United States v. Transit-Mix Concrete Corporation

70 Cr.844 (S.D.N.Y. December 11, 1970)

One-half of fines collected earlier by U.S. in action by same name under Refuse Act, 33 U.S.C. § 411, awarded to informer. Court has no discretion under § 411 not to award one-half total fines imposed, once court determines that informant should be awarded any fraction of the fines. Although plaintiffs' information was not the basis of U.S. action, nevertheless their persistent efforts did "lead to conviction."

Counsel for United States of America:
John M. Burns, III Executive Assistant U.S Attorney
United States Courthouse
Foley Square
New York, New York 10007
(212) 264-6535

Counsel for Transit-Mix Concrete Corp.:
Goodstein, Zamore, Mehlman and Krones
21 East 40th Street
New York, New York
(212) 685-4822

Mrs. Gwen B. Zeichner and Steven Zeichner pro se
620 East 20th Street
New York, New York
(212) 777-9487

[1 ELR 20041]

Wyatt, J.

This is a motion for judgment by Gwen B. Zeichner and her son, Steven Zeichner, acting for themselves and without counsel, for payment to them of "one half (or some portion thereof") of the fines here involved.

There was an indictment under 33 U.S.C. §§ 407 and 411 for discharging "refuse matter" (concrete and alkaline water) into the East River at the foot of East 20th Street. There are 100 counts. On October 22, 1970, defendant pleaded guilty to all counts. On November 24, 1970, sentence was imposed. There was a fine of $500 on each of the first 50 counts (total $25,000) and on counts 51 through 100 imposition of sentence was suspended and defendant was placed on probation.

The statute, after specifying penalties of fine and imprisonment (for a natural person), continues ". . ., in the discretion of the court, one-half of said fine to be paid to the person or persons giving information which shall lead to conviction".

Mrs. Zeichner made their[sic] claim by letter dated October 22, 1970 addressed to the Chief Judge of this Court and others a copy of this letter was submitted at my chambers after sentence was imposed.

A hearing was held on the claim on December 9, 1970. The letter was treated as a motion for judgment. United States v. Koon Wah Lee, [1 ELR 20042]74 F. Supp. 449 (D.Hawaii 1947). The government, resisting (or at least questioning) the claim stood on no technical ground but consented to this procedure. There are instances where a civil action has been brought for an informer's award, for example, Shipman v. United States, 309 F. Supp. 441 (E.D.Va. 1970).

The office of the United States Attorney assisted in an exemplary manner to develop the factual background.

It appears that beginning at least in December 1965 the discharges of defendant into the East River were under observation from time to time by the Army Corps of Engineers; that in December 1965 and in May 1966 reports of alleged violations were made by the Engineers to the United States Attorney with request for prosecution and in each instance prosecution was declined; that Mrs. Zeichner and her son live at 620 East 20th Street from which operations of defendant could be observed; that in about April 1968 Mrs. Zeichner telephoned to the Engineers and reported persistent discharges of defendant into the East River; that whatever investigations were then made, nothing was done to prosecute defendant; that under date of October 22, 1968, Mrs. Zeichner wrote the Engineers to complain about continuing discharges of defendant which she said had been acknowledged to her by defendant to be illegal; that in her letter Mrs. Zeichner was urging action, finding it "incomprehensible" that the discharges were "condoned" and questioning whether defendant had some "special privilege"; that in her letter considerable information was given about the discharges of defendant; that nothing was done; that a few days before May 16, 1969 Mrs. Zeichner telephoned the Engineers to complain again and as a result an investigation was made, apparently revealing continuing offenses, and a report was prepared on May 16, 1969; that about May 21, 1969, this report was referred to the United States Attorney's office but nothing further occurred; that in January 1970 and by reason of some newspaper article, Mrs. Zeichner wrote to the United States Attorney in Brooklyn complaining about the routine discharges of defendant into the river and giving the times as after 3 p.m. on any work day; that this letter was referred to the United States Attorney in this district, who acknowledged it to the sender; that in March 1970, Mrs. Zeichner wrote to the United States Attorney in this district further complaining and giving further specific information; that it was then determined to attempt a prosecution; that about august 26, 1970, the Engineers took moving pictures of 7 violations of law by defendant; that these picutres were taken from the roof of a building at the foot of East 20th Street, either the building in which Mrs. Zeichner lived or one close to it; that the United States Attorney then obtained the records of defendant by subpoena; that defendant concluded itself to supply the dates and numbers of discharges into the river; that the matter was presented to a grand jury to which defendant supplied this information; and that Mrs. Zeichner and her son testified before the grand jury.

There are few precedents as to informer claims and none which are close to the situation here. There are provisions in the narcotics laws (21 U.S.C. §§ 183, 199) for payments to informers. There are other similar provisions, for example: as to penalties for violations in cotton futures (26 U.S.C. § 7263(b)), as to penalties for violation of the customs laws (19 U.S.C. § 1619), as to forfeitures for liquor violations in Indian country (18 U.S.C. § 3113), as to penalties for violations of laws protecting Indians (25 U.S.C. § 201), and as to recoveries in suits for false claims against the United States (31 U.S.C. § 232(E)). None of the few opinions under these statutes are helpful. The following statement may be noted from United States v. Simons, 7 Fed. 709, 712 (E.D.Mich. 1881; emphasis supplied):

The fact that a person has procured valuable testimony, making a strong case against the offenders, but for which it is indeed doubtful whether any conviction could have been had, or any money recovered from them, does not entitle the person procuring such testimony to any portion of the fine, where the fraud has been discovered and disclosed by others, and proceedings have been commenced in pursuance of that information.

In the situation here, while the government had information about discharges of defendant before the Zeichners gave information, no "proceedings [had] been commenced in pursuance of that information".

The statute here applicable is unlike that in 31 U.S.C. § 232(E)(1) where out of the proceeds of a suit for the United States an amount may be paid to an informer "for disclosure of the information or evidence not in the possession of the United States when such suit was brought".

The decision here must be made on the specific fact pattern present and on the specific statute applicable.

I conclude that although the Zeichners did not give all (or even a great part of) the information on which the conviction was obtained and although the government had information about discharges of defendant before that given by the Zeichners, nevertheless the information that they gave and the fact that they gave it did, under the circumstances here, "lead to conviction" of defendant.

Under the statute as I read it, payment to a qualified informer is "in the discretion of the court" but if discretion be exercised in favor of payment, the amount of the payment must be one-half. While the wisdom of the inflexible one-half requirement might be questioned, so the statute appears to read.

It may reasonably befelt that one-half of the fine is too much to award to the Zeichners but as between paying the Zeichners nothing and paying them one-half, I feel that they should be paid one-half of the $25,000 in fines imposed.

It is accordingly ordered that the sum of $12,500, constituting one-half of the fines imposed herein be paid over jointly to Gwen B. Zeichner and Steven Zeichner pursuant to the provisions of Section 411 of Title 33 of the United States Code.