Mastro and Allen Indicted
 

Carry on.

story

http://www.nydailynews.com/blogs/ite...-fraud-charges




.
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Did i maybe misread it - is the maximum sentence printed? How long could he possibly go away to jail for?

yuck.

Quoting from the article:

"According to the indictment, in advertising portraying Mastro Auctions as the premier seller of valuable items, including the world’s most expensive baseball trading card, a Honus Wagner T-206 card, Mastro allegedly failed to disclose that he had altered the Wagner T-206 card by cutting the sides in a manner that, if disclosed, would have significantly reduced the value of the card".

HOLY "NEVER GET CHEATED" BATMAN! This could potentially be one colossal buy-buck by the company that graded that card.

Mastro
 

Oh boy. Doesn't sound good.

I think each count of fraud carries a maximum sentence of 20 years and a hefty fine. Don't quote me on the numbers, but they are serious charges.

Tony

I wonder how it is that they determined Allen (14 counts) was much more culpable than Mastro (1 count).

Phew! I am so glad that I didn't buy that t206 Wagner!

Wagner
 

The article states that Mastro didn't disclose that the T206 Wagner was altered by cutting it from the sheet, however, PSA graded the card as an 8.

I wonder if PSA will be investigated to see how that happened?

Tony

I wonder what this means for their current operations? Legendary is currently sitting on one of the best prewar collections of all time.

Interesting. Did Mastro claim that it was unaltered? Didn't the guy at PSA who graded it, state that in the condition he received it, it was deemed by him to deserve that grade? Since it was the first card PSA graded, perhaps they simply changed their grading standards immediately after that one was slabbed.

Also, everyone has known for a long time that the slabbed Wagner was trimmed - way back to Gretzky - and that has not "significantly reduced the value of the card." In fact, the trimming story and resulting book may actually have caused the value of the card to increase.

the charge are for principally shill bidding if i understand good, and not for the psa 8 wagner....

i understand correctly?

Guess they'll have to dissolve and start a third auction house next week. I predict it will be called Super Auctions.

I just checked, www.pleasedontindictusagainauctions.com is still available

American justice is almost comical when seen from a distance.

MF Global's Jon Corzine can't account for $1.6 billion of investors money and still enjoying the good life and yet the Feds are going after some guy that misrepresented an old baseball card and supposedly did some shill bidding on items consigned to his auction house. There are hundreds of Wall street crooks that should be served with papers ahead of these guys.

He's already paid the price for his mistakes as far as I am concerned.

What price did he pay?

You can say almost anything you want but you are going to need to have your name in your posts...nothing personal it's just the rules. You can put a period between some letters to not show up in searches, if you want to...thanks for yours and everyone's understanding in this thread....

Lol

Yes, this makes a lot of sense. And I just lost 5 IQ points reading this post.

The guilt he felt about stealing all his friends' money?

For those of you not familiar with these individuals, here are two informative articles:

http://www.psacard.com/articles/arti...tml?artid=4511

http://www.psacard.com/articles/arti...tml?artid=4763

To the many lawyers on the board, what do you estimate the time horizon is for all this to come to trial? I have heard today that the Legendary Live Auction at the National is still on, as well as the August auction to follow shortly thereafter.

If my statements have harmed Jon Corizines reputation then please, by all means, remove my post. Should his lawyer call, feel free to give him or her my full name and phone number, which you already have in your database.

This quote is fascinating in light of the discussions with Heritage and Hunts and how they use a house account to bid and don't distinguish it from any other bid:

Here's the FBI Press Release:
 

CHICAGO—Online and live auctions of sports memorabilia and other collectibles conducted during the 2000s by the former Mastro Auctions, which was based in suburban Chicago, routinely defrauded customers, according to a federal indictment unsealed today. William Mastro, who owned the former business that once billed itself as the “world’s leading sports and Americana auction house,” together with Doug Allen and Mark Theotikos, both former executives of Mastro Auctions, were indicted on fraud charges for allegedly rigging auctions through a series of deceptive practices, including so-called “shill-bidding,” designed to inflate prices paid by bidders and to protect the interests of consignors and sellers at the expense of unwitting bidders.

