Greg Manning/Escala/Afinsa stamp Ponzi Scheme mess in Courts

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Greg Manning/Escala/Afinsa stamp Ponzi Scheme mess in Courts

Post by GlenStephens »

Image .......Image
Most readers have heard of the massive collapse of the Afinsa Stamp Bubble in Spain in mid 2006.

A massive Ponzi/Pyramid scheme using postage stamps, that bilked approximately 400,000 unsophisticated investors out of about 5 BILLION Euros ($A10 Billion) when it went belly up - as all such schemes eventually do.

Lurid stories of 10 MILLION EUROS in cash being seized in police raids etc of those allegedly involved, ensured it got a LOT of press - none of it good for the stamp hobby sadly. :twisted:

I wrote several columns about this mess at the time:

https://www.glenstephens.com/snjune06.html

And concluded:

Thankfully there will be virtually no local fallout in my view.

Our local Australian market is strong as real collectors are underpinning it. Very few collectors here buy Spain or Portugal stamps, where it can be expected weakness will prevail for quite some time.

The Federal Budget announcement in May of the very generous new Superannuation arrangements from July 1 next year will greatly increase local spending, not decrease it.

Many existing collectors are buying stamps of their choice with their self-managed Super
.


Which is a prediction which has proven perfectly correct. :mrgreen:

HOWEVER little has been published in the past 2 years or so. Ormond just linked elsewhere to a quite extraordinary 42 page US Government case against the Americans involved in this matter, who were connected with the US listed ESCALA company - who supplied much of what Afinsa bought and sold to the "investors":

https://www.sec.gov/litigation/complaints/2009/comp20965.pdf

I urge EVERYONE to make a LARGE coffee and print this out, or read it on screen.

I thought I knew a lot about what went on the stamp business, but most of what is in this most detailed US Federal Government brief of evidence was all new to me.

I stress this brief was only filed March 23, and AFAIK is still before the courts, and like in all legal matters, everyone is innocent until proven otherwise by a Court.

I've met Greg Manning several times, and have nothing against him whatever, and he has done no harm to me at any time.

However that said, the hour I took to read this dossier simply gob-smacked me.

Many major and very famous stamp auctions were owned by this Manning/Escala group.

The group's North American operations included huge names like the Greg Manning Auctions division, Ivy & Manning Philatelic Auctions, Greg Manning Galleries, Greg Martin Auctions, Spectrum Numismatics, Teletrade, Nutmeg Stamp Sales, Superior Sports Auctions, Bowers and Merena Auctions, Kingswood Coin Auctions, and H.R. Harmer.

In Europe, the leading stamp auction houses affiliated with the network were Auctentia Subastas (Afinsa Auctions) of Madrid Spain, Corinphila Auktionen of Zurich Switzerland, and the Koehler group of auction companies of Berlin and Wiesbaden Germany.

In Asia, Escala's auctions operations were conducted through John Bull Stamp Auctions Ltd, the oldest philatelic auction house in Hong Kong.

So they were a major GLOBAL player - to put it mildly
Image

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
------------------~-----~-------------------------------------------------------l[

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,

v.

ESCALA GROUP, INC., 09 Civ.
GREGORY MANNING,
LARRY LEE CRAWFORD, CPA,

Defendants.

------~-------------

42 pages of Evidence brief inserted here:

https://www.sec.gov/litigation/complaints/2009/comp20965.pdf

---------------------------

WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:

Permanently enjoining Escala, Manning, and Crawford from violating Section lO(b) of the Exchange Act [15 U.S.C. §§ 78j(b)] and Exchange Act Rule lOb-5 [17 C.F.R. §§ 240.10b-5];

Permanently enjoining Escala from violating Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act [15 U.S.C. §§ 78m(a), 78m(b)(2)(A), and 78m(b)(2)(B),] and Exchange Act Rules 12b-20, 13a-l, and 13a-13 [17 C.F.R. §§ 240.12b-20, 13a-l, and 13a-13];

Permanently enjoining Manning and Crawford from violating Section 13(b)(5) of the Exchange Act [15 U.S.C. §§ 78m(b)(5)] and Exchange Act Rules 13b2-1 and 13b2-2 [17 C.F.R. §§ 240.13b2-1 and 13b2-2];

Permanently enjoining Manning and Crawford from aiding and abetting the violation of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) [15 U.S.C. §§ 78m(a), 78m(b)(2)(A), and 78m(b)(2)(B),] and Rules 12b-20, 13a-l, 13a-13 [17 C.F.R. §§ 240.12b-20, 13a-l, and 13a-13];

Permanently enjoining Manning and Crawford from violating Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14];

Ordering Crawford and Manning to pay disgorgement of any unjust enrichment from the conduct alleged herein;

Ordering Crawford and Manning to pay civil monetary penalties pursuant Section 21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)] in respect of their violations;

Permanently and unconditionally barring Manning and Crawford from serving as an officer or director of a public company pursuant to Section 21 (d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)];

Granting such other relief as this Court may deem just and appropriate.

