Anyone remember the Michael Blodgett case?

kranky

It was big news in the early 90's. Mr. Blodgett feels he got railroaded badly and cheated out of millions, and is apparently trying to seek reparations. He has a (VERY lengthy) chronology of the events as he saw them here. Some prominent people are named. Be warned, it is extremely long and dry. If you don't remember the case it's probably not worth the read.

It came to mind after thinking about some of those Lincolns that sold for crazy money recently. IIRC, he was charged with charging exorbitant prices for coins (in the FTC's opinion). He felt the prices were fair, the government disagreed. I don't think the grade of the coins was in question (they were PCGS and NGC slabs), just the price. I wonder if dealers today would be at risk if they sell a pop-top for 100x the price of the next grade down, and prices then decline. I think an unhappy customer was the spark that got the Blodgett case going.

Jamericon

Interesting isn't it. Where does the liablity fall? On the dealer who sold the coin, well knowing its pop-top status was short lived, or the buyer who falls for it and plunks down wads of cash. And some people think that classic coins are too expensive!

EVillageProwler

I think it would be easy for dealers to provide a legal defense simply by pointing to recent auction results. The bidders, of their own volition and without any hype, chose to bid what they did.

EVP

Russ

Fascinating read. Even if only half of it is true, this guy really got bent over. I found this particularly galling:



<< <i>All of the rest of the transactions were based on charges that the government "appraised" values of the coins were less than the price paid by Blodgett’s customers. These were exactly the same transactions that had been examined by the FTC and which had not resulted in any finding of wrong doing. Blodgett’s best defense would have been to establish that the actual value of the coins was near the value established by Blodgett. This could have been established by cross-examining the government’s own experts, and by introducing coin pricing evidence from other experts, and getting testimony from a government expert whose appraisal would have completely validated Blodgett’s pricing. (But the government never disclosed that appraisal, see Vartian Deposition Documents BC 20, 21 and 23) >>



Basing charges on "government" appraisals? Yep, I'm sure the Logic Free Zone is just chock full of genuine coin experts.

Russ, NCNE

MastaHanky

Good hell.

If I ever can't fall asleep at night, I know where to start.

coingame2000

kranky,

This thread brings back memories because I testified at this trial. Where did you find this? The table of contents leads me to believe that there were 49 pages total and I would be very interested to read the rest. Did this appear somewhere on the interenet, and if so could you direct me there.

Thanks,

Mike

NumisEd

Looks like Dwight Manley is wrapped-up in that mess, as well as Vartian. What's the deal?

kranky

EVP, I completely agree that auction buyers are on their own. But if a retail buyer is charged a price that's commensurate with a recent auction, and it turns out the auction buyer was another dealer... that might not look too good to people who don't know coins, and it might be assumed that a sophisticated type of shill bidding was going on. Pump up the auction to justify the retail prices.

coingame2000, I was thinking about how some pop-top coins are priced at many multiples of the next grade down (I'm not making a value judgement, just an observation) and that got me thinking about the Blodgett case and whether there would be any risk for dealers today. I wasn't sure my recollection of the case was accurate so I did a google search and found his site.

It does say 49 pages but that is probably in printed form - the entire chronology appears to be on that one web page. His entire site seems to be dedicated to getting his name cleared. He has other documents linked from his main web page which is here.

UncleJoe

The first mistake was the treating of the purchase of "rare" coins as an investment.

That would make him a quasi "broker" and subject to the same kinds of trouble now facing Wall Street's big name houses.

IMHO. Joe.