I found this article on the NY Daily News website. Very disturbing news about the hobby. The FBI hit them at the right time. This should really put a scare to those people who make counterfeit cards.
“The same day Mastro Auctions sold a rare 1909 Honus Wagner card for $1.62 million at a sale held in conjunction with the National Sports Collectors Convention in Rosemont, Ill., federal agents investigating fraud in sports collectibles questioned employees of Professional Sports Authenticator, the hobby’s top card grading service.
Also on Friday, investigators from the FBI and the United States Postal Service interviewed a former Mastro Auctions employee who is known to be a “card doctor,” somebody who fixes dog-eared corners, removes stains, flattens out creases or takes other steps to improve the appearance of trading cards. Most collectors and dealers consider it unethical to alter cards.
“They spent a lot of time at the PSA booth,” one sports memorabilia executive said.
Federal agents spent several hours Thursday, Friday and Saturday at the National, sports memorabilia’s largest annual convention, issuing subpoenas to appear before a grand jury investigating fraud in the memorabilia business.
The agents’ appearance at the show is part of an investigation into sports memorabilia fraud initiated last year by the Chicago division of the FBI, whose “Operation Foul Ball” smashed a multistate autograph forgery ring during the 1990s. The target of the investigation appears to be Illinois-based Mastro Auctions, sports memorabilia’s largest auction house, although other businesses and individuals may also be involved.
The source said Bill Mastro, the company’s chairman, looked cool and collected during the auction, held this year at the Chicago ESPNZone. “But (Mastro president Doug Allen) looked awful,” the executive added. “I think all this is getting to him.”
Allen and Mastro could not be reached for comment Saturday. Neither could Joe Orlando, president of PSA.
The fact that PSA officials and the former Mastro employee were interviewed by agents indicates that investigators are also interested in learning about “card doctoring.”
Cards that have been trimmed, colored or repaired are tainted and worth considerably less than cards that have not been altered. The difference in the value of cards that have been altered and the same card that has not been doctored can be hundreds of thousands of dollars.
PSA was formed in 1991 to protect collectors from card doctors, counterfeiters and other cheats. But the company has been a lightning rod for controversy. Collectors and dealers say PSA inflates grades for cards submitted by big-volume customers such as Mastro Auctions.
The first card the company graded – another 1909 Wagner, at the time owned by NHL great Wayne Gretzky – had been cut from a sheet and later doctored, according to “The Card,” a book by two Daily News reporters. The Wagner, which PSA graded an 8 (on a scale of 1-10) sold for a record $2.8 million last year, even though a former PSA authenticator has said the company knew the card had been doctored.”