Kevin Keating responds to shill bidding allegations

[xplainer]

Originally Posted by Spahn21

As some of you may know, though I rarely post comments, I am a Net 54 member and often read its discussions—especially regarding autograph-related topics. And hearing now that Doug Allen is sentenced, I would like to address the conversation of me which has taken place here over the last several days.

Exhibit E (“EE”) lists me as a “shill bidder” on 38 different Mastro-Legendary (“M-L”) lots during the period from December 2007 - February 2009. Despite what it says, the document’s assertion that I was a shill bidder is categorically untrue.

I have NEVER shill bid in a Mastro auction, Legendary auction, or any other auction.

There was, however, a reason why the government included my name in relation to those items. Here is what happened.

On six occasions from 2007-2008 M-L paid me to authenticate autograph material consigned to their auctions. Sometime during or before this period, M-L auctions instituted a written code of conduct (“COC”), see:

http://www.sportscollectorsdaily.com...de-of-conduct/

According to paragraph 2 of its COC, M-L violated its own rules by accepting bids by me, one of its authenticators, on items they knew to be consigned by M-L or another party as defined in paragraph 2. This violation applied to the 38 lots in question, all of which I had bid on to win (succeeding on six), and all of which I am told were owned by an entity defined in COC, paragraph 2. Until the release of EE, I never knew the identities of the consignors of those items, or that my bid on any of those lots constituted a violation of any M-L rules. And I also did not know until last week that M-L was obligated under its COC to prohibit me from bidding on those lots.

The U.S. Attorney’s Office has confirmed that it has absolutely no evidence that I shill bid on any item, and that these 38 lots were added to EE because M-L violated its own publically released rules (COC, paragraph 2) by their acceptance and inclusion of my bids on items they knew were owned by M-L, a M-L employee or a M-L affiliate – and not because of any wrongdoing by me.

Despite my desire to release this statement before now, I wanted to allow the final proceedings in the criminal case to conclude first. And it is my understanding that those ended today with Doug Allen’s sentencing.

I cannot speak to any situation but my own. But if any of you have questions regarding this matter as it relates to me, please post them here and I will do my best to answer them.

--Kevin Keating

OK, I don't know Kevin and this is not a prepared response. But if I understand him, he was paid to authenticate some items, then he bid on some of those items (38 lots), but did not know about the internal Memo prohibiting those bids by M-L. M-L accepted those bids (and used them as shills) and he knew nothing was wrong until in the last few weeks.

Actually, I believe him. No being smart. If he didn't know, then he didn't know.

But, let's test this. Are there any authenticators out there that bid on items they have worked? Or, is there an understanding that family and friends are excluded from bidding on items. Not trying to hang him just want some others to verify the standard practice.

[begsu1013]

no dog in this fight and no clue about keating's past/present/future.

couldn't even pick him out in a line up. furthermore, i have taken absolutely zero time to look at who consigned the items in which he is listed as shilling and if there is any relation. and if i did, i still wouldn't be able to tell you jack schmidt...

however, if he is an authenticator (apparently autographs?) wouldn't that tend to give more him more credibility to his authenticating skills?

who would risk getting stuck w/ some items that didn't pass muster?



i could only imagine being such and looking at some of the remarkable sh!t that came across my desk. it'd only be natural to want some of that stuff....

again, i'm an idiot. i'm sure there are several hole punchers that can poke holes in my thought process. please, do your best...

this is no excuse for not knowing the rules however, it appears as the rules and even laws were the last thing on the minds of maestro/allen and they certainly weren't going to enforce them.

still "rules is rules" though.

[drcy]

I wouldn't bid on anything I authenticated for an auction house, but that's my personal rule. However, I'm not a dealer or even a collector, so it's not a hard rule to follow.

It does, however, say something if an authenticator is willing to buy what he okayed.

[vintagetoppsguy]

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

[Jantz]

Originally Posted by vintagetoppsguy

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

Not a jab at you David, just something for all of us to consider.

