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Questioning if fraud is really a crime is just what I said. As I understand it, altering something, getting an "expert" to say it's not altered, then selling it as unaltered is fraud. Whether it will be prosecuted is debatable, lots of worse crimes go unpunished because the cases are too hard to get a conviction on (see the Portland car theft article.) Or to use your house analogy, and I'd hope the actual lawyers will correct me if I'm wrong.. If you have a house, and rewire it to remove aluminum wiring, yes, that's an improvement. And I don't think you'd have to disclose it. I would also think that if it was done recently by a licensed electrician working with an approved permit, you would want to disclose that. Of course, if there was a permit or even without one, but the work was done by your acquaintance who says he knows how to wire, but he didn't really replace all the wiring, but just enough to get it past the building inspector who is known to be overworked and as a result doesn't look all that hard... Not disclosing is a problem isn't it? Maybe not, as long as nothing happens. But if there's a fire and some one gets hurt.... https://www.nytimes.com/1990/08/11/n...ire-death.html |
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Model Penal Code 224.7 and 224.8
Selling "adulterated" or "mislabeled" commodities is a criminal offense under MPC section 224.7, with those terms defined by established commercial usage. While the penalties may not be significant (in NJS 2C:21-7, a DP offense), it would expose those sellers to further criminal liability as to the corporate officials (in NJ, NJS 2C:21-9c) and Commercial Breach of Duty (MPC 224.8) criminalizing their accepting a benefit for themselves if they are in the business of making a disinterested selection/appraisal/criticism of a commodity.
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(scroll down) http://www.sportscardradio.com/alert...by-psa-or-bgs/ |
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The one(s) who had provable INTENT to sell something that they knew to be altered as unaltered.
At least that’s what you do criminally. |
Well as far as I know, and Peter correct me if I'm wrong, criminal fraud requires intent to defraud. You can't commit criminal fraud by accident. I don't even think you can commit it through incompetence. Civil liability is still on the table but unless there's a smoking gun that says PSA was complicit with the doctors there's nothing criminal there. Also you can't file criminal charges against a company (nice work if you can get it, they have all the rights of a person but...) you hav to have a person committing the criminal act.
Any corrections Peter? |
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"So what does a history of fraud in high-profile sports memorabilia auctions get you? For Bill Mastro, it’s 20 months in federal prison. That was the sentence handed down by U.S. District Judge Ronald Guzman on Thursday. It could have been as much as five years but Guzman and prosecutors agreed on the lighter sentence based on Mastro helping authorities following his 2012 indictment. In a plea agreement, Mastro admitted to driving up prices through shill bidding between 2002 and 2009. He and his associates would bid up auctions to drive prices higher. “The long-running and systematic nature of the scheme undermines confidence in the auction house and sports-memorabilia industries, and calls into question the true value of merchandise,” said Assistant U.S. Attorney Steven J. Dollear. “The defendant’s ultimate goal was to beat the competition and garner more business for his auction house, and, in the end, more money for himself.” After decades of whispers and suspicions, Mastro finally admitted to trimming the famed T206 Honus Wagner that would go on to be graded PSA 8 and sold to Wayne Gretzky and Bruce McNall. When Mastro sold the card in 1987, he didn’t disclose the fact that it had been altered. He was also involved in subsequent sales of the card in 1991 (to Gretzky and McNall) and 2000. Again, he didn’t given any hint about what he’d done to the card". |
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Collectors Universe (CLCT) is most likely to be sensitive to how this impacts their stock price and financial health. They are not a well capitalized company and they may have inadequate reserves given the magnitude of the problem. Their stock price will likely be driven by the selling or buying of several large institutional shareholders. Here's a partial list: https://finance.yahoo.com/quote/CLCT/holders?p=CLCT. Note that Renassaince and Dimensional are quant/indexing focused, not fundamentally focused, so one is better off trying to contact the money managers/research analysts at the other funds. If one is unable to make direct contact with these people, contacting investor relations at CLCT is an alternative -- though less impactful -- starting point. Investor relations is in contact with senior management, and will likely inform them if a groundswell of people are making inquiries. CLCT is most likely to start making the changes people desire if they are getting pressure or inquiries from their large institutional shareholders or senior management recognizes the potential enormity of forced buybacks of altered cards versus their reserves/cash levels. Beyond the $800,000 in reserves they have ~$16 million in cash (around $13.5 million net of debt). They generate a healthy amount of cash (~$12 million over the last 9 months), but a chunk of that goes to paying dividends, the absence of which would hurt the stock price. They also have exposure to the Chinese market in coin grading. One can see several potential problems, so they are certainly not immune to a grassroots effort among hobbyists. |
I will preface to say I am not a lawyer, though I do hang around some pretty good ones quite often.
