Mastro Auctions Being Investigated by the FBI

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Posted By: E, Daniel

I actually find quite reassuring.....

I appreciate the fact I know where he stands on such issues, and I can judge his opinion exactly like I do everyone else's on this board. With a grain of salt.

How do I know what anyone else's stated opinions are affected by, and whether they are 'tainted' by an undisclosed relationship? Seems ridiculous in this instance to only judge Leon in this way...

There is no big moral obligation for Leon to either have completely unbiased opinions (impossible to do and still be involved in the hobby), or be bound from expressing them. He doesn't influence what cards I buy or who I deal with any more than anyone else on or off the board - and if people as a whole tend to agree with his stances its because they seem more reasoned - and not because of any relationship to mutton .

And per this article, it seems to me also that I read near the exact same opinion almost a year ago, and it too talked of 'ongoing investigations'. All I can say is it seems a long time amaking for a serious legal case based on fairly defined measurables.....


Daniel


Edited to add paragraph 3.

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Posted By: davidcycleback

..

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Posted By: Richard Simon

Just to clarify: the bottom part of the article (with the full date) and the top headline are cut off due to the size of the newspaper being larger than my scanner.
The article was in today's newspaper.
--

I refuse to engage in a battle of wits with an unarmed opponent.
Unknown author
--
We made a promise. We swore we'd always remember.
No retreat baby, no surrender.
The Boss

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Posted By: JimB

Barry,
I was pulling numbers out of my head, but you can imagine the scenario: A consigner decides, at whatever price, that s/he would rather eat the BP and buy the lot back at a certain price that sell it at that price. I am sure there are instances where consigners are not thrilled with prices realized in Mastro auctions, like any others. As buyers we often feel like there are no deals there, but sellers feel differently.
JimB

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Posted By: Jeff Lichtman

Jim, and what if the consignor, whose card worth 20K is at 5K with a minute to go, bids and bids to try to 'buy' it back and then finds that he's still the underbidder at 19K because the top bidder put a ceiling bid in at 20K? And then he lays off the card. And Mastro allows this to occur because they allow consignors to bid on their own auctions. Is that still fair? Of course not. It's fraud.

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Posted By: Joann

I think the article is news if for no other reason than it indicates that the FBI investigation into Mastro still has a heartbeat. It seems like a lot of people have serious questions about some of the underpinnings of the hobby (see other thread on the broken grading system). I get the sense that for the next few years a lot of people involved in the hobby will be holding their collective breath waiting for the house of cards to collapse as soon as the first domino falls (gads - I really love mixed metaphors!). The article is a sign that there are forces chipping away at the foundations. To me, that makes it current and relevant.

As to Leon, I am with JimB on this one. He has a right to his opinion. I don't know that his opinion on Mastro is based on their advertiser status - I have no reason to think that. Regardless, he can base his opinions on whatever he wants - whether it be friends, advertiser status, or that he has a cousin that once lived on Mastro St somewhere. It doesn't really matter - he can voice his opinion like anyone else here.

The line would get crossed of the contents of all posts were regulated based on the interests of the advertisers. I think that's what some feared when the board took ads, and to me it remains the only relevant issue yet today. So far I haven't seen it, and I've been kind of keeping an eye on it. Leon voicing an opinion that favors an advertiser is not the same as his doing something so that the opinions of other also have to favor (or not disfavor) advertisers.

Joann

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Posted By: Joe D.

It is my understanding that it is common practice for the consignor of a horse to bid on his horse -

openly not secretly.


If a consignor is not happy with the price he is getting - he just bids. Everyone there knows he is the consignor. If he wins his horse back, he is out the consignment fee.


When you think about it... its basically an auction with a real 'reserve price'.

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Posted By: Jeff Lichtman

Regarding Leon's pro-Mastro bias, my (perhaps unwanted) two cents: I happen to think Leon has tremendous integrity. The fact that he deals with this site with all the BS he catches suggests something about his personality. And if you know him at all, you know what a decent guy he is. And I don't think the relatively minor ad dollars he receives from Mastro tilts his opinion in any kind of meaningful manner. I think he is prejudiced towards Mastro because he knows the players involved and he believes in THEIR integrity. That's fair and Leon's belief about someone's integrity (or lack thereof) goes a long way with me.