Dated: March 23 , 2009

Respectfully submitted,

Mark A. Adler (MA 8703)
Jane M.E. Peterson (Trial Attorney)
Cheryl J. Scarboro
C. Joshua Felker
Deborah A. Tarasevich
Devon A. Brown
Matthew Skidmore

Attorneys for Plaintiff - Securities and Exchange Commission

100 F Street, N.E. Mail Stop 4010
Washington, D.C. 20549-4010
Tele: (202) 551-4468 [Peterson] Fax: (202) 772-9245 [Peterson]

Image

Here is small part of what the PDF alleges:


18. Despite having discovered stamps with an alleged estimated value of $200 to $300 million to be forgeries in Afinsa's vault, Manning completed the Escala/Afinsa business combination transaction without disclosing the existence of the forgeries to others at Escala.

C. The Afinsa Supply Agreement

19. Escala was under tremendous pressure as the exclusive supplier of stamps to Afinsa. Afinsa's stamp needs were enormous and critical to its continued operation. Because it promised to buy back its stamp portfolios at 100 percent of the initial sale price plus interest, Afinsa required increasing numbers of investors and, in turn, increasing volumes of stamps to sell to them.

For each subsequent year, Afinsa had to increase the volume of stamps it sold in order to make new profits and to cover losses incurred for repurchases and interest. In other words, more new sales each year meant more repurchases in future years which in turn required more new sales. Manning understood the tremendous pressure Afinsa was under to maintain its Ponzi-like investment program.

D. The Brookman Agreement

20. To ensure that it could keep increasing the catalogue value of the stamp portfolios that it marketed to investors, Afinsa wished to control a pre-existing, international stamp catalogue. In an internal Afinsa report, the company stated: "Steps are being taken to control an international catalogue or to create our own in order to be able to fix prices in accordance with our philosophy."

In the words of a principal of Afinsa: "If we allow a third party to put out the prices, we are really in his hands, which cannot be admissible given the nature of our business."

21. Afinsa's discussions about controlling its own catalogue were occurring in the early stages of the Escala/Afinsa business combination negotiations - and included Manning.

Recognizing Afinsa's interest, Manning proposed that Afinsa consider entering into an arrangement with Barrett & Worthen, the current owner of the Brookman Catalogue - a stamp catalogue that Manning had owned before he sold it to a close family friend in 1983.

Manning told Mmsa: "I believe that a deal could be set up with [the current owners] staying on to run the entire operation .... We would have complete editorial control over the prices in the catalogue, but we can still use the current editors for the bulk of the work."

22. On behalf of Afinsa, Manning actively engaged in the negotiations with Barrett & Worthen focusing on editorial control of the Brookman Catalogue. On June 16,2003, Afinsa and Barrett & Worthen signed an agreement (the "Brookman Agreement") that Afinsa would pay $650,000 in annual payments of $65,000 for ten years.to Barrett & Worthen and would gain "full and final editorial review and control of the content and form of each edition of the Brookman Catalogue published during the term of [the] agreement"

"And that this "control and review shall include, but not be limited to, the final review of all pricing, the preparation and revision of all descriptions and the deletion and/or addition of material, in each case as [Afinsa], in its sole discretion, may determine ...."

The Brookman Agreement provided for confidentiality and non-disclosure of its contents. Manning negotiated the Brookman agreement, and it was drafted in-house at Escala. Crawford learned of the agreement while it was being drafted in-house.

23. Neither Manning nor Crawford told Escala's Audit Committee about the Brookman Agreement. Escala did not disclose the agreement publicly or mention it in any of its quarterly or annual reports that it filed with the SEC.

To the contrary, Escala remained silent on the matter and Afinsa sought to portray the Brookman Catalogue as an independent entity. In October 2003, an Afinsa representative thanked Manning for negotiating the Brookman deal and reminded him that "our name must not appear" in any Brookman Catalogue.



etc .... and this little gem. Some of the massive $$ figures in this evidence brief are astounding.


1. The Rapidly Rising Catalogue Values of the ABN Specimens

56. Manning determined the values for the ABN specimens which were to appear in a proposed future edition of the Brookman catalogue that ultimately was never published. Escala prepared spreadsheets containing these values.

In the months before Escala's first shipment of ABN Specimens to Afinsa in February 2004, Manning had estimated supplying approximately €60 million (as of February 1,2004 €60 million equaled approximately $74.8 million) catalogue value but had told Afinsa that a Brookman Catalogue draft could be finished in January with a catalogue value of approximately €30 to 40 million (as of February 1,2004 €30 to 40 million equaled approximately $37.4 to $49.8 million).

Manning also told Afinsa that "the new Brookman] catalogue will absolutely follow our suggestions about prices." As with the UN Archive, the catalogue values continued to rise.

57. With respect to Escala's first sale of ABN specimens to Afinsa, Manning used a catalogue that the two brothers had prepared as a starting point for setting the catalogue values. But Manning dramatically increased the prices of each item.

Thus an item listed in the Morowitz catalogue for $6 was listed in Escala's spreadsheet for €130 (as of February 1,2004 €130 equaled approximately $162).

58. In December 2004, after selling Afinsa ABN specimens worth a purported $266 million in catalogue value, Manning responded to an Audit Committee request and calculated the total catalogue value of ABN specimens that Escala had remaining in inventory. The amount was a staggering $512,348,355.

All told, the total alleged catalogue value set by Manning for the ABN specimens held by Escala, and purchased for approximately $850,000, approached $778 million.


etc, etc.

Essential reading, it really is.

Glen
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by rgnpcs »

It looks like the bid-rigging scandal of a few years ago was small potatoes compared to this Manning fiasco.