When was the last time our government got involved in anything that they didn't screw up?

That question is why I never posted in the thread about Leon's P&S.

It is also the same question that kept me from posting in the shill list thread.

[Spahn21]

Originally Posted by vintagetoppsguy

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

Hi David (I presume?)--

Thanks for your question.

In short, yes, the government told us last week about the code of conduct (COC) and the fact that the inclusion of the 38 lots with my name was the result of Mastro-Legendary's violation of its COC, paragraph 2--which Mastro-Legendary was obligated to enforce. Had they enforced that rule, then my bids should have been prohibited; and had my bids been prohibited, then the end result, i.e., end sale price would not have been as high as it was for those lots (same impact as a shill bid) -- and so, for purposes of determining "loss values", which I am told was the purpose of Exhibit E, the end result -- a higher price to the buyer -- is the same whether the bid is shilled or a prohibited bid (like mine). But, 1) owing to the purpose of Exhibit E -- to assess the monetary damages to lot winners/buyers -- and 2) the fact that the document was intended for internal use only for the court (and not to be released), no distinction was made on the list between shill bids and bids like mine -- or at least the bids I made on those 38 lots which M-L should have prohibited ( I can't speak to bids assigned to others).

It is my understanding that document EE is now redacted, but I'm not positive on that.

Also, I did just issue a more lengthy post which I believe also answers your above questions and in more detail, too. But if not, or if you have others, please pass them on and I'll do my best to answer them.

Thanks, David--Kevin K.

[vintagetoppsguy]

Originally Posted by Spahn21

Hi David (I presume?)--

Thanks for your question.

In short, yes, the government told us last week about the code of conduct (COC) and the fact that the inclusion of the 38 lots with my name was the result of Mastro-Legendary's violation of its COC, paragraph 2--which Mastro-Legendary was obligated to enforce. Had they enforced that rule, then my bids should have been prohibited; and had my bids been prohibited, then the end result, i.e., end sale price would not have been as high as it was for those lots (same impact as a shill bid) -- and so, for purposes of determining "loss values", which I am told was the purpose of Exhibit E, the end result -- a higher price to the buyer -- is the same whether the bid is shilled or a prohibited bid (like mine). But, 1) owing to the purpose of Exhibit E -- to assess the monetary damages to lot winners/buyers -- and 2) the fact that the document was intended for internal use only for the court (and not to be released), no distinction was made on the list between shill bids and bids like mine -- or at least the bids I made on those 38 lots which M-L should have prohibited ( I can't speak to bids assigned to others).

It is my understanding that document EE is now redacted, but I'm not positive on that.

Also, I did just issue a more lengthy post which I believe also answers your above questions and in more detail, too. But if not, or if you have others, please pass them on and I'll do my best to answer them.

Thanks, David--Kevin K.

Kevin,

Thank you for the explanation. For what it's worth, I believe you. However, I don't think Hank's statement lent any credibility to your opening post for 2 reasons (1) the timing of his response and (2) that he prefaced his statement with "Kevin...doesn't need, nor has he requested, any support from me." Although he didn't say it, that sort of implies that you didn't know he was going to make his statement when actually the two of you collaborated together on it. Had Hank not posted, I never would have questioned your OP, but when Hank's (obviously prepared) statement immediately followed yours, it sure looks suspicious. Your statement could have stood on it's own without any help. Again, all that said, I do believe you and thank you again for coming on here and telling your side - it's a lot more than some people have done.

Regards,

David

[Hankphenom]

Originally Posted by vintagetoppsguy

Kevin,

Thank you for the explanation. For what it's worth, I believe you. However, I don't think Hank's statement lent any credibility to your opening post for 2 reasons (1) the timing of his response and (2) that he prefaced his statement with "Kevin...doesn't need, nor has he requested, any support from me." Although he didn't say it, that sort of implies that you didn't know he was going to make his statement when actually the two of you collaborated together on it. Had Hank not posted, I never would have questioned your OP, but when Hank's (obviously prepared) statement immediately followed yours, it sure looks suspicious. Your statement could have stood on it's own without any help. Again, all that said, I do believe you and thank you again for coming on here and telling your side - it's a lot more than some people have done.

