A Silver Spring meat broker used falsified documents to conceal a scheme to bribe the former head of the meat department at Giant Food Inc., the Agriculture Department contends in legal documents filed in advance of court hearings that had been scheduled for this week.
In a document filed with the clerk for USDA's administrative law judges, a department lawyer also contends that Morris Hamberger, Giant's former vice president for meat purchasing, and Bernie Tompkins, a principal in Associated Food Brokers Inc. of Silver Spring, may have made false statements to a Silver Spring savings and loan when seeking a mortgage for a condominium they purchased together.
The lawyer, representing USDA's Packers and Stockyards Administration, asked administrative law judge Edward McGrail to delay a hearing that had been scheduled for today into commercial bribery charges the agency filed against the food brokers last year. The hearing subsequently was postponed indefinitely because of the illness of one of the participants.
USDA alleged in an administrative complaint that Associated Food Brokers, a related company named Associated Meats, Tompkins and his business partner, Clint F. Bedsaul, paid kickbacks to Hamberger and other Washington-area meat buyers to influence them to patronize the brokerages.
Contacted at his home in Bethesda, Hamberger, who previously has denied accepting kickbacks, said he denied the government's new allegations about falsification of documents and bank loan misrepresentations, calling the charges "ridiculous."
Peter Isakoff, lawyer for Tompkins, Bedsaul and the meat-brokerage companies, said his clients also denied the allegations about false documents and loan misstatements. "We consider the issues they have raised are a total red herring to get a delay because the government is not ready to try this case, even though they filed it a year ago," he said. Today's Hearing Canceled
USDA lawyer Thomas C. Heinz, in submissions to McGrail, had asked for an indefinite postponement of the hearing on the grounds that USDA wanted to have scientific tests conducted on some of the documentary evidence to determine whether some may have been falsified.
The administrative law judge had denied the government's request for a postponement, though the medical emergency later led to a postponement.
In his submission to McGrail, Heinz said that the documents the government wants to have tested include a purported promissory note for a $13,000 loan to Hamberger from Tompkins and a ledger purporting to show Hamberger making 14 monthly repayments, of $500 each, on the debt.
In his submission, Heinz said the government had only photocopies of these documents, and asked the judge to order the original documents turned over to the government because USDA doubts their authenticity. The government, he said, wants to see if the documents were created later in order to justify some of the payments made to Hamberger.
However, a lawyer for the meat brokers said last week that the original documents would be turned over to USDA voluntarily.
All the defendants have formally denied paying kickbacks and have indicated they intend to contest the complaint. If found in violation of the laws, the brokers could face fines and cease-and-desist orders. Hamberger and other meat buyers alleged to have received kickbacks do not face USDA charges because the department has said it only has authority to regulate packers and brokers, not supermarkets. USDA Questions Loan Authenticity
In his submission to the judge, Heinz outlined several reasons why USDA believes the documents purporting to show a $13,000 loan from Tompkins to Hamberger and numerous repayments may have been falsified.
According to Heinz, Tompkins and Bedsaul have claimed the money was loaned to Hamberger in order to help the former Giant executive pay his 1981 taxes, because, at the time, "he had no other available credit source." But, Heinz alleged, the $13,000 was used by Hamberger to buy a Lincoln Continental at a time when the Giant vice president otherwise had "more than enough liquid assets to pay his taxes without borrowing" and also had "large unused credit resources."
According to USDA, the $13,000 was given to Hamberger in the form of a $5,000 cashier's check deposited in Hamberger's bank account on Feb. 12, 1982, and in two $4,000 payments deposited in different Hamberger bank accounts on April 13, 1982.
On March 17 of that year, Heinz told the judge, Hamberger issued a $15,808.55 check to Safford Lincoln-Mercury of Silver Spring.
"A man who is allegedly strapped for cash to pay his taxes would not pay cash for a new car less than a month before the taxes come due," Heinz argued.
The note confirming the $13,000 no-interest loan is dated April 12, 1983, and carries Hamberger's signature, according to a copy filed with the USDA.
The note purports to affirm Hamberger's intention to repay the loan debt in monthly installments of $500.
According to the USDA lawyer, however, on May 20, 1983, Hamberger submitted a signed financial statement to First Maryland Savings and Loan of Silver Spring, which listed his total personal assets at $444,102.79, including liquid assets of $156,102.79, and total liabilities of $10,534.82. Not included among the liabilities was the $13,000 loan from Tompkins concluded a month earlier, Heinz told the judge.
According to Heinz, Tompkins also submitted a financial statement to the First Maryland Savings and Loan that did not list the $13,000 as an asset. Both Hamberger and Tompkins signed statements acknowledging that it was a federal crime to "knowingly make any false statements" on their financial disclosures, Heniz pointed out.
The USDA lawyer reported that the mortgage sought by Hamberger and Tompkins, which they allegedly used to purchase a condominium in a Silver Spring development called Parkside Plaza, actually was issued in December 1982, on the personal instructions of Julian Seidel, president of First Maryland Savings and Loan and Tompkins' former brother-in-law. Seidel allegedly directed a subordinate to loan the money "without a complete credit package in the file," Heinz said.
The USDA attorney also examined Hamberger's financial status in greater detail. He said Hamberger's gross income from Giant in 1982 was $111,969 and his gross income from the company in 1983 was $117,312.
The USDA lawyer reported that David Rutstein, Giant's general counsel, questioned Hamberger and Bernie Tompkins during September and October 1983 about the alleged kickbacks, but "both men flatly denied that any payments passed from . . . the brokers to Hamberger. Neither even hinted that a loan was involved," Heinz said.
According to Heinz, Giant also required Hamberger to submit an annual financial statement to the company, but Hamberger never disclosed the $13,000 payment from Tompkins.
Heinz told the judge that on the ledger submitted to USDA that purports to show Hamberger's repayments on the loan over a period of months, "all entries appear to have been made by the same hand at one sitting." He also said the government had "more than ample cause to believe" that the April 12, 1983, note itself "was not in fact executed on or about . . . the date appearing thereon."
USDA sources said that if the government obtains proof that misleading or bogus documents were created to conceal the alleged bribery scheme, those involved could be prosecuted for obstruction of justice. However, no criminal investigation has thus far been opened in the case.