The action in the room at Sotheby’s auction house was frenzied as heads in the front row turned to see who was bidding on the “mint-condition” T-206 Honus Wagner tobacco card that auctioneer Robert Woolley had introduced as the “Holy Grail.”
Woolley had just sold a pristine T-206 set (minus a Wagner) for $90,000 and looked towards the phone bank as a bidding war took shape. The bid started at $228,000 and approached $300,000 as Colorado memorabilia dealer Mark Friedland raised his paddle every time a mystery phone bidder countered him with another increment. With the tally heading towards $400,000, the audience reacted to each bid until Friedland raised his paddle one last time at $405,000.
Within seconds the phone bidder delivered the final blow and Woollsey dropped his hammer swiftly entering the winning bid of $410,000 for the buyers who would later be revealed as Hockey great Wayne Gretzky and LA Kings owner Bruce McNall. The crowd burst into applause for what was the highest price ever paid for a piece of baseball memorabilia.
Afterwards, Friedland told reporters, “I gave it my best shot, but when the phone bidder passed the $400,000 mark, I knew he was prepared to go all the way to half-a-million if that’s what it took to get the card. At that point I decided to drop out.”
Taking it all in was the maestro of the 1991 sale and the Sotheby’s sports consultant, Bill Mastro. He was the mastermind behind the auction and the guy who originally sold the Wagner card to the Sotheby’s consignor for $110,000, just two years earlier. In organizing Sotheby’s first baseball auction, Mastro had successfully taken the hobby mainstream with the sale of west-coast sporting goods mogul Jim Copeland’s treasure-trove and the sale of the hobby’s “holy grail” was just the icing on the cake. Mastro told reporters that “Gretzky, himself, was on the phone doing the bidding” and after the sale the newsletter, The Old Judge, remarked, “It’s certain that the hobby will never be the same.”
Mastro had to breathe a sigh of relief, however, as there were rumors circulating before the sale alleging that his former Wagner card had been altered to improve its condition. Allegations that it had been fraudulently trimmed were being leveled in a hobby that was also being recognized for what the Wall Street Journal would call an “epidemic of forgeries” in a marketplace where prices had skyrocketed.
The Journal interviewed the Sotheby’s consultant a year after the sale and reported that Mastro believed altered cards were a big problem in the hobby with sellers who would “trim cards with bent corners to restore them to mint condition.” The Journal said Mastro told them that “serious collectors regard(ed) this as ruining the card.” Writer Alexandra Peers echoed Mastro’s concern in reporting that after his Sotheby’s auction “questions about authenticity dog(ged) almost every major sale.” Unfortunately for Bill Mastro, the questions about his pristine Honus Wagner card would continue to dog him as well.
After the Sotheby’s sale, one of the hobby’s most knowledgeable dealers, Lew Lipset, was the first to report the controversy developing around Mastro’s card in The Old Judge newsletter. Lipset, who had attended the auction, described the “World Series” atmosphere in the room when the bidding stopped at $410,000 but noted that “the story for that card was only starting.” According to Lipset, the news that McNall and Gretzky won the card didn’t surface until late that evening and by the next day he said, “reports circulated that the Wagner card was being returned because it was trimmed and/or restored.”
Lipset investigated the rumors and got denials from McNall’s LA Kings front office but also had a “reliable source” who told him the card had not been returned and that ” a representative of the buyers indicated he knew the card was altered.” Lipset also noted that “it was the impression of several advanced collectors who viewed the card at Sotheby’s that the Wagner card was altered.” In the Old Judge Lipset wrote that, “A top grade paper conservator should be able to tell if a 100 year old card has been trimmed or recut by magnifying the edge and comparing the aging process to either side of the card or a similar card.” According to Lipset, the $451,000 Wagner, “Even if properly preserved, had to go through an aging process.”
Lipset knew a thing or two about Wagners as he’d sold another one to Mastro for $25,000 in his own auction in 1981. That Wagner was “oversized” and Lipset noted in his lot description: “Has oversize margins and it would be possible (if someone wanted) to “trim” to a mint card.” Lipset considered the card perhaps the finest example among the 40 or 50 copies known to exist at the time. In identifying the opportunity to trim an oversized Wagner down to mint condition, Lipset may have inadvertently egged someone on to trim the card that would be sold as a “mint” copy to the Great One and McNall a decade later.