As for Jay's suggestion about Leon's receipt of ad dollars impacting his judgement, Jay is right in the sense that such a relationship at least has the appearance of impropriety. For a rough analogy, if one makes a motion to recuse a judge due to the appearance of prejudice on the judge's part against the moving litigant, often judges will recuse themselves even though they state unequivocally that they can be fair to both sides -- but for the sake of the system working, the appearance of prejudice is enough to warrant recusal. And for the record, I believe wholeheartedly in Jay's integrity as well. There aren't all that many people out here that I would say such a thing about but Jay and Leon are two of them.

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Posted By: Bob C

The fact pattern in the article is thin. Not enough substance there...yet. The bigger story would be Mastro bidding on their own items to create artificial reserves or get high prices.
It should be interesting to see how this plays out.

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Posted By: barrysloate

I think Leon is walking a tightrope, and is not in an enviable position.

If he believes in a person, and wants to support him, and by coincidence that person is an advertiser, regardless of his conviction there is going to be the appearance of a conflict. So if I were Leon, I would not hesitate to express an opinion, but maybe take an extra moment to think it all out before I posted. In no way should Leon's feelings be censored, but he has an extra responsibility as board owner; and likewise, he has to understand that because he does accept advertising, he may have to be more careful than others when wording some posts. That just goes with the territory.

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Posted By: jay behrens

For those that don't know the full history between Leon and myself, there has been bad blood, but we've agreed to disagree on some issues. When I see something I think is wrong, I will bring it up. I've never been one to bite my tongue. I think for the most part we don't truly dislike each other, we just have a few disffering viewpoints that we both feel dtrongly about. I have no reason to dislike Leon as person. I really don't know him well enough to make that decision, but I do like him enough to go up to him at the National, shake his hand and talk with him. I've talked with him before and I hope to again. Talking with passionate collectors is always great.

Hell, when I first came to the board, I went toe to toe with Mike Wentz and earned the nickname Dunderhead At the last National in Chicago, who do you think I ended spending most of my time talking to? It was MW. Just because people have heated disagreements here doesn't mean we can't get along in person.

The board is the board, the world outside this board is another thing.

Jay



I love pinatas. You get to beat the crap of something and get rewarded with candy.

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Posted By: Hal Lewis

I recently consigned items to Mastro in their internet auctions, and I can assure you that I was not allowed to bid on them.

As someone pointed out, a few of them were VERY LOW and I would have been better off to buy them back myself if I could have.

I was almost crying when my three rare 1947 Tip Top rookie cards went for like $125 or something terrible.

I guess some of you are right in that I could have had some other board member bid on the cards for me, but short of utilizing lie detectors, I think that could happen at ANY auction.

I see the point about "Top All" bids, and I agree 100% that an auction house should be SHUT DOWN if they are "peeking" at the max bids and then driving them all the way up themselves... but it sounds like the claim is that the SELLERS are doing this, not the auction house.

I did win something for far less than my "Max Bid" in the last Mastro auction, so I don't think they're doing it.

But I guess actually I was just lucky that the consignor of that item was too honest to have one of his friends driving the price up for him.

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Posted By: barrysloate

I really see no realistic way for an auction house to prevent a consignor from asking a friend to bid for him. There is simply no way that I, or anyone else, can make the determination that bidder so-and-so was not bidding on lots he wanted, but was just helping out a friend. In a perfect world everyone would be honest, but the world isn't perfect.

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Posted By: Joe D.

and he does a tremendous service by keeping this place from slipping into chaos.

A thank you to Leon.

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Posted By: Bobby Binder

I am a paid advertiser on the site in the B/S/T section and to date Leon has not come to my defense. And I have gotten into more then one altercation on this board. He stripped me of my Avatar because it has my company logo.

I think Leon is doing this because the Mastro people in general are a good bunch and not because he is getting paid a few dollars. I am sure that if he dropped them as an advertiser he could fill the spot in minutes.

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Posted By: davidcycleback

I assume Leon was offering his opinion, as all posters do.

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Posted By: leon

you edited your statement....It didn't sound quite right ....

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Posted By: Mike

There is one person who can answer these questions and more. Robert Lifson. Why did they separate?

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Posted By: Jim Crandell

Mike,

Exactly.

