In the Matter of the Complaint Against JACKSON STATE UNIVERSITY, CHURCH OF UNIVERSAL EDUCATION, JACKSON STATE UNIVERSITY NATIONWIDE COUNSELORS, NATIONWIDE EDUCATIONAL COUNSELORS and WEST at P. O. Box 3199, Pasadena, California 91103 and 1108 Gallatin Road, Nashville, Tennessee 37206 and Suite 301 D, West Indian School Road, Phoenix, Arizona 85013 P.S. Docket No. 4/13October 22, 1975
William A. Duvall Chief Administrative Law Judge
Janice B. Adams, Esq ., Law Department, United States Postal Service, Washington, D. C., for Complainant No appearance on behalf of Respondent Before: William A. Duvall, Chief Administrative Law Judge
This case was initiated on June 9, 1975, when the Consumer Protection Office of the Office of the General Counsel, United States Postal Service, the Complainant, issued a Complaint in which it was alleged that Jackson State University, Church of Universal Education, Jackson State University Nationwide Counselors, Nationwide Educational Counselors and West, collectively sometimes referred to hereinafter as the Respondent, are engaged in conducting a scheme or device for obtaining money or property through the mails by means of false representations contrary to the provisions of Section 3005 of Title 39 United States Code. The enterprise in which Respondent is engaged is the advertising and sale, through the mail, of University degrees. These degrees hereinafter are sometimes referred to as the products.
On June 20, 1975, there was filed an answer to the Complaint in which the only one of the Respondents names was Nationwide Educational Counselors. According to the Rules of Practice, the fact that an answer was filed only on behalf of one of the named Respondents results in the failure to file answer on behalf of the other Respondents, and the remainder of the Respondents are deemed to be in default and to have waived hearing and further procedural steps. Therefore, as a technical matter, the only Respondent before the Postal Service now in this hearing is Nationwide Educational Counselors.
With the answer, there was filed a "Notice of Appearance" which bears the name Donal Schwartz. Mr. Schwartz is identified as the President of Nationwide Educational Counselors. It is stated that Mr. Schwartz will appear at th hearing and will represent the Respondent, Nationwide Educational Counselors. However, no appearance was made on behalf of any of the Respondents. In this situation, 952.11(b) of the Rules of Practice provides that if the Respondent files an answer, but fails to appear at the hearing, the presiding officer shall receive Complainant's evidence and render an initial decision. That provision of the Rules of Practice will be followed.
As has been said so many times in these proceedings, there basically are three issues:
(1) Does the Respondent, in the conduct of its business, use the United States Mails;
(2) In the conduct of its business, does the Respondent make the representations which are set forth in the complaint; and
(3) Are the representations made by the Respondent false and materially false as a matter of fact?
Postal Inspector Larry D. Webb investigated this matter and through his testimony and the exhibits received in evidence in connection therewith it was clearly established that in the conduct of its business Respondent does use the United States mails. (Tr. 11-21; Complainant's Exhibits 1-9).
The next matters to be disposed of are (1) whether Respondent makes the representations alleged in the complaint and (2) whether they are (a) material representations and (b) true or false.
The first allegation to be considered is allegation a. in paragraph III - that Respondent's products are issued by Jackson State University, a bona fide institution of higher learning which was established in 1907 by the Church of Universal Education with facilities located at Nashville, Tennessee; Pasadena, California, and Phoenix, Arizona.
This representation is made on the front cover of the brochure which is sent by the Respondent to prospective purchasers. (Comp. Ex. 4A) It has an imprint of a seal that looks like an official seal that some university might use, and it bears the date of 1907. Beneath the seal is the address of Jackson State University given as Nashville, Tennessee or, in the case of a subsequent brochure, the address is given as Phoenix, Arizona. The clear implication to the reader is that Jackson State University has been in existence at these premises since 1907.
On pages 6 and 7 of the brochure, a facsimile of a degree awarded by Jackson State University is shown. This facsimile also has the seal at the top of it, bearing the date 1907. Therefore, the prospective purchaser is led to believe, and can see, that this is a university that has been in being for some years. This seal, which appears on Complainant's Exhibits 4A and 5A, is an attempt to enhance the credibility of Jackson State University, to make one believe that this is a bona fide institution of higher learning. Therefore, it is quite clear that the representation is made in Complainant's Exhibits 4A and 5A that the University is established at Nashville, Tennessee or Phoenix, Arizona.
