The U.S. Marshals Service are looking into a series of so-called 'Bernie Madoff' auctions in the Northeast, part of a national trend of auctioneers attempting to spark interest in their offerings by dropping Madoff's name.
New Jersey-based Northeast Galleries, Inc. recently held auctions in Rye, New York and Avon, Conn. and raised eyebrows when the auctioneer couldn't identify which items had actually belonged to the disgraced New York financier or victims of his Ponzi scheme. Additional auctions are planned this weekend in Fairfield and Westbrook, Conn.
The man running the sale, Antony Wellesley Briscoe, wouldn't tell a reporter for the Hartford Courant how many items came from the billionaire's estate or how they were acquired. When it came time for the live bidding, the Courant noted that not a single Madoff item was offered in the first hour.
Similar auctions have recently popped up across the Eastern U.S., many of them run by a company out of Atlanta called Southern Star Auctioneers.
The Better Business Bureau has warned prospective bidders of a possible scam, and the attorney general's office of more than one state has taken an interest in the questionable Madoff auctions as well. Connecticut Attorney General Richard Blumenthal announced this week that his office is actively investigating Northeast Galleries.
Now the U.S. Marshals are getting involved. "We're looking into it ourselves," said Supervisory Deputy U.S. Marshal Roland Ubaldo.
"We've only had one auction so far and in that auction, 200 items were from the Bernard Madoff estate," said Ubaldo. "You really have to be cautious about these auctions that are popping up."
Conn. Attorney General Subpoenas Auctioneer's Records
He said it's possible, but not likely, that an auctioneer had purchased Madoff items from the Marshals with plans to resell them.
"There's no true way of telling," he said. "We would obviously caution anybody that's purchasing or bidding on any of these so-called Madoff items."
In the cities were its "Madoff" auctions are held, Northeast Galleries takes out advertisements in local newspapers. On the Friday before the Avon sale, they placed an ad on page A11 of the Courant, which read: "One Day Only PUBLIC AUCTION Personal items belonging to Ruth & Bernie Madoff."
According to the Courant, the ad said the sale would include "a huge portfolio of investment grade art" from a person "whose family was victimized by the MADOFF PONZI SCAM."
Connecticut Attorney General Richard Blumenthal is also investigating Northeast Galleries, Inc. Blumenthal's staff is contacting law enforcement agencies across the country, in hopes of gathering additional information on the auction company and any affiliated ventures.
"Much like Madoff's Ponzi scheme," said Blumenthal in a statement, "there's a danger of a scam built on a scam. In the spirit of the Madoff scandal, these auctions appear to blur the truth and dubiously deceive consumers. Auction goers deserve details and proof prior to purchase -- not after it's too late."
Blumenthal addressed his concerns in a letter sent to the auctioneer earlier this week. He asked the company to provide him with documentation proving that items previously advertised or sold were actually owned by Madoff or his victims.
This week, the Connecticut Department of Consumer Protection authorized Blumenthal's office to subpoena records from Northeast Galleries and any associated companies. Commissioner Jerry Farrell, Jr. said the company's advertisements raise serious questions about whether they're "meant to trick customers into believing that items are actually from Bernard Madoff's financial victims, when in fact, they may not be."
"Invoking the name of a famous fraud criminal to pitch bogus items from fictitious victims would certainly be the height of arrogance and public deception," said Farrell in a press release.
Additional Companies Tied To So-called 'Madoff Auctions'
Artworks on display at the auction in Avon were labeled "U.S. Auction Corp." and included a Leonia, New Jersey address, the Courant reported.
The national Better Business Bureau and its offices in New York, New Jersey, and Conn. said they haven't received any complaints about a U.S. Auction Corp. or Northeast Galleries, Inc.
Calls to the offices of Northeast Galleries, Inc. were not returned by press time. An e-mail sent to the address found on the company Web site was returned as undeliverable.
When ABC News tried to reach Briscoe by phone numbers listed for him, messages said the numbers had been disconnected. A phone number for his son and business partner, Dominic Antiny Briscoe, was also inactive.
Similar auctions have been held across the Eastern U.S., including those arranged by Atlanta-based Southern Star Auctioneers and affiliated companies.
Like Northeast Galleries, the company uses newspaper advertisements to promote its auctions. The ads are stickers slapped on the front page of the paper, and include the claim that the auction is "Due to the Losses Caused by Bernie Madoff," as well as a list of the luxury items for sale, like artwork by Peter Max, Salvador Dali, and Norman Rockwell, Rolex watches and other "flashy items."
In garbled English, the ad indicates that the items were "duly instructed by Millionaire's estate as well as other prominent traders" and says "Seized assets and general order merchandise will be auctioned off to the highest bidder to recover losses from Ponzi scheme." At the bottom, however, in fine print, it notes "Items available for sale did not belong to Bernie Madoff."
"If a business advertises itself as a 'Bernie Madoff Auction,' but doesn't have any Bernie Madoff items, then I would call that a scam," Alison Southwick, national media relations manager for the Better Business Bureau, told ABC News.
"The fine print doesn't always get you off the hook," said Southwick. "If enough people are getting misled, the fine print is too fine."