July 26, 2012
Indictments came down from Chicago yesterday implicating hobby pioneer Bill Mastro in a scheme to defraud buyers of the famous T-206 Honus Wagner tobacco card, by trimming its borders down to its “factory-size” to enhance its condition and value.
Mastro’s Attorney Michael Monico told the Chicago Tribune that his client will plead guilty to one count of mail fraud.
Monico was quoted as saying, “He was a pioneer in the sports memorabilia industry,” and that ”He does and will accept responsibility for the conduct that has led to this case.”
A source familiar with the case told Haulsofshame.com that the Feds based their fraud count regarding the Wagner trimming on Federal wiretaps that caught Mastro admitting he had trimmed the card sometime after he purchased it for $25,000 with his friend and associate Rob Lifson in Long Island in 1985.
Another source once close to Lifson also told us that Lifson expressly knew that Mastro had trimmed the card when he sold it at Robert Edward Auctions in 2000 for $1.26 million to collector Brian Siegel. When Lifson sold the card it had already been graded a PSA-8 and both he and Mastro knew that the card had been altered and should have received just an “authentic” grade from PSA, which would have cut the value considerably. At the time of that sale in 2000, Lifson and Mastro were both officers of MastroNet Inc., the auction behemoth that formed in the aftermath of the Barry Halper sale at Sotheby’s in 1999.
Allegations have also been leveled by Lifson’s former confidant, that Lifson, not collector Mike Gidwitz, was the majority owner of the card when Lifson bid and won the card for $640,500 at Christie’s in 1996. (Look for more on these allegations in our next report, “Part 3″ on the Mastro Investigation.) When Lifson won the card in 1996, Bill Mastro was the under-bidder. Allegations have also been made that their bidding against each other was part of a plan to artificially enhance the value of the Wagner card for future sales. Additionally, it has been alleged that with the card in Lifson’s or Mastro’s possession, no one would have access to remove the card from its PSA holder to examine it for traces of trimming or enhancement.
Lifson has long been shielded from being implicated in the card doctoring scandal by reporters Michael O’Keeffe and Teri Thompson of the New York Daily News because he was an “unfailingly generous” prime source for their book, “The Card,” which painted Mastro as a villain and Lifson as the hobby’s “white-knight” crusading against fraud in the hobby. Lifson even includes a link to purchase the book by the reporters on his Robert Edward Auctions website. In our last report, audio tapes proved that as late as April of 2002, Lifson stated as an officer of MastroNet, ”I can assure you that we (MastroNet) run the cleanest auction on the face of the earth.” Lifson also added, “We have thirty-five people who work for our company (MastroNet) and they’re all honest and they are all working to have a great auction and auction company.” It is widely known in hobby circles that Lifson fell out with Mastro after they parted ways in 2002 and Lifson discovered that Mastro made millions selling the company after buying Lifson out for a reported few hundred thousand dollars. Sources indicate that Lifson became an FBI informant against Mastro and his company, sometime after they parted ways.
The Wagner card was trimmed in the days before professional grading companies like PSA/DNA and SGC were in existence. In fact, in 1981, Mastro purchased another Honus Wagner card for close to $25,000 from dealer Lew Lipset, who stated in his auction description that the card was the finest example known and that “the card has oversize margins and it would be possible (if someone wanted) to “trim” to a mint card.” Lipset was indicating that the card would still be regulation-factory size, if trimmed. It has been stated by several observers that trimming of cards was taboo, but Lipset’s auction description is evidence that trimming issues were a part of the hobby discourse dating back to the early 1980s. Dan McKee, a vocal critic of PSA and a veteran collector who started opening packs and buying tobacco cards in 1969 at the once a year show in Pikesville MD., told us, ”I don’t ever remember trimming not being a big deal. Maybe on an oversized tobacco card we may hack it down to fit in the sleeves correctly but that would have been done with a pair of sheers and easily detectable today.”