After the sale, Lipset’s sentiments were echoed by others including then KCBS-TV broadcaster Keith Olbermann and Superior Galleries auction consultant Mike Gutierrez. Olbermann discussed the Wagner controversy on his half-hour Sunday show with co-host Matt Federgreen, who also owned the Beverly Hills Card Shop. On his Baseball Nerd blog at MLB.com, Olbermann recently recalled how McNall contacted Federgreen before the 1991 sale for his opinion on the trimming issue. Olbermann recalled, “Something was very wrong. I couldn’t go with Matt to the inspection of the Wagner that McNall had arranged for him. But Matt took a bunch of pictures, and the next time he came in to the studios he brought them.” (In 2012, Olbermann contradicted this statement saying that he actually met with McNall.)
When Olbermann examined the photos he told Federgreen it looked trimmed and Federgreen said that was exactly what he’d told Bruce McNall but that McNall told him he’d “probably bid on the card anyway.” But after examining the photos of the Sotheby’s Wagner, Olbermann now claims that he had additional evidence proving the card was trimmed stating he’d found pictures of “a Wagner that had been offered for sale in the early ’80s by a fellow who owned a baseball card store on Long Island” and that when he compared the photo to the pristine Wagner it was like seeing “before and after” shots of the same card.
A few months after the Sotheby’s sale the Chicago Tribune published an article entitled, “$451,000 Wagner Card May Not Be In Mint Shape,” and quoted Mike Gutierrez, a consultant for McNall’s Superior Galleries, as stating the card was trimmed. Gutierrez said, “The card was altered at some point… I don’t know when it was cut, or by whom, but it sure was. I have no doubt.”
Unlike Gutierrez, Josh Evans, a hobby competitor heading Lelands auction house in New York City, knew who had trimmed the now famous card. According to Evans, Mastro had told him directly that he’d trimmed the card after he purchased it with Rob Lifson in Bob Sevchuk’s card shop in 1985. In an interview earlier this month, Evans recalled, “He told me on several occasions and then he’d say, ‘Now just shut up and stop talking about it’.”
With all of this evidence circulating in the hobby rumor-mill, Bruce McNall somehow still went ahead with his plans to purchase the card at Sotheby’s. McNall, however, was by no means some rube when it came to buying spectacular relics. At the age of 24 he had pursued the “Athena Decadrachm” which was known as the “Mona Lisa of Greek Coins” and paid $420,000 for the coin at auction in 1974. At the time the sale price quadrupled the highest price ever paid for a coin at auction. According to a Sports Illustrated profile of McNall published just two months after the purchase of the Wagner card, he sold that same coin a week later in 1974 for $470,000.
Although several published reports claim buying the Wagner was McNall’s brainchild, SI reported that the idea was hatched by Gretzky after he was steered to the Wagner card by an autograph hound “who haunted the Kings’ hotel lobby” in Chicago. After his encounter with the fan he had “wondered if it wouldn’t be fun to invest in the rarest baseball card.” SI reported that Gretzky pitched the idea to McNall, who already knew about the offering of the pristine Wagner and the finest T-206 set being offered at Sotheby’s, and the two “agreed to go halves on the entire collection and to spend a maximum of $500,000.” The final bid on the set was $90,000 and the Wagner went for a final bid of $410,000. SI reported that Gretzky asked McNall, “How did you work that out?”
When the Chicago Tribune asked McNall about the Wagner controversy after the Copeland sale he said, “That (the card was trimmed) is what people are saying. We’ve heard all that talk. We talked with people before we bought the card, and we’re both happy with it. Any time you have something like this, people will say things. Sotheby’s stands behind the card. I have no intention of returning it or selling it.” McNall’s confidence in the card, however, had been bolstered considerably by the time the Tribune published his statements on July 9, 1991, as the Wagner had recently been graded and authenticated by Professional Sports Authenticator (PSA) in Newport Beach, California. The company was an off-shoot of another outfit that had gained its reputation grading and encapsulating coins and Bill Mastro’s mint condition Honus Wagner card was the first ever graded by the company’s new sports authentication division under the auspices of founder and Chief Executive David Hall. The card was graded sometime before McNall displayed it at the 1991 National Convention in Anaheim to promote his own baseball relic auctions at Superior Galleries.
At the time he gave the card to PSA, McNall was invested in coins graded by Hall’s other company and, according to several sources, was well-aware of the potential value for grading baseball cards in the same manner. The Chicago Tribune asked David Hall about the company’s grading of the Wagner card and he responded, “It’s in the mid-range of acceptable size. We used five, 10 and 20-power magnification to examine the card. Compared to other (Wagner) cards it looks about the same.” Hall, who the Tribune identified as “one of three members of the firm (PSA) who graded the Wagner” didn’t directly address any of the allegations regarding trimming and alteration.
