FBI issues subpoenas as part of widening sports trading card fraud investigation – USA TODAY

Posted on August 6, 2019

A.J. Perez, USA TODAY Published 2:01 p.m. ET Aug. 6, 2019 | Updated 3:00 p.m. ET Aug. 6, 2019

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Federal authorities have issued several subpoenas and contacted mostly anonymous members of an online forum as part of an ongoing investigation into altered sports trading cards that have sold for millions of dollars over the past several months.

PWCC, a major auction house in the trading card industry, was subpoenaed last month and was already cooperating with an FBI investigation, Jeffrey Lichtman, an attorney for the auction operator, told USA TODAY Sports. FBI agents served several others with subpoenas over the weekend at the National Sports Collectors Convention in Chicago, two people with knowledge of the investigation told USA TODAY Sports. The people were granted anonymity because details of the investigation have not been disclosed publicly.

“There has been some evidence that cards sold at PWCC auctions have been altered,” Lichtman said. “While there are questions of what constitutes an improper alteration, I can say with that PWCC is among those who have sold altered cards. PWCC has sold hundreds of thousands of cards and the problematic ones are in the hundreds — or less than 1%.”

The investigation appears to include auction houses, authentication firms as well as dealers who submitted possibly altered cards for auction. One person with knowledge of the investigation also said the FBI is likely looking at shill bidding, when the seller or somebody associated with the seller enters bids to drive up the price of an item.

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Lichtman said that PWCC has already refunded money to “hundreds” of people who purchased suspect cards at auction and has worked with FBI to identify the dealers that supplied the cards to the auction company.

A spokesperson for the FBI’s field office in Chicago declined comment when reached by USA TODAY Sports, citing bureau policy about ongoing investigations.

Player popularity and card scarcity and condition are major factors in determining the value of a vintage trading card.

Card grading by an independent company, such as PSA, has become popular in the industry because it theoretically brings consistency to the grading process. Before grading was introduced, the buyer and seller would have to argue over whether a card was “very good/VG” or “Excellent/EX.”

Today, for example, PSA grades cards on a 1-10 scale. To receive a “10” a card has to be “mint,” and that requires perfect corners.

“Trimming” is a common way of altering cards. With modern technology, it’s possible to re-cut a card to make it appear like it came fresh out of a pack.

If a card grader doesn’t detect a trimming, a “7” could become a “9” or an “8 could become a “10”. Some “trimmers” have been caught, and card graders have rejected the card for trading.

An improved grade on a card can mean a significant increase in the price of the card.

A list obtained by USA TODAY Sports included more than 350 suspect cards sold at auction by PWCC that were graded by leading sports memorabilia authentication firms like PSA, Beckett Authentication Services and SGC.

The card on that list that went for most at auction was a 1914 Cracker Jack Joe Jackson, which was originally graded by PSA as a 2 and sold at auction for $22,800 in 2017.

SGC later gave it a 5.0 and it was sold at a PWCC auction last year for $87,877.77.

Messages left with PSA executives by USA TODAY Sports were not returned.

There is a group of about a half dozen members of the message board Blowout Forums — known on the site as the Blowout Detective Agency (BODA) — who have flagged questionable gradings and the ensuing auctions of those cards in recent months.

The FBI has taken notice and has reached out to at least one in the BODA contingent, according to one of those associated with BODA. The person was granted anonymity because the investigation is ongoing.

Members of BODA often get “tipped off” to questionable auctions by dealers who want the auction process “cleaned up.” Those dealers don’t want their names attached for fear of being ostracized by the sports memorabilia collector community.

Forum users often post pictures of cards they suspect could be altered and seek BODA’s assistance before making a purchase.

This isn’t the FBI’s first investigation into the sports memorabilia.

The FBI’s Chicago office — the same leading up the current investigation — “identified a major problem threatening the entire sports and celebrity memorabilia market. In the mid-1990s,” according to a release from the agency in 2005. That investigation revealed a group that had “forged, fraudulently authenticated, and distributed” Michael Jordan signed memorabilia along with those of other Chicago athletes.

The original investigation in Chicago in the 1990s was called Operation Foul Ball before the FBI’s field office in San Diego launched Operation Bullpen as an undercover sting in 1997. In total, 63 people were convicted while $4.9 million of property, cash and luxury items like a Ferrari were seized as 18 forgery rings were dismantled, according to the FBI.

“One of the conspirators liked to joke to the undercover agent how Mickey Mantle still has one arm out of the grave signing autographs,” the FBI wrote in the news release. “Other conspirators were noting how Wilt Chamberlain was still available for signing weeks after his death.”

The FBI noted the internet had become a destination for memorabilia scammers.

“The industry, as a whole, has moved in this direction where individual collectors can now easily sell pieces,” the news release read. “The forgers unfortunately led the way, realizing the anonymity that the Internet provided for dealing their forgeries.”

Contributing: Kevin Allen