Bill Mastro has pleaded guilty in a Chicago federal courtroom to mail fraud, officially acknowledged that he trimmed the $2.8 million T206 Wagner card and engaged in shill bidding.
The Chicago Sun-Times reported that under the new plea agreement, the judge in the case won’t have to abide by federal prosecutors’ recommendations that his sentence be capped at 2 ½ years in prison.
The 60-year-old Mastro, former head of Chicago-based Mastro Auctions and a long-time collector, will have to cooperate with investigators who also pursuing a case against other Mastro Auctions representatives and also faces a maximum $250,000 fine.
The news comes eight months after an initial agreement had been reached in the case. That deal and another one offered by government attorneys and Mastro’s lawyer were rejected by Judge Ronald Guzman who wasn’t satisfied with the arrangement that would have meant no more than that 30 month prison sentence.
Mastro was accused of various types of fraud from 2002-2009 including a scheme to run up the prices attained at his auctions through shill bids placed by Mastro employees, other clients and relatives of the firm. Mastro also admitted to trimming the edges of the hobby’s most expensive baseball card, a T206 Honus Wagner card now graded PSA 8. A federal grand jury indicted him in July of 2012.
Prosecutors say he failed to disclose that he’d trimmed the card when he sold it for $110,000 two years after he bought it from a New York card shop. For years, Mastro publicly stated that he had done nothing to the card.
The New York Daily News quoted a source as saying Mastro was caught admitting that he’d trimmed the Wagner card through a wiretap during which he was engaged in conversation with a former employee who agreed to cooperate with federal investigators.
According to the plea agreement, prosecutors believe a sentence of up to five years in federal prison would be appropriate in the case while Mastro’s attorney is still hoping the judge will agree to a sentence of no more than three years. Government attorneys originally wanted a much longer sentence but backed off when it became clear, they say, that determining the extent of fraud committed by Mastro against bidders at Mastro Auctions was difficult. They also say Mastro provided “valuable information” with regard to the case. Three of his colleagues at the now defunct company also face wire and mail fraud charges in connection with what went on during Mastro’s tenure as head of the company, including Legendary Auctions’ President Doug Allen and associate Mark Theotikos. It wouldn’t be a stretch to say Guzman may take Mastro’s cooperation level in the case of his former colleagues into consideration when handing down the sentence. No sentencing date has been set as of yet.
The difference between what investigators believed was the amount of unnecessary expense incurred by winning bidders in some of Mastro’s auctions and what Mastro’s attorneys claimed was large. Prosecutors believed it was between $400,000 and $1 million. Mastro claimed it was less than $70,000. Examining bidding records, however, provided no concrete answers as to what the figure may have been. Mastro claimed to have bid on some items with an intent to win them, rather than simply to increase his profit. Many times, predicting what legitimate bidders would have paid without a possible shill bid was impossible to decipher.
“Determining the loss for purposes of the guidelines was a complicated endeavor, requiring a lot-by-lot, bid-by-bid analysis of tens of thousands of records,” U.S. Attorney Nancy DePodesta wrote in the memorandum. “While the parties’ positions with respect to loss vary, the parties are in agreement that there is little precedent available for calculating loss amount stemming from the types of auction practices charged in the indictment.”
Court papers filed Monday indicated Mastro officials had either destroyed or partially deleted some bidding records dating from auctions held prior to July 2007.
As for the future of the Wagner card, now that it’s officially known to have been hand cut, don’t expect anything drastic. The card’s current owner, Ken Kendrick, told an interviewer earlier this year that he has no plans to sell it and expects it to be handed down to his children, along with the rest of the collection.