Mastro Auctions: Looking for Former Employees

[Aquarian Sports Cards]

Originally Posted by Yoda

I would have to believe that the public shame, embarrassment and ruined reputations must be much worse than the prison time served by these three.

I would agree to a point, but if you' are getting out of prison and immediately being hired by a leader in the very industry in which you committed your crime, where's the shame, embarrassment and ruined reputation?

[jerrys]

The document I referred to was not meant for the public but for the FBI report. The FBI have difference criteria for evidence that is applied which enables them to prove a dollar loss amount to set a sentencing for a crime. Their files must be 100% complete and accurate, not up for interpretation and favorable to the defendant. Yes Eric the actual dollar amount is much higher than stated. And again, this only is for the period 2007 to 2009.

My point of the post was that non-Mastro employee consignors of lots in those auctions found a partner to shill bid his/her lots. These partners are just as guilty of fraud as the Mastro family but have escaped exposure or penalty.

[egbeachley]

Originally Posted by jerrys

The document I referred to was not meant for the public but for the FBI report. The FBI have difference criteria for evidence that is applied which enables them to prove a dollar loss amount to set a sentencing for a crime. Their files must be 100% complete and accurate, not up for interpretation and favorable to the defendant. Yes Eric the actual dollar amount is much higher than stated. And again, this only is for the period 2007 to 2009.

My point of the post was that non-Mastro employee consignors of lots in those auctions found a partner to shill bid his/her lots. These partners are just as guilty of fraud as the Mastro family but have escaped exposure or penalty.

I have seen some of the governments calculations on the Exhibits and they are not only incorrect,they are blatantly stupid. Far from 100% accurate as you imagine.

A couple shill bids placed for $100 each at an early level with frequent bidding, and then a final shill of $500 placed when the price was 5x higher, was calculated as a $700 loss when the first 2 bids clearly had no effect. But even worse calculation was when a single shill was placed early and the item sold for much higher, they said the loss was the full amount paid. I believe one item that sold for $4,800 was identified as a $4,500 loss to the victim.

I’m not trying to minimize the crime, and certainly the missing years are important, but mis-stating the numbers raises doubt. They didn’t need to inflate them.

[Peter_Spaeth]

Not at all to defend, but just on the question of dollar loss, in any given case I would think it's difficult to truly know the effect of the shill bids, because unless they were placed at the very end, you don't know what the course of legitimate bidding would have been but for the shills. Just by way of example, suppose the high bidder wins for 1000, but if you take out the shills his bid would have been 800. You can't really say that's a loss of 200, because if the high bid had showed at 800, not 1000, someone else might have bid 900.

Indeed, the government did not pursue restitution, perhaps because of difficulties of calculation.

[Kenny Cole]

Originally Posted by Peter_Spaeth

Not at all to defend, but just on the question of dollar loss, in any given case I would think it's difficult to truly know the effect of the shill bids, because unless they were placed at the very end, you don't know what the course of legitimate bidding would have been but for the shills. Just by way of example, suppose the high bidder wins for 1000, but if you take out the shills his bid would have been 800. You can't really say that's a loss of 200, because if the high bid had showed at 800, not 1000, someone else might have bid 900.

Indeed, the government did not pursue restitution, perhaps because of difficulties of calculation.

But "someone else" didn't have the opportunity, or the ability, to bid at that level because a fraudulent bid took that ability away. Mastro, et al., created whatever uncertainty exists regarding the number. So, IMO, they get to eat it.

Civilly, that would not not be a defense at all, at least not where I practice. I encounter similar claims pretty frequently. Once the fact of damage is shown, if the defendant's actions created the uncertainty as to the amount, the jury decides what the number is based upon the best evidence available. The "speculation" defense goes away. The bad guys don't get to benefit from the uncertainty they created by their own fraud. I don't know how it works in the criminal arena, but that is an issue -- probably one of the few -- that I have never lost either in state or federal court, in 32 years of practice.

[Peter_Spaeth]

Maybe Kenny, I'd have to think about that although my general understanding is that the plaintiff who has the burden of proof has to have a non-speculative damages theory and simply assuming there wouldn't have been any other bids in the but-for world of no shill bids seems awfully speculative to me. In any event, mine was less an observation about the mechanics of an actual trial than an observation that just academically speaking it's not an accurate measure of loss just to take the high bid and remove the shills.

[Kenny Cole]

Peter,

"Viewing this evidence in the light most favorable to the plaintiff, we find that there was substantial evidence reasonably tending to support the jury's verdict. Mr. Musgrove had extensive experience in the travel business and a foundation was properly laid for his testimony relating to the value of Rainbow's good will. Indeed, appellants did not object to Mr. Musgrove's testimony and conceded that he was qualified to express an opinion on the issue of good will. Appellants argue nonetheless that the amount of damages to good will was so uncertain as to be speculative. The rule in Oklahoma, however, is that the prohibition against recovery of damages because the loss is uncertain or too speculative in nature applies to the fact of damages, not to the amount. Martin v. Griffin Television, Inc., 549 P.2d 85, 92 (Okla.1976). “Where it is made to appear that some loss has been suffered, it is proper to let the jury determine what the loss is from the best evidence the nature of the case admits.” Hardesty v. Andro Corporation–Webster Division, 555 P.2d 1030 (Okla.1976). Given the nature of good will, which is an intangible asset dependant upon a business' reputation, it was proper for the district court in this case to submit the question of damages to good will to the jury. See Westric Battery Co. v. Standard Electric Co., Inc., 522 F.2d 986, 987 n. 2 (10th Cir.1975) (“The amount cannot and hence need not be proven with absolute certainty.”). See also Kestenbaum v. Falstaff Brewing Corp., 514 F.2d 690, 698 (5th Cir.1975), cert. denied, 424 U.S. 943, 96 S.Ct. 1412, 47 L.Ed.2d 349 (“The wrongdoer may not complain of inexactness where his actions preclude precise computation to the extent of the injury.”)."

Rainbow Travel Serv., Inc. v. Hilton Hotels Corp., 896 F.2d 1233, 1239–40 (10th Cir. 1990) (emphasis added).

[egbeachley]

And, I might add, as was pointed out to me in a PM, even a solitary shill bid placed to raise the price to the “hidden” maximum bid assumes that there is a loss to the victim 100% of the time when in some instances someone else may have stepped in with a legitimate bid. No modeling percentages were taken into consideration.