Palos Park man indicted in auction fraud
By Mike Nolan firstname.lastname@example.org July 25, 2012 12:46PM
Updated: July 25, 2012 9:24PM
Executives of a now-defunct suburban auction business that sold sports memorabilia and other items allegedly bilked customers through the use of “shill bidders” that inflated sale prices, and misrepresented the authenticity of some items, including what they claimed was hair belonging to Elvis Presley, federal authorities said Wednesday.
A grand jury indictment unsealed Wednesday charges William Mastro, of Palos Park, with one count of mail fraud, while Doug Allen, of Crete, faces 14 counts of wire and mail fraud. Allen is now an executive with another auction house in Lansing.
Mastro owed Mastro Auctions until 2004 and was its chairman and chief executive from 1996 until early 2009, the U.S. attorney’s office in Chicago said. Allen was president and chief operating officer of Mastro between 2001 and February 2009.
Authorities said Mastro Auctions had offices, at different times, in suburbs including Burr Ridge and Willowbrook and boasted it was the “world’s leading sports and Americana auction house.”
In April 2003 the company sold what it claimed was hair from Elvis Presley, but the hair was later returned by the purchaser, along with the results of DNA testing that called into question the hair’s authenticity, according to the indictment. After learning about the DNA testing, Allen refunded the buyer’s purchase price, yet bits of the hair were sold at four separate auctions from December 2005 through August 2008, with the company insisting the hair was “bona fide,” according to the indictment. Sale prices for the hair were not disclosed in the indictment.
The company also allegedly swindled the buyer of what Mastro Auctions claimed, in an August 2002 auction, was a trophy baseball used by the 1869 Cincinnati Red Stockings. About four years after buying the ball, however, the purchaser sent it to a lab which discovered that paint used on the trophy ball contained a material not used in commercial paint until after World War II.
While that buyer had his money refunded, the company sold the baseball to another buyer in 2006 — also claiming it was the 1869 trophy ball — for about $62,000, according to the indictment.
The U.S. attorney’s office said that Mastro and Allen will be arraigned at a later date.
Each count of mail and wire fraud against Mastro and Allen carries a maximum penalty of 20 years in prison and a $250,000 fine.