Do these big shot dealers really expect to get away with all the fraud that is perpetraded in this hobby. Years ago it was just regumming, and reperfing stamps, and then it accelerated into completely altering damaged stamps into what looked like original pristine copies to fool the stamp collector.

Remember the Drysdale Co that openly advertised that they would regum, etc, any stamp for a small fee. I knew the owner personally, and was once invited to his house, where I saw the way he did his work.

I even saw a pile of orders, only being able to see the top name of another big shot dealer, one that was involved in the bid rigging. I cannot reveal his name, but he is still active today, and probably still selling repaired stamps to the innocent collector.

I first met Greg Manning when he was a teenager, at a stamp show in Long Island, NY, where he had the booth next to mine. I always thought that he thought that he was God's gift to philately. He never really seemed interested in the collector, just his money.

When we would see each other at a show, I felt that he was condecending to talk to me, as he felt that I was way beneath him.

I once made a bad mistake in giving him a large US collection for auction. I specifically asked that certain stamps be sold either separately, or in small lots, but he instead grouped the whole collection, with exception of one stamp, into one lot. I was away in Florida at the time, and did not get the chance to make any changes.

The stamps went for a fraction of their real value.

I am now 86 years old, and I could write a book about all the phony dealers that I have met.

I have always run my busines with honesty, as I am sure many that know me will attest to.
Anyone with any questions, please feel free to ask, and I will answer as best as I can.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by David Benson »

I only met Greg Manning once and quickly realised that he was, to use an Australian expression " up himself ",

As far as I am concerned I hope he gets what he deserves, a long vacation at the governments expense,

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by BillyBoy »

A very interesting article by Glen, who has obviously done a lot of research on our behalf. Thanks Glen, it just goes to show how careful we have to be!

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by harry01562 »

I met Manning several times years ago, and purchased several lots at an ASDA members bourse prior to one of the NY ASDA shows. They were material unfamiliar to his people, and my purchase was very much in my favor. His auctions sold mostly stamps, rather than postal history material or covers, and were of little interest to me.

The numbers mentioned in the full document are VERY large, and the temptations to manipulate and manufacture a market were obviously too great. Greed should not be the major compulsion of a true collector, or even an honest dealer.

Sad, but common story today...

Should be at least browsed by all of us, and thanks for posting the link.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Lakatoi 4 »

These are the one's that will really hit home:

Ordering Crawford and Manning to pay disgorgement of any unjust enrichment from the conduct alleged herein;

Ordering Crawford and Manning to pay civil monetary penalties pursuant Section 21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)] in respect of their violations;

I guess if found guilty, they will put their companies and themselves in bankrupcy no doubt having already deposited the cash in banks in various obscure tax havens with untraceable accounts.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Winnie »

I was at the APS Shows in Sacramento 2004 & Atlantic City in 2002. At one of those shows, (can't remember which), I stopped briefly at Greg Manning's booth.

He gave me one of his advertising pens with "Greg Manning Auctions Inc" printed on the side.

With all that money he seems to have, Greg could have got better value for his advertising dollars - it's a lousy pen.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by gavin-h »

Winnie wrote:With all that money he seems to have, Greg could have got better value for his advertising dollars - it's a lousy pen.
Winnie,

For a chance to win some top quality merchandise, join in the fun here:

http://www.stampboards.com/viewtopic.php?f=13&t=11699

Great t-shirt - it's just the model that's lousy :lol: :lol:
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by crazygerman »

A person like Greg Manning needs people who give him money.

These people are speculators which want to make a lot of money in short time - and lose it all - or these people are collectors who do not know enough about the stamps they collect.

And here stampboards is a good protection. We all need a lot of knowledge of which we can find some here on stampboards.

It is the best protection.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by stampsrart »

Replace the word Manning with Gibbons in this legal document and you will understand how their "Guaranteed" stamp investment Ponzi scheme operates.

Gibbons will be the next foot in the grave for philatelics - or perhaps it will be the PSE stamp grading scheme ????
Visit my web site www.stampsrart.com to learn some hopefully new information that you can use to preserve your philatelic items
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by rgnpcs »

Please excuse the error in my post of spelling the word "altering" wrong, I had it as "alterating". I think that I invented a new word. One of my weak areas is spelling, and I use "spell check" quite a lot.

My wife bought a Word Power for me several years ago, and that is always by my side, a very handy tool.

I am enjoying the comments about Greg Manning. Seems that I am not the only one that does not approve of him.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Lakatoi 4 »

Richaard,

I've edited that word for you now :D
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Skippy »

I have never heard of a Ponzi scheme and have just spent a bit of time reading google.

Thankyou Glen and stampboards, this board is so much more than "Just stamps" :!:

For Ponzi schemes in general.... If I understand it right A Ponzi scheme works by using the money of new investors, to pay the earlier investors.... and it circulates like that as long as people keep investing to top it up ?

Our whole econony is one big Ponzi scheme :lol:

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by fromdownunder »

Skippy wrote:I have never heard of a Ponzi scheme and have just spent a bit of time reading google.

Thankyou Glen and stampboards, this board is so much more than "Just stamps" :!:

For Ponzi schemes in general.... If I understand it right A Ponzi scheme works by using the money of new investors, to pay the earlier investors.... and it circulates like that as long as people keep investing to top it up ?

