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UN Linked to $1Billion Stamp Scandal

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posted on Jun, 6 2006 @ 12:19 PM
The SEC has stepped into the investigation of the sale of the UN's stamp archive. Over a metric ton of material was sold to a single bidder at a private auction held in May 2003. The collection was quickly resold and it is thought to have been broken up and sold in lots for many times the original auction price. Now two companies, Escala and Afinsa, closely related financially and dealing in auctions and collectibles, are at the center of the SEC investigation into what may be a scam that has bilked investors out of nearly $1Billion.
Amid the many scandals at the United Nations, a new mystery now looms. What happened to the world organization’s unique and valuable postal archive — in effect, the U.N.’s own stamp collection, one of the crown jewels of its past and a popular point of contact with the global public?

Auditors from the U.N.’s investigative arm, the Office of Internal Oversight Services (OIOS), are currently putting the last touches on an investigative report that has taken months to complete, and that aims to determine exactly what happened — and why — to the U.N.’s rare and much-admired collection of materials that belong to the United Nations Postal Administration.

The audit report has not yet been “finalized,” meaning it is soon to be submitted to senior U.N. managers for comment before being handed on to Secretary-General Kofi Annan, and the U.N. General Assembly.

One thing that investigators know for certain about the archive: In a discreet but historic auction carried out in a quiet suburb of Geneva, Switzerland, all of it — more than a metric ton of prized material, dating from as early as 1951 — was sold off to a single bidder on May 12, 2003. The collection included original artwork for U.N. stamps, unique so-called die proofs to test the faithfulness of design reproduction, printing proofs and other rarities, along with hundreds of thousands of other stamps, reflecting many of the most colorful aspects of U.N. history.

Please visit the link provided for the complete story.

This story continues to unfold, with more arrests of Afinsa officials in Spain in past weeks.

Be sure to read the entire article linked to above, and also the related articles and video linked to below. There is just too much too this to go into all the angles here.

Related News Links:
scroll down to World Headlines for video

[edit on 6-6-2006 by Icarus Rising]

posted on Jun, 7 2006 @ 12:14 PM
So the scandal is that it

according to U.N. sources, the archive sale may well have taken place without the permissions required by the regulations of the U.N. Secretariat for the disposal of such important U.N. property.

So we have perhaps a single source saying that it might've been originally sold without the proper beaurocratic red tape being followed?

from the article
Within months of the Geneva auction, the U.N. postal archive was resold, then resold again, in proper legal fashion — but in all likelihood for sums that underscore the historic loss to the United Nations.

It was a net gain in profit, but not as much as it could've been.

That doesn't seem like much of a scandal.

posted on Jun, 7 2006 @ 12:29 PM

Originally posted by Nygdan
So the scandal is that it

according to U.N. sources, the archive sale may well have taken place without the permissions required by the regulations of the U.N. Secretariat for the disposal of such important U.N. property.

So we have perhaps a single source saying that it might've been originally sold without the proper beaurocratic red tape being followed?

While neither of us can know for sure, Nygdan, it would seem illogical to conclude "perhaps a single source." Possible, but illogical, for this reason; both the U.N. and the SEC are investigating this. I don't like the "where there is smoke there is often fire," analogy, but let me ask you a pair of questions.

Does it seem reasonable (not possible, but reasonable) that the U.N. would investigate this on the basis of a single source? Does it further seem reasonable that the SEC would investigate and that some individuals would be arrested on the basis of a single source?

I don't find it reasonable. I'd imagine that the "scandal" is this: Someone illegally authorized this auction (or just sold it without bothering to get any "authorization", legal or otherwise) with the express purpose of selling it to a single entity on the cheap. Said entity then breaks up the materials (to make them harder to track down) and sells them at enormous profit. Original U.N. accessories get huge kickbacks from the sales.

Just my thoughts.

posted on Jun, 7 2006 @ 12:40 PM
Perhaps it also has to do with not paying the appropriate taxes? You know governments and organizations do not like it when taxes are evaded.

[edit on 6/7/2006 by DYepes]

posted on Jun, 7 2006 @ 01:02 PM
Where the $1Billion scandal comes in is between Escala, the company here in the US that bought the stamp collection from Arthur Morowitz, CEO of a Manhattan-based firm called Champion Stamp Collection, who bought the collection from the UN, and Afinsa, the Spanish auction house that owns 70% of Escala, and is under investigation for selling stamps at wildly exaggerated prices, bilking customers out of up to the $1Billion mark. Escala has a contract to sell Afinsa $100 million worth of stamps a year for the next ten years. The fact that Escala is listed on the NASDAQ exchange is where the SEC comes in.

The sole winner of the Geneva auction bid was Arthur Morowitz, CEO of a Manhattan-based firm called Champion Stamp Collection. Morowitz is also secretary of the American Stamp Dealers Association, an industry group. When contacted by FOX News, Morowitz declined to comment on the sale, or the subsequent resale of the postal archive.

Even before leaving Geneva, however, Morowitz had been contacted by another U.S. auctioneer, Greg Manning, head of a New Jersey auction firm named Greg Manning Auctions, Inc (GMAI), since renamed the Escala Group. Escala is now the world’s largest stamp and coin auction house, and its stock is traded on NASDAQ.

Manning told FOX News he “did not have the pertinent mechanism in place” to take part in the Geneva auction himself. But, he says, he bought the entire archive over the telephone from Morowitz for a sum Manning would not disclose.

Six months later, at his auction galleries in West Caldwell, N.J., Manning put the rarest and most unique items in the U.N. archive up for auction once again — more than 2,000 items in all. They ranged from artists’ drawings for the earliest U.N. stamps in 1951 to approved models for special anniversary issues to unique rarities celebrating peacekeeping operations and national member states.

He declined to give the total revenue from the sale. Stamp industry insiders, however, say that the auction brought in $1.2 million.

So, where did Afinsa get the stamps they sold at wildly exaggerated prices, bilking their customers out of so much money?

After the sale, Manning still retained "hundreds of thousands” of individual items from the archive, less unique than the top-line items but still in highly limited quantity. These, he says, he disposed of throughout 2004 to other private customers.

A “significant amount” of these items, he said, went to a single firm: Afinsa Bienes Tangibles, a Madrid-based firm with two Spanish shareholders that is considered to be one of the most important retail stamp-selling companies in the world. While it sells stamps to collectors, Afinsa also warehouses many of its clients’ collections in special vaults, contained in an elegant restored palace that was once the home of Spain’s Papal Nuncio.

Afinsa and Greg Manning’s company, in fact, have a unique mutual relationship, which deepened dramatically between the time of the Geneva UNPA auction and Manning’s resale of the U.N. archive.

My impression? The UNPA collection was the vehicle used to bilk Afinsa's customers in the runup to the 60th anniversary of the UN. So far only one UN official has been identified in connection with the sale of the collection.

He is Andrew Toh, currently Assistant Secretary General of the Office of Central Support Services (OCSS), which includes the UNPA. According to the letter in the Geneva sales catalogue, Toh was then serving as Director of the U.N.’s Facilities and Commercial Services Division.

So, Toh and Morowitz got together and made a deal, and Manning (Escala) and Afinsa cooked up the scam. The billion dollar question now is, who had foreknowledge of what and when, and as mentioned above, who got kickbacks and how much?

[edit on 7-6-2006 by Icarus Rising]

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