The back page of the brochure, opposite page 10, contains an application blank directing that remittances be sent to Pasadena, California. This direction tells the reader, the prospective purchaser, that Jackson State University not only has facilities in Nashville or Phoenix, but that there are, in addition, some facilities in Pasadena, California.
That Jackson State University was established by the Church of Universal Education is implied throughout this brochure. (Comp. Ex. 4A) It is stated, for example, on page 1, that "Jackson State University is administered by the Church of Universal Education, whose aim is to help qualified people receive recognition for what they have learned in life." At the top f page 2 of the brochure, the second paragraph, it is noted that "Your degree is a full bonified [sic] academic degree. The title 'honorary' or the Church's name will not be on your degree or transcript." This statement indicates that the church is associated with Jackson State. Further down, in paragraph 3 it is stated: "It might be added that the Church of Universal Education is a non-profit religious organization." On page 3 reference is made to Jackson State University "under the administration of the Church of Universal Education, a non-profit religious organization." From the fact that, throughout the brochure, it is requested that donations be made payable to the Church of Universal Education, it is clear that the Church of Universal Education is presented as the one sponsoring, the one responsible for, Jackson State University.
Allegations b. and c. in the third paragraph of the Complaint are that Jackson State University is duly authorized to issue degrees by the states in which it operates and that Jackson State University is duly authorized to issue degrees by the states in which it operates and that Jackson State University is duly authorized to issue degrees by the United States. These two representations are based on quotations appearing in Complainant's Exhibit 4A. The first quotation is taken from the top of page 2, the second paragraph, where it is stated that "Your degree is a full bonified [sic] academic degree." The second quotation is taken from page 3, the third paragraph, where the following language is used:
"*** Jackson State University is a legal bonified [sic] institution operating under the laws of the United States of America."
The quoted excerpts are examples of the attempt by Jackson State University to hold itself out as an authorized institution. The statement that we are "a legal institution operating under the laws***" is a clear attempt to say to the ordinary reader, to the public: "Look, we're all right...we're authorized...we're not doing anything that is wrong." By this brochure Jackson State is attempting to hold itself out as a valid institution and an old institution, perhaps steeped in tradition and history, but, certainly, a valid, authorized, legally functioning institution.
With respect to the claim that there are educational facilities located in Nashville, Tennessee or Pasadena, California, or Phoenix, Arizona, the testimony of Inspector Webb was that there are no facilities in California. The addresses given in Nashville, Tennessee and Phoenix, Arizona are answering services. Jackson State maintains no facilities at these addresses.
There was testimony of Dr. Leslie W. Ross, Assistant Director, Accreditation and Institutional Eligibility Staff, Office of Education, Department of Health, Education and Welfare that, first of all, there are no laws on the subject and there are no means by which the Federal Government approves the issuing of a degree by an institution. Dr. Ross also pointed out that Jackson State is not approved or accredited by any of the accrediting associations recognized by the Federal Government.
There is in the record the affidavit of Robert M. Redfield, Supervising Field Representative, Bureau of School Approvals, Department of Education, State of California, wherein it is stated that Jackson State is not authorized to issue degrees in California and that to do so is, in fact, a violation of the California Education Code. (Comp. Ex. 10) Also in the record (Comp. Ex. 12), is the notarized letter of Dr. George M. Roberts, Associate Director for Federal Affairs, Tennessee Higher Education Commission, in which it is stated that Jackson State is not authorized to issue degrees by the State of Tennessee.
Throughout paragraph IV of the Complaint, Complainant alleges that Respondent knowingly cooperates with the purchasers of its product in the deception of third parties. It is alleged that this is a violation of 39 U. S. Code 3005.
Referring to the allegation in paragraph IVa. of the Complaint, it is alleged that Respondent knowingly cooperates with the purchasers of its product in the deception of third parties by supplying apparently bona fide college degrees and transcripts in the name of Jackson State University, and by encouraging the purchasers thereof to falsely represent to potential employers and other universities that the degrees and transcripts represent recognition of satisfactory completion of the required courses for the named academic field.
