A federal appeals court Wednesday upheld Harry Seidman’s conviction for embezzling $800,000 from the International Organization of Masters, Mates and Pilots in a complicated kickback scheme.
Seidman argued that secret tape recordings should not have been allowed in his 1997 trial, because the government informant who made the tapes had walked into his house uninvited.
But the U.S. 4th Circuit Court of Appeals in Richmond rejected that claim, saying that Seidman spoke freely with the informant once he was in the house and made no effort to kick him out.
Seidman worked in various positions for the union from the 1950s until Dec. 28, 1993, when he resigned as comptroller after an audit revealed discrepancies in the union’s books.
As comptroller, he was responsible for paying bills, running the office and obtaining annual financial audits. He was “personally authorized to sign checks on the union’s behalf,” according to court documents.
Assistant Comptroller Beverly Gutmann told the union president in May 1993 that she suspected the union was being billed twice for costs of printing its bimonthly newspaper. When questioned, Seidman blamed the additional costs on editorial changes the president had made to the publication.
Union President Timothy Brown grew suspicious when “the cost of the newspaper had not decreased, even though the paper was being published bimonthly instead of monthly,” court documents stated.
In November 1993, Gutmann told Brown that she suspected Seidman was embezzling union funds with Ronald Schoop, whose Mercury Graphics Corp. did printing work for the union.
On Dec. 24, 1993, Brown hired an auditor, who reported that Seidman had written checks directly to Schoop for invoices submitted by Mercury Graphics and that the union had been double- billed for at least two issues.
“Schoop testified that he submitted fraudulent invoices to the union from Mercury Graphics, and that Seidman issued checks on the union’s checking account to Schoop personally,” court documents stated. They said Schoop then cashed the checks and gave about 80 percent to Seidman.
In March 1995, Schoop confessed to conspiring with Seidman to steal union funds and agreed to serve as an informant. He taped two telephone calls to Seidman and agreed to go to Seidman’s house wearing an electronic recording device.
On May 23, 1995, Schoop knocked on Seidman’s door and when there was no answer, let himself in. According to court documents, Seidman said he had been riding his exercise bike in the basement with the door closed, then led Schoop into the kitchen where the two talked.
Seidman did not confess to embezzlement, but court records said his answers to Schoop’s questions and failure to respond in some situations supported the government’s evidence and witness testimony.
Almost a year after Schoop’s visit to Seidman’s house, Seidman was charged with “one count of conspiracy to embezzle funds from a labor union and 12 counts of embezzlement from a labor union or aiding and abetting the same.” The indictment alleged that Seidman and Schoop conspired to steal money from the union from about 1987 to 1993.
Seidman was convicted Sept. 26 in U.S. District Court in Baltimore of conspiring to steal funds from the labor union and of stealing or aiding in the theft of $800,000. He was fined $30,000 and sentenced to 39 months in prison.
For his cooperation with the government, Schoop received a reduced sentence.
On appeal, Seidman also claimed that the trial court was wrong to give jury instructions on aiding and abetting in the embezzlement. Since Schoop was not employed by the union, Seidman argued, he could not be convicted of embezzling from it and Seidman, in turn, could not be guilty of aiding and abetting him.
But the appeals court said the jury instruction on aiding and abetting “was proper because Schoop was indirectly employed by the union.”
Assistant U.S. Attorney Ira Lee Oring said Thursday that he was “very pleased” with the appeals court’s ruling.
Seidman’s attorney, Mark J. Biros, said he had not reviewed the decision and declined to comment on it Thursday.