feasible to a carrier because it would cost more for a truckload carrier to pay the driver and therefore the carrier could not make a profit. Harry Schreiber further admitted that he was, in essence, supporting himself before the ICC in order to get the 29-state authority and that he stood to benefit the most should the application prove successful since he was the sole owner of the Schreiber corporations.
While there is nothing wrong with a carrier seeking to expand its ICC authority, the use of false supporting documents is not the way to go about it.
Harry Schreiber stated that he was ultimately seeking a permanent authority since the problem of motor carrier service for the freight forwarders was a continuous one. However, Schreiber Freight Lines was soliciting business with its new 29 state temporary authority rather than just disposing of the goods which allegedly could not be moved. Mr. Schack's letter dated August 28, 1974 specifically informed Mr. Schreiber not to solicit.
The intent, purpose and motive back of the whole scheme is clear -- to buy up two inactive freight forwarder authorities, mere shells, and then use them to support a far flung authority covering a large number of commodities covering the eastern half of the United States.
Joseph Bruzzese who was general sales manager for Schreiber in August 1974, and who was subsequently convicted for his involvement in this matter, testified that he first became aware that Schreiber Freight Lines was applying for an authority on the morning of August 15, 1974. Harry Schreiber called Bruzzese at his home and instructed him to have his sales personnel obtain support from the shippers that Schreiber solicited. Mr. Schreiber wanted his sales people to get blank letterheads from shippers and, if possible, to have them sign them. They were also to obtain information concerning types of commodities, weights and destination points. Time was essential in that an ICC representative was scheduled to pick up the letters.
Schreiber advised Bruzzese that a form was being sent and that the letters were to be prepared in the office. Bruzzese relayed the message to salesmen Wurzer, Belczyk and Cadwell and thereafter obtained two letterheads from Stylette Plastics and Bruce Molded Plastics.
Wurzer obtained letterheads from Woodings-Verona, Allegheny Label, Blawknox Foundry, Armstrong Store Fixtures and Henry Miller Springs. Wurzer basically explained to the traffic managers that he really didn't know for what purpose the letterheads were needed, but that it was urgent. One traffic manager from Rayson Laboratory refused to have anything to do with the matter.
Bruzzese arrived at the office and went directly to Harry Schreiber whose office is on the seventh floor. Mr. Schreiber informed Bruzzese that the information had not yet arrived from Washington, D.C., but that as soon as it did, the secretaries, Nancy Vogel and Karen Stubinger, would bring the forms to the fifth floor
where the letters and certifications of support were to be prepared. Harry Schreiber told Bruzzese to have the secretaries use different typewriters and typewriter balls in order that the letters would not look alike. Bruzzese relayed this information to Karen Stubinger and told her to get Nancy Vogel.
Wurzer returned to the office just before noon and handed the information to Karen Stubinger (now Glendorf).
The actual operation began in the afternoon on August 15, 1974 and was described as being "very hectic". The girls brought the forms with them and the salesmen drafted the various letters from the forms
putting in the various commodities, weights and destination points of the shippers. Harry Schreiber had instructed Bruzzese to have his people interchange the paragraphs of the forms, and Schreiber also gave instructions as to how to answer questions in the appendices to the support letters. Bruzzese, Wurzer and Stubinger identified the support letters (G Ex 3-9) as being part of those which had been prepared August 15, 1974.
All but one of these seven letters indicated that a carbon copy was to go to Harry Schreiber. As the letters were finished they were taken into Bruzzese's office.
Bruzzese explained that Harry Schreiber was very anxious that the information be finished. Harry would call on the terryphone (office intercom) and was physically present on the fifth floor on five or six different occasions. Mr. Schreiber came into Bruzzese's office to check the finished letters. Wurzer stated that he observed Harry Schreiber on the fifth floor once or twice to see how things were progressing and that he overheard Harry ask, "Are we going to be ready by five?" Miss Stubinger testified that she saw Mr. Schreiber on the fifth floor at least three times and that she heard him constantly call over the terryphone.
Harry Schreiber admitted that he stuck his head into Bruzzese's office in the afternoon.
At the end of the day, Stubinger and (Vogel), Wurzer and Bruzzese took the completed letters to Harry Schreiber on the seventh floor where they xeroxed the letters.
