III. THE INVESTIGATION

Following is a summary of the staff's findings and the alleged violations:

The Staff informs us that it opened its investigation into the practices of K & T and the recently formed corporation ABC because of continued unlawful advertising and operations as a household goods carrier. According to staff, these unlawful activities occurred over a period of 379 days, from June 28, 2002 through July 14, 2003, and continued even after the denial of the respondents' application on December 3, 2002. Staff alleges K & T falsely held themselves out to the public as a licensed mover by including unauthorized permit numbers in Yellow Pages Directories and newspaper advertisements. Staff warned this operator to cease and desist all unlawful advertising and operations as a mover without the required permit in seven (7) letters dated: June 27, 2002, August 20, 2002, September 4, 2002, November 27, 2002 (two letters), December 4, 2002, and April 3, 2003. Notwithstanding directives issued by CPSD's staff to cease and desist, K & T continued to violate the statutory and regulatory schemes applicable to household goods carriers. As noted above, CPSD obtained a Finding of Probable Cause from the Superior Court in San Francisco to terminate the carrier's telephone service. Despite the court's action, K & T obtained new telephone numbers and placed new advertisements in local Chinese newspapers. CPSD then filed a complaint in San Francisco Superior Court to enjoin the respondents' unlicensed moving business. The court issued an "Order For Entry of Permanent Injunction", enjoining the respondents. These documents are included with CPSD Declarations supporting issuance of this order. K & T conducted, or attempted to conduct, moves after its application was denied. Moreover, K & T Moving has filed no evidence of adequate public liability insurance.

1. Fitness Issues

Public Utilities Code Section 5135 provides in part:

"The commission may refuse to issue a permit if it is shown that an applicant or an officer, director, partner or associate thereof has committed any act constituting dishonesty or fraud; committed any act which, committed by a permitholder would be grounds for a suspension or revocation of the permit; misrepresented any material fact on the application; or, committed a felony, or crime involving moral turpitude."

Staff states it obtained copies of criminal court dockets and other official documents relating to Mr. Wong from the courts in San Francisco and San Mateo Counties. According to court records in San Mateo County, Stanley King Chee Wong has three misdemeanor convictions. In August 1995, the court convicted Wong of driving with a suspended California driver's license in violation of Section 14601(A) of the California Vehicle Code (CVC), and false impersonation of another in violation of Section 529.3 of the Penal Code (PC). Mr. Wong was sentenced to two years probation and served one day in jail. He also paid a fine of $ 515 for these offenses. In August 1998, the court convicted Mr. Wong of petty theft, in violation of Sections 484/490.5 of the Penal Code. The court in South San Francisco sentenced him to 18 months probation, one day in jail, and imposed a fine and fees of $ 678. Court records in San Francisco County disclosed Mr. Wong had one misdemeanor conviction in September 2000. The court convicted Mr. Wong of driving without a valid driver's license in violation of Section 12500(A) CVC. The Superior Court in San Francisco County sentenced him to serve one day in jail for this offense. The Department of Justice records also show a 1987 misdemeanor conviction for Wong in Los Angeles County for disorderly conduct and prostitution. Is this the same Wong discussed above in ABC?

2. Submission of Inaccurate Information By King Wong (File T-189,587)

On July 3, 2003, K&T re-filed an application for a household goods carrier permit. The application disclosed that Stanley King Chee Wong, Co-Partner, signed under penalty of perjury, the Certification Of Household Goods Carrier Applicant, Form TL 706-L. On that form, Mr. Wong certify that:

"I (we) have not committed any act constituting dishonesty or fraud; committed any act which, committed by a permit holder would be grounds for a suspension or revocation of the permit; misrepresented any material fact on the application; or, committed a felony, or crime involving moral turpitude."

Here, staff alleges Wong's failure to divulge his convictions constitutes misrepresentation of material facts on his application, a violation of Public Utilities Code Section 5135.

3. Failure To Submit Required Information by Corporate Officer, File T-189,779.

The HHG application filed by ABC on October 16, 2003 was signed by Su Fen Wu, President. Su Fen Wu also signed the Certification of Household Goods Carrier Applicant, Form TL706-L. However, she failed to respond to the following questions that were on the form:

a) I (we) am (are) not legally prohibited from engaging in operations as a Household Goods Carrier.

b) I (we) [ __ ] have [ __ ] have not been convicted of committing any felony or crime involving moral turpitude. (if the first box is checked, please attach full explanation.)

Here, staff alleges Su Fen Wu's failure to reply, and divulge prior convictions of ABC's Manager/Associate, Stanley King Chee Wong, constitute a failure to disclose material facts in its application, a violation of Public Utilities Code Section 5135.

4. Advertising Without a Permit in Force

According to Sections 5139 and 5314.5, every corporation or person who knowingly and willfully causes or permits the issuance, publishing of any oral or written advertisement of household goods carrier operations to the public without a valid permit is guilty of a misdemeanor punishable by a fine of not more than one thousand dollars
($ 1,000). Respondent K & T advertised household goods carrier services to the public for a total of 379 days: from June 8, 2002 through July 14, 2003. Section 5315 provides every violation of the Household Goods Carriers' Act is a separate and distinct offense, and in case of a continuing violation, each additional day is a separate and distinct offense. A $ 1,000 fine per violation multiplied by 379 alleged violations could make the respondents jointly liable for a total fine of $ 379,000.

5. Operating Without Proper Insurance Coverage

According to Sections 5139 and 5161, and Commission General Orders (GOs) 100-M and 136-C, a carrier must maintain inter alia liability, property damage, and cargo insurance coverage in effect and on file with the Commission. In this case, Respondent K & T failed to maintain the required insurance coverage for a total of 379 days (June 8, 2002 through July 14, 2003). Section 5313 authorizes a $ 500 fine per violation, that when multiplied by 379 alleged violations, could make respondents jointly liable for a total fine of $189,500.

6. Operating Without Permit in Force

According to Section 5133, no household goods carrier shall engage, or attempt to engage, in the business of transportation of used household goods by motor vehicle over the public highways in this State without a permit in force issued by the Commission authorizing those operations. Respondent K & T conducted household goods operations for a period of 379 days (June 28, 2002 through July 14, 2003). Section 5315 provides every violation of the Household Goods Carriers' Act is a separate and distinct offense. In case of a continuing violation, each additional day is a separate and distinct offense. Section 5313 authorizes a $ 500 fine per violation, that when multiplied by 379 alleged violations, could make respondents jointly liable for a total fine of
$189,500.