Article about Collecting and Fraud in the Hobby

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Hi Gang:

A recent article appeared in the Philadelphia Inquirer and Daily News regarding the hobby. Some of our members and are interviewed and shown in photos. Sadly, I can't show the photos and the article can be seen by subscription only, but I copied it below

SPORTS
Fraud is ‘rampant’ in sports collectibles. Here’s how the industry and collectors are trying to fight it.
The hobby has struggled to regulate itself, creating opportunity for bad actors looking to cash in.

A fan holds an autographed baseball.
A fan holds an autographed baseball.
Aaron Doster / AP
by Jon Marks, For The Inquirer
Updated Sep 13, 2022

The collector had no idea he had been scammed. He had bought autographed baseballs for 25 years, amassing 263 in his collection that include some of the all-time greats: Ty Cobb, Babe Ruth, Honus Wagner, Cy Young, and Christy Mathewson, as well as current stars such as Mike Trout, Albert Pujols, Ronald Acuña Jr., and Bryce Harper. He even had all-star team balls signed by every player, all of them authenticated as legit.

So there was no reason to suspect the Thurman Munson ball he purchased a decade ago was a fake until the auctioneer he bought it from contacted him last year.

“They had been tracking this [forger] because there was a painting he forged,” said the Montgomery County collector who prefers to remain anonymous. “They followed the money.

Pictured is the autographed baseball collection by a Montgomery County collector, including a fake Thurman Munson ball (fourth from the left on the second row).
Pictured is the autographed baseball collection by a Montgomery County collector, including a fake Thurman Munson ball (fourth from the left on the second row).
Jon Marks
“The way it was explained to me, he’d pay his people with checks and they were able to trace where the money went and found other people who did this and they all came clean. The FBI got back to the auction house and said this ball was forged and they called me and said, ‘It’s a fake and we need it back.’ They turned it over to the FBI.”

He’s not the only one to fall victim to a practice that has grown in recent years. Despite ongoing FBI investigations and better public awareness, fraud in the sports collectibles industry has become a problem.

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“There’s a lot of money out there,” said Brian Brusokas, an agent with the FBI’s Art Crimes Team, which was created in 2007 to investigate suspicious activities in several areas, including sports collectibles. “That’s when the unscrupulous actors start to take advantage of collectors.

“That’s what myself and my colleagues in the FBI are looking to root out.”

Al Crisafulli of Love of the Game Auction House, which specializes in vintage pre-war cards.
Al Crisafulli of Love of the Game Auction House, which specializes in vintage pre-war cards.
Jon Marks
While the vast majority of collectors and dealers are legit, Brusokas said there is that element that will try to take advantage of unsuspecting customers. The 1999 FBI investigation called Operation Bullpen and subsequent Operation Foul Ball resulted in numerous convictions in several states and recovered millions in phony memorabilia, but instances of fraud have been on the rise in recent years.

‘Rampant’ fraud
“It’s rampant and it’s been rampant for years,” said Al Crisafulli of Love of the Game Auction House in Kingston, N.Y. “The authentication companies have done a pretty good job on the autographs side, so you’re usually good as long as what you’re buying has been authenticated by a reputable company.

“The hobby has not done a good job policing itself and it’s not regulated. If you have a car with 100,000 miles on it and roll back the odometer, you can go to jail. But in this hobby, there is no governing body. No laws that prevent somebody from theoretically doctoring a card, getting it past the grading company, and having it go to auction. There hasn’t been anybody who’s paid a really stiff punishment.”

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Perhaps that’s why there were long lines in July at the National Collectors’ Convention in Atlantic City for the Professional Sports Authentication and James Spence Authentication sites, considered the foremost authentication authorities.

“There’s a lot of fraudulent memorabilia in the market,” said Chris Carlin, the director of customer care at California-based PSA. “We employ some of the most renowned autograph experts in the world, which is why people are in long lines here today.

Jay and Jim Lutz of Bucks County Baseball Co. in Bristol. They are a father-and-son team, specializing in the Phillies and other Philadelphia team memorabilia.
Jay and Jim Lutz of Bucks County Baseball Co. in Bristol. They are a father-and-son team, specializing in the Phillies and other Philadelphia team memorabilia.
Jon Marks
“Grading services are where we will authenticate and encapsulate trading cards and assign them a numeric grade from 1-10. Autograph authentication is done by PSA/DNA.”

PSA/DNA is a detailed four-step authentication process that includes using invisible ink containing a synthetic sequence specific to PSA.

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“Our services are designed to protect the consumer,” said Carlin, who added they’ll soon be changing the name from PSA/DNA to PSA Autograph Division to avoid confusion since no actual DNA is used. “If we don’t have confidence in what’s presented to us, we will not pass it through the process.”

