Yeager Sued by Sports Collectibles Investors

A six-line classified ad in the Fresno Bee followed by a call from former Dodger catcher Steve Yeager were enough for Gary Beaudette to withdraw $2,950 from his 401-K plan, at a great penalty.

Beaudette, 40, a sales manager for a roofing company, responded to the sports collectibles company’s pitch. Then a phone call from the former World Series hero to his Modesto home about two weeks later closed the deal, Beaudette said.

“He talked about what a great company it was and how he staked his reputation on it,” said Beaudette, who withdrew the money despite the 10% early-withdrawal penalty. “That was the main thing. . . . With Steve Yeager, you can’t go wrong.”

But since then, little has gone right for the company Yeager was representing, Collectibles International of Laguna Niguel. It filed for bankruptcy in April, and the company and its chief executive officer, Nicholas A. DiPaolo, face seven lawsuits in five states.

Neither DiPaolo nor his bankruptcy lawyer could be reached for comment. DiPaolo denied any wrongdoing after one of the lawsuits, in New York, was filed. Yeager is involved in settlement discussions in that suit.

Instead of being able to tell the kids he coached on his son’s PONY League team he was working with a company whose spokesman was the co-MVP of the 1981 World Series, Beaudette is merely a name on a list of hundreds of wannabe brokers and creditors who are trying to get their money back.

Beaudette and others answered ads that promised returns of as much as $800 a day working as sports card brokers. Court papers said applicants were asked to pay $800 to almost $3,000 as a deposit, but the requirements to get the deposits back were almost impossible to meet.

Yeager, 48, has been named in two of the lawsuits--an action in U.S. District Court in New York and another in the Circuit Court of Cook County, Ill.

Yeager, who retired from baseball in 1987, said he could not comment when contacted at a recent sports card show at the Hollywood Park Casino.

“I can’t say anything about it because I’m in litigation,” Yeager said. “I’m just a spokesman for the company, that’s all I can say.”

Said Yeager’s lawyer, Leonard Lerner: “Steve Yeager shouldn’t be in this lawsuit. . . . The wrong guy is left defending actions he doesn’t even know about.”

Lerner said his client was only a celebrity spokesperson, not an officer of the company or even a paid employee.

Yeager was featured in Collectible International’s brochure, on an audiotape and a videotape and made at least two personal appearances, in New York and Detroit, according to those who invested in the company.

Collectibles International and DiPaolo entered Chapter 7 bankruptcy proceedings in April. Court documents show the company with assets of $1,050 and liabilities of $232,274.64.

The company’s legal trouble escalated last June with a lawsuit filed by the New York Department of Consumer Affairs and later transferred to federal court, saying the company engaged in deceptive trade practices.

Jose Maldonado, New York’s consumer affairs commissioner, called the venture “classic snake-oil salesmanship.”

He said a combination of factors led individuals to trust Yeager.

“The average sports fan is living from paycheck to paycheck,” he said. “When you see an opportunity to identify and affiliate yourself with a sports figure and given the chance that you can make money for it, they’re going to fall for it.”

Collectibles International placed advertisements in newspapers around the country. For his investment, Beaudette received names and numbers of people in the Modesto area who supposedly were interested in buying or selling sports memorabilia. He said he contacted at least 20 individuals on the list, but no one was interested.

Beaudette contended he met the requirements to receive his refundable deposit.

Said Maldonado: “Their material was nothing short of a litany of falsehoods and misrepresentations.

“They’re supposed to have given leads that were pre-screened, people Nick DiPaolo knew, sports fans. People on the lists were people who were deceased or people who had moved away or had no interest in sports memorabilia.”

More than a year later, Beaudette has made numerous attempts to reclaim his deposit and has informed government agencies about his experience, as a thick file of correspondence attests.

“They took the money and ran--and a big part [of his getting involved] was Steve Yeager,” Beaudette said.

Beaudette is not alone in his displeasure.

Not every consumer became involved solely because of Yeager’s backing, but Mitchell Savage of Staten Island, N.Y., who said he lost about $2,500 in his dealings with Collectibles International, felt Yeager’s endorsement of the company increased his comfort level.

“It kind of legitimized it,” Savage said. “I felt a whole lot better. In fact, he welcomed me to the company.”

Maldonado’s department brought action against former Cincinnati Red catcher Johnny Bench and the Home Shopping Network in 1993, contending Bench and the company allegedly made false or misleading claims concerning the retail and investment value of their products.

The matter was settled when Bench paid $5,000 and Home Shopping Network $30,000, but neither admitted to any wrongdoing.

