Friends part ways at trial Businessman testifies in embezzlement case against union official

September 17, 1996|By Scott Higham | Scott Higham,SUN STAFF

During their 20-year friendship, Ronald Schoop did plenty of favors for Harry Seidman, who held the purse strings of an international maritime union headquartered outside Baltimore.

Schoop gave him a Cartier watch. He served as best man at his wedding. And when Seidman's daughter graduated from law school, Schoop paid for the party, according to court records and testimony.

But the favors finally ran out yesterday in U.S. District Court in Baltimore. Schoop took the stand as the government's star witness against Seidman, 64, who faces 13 embezzlement counts for allegedly skimming more than $800,000 from the union in Linthicum Heights.

"I owned up to my part in the conspiracy," Schoop, 60, told the jury in a thick New York accent, his eyes downcast and averting the stare of his former friend sitting a dozen feet away at the defense table.

Schoop has pleaded guilty to conspiracy in the case. He told jurors that the alleged scheme to embezzle money from the International Organization of Masters, Mates and Pilots was born during a taxi cab ride in New York City nearly 20 years ago.

Schoop owned a printing company called Mercury Graphics. Seidman was the comptroller of the union, which moved from Manhattan to Maryland in 1984. Schoop said Seidman suggested during the cab ride that Schoop divide the jobs that Mercury Graphics performed for the union and submit phony invoices for different printing costs.

Some of the costs would be legitimate. Others would be false.

Schoop testified that Seidman wrote union checks to cover the phony costs. Schoop said he cashed the checks and gave most of the money back to Seidman. To conceal the alleged scheme, Schoop said Seidman promised he never would send him a 1099 tax form, alerting the Internal Revenue Service that the union had paid an outside contractor.

Instead, Schoop said Seidman made the checks out to his personal account.

"What would you do with the checks made payable to you?" Assistant U.S. Attorney Ira L. Oring asked.

"Cash them," Schoop said.

"What would you do with the cash?" the prosecutor asked.

"Gave most of it to Harry."

It was part of doing business with the union, Schoop testified. He made nearly $4 million from the union in checks that went directly to his company.

Prosecutors and Labor Department investigators estimate that Schoop kicked back at least $800,000.

Schoop said he submitted false invoices and double bills on numerous jobs -- to print the union's calendars, its boarding log books, its newspaper, even its constitution.

He said he submitted bills for printing copies of the constitution numerous times, when, in fact, he had printed it once or twice.

Schoop stood before the jury and explained how he and Seidman allegedly skimmed the money from the union, pointing to a poster prepared by prosecutors and illustrated with copies of bills and checks.

Oring asked Schoop to explain a bill for printing 3,000 copies of the union's constitution.

"Is that bill legitimate?" Oring asked.

"No, it's not," Schoop said. "It's bogus."

Seidman claims he never embezzled any money.

His defense: He was holding the cash in a trust fund for Schoop to prevent him from wasting it on liquor and gambling at Atlantic City casinos.

The alleged scheme started to unravel in 1993, when Beverly Gutmann, an assistant to the comptroller of the union, told her bosses that she thought Seidman was paying double bills to publish the union's newspaper.

Gutmann testified yesterday that she was suspicious of the relationship between Schoop and Seidman for years, but was too afraid to say anything.

She said she was suspicious because she saw unexplained charges coming in from Schoop and being paid out by Seidman to Schoop's personal account.

Gutmann also said that Seidman told her that Schoop should never receive a 1099 for checks written to Schoop's personal account.

She confronted Seidman with the unusual invoices, and he responded by monitoring her calls and tracking her movements in the office, she testified.

Gutmann finally went to her supervisors a few months after she found an unsettling note on her desk one day.

"Paybacks are hell," it read. "Stay out of other people's business."

Pub Date: 9/17/96

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.