ASM #252 CGC 9.8 Record Sale - something fishy going on? - Holder Tampering Incident confirmed by CGC 50 50

[BrashL]

On 2/3/2024 at 11:03 PM, brute_nm said:

Looks like there's a new filing for this case:

Certified Guaranty Co., which provides authentication and grading for comic books, sued customers Ulises Zanello and Bree Riva for trademark infringement, false advertising and breach of contract on Feb. 2 in New York Southern District Court. The suit, brought by Mitchell Silberberg & Knupp, accuses the defendants of obtaining high-value comic books in holders with grade labels from the plaintiff, then swapping the comic books with lower-graded comics and reselling them, thereby deceiving customers into paying inflated prices for incorrectly-graded comic books. The plaintiff filed a similar lawsuit against two former employees on Jan. 31 in Florida Middle District Court. Counsel have not yet appeared for the defendants. The case is 1:24-cv-00797, Certified Guaranty Co. LLC v. Zanello et al.

Defendants: ULISES ZANELLO and BREE RIVA

https://www.law.com/radar/card/pm-52207009-certified-guaranty-company-llc-v-zanello/

https://dockets.justia.com/docket/new-york/nysdce/1:2024cv00797/615000

Well I have to admit when I’m wrong. They actually filed suit.  This is going to be fascinating.  

[migmtl76]

Swagglehaus made a video :

 

[HighGrade]

I said there was more to come, CGC is not playing, they are going after all these clowns, and I for one am so happy some someone is finally going after scammers and thieves!  I really hope they win these cases, I know the money is not going to be there, but this will help secure the name, holder, and label. plus employees will 100% think twice before doing something like this. I bet they didn't expect this, I certainly didn't expect it until I read the first lawsuit, then I knew what they were trying to do.

Time and time again large companies hide to keep problems hidden, and not waste money and resources going after scammers. It would have been far too easy to just fire them and hush it up.

Wouldn't be surprised if a few current employees are nervous, you never know...might be some that are not yet uncovered...yet...

[Gaard]

On 2/4/2024 at 12:53 AM, shadroch said:

Outdated web pages don't inspire a lot of confidence in a company.  Details matter.

 

[agamoto]

This is a rather nuanced case of trademark infringement that delves into the scope of protection a company like CGC can enjoy against practices that exploit their processes... Where damage to the trademark has occurred, but where there is no actual counterfeiting or alteration of the trademarked goods and services.

https://www.cgccomics.com/submit/services-fees/cgc-grading/

This is an admission by CGC that they must perform at least some degree of analysis on any book sent in for reholder to determine if any "damage occurred post-encapsulation." 

https://boards.cgccomics.com/topic/510739-reholder-service-clarification/#:~:text=Reholder services remove the book from its,in a new sleeve and new case

This is clarification that books sent in for reholder are removed from their old outer case and inner sleeve. 

Any reasonable person would agree that this would allow detection of things such as pages ripped out, missing MV stamps, severe dings on 9.8's, etc., all readily apparent to whomever at CGC was tasked with pulling the book out of its outer shell and inner sleeve and performing this rudimentary check for damage prior to putting it inside a new sleeve and encapsulating it with a new label. It also begs the question, what the qualifications were of the person(s) making this call? If they aren't graders, what are they?

https://www.cgccomics.com/submit/services-fees/cgc-grading/

Here, CGC tells us that books sent in for regrading accompanied with their original label, which is what a reholder could be classifed as, are not guaranteed to receive the same grade. Once again, implying there is some level of reassessment performed at CGC with any book submitted.

 

https://www.cgccomics.com/legal/terms-and-conditions/

Here, CGC defines tampering. However, all of the examples include alterations to the submitted book itself, when in this case you have swapped out books and/or labels which are unadulterated.

CGC giving us a little reminder their cases are tamper-evident. 

This is an aside, but I had to do a double take when I read this.

So, here, CGC is saying they reserve the right to charge someone 0.1% of its declared value per month to cover the insurance if a book has to sit on their premises waiting. Interesting. So, if I have a Superman #1 valued at $1,000,000 that sits on the shelf for a month, that's $1001 a month for storage and insurance. Ok, well, in 2021, as an associate member, it would have cost me $6001 to get that Superman 1 graded under the $5K cap for walkthrough, plus the month for it to sit on the shelf, plus 0.1% insurance. Now in 2024, that Superman 1 will cost me $36,001 to get graded and to sit on their shelf for a month. One of the justifications I read for why this huge jump in costs was due to insurance. Really? The insurance premiums went up that high? 

