Federal prosecutors have charged six men with selling, consigning or auctioning jerseys to individuals--and card companies-- purported to have been worn by pro and college athletes that were never actually donned in competition. It's the second time in less than four months, fraud charges have been filed against dealers accused of selling bogus jerseys.
Four defendants were charged Tuesday in U.S. District Court in Rockford, Ill., in criminal informations and two others were charged in indictments. According to the Justice Department, the cases are similar, but separate and involve doctoring jerseys to make them appear game used and re-selling them.
Charged by indictment with mail fraud after evidence was presented to a grand jury were:
ERIC INSELBERG, a resident of New Jersey, involved in the business operations of Taylor Huff, Inc. and Pasadena Trading Corp, from late 2001 through late 2009, in two counts of mail fraud.
BRADLEY WELLS, a resident of Florida, involved in the business of Authentic Sports, Inc., and Historic Auctions, LLC, both Florida businesses, from late 2005 through the middle of 2009, in two counts of mail fraud.
The four charged by information with mail fraud, indicating they may have already reached a plea agreement with prosecutors, were:
BERNARD GERNAY, a resident of New Jersey, involved in the business operations of Pro Sports Investments, Inc., a New Jersey business;
BRADLEY HORNE, a South Carolina resident, involved in the business operations of Authentic Sports Memorabilia, Inc., a South Carolina business;
JARROD OLDRIDGE, a resident of Nevada, involved in business operations of JO Sports, Inc., a Nevada business; and,
MITCHELL SCHUMACHER, a resident of Wisconsin, using the trade name MS Sports.
Agents say the jersey sales amounted to "hundreds of thousands of dollars" and took place from the middle of 2004 through 2008. Federal officials say some of those fake jerseys wound up being sold to card companies creating "relic" cards for insertion into packs. How many fake swatches may have wound up in collectors' packs hasn't been revealed as of yet.
According to court documents, each case involved the sale, consignment, or auction of jerseys, in which each defendant falsely and fraudulently represented to buyers that the jerseys were “game used,” when they were not. Jerseys worn by professional and collegiate athletes during a game are usually known as “game used” or “game worn,” and are commonly bought and sold by collectors and others. The value of game used jerseys varies based on the popularity of the player that used the jersey and how long it had been since the player had actively played the sport. The value of a jersey was greater if it was game used.
Trading card manufacturers frequently purchase game used jerseys, cut the jerseys into small pieces, and insert the pieces into card packages. When game used jerseys were purchased for this purpose, the manufacturers often required that the seller provide a “certificate of authenticity” that the jerseys were authentic game used jerseys.
Prosecutors say the men obtained "hundreds of jerseys" from a variety of sources, including retail sellers, then frequently changed the jerseys’ appearance by roughening, scuffing, washing, or dirtying the jerseys so that they appeared to have actual “wear and tear.” Prosecutors say those same jerseys were then re-sold, consigned, and auctioned for hundreds of thousands of dollars to card companies and other buyers as "game used" jerseys. As part of the scheme, investigators say the defendants provided the buyers with fraudulent certificates of authenticity.
At this summer's National Sports Collectors Convention, agents from the U.S. Postal Service arrested Steve Jensen of Vintage Authentics. He has been charged with mail fraud and wire fraud over what federal authorities say were jerseys falsely described as game worn.
Each mail fraud charge in these cases carries a maximum penalty of 20 years in prison, and a $250,000 maximum fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.
Sports Collectors Daily will have more on this story as it becomes available.