Heritage Auction

[gordonanalytic]

DALLAS, Sept. 11 /PRNewswire/ -- A racketeering lawsuit aimed at Heritage
Auctions and its top executives was expanded Wednesday, when a prominent
Montana businessman joined the charges against what has been termed as a
"massive auction scam." The suit charges the defendants used a secret,
undisclosed shill, or fictitious bidder, at auctions, so winning bidders paid
inflated prices.

Defendants in the suit are Gregory J. Rohan; Steve Ivy; James L. Halperin;
Marc D. Emory; Paul R. Minshull; Dagmar Byers; and their company, Heritage
Auctions, Inc.

Gary Hendershott, an expert in Civil War memorabilia, was joined in the suit
by Chris Kortlander, a prominent Montana businessman. Kortlander alleges that
he "consigned thousands of individual historical manuscripts and photographs
to Heritage," but was deprived of profit because of Heritage's fraudulent and
deceptive acts.

Mark Senter, attorney for the plaintiff, charged that "the Heritage defendants
use N. P. Gresham, a fake bidder, to rip-off legitimate bidders."

These charges appear to be the latest in a long line of lawsuits filed across
the U.S. charging the defendants with fraudulently manipulating auctions. In
1989 the FTC ordered Heritage to pay $1.2 million in restitution to victims of
Heritage and Halperin who had paid inflated prices for coins. Forbes magazine
reported that on another occasion, an arbitration panel ruled that Heritage
must pay $23 million to another plaintiff.

"Texas law strictly and explicitly forbids shill, or fictitious, bidders at
auctions, but James Halperin, Heritage's Chairman, admitted in sworn testimony at an injunctive hearing that N. P. Gresham does not exist. Yet Heritage later admitted that N.P. Gresham not only bids at auctions, but that no one outside of Heritage knows who Gresham is," said Senter.

According to the lawsuit, the defendants are in violation of RICO by "secretly
bidding in the name of N. P. Gresham at auctions in surreptitious competition
with other valid bidders."

Senter explained that using N. P. Gresham as a ghost bidder results in higher
prices being paid at auctions by innocent, unknowing bidders. The practice
overstates Heritage's ability to effectively get the best prices for items it
auctions.

Depositions in the lawsuit are scheduled to begin in the near future.