In the Matter of the Complaint Against: 

 WILLIE J. BLOCKER,
 506 Payne Drive
 at
 Fort Washington, MD  20748-1152

 P.S. Docket No. PF-14

 07/15/91

 Mason, Randolph D. Administrative Law Judge

 APPEARANCE FOR RESPONDENT: Douglas E. Sapp, P. O. Box 2670,
 Merrifield, VA  22116 

 APPEARANCE FOR THE POSTAL SERVICE: Janet E. Noble, Esq.,
 Office of Labor Law, United States Postal Service,
 475 L'Enfant Plaza, S.W., Washington, DC 20260-1133

This proceeding arises out of a Complaint issued on November 15, 1990, by the Reviewing Official of the United States Postal Service under the Program Fraud Civil Remedies Act of 1986, Pub. L. 99-509, 31 U.S.C. $Z3801-3812, and 39 CFR Parts 273 and 962. In the Complaint, as amended at the hearing and on brief the Reviewing Official ("Complainant") alleges that Willie J. Blocker ("Respon- dent") violated 31 U.S.C. § 3802(a)(1) by making a false claim for continuation of pay for disability, contending that Respondent is liable for an assessment of $4,866.56 (twice the amount of the alleged false claim n1 plus a civil penalty of $5,000, for a total liability of $9,866.56. In the alternative, Complainant seeks a penalty of $15,000 for alleged false claims made when Respondent presented three checks for payment of continuation of pay, plus an assessment of $4,866.56.

n1 At the hearing, Complainant amended the Complaint to assert continuance of pay in the amount of $3,770.00 (Tr. 15). On brief this was reduced to $2,433.28, representing only the first three of four checks paid for the period in question plus administrative leave on the date of injury.

On January 28, 1991, Respondent timely filed a Petition for Hearing in which he denied the allegations of the Complaint.

A hearing was held by the Administrative Law Judge on April 9, 1991, in Washington, DC. Complainant was represented by counsel, and Respondent was represented by Douglas E. Sapp. Complainant presented the testimony of Inspector Jeffrey Braveman, Francis Ford, and Bill Demant. Respondent testified for himself. Both parties presented documentary evidence, including a transcript of the prior testimony of Peter Moskovitz, M.D.

After the hearing both parties filed briefs which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. The findings of fact and conclusions of law set forth below are based on the entire record herein, including observation by the Administrative Law Judge of the witnesses and their demeanor, the briefs, stipulations, exhibits, and other relevant evidence adduced at the hearing:

1. Respondent worked as a maintenance engineman for the Postal Service at the General Mail Facility in Merrifield, VA. On about October 30, 1989, he submitted a Employee's Notice of Traumatic Injury and Claim for Continuation of Pay/Compensation (Department of Labor Form CA-1) in which he claimed to have injured his back on October 23 while lifting a battery (Postal Service Exhibit ["PSX"] 14). He claimed to be totally disabled and began collecting continuation of pay (COP) from the Postal Service.

2. Respondent attempted to substantiate his claim by seeking the professional assistance of Peter A. Moskovitz, M.D., an orthopedic surgeon. On October 25, 1989, when Respondent visited Dr. Moskovitz, he walked slowly in a bent-over position and stated that he could not stand erect. He told the doctor that he was unable to rest in anything but a prone position. He claimed to be very sensitive to pain and would not hold still for the x-ray machine. He also claimed to have been staying at home using Tylenol. As a result of this visit, Dr. Moskovitz prescribed several medications for Respondent's back condition and instructed him to have bed rest (Jt. Exh. 1, pp. 61-66).

3. On November 16, 1989, Respondent again visited Dr. Moskovitz, and was still walking and moving in a crouched position. He claimed to have been limited to housebound activities on a very restricted basis, and was basically confined to bed. Thereafter, the doctor signed a DOL Form CA-17 Duty Status Report, which Respondent filed, finding that the Respondent was temporarily totally disabled from October 23 to December 1, 1989, due to an acute disc injury in the lumbar spine and camptocormia (inability to assume an upright position without severe pain) (iI. pp. 66-69); PSX-15). Respondent's filing of the CA-1 and CA-17 automatically caused the payment to him of about 45 days of continuation of his pay (Tr. 32).