In Collectibles International’s brochure, DiPaolo, 28, is said to have more than 20 years’ experience in sports cards and collectibles.

Both lawsuits said DiPaolo did not manage a leading auction house at the age of 20, as claimed in the brochure, but was a low-level employee, according to a letter from the company president submitted in the lawsuit.

The brochure also says DiPaolo was quoted in the business section of the Los Angeles Times in 1993 on his outstanding investment performance. There is no mention of DiPaolo in any Times’ story in 1993.

Also at issue in the New York lawsuit is DiPaolo’s claim that the company works “directly” and “very closely” with leading baseball card companies. Letters filed with the lawsuit from Topps, Upper Deck and other companies state otherwise, and none of the companies gave authorization to use its logo in Collectibles International’s brochure and video.

“This one differs [from the Bench case] in the level of promotion and hucksterism, if you will, on the part of Nick DiPaolo and Steve Yeager,” Maldonado said. “It reached new heights.”

The company’s fall started with lawsuits in New York and Illinois and culminated with the bankruptcy.

Illinois Atty. Gen. Jim Ryan filed suit against the company in November. Illinois consumers reported losing more than $16,000, and the New York Department of Consumer Affairs office has received more than 60 complaints. Lawsuits also were filed in Maryland, California and New Jersey.

How much money Yeager earned from Collectibles International is unclear, but Lerner said payment was a flat, yearly fee. “It was peanuts, a couple thousand a year,” he said.

As for Yeager’s appearances and phone calls, Lerner said the interactions were formatted. “He was given a script and he was asked to read it,” Lerner said.

Lerner contended that the wrong person is being held responsible. “It’s somebody in middle America who bought a bill of goods and would like to blame the spokesman,” he said.

Although there is no large body of case law dealing with an endorser’s obligations, one noteworthy settlement in 1990 involved actor Lloyd Bridges, who had appeared in a commercial in which he endorsed an investment firm and mortgage company that eventually bilked investors out of millions.

In 1981, singer Pat Boone, who had endorsed an acne medicine, was ordered to help pay refunds to unsatisfied customers.

Los Angeles publicist Michael Levine, who has represented Barbra Streisand and Michael Jackson, said celebrities have ethical and moral responsibilities when they lend their credibility and name to a product.

“It’s an odd time in our country,” he said. “Before there had never been a big correlation between credibility and visibility. Today, if you’re visible, you’re credible.”

Said Maldonado: “A sports figure or any public figure has a moral and an ethical responsibility to learn something about the product they are being asked to endorse.”

Since his retirement--Yeager finished with the Seattle Mariners after spending most of his career as a Dodger--he has faced financial difficulties. The thrice-divorced Yeager filed a Chapter 7 bankruptcy petition in 1991, listing debts of $1.298 million, including a federal tax lien of $329,180 in 1990.

Since Yeager emerged from bankruptcy in 1992, court documents show federal tax liens of $740,507 (1993), $749,405 (1995), and $715,109 (1997) and a state tax lien of $107,280 (1995), among others, against Yeager.

Lerner said the hard times came because Yeager was taken advantage of by a former business associate.

“The U.S. government and the IRS don’t care why it was done,” he said. “He spent 17 years in the big leagues, plying his trade and others were out there screwing him.”

One of the issues in the lawsuits is Yeager’s assertion that he lent his name to only two companies other than the Dodgers--sporting goods manufacturer Rawlings and Collectibles International. In the brochure he states that the company is “one of the finest and most ethical companies in sports cards and collectibles. I back C.I. 100%!”

The Illinois lawsuit states that Yeager’s representations are unfair and deceptive because he has endorsed several other products, including a cologne and automobile lubricant. And there is an Internet site pitching the cologne, Legends No. 7.

The New York lawsuit said Yeager also promoted a vacation package marketed by Champion Sports Marketing and appeared in an infomercial promoting the Viper golf club.

Lerner said Yeager never saw the material before it went out, and never authorized the specific claims. But an audiotape has Yeager making the same assertions of exclusivity.

“He was not given the opportunity to see what his name was being put on. Steve’s signature was computerized and Nick DiPaolo was using it on all sorts of things. Steve is only now seeing them,” Lerner claimed.

Beaudette, who has been unable to work recently because of a ruptured disk, keeps trying to get his money back, though he knows his attempts could be futile.

“At first, I thought maybe they were just having problems, that maybe they’d work it out,” he said. “But these guys were out to cheat someone and they didn’t care who they hurt.”