The best analogy I can come up with is rolling back the odometer on a car, which is a felony. Obviously, the car is still authentic and in many ways materially the same. However, it has been altered in a way to make it appear to be in a much more pristine condition and have less wear than is actually the case. When buying a vehicle, the purchaser must receive a written declaration of the accurate mileage. Imagine a scenario where a person purchases a vehicle with 100k miles, rolls back the odometer to 10k, and details the rest of the car to make it appear in significantly better condition. Then this person takes said vehicle to a "professional" mechanic or vehicle inspector who certifies that it does, in fact, only have 10k miles on it and is otherwise unaltered. Then this vehicle is sold for multiples of what it otherwise would be, based on the representation of mileage and condition. Is this not fundamentally what is happening here? And, if not, please explain your reasoning. |
Same concept IMO and well reasoned. Only difference is that here it's done over and over and over and over again and involves use of the mail and wires.
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I actually know a lot about odometer tampering. When I was a 22 year-old college student in 1997 I was the youngest juror on a federal case where 11 defendants were on trial. Think sports cards can be sleazy?! Through this ring it was estimated that 60-70% of all used cars in Baltimore had been altered. The amount of effort it took to cover their tracks was mind-boggling and several office workers had been paid off to facilitate the scheme. It took 3 months and was one heck of an interesting summer job that I hadn't expected. The comparison to our industry is a very, very good one. |
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I already know the answer. I have a lot of experience auctioning pre-owned vehicles. I did this for many years. My old eBay username is pre-ownedautos. I was offered a lot of money for the sale of that ID. I declined. So, let's hear your answer. |
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The owner has a 15 year relationship with the consignor selling multiple vehicles for him over the years. He knew the consignor had a criminal past, served some prison time, was just a shady guy in general, but didn't know about the odometer roll back even though he suspected it. |
My ebay ID is used-cards. So far no one has offered me any money for my ID, but because of this quagmire and now the auto analogy, maybe there is a windfall for me in the future
Brian |
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Assuming the answers to these questions are all no, unless there is some statutory law that pertains to automobile auctions that imposes strict liability on the auctioneer that the odometer reading is accurate, I would think the auction company would not be responsible for the misrepresented car. |
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I had a high end card last year that I wanted to cross over to PSA. It was a SGC 30. PSA put it in a holder and marked it PSA 4.5.
Have I committed mail fraud if I don't disclose to to my buyer that the other leading card grading company offered me their professional opinion that the card is of a significantly lower quality than PSA? |
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B. Thus, it is not an "apples to apples" comparison. All it accomplishes is to further demonstrate PSA's ineptitude. |
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I didn't know he says that. If so, fair enough. |
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"I can assure you that this process is completely unbiased; when Brent does his review he does so for the entire auction after the cards have been sorted by sport, year, and issue." |
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To a certain extent I don't expect one companies 6 to be anothers. I do expect one companies 6 to be a 6 every time they grade a similar card. |
Meanwhile, after promising there were no Moser cards in the current auction, they have taken down quite a few more. I suppose it could be unrelated.
https://www.ebay.com/itm/401777740858?nordt=true https://www.ebay.com/itm/352682160064?nordt=true https://www.ebay.com/itm/401778998920?nordt=true https://www.ebay.com/itm/352680563526?nordt=true https://www.ebay.com/itm/352680532262?nordt=true https://www.ebay.com/itm/352680537796?nordt=true https://www.ebay.com/itm/401777760222?nordt=true https://www.ebay.com/itm/401777757855?nordt=true |
The focus of the scandal
The focus of the scandal for many on this board and the BO board seems to be the card doctors (Moser in particular) and the auction houses (PWCC in particular) that possibly knowingly sold doctored cards.
Of course this is bad behavior and possibly illegal, definitely immoral, and they and their businesses will likely suffer in undetermined ways because of their actions. But not enough of the focus is on PSA or the third-party graders in general. We didn't really learn anything new about the tendency of people like the card doctors and their sales fronts in this scandal. Those things have been present in one way or another for years and in fact are part of the reason for the TPG's in the first place - to give the buyer/collector/investor comfort that the card is real, unaltered, and it fits closely to the objective traits of the subjective grade that they provide. I think a new learning would be (or at least a more solid understanding of how pervasive the condition) how inept or carelessly or willfully negligent the TPG's really are at assigning a grade and detecting alterations including trimming, recoloring, adding back corners, removing stains, removing creases, etc. So while the particular doctors in this case may be stopped for now, and while one auction house may take a hit, the big impact of the scandals uncovered over the past few months is that our collective faith in third party graders who grade using current methods has been probably irreparably damaged. The damage to our faith in their expertise will likely cost many who own graded cards some measure of market value of those cards. The open question is what will come to rectify the problem of TPG's' ineptitude? Because the need is still there. Because there is a need for uniform opinions of condition rather than the old days of "well high book value X and this card looks pretty good", and because there are many more card doctors hiding in the shadows, the need for a good third-party opinion remains. The question is - who and what will come in to fill that need now that the current TPG's have proved extremely fallable? That should be the trajectory this discussion takes while the market and legal authorities deal with those who have been exposed. |
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People keep saying there is no focus on PSA but there has been plenty of discussion of PSA. There is more on PWCC for now because of the nature of what's been uncovered, and all the statements they have made, and their direct relationship to certain people. But I don't see anyone avoiding PSA as a topic. Quite to the contrary. Read all the threads, it's very much there.