Since the grading of its first submission by McNall and Gretzky, PSA has grown into a giant in the collectibles industry and twenty years after grading the Wagner card PSA and Hall claimed in trade publication ads that the company had “authenticated more than 3,000,000 cards, among them virtually every sportscard of major historical importance and high monetary value.” But for several years in the early 90s the business struggled with what Hall claims were “only 300 to 600 submissions per month.” A marketing campaign which included pimping the PSA-8 Wagner card helped to change that as the card was exhibited at grading booths at collector conventions with ads saying “See the World’s Most Valuable Sportscard On Display.” By 1996, the company was distributing to collectors “Free PSA Information Kits” and PSA advertisements stressed the ability and integrity of its graders stating, “You can be sure that you are getting a card that hasn’t been trimmed and altered in any way.”
Hall and PSA even went so far as to utilize the PSA-8 Wagner to sell stock in its parent company Collectors Universe (CLCT) a public company traded on NASDAQ. After the Wagner sold for over $1.25 million at auction in 2000 PSA published an ad stating, “You can’t own a piece of the T206 Honus Wagner card, but you can own a piece of the company that graded it, Professional Sports Authenticator (PSA).” The ad listed the phone number with “more information about how you can own stock in Collectors Universe.”
Despite the lingering doubts about the Wagner card, almost every time its been offered the seller has made a hefty profit and since it was authenticated in 1991, PSA has graded “over 20 million cards and collectibles.” PSA rode the Wagner gravy train for over two decades until things came to a screeching halt in August of 2012 when the US Attorney’s office in Chicago indicted auction king and PSA-client, Bill Mastro, for multiple counts of fraud. One of those counts charged Mastro with having fraudulently promoted the Wagner card as the most expensive card in the world when he knew it had been altered and was a fraud. In line with what Lipset, Olbermann, Gutierrez and others had suggested in public in the past, was now the subject of an FBI investigation and a grand-jury focusing on multiple counts of fraud committed by Mastro and his auction company.
The allegations in the indictment that the PSA-graded Wagner card was a fraud put into question the credibility and reputation of the authentication giant. David Hall and PSA issued no public statements addressing the issue and declined interview requests by Michael O’Keeffe of the New York Daily News. O’Keeffe, who claimed to have a source in attendance at the PSA lunch at the 2012 National Convention reported that Hall told guests that PSA had “never considered that it had been altered.” The source also said that Hall questioned whether Bill Mastro had cut a deal with the Feds and just agreed to say the card was trimmed for his own self interest.
O’Keeffe is the co-author of the 2007 book about the Wagner called, The Card, and in that book he revealed perhaps the most damning piece of evidence against PSA in the Wagner scandal—-that PSA grader Bill Hughes (who had graded the card with Hall in 1991) told O’Keeffe he knew the card had been trimmed and altered when he graded and authenticated it in 1991. In a 2005 interview Hughes told O’Keeffe, “I was aware it was part of a strip. We (PSA) were aware of that when the card came to PSA and I graded the card. This card was obviously cut, but if it had been a disgusting card that was cut, of course we would have graded it trimmed.” In Hughes’ opinion, “The card is so outstanding, it would have been sacrilegious to call the card trimmed and completely devalue it.” O’Keeffe reported that his source also said Hall addressed the admission by stating that Hughes denies making those comments and that it was “an out and out lie that he knew the card was trimmed.”
But according to a Government Memorandum filed in support of a proposed plea agreement by Bill Mastro, the card was altered by trimming. The document filed in Chicago Federal Court in April states that as part of a proffer agreement Mastro admitted to “having cut the sides of the T206 Honus Wagner card despite prior statements to the contrary.” Last year a source with knowledge of the FBI investigation also claimed that the government had a wiretap where Mastro made a similar admission.
Earlier this year Hall appeared in an ESPN 30 for 30 mini-documentary about the Wagner card and discussed his grading of the card stating, “I think I may be the only person in the world that’s examined the card under magnification” and that despite the very public statements about “trimming” made by Lipset, Olbermann, Gutierrez and others in major newspapers and network TV, Hall added, “Those rumors have been around for awhile. We didn’t really talk about those rumors.” Hall added, “It doesn’t look trimmed to me.”
