Bloomberg is reporting William Mastro has plead guilty to mail fraud. The case revolves around accusations of misrepresenting auction terms, shill bidding and misrepresentation of condition and authenticity. That, to me sounds like the trifecta of donts for an auction house. He altered a Honus Wagner baseball card by trimming edges and did not disclose the alterations. The card later sold for over $1 million. Mastro used the sale to leverage additional consignments.
Mastro can be imprisoned for up to five years on the charges. When the judge asked Mastro if he did all of these things, he answered yes.
Bloomberg reports
Source: BloombergWilliam Mastro, the sports memorabilia auction house owner accused of secretly altering a rare Honus Wagner baseball card to boost its value and the reputation of his business, pleaded guilty to mail fraud.
Mastro, 60, entered his plea to a single count of that crime today before U.S. District Judge Ronald A. Guzman, who twice previously rejected a U.S. government plea agreement with Mastro, citing concerns it wasn’t tough enough.
“Are the facts true?” Guzman asked Mastro today, after their recital by Assistant U.S. Attorney Nancy DePodesta. “Did you actually do all these things?”
“Yes your honor,” replied Mastro. Asked how he pleaded, the businessman replied, “guilty, your honor.”
Mastro and two other men were indicted last year on charges they’d lied about the terms of company auctions, used shill bidders to drive up sale prices and misrepresented the condition and authenticity of items sold including the Wagner card.
The auctioneer faces a maximum penalty of five years imprisonment. While prosecutors have agreed to seek a sentence no longer than 2 1/2 years, the judge isn’t bound by that accord.
Mastro and his attorney, Michael Monico, declined to speak to reporters after the hearing. No sentencing date has been set.
Pittsburgh Pirates
Wagner, who played Major League Baseball from 1897 to 1917, predominantly for the Pittsburgh Pirates, was inducted into the Hall of Fame in 1936. He died in 1955.
American Tobacco issued the card bearing Wagner’s likeness in 1909 as part of a 524-card set and without the ballplayer’s permission, Ken Goldin of West Berlin, New Jersey’s Goldin Auctions, said in an April interview.
Wagner didn’t want youngsters buying cigarettes to get his photo, according to the Society for American Baseball Research. When he objected, the card was withdrawn from what later became known as the T-206 series.
Goldin sold a T-206 Wagner card unrelated to the Mastro case for more than $2.1 million on April 6. Maybe 150 were issued, of which perhaps 50 or fewer exist today, he said in the April interview.
Auction Business
Mastro of Palos Park, Illinois, owned the auction business known as Mastro Fine Sports and Mastro Net until 2004 and was its chairman and chief executive officer from 1996 to February 2009, according to the government.
The mail fraud charge to which he pleaded guilty was isolated from prosecutors’ case against his co-defendants in a separate charging document filed against him Oct. 7.
It alleges he and the other two men failed to disclose in auction house marketing materials that while they’d once sold a T-206 Wagner card, Mastro had altered it by cutting the sides in a manner that, if disclosed, would have significantly altered its value.
Mastro acquired the card, which had “bowed borders” giving it a football-like shape in 1986, according to his plea agreement. Using a paper-slicing machine, he trimmed those edges, then sold the card in 1987 without ever disclosing he’d done so.
Altered Condition
The card was later graded based on its surreptitiously altered condition. Mastro Auctions later participated in its sale for more than $1 million. The business publicized its role in that sale to distinguish itself from competitors, according to the agreement.
Mastro and the two other men were also accused of misleading collectors by claiming they had Elvis Presley’s hair for sale and a baseball awarded as a trophy to the first professional baseball team, the 1869 Cincinnati Reds, while knowing the authenticity of those items was in dispute.
Guzman in April rejected a plea deal under which Mastro would have received a prison term of no more than 30 months, avoiding a potential 20-year sentence if convicted at a trial, without requiring him to cooperate in the prosecution of the other defendants.
“I’m not sure what I’m getting into, so I’m not getting into it,” the judge said then.
He previously rejected the pact in February, asking DePodesta then, “What does the government get out of this?”
Today’s accord requires Mastro’s cooperation in the case against his co-defendants, who are scheduled for a status conference with Guzman on Oct. 30. Mastro has also agreed to pay the maximum statutory fine of $250,000.
The case is U.S. v. Mastro, 1:12-cr-00567, U.S. District Court, Northern District of Illinois (Chicago).
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