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United States v. Polin

September 23, 1963

UNITED STATES OF AMERICA, APPELLEE,
v.
JACOB POLIN, APPELLANT.



Author: Forman

Before McLAUGHLIN and FORMAN, Circuit Judges and COOLAHAN, District Judge.

FORMAN, Circuit Judge.

Jacob Polin, Phil-Jer Freightways, Inc. (Phil-Jer), John Richards and Richards Freight Lines, Inc. (Richards Freight) were joined in an indictment of three counts. The first count, charged them with conspiracy between December 1, 1957 and June 1, 1958, to defraud the United States and to commit offenses against it,*fn1 by causing material false statements and representations to be made in connection with an application on form BMC-76 to the Interstate Commerce Commission (Commission) to transfer a portion of the certificate of further convenience and necessity of Laurel Transport Corporation (Laurel) in violation of 18 U.S.C.A. § 1001*fn2 and to accomplish and effectuate the control and management in a common interest of Richards Freight and Phil-Jer without obtaining the approval of the Commission in violation of 49 U.S.C.A. § 5(4).*fn3

The second and third counts charged the defendants with violating the substantive offenses interdicted in 18 U.S.C.A. § 1001 and 49 U.S.C.A. § 5(4) on January 30, 1958 and May 9, 1958, respectively.

A plea of nolo contendere was accepted from Richards Freight. Each of the other defendants entered a plea of not guilty. At their jury trial they rested on the Government's case and were convicted on all three counts.*fn4 Polin alone prosecutes this appeal.

Motions for a directed verdict of acquittal were made at the end of the Government's case and renewed before the case was presented to the jury. After the jury's verdict a timely motion was made to set it aside. It and the motions for directed verdict were denied.

Out of a great mass of oral and documentary evidence emerge the following circumstances pertinent to the Government's charges:

In May of 1956 Henry Pfeiffer and Alfred J. Marts had agreed to purchase the outstanding shares of stock of Laurel whose principal place of business is at Wildwood Crest, New Jersey. It operated under a certificate of convenience and necessity issued by the Commission which authorized it to transport by motor vehicle in interstate commerce as a common carrier commodities between Philadelphia and points in the following counties in New Jersey: Cape May, Cumberland, Gloucester and Salem. Laurel also had the right to transport household goods between Philadelphia and certain other points in Southern New Jersey but those routes are not involved in this litigation. Messrs. Pfeiffer and Marts had agreed to pay $23,000 for the stock. Each was to make a down payment of $7,500 and the balance was to be represented by their promissory notes. Each gove has check for the down payment but Mr. Marts's developed fatal infirmities. Mr. Pfeiffer was in danger of losing his payment and consulted a friend, Maurice Robbins, who, in turn, introduced him to the defendant, Jacob Polin, a practitioner before the Commission. Messrs. Polin and Robbins came to the rescue. They made good the deficit caused by Mr. Marts's default and the deal was consummated. It appears from the testimony of Mr. Pfeiffer that he was not called upon to pay anything on account of any balance due on the purchase price and the record fails to disclose if and how such balance was financed.

Following the purchase, ten shares of Laurel were issued, - four to Mr. Pfeiffer, three to the defendant Mr. Polin and three to Mr. Robbins.

Mr. Pfeiffer took charge of the trucking end of the business and Mr. Polin handled all matter pertaining to the requirements of the Commission such as the making of logs and documents in connection with interchange of equipment. Mr. Robbins did not participate in the operation of the business. It was under such auspices that Laurel operated in 1957 and part of 1958.

Meanwhile the defendant, John Richards, was operating Richards Freight, a Pennsylvania corporation, from its headquarters in Scranton, doing a motor vehicle transportation business involving some 35 tractors and approximately 90 trailers. However, it was experiencing difficult financial circumstances. In the latter part of 1957 it welcomed an opportunity to engage in an extensive movement of glass containers from Salem, New Jersey to Canajoharie, New York, but it lacked the rights to haul the freight over its own routes continuously from the point of origin to destination. On the northern end it had no authority from Utica to Canajoharie in New York and on the southern end, from Salem to Camden in New Jersey. To supply the deficit it arranged to interline its movement from Utica to Canajoharie in New York with the Kelly Transport Company and from Salem to a point near Camden in New Jersey with the Star Transport Company (Star).*fn5

From January 1, 1957 to December 1958 Mr. Richards and Richards Freight were represented in Commission matters by Edward F. Bowes and A. David Millner, attorneys of the State of New York and practitioners before the Commission with offices in Newark, New Jersey. The firm was on a monthly retainer and its members consulted frequently with Mr. Richards with respect to the many problems that arose in the daily operation of Richards Freight. Messrs. Bowes and Millner represented Richards Freight in the negotiations for the interline with Star which was represented by Mr. Polin.

