Feds Bust Sports Memorabilia Ring

November 22, 2011

C'mon admit it - you've often wondered whether you should splurge on some piece of sports memorabilia.  If you're a kid from the 50s like me, maybe it's a Rocky Colavito autograph, a Jim Brown jersey, a Ted  Kluszewski sleeveless shirt, a Bill Russell or Bob Cousy basketball, or anything of Willie Mays or Mickey Mantle. 

Of course, I'm a cynic and don't believe anything. How do I know that that's really the Say Hey Kid's glove or the Big O's jersey?  Oh, yeah, right - cause you say so? Like any idiot can't forge Stan the Man's name on a baseball - and I'm supposed to take comfort from the sticker on the plastic case that guarantees it's authentic?

Feds Swing Some Bats

On October 25, 2011, four defendants were charged in a criminal Information and two were charged in Indictments in federal court in the  Northern District of Illinois in separate but similar fraud schemes involving the sports memorabilia business.  The Feds alleged fraud in the sale, consignment, or auction of sports jerseys, which were falsely and fraudulently represented by the defendants to various buyers as "game used."

Federal prosecutors alleged that the six defendants obtained hundreds of jerseys and then changed the jerseys' appearance by roughening, scuffing, washing, or dirtying the jerseys so that they appeared to have actual "wear and tear." Those faked game-used jerseys were then re-sold, consigned, and auctioned for hundreds of thousands of dollars to sports trading card companies and other buyers. In furtherance of their scam, the  defendants allegedly provided buyers with fraudulent certificates of authenticity.

SIDE BAR: In order to fraudulently increase the value and price of packages of sports trading cards, manufacturers frequently purchase game-used jerseys, cut the jerseys into small pieces, and insert the pieces into card packages - with such use, the manufacturers often required that the seller provide a "certificate of authenticity" for game-used jerseys.

Bill Singer's Rambling SIDE BAR: A piece of fabric in a package of trading cards? When the hell did that happen?  And, no, I'm not the two-time All Star pitcher Bill Singer who won 118 games in the major leagues and threw a no-hitter.  Unless, of course, you got a few spare bucks and are dying to own one of my limited edition court-used lawyer's suits?

When I was a kid, we had two types of merchandise included with our packs of cards: fresh bubble gum and stale bubble gum.  The way you could tell the difference is that the fresh gum was soft and chewy; whereas the stale gum was hard and brittle.  Of course, fresh or stale didn't much matter because it all went into your mouth and got chewed to death. 

The booby prize in packs of trading cards was either the annual checklist card or the card for the Commissioner of the either league. To this day, I still recall my utter disgust in getting a pack of gum (with stale gum) that had both the annual checklist card and the card of National League Commissioner Warren Giles.

The two indicted defendants were charged with two counts each of mail fraud:

ERIC INSELBERG, NJ, involved in the business operations of Taylor Huff, Inc. and Pasadena Trading Corp, from late 2001 through late 2009.

BRADLEY WELLS, FL, involved in the business of Authentic Sports, Inc., and Historic Auctions, LLC, both Florida businesses, from late 2005 through the middle of 2009.

Four defendants were charged in an Information with mail fraud:

BERNARD GERNAY, NJ, involved in the business operations of Pro Sports Investments, Inc., a New Jersey business;

BRADLEY HORNE, SC, involved in the business operations of Authentic Sports Memorabilia, Inc., a South Carolina business;

JARROD OLDRIDGE, NV, involved in business operations of JO Sports, Inc., a Nevada business; and

MITCHELL SCHUMACHER, WI, using the trade name MS Sports.

Each mail fraud charge 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).

NOTE:  indictments and informations are merely allegations and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Guilty Pleas

On November 21, 2011, defendants Gernay, Horne, and Oldridge pleaded guilty.  According to their plea agreements, these three defendants sold, consigned, or auctioned jerseys, which were falsely and fraudulently represented to buyers as "game used." Also, the defendants sold what they falsely represented were game-used jerseys to other persons knowing the jerseys were intended to then be sold to sports trading card companies.

Defendants Gernay, Horne and Oldridge admitted the jerseys they sold were altered to appear game worn - which was accomplished by 

  • replacing the name and number on a jersey from a lesser player to that of a more popular athlete;
  • changing the shape of the jerseys; and 
  • adding patches or other identifiable marks on the jerseys.

The three defendants are scheduled to be sentenced in May 2012.