Regards,

David

How could my post look suspicious to you when everything was laid out in it, including up front my very close relationship with Kevin? His reputation had been tarnished, and I wanted to vouch for him, simple as that. According to your way of thinking, it would have been less suspicious had I waited seven posts into the thread before coming in? That's exactly why I DIDN'T do that. And there was no "collaboration" on my statement, as you put it. Kevin never asked for it, nor did he ask for any changes to be made. I showed it to him primarily to get his input on my breakdown of the list into different categories of offense, not in any way to get his approval of my comments about him. "Kevin...doesn't need, nor has he requested, any support from me" is the truth, nothing more or less complicated than that.

[Runscott]

Originally Posted by drcy

It does, however, say something if an authenticator is willing to buy what he okayed.

It says something if he is willing to bid it up.

Higher prices make the authentication company look better. Given all the people who shilled the Mastro auctions for monetary gain, I don't understand why it is implausible that TPA employees would shill up their company's authenticated items for the same reason.

[drcy]

Higher prices make the authentication company look better. Given all the people who shilled the Mastro auctions for monetary gain, I don't understand why it is implausible that TPA employees would shill up their company's authenticated items for the same reason.

I actually hadn't thought of that angle. But, as I said, my personal rule is I wouldn't bid on anything I authenticated-- to steer way clear of any perception or even misperception of conflict of interest or whatever. That you were able to just come up with a new reason I hadn't thought of why not to bid is exactly why I wouldn't bid.

I think the entire authentication and grading aspect of the hobby is messed up on many fronts, which is why I don't participate in that. I used to write a few LOAs here and there (not suggesting there was great demand) and almost solely for collectors, but quit. That's no commentary on Kevin, as I have no special insight on his situation and have no reason to doubt what he says-- and I've never dealt with autographs. I just think that the ways things are set up, and the expectations of the hobby visa vie people giving opinions, is mixed up.

I did archiving for a historical museum and discovered they had no interest or knowledge what items were worth and had never sold a thing. The executive director was surprised when I pointed out that some of their items had market value, and another person there said she didn't think they were even legally allowed to sell anything. All they cared about was the items being accurately identified and described for their records. How refreshing, I thought. The museum's archiving system had its own set of annoying peculiarities, but maximizing resale value wasn't one of them.

[Runscott]

Originally Posted by drcy

I actually hadn't thought of that angle. But, as I said, my personal rule is I wouldn't bid on anything I authenticated-- to steer way clear of any perception or even misperception of conflict of interest or whatever. And marketing has never been my strong point

Your integrity is why your name isn't on any shill lists.

[drcy]

A funny story from the museum is I was cataloging a bunch of photos (a painstaking process at a museum) and at the end of the day I asked the head archivist if I could take them home with me to continue work on them at home. She said "I've worked at museums for twenty five years, and you're the first person to ever ask that question." She said she didn't know what was the rule, but said that if I had taken them home and returned with them the next day probably no one would have noticed.

Another funny story is the head archivist was 76 and, shall we say, not computer savvy. I was researching several mystery donations and she was amazed at all the information I found out about them. She said "How'd you get all that information?" and I said "Wikipedia."

[ErikV]

I'm a little confused as to why Kevin is taking any heat at all. Here it's become
clear that M+L has been running a scandalous operation. They have been found
guilty in a court of law and are being sentenced for their crimes. On the other hand,
Mr. Keating has been forthright in wanting to clear his name. He's emailed all of his
customers (I also received his email) explaining his side of the story. He's come on
the board and has answered all questions presented to him. Between M+L having
the reputation and court conviction of criminal activity, their word is worthless.
It would not surprise me that they did something like this behind a customers back.
In M+L "poisoning the well" along with having several prior dealings with Mr. Keating,
this is slam-dunk case for me. I believe Mr. Keating 100%.

