Mastro Sentencing Postponed As Theotikos Set For Guilty Plea; Plea Agreement Details Shill-Bidding Scheme; Victim Says Auction Was “Screwing” Collectors
By Peter J. Nash
July 18, 2014
Bill Mastro leaves a Chicago courthouse after pleading guilty to one count of mail fraud tied to a massive shill-bidding scheme (Chicago Tribune Photo)
When former hobby kingpin Bill Mastro appeared in a Chicago Federal courthouse last October and plead guilty to one count of mail fraud, his plea agreement included details of the auction house improprieties which contributed to his possible five-year sentence in a Federal prison. Mastro was scheduled to be sentenced last December, but papers filed in court postponed the sentencing until June when it was again pushed off until October. Mastro’s co-defendant, Mark Theotikos, was also scheduled to change his plea to guilty in June but on Wednesday his hearing was again postponed from July 28th to August 6th when he is expected to enter a guilty plea. Mastro’s other co-defendant, Doug Allen, is scheduled for trial in September.
Mastro’s plea agreement stipulates that he must cooperate with the Government in its case against his co-defendants but it also details the elaborate shill-bidding scheme that prosecutors allege Mastro and his employees engaged in from 2002 to 2009 at Mastro Auctions.
In Mastro’s plea agreement, filed on October 10, 2013, by Judge Ronald Guzman in the United States District Court of Northern Illinois, the government states that Mastro has admitted his guilt and that he and his employees Doug Allen and Mark Theotikos and others unnamed “knowingly devised and intended to devise, and participated in, a scheme and artifice to defraud the customers of Mastro Auctions, and to obtain money and property by means of materially false and fraudulent practices.” Mastro, as the CEO of Mastro Auctions, admits to misrepresenting and deceiving bidders and to misrepresenting his auction house as a company that “always conducted competitive auctions” and that “greater market demand existed for some items sold by the auction house than actually was the case.”
The plea agreement also alleges that Mastro’s co-defendants Allen and Theotikos and others “engaged in practices designed to protect the interests of consignors and sellers which had the effect of artificially inflating the prices paid by some bidders.” The court papers describe how Mastro and his associates “placed shill bids, meaning fictitious bids placed without the intent to win the item, which had the effect of artificially inflating the price of an item in the auction.” Mastro says that in doing so he believed that this practice “attracted more bidders” and also protected consignors items from realizing “a sales price below an item’s estimated market value.” Mastro admitted that the shill-bidding scheme “stimulated bidding and increas(ed) the number of bidders” as well as inflating prices “resulting in bidders likely paying more for an item than what they otherwise would have paid.”
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