Attorney General Lockyer Joins in Antitrust Lawsuit Alleging Bid Rigging Scheme at Stamp Auctions
(SACRAMENTO) – Attorney General Bill Lockyer today announced that California is joining with New York and Maryland in an antitrust lawsuit against seven individuals from the United States, England, France and Holland who engaged in a conspiracy to rig bids at postage stamp auctions across the United States for nearly two decades.
The lawsuit alleges that the bid-rigging scheme cost stamp sellers at least $5 million and prevented full and open competition at stamp auctions. The lawsuit was filed against John Apfelbaum, Etienne de Cherisey, Davitt Felder, Anthony Feldman, Dana Okey, Stephen Osborne, and Kees Quirijns, together with several affiliated corporations. The complaint alleges that the defendants illegally conspired to restrain competition at postage stamp auctions held in New York City, Baltimore, San Francisco and elsewhere.
The complaint identifies 14 specific auctions in which the bid rigging ring operated, including a June 5-6, 1997, auction in San Francisco by the auction house Harmer-Schau. According to the lawsuit filed in the US District Court in New York, the ring held secret pre-auctions prior to public auctions to take bids for lots of postage stamps. To carry out the scheme, the ring members agreed that only the winner of the secret auction would bid at the public auction. The other ring members who withheld bids were compensated after the auction through an elaborate system of pay-offs made by the ring member who won the public bidding. The pay-offs to the co-conspirators typically totaled thousands of dollars per auction. The complaint notes that in one instance three members in a March 1997 secret auction bid more than $47,000 for a lot that a ring member subsequently purchased at auction for $26,000. On that lot alone, the ring deprived the seller of more than $21,000.
The lawsuit also alleges that stamp sellers and auctioneers received less for their stamps than they would have under competitive market conditions. The bid rigging enabled the ring members to accumulate millions of dollars in illegal profits and effectively stymied competition in the stamp market. The lawsuit seeks damages and restitution for those who were harmed by the conspiracy, as well as civil penalties, costs and attorneys' fees and injunctive relief to prevent any future anti-competitive conduct by the defendants. In 2000 alone, nearly $1 billion in stamps were sold to collectors and dealers in the U.S. More than $150 million of that total were sold at public auction.