OT: Top Baseball Card & Memorabilia dealer indicted on fraud

[tornado]

If you can't trust the very best then who can you trust...

this guy is the #1 top seller and marketer of baseball cards, and other sports memorabilia and has been for decades....

But - now he's being indicted for FRAUD....
"routinely defrauded customers, rigged auctions and inflated prices paid by unwitting bidders"

http://www.nydailynews.com/sports/i-team/bill-mastro-partners-indicted-fraud-charges-stemming-massive-sports-memorabilia-scam-article-1.1121644

Even worse for one guy - who paid $2.7 million for the T206 Honus Wagner (once owned by Wayne Gretzky) that is the most valuable card in the history of the world...
it is now being proven to have been cut & altered which may make it worthless or unsellable - thus the guy loses $2.7 Million!

[Beninator]

Fraud in the sports memorabilia business.... I'm shocked.... Say it aint so!

Most collectors have speculated for quite some time that the T206 Wager (Gretzky card) was trimmed. Per the article, check out this book on the subject. It is quite the page turner and is interesting even if you are not involved in the hobby.

"The Card: Collectors, Con Men, and the True Story of History's Most Desired Baseball Card" by Michael O'Keefe.

http://www.amazon.com/The-Card-Collectors-Historys-Baseball/dp/B003H4RB4O/ref=sr_1_4?ie=UTF8&qid=1343390835&sr=8-4&keywor

T, your article mentioned the Shanus v REA lawsuit. Here is an article that sheds a little more light on the subject. I am on a message board in which one of the people involved in the lawsuit is an active member. I can tell you for a fact that the lawyers have probed every comment made on that message board for fodder with the lawsuit.

http://www.nydailynews.com/sports/i-team/attorney-collector-corey-shanus-owner-new-jersey-auction-house-sold-counterfeit-items-article-1.108694

[Beninator]

More drama involving the T206 Wagner "Gretzky card", Bill Mastro and PSA grading company.

From Michael O'Keeffe of the New York Daily News.

http://www.nydailynews.com/blogs/iteam/2012/08/psa-stays-mum-about-honus-wagner-t206-in-public-but-not-in-private

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"Mastro??™s lawyer has said that he expects the case against his client will be resolved without a trial, suggesting that Mastro is not only cooperating with the authorities, but will eventually acknowledge that he did indeed alter the card."
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"As we wrote in ???The Card,??? our book about the T206 Wagner and corruption in the hobby, a member of the PSA team that graded the card acknowledged that he knew the card was trimmed. Visitors to the National Sports Collectors Convention in Baltimore last week say an FBI agent spent a lot of time at the company??™s booth at the Baltimore Convention Center questioning PSA president Joe Orlando."
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[tornado]

Ben - I have loved collecting and enjoyed doing it with my kids for more than a couple decades...

but I have followed two main blueprints for the hobby...

-don't ever spend on things you don't like just for the "investment value" ...
..because it's a little like buying and selling diamonds - only a very few ever actually make money doing it as the markup is so high.

-and always be careful ever spending or "investing" more money than you'd spend for dinner - because there's a lot of people out there who don't have ethics and will cheat you.
Look at all those people who spent upwards of $500K and $1 million on a simple piece of cardboard that was "fabricated" or faked....
Now they look like really careless fools.....
Maybe losing a million is no big deal to some very rich folk - but I happen to value the time it takes to earn that kind of $$ enough that I wouldn't want to waste it and see it disappear.

[Beninator]

T, I very much agree. I have always looked at this as a hobby and never an investment. The Baseball Hall of Fame and big time collectors such as Barry Halper have been duped by forgeries. As you know, the days of flipping cards (buying low and selling for a profit) are long gone. Until 2008, I was pretty much out of the hobby until I sold most of my collection to a couple of friends. I used most of the proceeds at the time as part of a pool to invest in CAT stock. Strangely, that got me back in the hobby in a centralized way! I am not even condition sensitive when I purchase some older cards if the price is right.

Michael Gidwitz, a previous owner of the T206 Wagner "Gretzky card" and the first person to sell that card for over a million dollars had a disdain for what happened to the hobby and for the most part, got out of collecting after the sale to focus his interest elsewhere. It will be interesting to see what happens next with this ordeal.

[Beninator]

Here you go T. A frivolous lawsuit that does not involve auction houses or dealer fraud. Or better yet... What not to do with $5,000.

http://www.sportscollectorsdigest.com/infield-dirt/collector-sues-carmonahernandez-wants-roi-on-his-rookie-cards#comment-704271

[tornado]

that's funny - what ever happened to "buyer beware"

[Beninator]

Bill Mastro has now changed his plea to guilty with plea hearing set for February. Mastro will also apparently admit that he altered the famous T206 Honus Wagner (Gretzky card).

http://www.nydailynews.com/sports/i-team/sports-collectibles-king-pleads-guilty-article-1.1210539

If Mastro admits this, one has to wonder what will happen to the PSA grading company which basically got its start by authenticating and slabbing the "Gretzky" card.

One other curious part of the article.

"Monico said Mastro has been soliciting character references from collectors and dealers that will be submitted to the judge who ultimately sentences Mastro after he pleads guilty.

"Some hobby insiders, however, say that they are reluctant to express support for a man they suspect ripped them off ??” especially since, they say, Mastro does not appear to accept responsibility for his actions."

[tornado]

after a Wall Street Journal column in 1987 detailed how mint, unopened packs and boxes of cards had a better investment performance than anything else - even gold, land, or stocks, thousands of people - non-collectors - went out and bought unopened cases of 1987 Topps baseball - causing Topps to print an exceptionally large amount of the product..

Of course, guess what happened -
The value of unopened stuff that the Wall St. Journal was writing about was because NOBODY in the past ever saved their stuff unopened -- everyone always opened it to see what they got....
and since now so many people were sitting on cases of a tremendously overproduced product - it was quite a worthless investment -- and to this day nothing in that entire set of cards is worth more than a few pennies...

I understand there are still investors who have cases of unopened 1987 Topps waiting and hoping some day it'll be valuable
..now, had they bought the late season, low production Topps Traded set - they would have cashed in a bit better

[Beninator]

T, this is the kicker. PSA guarentees their card grade and authenticity. If Mastro admits to trimming the card, then PSA has some questions that need to be addressed. One could argue that the Gretzky Honus Wagner card will carry a bit of a premium due to the card's "celebrity".. But the Diamondbacks owner paid $2.8 million for the card which is certainly worth less money if Mastro admits that it is trimmed. This could get very messy!

http://www.psacard.com/about/financial_guarantee.chtml

[tornado]

agreed - and did PSA simply make a mistake and certify a card they did NOT know was trimmed

..or as is currently being alleged - did they cheat and do a favor to Mastro & go ahead and certify the card as if it was an authentic "8" knowing it had been trimmed from a sheet?

both actions severely damage "PSA's" credibility and reputation but the 2nd one means they have committed legal violations and fraud...
and then just maybe the buyer of the card can re-coup any losses by suing the card grading company