CHICAGO (MCT) — “Simply astounding” — that’s how Mastro Auctions described the 1869 Cincinnati Red Stocking’s trophy ball that the firm was offering for sale to the highest bidder.
But what appeared to be a collector’s dream had a problem — the buyer had tests run by a lab and discovered a material in the paint on the trophy ball hadn’t been used until after World War II.
Mastro Auctions refunded the buyer’s money, but its woes didn’t end there, authorities allege. The auction house resold the ball to another buyer for about $62,000 without disclosing the results of the paint test, according to a 16-count indictment unsealed Wednesday in federal court in Chicago.
Prosecutors charged that executives of Mastro Auctions, which billed itself as the “world’s leading sports and Americana auction house,” even misrepresented the authenticity of a lock of hair they claimed was from the late Elvis Presley.
The firm’s onetime owner, William Mastro, and two former top executives, Doug Allen and Mark Theotikos, were charged in what prosecutors described as a fraud scheme that went on for more than eight years. The indictment was unsealed after a fourth executive, William Boehm, was arrested in Missouri on a charge he lied to the FBI.
Attorney Michael Monico, who represents Mastro, 59, of Palos Park, said his client will plead guilty to one count of mail fraud.
“He was a pioneer in the sports memorabilia industry,” Monico said of Mastro, who owned the business until 2004 and continued as its chairman and chief executive officer until February 2009. “He does and will accept responsibility for the conduct that has led to this case.”
Attorneys for Allen, 49, of Crete, and Theotikos, 51, of Addison, said their clients intend to fight the charges. Allen, who was president and chief operating officer, was charged with 14 counts of mail and wire fraud, while Theotikos, who was most recently vice president of acquisitions, faces six counts of mail and wire fraud.
“Doug Allen is a husband, a father and a substantial member of the business community,” said his attorney Michael J. Petro. “Doug and I would like to remind everyone these are just allegations and that we intend to fight them to the fullest.”
It wasn’t immediately known who represents Boehm, 63, of Ballwin, Mo., who was director of information technology.
The auction house operated at times from offices located in Oak Brook, Willowbrook and Burr Ridge. It also sold collectibles including coins and art.
In one catalogue listing, Mastro’s boasted of “offering the largest quantity of Elvis (Presley) hair ever to be sold publicly.”
The buyers paid $115,000, according to the catalogue, but prosecutors said the purchasers had DNA tests done on the hair that raised questions about its authenticity. The business refunded the money in 2004. But according to the indictment, Allen sold portions of the hair four separate times without disclosing the results of the DNA testing.