4. If Dr. Moskovitz had known that Respondent had actually been working at the Lerner Corporation, performing the activities set forth below, between October 23 and November 16, 1989, he would not have reached the same conclusion; he would have concluded that Respondent was malingering (PSX-11, p. 3; Jt. Exh. 1, pp. 73-74).

5. After Respondent received a certificate dated November 22, 1989, from Dr. Moskovitz saying it was "okay to return to work," he was required to see a Postal Medical Officer to obtain a limited duty assignment in accordance with USPS procedures. On December 1, 1989, he was authorized to engage in "lifting, carrying, pulling, pushing up to 30 lbs, no overtime" (RX-4). There is no credible evidence that USPS failed to follow normal procedures or kept Respondent from returning to work any earlier.

6. During the entire period for which Respondent collected COP for his alleged disability, Respondent was actively working about 40 hours a week for the Lerner Corporation as a maintenance engineer repairing heating and air conditioning systems (Tr. 19, 88; PSX-3-10). Respondent began working at that job in June of 1989 (PSX-1, 4). He was required to lift and carry up to 50 pounds, climb in ceilings 20% of the time, stoop, bend, walk and work in small places in ceilings (Tr. 89-90; 100-101; PSX-1). He performed all of these tasks and did not complain or request light duty (Tr. 92-93). During the period of his alleged injury, he did not miss a single day of work and did not appear to be injured (Tr. 92-94; PSX 5-9). He did not tell his supervisor that he had been injured at the Postal Service (Tr. 93).

7. The above findings are based, in part, on the credible and forthright testimony of Respondent's supervisor, Bill Demant. Respondent's testimony that he spent his work hours at Lerner "sitting around talking . . . reading the newspapers, . . . drinking . . .coffee" (Tr. 107-108) is not credible and is rejected. Respondent was evasive during his testimony.

8. By the time USPS Injury Compensation Specialist Francis Ford received the CA-1, she had already been informed that Respondent was working at Lerner Corporation after the alleged injury. Accordingly, she notified the Inspection Service and later controverted the claim with DOL (Tr. 33-34; PSX-16). On November 21, 1989, Postal Inspectors R. A. Martin and J. A. Braveman interviewed Respondent and his supervisor at his workplace at Landover Mall and briefly discussed the claim in issue, indicating that it was being investigated (Tr. 20). Later that day, or the next day (RX-3), Respondent called Dr. Moskovitz and requested that he be released to return to work at the Postal Service (Jt. Exh. 1, p. 77). Respondent's testimony that he called simply to get the results of a back scan is rejected. Respondent knew he was in trouble and decided to stop feigning illness.

9. As previously stated, on about October 30, 1989, Respondent submitted the Form CA-1 Notice of Traumatic Injury and Claim for Continuation of Pay/Compensation. He certified that he had injured his back on the job on October 23, 1989, and claimed continuation of his regular pay not to exceed 45 days, and compensation for wage loss if disability for work continued beyond 45 days. The form also states (PSX-14):

"Any person who knowingly makes any false statement, misrepresentation, concealment of fact, or any other act of fraud to obtain compensation as provided by the FECA or who knowingly accepts compensation to which that person is not entitled, is subject to felony criminal prosecution and may, under appropriate provisions, be punished by a fine or imprisonment, or both."

10. In view of the work that Respondent performed for the Lerner Corporation during the period in issue, it is obvious that Respondent misrepresented his symptoms to Dr. Moskovitz, causing the latter to find him totally disabled on the Form CA-17 filed on about November 16, 1989. Thus the Form CA-17 asserts a material fact which is false since Respondent was not injured or disabled. Respondent also knowingly made a false claim on his Form CA-1 when he claimed continuation of pay (and compensation) for a back injury which never occurred.

11. Respondent was paid continuation of pay (COP) from October 24, 1989 to December 3, 1989, when he returned to work (PSX-18; Tr. 47-48). He received and cashed four COP checks covering that period (PSX-17, 18, 21; Tr. 131-132, 135-136; Stip., Order dated April 24, 1991).

These payments, adjusted here tovinclude amounts withheld, totalled $3,393.73: (1) $595.03 for 10/29-11/3/89 plus $27.96 for 1.88 hours of administrative leave for time lost on the date of the alleged injury; (2) $603.43 for 11/21-11/17/89; (3) $1,206.86 for 11/18-12/1/89; and (4) $960.45 (adjustment in pay period 8 of 1990), which includes $357.02 for 10/24-10/27/89 and $603.43 for 11/5-11/9/89. n2 Complainant seeks assessments and penalties only for the first three amounts totalling $2,433.28.

n2 Respondent had not previously been paid for the latter two periods because he had not yet submitted his CA-1 and his CA-17, respectively (Tr. 38).

