July 25 (Bloomberg) -- William Mastro, a sports memorabilia auctioneer, was indicted by a U.S. grand jury for defrauding bidders through actions that included hiding alterations to a rare Honus Wagner baseball card.
Chicago’s Acting U.S. Attorney Gary Shapiro announced charges today against the former Mastro Auctions principal and three other men. The portrait of Wagner, who played shortstop for the Pittsburgh Pirates a century ago, is “the world’s most expensive baseball trading card,” he said.
“Mastro allegedly failed to disclose that he had altered the Wagner T-206 card by cutting the sides in a manner that, if disclosed, would have significantly reduced the value of the card,” Shapiro said.
Mastro and two other defendants deceived prospective bidders about the fairness and competitiveness of the company’s auctions, according to the indictment unsealed in federal court in Chicago.
Other items that Mastro, 59, and former Chief Operating Officer Doug Allen are accused of auctioning while knowing their condition was misrepresented include hair from Elvis Presley and “a purported 1869 Cincinnati Red Stockings trophy baseball,” according to Shapiro.
Michael Monico of Chicago, Mastro’s lawyer, said his client will take responsibility for his actions.
“That card is nicknamed the Holy Grail of our hobby,” said Bill Goodwin, president of the St. Louis-based auctioneer Goodwin & Co., which sold one in April for $1.23 million. “It’s the ultimate sports collectible.”
According to legend, Goodwin said today in a phone interview, Wagner opposed having his image included with tobacco products, which is how the cards were circulated at the time.
The card was pulled from production, accounting for its scarcity, he said. About 45 to 65 are believed to exist in varying degrees of preservation, according to Goodwin.
Wagner, who played Major League Baseball from 1897 to 1917, was inducted into the Hall of Fame in 1936. He died in 1955.
“Everyone that’s purchased a Wagner card that I know of has made money on it,” he said.
Mastro, a resident of Palos Park, Illinois, is charged with a single count of mail fraud, according to prosecutors. He owned Mastro Auctions until 2004 and was its chairman and chief executive officer from 1996 to February 2009.
“We expect this matter will be resolved relatively quickly without a trial,” Monico said in a phone interview. The attorney, who called his client “a pioneer” in the sports memorabilia industry, declined to say whether a plea agreement had been reached or whether there was any specific time-frame for doing so.
Allen, 49, of Crete, Illinois, faces 14 counts of mail and wire fraud. He is accused of making false representations about the “authenticity of the purported Elvis hair.”
Mark Theotikos, 51, of Addison, Illinois, a former vice president of auction operations, is charged with six counts of wire and mail fraud.
William Boehm, 63, of Baldwin, Missouri, the company’s former director of information technology, is charged with a single count of making false statements to Federal Bureau of Investigation agents.
“We are in the process of reviewing the allegations,” Allen’s attorney, Michael J. Petro of Chicago, said in a telephone interview.
Theotikos’s lawyer, Allan A. Ackerman of Chicago, said his client will plead not guilty when arraigned. “We look forward to his vindication,” the attorney said by phone.
No arraignment date has been set for Mastro, Allen or Theotikos, Shapiro said. Boehm made an initial appearance today in federal court in St. Louis.
The case is U.S. v. Mastro, 12-cr-567, U.S. District Court, Northern District of Illinois (Chicago).
To contact the reporter on this story: Andrew Harris in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com