Traveling auctioneers leave buyers, regulators fuming

Rodney Martin was walking a tightrope between panic and anger.

Martin, who co-owns a popular club in the Stockyards, had attended a spring auction at an Arlington hotel after seeing a bright red advertisement. "SEIZED & FORFEITED ASSETS," it read. "Jewelry & Fine Art SEIZED by police & federal agencies."

At the auction he spotted a Picasso lithograph and decided to bid after an auctioneer advised him of its potential worth.

The $4,900 Martin paid, counting taxes and the auctioneer's fee, seemed like a steal.

Yet on the way home to Mansfield, Martin began to feel uneasy. He later looked up the painting's authenticator on the Internet and said he saw reports linking him to a scam.

Martin now believes he was a pigeon. "These guys are really good," he said.

He was caught up in the razzle-dazzle of a network of expert auctioneers roving the nation. Abraham Avi Asher or his cousins, Gavin and Dion Abadi, roll into towns with a seemingly inexhaustible supply of paintings by master artists, flawless gemstones, Rolex watches and silk rugs. By the time they pack up, they leave state regulators and some customers fuming.

Over the years in many states, the Abadis and Asher have become damaged goods, with a trail of fines, tax liens and outright bans on holding auctions, the Star-Telegram found. Arrest warrants were also issued for the Abadis, according to records in other states.

But dissatisfied buyers and state agencies can have a hard time even determining who is responsible for the auctions.

Asher and the Abadi brothers are showmen -- smooth, witty, pleasant. Family ties and their South African heritage bind the men, who have a knack for seducing buyers without squeezing them.

The auctioneer pouts for the house as you win a $42,000 blue star sapphire for just $3,400.

But somewhere along the line, such bargains have sometimes turned bogus. Sonja Straus won the jewel at a Fort Lauderdale, Fla., auction conducted by Gavin Abadi for D&G Auctioneers. She said an independent jeweler discovered that the gem's star was painted on. D&G, incidentally, wasn't licensed to conduct auctions in Florida, according to an administrative complaint.

Asher said he would be surprised to find that the gem's star was fake.

"A painted stone, that's out of control," Asher said. "That does not happen with us."

The Abadis have gone to court at least once claiming that someone had sold them counterfeit goods, winning a judgment of almost $400,000, according to West's Jury Verdicts.

Asher says most customers are quite content.

His business philosophy is fairly simple: Buyers pay what they will pay.

Consider, he says, artwork by H. Claude Pissarro. Asher said he recently auctioned off a few of Pissarro's works for up to $15,000. Asher said he's seen such works priced at $38,000. The seller could go higher, asking $80,000.

"There's no law that says he can't ask. ... He can say, 'I want a million dollars.' ... If somebody wants to pay for it, God bless them."

Indeed, overcharging for a product -- or paying too much -- is not illegal.

But misrepresenting items is.

Regulators have penalized Asher and Abadi family members for offering wares that were not quite as advertised, as well as for conducting auctions without licenses.

The $20,000 that Martin claims Asher told him the lithograph was worth seemed more implausible as he mulled the purchase. He filed a complaint with the state. Asher says he put no value on the lithograph and that Martin must have "freaked out" over the price. Besides, Asher says, Martin got his money refunded "straight away." But that's hardly how Martin describes what happened.

The Abadi brothers could not be reached for comment for this report.

Last year, Asher and the Abadis were in the national spotlight when they traveled the country claiming to auction items belonging to Bernie Madoff or his victims, to help recover losses from Madoff's Ponzi scheme.

At least some of the items they sold might be described as Madoff-related -- Dion Abadi bought them from a Texas company sanctioned by the U.S. Marshals Service to sell them, an investigator said. But while proceeds from the authorized Texas auction went toward victim restitution, the "Madoff auctions" put on by Asher and the Abadis benefited no one but themselves.

Ohio found that the auctions were dishonest.

In an interview, Asher said the items "were from Madoff victims. They were. They were not on behalf of the Madoff victims."

This spring Asher led auctions across Texas. They never identified the "federal and police agencies" that seized the goods being sold. Asher concedes that the agencies should have been named.

"We buy from the marshals, from all different sources," he said.

M.C. Escher could not have devised a more creative labyrinth of businesses.

The Abadis or Asher have ties to at least a dozen art sellers and auction houses in Georgia alone. While documents show seemingly independent companies, their officers run businesses with one another.

Consider the Texas auctions this May.

In Southlake and Arlington, the company that set up in posh hotels was called USA Art Source. The company's real name: Balfour Park of Georgia.

Ads listed the telephone number for an apparently unrelated company: East Coast Financial of Georgia.

Next stop, Odessa, where East Coast Financial was now in business, with Asher still presiding. Auction ads in Odessa's newspaper were nearly identical to ones in the Star-Telegram and resemble auction ads going back to 2001.

Dissecting East Coast Financial's anatomy is confusing. Georgia and Florida corporation documents list Gavin Abadi's Atlanta address, yet his business associate Adam S. Levinsohn is listed as the company's CEO, chief financial officer and secretary.

Family ties are deep. The Abadis and their father, Ezra Aviad Abadi, ran an auction company in the 1990s, and Ezra Abadi has conducted auctions for Asher.

In 2007, one of Ezra Abadi's auctions unloaded two pieces of diamond jewelry for $38,730. An appraisal on the pieces came back at $6,480, according to Florida records. In 2009, Florida authorities found that he conducted the auction without a license. Later, Asher lost his Florida license after he got caught allowing his uncle to auction for him.

Family ties aside, Asher says he maintains objectivity about the businesses because he is independent.

