III. THE INVESTIGATION

Following is a summary of the staff's findings and the alleged violations. Staff informs us that it opened its investigation into the practices of All State Moving and Washington Mini-Storage because of consumer complaints, continued unlawful advertising and operations as a household goods carrier without a valid permit issued by this Commission. According to staff, these unlawful activities encompassed the periods from June 1, 2002 to August 31, 2003. Since on or about October 21, 2002, when All State Moving and Washington Mini-Storage's illegal and unlicensed activities were first discovered, All State Moving and Washington Mini-Storage continued to operate through various shell corporations, several fictitious business name and personal aliases with the express purpose of avoiding detections. At an April 29, 2003 meeting with staff, Israel Lerner stated that Prime Movers, All State Moving and Storage, Inc., and California Transportation Systems were one and the same company. Staff's investigation of the complaints revealed that documentation provided to the customers showed an address (13148 Raymer Street, North Hollywood, CA 91605) for Washington Mini-Storage that was the same as listed for All State Moving. Furthermore, on July 28, 2003, staff conducted a sting call to (301) 772-7727, a phone number registered to Washington Mini-Storage in Maryland. An employee answered the phone and stated that the company name was "Prime Movers". The employee further stated that Washington Mini Storage, Inc. and Prime Movers were the same company. When staff inquired about the cost for a move within California, staff was transferred to the company's California office. Staff contacted the California office and was told that the office and trucks are located in North Hollywood, and that the phone number is 800-504-6683. This is the same phone number used and advertised by All State Moving to conduct unlawful moving services. Staff was provided with a rate quote for a move and was told that payment should be made to Washington Mini-Storage.

Staff alleges All State Moving and Washington Mini-Storage falsely held itself out to the public as a licensed mover by including unauthorized permit numbers in its advertisements in three SBC Smart Yellow pages directories. Staff warned All State Moving and Washington Mini-Storage to cease and desist all unlawful advertising and operations as a mover without the required permit in several separate verbal admonishments and multiple cease and desist letters. Despite directives issued by CPSD staff to cease and desist, All State Moving and Washington Mini-Storage continued to operate and solicit business, therefore violating the statutory and regulatory schemes applicable to household goods carriers. This is evident by additional complaints received from consumers alleging loss and damage and overcharge for moves performed by All State Moving and Washington Mini-Storage in November and December 2002, and January and March 2003 (See Declarations of consumers Piediscalzi, McPeters, Kalemci, and Arnold in the attached staff investigation file). Moreover, All State Moving and Washington Mini-Storage performed moves during periods in which All State Moving and Washington Mini-Storage failed to have at least one of the required types of insurance coverage (public liability, cargo, and/or workers' compensation) with the Commission.

Furthermore, staff discovered that All State Moving conducted seven moves through a referral from Safari Moving Storage (Safari). Safari, a licensed household goods carrier based in San Jose, provided staff with documentation showing that All State Moving conducted nine intrastate moves from March 8, 2003 through June 6, 2003, during a period in which All State Moving did not hold a valid permit from this Commission (see Richard Molzner's declaration).

In a follow-up investigation, staff reports that as of December 2003, All State Moving and Washington Mini-Storage have closed their Raymer Street operations in Los Angeles, California, and that all advertised telephone numbers are disconnected. However, staff is not aware if All State Moving and Washington Mini-Storage may have set up a business office at another address location in California. Staff reports that Israel Lerner, a former officer of All State Moving, has started a new moving business under a newly formed corporate entity named VIP Relocation. Staff has twice admonished VIP Relocation to not operate or advertise without a valid household goods permit issued by the Commission. Despite staff's directives to cease and desist operations, staff alleges that VIP Relocation continues to operate to date and falsely held itself out to the public as a licensed mover by including unauthorized permit numbers in its postcard advertisements. This is evident by a sting call that staff conducted on July 27, 2004, to 866-888-3847(VIP Relocation's phone number on the postcard). Staff was given a written rate quote of $91 per hour for 3 men and one truck or $111 per hour for four men and one truck. VIP Relocation also provided staff with a Reference List showing at least ten intrastate household goods moves conducted by VIP Relocation during the period of December 20, 2003 through July 14, 2004. (See Deborah Zundel's declaration).

To date, staff has documented several violations involving Respondents' intrastate moving services. However, there may be several unlawful moves that staff is unaware of or has not been able to document during its investigation.

Respondents are subject to Public Utilities Code Section 5314 because they operated as a household goods carrier without the required permit. The fact that Respondents have three times filed for such a permit indicates that they understood the permit to be a necessary prerequisite to doing business as a household goods carrier. Clearly Respondents have little regard for the state's licensing laws and have continued to ignore staff's warnings. The evidence shows that Respondents knew of the permit requirement and made an informed decision to continue operation in violation of the law. Thus, these actions satisfy Public Utilities Code Section 5314's requirement that a defendant "willfully" and "knowingly" violate the law.