BILKED BOMBER
Hal Steinbrenner cited as memorabilia victim in court papers
THE YANKEES haven’t been fleeced like this since George Steinbrenner sent Jay Buhner to Seattle for Ken Phelps back in 1988.
Documents filed in Chicago federal court by attorneys for a sports memorabilia executive charged with fraud suggest now-defunct Mastro Auctions stole more than $30,000 from Yankee general managing partner Hal Steinbrenner through shill bidding.
According to the documents filed by lawyers for former Mastro president Doug Allen, the Yankee owner was gouged by Mastro Auctions as he bid on more than a dozen lots in 2007 and 2008. The court papers do not identify the items Steinbrenner bid on or purchased from Mastro Auctions, which offered vintage baseball cards and other sports memorabilia to affluent collectors before it went out of business in 2009, but a review of Mastro Auctions catalogues indicates the Yankee boss spent thousands of dollars on unopened packs of late ’60s and early ’70s Topps baseball cards.
The documents were included in a sentencing memorandum filed Jan. 25 by attorneys for Allen, who pleaded guilty to wire fraud in August 2014 and is scheduled to appear with co-defendant Mark Theotikos for sentencing before U.S. District Judge Ronald Guzman in Chicago on Feb. 8.
The government estimates Mastro Auctions stole about $35,000 from Steinbrenner through shill bidding, which occurs when consigners, auction house employees or others place fake bids on an item in order to jack up the final price. Defense attorneys say Steinbrenner’s loss due to the fraud was $2,000 or less. Steinbrenner declined to comment.
“The entire hobby is crooked,” said New York attorney Jeffrey Lichtman, a vintage card collector who has represented several industry figures linked to the FBI’s Mastro investigation. “Every auction is rife with fraud. It’s like there is a 25% fraud tax built into auction prices.”
Allen’s lawyers say the government, which is expected to file its sentencing memorandum next week, will seek a 57-month sentence for the disgraced sports memorabilia executive. Allen’s attorneys have asked Guzman to sentence their client to 18 months since auction house founder Bill Mastro — identified as “the leader of the conspiracy” in Allen’s sentencing memora ndum — is currently serving a 20 -mont h sentence for his role in the shill bidding scheme.
“He should get less than Bill Ma st ro, and he got 20 months” Allen’s attorney, Valarie Hays, told the Daily News.
The Chicago prosecutors have apparently mel lowed: They said they hoped to put Allen behind bars for more than 12 years at his 2 014 plea hearing. T he prosecutors said Allen, who had promised to cooperate with investigators in exchange for leniency, warned his business associate, John Rogers, that he would be wearing a wire for the FBI. Rogers re paid the favor by recording Allen as he coached the snitch on how to shake the feds. Defense attorneys called it a “fatal error in judgment” in their sentencing memorandum.
Former ESPN broadcast er Keith Olbermann was also a victim of Mastro Auctions’ shill bidding, according to the court papers, which identify dozens of people — including many prominent sports memorabilia industry figure s—as participants in the shill bidding.
Those prominent figures include John Reznikoff, an autograph expert who is a regular on the “Pawn Stars” reality show and works closely with PSA/ DNA, one of the hobby’s most prominent authentication services. PSA/DNA autograph authenticator Zach Rullo is also listed as a shill bidder in the document; so is PSA/ DNA baseball autograph consultant Kevin Keating.
Reznikoff, Rullo and Keating, who have not been charged in the case, did not return calls for comment. Neither did their boss, PSA/DNA president Joe Orlando, who is not listed as a shill bidder in the documents.
The government i dentified 347 victims of shill bidding and claims more than 2,600 shill bids were placed on lots in Mastro Auctions between December 2002 and February 2009, according to the defense documents, with the total damage to collectors valued at more than $1.9 million.
But Lichtman and industry sources say $1.9 million is just a fraction of the actual damage created by Mastro Auctions shill bidding. Company officials destroyed bidding records and other documents after they learned about the government’s investigation.
Mastro Auctions was once the most prominent business in the sports memorabilia industry for most of the 1990s and 2000s, but the company went out of business in 2009 in the wake of the investigation led by the Chicago FBI.
A 2012 indictment alleging massive shill bidding said Allen and Mastro sold a 1869 Cincinnati Red Stockings trophy ball for $62,000 even though lab tests showed paint on the ball had not been manufactured until after World War II. Allen is also accused of selling hair from Elvis Presley even though he knew DNA tests had raised questions about its authenticity.
Mastro, meanwhile, acknowledged in court that he had altered the world’s most expensive baseball card, the T206 Honus Wagner card once owned by NHL great Wayne Gretzky.
As two Daily News reporters wrote in their book “The Card,” the alteration increased the card’s value significantly and helped spark the sports memorabilia boom of the 1990s even though trimming is an egregious violation of hobby practices. The Wagner currently belongs to Arizona Diamondbacks owner Ken Kendrick, who paid a record $2.8 million for it in 2007.