In the same documentary film Keith Olbermann contradicted Hall and opined, “The most famous Honus Wagner card is, to some degree, fraud.”
Not just to some degree, though. As of October 10, 2013, it’s officially a full-blown fraud now that Bill Mastro has admitted in Federal court that he did, in fact, cut the Wagner card with a paper slicer to enhance its condition and value. US Attorneys in Chicago released a 30-page plea agreement that could send Mastro to prison for as many as five years for one count of mail fraud. Mastro’s admission finally puts to bed speculation in the hobby that the card was legitimate and calls into question the company that graded the card with a “PSA-8, Near Mint” designation.
In late September, before Mastro’s trimming admission in court, PSA and Collectors Universe finally issued a formal statement about the Wagner card in the form of a cease and desist letter sent to Haulsofshame.com. In the letter, attorneys representing the company and CEO Joe Orlando claim that reports published by Hauls of Shame have spread “false, destructive and defamatory rumors about the company.” PSA attorney Keith A. Attlesey, of Attlesey/ Storm LLP, claims that Hauls of Shame’s assertions that the company was “founded on a fraud” and that the company “knowingly grad(ed) a trimmed and altered card” (the PSA-8 Wagner) are false. PSA and CU also claim that Hauls of Shame falsely reported that they “provided inaccurate and misleading authentication and grading while under the influence of Wayne Gretzky and Bruce McNall.” In addition, the letter states that claims made “that the company is under investigation by the ‘Feds’ regarding the investigation of the T206 Wagner card” are also false. PSA and Collectors Universe are threatening litigation if these statements (and others) are not removed from the Hauls of Shame website in “5 days.”
Just as David Hall and PSA claimed they “Didn’t really talk about those rumors (about the Wagner trimming)” back in 1991, Collectors Universe and PSA CEO Joe Orlando appear to be ignoring the overwhelming evidence suggesting that PSA was “founded on a fraud.” The PSA-8 Wagner scorecard tells the tale:
1. US Attorneys state in a filed memorandum that Bill Mastro has actually admitted to trimming the card and fraudulently promoting it as the finest in existence.
2. Bill Hughes, David Hall’s grading partner on the Wagner in 1991, told Michael O’Keeffe, of the NYDN, that he had advance knowledge the card had been trimmed and cut from a sheet when it was graded by PSA. Despite this being common knowledge within the company, when the Wagner sold for $2.35 million in 2007, current PSA President Joe Orlando told FOX News: “This particular one was preserved in spectacular condition. It’s the Holy Grail of baseball cards.”
3. Bill Heitman, a hobby pioneer and author of the T-206 book The Monster, supported Hughes’ statement on collector forum Net 54 stating in 2005, “When PSA was first starting up, they were practically doing handstands to get to grade the T206 Wagner that McNall and Gretzky had just bought. I happened to know the pedigree of the card and knew that it had been trimmed. The guy who was going to grade the card stopped by my home on the way to PSA headquarters to grade the card. He knew that the card had been trimmed, but told me PSA had to grade the card because the good publicity that would come from grading the card.” He added, “I actually talked once to Bruce McNall about this and he acknowledged that he knew the card had been trimmed. So, PSA, the owners of the card and the grader of the card knew it was trimmed. But put some plastic over it and all was forgotten.”
4. Keith Olbermann, of ESPN, claims that he has photos taken of the card before it was trimmed which show the “before and after” state of the PSA-8 Wagner.
5. Alan Ray, who originally sold the Wagner to Mastro and Rob Lifson in 1985, took the “before” photos of the card after it was cut from a sheet of T206’s and before Mastro further trimmed it to achieve its near-mint status. In an interview with Hauls of Shame earlier this month Ray was asked how many cards in addition to the Wagner were in the original deal he cut with Mastro and Lifson. Ray said, ”There was about 60 or 70 T-206 cards.” While Ray would not divulge anything further, it is believed those cards were also cut from sheets, including the T-206 Eddie Plank card Mastro sold to collector Charlie Conlon.
6. PSA appears to have further exposed the Wagner trimming with its grading of the Eddie Plank card that was also part of Mastro & Lifson’s 1985 purchase from Alan Ray and cut from the same alleged printer’s sheet as the Wagner card. Instead of grading that card a PSA-8, like the Wagner, they graded it “Altered” and “Authentic.” When Mastro sold the card to collector Charlie Conlon in 1986 he wrote a letter stating the card was, “one of the finest copies known to exist.” When sold as the “Gretzky-McNall Mate” at REA in 2009, Rob Lifson said, “It is our opinion that this card was long ago cut from a sheet that was saved by the printer, and was carefully cut from the sheet possibly decades after being printed…the Plank does have a very slight irregular cut……but it is not trimmed.” Are we really to believe that Lifson didn’t know Mastro cut it himself?