12. The above payments were made automatically, in accordance with normal procedures, even though the claim was under investigation by both the USPS and DOL. At the time of hearing, DOL had not yet determined whether the claim was false (Tr. 54).

13. Respondent testified that his union representative told him he could cash the above checks; however, this is not mitigating since Respondent knew he was not entitled to the money and there is no evidence that the union representative knew all the facts. Similarly, his statement that DOL told him the same thing is also questionable and is rejected (Tr. 132).

14. Respondent was indicted on August 22, 1990, on three counts. Following a jury trial, Respondent was convicted on Count II of the indictment for violation of the False Statements Act, 18 U.S.C. $S1001 (Tr. 26). Count II states (PSX-12):

On or about October 25, 1989, . . . [Respondent] willfully and knowingly did make and cause to be made a false, fictitious, and fraudulent statement and entry as to material facts . . . in that in a Form CA-1. . .[Respondent] stated and represented that he was disabled for work because of an injury incurred while working at. . .[USPS] on October 23, 1989, whereas in truth of fact, as he then knew, he was not disabled for work by any injury.

Respondent was sentenced to serve 90 days incarceration, two years of supervised probation and was ordered to pay $3,770 in restitution to USPS.

15. Respondent was found innocent of Count I, in which it had been alleged that he stole $3,770 in cash from the government. The prosecutor withdrew Count III during the trial (Tr. 29).

1. Respondent first invokes the Federal Employees' Compensation Statute, 5 U.S.C. § 8128(b), providing that the "action of the Secretary [of Labor] or his designee in allowing or denying a payment" under that Act "is (1) final and conclusive for all purposes and with respect to all questions of law and fact; and (2) not subject to review by another official of the United States or by a court by mandamus or otherwise." For the reasons stated below, it is concluded that this statute does not deprive the Administrative Law Judge of jurisdiction under the PFCRA.

2. First, although he claims that DOL has awarded him the continuation of pay in issue herein, there is no evidence of record of any adversarial adjudication. It appears that USPS has controverted the claim, but that DOL has not yet ruled on the controversy. Second, even if DOL had taken the "action" contemplated by the statute in allowing payment, § 8128(b) relates only to DOL's decisions in making or denying compensation awards, and an agency such as the Postal Service still has jurisdiction under PFCRA to determine whether a false claim has been made, and if so, the amount of assessments and civil penalties under 31 U.S.C. § 3802. These latter questions are within the separate statutory sphere of an agency making a determination under the Program Fraud Civil Remedies Act. Cf. Minor v. Merit Systems Protection Bd., 819 F.2d 280 (Fed. Cir. 1987)(USPS not barred from deciding fraudulent conduct in obtaining compensation award for purposes of adverse action); Miller v. U.S. Postal Service, 26 M.S.P.R. 210 (1985)(MSPB not precluded from making similar decision).

3. Complainant contends that the Respondent is collaterally estopped from relitigating the decision of the U. S. District Court in which he was convicted of willfully making a false statement on the Form CA-1 by stating that he was disabled for work due to an injury. In view of the higher standard of proof and greater procedural protections in a criminal proceeding, it has been held that a criminal conviction collaterally estops a defendant from litigating the same issue in a subsequent civil proceeding. United States v. Thomas, 709 F.2d 968, 972 (5th Cir. 1983); United States v. Ben Grunstein & Sons Co., 127 F. Supp. 907 (D.C.N.J. 1955); United States v. Shaw, 725 F. Supp. 896 (S.D. Miss. 1989). Accordingly, the finding of the District Court is binding upon the instant proceeding. It is noted, however, that there is ample evidence of record to independently support this finding without relying on the doctrine of collateral estoppel.

4. Also, Respondent argues that if the doctrine should be applied, he should not have to litigate the issue in Count I where he was acquitted of stealing $3,770 in cash from the government. However, the government is not collaterally estopped from bringing a civil suit for damages where the defendant had previously been acquitted in a criminal proceeding. This is so because acquittal in a criminal action means no more than that the prosecution was not able to prove guilt beyond a reasonable doubt. The prosecution might have obtained a conviction if it had only been required to prove its case by a preponderance of the evidence, which is the standard of proof in cases under the PFCRA. Eastern School v. United States, 381 F.2d 421 (Ct. Cl. 1967).

