SBJ/Nov. 8-14, 2010/This Week's Issue
Court case leaves collectors with questions
Published November 8, 2010
Ever since news broke that marketing agent Mike Ornstein had pleaded guilty to two felonies, admitting he and others conspired to scalp Super Bowl tickets, NFL insiders have been wondering whether Ornstein will name names to federal law enforcement authorities.
But that is just one of the mysteries surrounding the case. Although Ornstein’s admissions regarding Super Bowl tickets grabbed the most headlines, he also admitted that he sold an untold number of NFL jerseys that were falsely advertised as worn by NFL players in NFL games.
Inside the world of sports memorabilia collectors, the burning question is, What happened to those jerseys?
Ornstein is scheduled to be sentenced Nov. 17 in a federal courtroom in Cleveland, where he faces a maximum of 25 years in prison after pleading guilty to one count of mail fraud and one count of conspiracy. Ornstein originally pleaded guilty in June, although the news of his pleas was not reported until October. He had been scheduled to be sentenced Jan. 24, but his attorney asked that sentencing be moved up to this month, although it is not clear why and his attorney did not return phone calls.
According to the government’s bill of information in the case, during the years 2000 through 2003 Ornstein ordered NFL jerseys multiple times from Ripon Athletic, a subcontractor of Reebok, which has the apparel license from the NFL, and then sold them at a profit of more than $100,000. The jerseys, the exact number of which is unclear, were dispersed to a number of outlets, including to an unnamed sports memorabilia dealer and to be sold under consignment by an unnamed Internet site.Additionally some of the jerseys were sold to unnamed “others” and other jerseys were cut up and “affixed to trading cards, which trading cards were then sold purporting to contain pieces of NFL game-worn jerseys,” according to the bill of information. It did not identify the outlets that sold the jerseys.
A spokesman for the U.S. attorney’s office in Cleveland, which is prosecuting the case, said that both the Super Bowl tickets and NFL jerseys investigations continue, but he has been mum on the details of those probes.
It is not clear exactly how many jerseys Ornstein sold in the years 2000 through 2003 and whether those jerseys are in hobbyists’ collections or still circulating on the sports memorabilia market, the size of which has been estimated at $1 billion in the U.S.
Rich Mueller, editor of industry publication Sports Collectors Daily, wrote a story on this subject Oct. 6, days after news broke that Ornstein had pleaded guilty in the case.
“People are waiting to hear a little bit more about what happened to those jerseys,” Mueller told SportsBusiness Journal, adding “I am surprised that is not part of the court documents.”
Sports collecting has been hit with its share of scandals in the last several years. As reported by the New York Daily News in August, at least one FBI agent was at the National Sports Collectors Convention for the third year in a row. It’s not clear whether the Ornstein investigation is part of that federal probe or a different one.
Mueller said that what people in the hobby want to know is how many jerseys were sold through auction houses and how many were cut into pieces and sold on trading cards.
“The trading card industry is driven now by the memorabilia cards and autographed cards and relic cards,” Mueller said. Cards with pieces of game-worn jerseys “are the prizes in the packs people are looking for. Those are what drive the industry. They drive today’s card collector,” he said.
In the years 2000 through 2003, a number of companies big and small sold trading cards containing pieces of NFL jerseys. SportsBusiness Journal contacted the three largest sports trading card companies, Topps, Upper Deck, and Panini, asking whether they bought jerseys from Ornstein and for any other information the companies knew about the case.
Warren Friss, a vice president at Topps, declined comment.
Jason Howarth, vice president of marketing at trading card company Panini, formerly known as Donruss, said in an e-mail, “Neither Panini nor any of its predecessors have purchased jerseys from Michael Ornstein.”
Michael Bernstein, general counsel for Upper Deck, said the company never bought jerseys from Ornstein. Even so, he added, the company is concerned about the case and its potential impact on the sports collecting industry.
“The memorabilia and trading card industry is an industry that is built on delivering authentic autographs and memorabilia to the collecting public,” Bernstein said in an e-mail. “Unfortunately, incidents like this serve to undermine the principals the industry is founded on.”
