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FBI probes hobby biz honchos
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BY MICHAEL O'KEEFFE
DAILY NEWS SPORTS WRITER
Sunday, July 8th 2007, 4:00 AM
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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."