Our whole econony is one big Ponzi scheme :lol:

Skippy
Well not really. In the real economy money is used to create real wealth (a factory producing wallamigots, a dam, a power station an internet, Barbie dolls) which has "value", ultimately to consumers, who are then willing to pay for the goods and services produced by this money which increases it's circulation and movement (which is in an "idiot's guide to the economy" sense, why low inflation is built into the fiat money system)

In a Ponzi scheme there is no added value. The newer money is just used to pay interest on the older money. As soon as you run out of new money, people just lose interest :lol: :lol: :lol: :lol: :lol: :lol: , and as in a pyramid scheme the later people lose their capital investment, because that has what has been used to pay interest to the earlier investors.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Skippy »

Thanks for that Norm

I was thinking Rudd's stimulus package so the "economy bubble" doesn't burst was similar to finding a new investor (new money) for the Ponzi scheme.

Like Ponzi, Rudd has taken from one to give to the other.... " here I'm giving you money, trust meeee *big Ruddy grin* "

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by fromdownunder »

Well Governments can just print money. Look how well it has worked for Zimbabwe (and Germany in 1923). The scary thing is that these days, it does not even have to be printed - it can be "created" and just added automatically to the bit of plastic sitting in your wallet/purse.

You get it from a computer program, spend it on whatever from your plastic card, and it has come and gone as though it never existed. I could get a $10,000 credit card tomorrow, easily, from just about anywhere I wanted to, and "spend" $10.000 that technically does not exist today. All that exists is my promise to pay it back.

I hope the banks and major finance companies like AIG know what they are doing....oh, wait.... :shock: They don't.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Fraaank »

Whooaaaaah!!! :shock:

What a read - if this scheme wasn't so bad it would almost be laughably good in its detail and execution. :lol: Top marks for creativity.

I guess it's just the old case of one cover up, leading to and inspiring another, with the added incentive (that most of us don't get when twisting the truth) Financial GAIN.

There's going to be some headaches involved in sorting this out - hope most of them are wicked migraines dealt to Manning. :twisted:

This is why most collectors are lovely people - they are in it for the joy - not the money. Joy really is free.

And those in it for the money often have an appreciation of the little pieces of art they are collecting or rehousing to worthwhile homes.

They also happily help the little collectors, honestly promote the hobby and share their knowledge with others (like Glen does). And at the end of the day they should be financially rewarded for their efforts.

Those who don't fit into these categories are the regummed forgeries just oozing with unseen rust - like Manning.
It's not stamp mess - I just need time to sort it out....
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by mozzerb »

Ironically, if the journalist writing the expose below has got it right, Escala/Afinsa were brought down by a bunch of "naked short seller" types who had identified a genuine target for once.

In short, the story would be big league crooks shafting medium grade crooks. :)

The names of Escala/Afinsa kind of jumped out at me when I read it (p60): it's an interesting and sadly believable piece (albeit one that would make the Afinsa scandal look like shoplifting).

http://www.deepcapture.com/wp-content/uploads/2008/06/deepcapture-the-story-v1.pdf" onclick="window.open(this.href);return false;
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by admin »

mozzerb . . this outfit were on trainer wheels!

Disgraced USA financial guru Bernie Madoff is facing a 150 year prison sentence for perpetrating the biggest "Ponzi" scheme in history.

In March 2009, Bernie Madoff pleaded guilty to defrauding investors of $US65 BILLION - not million!)

Oddly, this matter seems to have attracted surprisingly little press outside the USA. Madoff will be sentenced on June 16
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Nguyen »

GlenStephens wrote:I stress this brief was only filed March 23, and AFAIK is still before the courts
Sorry for my poor reading, but what's the status of the issue?

Madoff was convicted yesterday, June 30, for 150 years in prison. I believe he deserves much much more!
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by gavin-h »

Nguyen wrote:Madoff was convicted yesterday, June 30, for 150 years in prison. I believe he deserves much much more!
Apparently when he heard the verdict, he turned to the judge and said "150 years! I can't do that!!!".

The judge just smiled and said "Well, just do what you can..." :lol: :lol: :lol:
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by PeterS »

Nguyen wrote:
GlenStephens wrote:I stress this brief was only filed March 23, and AFAIK is still before the courts
Sorry for my poor reading, but what's the status of the issue?

Madoff was convicted yesterday, June 30, for 150 years in prison. I believe he deserves much much more!
He is 71, so if he was to do the whole 150 (the maximum possible sentence for his crimes) he would need to live to the age of 221! Rather unlikely. :roll:

What he has effectively gotten is a life sentence.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by admin »

I got this email from Greg Manning today.

I post it here as it links to a site that gives his side of the story, and as they say, there are always 2 sides to any story. :idea:

Glen

----------------------

Dear Glen,

A new website is up at http://www.gregmanning.me" onclick="window.open(this.href);return false; which contains much information about Greg Manning Auctions/Escala and the manipulation of its share price.

An independent research report posted on the website, "Market Manipulation of Escala", details massive unexplainable share volume, both short and long stock sales, which apparently evidences huge illegal share price manipulation based on actual trading numbers and this detailed analysis.

In addition, this website contains direct feedback from an Afinsa client regarding current affairs in Spain. Links to Spanish websites show pictures of massive demonstrations against the Spanish government by Afinsa clients.

If you have any interest in learning the truth about the events of May 9, 2006 that took place in Madrid, please take a few minutes to review this site.

