Issues of trust and legitimacy are the biggest takeaways from the recent scandal over graded sports cards that have been trimmed, recolored or otherwise altered. But is there a legal reckoning to come?
A professor of law at a South Florida university says it’s possible, but cautions it is a difficult process.
“This is the crime to commit,” said Bob Jarvis, who has taught baseball law and sports law at Nova Southeastern University for 32 years. “Especially if you don’t get greedy.”
The dogged work of sleuths on the Blowout Cards message board has revealed a disturbing number of obviously doctored cards. Message boards have been full of examples of before and after photographs of cards that have been bought online. Many were sold through PWCC Marketplace, the hobby’s largest volume sports card auction company, which has been offering refunds to collectors who bought them. PSA said it was conducting its own investigation into the matter.
PWCC says it also banned longtime card dealer Gary Moser, who among several dealers accused by collectors of misdeeds. They include trimming, coloring and cleaning cards with an unknown substance that resulted in physical changes to some of them. In an interview with The New York Times earlier this month, Moser denied the accusations, stating he had “nothing to hide.”
The online forum has been the source for an ongoing, almost daily revelation of cards that have been bought at public auction, removed from their holder, altered, graded again (usually higher), and then sold again without disclosure of those actions. The “work” appears to be generating a substantial profit for those involved in the scheme. While no charges have been filed yet, it’s a concern to anyone who collects cards, whether they were made this year or over 100 years ago.
Any law enforcement agency investigating such a case would look for a paper trail, according to Michael Rainka of Rainka Law in Jacksonville, Florida.
“They would want to speak with anyone that may have been involved with the sale, even if only remotely involved,” Rainka told SC Daily. “I’m sure they would want to see emails, contracts, or any other written correspondence that would provide insight to any crime that may have been committed, as well as researching prior sales with the same individual or company. While I haven’t handled fraud cases concerning altered cards, many cases involving this type of fraud require some expert testimony regarding any alterations that may have been made to the cards which could have increased the value.”
As we’ve written before, Rainka says transporting fraudulent goods through interstate carriers such as the U.S. Mail, UPS or FedEx would also leave any card doctor exposed to a federal investigation.
Altered cards have long been a topic within the hobby, but so far, there has been no widespread prosecution based strictly on that type of crime.
“We’re only catching a small percentage of these frauds,” said Jarvis, 59, co-author of the 2016 book, Baseball and the Law: Cases and Materials. “And prosecuting them is an even smaller percentage.”
So, why aren’t there more criminal cases against card doctors? The reason in some cases could be money, Jarvis said.
“Federal prosecutors are not really interested until you hit a million dollars,” said Jarvis, who earned his law degree from the University of Pennsylvania in 1983. “You have to have a pretty big number to get their attention, and a million gets their attention.”
The Mastro Auctions case was that kind of a head-turner. The firm’s founder was indicted on fraud charges in July 2012 that was centered on shill bidding but court papers also included the alteration of the Holy Grail of cards, a T206 Honus Wagner. In 2015, Mastro was sentenced to federal prison after he paid a $250,000 fine.
That was a high profile case. Jarvis said many other cases don’t get to court because there is simply not enough money involved.
“On the state level, that depends on the state prosecutor,” Jarvis said. “A prosecutor in Topeka is going to have a different number (that would get their attention) than a prosecutor in San Francisco.”
Perception is also a factor, Jarvis said.
State prosecutors handle cases that occur in-state. “Prosecutors ask, ‘How easy is this going to be to prove in court?’” Jarvis said. “There can be too much doubt.
“If I have a case where a card is clearly doctored, it’s not just about dollar value. How much time am I going to have to put into this to get a conviction?”
Rainka believes it’s important to speak up if you have firsthand information or have been a victim.
“State or federal authorities are receptive to any information regarding the ongoing commission of a crime, especially a felony, which this likely is. I would have to imagine that the final sale price of the altered cards is high, therefore the potential loss to the victim would be greater and likely pique their interest.”
If the issues that seem to be connected to several individuals are somehow related, some collectors have wondered whether it could even be a Racketeer Influenced and Corrupt Organizations (RICO) Act case. That, too, could pique the interest of prosecutors.