Although Harry Schreiber and Bruzzese claimed that they advised the salesmen to call back the various traffic managers, Wurzer testified that Bruzzese told him to call back and thank the traffic managers but not to tell them what had been placed in the letters.
Harry Schreiber also had Bruzzese sign as an officer of Master and Central States Forwarders in their support for the Schreiber application appointing him "secretary for the day". Bruzzese had never been an officer of any Schreiber-owned corporation and stated that he had signed it without reading it since in August of 1974 he would have done anything Harry Schreiber told him.
Following the support letters, Harry Schreiber caused his employees to send mailgrams in support of the Schreiber application. Forms were prepared and a copy of one which contained Harry Schreiber's handwriting was introduced at trial (G Ex 38).
Wurzer, Bruzzese and Stubinger testified that they would send many mailgrams at one time and that in doing this they would identify themselves as the various shippers and have the expense billed to Schreiber Freight Lines, Inc.
Because of the number of support letters and of protests from other carriers,
the ICC began an investigation of the Schreiber application in October, 1974. On Friday, October 11, 1974, ICC investigator Amerine, after discovering that the traffic managers had not written or authorized the letters, confronted Harry Schreiber with this information. Mr. Schreiber's initial response was one of surprise but then Mr. Schreiber asked, "Can we settle it here"? Amerine replied that he could not, but a meeting was scheduled with ICC officials in Philadelphia, Pennsylvania the following Tuesday. The court, however, does not infer anything sinister from Schreiber's inquiry.
Subsequent to Amerine's departure, Schreiber called the sales personnel to his office. Also present was Sheldon Krupnik, corporate counsel. Wurzer testified that Schreiber said that they had a problem, that the ICC had seen the shippers and had discovered the shippers had not written the letters. In order to neutralize the situation, Schreiber wanted a form affidavit (G Ex 40)
taken to the various shippers for their signature. Even after Wurzer explained that it would be difficult because one of the shippers had been fired and others were angry, Harry Schreiber did not question whether the shippers had, in fact, originally given their permission. Krupnik prepared the affidavits and a weekend campaign was launched to get them signed.
In February 1976, Paul Belczyk, who had been a salesman for Schreiber in August of 1974, was called to testify before the grand jury. Both Harry Schreiber and Sheldon Krupnik advised Belczyk not to say anything because the government could "put words in his mouth".
Finally, Ron Faherty stated that following the conviction of Joe Bruzzese, he was on the seventh floor of the Schreiber building with Harry Schreiber. Faherty suggested to Harry Schreiber that he, as president, would probably be indicted next. Mr. Schreiber replied that he was not worried about being indicted because, if he were, he could give the prosecutors a bigger person, namely an ICC Commissioner.
The court finds that this conversation together with the attempt to cover up by the defendant is indication of consciousness of guilt.
While defendant testified he had instructed Bruzzese to call the shippers back and report what information had been included in the support letters, he never checked to determine if this had been done although he knew the information was inserted by Schreiber employees in Schreiber's offices.
Defendant admits his handwriting is on the instructions for the mailgrams (G Ex 38) and he instructed Bruzzese to send them.
Masters and Central States Freight Forwarding Company were not in operation at the time defendant purchased their certificate in July 22, 1974. Nevertheless on September 13, 1974, defendant sent a telegram to the ICC urging immediate action on the application and representing that 5 million pounds of freight were backing up each day, an incredible figure.
The government must establish a specific intent, a willful and knowing violation of the statute. It is important that no defendant should be convicted unless the evidence shows a deliberate course of conduct with intent to violate the law and that he be not convicted where there is mistake, inadvertence or lack of guilty knowledge.
In the instant case and in the light of all the above recited facts, the court concludes that the defendant did act willfully and intentionally and with guilty knowledge. For instigating and causing these false documents to be sent, he would be guilty as a principal under 18 USC § 2.
The court finds that the whole scheme of supplying the ICC with false and manufactured information was one instigated by the defendant and the court finds that Bruzzese and the other underlings in this corporation would not have thought this up and acted entirely on their own without defendant's guilty knowledge and participation. To summarize in determining defendant's involvement in this operation the court has considered the following:
(1) His attempts to cover up by having the affidavits circulated to the shippers in an attempt to cover the falsity of the support letters.
