Another Dealer Pleads Guilty in Fraud Case

[Ripken]

Story (http://www.sportscollectorsdaily.com/fifth-dealer-pleads-guilty-to-selling-bogus-jerseys/)

[momen55]

good. serves him right. they should all go down.

[LastingsMilledge85]

I don't want to completely go off topic, but this article I found was interesting. At least there was no motive to con anyone here, but still shows the misrepresentation and uncertainty in this hobby.

http://www.examiner.com/article/lamichael-james-online-auction-selling-fake-game-used-jersey

[jake33]

I want to see them go after card companies. IF you or I bought a fraudlent item and resold it knowing or unknowing it was fraud, we are accountable for legal action. Why not the card companies?

Would love to see a class action lawsuit against card companies who bought game used items from 3rd parties to put on cards as "game used." It would probably take a former employee from one of the card companies to come forward with information to get that moving.

I think it is reasonable to say the general population of gameuseduniverse would say "jersey cards" at least could be conservatively viewed as "questionable." Once there is HARD fact and testimony to support this, I would like to see action taken towards card companies.

This would have some change to the sports card industry for the long term. Something, I personally feel is long overdue.

[Eric]

Story from the NY Daily News website


SEPTEMBER 6, 2012 5:02 PM
Sports memorabilia dealer pleads guilty to fraud, faces 20 years over fake game-used jersey scam
BY MICHAEL O'KEEFFE
A Florida man accused of selling hundreds of bogus game-used jerseys pleaded guilty to mail fraud on Thursday in federal court.

Gary Shapiro, the acting United States Attorney for Northern District of Illinois, announced that Bradley Wells of St. Petersburg acknowledged in a plea agreement that he altered replica jerseys by adding patches and other identifiable marks to make them look like professional athletes had worn them in games.

Wells and other dealers then sold the jerseys, primarily to trading card companies that create premium collectibles by cutting up the garments and inserting swatches of the material into cards.

Wells was one of six memorabilia dealers indicted in October on fraud charges in connection with the bogus game-used jersey operation. Four others have already pleaded guilty. Prosecutor Michael Love said the sixth defendant, Eric Inselberg of New Jersey, is awaiting trial, although a trial date had not yet been set.

The charges stem from an ongoing five-year investigation into fraud in the sports memorabilia industry that has been conducted by the Chicago FBI and other federal agencies. In July, a grand jury indicted one-time memorabilia king Bill Mastro, the founder of Mastro Auctions, and his longtime associate Doug on fraud charges. Both men have pleaded not guilty.

The indictment alleges that Mastro and Allen - once the most influential figures in the multi-billion sports memorabilia industry -- routinely defrauded customers, rigged auctions and inflated prices paid by unwitting bidders.

The indictment also claims that Mastro altered the world's most expensive baseball card, the Honus Wagner T206, which has sold for millions of dollars in a series of high-profile sales since Mastro bought it for $25,000 in a Long Island card shop in 1985. Its owners have included NHL great Wayne Gretzky.

The card is now owned by Arizona Diamondbacks owner Ken Kendrick, who paid $2.8 million for it in 2007 from Tom Candiotti, the former major league pitcher.

In their 2007 book "The Card," Daily News reporters Michael O'Keeffe and Teri Thompson reported that the card had been cut from a printer's sheet and was further trimmed by Mastro to make it appear as if it had come from a pack of cigarettes in 1909.

Wells is scheduled to be sentenced on Dec. 14. The maximum sentence for fraud is 20 years in a federal prison.

Inselberg, meanwhile, has been linked to a University of North Carolina warm-up jersey sold at a 2007 Mastro Auction for $11,000. Mastro executives claimed the jersey had once belong to Michael Jordan.

As the Daily News first reported, authenticators and collectors said the jersey was an obvious fake in the weeks leading up to the auction, which was conducted at the National Sports Collectors Convention in Cleveland.

The Daily News reported in August 2007 that Mastro employees sent the "Jordan" shirt and other items to Memorabilia Evaluation and Research Services, one of the hobby's leading authentication services, for review before the auction at the National that year. The company concluded that while the jersey appeared to be a legitimate North Carolina shooting shirt from the 1980s, it did not belong to Jordan.

When the shirt was placed over a light table, it was apparent that another name had been removed from the back and replaced with "JORDAN." The letters also seemed to be made of different materials than other patches on the piece, according to the MEARS work sheet.