Jarvis offered some fascinating insight into what drives people to pass off altered cards as legitimate or hold them, listing four scenarios: sales, charitable donations, insurance and even loans.
“I want to sell it. I want to donate it. I want to burn it,” Jarvis said. “And here’s a fourth one: Use the card as collateral for a loan — and if you use it, it’s bank fraud.”
Some unscrupulous collectors may overinflate the price of their collections, and when the cards go up in smoke, fraud can occur.
“To get the card insurance money (illegitimately) is fraud,” Jarvis said. “When I say I lost a $10,000 card when in fact I know it was a $10 card (is fraud).”
While many of the cards identified online in recent months have been valued in the hundreds or thousands of dollars, Jarvis said savvy card doctors can turn big profits while remaining under the radar.
“This is highly, highly lucrative,” Jarvis said. “Let’s be honest. If I take a $10 card and alter it so I can sell it for $50, well, if I get caught it’s just a slap on the wrist. People who are stupid try to do the big stuff.”
Slipping cards past a third party grader who renders them authentic with a certain grade doesn’t mean the card doctor is off the hook, either.
“The party altering the card is still liable, both civilly and criminally,” Rainka said. “The grading company would likely only be subject to criminal liability if it is shown they knew of the alterations prior to accepting the card or were otherwise engaged in a conspiracy with the party making the alterations.”
The authentication services base their reputations on fair, accurate grading, and knowing how the recent alterations have somehow slipped passed graders is something they’re hopefully trying to figure out.
Andy Broome, the senior vintage card grader at Beckett Grading Services, told Forbes that trimming cards was the “worst alteration” the company deals with.
“No card is immune from it, from prewar to the latest Bowman Chrome,” Broome stated.
When customers submit cards for authentication, they fill out paperwork and sign an agreement, such as this one from PSA, that essentially indicates they’re acting in good faith regarding their knowledge of the card. If they’re found to have violated that agreement, it could open the door for grading companies to take their own legal action.
“The grading company would likely be able to sue the individual making these alterations for fraud,” Rainka stated. “Even if the company reimburses those would have purchased the altered cards, they would still likely have a very strong case against the individual providing them the card.”
Litigation may be something that authentication companies may try to avoid, though, and cost has nothing to do with it, Jarvis said.
“There’s that embarrassment factor that ‘We got duped,’” Jarvis said. “As soon as you file in court, everyone is going to know you got duped because court filings are public record.”
The red-face factor also applies to collectors.
“When you are duping your victims, a lot of them don’t follow through to prosecute cases because they don’t want to look like idiots,” Jarvis said.
Still, there is legal precedent for prosecuting fraud in the hobby.
In the late 1990s, an 18-month FBI investigation dubbed “Operation Foul Ball” led to the arrest of Anthony J. Alyinovich of Chicago, who crafted a scheme to distribute forged sports memorabilia, focusing on stars such as Michael Jordan. It played into the hands of eager collectors who wanted a piece of their sports heroes.
“When it comes to sports memorabilia, people suspend the skepticism they bring to ordinary affairs of life,” U.S. Attorney David Rosenbloom told Forbes. “If somebody gave you a $50 check signed by Michael Jordan, you would call the bank. But (if someone charged you) $900 for a jersey, (you’d say) ‘Thank you!’”
Another interesting case was Gentry v. eBay, Inc.
Plaintiffs Lars Gentry, Henry Camp, Mike Hyder, James Conboy, William Pommerening and Michael Osacky brought a $100 million class-action lawsuit against eBay, alleging the company “was not doing enough to prevent fakes,” Jarvis said.
The plaintiffs alleged eBay violated California’s Autographed Sports Memorabilia statute by failing to furnish a certificate of authenticity to people who bought autographed items through its website.
“eBay’s defense was ‘We are just a platform,” Jarvis said.
The trial court agreed, ruling eBay was not a dealer. The case was appealed, but the courts upheld the lower court decision in 2002.
If the case had not gone eBay’s way, “they would have gone out of business,” Jarvis said.
Jarvis, like many experts, urges collectors to do research and conduct due diligence before buying any significant piece of memorabilia. For every legitimate dealer, some unscrupulous people are looking for an easy mark and will execute any number of schemes to take your money, including making cards look better than they really are.
“The list of possibilities is only limited to the imagination of the criminal,” he said.