The opinion of the court was delivered by: KNOX
Defendant Harry Schreiber is charged in a seven count indictment with violations of 18 USC § 1001
in connection with the submission of false or fraudulent statements or representations to the Interstate Commerce Commission involving applications for emergency temporary authority and temporary authority.
He waived jury trial. The trial occupied all or part of eight calendar days and the matter is now before the court for disposition on the merits. We summarize the facts as follows:
The evidence demonstrated that Harry Schreiber, president and sole owner of Schreiber Freight Lines, Inc., in order to obtain a 29 state (Govt Ex 1 shows 31 states) authority from the Interstate Commerce Commission (ICC) instigated and participated in a plan whereby Schreiber Freight Lines' sales personnel
obtained blank letterheads from certain shippers which Schreiber Freight Lines served, filled in the body of these letters, signed the names of the representatives of the various shippers, and submitted them to the ICC in support of the Schreiber Freight Lines' application for authority. The letters contained false statements and representations which had not been authorized by the shippers.
Edward Schack, an attorney and Associate Director of the Office of Proceedings of the ICC explained that the ICC regulates surface transportation. An important part of this regulatory process consists in the licensing of motor carriers to conduct operations in interstate commerce. The license granted to a motor carrier is termed an "authority" which specifies a "route" or a geographical area within which a motor carrier may operate.
The types of authority which the ICC can grant are: an emergency temporary authority (ETA) which runs for 30 days and may be extended twice, a temporary authority (TA) which may run from 30 days to 180 days, and a permanent authority (PA). This last authority technically a certificate of public convenience and necessity has a monetary value and is salable.
The ICC will grant an ETA or a TA if the carrier can prove that an "immediate and urgent need" exists, or in the case of a permanent authority, if the carrier shows public need, convenience and necessity. Therefore shipper support
for the carrier's application for an ETA or TA is necessary to show an immediate and urgent need, and the ICC is dependent upon the shippers' statements to render a decision since that is the only record which the Commission has before it.
Schreiber Freight Lines, Inc., a motor carrier which from 1971 to August 1974 had the authority to haul steel and general commodities from Pittsburgh to Chicago, sought in August 1974 to obtain a 29 state authority
from the ICC. Mr. Schack presented a chronological listing of the Schreiber applications (6 ETAs and 2 TAs) for this additional authority (G Ex 32), and a clerk-stenographer for the ICC, Shirleen Harbison, testified to the receipt of the applications for the temporary authority for Schreiber in 1974.
Included within Schreiber Freight Lines' ETA Application filed on August 19, 1974 with the ICC in Pittsburgh, Pennsylvania (G Ex 1) and the TA application filed on August 29, 1974 (G Ex 2) were letters and certifications of support purportedly from seven shippers which formed the basis of the indictment. These shippers were Chrysler Corporation, Pittsburgh Forgings, Armstrong Store Fixtures, Stylette Plastics, Woodings-Verona, C.M. America and Duer Springs. (G Ex 3-9, inc.)
Nicholas Mascio, warehouse manager for the Parts Division of Chrysler Corporation, testified that despite a letter of support for the Schreiber application on a Chrysler Corporation letterhead signed by a "Mr. Ken White, Division Traffic Manager", Chrysler did not use Master Freight Forwarding Company (more precisely Master Forwarding Corp.), did not have a "desperate, urgent and immediate need" for that type of transportation service, and did not need Schreiber Freight Lines to haul its goods from Oakdale to Denver, Texas, Illinois and Louisiana. Any connection Chrysler had had with Schreiber had been with Schreiber Air Freight also owned by defendant. Andrew Gourash, office manager at Chrysler in charge of personnel, stated that Chrysler had never employed a "Ken White".