After only a brief period Mr. Polin, on behalf of Star, notified Richards Freight and Messrs. Bowes and Millner that it desired to terminate the relationship at the end of December 1957.

In anticipation of the termination of the association with Star Mr. Richards was naturally anxious to obtain a substitute interline carrier for the Camden-Salem leg of the Canajoharie-Salem business. The anxiety in this respect was shared by Messrs. Bowes and Millner. On learning of the decision of Star to discontinue its relationship with Richards Freight Mr. Millner inquired of Mr. Polin as to the availability in the area of an appropriate substitute connecting operator. Mr. Polin informed him that Laurel was such an operator and might be interested in a transfer of that portion of its line authorized in the three New Jersey Counties, south of Camden to Salem.

Many conversations were had between Mr. Polin and Mr. Millner during the latter part of 1957 concerning the attitude of Star towards Richards Freight. On one occasion Mr. Polin informed Mr. Millner that Laurel might be interested in a transfer of that portion of its line which was authorized in the three New Jersey Counties south of Camden to Salem.

Negotiations were commenced between Mr. Polin for Laurel and Mr. Millner for Richards Freight looking toward such a transfer. They entailed the commencement of the preparation of the Commission's Form BMC-44 for filing under Section 5 of the Interstate Commerce Act. This was a substantial project and could involve five or six weeks of work. The price mentioned for the transfer was approximately $15,500 to $16,000. However, the negotiations came to naught when Mr. Polin advised Mr. Millner that Laurel would not consider a direct transfer to Richards Freight because it had no confidence in its financial stability.

Early in January 1958 Mr. Polin telephoned Mr. Millner that Laurel intended to sell the rights they had been discussing to a Mr. Samuel Kellman of Philadelphia for $5,000 and since he, Mr. Polin, was going to be away and Mr. Millner was familiar with the situation he asked Mr. Millner whether he would see Mr. Kellman to help him with the transfer documents. Mr. Millner communicated to Mr. Polin his concern as to whether the interchange with Richards Freight would be continued. He was told by Mr. Polin that he could not speak for Mr. Kellman with respect to that but if Mr. Kellman succeeded in obtaining the operating authority it would be timely to discuss it with him.

Mr. Millner assented and Mr. Kellman called at his office it being understood that he was there pursuant to Mr. Polin's recommendation. Mr. Kellman told Mr. Millner that he had been in the transportation business for many years and had retired but was desirous of reentering the business. Mr. Kellman was already known to Messrs. Bowes and Millner having called at their offices on one or more previous occasions. They indicated their willingness to aid him in the preparation of the necessary papers for the approval by the Commission for him to acquire the rights of Laurel to operate in Gloucester, Cumberland and Salem Counties, New Jersey. Mr. Kellman made known his further desire to conduct the proposed venture in the form of a New Jersey corporation. It was recommended that Mr. Kellman retain a Camden, New Jersey lawyer, Edwin Segal, Esq., whom he did consult.

At Mr. Kellman's direction Mr. Segal prepared and filed the necessary papers to form the New Jersey corporation to be known as Phil-Jer Freightways, Inc. (Phil-Jer). The certificate of incorporation was signed by Mr. Kellman, Mrs. Doris Steinberg, Mr. Segal's secretary, and her husband, Louis Steinberg, and was filed with the Secretary of State of New Jersey on January 15, 1958. Minutes of the meeting of incorporators and the first meeting of the directors, both held on January 22, 1958, disclose that Mr. Kellman, Mrs. Steinberg and Mr. Steinberg elected themselves directors and respectively president, secretary treasurer and vice president of the company. Certificates of stock were issued to Mr. Kellman and Mr. and Mrs. Steinberg, but the numbers of shares were left blank. It was quite obvious that Mr. and Mrs. Steinberg were dummy stockholders, officers and directors acting to meet the requirements of the Corporation Act of New Jersey.*fn6

Following the incorporation, application form BMC-76 requesting the transfer of the rights in the three counties from Laurel to Phil-Jer was prepared in the office of Messrs. Bowes and Millner. The information required to be inserted in the application was supplied by both Mr. Kellman and Mr. Polin according to Mr. Millner.

The application was a printed form with blank spaces in which the required information was to be supplied. The following items pertinent to this case were answered and submitted as follows:*fn7

"III. That the total consideration involved in the proposed substitution, transfer, or lease is $5,000 * * *."

"(4) Are any funds to be borrowed to finance the proposed transfer, lease, or substitution? No / ...


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