The degree given by Jackson State University, while not in reality being an academic degree, on its face appears to be. Because of its structure and its appearance, it is quite possible that the average employer would look at this degree, see the official seal, and believe that this is truly a college degree.
On page 4 of the brochure (Comp. Ex. 4A), in the third and fourth paragraphs, there is the following language:
"Your transcript is a basic college transcript listing the unites (credit hours) you have received from our University. Also our transcript will state the degree you have earned. Our transcript does not state how you earned your degree or your credits. This is your business and it is the University policy not to give this information out to anyone. Inquirers will only receive from us information about the degree awarded and a copy of transcript. Your transcript will bear the seal of the University.
"We offer a clearly defined transcript to our graduates, which many of them have used to get better jobs, apply for higher degrees at other colleges, etc., and all have been accepted. We pride ourselves in really backing up our transcripts and degrees to give our graduates every possible help toward his success."
That allegation b. of paragraph IV of the Complaint is made is established by what previously has been quoted, above, from Respondent's advertising material.
As indicated earlier, it is very likely the case that this degree, particularly with the name Jackson State University, giving the date, and being signed by the Dean, the Assistant Dean, and the Registrar, with the official seal of the school affixed, and the location, Nashville, Tennessee, indicates to a third party looking at this degree, that Jackson State University, Nashville, Tennessee, is authorized to issue college degrees and that this is a college degree from that school.
Allegation c. of paragraph IV of the Complaint charges that Respondent agrees to verify validity of the college degree and transcript to all who inquire.
Once again, it is necessary to refer only to page 4 of the brochure, the first paragraph, where it is stated that: "Jackson State University will keep on record all degrees awarded and will verify the same to all interested parties. Also as a special service to you, we will notify you by mail of any inquiries by companies or individuals verifying or checking your degree."
Complainant alleges in paragraph IVd. of the Complaint that the Respondent knowingly cooperates with its purchasers in third party deception by requiring that all the remittances and payments for Jackson State University degrees and transcripts be made payable to the Church of Universal Education, so that the purchaser may falsely represent to the Internal Revenue Service that the payment was a donation to the Church of Universal Education and, therefore, tax deductible.
At the top of page 8 of Complainant's Exhibit 4A, in the first paragraph, it is stated, "Please make all remittances (donations) payable to the Church of Universal Education to receive your tax deductions." On page 10, it is stated "It should also be noted that all donations are tax deductible if they are sent in the name of the Church."
In this case, one does not have to wonder who the third party is who is to be deceived. Jackson State has told its potential buyers that by following Respondent's advice the buyers may deceive the Internal Revenue Service.
In U.S. Postal Service v. International Term Papers , 477 F.2d 1277 (1st Cir., 1973) it was established that the jurisdiction of 39 U. S. Code 3005 is broad enough to include third party misrepresentations when the Postal Service can establish that the sender is actually contemplating a scheme which involves misrepresentation to third parties by the purchaser of the product based on the material that the sender transmits through the mail.
The Complainant has presented a thoroughly documented case, and Complainant's Counsel has ably argued with respect to each of the issues, that the exhibits and testimony received in this proceeding fully support the proposition that the Respondent is engaged in a scheme to obtain money or property through the mails by means of false representations, contrary to the provisions of Section 3005 of Title 39, United States Code.
To conform the pleadings to the proof received at the hearing, the address P.O. Box 30161, Los Angeles, California 90030 is deemed to be included in the caption of the Complaint. The envelope in which Respondent mailed Exhibit 4A bore that address imprinted in the upper left-hand corner of the face thereof. Thus, Respondent by its own act admitted that it was engaged in the unlawful enterprise from the Los Angeles address.
In view of all of the foregoing facts and circumstances, it is concluded that an order substantially in the form attached, as provided in 39 United States Code 3005, should issue against Jackson State University, Church of Universal Education, Jackson State University Nationwide Counselors, Nationwide Educational Counselors and West, at all of the following addresses: P. O. Box 30161, Los Angeles, California 90030; P. O. Box 3199, Pasadena, California 91103; 1108 Gallatin Road, Nashville, Tennessee 37206; or Suite 301 D, West Indian School Road, Phoenix, Arizona 85013.