Denver attorney Marshall Fogel, whose sports memorabilia collection is reported to be worth millions and who is trying to start a trade association to establish standards for authenticating sports memorabilia, agrees. Fogel said he hopes authorities recover and disclose the falsely advertised jerseys to whoever may have purchased them.
“It is important to do the best job possible to recover fraudulent items so they don’t get resold by innocent parties to other innocent parties,” Fogel said.
“And secondly … it’s important because we want to protect the reputation of the industry.”
None of the sports collector experts interviewed for this article were aware of the federal authorities notifying anyone that they were in receipt of falsely advertised jerseys. But one sports collector thinks he may know how about 20 NFL jerseys were sold more than seven years ago.
Guy Hankel, a well-known collector of Green Bay Packers game-used jerseys who writes a blog on sports memorabilia, read about Ornstein’s case in Sports Collectors Daily. Specifically, he was interested in a line in that story that said Ornstein had sold 20 NFL jerseys for more than $30,000.
That made Hankel recall an auction from years back, which had stuck in his mind for a couple of reasons. For one thing, a Brett Favre Packers jersey went for the top price, $3,699.93. Also, the jerseys were given certificates of authenticity by NFL Properties, a division of the NFL.
“I personally have never seen a group of jerseys sold by an auction house with NFL Properties COAs previously or since then,” Hankel said.
Hankel dug out the auction book, which dated back to a 2003 auction by Las Vegas-based American Memorabilia, an auction house that caters to high-end collectors. Hankel, a serious collector who keeps detailed records, had also printed out the prices realized in that auction — as published on American Memorabilia’s website — and added them up. The total came to $30,942.23.
That’s almost the exact amount that the U.S. attorney’s office said the 20 jerseys in the Ornstein case brought in. Ornstein and others “sold approximately 20 of the falsely-advertised game-worn jerseys for approximately $30,942.25,” according to the bill of information.
The jerseys were sold between Feb. 1 and June 5, 2003, according to the bill of information in the case. The American Memorabilia auction concluded March 6, 2003.
SportsBusiness Journal attempted numerous times to contact American Memorabilia, which was not implicated in the Ornstein case. A woman who identified herself only as “Kieta” and said she was the CEO of the Las Vegas auction house took down information and questions but did not call back. Later phone calls and e-mails were not returned. On its website, the company lists Kieta as vice president/CEO and Victor Moreno as founder, president and CEO. Ornstein, asked about the American Memorabilia auction, cut an interview short. “I don’t want to talk to you anymore,” he said.
SportsBusiness Journal e-mailed a list of six questions to the NFL about the jerseys, asking, among other things, whether NFL Properties had ever issued COAs; whether the jerseys in the 2003 American Memorabilia auction were the jerseys referred to in the Ornstein case; and whether there was any NFL investigation or subsequent action linked to the issuance of COAs.
NFL senior vice president Greg Aiello wrote back, “These matters were investigated and resolved many years ago.”
Two sources said that the NFL did investigate a matter involving COAs and that at least one person was punished. Asked to confirm or deny this, Aiello declined to comment.
Mike Tobin, spokesman for the U.S. attorney’s office in Cleveland, would not comment on whether the jerseys sold in the March 2003 auction were the same as the ones listed in the court documents. He also would not say whether buyers of NFL jerseys that court documents said were falsely advertised as game-worn had been told the items they bought were fakes.
“While federal guidelines call for victims to be notified if and when they are identifiable, we don’t comment on the status of that to the public,” Tobin said in an e-mail.
It is not clear if or when the U.S. attorney will notify people who bought the falsely advertised jerseys referred to in the Ornstein case, but Hankel is among the collectors who think they should do so.
“Even if collectors discover fraudulent or misrepresented items that sold at auction years ago, it is still very much worth it to publicize these findings, since most collectors want to know if a piece they have is a fake,” Hankel said. “We need to stop ‘bad’ jerseys from continuously circulating through the hobby, being bought and sold over and over.”