Former Mastro Auctions President Doug Allen pleaded guilty to a charge of mail fraud Monday in federal court, but a plea agreement revealed a new twist in the case.
Allen becomes the third member of the former Mastro Auctions group to plead guilty to shill bidding and other wrongdoing.
According to the Chicago Tribune, Allen, now president of Legendary Auctions, agreed to cooperate in the federal investigation in return for a potentially lighter sentence. However, prosecutors say when Allen was outfitted with an undercover recording device as part of that investigation, he tipped off Arkansas businessman John Rogers that federal agents were about to raid his home.
Earlier this year, agents, some from Chicago, did use a search warrant to go through Rogers’ home and photo business near Little Rock, but the paper reported that because of Allen’s statement, Rogers knew they were coming.
According to the plea agreement cited by the Tribune, Rogers then began wearing a wire, recording meetings with Allen in which Allen gave advice on how to throw off investigators.
The report states Rogers then began wearing a wire for the FBI and recorded meetings with Allen.
The plea agreement states that Allen could face 10-12 years in prison because of the amount of fraud perpetrated on customers. His attorneys say they plan to dispute the amount of fraud that took place in hopes of lightening his sentence.
Rogers is an investor in Legendary Auctions. His attorney, Blake Hendrix told Arkansas Business that "Mr. Allen tried to ensnare John Rogers in Mr. Allen's own criminal conduct to try to get a lesser sentence," Hendrix said. "We immediately contacted the FBI and agreed to assist its agents in investigating Mr. Allen's obstruction of justice. Mr. Allen's plan backfired."
In its story, the New York Daily News quoted another industry executive who was puzzled by the likelihood of Allen facing more prison time than Mastro, who is not expected to receive more than five years behind bars. "Everybody knew Bill was the real power behind Mastro Auctions. This is like giving the getaway driver more time than the bank robber."
Last week, former Mastro Vice-President Mark Theotikos pleaded guilty to one count of mail fraud for his part in the scheme. The former CEO, Bill Mastro, a long-time collector and at one time, one of the giants of the auction business, pleaded guilty last October and continues to cooperate with federal investigators while awaiting sentencing.
William Boehm, the former director of information technology at Mastro Auctions, is awaiting trial after being charged with lying to FBI investigators. The Daily News reported that Boehm may have assisted the company in destroying auction records once officials learned of the FBI's investigation into its practices.