Old News About Stamp Fraud

One of the ring members fled to the UK to avoid prosecution (he is still an active buyer).

In fact, most of them are still "active".

Bill, thank you for https://goscf.com/t/42988&whichpage=4#368767 ...

... but I still don't see it. Not your fault.

Since when is a seller entitled to a buyer's money? From an open pool?

No one prosecuted the colluding buyers of the Montgomery Bus Boycott, for example. (Maybe they would have liked to try ...)

No one is prosecuting the carbon divestment agitators, who are demanding that institutions un-buy selected investments.

The only construction that I have managed to date is if the oil companies had got together to boycott & bankrupt a railroad, thereby allowing them to buy that railroad, vertically integrate, target another railroad, etc. But that imagines that the railroads (the sellers) would have failed to see the threat, fashion a response, etc ... which seems unlike the railroads.

Buyer collusion (in an open bidding pool) is just not ringing my bell.

I hope you don't think less of me for that.

Cheers,

/s/ ikeyPikey

ikeyPikey,

You should look at it from an economics perspective. Do the buyers have market power? I.e., can they influence the market price? If they can, that is "bad." If not, then pooling to purchase is innocuous. An example of the latter would be IGA, where small grocers pool together to increase their ability to negotiate lower prices for their goods. But take the cocoa market, where three buyers essentially dominate the world wide market. If they got together and colluded to keep prices low, there would be clear antitrust implications.

Apparently, the antitrust authorities involved in the case under consideration had a persuasive case that the colluding resulted in anticompetitive pricing. A "buyer's cartel" can be just as bad as a cartel of sellers or producers.

remember also that the bid ring was operating in the 1980s into mid-1997 according to the charging documents. If I remember correctly they were mostly buying large lots & collections, rather than single stamps. Thus, it was mostly a wholesale rather than retail market, and this was before there were lots of internet dealers buying wholesale lots to break-down on ebay. I'm not sure the bid ring would be able to function today, but 20 years ago the market was different.

I just started stamp collecting from scratch after a 45 year hiatus and I agree with bookbndrbob (sorry if I have the name wrong). In 4 months of collecting I have purchased a reprint (and got my money back) and have seen forgeries at local auctions from the Italian States, Old German States, Cape of Good Hope, France, etc., as well as fakes and forgeries and stamps that have been repaired without being listed as so on "reputable" auction and dealer websites as well as on ebay. We all have to help one another to avoid being "taken", as many times the sellers have themselves been taken or simply don't have the knowledge or the time to investigate all the stamps they sell. I'm certain that the collectors from whose collections the fakes at my local auction came from thought they had the "Real McCoys", and the auctioneer and his staff didn't have the expertise or time to check every item. We must be wary! It kind of spoils the hobby, though, doesn't it?

I do not. We all, as human beings, have moral and ethical standards that we set for ourselves. It is only a question of where a line is drawn. Some people see no harm in things that others find repulsive or dishonest. If we started hating each other for differing standards, no one would talk to anyone else and we would live in a vacuum. Hopefully though, it would be nice (in a perfect world!) if on a philatelic discussion forum that we all agreed on standards affecting our hobby.

I couldn't agree more!

Ikey, how about this scenario? You own a house in a small town where the population remains about the same. You need to relocate in 2 months, so put your house up for sale. The 5 people in town who are in the market for a new house have gotten together and decided that they will have a lottery, and whoever wins gets to make an offer on the house at 1/2 to 3/4 of what it's really worth at the time.

With no other offers you decide to accept. Later you find that there was collusion.

Raymodj has hit the nail on the head. In his hypothetical (and in the Ring's all too real) scenario the "open pool" of potential buyers for a sale was manipulated in secret to be artificially small by collusion, thereby deflating the value of the item in question below its true supply-and-demand level on the open market. It was only in the subsequent closed and restricted market transaction that the item's true value was realized (to the detriment of the original seller).

raymodj, dudley: I respect the effort, but 5 buyers in a small town is exactly what you don't have at stamp auctions. A house in a small town has pretty much got to stay there. The catalogs of the major auction houses reach hundreds & hundreds of buyers around the world, not one of which has to move to the city where the auction took place to enjoy his purchases.

SPQR, blcjr: I respect the effort, but back in the day, all those brick'n'mortar stores (of which we so evocatively lament the passing) bought collections to break down into retail lots. There were thousands of motivated, cash-armed (encashed?) buyer-bidders for wholesale lots at public auctions. How six guys trying to avoid stepping on each others' toes could have all that much effect on the market is beyond me.

The collusion began in the early 1980s which, if memory serves, coincides with The Great Asset Bubble. These cases take years to initiate, investigate, etc. I can see a Grisham tale about rich people dabbling in the stamp market, and getting burned, and demanding that the authorities do something, and the authorities finding wrongdoing to prosecute (somebody to blame for something), even the crime they prosecuted was far-removed from the original complaint.

OTOH, I heard the Armenian Genocide being blamed on the Rothschilds this morning (WNYC!), so maybe I'm just in a mood.

Thank you all.

Cheers,

/s/ ikeyPikey

Ok, last link I will post on the subject, with the most information I've seen yet.

It's certainly interesting who turned them in!

http://archive.today/1w1Z

After an unsuccessful blackmail attempt.

.....and anyone who wants to know why Stolow was not charged for the crimes he allegedly committed needs to look no further than this article. The "rumor" was that NY Attorney General at that time (Eliot Spitzer) made the deal with GS that in return for his testimony about the "Ring", he would not be prosecuted for everything that (mostly) George Kopecky uncovered.

So anyone who believes it's possible to prosecute the ethically-challenged ebay sellers - particularly any who do not reside in this country - by getting a State Attorney General interested in the crimes - is just kidding themselves. If they didn't prosecute GS, they won't prosecute anybody. In fact, as others have pointed out in this forum, law enforcement generally regards philatelic crimes as too "small potatoes" to want to be bothered with.

A true story; many years ago I attempted to report a philatelic crime to the FBI who, I was told, would have jurisdiction in the case. The agent I spoke to, after explaining the crime to him (I think it involved about $5,000.) told me that they were not interested in such a case. When I persisted, he threatened me - "I am warning you, do not bother us again about this". Message was clearly received! Chalk up another victory for the bad guys. Some day, I'll tell the rest of the story, but the money was eventually recovered.......

Ikey - you miss the point. It's not about the effect it had on the market. It's about how the sellers lost money, and the auction houses, as a direct result of the collusion.

It's definitely sad the perpetrators can get away with this so blatantly. My guess is the FBI agent probably figured that $5K was less than it would cost to assign someone to the case. They also probably figure that there's not going to be much public outrage about a philatelic crime. Thinking about this from the perspective of a non-collector, the details of the case would make most people's eyes glaze over, for one. And then we're also talking about bilking hobbyists out of significant sums of money - money they seemed to think was appropriate to spend on a little piece of paper. We're not talking about a little old lady's life savings. I'm not trying to be callous or crass here, just trying think of how these things would play out in the minds of non-collectors and law enforcement agents. Unfortunately, it's just hard to get most people to care deeply about these things.