Anyways, back to what I was getting at. 

 

This of course hinges on CGC's definition of tampered and genuine. Their own definition makes no mention of alteration or manipulation of their own case, label, or inner sleeve so they may want to modify those defintions.

NOW! 

All that said, I believe the defense in this case has a very good chance of successfully challenging CGC's argument of trademark infringement here. The assurances CGC provides its customers imply a committment to verifying the authenticity and the condition of a book, even upon resubmission for reholder before they reissue the book encased in the CGC slab and label. This assurance is quintessential to the trust and value associated with their trademark. If an individual has exploited the process by submitting items which CGC themselves did not properly or adequately reassess, leading to an inaccurate recertification, then the disruption here primarily arises from CGC's own process and execution failure. 

It can be argued the onus is on CGC to accurately verify an item's authenticity and condition, whether it's the first of fiftieth submission of the same book. If this process has a hole you can drive a truck through, then it deeply undermines the reliability of the certification service itself, and by extension, the trademark's value promise of authenticity and grade. It might be challenging to argue that the trademark has been infringed upon by external parties when the perceived dilution of the trademark's value could be seen as stemming from the company's failure to uphold it's own standards when reholdering books, if we are to believe what CGC has written in their own descriptions and terms. 

Bit of a chicken and egg situation... Which came first, the weak process controls that led to an exploitable weakness which eventually lead to harm or dilution to the reputation of the certification the company provides, or the dude who found a way to exploit those weak processes, and succeeded, time and again, then got caught, which then caused harm.

There are examples of books we've all seen where the high grade doesn't match the comic's appearance, and CGC gets dumped on regularly because of that. While everyone has always just assumed the unexpected variances in grade are due to what day of the week it is or whether the grader got lucky the night before, what if the reality is that others have been abusing this very same weakness for years?

I think CGC is going to have an uphill battle arguing they aren't at least in some way, responsible for the harm to their own reputation due to process failure, I don't think they can pin it all on the defendent. 

 

[EastEnd1]

On 2/4/2024 at 12:03 AM, brute_nm said:

Looks like there's a new filing for this case:

Certified Guaranty Co., which provides authentication and grading for comic books, sued customers Ulises Zanello and Bree Riva for trademark infringement, false advertising and breach of contract on Feb. 2 in New York Southern District Court. The suit, brought by Mitchell Silberberg & Knupp, accuses the defendants of obtaining high-value comic books in holders with grade labels from the plaintiff, then swapping the comic books with lower-graded comics and reselling them, thereby deceiving customers into paying inflated prices for incorrectly-graded comic books. The plaintiff filed a similar lawsuit against two former employees on Jan. 31 in Florida Middle District Court. Counsel have not yet appeared for the defendants. The case is 1:24-cv-00797, Certified Guaranty Co. LLC v. Zanello et al.

Defendants: ULISES ZANELLO and BREE RIVA

https://www.law.com/radar/card/pm-52207009-certified-guaranty-company-llc-v-zanello/

https://dockets.justia.com/docket/new-york/nysdce/1:2024cv00797/615000

This is wonderful news.  Would still like to see criminal prosecutions with the two scammer situations (CGC did say, at least with the MJ reholder scammer, that they would hold the culprits accountable to the FULLEST extent of the law), but this is a good start. 

[HighGrade]

On 2/4/2024 at 8:46 AM, EastEnd1 said:

This is wonderful news.  Would still like to see criminal prosecutions with the two scammer situations (CGC did say, at least with the MJ reholder scammer, that they would hold the culprits accountable to the FULLEST extent of the law), but this is a good start. 

You never know, looks like they are not going to just let it go, I would love to see them try all these clowns with multiple lawsuits!

This is good for all parts of the hobby, just think if every business went after thieves and scammers.  Today especially, nobody does anything! Theft keeps rising, auction sites are full of scammers that never have any consequences, sad state of affairs.

[onlyweaknesskryptonite]

On 2/4/2024 at 7:27 AM, agamoto said:

This is an aside, but I had to do a double take when I read this.

