Maritime union figure on trial Prosecutors outline embezzlement case against Seidman PTC

September 10, 1996|By Scott Higham | Scott Higham,SUN STAFF

At the maritime union's headquarters on the outskirts of Baltimore, not much was sacred.

Prosecutors said in court yesterday that double-billing was rampant. So were kickbacks, gifts, trips, even visits to massage parlors. And when the union wanted to publish copies of its constitution for its 7,000 members, a kickback allegedly was part of the plan.

The claims came during opening statements in the federal corruption trial of Harry Seidman, 64, former comptroller of the International Organization of Masters, Mates and Pilots, a union that represents ship captains and deck officers in seaports in the United States and abroad.

Seidman is charged with 13 counts of embezzlement for allegedly skimming more than $800,000 from the union's accounts in Linthicum Heights in an elaborate scheme with his former friend and best man, Ronald Schoop.

Schoop has pleaded guilty to conspiracy charges. He is now the federal government's star witness in the case, which, during the next two weeks, is expected to provide a rare look at the inner workings of the international union.

Prosecutors yesterday portrayed Seidman as a smart union stalwart who knew how to manipulate the financial books and cover his tracks. For nearly 35 years, he held the union's purse strings, and it paid off, prosecutors told jurors in Courtroom 1A of the U.S. District Courthouse in Baltimore.

"He knew that no one would ever review the checks he signed," Assistant U.S. Attorney Ira L. Oring told the jury. "He knew how far he could go. He knew there were no checks and balances. The evidence will show he knew how to use this to his advantage."

Prosecutors and U.S. Labor Department investigators estimate that between 1978 and 1993, Seidman made more than $800,000 in the alleged embezzlement scheme. The scheme worked this way, Oring told the jury:

Schoop owned a company called Mercury Graphics Inc., which published the union's newspaper, stationery and other material. For Schoop, who made about $4 million from the union, it was a lucrative deal.

To show his thanks, Oring said, Schoop agreed to be a conduit for Seidman, providing him with a series of kickbacks, most of them in cash, but others in gifts and trips to a resort and massage parlors. He said Schoop over-billed, double-billed and billed for services he claimed he performed -- but never did.

In return, Seidman wrote union checks to Schoop's personal account. Schoop then deposited the checks and allegedly gave most of the cash back to Seidman, Oring told the jury.

In one of the alleged schemes, Oring said, Schoop submitted numerous bills associated with printing the union's constitution -- bills for typesetting, paper, changes and other services. Seidman then wrote union checks to Schoop to cover the bills.

The trouble is, only one of the bills was real, Oring said.

"You see it happen again, and again, and again and again," the prosecutor said.

Seidman's defense lawyers said Seidman never embezzled any money from the union. Instead, they told jurors that he was holding the cash in a trust fund for Schoop so he wouldn't gamble it away in Atlantic City's casinos -- where Schoop was a rated player.

Schoop once gambled away $14,000 in 13 minutes.

"This wasn't part of some conspiracy," defense lawyer Mark J. Biros told the jury.

Biros said Seidman did everything in the open and never had a corrupt relationship with Schoop. He said ship captains who served as union officers oversaw the union's finances and never saw anything unusual. When double-billing problems surfaced, he said, Seidman reported them to his supervisors.

"Why would a master criminal turn to his supervisors and say: 'double billing'?" Biros asked.

The alleged scheme started to unfold in 1993 when a secretary noticed what she thought were double bills. Auditors found more problems in the books, and Seidman and Schoop were forced to resign.

Seidman then went to Schoop with an unusual request. He asked Schoop to sign a release form stating that Seidman was holding $265,000 in a trust fund for Schoop and he wanted to return the money. Schoop signed the letter and took the check from Seidman.

Labor investigators started to examine the union when someone called in a tip to a federal corruption hot line -- nearly nine months after Seidman was fired.

Biros said the $265,000 check was proof that Seidman received cash from Schoop to prevent his friend from gambling it away. But prosecutors said it was evidence of something else. They said it was part of a careful plan by Seidman and his lawyers and his accountants to extricate himself from what he knew could become a criminal case.

"He tried to buy himself a defense," Oring told the jury.

Pub Date: 9/10/96

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