In the Matter of the Complaint Against ) January 14, 1994 ) JOHN PODMAJERSKI ) d/b/a DIRT DESTROYERS MOBILE ) TRUCK WASH ) P. O. Box 3275 ) 511 S. Highland Avenue ) ) at ) ) Oak Park, IL 60303-3275 ) P.S. Docket No. PF-63 APPEARANCE FOR RESPONDENT: None APPEARANCE FOR POSTAL SERVICE: Elizabeth P. Martin, Esq. Law Department United States Postal Service Washington, DC 20260-1144
This proceeding arises out of a Complaint issued 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. §§3801-3812, and 39 C.F.R. Parts 273 and 962. The Complaint was mailed to John Podmajerski d/b/a Dirt Destroyers Mobile Truck Wash ("Respondent") on November 15, 1993. On November 18, 1993, Respondent acknowledged receipt of the Complaint by signing a Domestic Return Receipt (PS Form 3811). To date, Respondent has failed to file a Hearing Petition as required by 39 C.F.R. §962.3.
By order dated January 4, 1994, the Judicial Officer referred the Complaint to the Acting Chief Administrative Law Judge for an Initial Decision in accordance with 39 C.F.R. §962.4.
In the Complaint, the Reviewing Official alleged that Respondent is liable to the Postal Service for civil penalties in the amount of $15,000 ($5000 for each of three claims) under 31 U.S.C. §3803.
In accordance with 39 C.F.R. §962.4(a), this Initial Decision is based upon the information contained in the Complaint.
1. Respondent John Podmajerski d/b/a Dirt Destroyers Mobile Truck Wash is an individual with a business address of 511 S. Highland Avenue, Oak Park, Illinois. Respondent had a total of fourteen truck washing contracts with the Postal Service in the Chicago area under the name "Dirt Destroyers".
2. On or about October 2, 1992, Respondent submitted Invoice No. 920764, claiming payment for having washed thirteen postal vehicles at the Clarendon Hills, Illinois, Post Office. Respondent knew or had reason to know that he had not washed those vehicles. Respondent also knew or had reason to know that Invoice No. 920764 was a false, fictitious, or fraudulent claim for money in compensation for work falsely reported as performed.
3. On or about October 25, 1992, Respondent submitted Invoice No. 920838, claiming payment for having washed thirty-five postal vehicles at the Lemont, Illinois, Post Office. Respondent knew or had reason to know that he had not washed those vehicles. Respondent also knew or had reason to know that Invoice No. 920838 was a false, fictitious, or fraudulent claim for money in compensation for work falsely reported as performed.
4. On or about October 29, 1992, Respondent submitted Invoice No. 920857, claiming payment for having washed thirty-eight vehicles at the main Oak Park Post Office, as well as the River Forest Branch and South Station facilities. Respondent knew or had reason to know that he had not washed those vehicles. Respondent also knew or had reason to know that Invoice No. 920857 was a false, fictitious, or fraudulent claim for money in compensation for work falsely reported as performed.
1. Respondent submitted a total of three invoices--one each on October 2, October 25, and October 29, 1992--claiming compensation from the Postal Service for having washed vehicles that he knew or had reason to know he had not washed. Each of the three invoices bearing a charge for having washed vehicles that had not, in fact, been washed constitutes a "claim" for money within the meaning of 31 U.S.C. §3802(a)(1).
2. Respondent is liable for civil penalties in the amount of $5000 for each of the three false claims for a total of $15,000. The Reviewing Official has requested $15,000 in civil penalties. Since Respondent has failed to file a Petition in opposition to the Complaint, the allegation of liability for a $15,000 penalty is deemed admitted. See, 39 C.F.R. §962.4(a) and §962.15(a)(2) and (d).
3. Although Respondent technically has admitted the amount of the penalty by failing to respond, the Administrative Law Judge has redetermined the amount of the penalty in view of the factors considered below. 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 C.F.R. §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.
4. First, Respondent knew that he was deceiving the government each time he submitted one of the three invoices. The deliberate nature of the false claims is an aggravating factor.
5. The fact that the Postal Service did not actually lose any money constitutes a mitigating circumstance. It would be difficult to justify the
imposition of the maximum penalty of $5000 per claim under such circumstances.
6. Finally, in determining the amount of a penalty, the Administrative Law Judge must consider that the purposes of the statute are to recompense the government for losses resulting from false claims (including the cost of the investigation and the instant litigation), to deter the making of such claims in the future and to protect the integrity of the government program in question. S.Rep. No. 99-212, 99th Cong., 1st Sess. 2 (1985). Here, there is no evidence showing that the Postal Service has conducted a lengthy investigation or that it has incurred any unusual costs in litigating this matter. Furthermore, as noted above, the Postal Service did not incur any actual losses because the false claims were not paid.
7. After considering all of the circumstances of these claims, it is concluded that Respondent's liability should be reduced from the maximum of $5000 per claim to the sum of $2000 for each of the three false claims, for a total of $6000. Accordingly, Respondent is liable to the Postal Service under 31 U.S.C. §3802(a)(1) for a civil penalty totaling $6000.
Judith A. Dowd Acting Chief Administrative Law Judge