5. Respondent argues that a judgment under the PFCRA exposes him to double jeopardy under the Fifth Amendment because he has already been tried and convicted in a criminal action in United States District Court. Generally, the double jeopardy clause protects against a second criminal prosecution for the same offense after acquittal or conviction and against multiple punishments for the same offense. North Carolina v. Pearce, 395 U.S. 711, 717 (1969). Since the "Program Fraud Civil Remedies Act" is civil and remedial rather than criminal, Cf. Chapman v. United States, Dept. of Health & Human Services, 821 F.2d 523 (10th Cir. 1987), a Respondent in a PFCRA case would not ordinarily be said to have been placed in double jeopardy. Helvering v. Mitchell, 303 U.S. 391 (1938); Rex Trailer Co. v. United States, 350 U.S. 148 (1956).

6. However, the amount of the penalty must be examined to complete the inquiry. The Supreme Court has held that a person convicted under the criminal False Claims Act was subjected to double jeopardy when the government subsequently brought a civil action under the False Claims Act, 31 U.S.C. § 3729, seeking $130,000 in penalties ($2,000 for each of 65 false claims) plus an assessment of twice the $585 which the Government had lost. United States v. Halper, 490 U.S. 435, 109 S. Ct. 1892 (1989). The disproportionate penalty constituted a second punishment. However, the Court concluded that this was a rare case where a fixed penalty provision subjects a small guage offender to a sanction overwhelmingly disproportionate to the damages he has caused.

7. The instant case clearly does not run afoul of Halper. As discussed hereafter, the Respondent is only subjected to a penalty of $5,000 plus an assessment of $4,866.56. These amounts have a rational relation to the $2,433.28 falsely claimed by Respondent plus the cost of investigating and prosecuting the false claim. The amounts imposed herein do not constitute a second punishment for the purpose of double jeopardy analysis. Respondent's argument is rejected.

8. The next issue is whether Respondent is subject to a civil penalty in the amount of $5,000 under 31 U.S.C. § 3802(a)(1) n3 for making a false claim for continuation of pay and compensation. It is concluded that Respondent's statement on the Form CA-1 indicating that he was disabled due to an injury is materially false. Likewise, his submission of the CA-17 form stating that he was totally disabled is also materially false.

n3 Section 3802(a)(1) provides as follows:

3802. False Claims and statements; liability

(a)(1) Any person who makes, presents, or submits, or causes to be made, presented, or submitted, a claim that the person knows or has reason to know--

(A) is false, fictitious, or fraudulent;

(B) includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent;

(C) includes or is supported by any written statement that--

(i) omits a material fact;

(ii) is false, fictitious, or fraudulent as a result of such omission; and

(iii) is a statement in which the person making, presenting, or submitting such statement has a duty to include such material fact; or

(D) is for payment for the provision of property or services which the person has not provided as claimed, shall be subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000 for each such claim. [Unless payment has not been made by the Government on the claim, as provided by § 3802(a)(3)]. . ., such person shall also be subject to an assessment, in lieu of damages sustained by the United States because of such claim, of not more than twice the amount of such claim, or the portion of such claim, which is determined under this chapter to be in violation of the preceding sentence.

9. He submitted those false statements in support of his claim knowing, or having reason to know, that they were false.

10. Under these circumstances, Respondent is subject to, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000. Complainant requests the maximum penalty of $5,000. It is clear that the amount of the penalty must be determined by examining all of the circumstances surrounding the false claims, including all aggravating and mitigating factors. See, S. Rep. No. 99-212, 99th Cong., 1st Sess. 18 (1985). Many government agencies have adopted a set of model regulations proposed by the President's Council on Integrity and Efficiency, which contains a list of factors which may be considered as guidance. E.g., 45 CFR § 79.31 (1988); 52 Fed. Reg. 27423, 27432. The Administrative Law Judge is not bound by the regulations of other agencies, but has discussed some of those factors below.

11. There is a high degree of culpability here. Respondent clearly knew that he was deceiving the government. He deceived his doctor and convinced him to submit a CA-17 in support of his claim stating that he was totally disabled when this was clearly false. In the doctor's office, he pretended that he could not even stand up at a time when he was actively working another job. He only attempted to return to the Postal Service job after he was confronted with his deception by the Postal Inspector. Even at the hearing he has continued to deny wrongdoing and has failed to be forthcoming.

