What's Going On at Mastro Auctions?
Sunday, February 08, 2009
From the New York Daily News:
Is Mastro Auctions, already the target of an FBI investigation, suffering from financial problems?
Sports memorabilia's largest auction house recently asked consignors not to cash the checks the company issued them for items sold at Mastro's December catalogue sale.
In an e-mail to the Daily News, Mastro Auctions president Doug Allen blamed the problem on "a banking issue." The checks, he said, were drawn from the wrong account.
"As a result we had to contact a handful of consignors. In all those cases we have personally made calls, provided replacement checks and wires when requested," Allen added.
A lawyer contacted by an angry consignor, however, said company founder Bill Mastro told him the company had a cash-flow problem. Mastro sold the auction house in 2004 to SilkRoad Equity, a private investment firm.
"Mastro said the new owners have been reluctant to expand or renew their bank credit line," said the lawyer, who spoke on the condition of anonymity.
The lawyer said Mastro told the consignor the company had to call back $600,000 but assured him that replacement checks would go out immediately.
The Daily News reported in September that sports memorabilia officials have testified before a grand jury in Chicago that is investigating Mastro Auctions and fraud in the collectibles business.
The grand jury deliberations are part of an investigation into memorabilia fraud initiated last year by the Chicago division of the FBI, whose "Operation Foul Ball" smashed a multistate autograph forgery ring in the 1990s.
Although the target of the investigation is Illinois-based Mastro Auctions, sports memorabilia's largest auction house, other businesses and individuals may be involved.
The investigation of Mastro Auctions has focused on shill bidding, card doctoring and other allegations of fraud.
Is Mastro Auctions, already the target of an FBI investigation, suffering from financial problems?
Sports memorabilia's largest auction house recently asked consignors not to cash the checks the company issued them for items sold at Mastro's December catalogue sale.
In an e-mail to the Daily News, Mastro Auctions president Doug Allen blamed the problem on "a banking issue." The checks, he said, were drawn from the wrong account.
"As a result we had to contact a handful of consignors. In all those cases we have personally made calls, provided replacement checks and wires when requested," Allen added.
A lawyer contacted by an angry consignor, however, said company founder Bill Mastro told him the company had a cash-flow problem. Mastro sold the auction house in 2004 to SilkRoad Equity, a private investment firm.
"Mastro said the new owners have been reluctant to expand or renew their bank credit line," said the lawyer, who spoke on the condition of anonymity.
The lawyer said Mastro told the consignor the company had to call back $600,000 but assured him that replacement checks would go out immediately.
The Daily News reported in September that sports memorabilia officials have testified before a grand jury in Chicago that is investigating Mastro Auctions and fraud in the collectibles business.
The grand jury deliberations are part of an investigation into memorabilia fraud initiated last year by the Chicago division of the FBI, whose "Operation Foul Ball" smashed a multistate autograph forgery ring in the 1990s.
Although the target of the investigation is Illinois-based Mastro Auctions, sports memorabilia's largest auction house, other businesses and individuals may be involved.
The investigation of Mastro Auctions has focused on shill bidding, card doctoring and other allegations of fraud.
posted by Chris and Frank at 10:39 AM
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