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As you note, though, they sold them once, got them back and sold them again. The question of criminality of this will certainly be influenced by who sent them in. |
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I think if PWCC turns on Moser in an effort to deflect FBI attention from themselves, this could get very interesting. Especially if he can in turn, disclose proof that they were complicit.
I also think some here's questioning of the legality of committing fraud is pretty suspect. Using some of the mental gymnastics I've seen in this thread, you can dismantle any case of fraud under the guise of righteous intent, ie claiming someone wanted to conserve the cards doesn't absolve them of possible fraud charges. You don't get a free pass to commit fraud simply by stating you meant well. |
Yup, I came here to post this as well. I had my eye on this auction:
https://www.ebay.com/itm/352680537796?nordt=true |
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Awesome
Nice job Brent.....
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Next on American Greed.....
When will this episode air?
Maybe can they will have a week dedicated to the hobby at the rate things are going... T206 signatures and the like.. |
I agree with Peter, there's plenty of ire towards the TPGs, you just have to read all of it.
PWCC is in focus because they gave market access to Moser (they've admitted as much now). They're also being questioned whether they actively participated in the alterations, and some of what has been found seems to indicate maybe they were. Until they say one way or another, we don't know FOR SURE but we have a pretty good idea. "PSA is inept" is the easy way to give them a part in all this (and they clearly have a part in it). It's certainly the easiest answer, but that doesn't mean it's the real answer. There are reasons to believe that PSA knew who Moser was previously, and the possibility exists that they took cards directly from him or knew about his relationship with PWCC, and were taking his cards from them. It's why the questions of (1) who sent those cards in, (2) what did they know about those cards when they were sent in, and (3) did PSA know anything about that relationship and/or if something had been done to the cards matters so much. There's a whole matrix of what happens next depending on these answers. Some will point the financial issues to certain/all parties involved, others may point criminal issues to certain/all parties involved. Certain outcomes are more likely than others, but obviously some things need to continue to play out. None of the above addresses BGS, but they've got some similar and also different potential issues. They don't have the financial guarantee, so theirs is maybe a little less complicated. |
https://www.pwccmarketplace.com/eye-appeal
"On average, PWCC Certified cards have consistently sold for 130-200% of average market. Our desire is to empower investors with a consistent and unbiased eye appeal assessment overseen by Brent Huigens, the founder of PWCC and a card expert with more than 25 years of experience in the industry. All pre-1987 trading cards with a market value over $250 are eligible for eye appeal review." |
On the subject of the guarantee everyone so far is making an assumption that PSA would have to pay for these out of “reserves”. However, there is another possibility.
Most service businesses carry Errors & Omissions liability insurance, as well as quite a few addition liability coverages. If a TPG carries E&O coverage it would certainly be to cover extraordinary guarantee costs beyond a reasonable deductible level that the TPG would have to pay first. While their future premiums could be increased dramatically as a result of this, I doubt very much that a large number of guarantee claims resulting from this situation would dent a TPG too badly in terms of depleting their reserves. And besides, in this case there is a patsy named Brent who is basically going to take the brunt of it all. The TPG records are almost certainly sufficient to be used as the basis for going after Brent criminally if he doesn’t do exactly what the TPGs he brought into harms way want him to do. More than likely almost none of the stink of this falls back on the TPGs if they intelligently leverage what they have to hold over Brent’s head. |
I keep asking questions, but get no response. Doesn't PWCC want to regain our trust?
https://www.blowoutforums.com/showthread.php?t=1297500 |
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Reach in your pocket and pull out your change. Study each coin carefully. Now go spend them. Do this every day for the next 6 weeks and let me know if you get any of that same change back from another store within the next 6 weeks. This is basically what people are asking Brent to do - identify every card he's ever handled. Let's be realistic. |
American caramel Honus Wagners just grow on trees?
Edit: I remember the time as a kid I got an 1859 Indian Head penny in change. |
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D@vid, if the devil does ever need an advocate, you be his #1 draft pick. As the Mythbusters would say, that myth is BUSTED!