ErikV

[Runscott]

Originally Posted by xplainer

Or, is there an understanding that family and friends are excluded from bidding on items. Not trying to hang him just want some others to verify the standard practice.

Seriously?

Those who cheat are never going to admit that cheating is standard practice.

[Spahn21]

Hi Al,

Thanks for sharing your concerns with me. Pardon my delay but I had to eat dinner with my family, put my children to bed, make a few phone calls, and do a few other things so I am only getting to your question now as I wanted to wait until I could give it the attention it deserves.

Yes, I did hire an attorney: William Coffield (of Berliner, Corcoran & Rowe, LLP Washington, DC, ). My attorney spoke directly with the FBI and multiple times with the U.S. Attorney's Office. My lawyer has advised me that I do not need a written statement because the U.S. Attorney's Office in charge of the case approved my statement last week. And I’m confident they would corroborate my statement again if you wish to contact them.

This entire episode began for me on Sunday, January 31. I had just returned from a family vacation and put our children to bed. It was about 10:30 at night when I was clearing through emails that had piled up while gone and came upon the one I have copied (verbatim) below from a friend who is also the owner of an auction company and here is what he wrote, in its entirety (save for his name at the end):

Hey Kevin,

Hope all is well with you. Information came out in Doug Allen's sentencing regarding shill bidding. Your name is on a spreadsheet that is circulating on the internet. It makes no sense that you would do something like this, you were probably just bidding. I wanted (you-sic) to be aware of this so you can correct it.

Needless to say, as someone who has NEVER shill bid in any auction, I was more than stunned at the information before me which I was doing my best to process. I spoke with my attorney the first thing the next morning and we immediately began fact-finding to determine what the list was, what purpose it served, and most importantly (to me, anyway): how was it that my name had been added as a “shill bidder”???

My lawyer started making phone calls while I researched the 38 lots. Fortunately, the Legendary website remains operational and I was able to find every lot in question in their on-line archives. While I did not remember seeing everything before (this was 7-8 years ago), I did recall some.

But what was apparent to me was that these were all lots I would have bid on if given a chance.

After that I went to the spreadsheet on Exhibit E and, using a “Control F” search, I consolidated all the entries of my name so that I could evaluate that data more easily.

With all the information on a single page, a few things jumped out at me and raised some additional questions:

1) At first, I did not know who “Historical Collectibles” were. But once I learned that it was a M-L “Shell company”, I realized that everything attributed to me was, in fact, owned by M-L or someone I knew to be a M-L employee, (with one possible exception—Lot 949 in the December 2008 auction);

2) How could I—or anyone—be accused of shill bidding on seven lots I had won—especially when all seven were owned by someone else?

3) How could anyone—in this case, me—be accused of shill bidding on two lots they did not own and for which the loss amount attributed to the shill bidding is ZERO? (see lots 107 & 426 from the August 2008 auction). What's the point on shill bidding something for no monetary gain???

4) The total “loss amount” assessed to the 38 lots comes to $20, 437, an average of $537.81/lot (and twelve of the lots were assigned a loss value of $100 or less each). But I had bid on hundreds of M-L lots during that same, two-year period, so why were these 38 lots selected for inclusion and the hundreds of others were not?

And besides knowing that I had never shill bid, I also knew that in all the discussions I have had with the FBI about the M-L and other investigations, I have never been questioned in any way to suggest that I was ever suspected of complicity in any unethical or criminal behavior. And I have never been asked to provide grand jury testimony, either.

Considering all this and the questions which I had derived from my spreadsheet analysis, I concluded that the only explanation for my inclusion on the list was that M-L had used my account somehow without my knowledge to execute some of its shilling activity--and that use was attributed to me when this list was prepared.