This part is definitely disturbing.  Considering that I have had some books take them over a year to grade and send back. It should be clarified as once grading has been completed and is ready for shipment.  Not from submission. There were times it took them more than a month to open the package from time of submission. 

[HighGrade]

On 2/4/2024 at 9:01 AM, onlyweaknesskryptonite said:

This part is definitely disturbing.  Considering that I have had some books take them over a year to grade and send back. It should be clarified as once grading has been completed and is ready for shipment.  Not from submission. There were times it took them more than a month to open the package from time of submission. 

This is about contact, it says "if property remains unclaimed", it's your responsibility that contact info is correct, unclaimed means they tried and can't contact you, they will try for 1 year, if they can't contact you or you don't contact them, they can do whatever after that full year is up, that's pretty basic, seen that before in other companies.

But yeah, that's clear, no worries.

[Mikey C]

On 2/4/2024 at 12:53 AM, shadroch said:

Outdated web pages don't inspire a lot of confidence in a company.  Details matter.

As someone in Marketing, this x1000000.

[ramithard]

_{Finally.....people have been named....now us collectors that are NOT in the inner circle can see if we have made any purchases from them...the secret only took 385 pages....carry on......}

Edited February 4 by ramithard

[sledgehammer]

Edited February 4 by sledgehammer

[ramithard]

now we just need pics of the culprits.....so I know which booth to NOT do business with at Wonder-Con....I can wait another 200 pages....

[grendel013]

On 2/4/2024 at 9:52 AM, ramithard said:

now we just need pics of the culprits.....so I know which booth to NOT do business with at Wonder-Con....I can wait another 200 pages....

I'm hoping we have some celebrity comic artists do the court room sketches. Then they can auction on Heritage. Then they can have a signature series. That's where my collector's eye is focused next!

[sledgehammer]

On 2/4/2024 at 8:52 AM, ramithard said:

now we just need pics of the culprits.....so I know which booth to NOT do business with at Wonder-Con....I can wait another 200 pages....

A Ulises Zanello graduated from Middlebury College in 2003, and CGC was sent a photo of a guy at NYCC wearing a Middlebury College jacket and working for Comic Book Station.

2019, I think.

I would think there's a semi remotely decent chance it's him.

[ramithard]

On 2/4/2024 at 7:08 AM, sledgehammer said:

A Ulises Zanello graduated from Middlebury College in 2003, and CGC was sent a photo of a guy at NYCC wearing a Middlebury College jacket and working for Comic Book Station.

2019, I think.

I would think there's a semi remotely decent chance it's him.

Thank You Sir!!

[shadroch]

On 2/4/2024 at 8:08 AM, sledgehammer said:

A Ulises Zanello graduated from Middlebury College in 2003, and CGC was sent a photo of a guy at NYCC wearing a Middlebury College jacket and working for Comic Book Station.

2019, I think.

I would think there's a semi remotely decent chance it's him.

There is a Facebook picture of Ulises Zanello with a woman whose first name is Brea.  I have no computer skills and it took me thirty seconds to find it.

[sledgehammer]

On 2/4/2024 at 9:19 AM, shadroch said:

On 2/4/2024 at 9:08 AM, sledgehammer said:

A Ulises Zanello graduated from Middlebury College in 2003, and CGC was sent a photo of a guy at NYCC wearing a Middlebury College jacket and working for Comic Book Station.

2019, I think.

I would think there's a semi remotely decent chance it's him.

There is a Facebook picture of Ulises Zanello with a woman whose first name is Brea.  I have no computer skills and it took me thirty seconds to find it.

What search engine did you use? Google?

What words did you use in the search?

It was obvious 5 weeks ago, that Bree Ashley was Bree Riva's facebook identity, and Zanello does not have one.

[ramithard]

On 2/4/2024 at 7:19 AM, shadroch said:

There is a Facebook picture of Ulises Zanello with a woman whose first name is Brea.  I have no computer skills and it took me thirty seconds to find it.

I don't have facebook.......so can't access

[shadroch]

I'm not sure exactly what i typed in.  Pretty sure it was just zanellos name and the first thing that popped up was a travel site. Scroll thru the comments and it is all  couples posting photos of themselves. Ulises was about halfway down the page