Leon--given your defense of Mastronet, how do you interpret Rob Lifson's letter and subsequent comments about Mastronet?

Jim

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Posted By: leon

I am not aware of any letter that Rob has written concerning Mastronet except for the one time there was a major shipping issue with some return addresses. He had no choice in that case. Please show me the letter so I can make an appropriate comment. It's my firm understanding that Rob would never write about another company, Mastro Auctions included. thanks much...

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Posted By: Jimmy

This info is disturbing, but I think it was mentioned earlier this year. Any auction house or even eBay should restrict bids by the consignor period. I have a small group of auctions every week on eBay and none of my consignors would ever bid - I can also block them from bidding if needed. When dealing with the FBI and the IRS definetly a serious matter and I just hope it does not get out of hand and things get worked out. I am sure, there is just two parties involved at this point Mastro's and the person that informed the FBI, I only hope.

Jimmy

below is from the http://www.sportscollectorsdaily.com/

The New York Daily News reported in its Sunday edition that the FBI has initiated an investigation of Chicago-based Mastro Auctions, considered the largest sports memorabilia auction house in the hobby.

There was no confirmation from the Bureau, but Daily News reporter Michael O'Keeffe reported that Bill Brandt, President of a company hired by the state of Ohio to liquidate collectibles bought with stolen state funds by convicted felon Tom Noe, had deferred some of their activities to the FBI's own investigation. Noe's holdings reportedly included items purchased from Mastro Auctions.

O'Keeffe also quoted a dealer as saying he had been interviewed within "the last ten days". Another person in the hobby also said he had been contacted by the FBI but would not comment further.

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Posted By: Jim Crandell

Leon,

This is a well known letter that was discussed on this board--I will try to find when I get the time.

Jim

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Posted By: leon

Jim- find the letter and lets take a look. I am quite sure of my last response. Maybe Rob stated "other" auction houses, or something to that effect....but I will believe he mentioned Mastro when I see it (except for the one shipping debacle which has been stated previously)....

Jimmy boxing card guy- Okeefe has it out for Mastro, plain and simple. Okeefe is continuing to talk about a yr old investigation and now throws in some more hearsay...I am NOT saying the investigation is not relevent. It is....It has been going on for a yr though. Please show me something from someone other than the person who has it out for Mastro. I would say that if nothing has come to light in a yr in must not be too strong of a case/allegation. And for the record....I absolutely understand there is a perceived conflict of interest in my taking up for Mastro. There is by virtue of them being an advertiser. At the same time why is it no one says anything about Okeefe? He obviously doesn't like Mastro....anyone ever consider the author of all of this stuff? If Mastro made illegal mistakes I am sure it will come out in the press. Until then it's an ongoing investigation with no teeth to date.....best regards

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Posted By: Jeff Lichtman

I've heard the FBI has it out for Mastro too. And Atty Genl Gonzalez. And Bush, too. Hugo Chavez also. O'Keefe is just their mouthpiece.

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Posted By: shane leonard

I placed a bid on my own item one year ago when it opened up just to see if it would allow me to. I had heard that people can bid on their own item and wanted to prove that theory. It kicked it back that I was unable to bid on my own item. Do you realize that in other auction houses (cars and antiques) that a consignor can bid on his own item? If they win, they pay both sides of it. This is really not that big of a deal. I will bid on the items that I want, with who I want and when I want. If I feel the cost of the item is not worth it, I bow out. Some of you sure like to bitch and complain about a lot of stuff out there. Times must be really bad for you guys to have to complain so much.

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Posted By: Jim Crandell

Leon,

Don't think there was any doubt he was referring to Mastronet although he did not mention it by name.

Jim

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Posted By: Joe D.

but this is back peddling at its best, no?


Jim:
"Leon--given your defense of Mastronet, how do you interpret Rob Lifson's letter and subsequent comments about Mastronet?"

Leon:
"I am not aware of any letter that Rob has written concerning Mastronet except for the one time there was a major shipping issue with some return addresses. He had no choice in that case. Please show me the letter so I can make an appropriate comment."

Jim:
"This is a well known letter that was discussed on this board--I will try to find when I get the time."

Leon:
"find the letter and lets take a look."


Jim:
"Don't think there was any doubt he was referring to Mastronet although he did not mention it by name."



Didn't mention them by name?!?

