CHICAGO (CN) – Federal prosecutors accuse three top executives of Mastro Auctions of selling bogus “bona fide” locks of Elvis Presley’s hair though they knew they were phony.
The 16-count grand jury indictment also accuses the defendants of selling bogus baseball memorabilia – including a $62,000 baseball and an altered Honus Wagner baseball card, which the auctioneers claimed to be “the most expensive baseball card in the world.”
Lead defendant William Mastro, 59, was chairman and CEO of the suburban Chicago auction house from 1996 to February 2009, prosecutors say in the indictment. Defendant Doug Allen, 49, was president and COO from 2001 to February 2009. Defendant Mark Theotikos, 51, was vice president of operations and acquisitions from 1996 to February 2009.
The fourth defendant, William Boehm, was an employee who worked as director of information technology.
Mastro Auctions, which advertised itself as “the world’s leading sports and Americana auction house,” conducted live and online auctions throughout the 2000s, according to the 33-page grad jury indictment.
Mastro sold purported locks of Elvis Presley’s hair in 2003, but when the buyer had the hair DNA-tested and questioned its authenticity, Mastro issued a refund, according to the indictment unsealed Wednesday.
But in 2005, 2006, 2007 and 2008, the auction house again advertised and sold “bona fide” locks of Presley’s hair, claiming “that the Elvis Hair was ‘bona fide,’ that it would be sold with ‘documents attesting to the veracity’ of the Elvis Hair, and that ‘short of comparing mitochondrial DNA with that of known Presley relatives, the hair … is … authentic,'” according to the complaint. (Ellipses in complaint.)
Prosecutors say the defendants knew those statements were false.
In addition, Mastro Auctions fraudulently resold a 1869 Cincinnati Red Stockings baseball for $62,000 after the first buyer found that the paint on the ball contained a material not used until after World War II, according to the indictment.
“As Mastro well knew, the trophy ball he offered to Victim A was the same trophy ball that had been returned by Purchaser A due to concerns regarding its authenticity,” the indictment states.
And Mastro “represented that Mastro Auctions had sold the most expensive baseball card in the world, a Honus Wagner T-206 card. In making this representation, however, defendant Mastro knowingly omitted the material fact that defendant Mastro had altered the baseball card by cutting the sides of the card in a manner that, if disclosed, would have significantly reduced the value of the card,” according to the indictment.
The auction house also rigged auctions with shill bids, prosecutors say: “defendants and their co-schemers engaged in a series of practices designed to fraudulently inflate prices paid by bidders and protect the interests of consignors and sellers at the expense of bidders. In addition, defendants Mastro and Allen caused the sale of certain items whose authenticity and condition they knew to have been misrepresented to customers.”
The indictment states: “Beginning no later than in or about 2001 and continuing until at least in or about December 2008, defendant Mastro placed shill bids, and caused others to place shill bids, using several accounts, including defendant Mastro’s account, a fictitious account, Mastro Auctions’ corporate bidding account, employee accounts, and accounts in the names of defendant Mastro’s family members, a priest, and others.”
The indictment makes similar allegations against Allen and Theotikos, with adjusted time frames.
Mastro is charged with one count of mail fraud, Allen with 14 counts of wire and mail fraud, and Theotikos with six counts of wire and mail fraud.
If convicted, they face up to 20 years in prison for each count.
Boehm faces one count of lying to the FBI during its investigation.