Regards,
Greg

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by OttawaMike »

That site is a really dull read, but if even some of that stuff is true, what a mess! I suspect you'll have to look very hard to find anybody who is totally clean in this fiasco.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Frank E Ring »

Reading their defense's side of the story makes me think they managed to truly piss off some prominent people (eg investors and politicians), and additionally somebody who figured there was an astounding cash balance to be raided (a cash amount that, quite frankly, should not have existed if Afinsa did indeed stock up on valuable stamps, like they promised their small scale fishing-village-investors). The web that Afinsa was weaving in every corner of the world, involving even such agencies as the UNICEF and UPU, would clearly stand a good chance for upsetting others.

On the day that Afinsa was raided, the market for mnh EUROPA CEPT stamps went belly-up. Dealers and investors alike were running around trying to load off their stash (we're talking AU$1Mill+ franking value per snout) all over Europe. Some had news from Spain come in early and got lucky. Others are selling postage at half off until eternity. And the funniest thing was that this dive was not reflected in the Michel CEPT Special catalog that was published the following winter; its foreword talking about small adjustments in the market ;-) So much for catalog value being reliable intel.

Anybody know what kind of stamps were in Afinsa's vault?
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by admin »

OttawaMike wrote:That site is a really dull read, but if even some of that stuff is true, what a mess! I suspect you'll have to look very hard to find anybody who is totally clean in this fiasco.
Oddly the 'timeline' goes up to December 2006 -

http://www.gregmanning.me/inner.asp?z=4
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Global Administrator »

Kevin Morgan just passed this onto me -

http://www.barcelonareporter.com/index.php?/news/comments/af ... 11091241pm" onclick="window.open(this.href);return false;


As reported by the High Court of Madrid, the holder of the court, Francisco Javier Vaquer, however temporarily suspend the obligation of the receivers to present a plan to sell the assets of the company and to begin to pay the 190,666 customers

Afinsa go into liquidation. Those affected will receive a maximum of 33% of money invested

The Commercial Court number 6 in Madrid has agreed to dissolve and liquidate Afinsa, after the company failed to provide tangible assets for creditors to support its viability plan.

The 190,666 customers affected will recover a maximum of 33% of what they invested because the company only had assets valued at 812.64 million it should be 2443.75 million, leaving a hole of 1.631 million euros.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by PeterS »

Global Administrator wrote:Kevin Morgan just passed this onto me -

http://www.barcelonareporter.com/index.php?/news/comments/af ... 11091241pm" onclick="window.open(this.href);return false;


As reported by the High Court of Madrid, the holder of the court, Francisco Javier Vaquer, however temporarily suspend the obligation of the receivers to present a plan to sell the assets of the company and to begin to pay the 190,666 customers

Afinsa go into liquidation. Those affected will receive a maximum of 33% of money invested

The Commercial Court number 6 in Madrid has agreed to dissolve and liquidate Afinsa, after the company failed to provide tangible assets for creditors to support its viability plan.

The 190,666 customers affected will recover a maximum of 33% of what they invested because the company only had assets valued at 812.64 million it should be 2443.75 million, leaving a hole of 1.631 million euros.
I wonder how much of that 812.64m Euros will actually be achievable? I suspect 33% will be a dim and distant prospect for the unlucky 'investors'.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Eric Casagrande »

PeterS wrote:
Global Administrator wrote:Kevin Morgan just passed this onto me -

http://www.barcelonareporter.com/index.php?/news/comments/af ... 11091241pm" onclick="window.open(this.href);return false;


As reported by the High Court of Madrid, the holder of the court, Francisco Javier Vaquer, however temporarily suspend the obligation of the receivers to present a plan to sell the assets of the company and to begin to pay the 190,666 customers

Afinsa go into liquidation. Those affected will receive a maximum of 33% of money invested

The Commercial Court number 6 in Madrid has agreed to dissolve and liquidate Afinsa, after the company failed to provide tangible assets for creditors to support its viability plan.

The 190,666 customers affected will recover a maximum of 33% of what they invested because the company only had assets valued at 812.64 million it should be 2443.75 million, leaving a hole of 1.631 million euros.
I wonder how much of that 812.64m Euros will actually be achievable? I suspect 33% will be a dim and distant prospect for the unlucky 'investors'.
Peter ... they forgot the decimal point.

What they really meant was 3.3%. :lol:
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by PeterS »

Eric Casagrande wrote: What they really meant was 3.3%. :lol:
Optimist!! :lol: :lol: :lol:
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by figmente »

As reported by the High Court of Madrid, the holder of the court, Francisco Javier Vaquer, however temporarily suspend the obligation of the receivers to present a plan to sell the assets of the company and to begin to pay the 190,666 customers
That first sentence sure seems a super example of goobley-gook, especially the string in the middle

"however temporarily suspend the obligation of the receivers to present a plan to sell".

I can't extract a clear meaning from that, and must wonder whether it really matches the statement which follows
Afinsa go into liquidation.


Taking a guess that the 812.64 million represents catalog values, mostly from Michel and other European catalogs and such things as the alledged captive catalogs for specialty material of which they had bought the bulk of the world's supply, that 3.3% estimate could easily be way too high.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Global Administrator »

got this today -

================

Spectrum Group International, Inc. Announces Preliminary Settlement with Former CEO Greg Manning

Manning Announces Proposed Resolution with SEC

Spectrum Group International, Inc. (SPGZ.PK) today announced that it had entered into an agreement in principle to settle the arbitration action between the Company and its former President and CEO, Greg Manning. In the action, which was brought in 2007, Mr. Manning asserted claims for breach of contract and defamation, based on his allegation that the Company wrongfully terminated his consultancy for cause.

