Bergen County prosecutor used false document to sell bogus memorabilia

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HACKENSACK, N.J. (PIX11) -- The Bergen County Prosecutor ripped off unsuspecting bidders by selling them phony autographed sports memorabilia at two auctions in May and September.

A six-month investigation by PIX11 found that Prosecutor John Molinelli's office made false statements in official documents filed with the County Board of Freeholders in order to hire Molinelli's chosen authenticator.  That authenticator, Drew Max, was retained with a $10,000 no bid contract.  He then gave his stamp of authenticity to hundreds of autographs on items that previously had been rejected by reputable authenticators. Molinelli never revealed the previous rejections to bidders at his auctions.

Among the bidders were Mary Byrne and John Slokovitz, big Yankee fans who got married at Yankee Stadium in August.  They spent about $2,500 at the auction, money they say they could have used to help start their married life. They also say friends paid for some auction items as wedding gifts.

"It was kind of like a once in a lifetime opportunity," Mary told us. "Now we have a Mickey Mantle baseball to add to our collection," Mary said, referring to an autographed baseball for which she and John paid $250 at the May auction. At the time she was unaware that the baseball she had just won at auction was identified by two top authenticators as a remnant from a well-publicized federal bust of a huge forgery ring.  It was just one of hundreds of autographs on memorabilia divided into 259 lots in the May auction.

It's a long, twisted trail of events that led to this year's auctions.

THE BUST

The trail began with a rogue drug store owner, William Stracher. Stracher was making money selling stolen drug samples through his Paterson store. In an apparent attempt to launder the loot, he bought a substantial amount of sports memorabilia, including autographed items. In July 2007, he contacted Watchung, NJ auction house owner Rob Lifson to sell his items.

Lifson's company, Robert Edward Auctions, handles high end sports memorabilia. Lifson said Stracher had previously had his collection assessed by the firm PSA when it was based in New Jersey.  In 2007 Lifson retained James Spence Authentication, based in Parsippany, to examine Stracher's material at Stracher's home in Vermont.

According to court papers, there were more than 40,000 items!

SEE Appellate opinion with statement of facts

Spence divided the items between those that he deemed authentic and those that were either forgeries or of little value.  Lifson took the items that passed authentication for his annual auction (now a bi-annual event for his company).  The other items were left behind in Vermont.

In November 2007, Stracher was arrested. The remaining memorabilia was seized.  At the time, Prosecutor Molinelli showed it off for the media and said the seized memorabilia could be worth a lot of money.

Lifson read about the seizure and knew Molinelli was wrong. "We had reason to believe there were grave authentication issues," Lifson told us."This was all the material that we'd rejected."

So Lifson called the prosecutor's office to let them know that he had Stracher's bona fide material and was including it in his spring 2008 auction. "They were not just on notice. They were grateful," Lifson said.

THE WARNING

But any gratitude faded. Lifson and Molinelli butted heads in litigation over the rights to sell the verified items in Lifson's possession. During that litigation, Lifson filed a court statement.  Paragraph 50 of his statement made it crystal clear to the prosecutor that the arrest of William Stracher had netted him a bunch of leftover forgeries.  Lifson's statement said, “With one exception, the material the State had seized had been rejected as not being authentic, was not genuine and had no value.”

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Lifson won his litigation with Molinelli and auctioned off the bona fide material in May 2008. He turned over more than $315,000 of the proceeds to the county.  Lifson says he retained more than $87,000 in commission and to cover all his expenses.

So everything Molinelli seized from William Stracher.-the leftovers, the fakes- sat in the prosecutor’s evidence locker until Molinelli hatched a plan to clear them out.

THE PLAN

Molinelli told PIX11 he could not simply destroy any forgeries.  He couldn't just go on someone else's word.  He needed to have his own authentication done.  And here's where things get really interesting.

On January 2, 2013, one of Molinelli's assistants contacted the president of respected authentication company PSA/DNA, based in Santa Ana, CA.  According to calendar notes retained by PSA/DNA, on January 3, 2013, Deputy Executive Assistant Prosecutor David Nathanson followed up by emailing the company and cc'ing the prosecutor. Nathanson followed up again with a phone call on January 7th and scheduled a conference call for January 10th with himself, Prosecutor Molinelli and PSA/DNA President Joe Orlando.  On that call, Orlando says he gave advice about the business and suggested several other companies that Molinelli might contact for more information.  He does not recall which particular companies he mentioned.

