New York Attorney General Letitia James has officially taken action against National Book Auctions, the disgraced consignment and auction business formerly stationed in Freeville.
In special proceedings filed Wednesday in Tompkins County Court, the AG's office laid out a set of restrictions on Bid Club, Inc., which operated National Book Auctions, Worth Auctions and JLF Holdings. David Hall, the owner and operator of all the businesses, was arrested in November on one charge of grand larceny amid millions of dollars of complaints, though it's possible that list of charges will grow now that the AG has conducted its investigation. Now the Attorney General, represented by prosecutor Michael Danaher, seem to have a plan in place to handle the future of the businesses: they will allow National Book Auctions to keep operating, while monitoring the business to ensure that most money made from its operation is put directly toward restitution for the victims. The order is proposed, and must presumably be approved by a judge before it goes into effect.
The New York Attorney General's office and the Tompkins County District Attorney had both declined to specify the number of victims and the total amount owed, but this most recent action does just that: according to the proceeding, the AG's office has found at least 115 consumer victims and $1,042,542.74 in total theft that has been reported so far. There's certainly a chance more theft will emerge, as the office is opening up an additional reporting period for more victims to come forward and be added to the restitution list. In the order, the AG's office calls National Book Auctions' conduct "deceptive, fraudulent or illegal," and orders an additional $52,000 in civil fines be paid.
"Respondents are permanently enjoined from receiving, administering or any way controlling the proceeds of any sales of property owned by others, including auction sales, until such time that all restitution, civil penalties and costs awarded herein have been paid in full," the injunction order said. "When all restitution, civil penalties and costs awarded herein have been paid in full, respondents shall be permanently enjoined from receiving, administering or any way controlling the proceeds of any sales of property owned by others, including auction sales, until they shall obtain and continuously maintain a $500,000 performance bond that is filed with the Attorney General by a surety or bonding company [...] guaranteeing that respondents will comply with this order and judgment, the proceeds of the bond to be applied to restitution to consumers injured by the deceptive, fraudulent or illegal conduct of the respondents and to ensure payment of penalties, allowances and cash."
National Book Auctions will also have to engage with a trustee that will control its accounts and report to the AG's office. Thirty percent of all sale proceeds to National Book Auction will go directly towards restitution, and 80 percent of any property or items actually owned by National Book Auction that are sold off will be dedicated to restitution. People who have not yet reported losses to the Attorney General have a 90 day window to do so, which started on May 15. Claims will be vetted and calculated by the Attorney General's office after that.
At the time of Hall's arrest, several victims had come forward to tell their stories of losing money to Hall, usually through similar means: they would bring items to him so that he could auction them off through either National Book Auctions or Worth Auctions, taking an agreed-upon cut of the profit (usually between five and 35 percent, according to the AG's suit). But when the items would sell, the original owners would have a difficult time collecting their money from Hall, waiting months or even years to receive their compensation, if they received it at all. Those who came forward had expressed anger at what they felt was a lack of transparency regarding the investigation into Hall's business dealings.
The two highest amounts of reported thefts appear to be from two men who lost over $227,000 and $166,000 each. Other notable victims include the Putnam Museum & Science Center, in Davenport, Iowa, and the local Friends of the Library organization.