Mr. Manning sought damages of approximately $34,000,000. The Company filed counter claims against Mr. Manning for breach of contract, breach of fiduciary duty and unjust enrichment, seeking damages of approximately $20,000,000. The Company also sought a declaration that Mr. Manning was not entitled to advancement of legal expenses or indemnification from the Company.

As part of the settlement agreement, which is subject to the satisfaction of certain conditions, the Company has agreed to pay $2.7 million in cash, resolving all of the arbitration claims as well as certain other obligations arising out of Mr. Manning's employment with the Company, including those relating to indemnification.

In announcing the preliminary settlement agreement, Greg Robert, President and CEO of the Company, said "While both sides were prepared to go to arbitration, our Board of Directors determined that a settlement on these terms was in the best interests of the shareholders.

The final resolution of this matter, following the Company's settlement last year of the shareholder litigation and the investigation by the Securities and Exchange Commission (SEC), will help reduce legal fees and expenses going forward and will enable management to focus its time and attention on our ongoing businesses."

Greg Manning stated, "When Greg Roberts approached me and suggested we explore an amicable settlement of this arbitration, it made sense to me to resolve this matter with the company I had founded. Fortunately, at the same time the staff of the SEC and I were able to reach a proposed resolution to settle the charges brought against me personally in connection with the SEC's investigation into the Company's historical transactions with Afinsa, its majority shareholder.

"I understand that the staff has agreed to recommend this proposed settlement offer to the commission. Once final, both of these settlements will bring both closure and more time for me to pursue productive endeavors in several fields of interest."
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by aethelwulf »

The SEC compiles a 60-page document outlining how Greg Manning rigged prices, tried to buy a catalogue so that he could invent whatever prices he wanted (such as a $6 stamp becoming "worth" $160), etc etc, and he still manages to get $2.7 million in damages from the company he was kicked out of? :shock: Obviously he still has some connections (given his behaviour I'd hesitate to call them 'friends') on the board of directors who did him a favour...
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by PeterS »

aethelwulf wrote:The SEC compiles a 60-page document outlining how Greg Manning rigged prices, tried to buy a catalogue so that he could invent whatever prices he wanted (such as a $6 stamp becoming "worth" $160), etc etc, and he still manages to get $2.7 million in damages from the company he was kicked out of? :shock: Obviously he still has some connections (given his behaviour I'd hesitate to call them 'friends') on the board of directors who did him a favour...
It might not, necessarily, be damages. The settlement could amount to settlement of severance issues (termination payout). Happens here often enough, when a CEO or such is terminated and cannot reach an agreement over severance pay.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by GlenStephens »

Had not seen this before.

http://www.sec.gov/litigation/litreleases/2010/lr21630.htm

SEC Settles Disclosure and Accounting Fraud Charges Against Escala Group, Inc.'s Former CEO, Gregory Manning.

The Securities and Exchange Commission announced that on August 23, 2010, the Honorable Denise Cote of the United States District Court for the Southern District of New York entered a Final Judgment against the founder and former CEO of Escala Group, Inc., Gregory Manning ("Manning"), 64, who was charged, along with then-NASDAQ National Market issuer Escala Group, Inc. ("Escala"), and former CFO Larry Lee Crawford, 62, with disclosure and accounting fraud violations concerning related party transactions between Escala and its parent company, Afinsa Bienes Tangibles, S.A. ("Afinsa").

The Final Judgment, to which Manning consented without admitting or denying the allegations in the complaint, permanently restrains and enjoins Manning from: (blah, blah re acts and sections) It also orders Manning to pay $669,489 in disgorgement, prejudgment interest and penalties, and bars Manning from serving as an officer or director of a public company for 10 years.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by stallzer »

Pretty sad, but ain't that America ? He has to pay back one tenth of what he swindled honest people out of, and he can resume his crooked activities again but he must not put his name on the brand.

It just goes to show that in America, justice is for those who can afford it...aka John Delorean etc... I just wonder how much the District Attorney, prosecuting Attorneys' and Court system were paid for this.

And of course, the kicker here is that even though he will pay out a small amount of money, there is no guilty verdict here so no criminal record.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by panda.bear »

Thanks for the research Glen - I remember reading about this story when it first broke and it made me sick.

In my opinion, these con-men who prey on the naivety and good faith of often hard working people deserve a very special place in Hell.

Hopefully the SEC's case is just a start in a long list of judgments against those involved.
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by fromdownunder »

Has anybody on the ground got any more information on the Afinsa Pontzi Scheme? The latest I found was from Wiki which claims:
In July 2013, a Spanish court handed down indictments against 14 officers of Afinsa and Escala.
This is taking...like...forever.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Rod Perry »

Yes, curious that the most amazing philatelic "scheme" since the Shanahan Saga of the 1950s is unfolding with a whimper?

I read somewhere that Greg Manning advised the powers that be that he found US$180 million worth of forgeries in the Afinsa philatelic inventory!

Greg had come a long way since I first met him in N.J. in 1973 and he was able to offer me "hot" obsolete Australian stamps at face (he was at the time the Australian P.O. Agent in U.S.).