"I don't own or affiliate myself with any of these companies right now," he said.

The paperwork differs. Documents filed with the Georgia secretary of state four days before the Arlington auction listed Asher as chief financial officer of USA Art Source/Balfour Park. Company President William Peter Allen could not be reached for comment. Allen is tied to at least one of Gavin Abadi's business ventures in Atlanta.

Asher's own auction company, DRJ Auction Services, also plowed through Texas this year.

Differing values

Sapphires, signed Chagall artwork and silk rugs tantalize buyers. Sure, some customers may complain here and there. But Asher says the Abadis have tens of thousands of happy customers.

In May, Dick Callahan of California was one of them. He was happy with a silk rug he bought from East Coast at a January "Madoff auction." He paid about $2,500.

The rug was worth at least $3,000, he said Asher told him.

Weeks later, while getting a stain out of the rug, Callahan said he discovered that he had been taken to the cleaners. A rug dealer and a friend who cleans rugs told him the rug was of poor quality. It was worth perhaps $400.

"I'm fairly comfortable that I got hosed on this deal," he said.

Asher said he doesn't give values at auctions.

"There are dealers who will destroy anyone's sale if a customer takes a rug in to be appraised," he added.

Lee Koneval of Ohio bought a yellow sapphire ring in Florida from USA Art Source in May. It was appraised at $6,900. Koneval paid about $2,000.

She later had several appraisers assess it. They valued it between $500 and $1,500.

Gavin Abadi eventually refunded Koneval's money.

Asher said Levinsohn, East Coast's CEO, told him that Koneval owns a competing auction company.

"The yellow sapphire was certified 100 percent," Asher said.

Koneval's name does not appear in Florida's or Ohio's lists of auctioneers.

"My husband's an insurance agent, and I'm a retired nurse," she said, laughing.

The Star-Telegram could not locate the company listed as appraising the gem.

But Koneval's payment was processed through a credit card machine for Auction RH Diamonds, a Georgia company run by an appraiser, Russell Hagy. When asked whether he appraised the sapphire, Hagy said, "I only do [Rolex] watch appraisals for the auction companies."

Yet the company is called Auction RH Diamonds. "Because I do diamonds, and I do Rolexes," Hagy said.

But not sapphires? "I do sapphires very rarely," he said.

Hagy then said he's in the gold business. And that he makes custom jewelry. His story changed repeatedly because, "You caught me off guard. I do other things," Hagy said.

Hagy said he had nothing to do with appraising either Koneval's gem or Martin's Picasso, although Auction RH Diamonds was involved in the transactions. Hagy hypothesized that his credit card machine was used by mistake on both purchases.

Georgia corporation records show that Hagy and Gavin Abadi are partners in the parent company of an Atlanta nightclub. Hagy said the partnership doesn't affect his appraisals.

Asher said he wants to remove the appraised value from items in the future "because it's just a headache."

"If I have that auction, I am going to remove the appraised value of that certificate. Because that means nothing," Asher said. "It's their opinion. It's not our opinion."

Disciplinary actions

Some states have clamped down on Asher and the Abadis. But states often don't share disciplinary information.

The National Auctioneers License Law Officials Association, a coalition of 21 states' auctioneer licensing boards, knew of just one complaint each against the Abadi brothers and Asher since 2006.

The Star-Telegram uncovered multiple disciplinary actions and fines.

Some states have disciplined them for violations elsewhere in the country. But unless a crime was committed, nothing in Texas' rulebook specifies that a license revoked in another state means trouble here, said Della Lindquist, assistant general counsel for the licensing department.

Asher's most recent Texas swing, including stops from Southlake to Austin, resulted in three complaints now under investigation by the licensing department. The state has also pursued USA Art Source, DRJ Auction Services and East Coast Financial for failure to file sales tax reports. They've accumulated tax liens from Tarrant County to New Jersey.

Florida stripped Asher of his license in 2009; Illinois indefinitely suspended Dion Abadi's in 2007; Alabama put Dion Abadi on a do-not-license list last year. Georgia investigated Gavin Abadi in 1998, 2002, 2005 and 2007 and Dion Abadi in 2003, 2004, 2009 and this year.

Ohio didn't mince words in denying a license to East Coast after Asher conducted an unlicensed auction. Authorities wrote Levinsohn that "you were dishonest, untruthful and improper in your business dealings." The mail went to the Atlanta house owned by Gavin Abadi. Asher was called out for being "improper and incompetent."

North Carolina put some hurt behind its words. It issued arrest warrants for Ezra Abadi and Gavin Abadi. Dion was nabbed by police in 2006 for running an auction without a license. He was found guilty of a misdemeanor, sentenced to 12 months of unsupervised probation and ordered to pay $500 restitution.

"These people, they come, go, sell stuff on Friday; they're gone on Sunday or Monday," said Ralph Southerland, an investigator with the North Carolina Auctioneer Licensing Board. "They use different names, different addresses, different information on invoices, old addresses where the Abadis or someone else has been before."

That state has investigated the Abadis several times, he said. Their MO, Southerland said: "coming in, defrauding, not having the appropriate license, getting out of town, going to wherever they live."

Asher said that the companies are not fly-by-nights and that they make good.

When Martin, unhappy about the lithograph, threatened to show up at the next auction in Odessa, he got a call back from an Abadi in-law, jeweler Gary Zelton Getz. As Martin pulled into an airport parking lot ready to board a plane to Odessa, Getz promised to refund his money and pick up the painting.

Asher said the piece was sold a week later to another customer "who is very happy."

Darren Barbee, 817-390-7126