(2) The fact that the defendant was in and out of the room during the preparation of the false support letters and when they were finished the letters were taken to him. The information contained could not have come from the shippers in this short space of time.
(3) The defendant directed the sending out of the mailgrams which were also false and gave instructions as to how they should be drawn so as to conceal the fact they came from a single source at Schreiber Freight Lines.
(4) Defendant told Belczyk not to talk with the Assistant U.S. Attorney because they would put words in his mouth.
(5) Defendant instructed Bruzzese to get the support letters in, to get hold of letterheads and to have the shippers sign in blank. He instructed Bruzzese to use different typewriters and different type balls on the typewriters so as to conceal the fact that they came from a single source, to wit: the applicant Schreiber Freight Lines. He also was responsible for the orders to interchange paragraphs on the letters so that they would look different.
(6) In his haste he made Bruzzese secretary for a day for the two forwarding corporations supporting the application.
(7) Defendant's handwriting appeared on the instructions for the mailgrams.
(8) Defendant sent the telegram to the ICC on September 13, relative to the preposterous claim that five million pounds of freight was backing up per day.
In light of the foregoing and the facts recited at length above, the court has no hesitation in finding beyond a reasonable doubt that defendant aided, abetted, counseled and commanded, induced and procured the commission of the violations of 18 USC § 1001 and caused these acts to be performed.
(B) Evidence as to the Mailgrams.
Defendant has objected to the evidence of the sending of the mailgrams which were sent out by relays of operators from the Schreiber Freight Lines Offices calling Western Union reporting that they were shipper's representatives and then having the charges sent to Schreiber Freight Lines. This was without the consent or knowledge of the shippers. The court finds that this was all part of an attempt to overwhelm the ICC with pressure and an attempt to show a need for immediate and urgent action which did not exist.
These mailgrams and the circumstances of sending the same had been introduced at a prior trial of Bruzzese and the Corporation, Schreiber Freight Lines, Inc. and defendant and counsel were aware of them being used in evidence having received a transcript of the prior trial and its exhibits.
The court ruled that these were admissible for the purpose of showing intent, plan and design under Rule 404(b) of the Federal Rules of Evidence which reads as follows:
"Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident."
See U.S. v. Goichman, 547 F.2d 778 (3d Cir. 1976); U.S. v. Stirone, 262 F.2d 571 (3d Cir. 1958) rev'd on other grounds 361 U.S. 212, 4 L. Ed. 2d 252, 80 S. Ct. 270 (1960). This evidence could not have surprised the defendant because he knew this evidence existed and the same was used only by the court to the extent it cast light upon his plans, motives, designs and method of operation.
(C) Continuance as Denying Speedy Trial.
The court had made an order that all documentary evidence to be used by the government should be produced to the defendant in advance of trial under Rule 16(a)(1)(C) which provides for the production of such evidence in the possession, custody and control of the government and which is intended for use by the government as evidence in chief. Certain exhibits were not produced and approximately one week before trial another Assistant U.S. Attorney took over the case. He discovered the order in question and dispatched these materials to the defendant the Friday before the trial began on the following Monday. When this was discovered at time of trial the court considered what should be done about the matter under Rule 16(d)(2) which reads as follows:
"If at any time during the course of the proceedings it is brought to the attention of the court that a party has failed to comply with this rule, the court may order such party to permit the discovery or inspection, grant a continuance, or prohibit the party from introducing evidence not disclosed, or it may enter such other order as it deems just under the circumstances. The court may specify the time, place and manner of making the discovery and inspection and may prescribe such terms and conditions as are just."
The First Circuit has had this to say in such a situation in U.S. v. Gladney, 563 F.2d 491, 494 (1st Cir. 1977):
"Violation of Rule 16(a)(1)(A), like the violation of other discovery rules, calls for the application of differing remedies depending upon the seriousness of the violation and the amount of prejudice to the defendant. In recognition of this, Rule 16(d)(2) provides for different remedies for noncompliance including -- as an alternative to outright rejection of the non-disclosed evidence -- a continuance.