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by gavin-h »

fromdownunder wrote:Has anybody on the ground got any more information on the Afinsa Pontzi Scheme? The latest I found was from Wiki which claims:
In July 2013, a Spanish court handed down indictments against 14 officers of Afinsa and Escala.
This is taking...like...forever.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by fromdownunder »

So... as far as my (limited) research has still not thrown up anything related to Court Cases regarding the Afinsa scam!

Hell, it's been close to 10 years now, and some of the retirees who were depending on stamp investments to fund their retirement are probably dead by now.

What does it actually take, even in Spanish Courts, to stop stamp scammers?

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Allanswood »

Did you miss the email from Linn's last August?

http://www.linns.com/news/world-stamps-postal-history/2016/a ... heme.html#

"Afinsa officials receive prison terms for stamp-investment scheme
August 02, 2016 12:15 PM

The National Court of Spain sentenced 11 former officials of Afinsa, a Spanish stamp dealer, to prison terms of up to 12 years July 27 for their involvement in a fraudulent stamp-investment pyramid scheme.
By Charles Snee

Eleven former directors of Afinsa Bienes Tangibles S.A., one of Spain’s biggest stamp companies, were sentenced to prison July 27 by Spain’s National Court, following conviction on charges that included criminal bankruptcy, fraud, and falsification of accounts.

The prison terms, which range from two to 12 years, were handed down by the court in response to the officials’ roles in the sale of stamp investments in a pyramid scheme that siphoned the savings of hundreds of thousands of investor customers.

Among the officials sentenced was former Afinsa president Juan Antonio Cano, who was sentenced to 12 years and 10 months.

The Associated Press reported July 27 that “the court ordered six of the former directors of Afinsa to pay a total of 2.6 billion euros [$2.9 billion] in compensation to the company’s 190,000 investors.”

Investigations of Afinsa’s questionable philatelic investment practices date back to early 2005, when Barron’s, the Financial Times and others published high-profile reports critical of the firm’s methods.

In early May 2006, Spanish authorities began investigating whether Afinsa and Forum Filatelico, another large Spanish stamp dealer, sold questionable stamp investments to as many as several hundred thousand small investors.

Linn’s reported May 29, 2006, that the Afinsa and Forum Filatelico stamp-investment programs were shut down. Spanish authorities raided both companies May 8, 2006, and ordered them to close.

At that time, eight officials of Afinsa and Forum Filatelico were sent to jail.

“According to accounts in Spanish newspapers,” Linn’s reported May 29, 2006, “the Afinsa investors were being promised a return of 6 percent a year on investments as low as $400.

“But the investors, many of them said to be elderly, never saw the stamps in which they were investing, one Spanish news service said. Afinsa held the stamps in its vaults.”

In that same report, Linn’s said “the Financial Times reported that the Spanish investigation might have been prompted by the refusal [in early 2006] of the Lloyds of London reinsurance syndicate to renew policies for the two Spanish collectibles firms.

“The Financial Times said stamp experts had advised Lloyds that the investment plans being offered by Afinsa and Forum Filatelico lacked a sufficient number of what the Financial Times called ‘investment grade’ stamps.”

According to the July 27 Associated Press report, Spain’s National Court “said Afinsa lured people with promises of high returns on investments in antique stamps that turned out to be overvalued or fake. The interest payments came from new customers and not from appreciation in stamp value, as promised.”

Another factor that likely contributed to the magnitude of investors’ losses is that investment plans in collectibles were not regulated in Spain at the time. Because of this, most such investments were not insured."
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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by malcolm197 »

The problem with Spain is that there is institutional corruption in many areas of public and private life which makes the aquisition of justice very difficult.

I have just returned from a 4 week break on the island of Lanzarote in the Canary Islands and the local English language magazine is full of instances of corruption ( in some cases leading to prison sentences when the culprits are eventually nailed). There were cases ongoing at Municipal, Island Council and Canary Government ( and probably National Government level) also.

This is a long way from suggesting that everyone is corrupt, but it seems to be that the Captains of industry, and local and national politicians are all drawn from the same groups of society and everyone is,metaphorically, in bed with everyone else. It takes a huge outcry of public opinion ( which doesn't happen very often),or a crusading individual to make any impact. Even the King had to abdicate because he was on the perifery of scandalous business deals.

The AFINSA scandal may only have eventually been resolved because it hurt a number of the aforementioned same groups of society.

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Re: Greg Manning/Escala/Afinsa mess now in US District Court

Post by Global Administrator »

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"470,000 families with 10 years of no income" - regular Spanish Afinsa street protests.


Noticed this doing some research -

SPAIN FRAUD

Former execs at a Spanish philately company jailed for huge fake stamp con

efe-epaMadrid 15 Feb 2018

Former execs at a Spanish philately company jailed for huge fake stamp con

Victims of Afinsa's stamp con protest in front of the Spanish National Court in San Fernando de Henares, Spain, Nov. 19, 2015. EPA-EFE FILE/FERNANDO VILLAR
Former execs at a Spanish philately company jailed for huge fake stamp con

The former president of Afinsa, Juan Antonio Cano (C), and the company's founder, Albertino de Figuereido (R), outside Spain's supreme court in Madrid, Spain, on July 28, 2016. EFE/MARISCAL

Menéame

A Spanish court ruled Thursday that a group of businessmen who duped many small-scale investors into staking their life savings on a supposedly high-yield venture based on postage stamps that in fact was no more than a pyramid-sales fraud should serve jail time.

