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UNITED STATES v. INDIANA TRUCKING

May 16, 1969

UNITED STATES OF AMERICA, PLAINTIFF,
v.
INDIANA TRUCKING, INC., A CORPORATION, AND J.B. FROSTICK, AN INDIVIDUAL, DEFENDANTS.



The opinion of the court was delivered by: Robson, District Judge.

DECISION ON THE MERITS

The twelve-count information in this criminal prosecution charges that the defendants knowingly and willfully used false freight bills in order to evade or defeat regulation by the Interstate Commerce Commission ("I.C.C."). The defendant Indiana Trucking, Incorporated ("Indiana Trucking") is charged as a principal under 49 U.S.C. § 322(c),*fn1 and the defendant J.B. Frostick is charged as an aider and abettor under 18 U.S.C. § 2.*fn2 After a trial on the merits, this court finds the defendants guilty as charged in the information.

The undisputed facts indicate that during the month of March, 1967, Indiana Trucking, a contract carrier, made twelve shipments which originated in Chicago, and other points in Illinois. The destination for all of these shipments was Butler, Indiana. These shipments were therefore in interstate commerce. It is admitted by the defendants that Indiana Trucking did not have the requisite certification by the I.C.C. authorizing interstate shipment of the particular goods involved, and these shipments were therefore in violation of 49 U.S.C. § 303(c).*fn3

It is undisputed that accompanying each of these twelve illegal shipments were three documents: a freight bill issued by Indiana Trucking, the preparation of which was supervised by the defendant J.B. Frostick; a bill of lading containing the terms of the carriage contract, which was prepared by the shipper, and a delivery receipt prepared by Indiana Trucking. These documents were kept in the office files of Indiana Trucking, the documents pertaining to each instance of transportation being fastened together with the freight bill on top. According to the uncontroverted testimony of the I.C.C. District Supervisor, James W. Habermehl, when an I.C.C. investigator stops a carrier for inspection, it is customary to request the driver to show him any freight bills in his possession pertaining to the transportation being performed.

The gravamen of this prosecution rests upon these freight bills. Three names and addresses appear at the top of each of the bills. Imprinted in boldface type in the center is:

                     INDIANA TRUCKING, INC.
                     425 West Chicago Avenue
                     East Chicago, Indiana.

On the upper right-hand-side of each bill is the imprinted word "Consignee." Typed thereunder on each bill is the same name and address:

                    Hendrickson Tandem Corp.
                        Butler, Indiana.

The word "shipper" is imprinted on the upper left-hand side of each freight bill. On the bills named in Counts I through IV, the shipper is identified as "Kropp Forge Co., East Chicago, Indiana."*fn4 On the bills named in Counts V, VIII, IX and XI, the shipper is identified as "Wyman & Gordon Co., East Chicago, Indiana." On the bills named in Counts VI, VII, X and XII, the shipper is identified as "Burton Auto Springs Co., East Chicago, Indiana." It is undisputed that none of the named shippers have facilities of any kind at East Chicago, Indiana. All of the named shippers are located within Cook County, Illinois, the actual point of origin of each of the shipments in question. However, the freight bills accompanying these unlawful interstate shipments gave the appearance of an intrastate transaction, with both points of origin and destination within Indiana, which would be exempt from regulation by the I.C.C.

It is also undisputed that Ralph A. Bihlman, the owner and principal officer of the defendant Indiana Trucking, has been in the contract carriage business for over 32 years, and that the defendant J.B. Frostick has worked for him for approximately 30 years. Indiana Trucking had previously obtained certification from the I.C.C. to ship specified goods on behalf of the Morton Salt Company and the United States Gypsum Company from Chicago, Illinois, to various points in Indiana. This uncontroverted evidence shows that the defendants knew the requirements of the law pertaining to the illegal shipments involved in this case.

The defendants contend that the offenses alleged in the information require proof beyond a reasonable doubt that they specifically intended to commit a willful and knowing fraud by the use of the "incorrect" freight bills. The defendants further contend that such a reasonable doubt exists because (1) no attempt was ever made to conceal the services being performed by Indiana Trucking; (2) the bill of lading showing the actual point of origin moved with each shipment and was filed in the offices of Indiana Trucking in regular order available for inspection, and (3) the I.C.C. made a previous finding that the conduct complained of here was not a "subterfuge." Furthermore, contend the defendants, when the I.C.C. District Supervisor visited the Indiana Trucking premises, its employees were courteous and cooperative, no attempt was made to conceal or misrepresent, and all documents requested were promptly produced for inspection.

THE ELEMENTS OF A 49 U.S.C. § 322(c) OFFENSE

It is the Government's contention that violations of the Interstate Commerce Act ("the Act") are crimes malum prohibitum*fn5 rather than crimes malum in se,*fn6 and therefore proof of specific intent is not an essential element of a 49 U.S.C. § 322(c) offense. According to the weight of authority, "knowing and willful" violations of the Act and its regulations, prosecuted under the general penalty provision, 49 U.S.C. § 322(a), have been interpreted to fall within that class of offenses characterized as malum prohibitum and therefore do not require proof of specific intent. United States v. John Henricks, Inc., 388 F.2d 677 (7th Cir. 1968); United States v. Lowther Trucking Co., 229 F. Supp. 812 (N.D.Ala. 1964);*fn7 Steere Tank Lines, Inc. v. United States, 330 F.2d 719 (5th Cir. 1963).

The defendant does not contest that the shipments in question violated the provision requiring a certificate of authority for interstate shipments, i.e., 49 U.S.C. § 303(c). However, the Government chose to prosecute these defendants for an aggravated offense under 49 U.S.C. § 322(c), which adds the element of using any false or fictitious document or other fraudulent device to evade or defeat the Act or its regulations. The defendant contends that in order to show a violation of this aggravated provision, the Government must prove fraudulent intent within the context of the common law elements of criminal fraud. However, it is the opinion of this court that Congress, in imposing an aggravated fine*fn8 for use use of false documents in connection with infractions of I.C.C. rules and regulations, did not intend to create a statutory equivalent of common law fraud. Rather, as a malum prohibitum offense, proof is required to show that the defendants used false documents knowingly and willfully as part of a course of conduct which sought to evade or defeat an I.C.C. regulation. Proof of specific intent to defraud the I.C.C. is not prerequisite to a finding of guilt. A construction of the Act requiring proof of fraudulent intent, or other common law elements of the crime of fraud, "would result in limitations neither expressed in the statute nor justified in the light of the purpose" of the Act. See United States v. Luxon, 166 F. Supp. 25, 29 (E.D.Ky. 1958), for a similar construction of a statute penalizing the making of a false statement, knowing it ...


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