Pittsburgh Forgings Company's traffic manager, William Geesey, testified that the company's support letter had his name on it but that he had not signed it (his name was spelled incorrectly). In August 1974 Geesey had supplied a blank Pittsburgh Forgings letterhead to Schreiber's salesman Cadwell, although Geesey had not been aware of the exact purpose of the letter. He explained that the statements contained therein were not true as to the need for Schreiber's service. Pittsburgh Forgings did not have an "urgent need" for Schreiber Freight Lines' services to Albany, New York, Lansing, Michigan, Bowling Green, Kentucky, Jackson, Tennessee; Pittsburgh Forgings did not risk contract losses or plant shutdowns; nor did it utilize the services of Master Freight Forwarding and Central States Forwarding. Geesey also said that he never sent nor did he authorize anyone to use his name in sending mailgrams (G Ex 10 and 11) in support of Schreiber's application and that the mailgrams' information pertaining to the need for Schreiber's services was false.
Geesey was first shown the support letter in October 1974 by an ICC investigator, Robert Amerine. Later when contacted by Schreiber employees, Bruzzese and Cadwell, to sign an affidavit
saying that Geesey authorized Cadwell to sign Geesey's name, Geesey refused because he was angry about the letter and wanted no "part of it".
Moreover, Turcol denied ever sending or authorizing anyone to send mailgrams (G Ex 13, 14, 15) in support of the Schreiber application. The information contained in the mailgrams was also false. Armstrong did not need Schreiber Freight Lines to haul to the specified destinations, nor did Armstrong stand to suffer "immediate and irreparable loss of business."
Turcol admitted to signing an affidavit (G Ex 28) in which he relates that he gave Wurzer permission to prepare the letter and to sign Turcol's name. Turcol stated that Wurzer and Fred Serbin, a notary public and another employee of Schreiber Freight Lines, visited Turcol at his house in October 1974, that he signed it to help them out and that the affidavit was false. Later, he was given a bottle of whiskey.
Lou James, traffic manager of Stylette Plastics, explained that he did not write or sign his name to the Stylette support letter although his name appeared at the bottom. In August 1974 James had given a blank letterhead to Bruzzese. The first time that James actually saw the support letter was in October of 1974 when ICC investigator Amerine confronted him with it. The letter itself was incorrect as to the need for Schreiber's services. There existed no "immediate and urgent need" since Stylette had many trucking outfits from which to choose. Following Amerine's visit, Bruzzese requested James to sign an affidavit (G Ex 29) which he did as an accommodation after learning that other traffic managers had done the same. James testified that the affidavit, itself, was false.
John Wysowski, former traffic manager with Woodings-Verona Tool Works, advised that he had given Wurzer a blank letterhead and had signed it, and because of this he was subsequently fired. Wysowski did not write the support letter and explained that the information therein was false. Woodings-Verona did not ship machinery but tools, and there had been no deadline problems facing its shipments. Although Woodings-Verona could always use another carrier, there was no "immediate and urgent need" for Schreiber's services. Wysowski also stated that on October 11, 1974 when Cadwell and Serbin came to his house to have him sign an affidavit (G Ex 30), he did so hoping he would get his job back. This affidavit was again untrue in several particulars.
John Belina, traffic manager for C.M. America, gave a blank letterhead to Cadwell on the premise that the letter would only specify that C.M. America supported Schreiber's application for authority to Texas. The actual support letter which was shown to him by Amerine in October, 1974, contained false information. C.M. America did not manufacture machinery nor did it ship to the specified destinations (except to Little Rock, Arkansas by UPS). Furthermore, C.M. America did not have active and inactive seasons, and there was no immediate and urgent need for Schreiber's services. No layoffs or plant closings were threatened. Belina denied knowing anything about mailgrams (G Ex 23 and 24) and indicated that their information was untrue. Belina admitted to having signed an affidavit at Cadwell's urging on October 15, 1974, but stated he had not read the contents.
There is no question that there was here a scheme to inundate the ICC with false support documents, letters and mailgrams in connection with these applications. The questions critical to this defendant's case are whether this inundation was solely the work of Bruzzese general sales manager in the Pittsburgh area, who was convicted of similar charges at Criminal 75-322 and other subordinate employees or whether the enterprise was instigated by the defendant, president of Schreiber Freight Lines, with guilty knowledge of the ...