Bidders Flock to Booty Call

Tour the site of the Treasury Department’s seized assets auction at a vast warehouse off the Long Beach Freeway this week and the question that comes to mind isn’t whether crime pays, it’s whom crime pays.

To be sure, a quick survey of the wares confiscated by the government provides ample evidence that misdeeds can reap great rewards for lawbreakers: a cherry red 1991 Ferrari Testarossa, a 20-foot Sanger speedboat and a shimmering, 18-carat gold Rolex.

But it’s not the crooks who are ultimately getting the payoff.

It is people like Eddie Quitana, who flew in from Miami to eyeball a carton of Tommy Hilfiger shirts that retail for $75 each, and other high-end clothes. He paid $5,800 for 151 cartons of colorful women’s blouses, which he expects to resell to Brazilian and Jamaican stores at a huge profit.

And Stephen Horowitz, who came from San Francisco to pay $15,500 for 26,000 pounds of fluorescent light bulbs he has never seen (they are in a warehouse in Chicago), which he plans to sell to an East Coast distributor for a big markup. Or Mike Coppersmith, who paid $4,000 for nine cartons of leather corsets and other “handicrafts” that he may sell for double that price.

They sometimes call themselves “liquidators.” Others call them hustlers. Whatever their job title, the description is the same: They travel from government auction to government auction, bidding on anything they think they can sell in a scramble for profits.

To the outside world, government auctions are often thought of as secretive sales where one can, well, make a steal buying exotic cars or expensive jewelry at low prices. And sometimes that’s true.

But to these men, it is a way of life.

“The police did their job,” said Quitana, a bargain-starved nomad who follows the auction circuit from Fort Lauderdale to Edison, N.J., to Los Angeles. “It’s my job to buy it and sell it.”

And so the same handful of men and women--some of them self-made millionaires--jaunt from auction to auction, gambling that they can tell the treasure from the trash, and that they can beat their competitors to a deal.

“You’re shooting craps,” said Quitana, flashing a toothy smile and a diamond-studded Gucci watch he bought at another auction for $500 (appraised value: $1,250.) On Thursday, he rolled the dice on a shipping container full of golf bag parts, paying $1,200. “I figure a 20-foot container with anything inside it is worth $1,200.”

Early Tuesday, at an auction preview, Quitana had looked over a carton of Armani-label bluejeans, but dismissed them as counterfeit--not that he was sharing his suspicion with other shoppers. Better to let some other sucker bid on them.

Of course, what’s a steal and what’s a rip-off is in the eye of the beholder. Hidden among the hundreds of items on the auction block: 65 pounds of dried shark cartilage, 200 pounds of pink earmuffs and 200 cartons of foreign-made “Death” cigarettes, in black packs marked with skulls and crossbones, with a manufacturer’s label that warns: “If you smoke, quit.”

Many of the items offered Thursday were for export only, because U.S. food or environmental regulations ban certain products from domestic sale. That doesn’t stop the top liquidators, who have set up export networks from Chile to Israel.

“In this kind of business, you’ve got to know more about what not to buy than what to buy,” said one buyer who asked not to be identified. “It’s a high-wire act.”

Whether they are attended by wheeler-dealers or auction rookies, the sales have become increasingly profitable for the federal government.

In recent years federal agents have seized millions worth of luxury items in money laundering, counterfeiting or smuggling stings.

And millions of dollars more in goods abandoned on the docks of U.S. ports also end up on the auction block.

The Treasury Department holds about 300 auctions a year to offer a cornucopia of commodities confiscated by the Customs Service, the Internal Revenue Service, the Bureau of Alcohol, Tobacco and Firearms, and the Secret Service.

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Net profits from auctions over the last five years exceed $125 million.

Thursday’s auction, bolstered by heavy pre-sale publicity, drew 2,000 registered bidders and raised $1.14 million in about four hours.

Warehouse officials, who have the contract to oversee the Treasury’s auctions, said it drew more bidders than any auction in recent memory, even more than the 1995 sale of a seized mansion used in making “Beverly Hills Cop II.”

To the liquidators, crowds spell trouble. Too many wallets and too few brains make for higher prices for everyone.

“With a crowd like this, from all walks of life, these people are not wholesaling,” said Coppersmith, a liquidator for 33 years. “These people are here to take what they want at any price.”

What food distributor Albert Guerrero wanted Thursday was a Ferrari.

The government happened to be selling one, confiscated from a suspect who IRS agents say cheated Northern California landowners out of $15 million in a fraudulent timber selling scheme.

The car had only 1,507 miles on it, but like everything else at the auctions, comes “as is, where is,” with no warranty.

Guerrero, who turns 85 next week, drew a round of applause as he placed the winning bid, $112,000--a figure that was frowned on by several veteran auction-goers as being too high.

But it certainly wasn’t the only purchase of the day to raise eyebrows. Horowitz, the light bulb liquidator, said he also looked at the items in Lot 77, a set of printing equipment confiscated by the Secret Service from a counterfeiting ring, and shook his head when someone paid $6,000 for the stuff.

“It’s rusted, it’s old. For me, that’s a real brain-scratcher,” he said.

“But that guy might say, why pay [$15,500] for light bulbs?”

Then again, one reason the printing press might have brought such a price is that its drum still had an imprint of a $20 bill on it.