If Jeff L. (or anyone) was defending Mastronet in a court of law... I think that exchange would have been a homerun.

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Posted By: Jim Crandell

Leon,

Rob Lifson in an open letter--

"Some of the most sophisticated work on cards has been executed by employees of auction houses that deal in cards."

Doug Allen's reply--

"the only auction house that I know of that has employees that handle significant volumes of raw cards for grading is Mastro Auctions and I can tell you we don't do sophisticated work on cards".

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Posted By: Rob Dewolf

This is really not that big of a deal. I will bid on the items that I want, with who I want and when I want. If I feel the cost of the item is not worth it, I bow out. Some of you sure like to bitch and complain about a lot of stuff out there. Times must be really bad for you guys to have to complain so much.

Let's think through the above statement.

You place a bid of $1,000 on an item because that's what you think it's worth and what you are willing to pay.

There is only one other legitimate bidder, who bids $200. By all rights you should win the item for $220 (or whatever bidding increment the auction house uses).

Instead, a shill bidder places a bid of $800. You've now won the item for $880, still below what you think it's worth, but far beyond what you rightfully should have to pay, if only "legitimate" bids had been used.

And "this is really not that big of a deal"?

I'm not saying that policing such actions is easy to do or even that Mastro is guilty of doing anything improper, but please don't suggest that illegal bidding isn't a big deal just because you set a maximum bid for yourself and are disciplined enough to stick to it.

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Posted By: Jeff Lichtman

Rob, times must be tough for you too to complain about the possibility of getting ripped off due to shill bidding. Perhaps you'd like to join me and Jim Crandell at the unemployment office today wherein we can ponder our fates.

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Posted By: Hal Lewis

Hey, I know a good book you guys can read while you stand in line, stuck in the bureaucratic morass.

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Posted By: shane

Rob,
You are right. I don't want to be run up and I want to get the item for as cheap as I can. Sometimes you have to overpay for a card you need. If you collect 1964 Topps, you can't understand where I am coming from on this issue. If you collect the rare, prewar cards- sometimes you got to do what you got to do to win it. I have never felt like I have been run up by Mastro and they have had plenty of times they could have taken advantage of me.

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Posted By: shane

Jeff,
It must be nice to always be right. You are the most intelligent person I know.



Shane

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Posted By: Rob Dewolf

Jeff,

Silly me. I didn't realize that the state of the country's economy -- or my economy, for that matter -- had any bearing on whether illegal practices by auction houses are worthy of my concern.

Hal,

I already bought one. I'm waiting to go stand in line until after it arrives.

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Posted By: Jim Crandell

I have bought a fair amouunt of stuff from Mastro over the years and never really thought I was being run up. Now there is another auction house that I stopped buying from where I definately had that feeling not only because I would win their stuff at the maximum all the time but because the prices they would get were staggering.

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Posted By: Jimmy

Leon,

Thanks for the feedback - we will have to wait and see, the hobby just seems to be getting too big fast. I am sure that the investigation would be significant if more articles and evidence did turn up. In a few years, the hobby will turn into an industry not a business, maybe it already has? I think that is way all the attention

Jimmy

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Posted By: Rob Dewolf

I could collect only the rarest of pre-war cards in existence and still not understand where you're coming from.

Somehow you've equated overpaying for a card -- which I've done many times and have no problem with as long as it's my choice -- with being forced to pay more than you should because of illegal bids. Those two aren't one in the same.

Not even close.

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Posted By: Cat

I trust Mastro more than I trust our Federal government!!!

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Posted By: Jeff Lichtman

Shane, thanks for the compliment. I always love compliments when they come from smart people like you.

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Posted By: leon

You said:

"Perhaps you'd like to join me and Jim Crandell at the unemployment office today wherein we can ponder our fates."


If it comes to that maybe we can get you a discounted rate with Mastro to consign your cards to? I am sure you could live for at least a few days on the proceeds. Otherwise, I know some restaurants you could buy cheaply? Seriously, if Mastro, or any auction house, is caught doing anything illegal they should be punished. End of story. Mastro, or any auction house, should also be innocent until proven guilty. You and a lot of the board prefer them to be guilty until proven innocent. You say you think they are greedy. I would argue it's the nature of "for profit" business and capitalism to be greedy. I like how they are so greedy they are charging to their live auction and donating the proceeds to charity. Personally, I think this reprinted old article was Okeefe printing something else to sell more books. Maybe in another year he will dole out some more hearsay and start all over again? Maybe it won't take that long?

