When the Feds seize property from convicted criminals and sell it off, can you bag a bargain?
The answer is yes!
You can get some great deals at government auctions. It's like the revenge of the law-abiding citizen. But bidder beware, because you can also catch auction fever and overpay.
"Good Morning America" visited a recent government auction in Florida, where the feds were selling off the belongings of notorious Ponzi schemer Scott Rothstein.
Rothstein persuaded investors to pour $1.2 billion into his illegal Ponzi scheme. Now, the government is selling off Rothstein's baubles and belongings to raise money for his victims.
So what did Rothstein buy? People crowded the auction preview to see for themselves.
Rothstein fancied designer watches. He had 203 of them. Auction attendee Drew Williams re-arranged his military leave to try and snag one.
"I actually, in all honesty, thought this was a, some sort of drug bust collection from a dealer," he said. "Good Morning America" told him it wasn't a drug bust collection, but a Ponzi bust collection.
Federal agents seized Rothstein's rare cars when they busted him, so Michigan car dealer, John Gerweck, convinced his family that coming to look would make a fun family vacation.
"We flew down from Michigan to look at the Mercedes. So we are hoping we can close the deal," he said.
Vanessa Leone came all the way from New Orleans for the jewelry. She's excited to think she may get a bargain.
On auction day, there are 366 registered bidders. Some are professionals. For others, it's a family affair. But everybody is hoping to bid their way to a bargain.
"You know we have done thousands of auctions and people can get a good deal," Rick Levin, of Rick Levin Auctions, told "Good Morning America." "Indeed they can get a good deal. On any given day something is worth what someone is willing to pay for it."
A necklace sold for $1,200. The fair price? $2,578.
A Corvette sold for $35,000. It was worth $37,566.
A bracelet sold for $6,250. The fair price was $10,917.
A man's ring sold for $13,000. The fair price was $22,287.
A watch sold for $19,000. The fair price was $32,000 to $34,000.
A ruby ring sold for $12,500. The fair price was $28,455.
Deals like a silver and diamond necklace – which sold for half off, or $1,300 less than what the expert appraisers at GCAL in New York called a fair price.
A 2008 Corvette sold for $2,500 less than its worth.
A men's gold and diamond ring sold at a $9,000 discount.
A Patek Philippe watch was $15,000 off.
And an incredible ruby and diamond ring sold for $16,000 less.
But there's a real risk of overpaying because the bidding is so fast and furious.
In just seconds, a fancy yellow diamond ring sells for three times what our expert appraiser believes it's worth.
Roger Wittenberns wouldn't mind if people overpaid. He brought his daughter to witness the auction because he was one of Scott Rothstein's Ponzi victims.
"I am glad they are doing this to try to generate some money for restitution of victims. People like me. I've got $300,000 in this and I'd be happy if I got some back," he said.
From a glitzy high rise, Rothstein ran the classic Ponzi in which money from late investors goes to early ones. There's so much anger that after Rothstein was sentenced to 50 years in prison, his wife's bodyguard got into a fight with a reporter.
Back in the bidding, Drew Williams has found the watch he wants. He jumps in at $5,000. Then stretches to $6,000. But surrenders when the price soars to $100,000.
But he's not sorry he rearranged his leave to attend the auction. "It was just a great experience," he said.