Got Used Clothing for Export : Firm Accused of Payoffs to Salvation Army Officers

Two used-clothing exporters gave payments over 13 years to top Salvation Army officers in return for a steady supply of clothes and cheated companies that handled shipments to 11 countries, a prosecutor said Friday.

“There are several officers of the Salvation Army being investigated. The investigation is continuing,” said Stephen Wehner, chief of the fraud section in the U.S. attorney’s office here.

Favored Treatment

Exporters Harry Usatch, 70, of Hollywood, Fla., and his son, Jerald Usatch, 45, of Philadelphia, have been charged with paying kickbacks to several Salvation Army officers to obtain favored treatment in buying used clothing and rags, he said.

The Salvation Army collects millions of tons of used clothing and sells some through its Thrift Shops around the nation. Surplus or unusable material is sold in bulk as rags.

David Warren, special agent in charge of the U.S. Customs office here, said that the investigation of the Salvation Army had not been narrowed to a specific number of officials. He said that the U.S. Postal Service was assisting in the inquiry.

“We are prepared to have justice done, and the Salvation Army is distressed beyond belief,” William Moss, an attorney for the organization, said.

The Salvation Army has been aware of the investigation for two years and has been cooperating, Moss said.

Wehner said that the Usatches, in trying to guarantee a steady supply of used clothing, paid off Salvation Army officers to favor them over other buyers.

A criminal information filed in U.S. District Court on Tuesday charged the Usatches and their Dumont Export Corp. with conspiracy and mail fraud. An information is an alternative to an indictment.

To Have Bail Hearing

The Usatches are to be arraigned and have a bail hearing before a U.S. magistrate Thursday, Wehner said.

The men understated the value and weight of used-clothing shipments to 11 countries by almost 5 million pounds over four years, thereby cheating companies that handled the shipments and depriving the nations of customs tax revenues, Wehner said. In addition, the Usatches misidentified shipments to circumvent laws banning imports of used clothing into Nigeria and of unsanitized clothing into other countries, Wehner said.