One major case
Just as the collectibles industry has expanded, so have the degree and levels of fraud. The fraudulent autographed Munson ball referenced earlier, as well as fake Ruth and Lou Gehrig autographs on bats by using wood from that era, are believed to have been perpetrated by Donald “DB” Henkel, who was indicted in April by the Department of Justice along with his brother Mark and another man. His Michigan studio was reportedly raided in July 2020, although the FBI would not confirm that since it’s part of an ongoing investigation. All three men have pleaded not guilty to federal fraud charges for allegedly scheming to create and sell false works of art and memorabilia.

“[Donald Henkel] is one of the best who ever lived,” said Jeremy Kraft, who has worked for Hunt Auctions in Exton for 14 years after spending four years as an authenticator. “It’s unreal what he can create.

Chris Ivy, Heritage Auctions Director of Sports Auctions, holds a 1952 Mickey Mantle card that sold for a record $12.6 million in August.
Chris Ivy, Heritage Auctions Director of Sports Auctions, holds a 1952 Mickey Mantle card that sold for a record $12.6 million in August.
LM Otero / AP
“Certain forgers’ work can be identified. That case is more of an anomaly, as forgers who are not necessarily talented can operate for some time.

“Most never get called out. But there are guys who are talented and who pump stuff out. At one time, there were tens of thousands of bad [Mickey] Mantle and [Joe] DiMaggio pieces that came into the market.”

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Besides producing fake autographs, there’s also the business of altering cards. Smoothing out rough edges, changing the degrees of color and realigning the print face can change a card’s value. So a card originally graded as a 4 suddenly is a 5 or 6 and so on.

But that’s not the case with the prize collection recently auctioned off by Dallas-based Heritage Auctions. The company, which also specializes in world and ancient coins along with comic books, auctioned off a 1952 Topps Mickey Mantle rookie card last month that graded 9.5. It sold for a record $12.6 million, easily surpassing the $7.25 million that a T-206 Honus Wagner card went for in a recent private sale.

“It’s got beautiful corners and everything about it is perfect,” said Crisafulli, whose auction house specializes in vintage pre-war cards. “Now, if you had this same card with a smushed-in corner, maybe that’s going to be a 4 worth around $70,000.

“If there was a way to take that smushed-in corner and straighten it to fool graders into a 5, that might go for $120,000. A 6, even more. With these kind of incremental changes, you can impact the value by trimming cards’ edges to make them a little sharper or adding color. It’s not easy to do, but for the people who do it, it’s fraud.

Julie Develin, founder of Women in the Hobby.
Julie Develin, founder of Women in the Hobby.
Jon Marks
“You’re lying about what you have and it devalues the card. The other thing it does is it causes the person who buys it to shell out a lot more money than they should for the card.”

In the mail: Nothing
Then there’s simply the old switcheroo.

“I met a guy who wanted to do a trade with me,” said Chicagoan Sam Nubani, who said his collection is worth $10 million. “I thought I could trust him.

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“He said he would mail me my cards and I would mail him his at the same time. I go to FedEx to mail my box when I get notification he mailed his. Two days later, I get the box and it’s empty. I lost about 70 grand.”

It comes with the territory.

“Yes, it’s something we always worry about,” said the founder of Women in the Hobby, Julie Develin, who grew up playing softball in Plymouth Meeting. “I feel like 95% of those in the hobby are probably good actors, but fraud absolutely happens.

“From my niche, women in general are probably preyed on more because we’re perceived as not having as much knowledge, which couldn’t be further from the truth.

“I’ve been scammed on eBay. I think all of us have.”

But the longer you’ve been around, the more you learn to sense when something might not be right.

I found in the ’90s, there were more fraudulent companies out there, but some of those items are still out in the marketplace. Today’s autographs are much more secure. Where it becomes harder are those older autographs.

Jim Lutz of Bucks County Baseball Co.
“Experience kind of tells us where we can see things that are kind of red flags,” said Jim Lutz, who works with his son, Jay, at Bucks County Baseball Co. in Bristol, where they used to get Mike Schmidt and other notable players to make personal appearances and sign for their customers. “When there are items people are trying to sell us, we kind of vet things.

“I found in the ‘90s, there were more fraudulent companies out there, but some of those items are still out in the marketplace. Today’s autographs are much more secure. Where it becomes harder are those older autographs.

“Even with the best authenticators, all they’re giving you is an opinion. It’s an educated opinion, but Connie Mack used to have a secretary do his signings.

“She was as good as he was. That’s a true story.”

Brusokas said that while the industry has made strides to inspire customer confidence over the last 20 years, collectors should remember that grading memorabilia is not a science but “an educated opinion.”

“Collectors should purchase sports collectible items because they enjoy looking at them, learning about the players or because looking at the item takes them back to a special time in their life, not for the resale value,” Brusokas said.

And as Carlin advises, if a deal looks too good to be true, “it probably is.”

Published Sept. 13, 2022
JM
Jon Marks, For The Inquirer
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