether there were even any other bidders."
The other executive, meanwhile, confirmed that he has been questioned by the FBI but declined comment for this story.
As The News reported last year, investigators who searched Noe's Vintage Coins and Collectibles in Maumee, Ohio, in 2005 found a cache of collectibles - everything from Beanie Babies to 19th century political banners to autographed baseballs - worth an estimated $3.5 million. Authorities believe the GOP fund-raiser bought most of the collectibles with state money; a major source of the memorabilia was Mastro Auctions of Burr Ridge, Ill.
Brandt said Mastro Auctions has not cooperated with DSI officials as they attempt to recover and liquidate assets Noe bought with money from the Ohio Bureau of Workers Compensation fund. He said attorney Randy Mastro, a deputy mayor under Mayor Rudy Giuliani and the brother of Mastro Auctions founder Bill Mastro, has told him to "pound sand."
"That's not true," Allen said. "I don't believe what anybody from that company says. It's comical. It's all lies."

[allstarsplus]

I know of the Bill Daniels story w/ Mastro and commend him for taking a stand on the issues he had w/ Mastro.

You figure with attorney's fees and time invested that it may be a financial loss even if you win the case.

Bill sells a ton of stuff on eBay. Here is his link for anyone who doesn't know Bill.

http://stores.ebay.com/Bill-Daniels-Sports-Collectibles

[geoff]

This is just another reason why I won't use Auction Houses for a source of my Collecting.

[lund6771]

the first time i ever consigned to an auction was with AMI and i put in some really nice pieces...the minimum bids were set quite low, so I put in a low bid on one of the lots...I had never heard of shill bidding before...my only thought was to start getting the ball rolling..anyhow, I was contacted the same day by AMI and they explained to me how & why this wasn't an ethical practice and we took the bid off...I guess i was ignorant to the whole process, but after their explanation it of course made a lot of sence...

bottom line, after my experience, I don't think that they would be involved with any sort of shill bidding

[sammy]

Does anyone actually care enough to stop bidding with Mastro's?


When you bid with a national auction house, do you consider shill bidding just part of doing business?

At least with eBay, you can get an idea of the bidding.

[PhilipCohen]

For anyone that is interested, a detailed case study of a blatant shill bidder on eBay, and a comment on eBay’s apparent attitude thereto, at http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24033

[otismalibu]

When you bid with a national auction house, do you consider shill bidding just part of doing business?

Last year I spoke on the phone with a gentleman who had a number of pieces up for auction with a major auction house.

I just had a few questions regarding one piece, but we ended up discussing some of the others he had up for bid. He just came right out and said if the bids didn't get to a certain price, he'd just buy those pieces back.