After this, the trail of the auction plan gets murky. Molinelli did not tell PIX11 the other companies contacted.  But he did claim in an interview last month that one accompany in Texas was especially helpful to his office. Documents filed with Bergen County say Molinelli's office contacted two auction houses, SCP and Heritage Auctions. Heritage is based in Dallas.

Molinelli did tell PIX11 that he wanted an authenticator who would not also insist on auctioning the material after authenticating it. The idea was to avoid any conflict of interest. He claimed to us that it was standard in the industry for auction houses to do both ends of the transaction, the authentication and the auctioning.  He said that made it difficult to find someone to handle his business.  Besides, the county already had a contract with a local auction company.

In published reports, the prosecutor said his problem was solved only when he saw the History Channel program "Pawn Stars" use Las Vegas-based authenticator Drew Max. He claims to have met with Max and found him suitable for the job.  "Drew Max was a company that Iiked," Molinelli told us.  "They do not sell anything that they authenticate…I reviewed his credentials."

Molinelli agreed to pay Max's company, Authentic Autographs Unlimited, $10,000 to store and authenticate the material over two months in Las Vegas.  Molinelli told us he only wanted Max to approve items when he was 100% certain about their authenticity.

Molinelli said he had his people check out Max. And in October 2013, Molinelli's deputy, Frank Puccio filed a memorandum with the county to get the authority and funding to retain Max.

FALSE STATEMENTS IN OFFICIAL DOCUMENT

The memorandum seeks to justify awarding Max the contract without competitive bidding.  It recounts Molinelli's claim that his office could not find another suitable authenticator because all the companies it contacted also wanted to auction off the material.  PIX11's investigation found the memorandum riddled with falsehoods.

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The document claims PSA/DNA's Joe Orlando turned down the prosecutor's business because the value was too little and because it could not also auction off the items in addition to authenticating them. But Orlando told us that's not true on either count.

After reading the memorandum Orlando said, “I find it disturbing because the very first sentence is a lie. The next sentence is a lie..."It says in the document that I refused to do business because we would need to not only authenticate the items but then to also auction them. We don't have an auction division at PSA and we never have."

Orlando says his company could have done just  the authentication job…and for about half the price Molinelli wound up paying Drew Max. And he notes that the value of the material was no object.  PSA/DNA has no limit on the number of items or the minimum value of items it will examine. The big difference, had the prosecutor used PSA/DNA to authenticate the items he wanted to sell, he wouldn't have had all that material to auction off as authentic.

The prosecutor's memorandum also claims two other companies it spoke with, Heritage Auctions, and SCP Auctions in Laguna Niguel, CA insisted on both authenticating and then auctioning off the items.  The memorandum claims the prosecutor's office received its information about the companies' insistence on performing the dual functions from two men: Clay Hill, SCPs West Coast Director of Acquisitions and Rob Rosen, Heritage Auction's VP of Private Sales and Consignments.

But PIX11 spoke within both men.

Rob Rosen said, "It's not true," and there was no such conversation with the prosecutor's office. He pointed out that Heritage is only an auction house before telling us to contact Heritage's spokesman for anything more.

Clay Hill couldn't recall having a conversation with Molinelli's office. Then over the phone, we read him the memo's characterization of the chat the prosecutor's office supposedly had with him. "No, that's not true. None of it is true," he said. Hill pointed out that SCP is an auction house and, like Heritage, does not do its own authentication.  Instead, as is the case with most major sports memorabilia auction houses, it uses independent outside authenticators.  Hill said SCP uses the authentication services of PSA/DNA and JSA.  So does Heritage.

 THE AUCTIONS

Generally in the auction industry, the auction house is responsible for getting the third-party outside authenticator.  Caspert Auctioneers of Englewood Cliffs has a contract to handle Bergen County auctions. But Caspert has no expertise in handling memorabilia. So when the prosecutor’s office told them it had already taken care of the authentication, there’s was no reason to question it. There’s no indication Caspert knew anything about Drew Max’s background or that there were any authenticity issues with items being auctioned.

The prosecutor's plans to auction off the items received publicity in newspapers, on the web and with some TV coverage. In May of this year, he held an auction at the Bergen County Law and Public Safety Institute in Mahwah.NorthJersey.com covered the "brisk" bidding live online.