[Eric]

From Tampa Bay online

St. Pete memorabilia dealer pleads guilty to mail fraud charges
Posted Sep 6, 2012 by Bob D'Angelo

Updated Sep 6, 2012 at 06:50 PM

For collectors of sports memorabilia and game-used cards, this is certainly a jolt. And card companies probably are not feeling too good about this, either.
Thursday in federal court in Rockford, Ill., Bradley Wells of St. Petersburg pleaded guilty to mail fraud. According to Gary Shapiro, the acting U.S. Attorney for the Northern District of Illinois, Wells, 31, acknowledged in a plea agreement that he altered replica jerseys by adding patches and other items, making them look like professional athletes had worn them during games.
After doing that, the Department of Justice said, Wells and other dealers sold the jerseys — mostly to trading card companies that used swatches to create their relic and “game-used” cards.
Wells was one of six memorabilia dealers who were indicted in October on fraud charges stemming from the fake game-used jerseys. According to a U.S. Department of Justice news release, Wells, involved from late 2005 through the middle of 2009 in the business of Authentic Sports, Inc., and Historic Auctions, LLC — both Florida businesses — was indicted on two counts of mail fraud..
Wells will be sentenced on Dec. 14; the maximum sentence for fraud is 20 years in a federal prison and a $250,000 fine.
Four of the other dealers already have pleaded guilty. The fifth, Eric Inselberg of New Jersey, has not come to trial yet.
According to court documents, each case involved the sale, consignment, or auction of
jerseys, in which Wells and the other defendants “falsely and fraudulently represented to buyers that the jerseys were ‘game used,’ when they were not.”
The court document also states that “As charged, the defendants obtained hundreds of jerseys from a variety of sources, including retail sellers, then frequently changed the jerseys’ appearance by roughening, scuffing, washing, or dirtying the jerseys so that they appeared to have actual “wear and tear.” The same jerseys were then re-sold, consigned, and auctioned for hundreds of thousands of dollars to sports trading card companies and other buyers as game used jerseys. As part of the scheme the defendants provided the buyers with fraudulent certificates of authenticity. Each defendant was allegedly involved in a business engaged in the purchase and sale of sports memorabilia, and the schemes are alleged to have taken place in Rockford and several other states.”
The charges against Wells and the other five dealers are linked to the Chicago FBI’s (and other federal agencies) ongoing five-year investigation into sports memorabilia fraud. The biggest indictment out of that probe so far was that of former big-time memorabilia dealer Bill Mastro, the founder of Mastro Auctions.
Mastro has pleaded not guilty to the charges.
So what does this mean? Well, I always figured that the card companies bought uniforms and other memorabilia directly, instead of through a third party. So now, when you pull a game-used card, it still might be exciting, but there could be that nagging doubt about the card’s authenticity. After all, the uniforms sold to the companies had certificates of authenticity, but the investigations showed that some of those were bogus.
Frauds have always been part of the memorabilia business. One colleague of mine here at the Tampa Tribune is Wade Boggs’ brother in law. My colleague has told the story of how Boggs, walking through a Tampa mall, strolled into a memorabilia shop. The shop owner proudly displayed several autographed bats purportedly signed by the Hall of Famer, but turned white as a sheet, then red-faced when Boggs declared flatly that he had not signed them.
Yikes.
I am sure that card companies are feeling a little red-faced today.

http://www.tboblogs.com/index.php/sports/comments/st.-pete-memorabilia-dealer-pleads-guilty-to-mail-fraud-charges/

[Eric]

Here is the actual announcement from the US Department of Justice

http://www.justice.gov/usao/iln/pr/rockford/2012/pr0906_01.pdf

[Eric]

Here is the plea agreement. Note the following lines

"In particular, the defendant admits that he, Eric Inselberg, and others sold, consigned, or auctioned jerseys that were not game used to others for either the re-sale, consignment or auction of the jerseys as game used jerseys, when in fact, the defendant knew the jerseys sold, consigned, or auctioned were not game used;"

"Beginning not later than early 2005, the defendant admits that in the name of Authentic Sports, Inc., the name of Historic Auctions, LLC, or in his name, he obtained hundreds of jerseys that were not game used for the purpose of re-sale, consignment, or auction of the jerseys as game used jerseys"

"In addition, the defendant and others had jerseys that were not game used jerseys altered, or caused them to be altered, to appear that they were game used jerseys. Such alterations included the removal of the name and number of one player from a jersey and the addition of the name and number of a more noteworthy player on the jersey, changes to the shape of the jerseys, and the addition of patches or other identifiable marks on the jerseys;"

"The defendant then sold the same jerseys that were not game used to sports card trading companies and by falsely and fraudulently misrepresenting to the buyers that the jerseys were game used"

http://www.justice.gov/usao/iln/pr/rockford/2012/pr0906_01a.pdf