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Posted By: Jim Crandell

Leon,

I think they are innocent until proven guilty. My beef with Mastronet is that Doug comes on the board and postures and refuses to answer questions--generally in regards to his past admissions that Mastronet took creases out of cards. To the extent you are his buddy, maybe you can urge him to be truthful and forthcoming in describing the company's business practices.

Jim

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Posted By: leon

I do consider Doug a friend but it's not like we are best buds. I speak with him every now and then as I do a lot of folks. I am not sure why you continue to embellish things either? If I remember correctly I think Doug had said they would potentially take out a surface wrinkle. There is a difference in most collectors opinions of a wrinkle vs a crease. To me a wrinkle only goes through one side whereas a crease goes through both. It's sort of semantics but sort of not when we talk about the potential for a crease or wrinkle to come back after it's been taken out. Also I think we spoke about the integrity of the card stock from a crease vs a wrinkle. I used to be ok with taking a wrinkle out ( I HAVE NEVER DONE THAT OR ASKED ANYONE TO DO THAT FOR ME)....but have since changed my view. I feel wrinkles and creases should be left alone. I still don't have a problem with any other first tier (as Dave Forman so eloquently put it) restoration. All he said is that if it can't be detected it can't be detected so please don't go and say that I said Dave said it was ok to alter cards. He didn't. I have soaked cards in water to get dirt and paper remnants off, pushed down a corner if it pops up, and erased marks on cards. If the erased mark leaves an indentation I always note it. If it doesn't then I don't say anything. I just had an auction end with a MK qualifier (PSA 4 MK) due to indentions from an erasure. The card was encapsulated when I bought it. I made note of it in the auction description even though I didn't have to. I have a feeling anything Doug says on this board will be misconstrued .....not sure why I feel that way but I do. I would not throw a friend into harms way like that....If he wants to come on and say anything he is welcome to...but I won't be asking him to....regards

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Posted By: Jim Crandell

and Leon--will you comment on Rob's quote?

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Posted By: leon

I doubt it but you never showed me what you were talking about? Show me and I will let you know. If it's something Rob was saying in general then why would I think it's only aimed at Mastro and why would I comment about it? You are phishing.....and I am not biting....but first you need to at least put bait on the hook....show me.....

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Posted By: Jim Crandell

"I feel wrinkles and creases should be left alone"--Leon Lucky(7/9/07)wow! Mark the date.

Here is Doug's exact quote--

"I have no problem with taking out light creases or surface wrinkles that do not break the surface"

As I previously stated I have a 48 Leaf Joe D with a very light surface wrinkle that is a PSA 4--

Last I remember from Doug he said he would report back to us after consulting with SGC and PSA--no report as far as I can remember but he seems to have chenged his tune about taking out light creases as Mastro Auctions "prepares" cards for grading.

With two hobby giants--Leon Lucky and Doug Allen seemingly opposing taking wrinkles out of the cards we can only guess what may be next for the hobby

Leon--I am trying to be somewhat funny here--I would put up a smiley face if I knew how.

Regards,

Jim

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Posted By: Jim Crandell

Leon,

I gave you the exact quotes--I don't know how to put the thread up but it was from the November 2006 thread where Doug admitted taking light creases out of cards.

Jim

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Posted By: leon

What Doug said there really is semantics.....I will let him answer if he wants to.....At the time I didn't think much of a surface wrinkle being taken out but it is such a slippery slope that I changed my view. I hope I am allowed to do that after I consider something and give it more thought. As for hobby Giants...I think Doug might be though he probably would be too modest to say it....and the only thing giant about me is my stomach and ego .....best regards

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Posted By: Jim Crandell

Leon,

You are allowed. You are also allowed to take credit for being a trendsetter as the rest of the hobby comes over to your position.

Will await your response on Rob.

Jim

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Posted By: Rich Klein

: followed by ) give you the

; followed by ) gives you a wink

It's pretty easy

Regards
Rich

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Posted By: Jim Crandell

I get that part--just don't know how to do the little yellow faces that Leon and you put into your posts.