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As to insurance coverage, that is not my area of expertise, except to say that the experiences I have had (in the real estate business) tell me that where there is potentially a lot of money on the line, carriers will look for any way out. And in this instance, I suspect they will take a long hard look at the voluminous numbers of high-grade vintage cards emanating from PSA. People for years have been opining that the sheer number is at variance with common sense, as well as reported observations from an earlier era. So this raises the issue to me of incompetence on the part of the insured which possibly could void coverage. Will an insurance company attempt to use that as a basis to deny coverage? Again, not my area of expertise but based on the limited experiences I have had, I would not be surprised to see that happen. Also, even if such coverage does come into play, how much could it potentially cover? $1 million, $2 million, I have no idea. But I would not be surprised if whatever the limit is, it is far too little if a significant percentage of altered cards were to be returned to PSA. |
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David at this point with due respect you're out there on a limb all by yourself. There is ZERO question he knew he was selling altered cards and by that I include trimmed ones. ZERO. He's admitted it to a number of people even if the massive evidence hasn't convinced you. There's no point in continuing this discussion, you're just making yourself look bad.
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I am the treasurer of a national non-profit company that has some potential liability concerns. We carry liability insurance but not from the first dollar. Therefore we also have a reserve that can be used to cover any deductible claims expenses that might arise. I don’t know of any well managed, publicly traded company that doesn’t carry sufficient insurance coverages to protect themselves. It would be a big surprise if a company like PSA was trying to self-insure something like this . |
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2 - sent back in by Moser, either in a slab or raw (if raw, PWCC probably sent to PSA to be slabbed) 3 - assigns sticker Really? He doesn't remember them? Let me answer your question directly: NO, I do not think he remembers every card he handles. HOWEVER, I do think he remembers these quite well. Believe what you want. |
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From the CLCT 10K We have no insurance coverage for claims made under these warranties, and therefore we maintain reserves for such warranty claims based on historical experience. Page 17, at the bottom. |
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3 years ago I was saying buy silver. I darn sure did. I feel a lot better about my silver purchases than most feel about their baseball card purchases right about now. What would you rather be holding onto right now? 50K in high grade cards or 50K in silver? http://www.net54baseball.com/showthread.php?t=216582 Post 32 I saw all this years ago, Peter when all the over graded cards first started showing up. Grading mistakes happen, but it was way too much and too often just to be a mistake. I knew then that it was only a matter of time before it all imploded. So to say that I'm out on a limb by myself I take as a compliment. I'm also saying Brent doesn't get indicted. We'll revisit that one too somewhere down the road. I'll say I told you so and gladly be out there on a limb by myself. |
On the cars/odometers analogy, I don't know what auto auctions are required to do legally, but I do know how one handled that sort of stuff in the late 80's.
I worked for a dealership. As most do we got a decent number of cars we didn't want to resell either because of condition, age or they were stuff that was just too hard to sell. (Like a black on black Iroc Camaro with no AC... ) so we sent them to a wholesale auction. They ran 4-5 different lanes of cars, and the ones I had the most experience with were the A lane cars. Old worn out high mileage, crash damaged.. The sales in the A lane were very nearly as-is. And very little was disclosed. The only car we had returned was one with a non-disclosed bent frame. The buyer figured it out before leaving the lot, had it examined by the auctions shop that existed just for that sort of dispute, and the auction company handled it quickly as the arbitrator. We got to keep the car, but sold it the next week with the damage disclosed, and got nearly as much. There was the occasional dealer, usually smalltime who would try to get that sort of thing through regularly, and after a few times getting caught and being difficult about the sale being rejected they were thrown out. In at least one case bodily- what a fun day that was, even the sleazy dealers hated him. |
Isn't silver at near an all time low?
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If I was PWCC, I would hire a public relations consultant stat! They are worth it for the situation.
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Silver is pulled from the ground at a 9:1 ratio over gold. For every 9 ounces of silver that is mined, one ounce of gold is mined. So if it comes out of the ground at a 9:1 ratio, why is there a price difference of nearly 90:1? :confused: Doesn't something have to give? Either gold comes down or silver goes up? You can follow the herd. I'll be myself. |
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Your math seems flawed though, it isn't just a question of quantity but I am sure you know that. |
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https://twitter.com/NorthmanTrader/s...14569693532162 Sorry let me post something about this topic to not get off point: Quote:
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In the thread I linked, the OP had probably 100+ suggestions of cards to invest in. I was the only one that suggested an alternative to cards. Whose investment advice looks better right now? My overall point is, I don't mind being out on that limb all by myself as Peter suggested. |
Not 50K in CLCT stock. Down over 9% today. I guess someone thinks they’re going to have a problem.
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Meanwhile, the jacked T206 Jennings one hand AB 460, psa 6 is still live, which means they have not taken out all the bad eggs; I suspect they have removed a mere fraction so far. |
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