According to the indictment, in advertising portraying Mastro Auctions as the premier seller of valuable items, including the world’s most expensive baseball trading card, a Honus Wagner T-206 card, Mastro allegedly failed to disclose that he had altered the Wagner T-206 card by cutting the sides in a manner that, if disclosed, would have significantly reduced the value of the card. The charges allege that Mastro and Allen caused the sale of certain items knowing that their authenticity and condition were misrepresented to customers, including purported hair of Elvis Presley and a purported 1869 Cincinnati Red Stockings trophy baseball.

“Consumers might be lured to the auction market for sports memorabilia and other collectibles by an emotional attachment to an item or purely as a calculated investment, but, as the allegations in this case demonstrate, bidders must remain mindful of the maxim ‘Buyer Beware,’” said Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois. “Consumers have a right to be protected from deceptive and dishonest sales practices, and we will prosecute those who fraudulently rig auctions at the expense of bidders as the indictment alleges in this case.”

Mr. Shapiro announced the charges with Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation, and Thomas P. Brady, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.

Mastro, 59, of Palos Park, who owned Mastro Auctions until 2004 and was its chairman and chief executive officer from 1996 until February 2009, was charged with one count of mail fraud.

Allen, 49, of Crete, who was president and chief operating officer of Mastro Auctions between 2001 and February 2009, was charged with 14 counts of wire and mail fraud. Theotikos, 51, of Addison, who was employed by Mastro Auctions between 1996 and February 2009 as vice president of auction operations and, later, vice president of acquisitions, was charged with six counts of wire and mail fraud. Both Allen and Theotikos are currently executives of Legendary Auctions, based in south suburban Lansing.

Mastro, Allen, and Theotikos will be arraigned on dates to be determined in U.S. District Court in Chicago.

The 16-count indictment, which was returned by a federal grand jury yesterday, was unsealed today following the arrest of a fourth defendant, William Boehm, 63, of Ballwin, Missouri, who was Mastro Auction’s director of information technology. Boehm, who was charged with one count of making false statements to FBI agents investigating Mastro Auction’s practices, had an initial appearance today in Federal Court in St. Louis.

According to the indictment, Mastro Auctions, which also operated under the names Mastro Fine Sports and Mastro Net, specialized in sports memorabilia but also featured such items as coins, art, and Americana collectibles. Most items were consigned to Mastro Auctions for sale by their owners, but Mastro Auctions also sold items that it owned. Between 2001 and 2009, Mastro Auctions’ offices were located at different times in Oak Brook, Willowbrook, and Burr Ridge, Illinois.

In conducting online and live auctions, Mastro Auctions typically charged a “seller’s fee” or a “commission,” usually a percentage of the price that an item sold for on consignment, and required potential bidders to pay a one-time fee of $75 that enabled them to participate in auctions. Successful bidders were assessed a “buyer’s premium,” usually a fee of 15 to 22 percent on top of their winning bid, which was known as the “hammer price.” Bidders could place bids online through Mastro Auctions’ website or by directly communicating with a Mastro Auctions’ employee by telephone or fax machine. Bidders could place either “straight bids” that incrementally increased the value over the last bid or “ceiling bids” that raised bids by established increments until the maximum a bidder was willing to pay was reached.

Between at least 2001 and February 2009, Mastro, Allen, Theotikos, and others allegedly caused and made false representations and omissions in Mastro Auctions’ catalogs, advertising, promotions, and other media and in the bids placed in certain auctions. Those three defendants allegedly intended to deceive bidders into believing that Mastro Auctions conducted auctions according to practices that ensured fair and competitive auctions for all participants. They further intended to deceive participants into believing that greater market demand existed for some items than actually was the case, the charges allege.