But that presumption was incorrect, and in one of my lawyer’s conversations with the government we were informed that the reason for my inclusion was simply that M-L had violated its own self-imposed code of conduct (COC) under paragraph 2, which prohibits authenticators and others who worked for the auction house from bidding on lots owned by M-L employees. As a stated policy, M-L was therefore obligated to prevent me from bidding on items they or their employees owned. And of course, because no one but M-L had access to information that would identify lot ownership, only M-L could enforce that policy—and, at least in my case, they chose not to do so and let me bid both unwittingly and in good faith on those lots.

Thus, for the purposes of assessing damages, which was the intent I am told, of Exhibit E, the effect of both a shill bid and a prohibited bid (as is the case of my bids) is the same to the lot winner because both bids will theoretically result in a higher end price for the winning bidder. And this list was prepared to look at the monetary damage assessment, a.k.a., "loss amounts." And, in my case, when compiling the list my name was co-mingled with others since no distinction was made between bids that were executed in good faith like mine (but were prohibited by M-L rules) and those that were actual shill bids.

These are the facts. I realize that they may not be enough to satisfy everyone but my goal is not to please everyone or to make everyone like me--I think I gave up on that goal back in kindergarten! My goal is simply to present the facts--convoluted as they are--in a coherent, logical way so that they may be readily understood. If I can achieve that, I am confident that fair-minded people will conclude that I did nothing wrong.

Again, thanks Al for asking your question—Kevin K.

[ElCabron]

Kevin,

Thanks for responding. Pretty much all of that makes sense to me, particularly this:

Originally Posted by Spahn21

Thus, for the purposes of assessing damages, which was the intent I am told, of Exhibit E, the effect of both a shill bid and a prohibited bid (as is the case of my bids) is the same to the lot winner because both bids will theoretically result in a higher end price for the winning bidder. And this list was prepared to look at the monetary damage assessment, a.k.a., "loss amounts." And, in my case, when compiling the list my name was co-mingled with others since no distinction was made between bids that were executed in good faith like mine (but were prohibited by M-L rules) and those that were actual shill bids.

So your inclusion on the list makes some sense for the purposes of assessing damages if they're saying your bids shouldn't have been allowed, thereby making the impact of your bids basically equivalent to a shill bid. But there really should have been an asterisk or something, clarifying that while your bids were (unknowingly to you) basically the equivalent to shill bids, YOU were not a shill bidder. It's unfortunate that the list was released the way it was because the list was not put together with the idea that it would go public. If it was, I think your inclusion would have been clarified. My sense is that it was more for the purposes of assessing damages, and more geared toward the specific targets of the case (Mastro and Allen) which is why your 38 lots would appear on the list. Whether or not you did anything wrong on those lots wasn't even the point. The point was that Allen and Mastro did. I imagine your case is pretty unique as far as the list goes, though. Those are pretty specific circumstances due to the authentication side of it.

This is the exact reason why anyone who feels they do not belong on the list should be loudly posting about it here. There's zero reason not to. In fact, it's the best possible way to clear your name. Unless you're guilty.

-Ryan

[Runscott]

Originally Posted by ElCabron

This is the exact reason why anyone who feels they do not belong on the list should be loudly posting about it here. There's zero reason not to. In fact, it's the best possible way to clear your name. Unless you're guilty.

-Ryan

Ryan, obviously this is just my personal opinion, but I don't think innocent people should have to explain their presence on that list - I certainly would NOT if my name were on it. The list was described in a thread here as a "list (of criminals)" - if everyone on the list is NOT a criminal, then the thread title should be changed. And if the document with the list actually describes people in the list as criminals, or even insinuates that they are criminals, when they are not, then whoever created or issued the list should be held accountable.

That's just my opinion - I understand yours as well. Perhaps if I saw my name on the list I would respond quickly in anger, just prior to asking Leon to end my subscription.