12. The amount of money falsely claimed is also an important factor to consider. The statute provides for a maximum penalty of $5,000, which is justified by the $2,433.28 falsely claimed.

13. Finally, in determining the amount of a penalty or assessment, the Administrative Law Judge must consider that the purposes of the statute are to recompense the government for losses resulting from false claims, to deter the making of such claims in the future, and protect the integrity of the government program in question. S. Rep. No. 99-212, 99th Cong., 1st Sess. 2 (1985).

14. After considering all of the circumstances of these claims, it is concluded that Respondent is liable for a civil penalty of 5,000.

15. The next issue is the amount of the assessment to be imposed upon Respondent under § 3802(a)(1). The statute provides, in pertinent part, that a person making such a false claim shall be subject to an assessment, in lieu of damages sustained by the United States because of such claim, of not more than twice the amount of such claim. Since Respondent made a false claim for a total of $2,433.28, he is liable for an assessment of no more than $4,866.56. Since it is not unreasonable to assume that the damages of the Postal Service, including the cost of investigation and litigation, have far exceeded this amount, and considering the aggravating and mitigating circumstances discussed above, it is concluded that Respondent is liable for the maximum assessment of $4,866.56. n3

n4 Although not binding herein, it is noted that the model regulations state that "[b]]ecause of the intangible costs of fraud, the expense of investigating such conduct, and the need to deter others who might be similarly tempted, ordinarily double damages and a significant civil penalty should be imposed." E.g., 45 CFR § 79.31 (1988).

16. Complainant contends in the alternative that each one of the three checks representing continuation of pay which Respondent received and cashed should be considered a separate false claim. Thus Complainant argues under this theory that three penalties of $5,000 each, for a total of $15,000, should be imposed upon Respondent. n5

n5 As previously noted, Respondent actually received four checks for the period in issue. The fourth check was received in pay period 8 of 1990 as an adjustment to the earlier periods. Complainant does not explain why a penalty and assessment were not requested for the fourth check.

17. Each of the checks in question were sent to Respondent in payment on his underlying claim filed on Form CA-1, "Claim for Continuation of Pay/Compensation". A "claim" means any "request, demand, or submission . . . made to an authority for . . . money (including money representing . . . benefits). 31 U.S.C. $S3801(a)(3)(A). Clearly, the CA-1 form is such a claim. However, the question remains whether the checks issued in payment of that claim constitute claims when they are presented for payment.

18. Under the facts presented here, it is concluded that those checks do not constitute "claims" within the meaning of the PFCRA. Respondent's CA-1 form constituted the false claim which generated the checks in question. It is arguable that the presentation of a check for payment could, under different circumstances, constitute a false claim under the Act. This might be so if there were no previous underlying claim, such that the presentation of the check for payment might be considered to be the false claim (e.g., a check mistakenly made payable to the wrong payee). However, in the instant case, only one false claim was made: The Form CA-1 supplemented by the CA-17 duty status report, and the checks were merely payment on that claim.

19. All of the cases cited by Complainant for the proposition that a check constitutes a "claim" under the False Claims Act, with the exception of United States v. Fowler, 282 F. Supp. 1 (EDNY 1968), are cases in which no previous underlying claim existed. In Fowler it appears that an underlying claim had generated the payment of checks for social security benefits since the defendant had "perpetrated a fraud . . . in demanding . . . checks" and the checks were issued in reliance upon a false statement concerning his past earnings. However, the Court primarily relied upon a case in which the checks had been issued by mistake and were not sent pursuant to a previous claim. Although cases under the False Claims Act may at times be helpful in interpreting the PFCRA, Fowler has not been cited in subsequent FCA cases involving similar facts. Fowler will not be followed here since it does not provide a reasonable basis for Complainant's interpretation of the PFCRA.

20. The findings and conclusions herein are based upon the preponderance of the evidence. 31 U.S.C. § 3803(f). In summary, Respondent is liable to the Postal Service under 31 U.S.C. $S3802(a)(1) for a civil penalty of $5,000 plus an assessment of $4,866.56, for a total liability of $9,866.56 less the amount of any restitution paid by Respondent pursuant to the Order of the United States District Court.