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Illustration: Aïda Amer/Axios

The FBI has launched a criminal investigation into the world of baseball card collecting — one that involves an industry-leading appraisal firm, a well-known memorabilia dealer, and an auction house, WashPost reports.

Details: This scandal began after two online collectors tracked hundreds of cards as they were (1) graded by an appraisal firm, (2) obtained by a "card doctor," (3) altered and resubmitted for a higher grade, and then (4) sold through an auction house.

  • Collectors rely on appraisal firms to determine the condition and market price of cards. The higher the grade, the higher the cards' market value.
  • For his part, the alleged "card doctor" told WashPost that he doesn't alter cards, but rather seeks out cards that he believes were "undergraded" and resubmits them in hopes of better value.

The backdrop: Modern baseball card collecting erupted in the 1990s when appraisal firms began grading cards' conditions on a 1 to 10 scale.

  • This offered collectors an objective measurement of a card's condition for the first time and gave hobbyists an easy way to upgrade their collections: simply purchase a higher-graded card.
  • "That encouraged friendly competition ... and some card connoisseurs began treating their collections as financial assets, similar to stocks, bonds or works of fine art," notes WashPost's Jacob Bogage.

The big picture: Forbes will tell you that, if a decade ago you had put your money in trading cards instead of the stock market, your payoff would be more than twice as big.

  • Yes, but: That fact is based on data generated by the auction house at the heart of the FBI's investigation.
  • And the cards they sold were graded by an appraisal firm that charges customers based on the grades they give their cards rather than a flat-fee, thus incentivizing them to give higher, possibly inaccurate grades.

The bottom line: Card collecting is a hobby — and a billion-dollar industry — built entirely on trust, and this scandal threatens to erode that on the eve of the National Sports Collectors Convention in Chicago.

"This is a crisis. There's just too much upside to being unethical in this industry. ... This is bad. This is really bad."
— Darren Rovell of the Action Network tells Axios

Go deeper

DOJ watchdog to probe whether officials sought to alter election results

Former President Donald Trump and former First Lady Melania Trump exit Air Force One in West Palm Beach, Florida, on Jan. 20. Photo: Alex Edelman/AFP via Getty Images

The Justice Department's inspector general will investigate whether any current or former DOJ officials "engaged in an improper attempt to have DOJ seek to alter the outcome" of the 2020 election, the agency announced Monday.

Driving the news: The investigation comes in the wake of a New York Times report that alleged that Jeffrey Clark, the head of DOJ's civil division, had plotted with President Trump to oust acting Attorney General Jeffery Rosen in a scheme to overturn the election results in Georgia.

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Axios Re:Cap goes deeper into what Google is doing, and why now, with Dr. Karen DeSalvo, Google's chief health officer who previously worked at HHS and as health commissioner for New Orleans.

Biden signs order overturning Trump's transgender military ban

Photo: Tom Brenner/Getty Images

President Biden signed an executive order on Monday overturning the Trump administration's ban on transgender Americans serving in the military.

Why it matters: The ban, which allowed the military to bar openly transgender recruits and discharge people for not living as their sex assigned at birth, affected up to 15,000 service members, according to tallies from the National Center for Transgender Equality and Transgender American Veterans Association.

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