As part of the alleged fraud scheme, the indictment charges that Mastro, Allen, and Theotikos made false statements regarding the conduct of Mastro Auctions, including the following:

each Mastro Auctions catalog represented that “items are sold to the highest bidder.” In fact, Mastro, Allen, and Theotikos allegedly knew that certain items were not sold to the highest bidder because they canceled sales and engaged in and facilitated shill-bidding to fraudulently inflate prices to the detriment of bidders;
consignment agreements prohibited consignors or their agents from bidding on an item and, if the consignor violated this provision and had the highest bid on an item or lot, the consignor would be required to pay the commission and buyer’s premium. In fact, the three defendants knew they permitted certain consignors to bid on their own items, and, at times, those consignors did not pay commissions or premiums when they placed the highest bid; and
the three defendants represented at various times that Mastro Auctions did not implement undisclosed “reserves,” meaning prices, not disclosed to bidders, at which Mastro Auctions would not sell an item if the bidding failed to reach the “reserve” price. In fact, in certain auctions, they canceled sales instead of allowing the highest bidder to purchase an item, in order to prevent the sale of the item at a price lower than the consignor desired.

In October 2007, Allen allegedly created a “Code of Conduct” for Mastro Auctions. Despite the code’s assurances to the contrary, Mastro, Allen, and Theotikos knew that Mastro Auctions frequently did not disclose true ownership of items or that several employees with bidding privileges, including Mastro and Allen, had access to information about the ceiling bids, including the bid amounts. Further, contrary to the code’s assurances, employees, including Mastro, Allen, and Theotikos, bid on items consigned by related parties.

Among allegedly fraudulent auction practices, the indictment charges that the three defendants and others placed fictitious shill bids for the sole purpose of artificially inflating the price of items being auctioned. They allegedly placed shill bids at various times using a corporate bidding account, their own personal accounts, and accounts of employees and friends. The defendants then ensured that when a shill bid was the highest bid, the shill bidder would not be required to purchase the item; instead, they canceled the sale and offered the item to the next-highest bidder, the charges allege.

The Code of Conduct also provided certain assurances that Mastro Auctions would disclose information about auction items that were altered or restored. After the code was published, Mastro and Allen allegedly failed to disclose alterations and caused restoration work to be done on baseball trading cards, despite assurances that no such work would be performed.

Mastro and Allen also allegedly knew that they had misrepresented the authenticity of the purported hair of Elvis Presley. In April 2003, Mastro Auctions sold hair purportedly of Presley. The initial purchasers later returned the hair along with the results of DNA testing, which called its authenticity into question. In June 2004, Allen provided a refund to the purchasers. In December 2005, August 2006, April 2007, and August 2008, Allen again sold portions of the purported Presley hair to Mastro Auction bidders. In each instance, he allegedly made false representations in catalogs, such as asserting that the hair was “bona fide” or that it would be sold with “documents attesting to the veracity,” without disclosing the results of the DNA testing.

In August 2002, Mastro Auctions sold to Purchaser A what it claimed was an 1869 Cincinnati Red Stockings trophy baseball, which was described as an actual game ball played with by the first professional team, decorated following the game, and presented to the winning team. In October 2006, Purchaser A submitted the ball for laboratory testing, which indicated that the paint on the trophy ball contained a material not used in commercial paint until after World War II, thus clouding the authenticity of the ball. A month later, Allen provided a refund to Purchaser A and the ball was returned to Mastro Auctions, the indictment states. In December 2006, Mastro allegedly contacted Victim A about purchasing the trophy ball and failed to disclose information about the paint test results. On December 27, 2006, Victim A purchased the trophy ball from Mastro Auctions for approximately $62,000, according to the indictment.

The false statements count against Boehm alleges that he lied to FBI agents in July 2007 when he stated that he had disabled the Mastro Auctions bidding account of Individual D because Individual D was having financial difficulties, and he had created a bidding account in the name of “Craig Helling” to catch a Mastro Auctions employee suspected of stealing company information. In fact, Boehm allegedly knew that the accounts in the names of Individual D and Craig Helling were used to place fictitious bids.

Assistant U.S. Attorneys Nancy DePodesta and Steven Grimes represent the government.

Each count of mail and wire fraud against Mastro, Allen, and Theotikos carries a maximum penalty of 20 years in prison and a $250,000 fine and restitution is mandatory. The court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. The false statements count against Boehm carries a maximum penalty of five years in prison and a $250,000 fine. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.


http://www.fbi.gov/chicago/press-rel...r-collectibles

Can a lawyer with access to PACER please post the criminal complaint in .PDF? I would like to read the allegations in detail.

It's not on PACER as of 30 seconds ago.