Lipset’s card was never trimmed and eventually ended up in the Barry Halper Collection and was purchased by the Baseball Hall of Fame with MLB funds from Halper along with a host of bogus artifacts including “Shoeless” Joe Jackson’s 1919 jersey; his “Black Betsy” bat and glove and pocket watch; Mickey Mantle’s 1951 rookie jersey; Buck Leonard’s Negro League jersey and other items.
Lifson’s close links to Halper also played a part in the New York Daily News’ shielding him from suspicion in the card-trimming scandal. Halper was a close personal friend of Daily News reporter Bill Madden, who acted throughout the years as Halper’s unofficial press agent. The Daily News has intentionally not reported about the Halper scandals because of Madden’s close ties to the former Yankee limited partner. In fact, reporter O’Keeffe has gone as far as reporting that the documentation of instances of sales of fraudulent artifacts by Halper are simply “accusations.”
In their book, “The Card,” Thompson and O’Keeffe lauded Halper as “The Babe Ruth of sports memorabilia,” and described the “truly historic” items in his collection including “Shoeless Joe Jackson’s Black Betsy bat,” and “Ty Cobb’s dentures and rifle Cobb’s mother used to shoot his father.” All of those items used as examples of Halper’s “Cooperstown South,” however, have been determined to be fraudulent artifacts as a result of investigative reports written by Haulsofshame.com and SABR researcher Ron Cobb.
PSA also had knowledge that the card was trimmed, but slabbed and graded it a “PSA-8″ when Wayne Gretzky and Bruce McNall submitted it as the first card the company ever graded. Former PSA card grader, Bill Hughes, confirmed that the Wagner was trimmed during an interview for “The Card,” with O’Keeffe.
If reports are confirmed that Mastro trimmed the card and PSA knew it was trimmed at the time of grading, the authentication company, a subsidiary of public company Collectors Universe, would now be known to have been founded on a fraudulent authentication. PSA/DNA has also caught the eye of the FBI for their authentications of forged baseballs and even the authentication of laser-copied forgeries and stamped signatures that they have slabbed for customers in their encapsulated holders.
The infamous Wagner card is now owned by Arizona Diamondbacks owner Ken Kendrick who purchased it for $2.8 million in 2008. Kendrick loaned the card to the Baseball Hall of Fame where it was displayed until this past Spring. It is not known if the card, in its PSA holder, has been turned over to the FBI as evidence in the Mastro case.
In the course of researching for the upcoming book, Hauls of Shame: The Cooperstown Conspiracy and the Madoff of Memorabilia, we’ve come across numerous items from the hobby’s formative years. Here’s one that is fitting considering yesterday’s news:
Hobby/Mastro Flashback: From Bill Madden’s October 17, 1981 “Collecting Memories” column in The Sporting News
“It is difficult to say what, if anything, constitutes a hobby coming of age and reaching a certain plane of sophistication. Recognition in the form of write-ups in the Wall St. Journal and other such financial beacons serve to enhance the hobby’s credibility. I guess, also, the amount of money poured into a hobby has a great deal to do with its position.”
“A while back, a young man, presumably of sound mind and judgment, spent the sum of $25,011 for a baseball card. ONE baseball card. The card is the 1910 Honus Wagner tobacco card long regarded as the “crown jewel” of baseball collectibles. The buyer is a collector named Bill Mastro, who makes his living as a respiratory therapist.”
Mastro said: “This is the third Wagner I’ve owned. The first one I had I sold when I was a senior in high school. I got it from a priest, who found it in his attic. Later I bought another Wagner for $1,500, which was then a record price for the card and everybody thought I was crazy. I later had to sell it for $1,000 because I needed it in a hurry for a car.”
Madden commented: “It’s a testimony to the hobby’s maturity that people such as Bill Mastro are prepared to invest huge sums on older cards. But until the greedy dealers, and other such carpet-baggers who have jumped aboard the baseball card boom of recent years, pack up and get out, would-be collectors and curiosity seekers should beware. The hobby has come a long way, but still experiencing some serious growing pains.”
Like Yogi says, “It’s deja vu all over again.”