Several dozen bidders appeared in person. Others bid online. Mary Byrne and John Slokovitz were excited to be there.  The big sports fans say they got a little carried away and spent more than they were planning to spend. They saw the auction as an opportunity and had no reason to doubt the authenticity of their purchases.

"It sounded legit enough coming from the prosecutor's office that we knew we'd be able to trust them," John said. Mary echoed his sense that they thought the auction was reliable and told us, "We got a certificate of authenticity and we were excited to have it."

The certificate of authenticity came from Drew Max.  Successful bidders for autographed items received certificates for the items he'd authenticated.  Prosecutor Molinelli attended the auction.  NorthJersey.com published a photo of him there as part of its live web coverage of the event.

Mary and John told us they witnessed he prosecutor personally negotiating with a bidder to sell off one of the higher priced items.  Material ranging from baseball cards to bats, balls and signed letters and prints went for prices ranging from $10 into the thousands.

But there might have been a big red flag had bidders known that items they were buying had been rejected by other authenticators years before Drew Max gave his ok.  What warning did the prosecutor give them? “He never told anybody that,” according to Mary Byrne.

Molinelli told PIX11 the previous authentications that rejected items he subsequently auctioned off are not relevant.  In fact, he went further. “That did not happen. They had not been rejected…The items that were just sold are authentic,” Molinelli maintained.

According to Molinelli, the May auction netted about $50,000 for his seized asset discretionary fund. He used those funds over the years to shower millions on favored government projects in Bergen County.  Items that went unsold in May were put up for auction again in September at a warehouse in South Hackensack.

DREW MAX RESPONSE

The prosecutor defends the hiring of Drew Max to do his authentication.  Molinelli cited intense competition in the industry in maintaining his support for Max. “This is a subjective science. It’s as good as the person who’s looking at it…I stand by my guy.”

But Steve Cyrkin, a leader in the fight against autograph fraud, has a much different opinion of Max: "He is up there with the worst authenticators out there."

Cyrkin runs the web site Autograph Magazine Live, popular among serious autograph collectors and professionals in the authentication and auction business.

He's puzzled by the prosecutor's actions. “He went through Drew Max  who’s well known in the industry as being an unreliable authenticator.”

Auction house owner Rob Lifson, thinks he knows the reason behind Molinelli's move. "They needed to have someone to authenticate the material that would be sold if any and they chose Drew Max."

PIX11 checked with six of the major sports memorabilia auction houses:  Heritage Auctions, SCP, Lelands, Hunt, Huggins & Scott and RR Auction. None accepts Drew Max certificates of authenticity as a basis for including items in its auctions. When we asked Molinelli about this he said, "I don't know why you say that no one accepts Drew Max...I dispute the accuracy of what you're saying.I don't think you're right."

We wanted to see what Drew Max had to say about all this.  PIX11 contacted his business partner, Marc Goldman who also signed the contracts with Molinelli on behalf of the company, Authentic Autographs Unlimited. Goldman said he'd pass along our questions to Max but warned us that Drew Max generally doesn't respond to media inquiries because, as Goldman put it, such situations tend to "bite us on the butt."  After three such inquiries aimed at Max, we asked Goldman to respond to the specific questions we'd presented.  His response did not answer any of them, speaking only in generalities such as "autograph authentication is not an exact science" and noting that authenticators may have diverging opinions.

OBVIOUS FAKES

So PIX 11 obtained opinions on some of the items Mary and John purchased at the prosecutor's auctions.  We chose items autographed by three men whose signatures are among the most popular: Mickey Mantle, Ted Williams and Joe DiMaggio. We retained the services of the two companies whose assessments are almost universally accepted by major sports memorabilia auction houses: PSA/DNA and its chief authenticator Steve Grad as well as JSA and its head Jim Spence.

Spence previously had examined the items for Rob Lifson but he doesn't recall most of them, especially the common items we sent for his review. Spence told us he also had seven other authenticators in his business take a look at the three items: a baseball signed by Mickey Mantle, a baseball with a Ted Williams autograph on the sweet spot as the main signature and a print signed by Joe DiMaggio.

The authenticators' independent opinions were identical.

On the Mantle ball, Spence said, “That particular ball is deemed non-authentic.”  Grad's take was, "It’s not really signed, it’s drawn. And it’s done very poorly.”

Mary's prized ball is a fake.

On the Ted Williams autograph, Grad said, “Within literally less than a second it was obvious that that this was not Ted Williams’ signature.”  Here's just one example he cited of what was off about the signature.