Jeff, you drive a PACER hook Manny up.

http://photos.imageevent.com/piojohn.../amc-pacer.jpg

Does this mean that Mr. Allen will not be a featured speaker at this year's Net54 dinner?

Ugly....could change the landscape of who's auction what down the road. Lots of details in that press release. Wonder what basis they have for alledging that Mastro trimmed the Wagner? Not that I doubt anything was fishy with the Wagner, just seems like mostly heresay unless there's some smoking gun testimony to that effect.....

It's not on Pacer but can be found on AMC Gremlin.....okay....that was gratuitous, I know....

I wonder if this indictment is a coincidence with National so close at hand. It seems like every year the Feds try to do something around this time.

Very good point!

I assume he will be attending his own live auction that night.

We can't consider your measly 5 IQ points, until after we've dealt with the guys like me who lost 10-20.

Now, for the obvious question:

Will this lead to an additional investigation of Legendary Auctions?

no one said 'boom goes the dynamite' yet, so i just thought i would just get that out of the way.

I think the phrase about the Wagner being trimmed and Mastro allegedly knowing this would only be part of the investigation and indictment release if the Feds have a plan to prove it was trimmed, otherwise why mention it? If they can prove it was trimmed, I think psa is in a conundrum. Would they then have to admit it is an "Authentic" or would they still stand by an 8? Would the Wagner get subpoenaed? That would be something.

whoa, come on now, completely different company.

But since Doug Allen was involved, fraud was still afoot.

This is devastating to me. My world has just been turned upside down. Along with Dave Kohler and Jerry Sandusky, there is no one I trust more than Doug Allen.

Can we assume additional indictments for shill bidding will follow shortly?

-Ryan

"Shortly" I don't think so. These cases take years and years to build.

I would say yes, eventually.

It's been several years for those cases, too. I don't want to be greedy, but another round would be nice.

-Ryan

Will we soon be able to bid on his ridiculously ancient computer that he has sitting on his desk? I'm assuming he'll need some money once he gets out of the chokey. :) *cough*

PS - Ray Charles saw this coming.

Will the 2006 PSA world series of authentication title be in jeopardy now if charges are proved?

For some (not saying me), the following clip may sum it up:

http://www.youtube.com/watch?v=SjbPi00k_ME

Last I checked it is not against the law to lose peope's money in a legal manner. Again that was last I checked.

Jake Lighter

Looking forward to seeing what comes of it.

I think a name is missing in this thread.......

hahaha. lol.

What did Dave Kohler do, I actually have no idea.

allegedly...

Anyhow, it's not like being a convicted felon has ever prevented anyone from running an auction house. If Memory serves me well, that is. Or am I driving in the wrong Lane?

Ryan, what cases are those?

x

http://www.nydailynews.com/sports/i-...icle-1.1121644

And Bill Mastro is cooperating against Doug Allen!!!

I'm just happy this happened long after Steinbach's passing. I remember when he was with Pat Quinn and I used to look forward to their listings in SCD.

This should be interesting.

Mastro, the founder of Mastro Auctions and the brother of Randy Mastro, Rudy Giuliani's former deputy mayor and longtime aide, was charged with one count of wire and mail fraud. His attorney, Michael Monico, said he expects the case will be resolved without a trial, indicating that Mastro is cooperating with authorities.

Mastro dropped out of the hobby in 2009, after he shut down Mastro Auctions, which once generated as much as $50 million a year in sales. He sold his legendary memorabilia collection in 2010.

"Bill accepts responsibility for the actions that led to this case," Monico said. "For many years, Bill has dedicated himself to religious and charitable works."

Read more: http://www.nydailynews.com/sports/i-...#ixzz21gsqbCBq

Cooperating indeed! I am suprised these quotes from Mastro's lawyer in the Daily News report didn't turn up in the US Attorney's press release:

"Bill accepts responsibility for the actions that led to this case," Monico said. "For many years, Bill has dedicated himself to religious and charitable works."

OldJudge, as for a trial timeframe, I'd think sometime between Jan 2013 and Sept 2013, as things now stand. And things are fluid. I doubt additional charges would be brought before trial, this seems something to which thought was given, so I'd think it's been thought through. And, a trial isn't a certainty...

