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Three men face federal charges for running sports memorabilia fraud, forgery scheme

Three men who were suspected of running a sports memorabilia fraud and forgery scheme for more than 15 years were indicted in federal court.

A federal indictment in Chicago alleges that three art and sports memorabilia dealers committed fraud involving the forged signatures of such baseball greats at Babe Ruth, Lou Gehrig, Cy Young and Honus Wagner, the Chicago Tribune reported Thursday.

The 34-page federal indictment alleges that brothers Donald Henkel, 61, of Cedar, Mich. and Mark Henkel, 66, of Ann Arbor, as well as Raymond Paparella, 59, of Boca Raton, Fla. participated in the fraudulent scheme over a 15-year period. They are also accused of selling phony art, including paintings from such noted artists as George Ault and Ralston Crawford.

The three were arraigned in federal court on Thursday and pleaded not guilty, the Tribune reported.

According to the indictment, wire and mail fraud charges allege that Donald Henkel purchased paintings, baseballs, baseball bats, celebrity photos and books, record albums and programs, and then altered them with forged signatures. The Henkel brothers used co-conspirators known as “straw sellers” to conceal the brothers’ involvement and pass the fake items off as legitimate to galleries and collectors across the country, the indictment says.

FBI: Fraud, forgery cases on the rise in hobby 

The indictment alleges that many of the items netted hundreds of thousands of dollars in illicit sales, the Tribune reported.

Among the victims of the scheme were a Chicago-area auction house, as well as auction houses and art galleries in New York, Texas, Pennsylvania, Michigan, California and London.

One of the first schemes occurred in 2005, when the Henkels allegedly sold baseballs purportedly signed by Wagner and Christy Mathewson to a sports memorabilia dealer in Exton, Pa. According to the indictment, the Henkel brothers allegedly recruited an associate identified as Co-Schemer A to provide false information about the authenticity of the baseballs, which were sold at auction for $121,000.

The investigation into fake paintings and forged memorabilia began in July 2020 when the the Detroit News reported that the FBI had raided Donald Henkel’s 4,000-square-foot Traverse City, Mich. home and found forged paintings and sports memorabilia. According to FBI officials at the time, Donald Henkel, a local artist, had built what was called “a forgery factory” for sports memorabilia and artwork.

More than 30 FBI agents raided this house and barn last week as part of a years-long investigation into forged artwork and sports memorabilia.

More than 30 FBI agents raided this house and barn last week as part of a years-long investigation into forged artwork and sports memorabilia.

Also See: Operation Expose the Fraud 

Noted sports memorabilia authenticator Steve Grad of Beckett Authentication told Sports Collectors Daily that Henkel was “a master forger” and “one of the biggest forgers in the entire history of the business.”

Sports memorabilia and tools to make them were discovered during the raid, as was a Mickey Mouse drawing autographed by Walt Disney.

Sports memorabilia and tools to make them were discovered during the raid, as was a Mickey Mouse drawing autographed by Walt Disney.

Also See: Forgery: The bane of the hobby 

FBI Special Agent Brian Brusokas told Sports Collectors Digest last month that fraud and forgery incidents in the hobby have been on the rice in recent months.

“The past two years, let’s say during the COVID crisis, has really, really impacted the hobby in both good and bad ways,” Brusokas told SCD's Greg Bates. “Good getting more exposure out there to the hobby, getting more people interested in it. And, unfortunately, … with more exposure, the unscrupulous people enter the marketplace and try to pull one over on the good collectors and some of the novices that are getting into the industry.”