“You have the open “D”. We go up to a valid Ted Williams signature which I have right here up on my screen.” The D, you have a nice buttonhook in here.”  Spence concurs.

The big point, though, is that both men say these forgeries would be easy for any authenticator to spot. They are remnants of "Operation Bullpen," a huge forgery ring broken up by the FBI in 1999.  There's even a book written about the operation. Spence notes the shrink-wrap on the Mantle baseball is a good tipoff.  The ring often wrapped the balls in shrink wrap to prevent smudging during transport.

“These were signed by the thousands, tens of thousands,” Spence told us.  Grad says he's seen hundreds of these balls and they come into his office every day. “Any reputable authentication firm would never put their name behind these.”

SOME AUTHENTIC SIGNATURES

Interestingly, both Spence and Grad agree that the Joe DiMaggio signature on a print of his image is authentic.  Its value is pegged between $150 - $250.  How could that be that there was even one authentic item, given that Lifson's 2008 court statement said, "with one exception, the material the State had seized had been rejected as not being authentic, was not genuine and had no value?”

Well, Lifson told us the phrase "no value" means no value for him.  There were a number of authentic low value items left behind.  These were things that would have cost Lifson more to authenticate and prepare for auction than he could have made by selling them, even if packaged together.  Some might have been worth just a few dollars. It's possible the DiMaggio print could be one of these items.  It's also possible that drug store owner Stracher acquired this print between the time Lifson had the authentication done on his items and the time Stracher got busted. But too much time has elapsed for Lifson to know for sure.

There are more signatures on the baseball with Ted Williams' signature as the centerpiece. They are those of Hall of Famers Hank Aaron, Willie Mays, Frank Robinson, Ernie Banks and Stan Musial.  Again, the authenticators agree those signatures are real.  But Grad and Spence say the ball has at most, nominal value.  After all, despite the Hall of Famers' signatures, the centerpiece of the ball is big bold Ted Williams forgery.  That makes it hard to sell and impossible to sell to serious collectors.

But Prosecutor Molinelli's auction made no distinctions among the signatures.  Drew Max authenticated the entire baseball as is.

MOLINELLI BOLTS

The prosecutor told us he stands behind his authentication and his chosen authenticator, Drew Max. “The items that were just sold are authentic,” he maintained when we spoke with him outside the Bergen County Justice Center. “If you don’t think it’s authentic , if you don’t want to trust Drew Max then don’t come and bid on it.”

But John Slokovitz, who gave the prosecutor's auction $2500 of his money, doesn't see it that way. “The prosecutor is the one who sold the items based on the fact they were authentic.”

Molinelli says Drew Max authenticated only a limited number of items, about 25% of the material the prosecutor had seized. He told PIX11 the rest were destroyed.

The auction brought in about $50,000 for the prosecutor’s seized asset fund, a fund he’s used to shower millions on preferred projects in Bergen County.

“What’s an extra $50,000 to them other than ripping off hard working people. It is not right.,” Mary Byrne told us. She and her husband John also can’t understand why they weren't told authenticators had previously rejected items they were bidding on.  That would have been a big red flag and they could have saved a lot of money.

We tried to ask Molinelli why he ignored the warning he received from Rob Lifson in their 2008 litigation.  But he gave us an odd response

“The lawsuit had nothing to do with the authentication of what we sold, " the prosecutor said. "Let me repeat that…This lawsuit had nothing to do with what we sold.”

So we tried to get him to read Rob Lifson's statement back in 2008, the statement that clearly warned the prosecutor there were problems with the material he'd seized:

“…with one exception, the material the State had seized had been rejected as not being authentic, was not genuine and had no value…”

We wanted to ask why he ignored the warning, regardless of Drew Max's work. But rather than read the crucial portion of the statement, the prosecutor suddenly bolted from our camera  for the safety of his office inside he Bergen County Justice Center.

We do want to be clear. The prosecutor’s auction did include some legitimate items.  And even the best authenticators can make mistakes.

But it’s no mistake that the Bergen County Prosecutor never revealed that items he sold to unsuspecting bidders had failed previous authentication. And it’s no mistake the prosecutor’s office said things that aren’t true in an official document in order to get a no bid contract to get his items authenticated.

Why? That we don't know. Perhaps the New Jersey Attorney General’s office will see fit to inquire.

PART ONE: Prosecutor auctions off bogus sports memorabilia

PART THREE: NJ prosecutor's memorabilia defense just raises more questions