Help friends, help strangers who need help... but don't throw a boat anchor to a drowning enemy. If that enemy deserves bad, then it will find him, without you getting involved. Don't tempt Karma... I wish them all well with it. I long for the days before grading, card investing, and the like; when cards were affordable and there was little incentive to trim or doctor a card.

The King is dead. Long live the King. It is really easy to hope someone goes to jail or even dies for the mistakes they made. It is amazing to me just how quick you can go from great to a piece of garbage. I think some of you might remember when Mastro was the king and you where his subjects.

I am more interested in all the people that authenticated for the King. Those are the people that allowed his royal subjects to buy and buy and buy. The card was always known to be a joke. Read the book or better yet play dumb.

Mastro, like me, has already cut a deal. I can tell you that none of you are going to be happy. BigJJ is wrong. Federal is a lot better than state. I know. He will go to a camp and do his time. He did not kill, rape or sell drugs to anyone. He did what many of you know. He lied cheated and defrauded people. This will pass like most things until the next guy gets arrested. Then the outrage will begin again. Welcome to Net 54. Shelly Jaffe net 54 member Leon wanted to make sure who posted this.

Funny when someone gets in trouble with the law they are all of a sudden religious

If the feds asked SGC to give there opinion on the PSA 8 wagner would it matter? In 2001 an SGC employee told me the story about how the wagner was trimmed yet PSA graded it. That is an authenticator respected by the hobby. Would that hold water in court, SGC vs PSA in a way. Just a thought. How could the feds prov the card was trimmed unless they have video tape of someone cutting the card. How could they prove this. It is a rumor thats rung through our hobby for years. If he is proven not guilty in the end should we think the wagner was never trimmed?

Since Bill is reported to be cooperating, and to have taken responsibility for his past actions, perhaps he admitted it. Or perhaps he admitted it in the past to someone else who came forward.

Wowsers.

Sounds like this card will have an * next to it.



Sad to see $ made this happen.

Amen.

Um, I mean - I agree.

-1. I'm ecstatic, and will remain so.

Bill

Me too, Bill. Now that the light is on it is going to be very satisfying watching the cockroaches run.

"sunlight is said to be the best of disinfectants"--Justice Louis Brandeis

I wonder what this means for "Legendary Auctions". Certainly some type of press release or communication is in order to reinforce cosignor and bidder confidece.

With Bill finally admitting that the Wagner is trimmed, PSA will also have a lot of explaining to do. And I imagine the current owner of the card is due some serious restitution. What a f**king mess.

Frank
 

Grading did not bring out the card doctors they were here well before grading. It did however make some of the better ones loads of money.

Ahhh retribution.

Card doctoring was rampant in the early 90s when PSA started. Although it did not work out perfectly in practice, I think it did deter, and has deterred, at least the more blatant fraud. It was very helpful to me in learning who could be trusted and who could not in the days of buying blind through SCD ads.

Speaking of card doctors
 

From the FBI Press Release:

The Code of Conduct also provided certain assurances that Mastro Auctions would disclose information about auction items that were altered or restored. After the code was published, Mastro and Allen allegedly failed to disclose alterations and caused restoration work to be done on baseball trading cards, despite assurances that no such work would be performed.

If it was admitted that the Wagner was trimmed, it appears other cards were doctored also, since there are allegations of "restoration work".

The next set of questions that beg to be asked, "Which cards?" "Were they graded by a TPG company?" "Which company" "Who restored them?"


http://www.fbi.gov/chicago/press-rel...r-collectibles


As for my take of Third Party Grading, it was good initially in screening out a lot of amateur doctoring, but has failed miserably in detecting the many of the advanced alterations that are rampant in the industry today.

would a press release really reinforce consignor and bidder confidence?

I hope the truth will be made arround this psa 8 wagner by the FBI, if it is legit or altered.

Well, when Doug would leave messages on my answering machine in 2006-7 about how wrong I was to accuse him and Mastro of fraud I always felt better. Of course, he continued to rip me and countless others off. But I still felt better.

Jeff, "accuse" takes the accusative LOL -- accuse HIM.

What the hell are you talking about?