Spain's National Court made public its verdict in the case of a company that sold allegedly rare stamps to investors as part of a Ponzi scheme that eventually wiped out the savings of more than 150,000 customers, in which it sentenced the company's former executives to various prison terms for aggravated fraud, money laundering, false accounting, bankruptcy fraud and tax crimes.

The ruling, which was accessed by EFE, said that the former top leadership of Afinsa was required to enter prison within the 10 days following the decision, which was made late on Wednesday.

According to the judges, Afinsa's clients were swindled by sales representatives who recommended they persuade relatives, friends, neighbors and acquaintances to join the scheme woven by the company's management by investing in philatelic products.

In exchange, Afinsa promised to re-buy the stamps at a higher price, a profit that derived from the company's constant revaluation of assets through pyramid sales.

The court said that this business model was "untenable," since Afinsa's investment was minimal and generated costs that increased its deficit equity, as demonstrated by the black hole in accounting of 2.6 billion euros ($3.2 billion) that prompted a police operation resulting in the arrest of Afinsa's top brass in 2006.

Afinsa's ex-president, Juan Antonio Cano, was sentenced to eight years and seven months in prison, while the company's founder, Albertino de Figuereido, his son, Carlos, and Afinsa's former CEO, Vicente Martín, were all condemned to more than eight years' imprisonment and fines of over 100,000 euros each.

In addition, Afinsa's ex-accountant, Emilio Ballester, was sentenced to eight years and four months as an accomplice to the crimes, while the person responsible for supplying the stamps, Francisco Guijarro, was handed a two-year sentence and a fine of 17.7 million euros for money laundering.

Guijarro, who went from being unemployed to amassing a fortune of more than 30 million euros in less than five years thanks to the massive scam, became Afinsa's sole stamp supplier between 1998-2003.

Police found 10 million euros in 500-euro bills hidden behind a freshly-built gypsum partition wall at his lavish mansion in northern Madrid.

The system used by the company consisted of recruiting small investors, often elderly people, who would pay small sums for stamps based on the promise of a 6-percent annual interest and the assurance that the products would rise in value as time went by.

Around 80 percent of the victims _ who never saw their stamps _ invested no more than 20,000 euros, while only 0.0001 percent put more than a million euros into the venture.

The ruse succeeded because the word-of-mouth recommendations by investors, encouraged by Afinsa, made the company gain new participants at a ballooning rate, thus enabling the payment of interest to original clients through revenue paid by new investors; this was tantamount to a classic Ponzi scheme.

In the summer of 2005, however, a United States broker named Louis Corrigan, who worked for the Atlanta-based hedge fund Kingsford Capital, sent a letter to the Spanish attorney general in which he denounced Afinsa's fraudulent activities.

On May 9, 2006, Spanish authorities carried out "Operation Atrio" against Afinsa and a similar philately company, Fórum Filatélico, after the country's tax agency found that both businesses had committed several fiscal crimes.

At the time, Afinsa had all the appearance of a blue chip company: it counted some 175,000 clients, possessed 100 offices spread out around the world, employed 2,600 people and showed a profit of 51 million euros; furthermore, Fórum Filatélico boasted 202,000 customers, 281 employees, 1,345 agents, five branches and 84.2 million euros in profits.

Spain's anti-corruption prosecutor said that the stamps' prices, which were set by the companies, were extremely overvalued, with some of the ones sold by Forum Filatélico being prized at 13 times their market value. In the case of Afinsa, many of the stamps they were peddling turned out to be fake.

Afinsa often bought the stamps from Guijarro at 8 percent of their value listed in philately catalogs and re-sold them at a monstrous profit of up to 1,150 percent. Just between 2000-02, it spent 57.88 million euros on the stamps and sold them for 723.55 million euros.

After a lengthy trial that stretched for almost a decade, Afinsa's executives were convicted by the national court in July 2016 and sentenced to up to 12 years in prison, although the Supreme Court later reduced Cano's sentence to only eight years.

Meanwhile, the separate (albeit related) trial focusing on Forum Filatélico started in Sept. 2017 and is expected to drag on until at least the spring of 2018.

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Re: Greg Manning/Escala/Afinsa stamp Ponzi Scheme mess in Co

Post by ViccyVFU »

This happens all over the world, all the time.

Creating false catalogue values to show growth...... Guaranteeing unrealistic returns over investment period .... Paying early investors out from proceeds of later investors .... selling at artificially high prices .... "no brainer claim" .... collapsing.

Did someone mention Stanley Gibbons Investment (Guernsey) Limited?

Its still happening today ... look at Changechecker.org (the marketing division of Westminster Collectables), and a grading company in America (Who think they are comparable to the RPSV, but in reality are just a commercial marketeer of stamps).

Anyone who thinks they are on to a "no brainer" investment, should print this off to remind themselves that few things are certain ....

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Re: Greg Manning/Escala/Afinsa stamp Ponzi Scheme mess in Co

Post by ottawasteve »

I just stumbled across this thread today. How interesting!

I always wondered whatever happened to Greg Manning Auctions, and especially Nutmeg. The latter was a great auction house, as they tended to strongly undervalue some areas I collected. I picked up several Lydenburg overprint pairs for a song from them, and some terrific WW2 covers.

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