7. A source known as “Hobby Deep-Throat” told this writer in 2000 that Mastro and his partner Rob Lifson both committed fraud when they sold the Wagner card at MastroNet/Robert Edward Auctions via eBay for $1.26 million to Brain Siegel. A former close associate of Lifson, the source claims Lifson told him of his first hand knowledge that the card had been trimmed by Mastro.
8. Josh Evans, of Lelands, has claimed publicly that in the 1980s Bill Mastro admitted to him on several occasions that he had trimmed the Wagner card to enhance its condition and value.
9. Bill Mastro admits in open court that he did, in fact, trim and cut the four sides of the card that became known as the “Holy-Grail” of the hobby.
10. Kirk Harris, a west coast coin collector, acquired through SCP Auctions the high grade T-206 set from Jim Copeland’s collection that was purchased by Gretzky and McNall. Sources indicate that many of the other cards Mastro trimmed were included in this set and were subsequently graded by PSA as “PSA-8″ (and higher) like the Wagner.
With all of this evidence in direct conflict with PSA’s denials David Hall has stated on the recent ESPN film that his company “pays out under the terms of (their) grading guarantee” and that PSA “stands behind the product. If the card were to be returned via a fraud claim, it would be current owner Ken Kendrick who would have to make such a request. However, the owner of the Arizona Diamondbacks, who paid $2.8 million for the card in a private sale in 2007, seems unlikely to make any such demand. When asked recently if he’d ever sell the card by Steve Berthiame on FOX Kendrick said, “I’ve never sold a baseball card ever and I don’t plan to sell.” Luckily for PSA Kendrick plans on passing along his trimmed Wagner to his kids.
Kendrick is heavily invested in PSA-graded products much like many other collectors who still support PSA despite the questions about the company’s credibility. From 2010 through 2012 Kendrick’s collection, including the trimmed Wagner were exhibited at the Baseball Hall of Fame in Cooperstown but no mention of the card’s controversial past was identified in the museum’s exhibit. In fact, the museum’s signage introducing the exhibition called “The Ultimate Card Set” stated that Kendrick’s cards were “the most treasured rarities of all time” and stressed that “All are in stunning condition, crucial to the high-end baseball card aficionado.” Hall official, Brad Horn, currently appears on the PSA website giving a testimonial identifying a relationship between the two entities and the “great synergy between the Hall and PSA.”
Sources indicate that a class-action lawsuit is in the works against Kendrick and the Hall of Fame on behalf of the 500,000+ paid visitors to the museum who viewed the Wagner card without any disclaimer about the card’s dubious past and the strong suspicion it had been altered.
The PSA website also includes a lengthy profile article about Kendrick called “The Man, the Collector, the Card and the Collection” and Kendrick speaks highly of the company saying, “I would never think of acquiring a card that had not been authenticated and graded. PSA has become the ultimate deciders on giving official identity and value to a card. They provide a great service.”
PSA removed a similar profile article featuring Bill Mastro from its website after he was indicted in August of 2012. That profile, entitled, “Bill Mastro- The Ringmaster of Memorabilia” quotes Mastro as saying, “Consumer confidence, that is the big thing. The more authentications that exist on an item, the better. Knowing that respected companies such as PSA and PSA/DNA have authenticated something, authentication that will run with the item for life, brings real confidence to buyers. Collectors want that confidence and they are willing to pay for it.”
With or without the ringmaster’s hat in the auction game collectors are still paying PSA hansomely despite the FBI probes and assorted controversies. Since Mastro was indicted last year Collectors Universe and PSA reported robust earnings and a 10% increase in revenues for authentications of cards and autographs. It seems that Kendrick and many other PSA customers are satisfied with PSA’s products and the company’s advertised promise: “We can help turn your cardboard into gold.”
They sure did deliver on that promise for Bill Mastro.
Now that Mastro’s former treasure been exposed as “fools-gold,” what does PSA have to say?
A call on Friday afternoon to PSA’s attorney, Keith Attlesey, for PSA’s reaction to the Mastro admission of trimming was not returned.