In the Matter of the Complaint Against ) January 19, 1994 ) RAYMOND AND DURENDA NAVAL ) 5100 S. Cleveland, Apt. 318 ) ) at ) ) Ft. Meyers, FL 33907-2136 ) P.S. Docket No. PF-65 APPEARANCE FOR POSTAL SERVICE: Samuel J. Schmidt, Esq. United States Postal Service Western Area Office 448 East 6400 South, Suite 450 Salt Lake City, UT 84107-7591 APPEARANCE FOR RESPONDENTS: None
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 Raymond and Durenda Naval on November 18, 1993, at 711 Mill Village, Millville, NJ. The Complaint was forwarded to Respondents at their new address of 5100 S. Cleveland, Apartment 318, Ft. Meyers, FL, where it was received on November 26, 1993. To date, Respondents have failed to file a Hearing Petition as required by 39 C.F.R. §962.3.
By Order dated January 12, 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 Respondents are jointly and severally liable to the Postal Service for a civil penalty in the amount of $5000 under 31 U.S.C. §3802(a)(1)-(2).
In accordance with 39 C.F.R. §962.4(a), this Initial Decision is based upon the information contained in the Complaint.
1. On or about January 29, 1992, Respondent Durenda Naval submitted a Request for Payment of Domestic Mail Insurance, PS Form 3812, to the Postal Service Lake Shore Station in Jacksonville, FL, claiming the loss of a parcel which allegedly had contained a torque wrench valued at $50.
2. On or about January 30, 1992, Respondent Durenda Naval submitted an Evidence of Value Supplement, again identifying the contents of the missing parcel as a torque wrench. Ms. Naval also presented a letter from Raymond Naval, verifying that the parcel she had sent had not been received.
3. Respondent Durenda Naval knew or had reason to know that the parcel she mailed to Raymond Naval did not contain a torque wrench, but instead contained a handgun. A handgun constitutes nonmailable matter under 39 U.S.C. §3001. Except for circumstances not relevant here, it is a criminal offense to knowingly deposit a handgun for mailing. See, 18 U.S.C. §1715.
1. Based on the information stated in the Complaint, there is no basis for finding that Raymond Naval is liable for making a false claim for payment of domestic mail insurance. The only allegation concerning Raymond Naval is that he wrote a letter stating that he had not received the package that had been mailed to him by Durenda Naval. There is no allegation in the Complaint that this statement was false. There is also no allegation in the Complaint that Raymond Naval identified the contents of the missing package as a torque wrench or that he co-signed with Durenda Naval the Request for Payment of Domestic Mail Insurance, PS Form 3812, claiming reimbursement for the alleged torque wrench.
2. Respondent Durenda Naval submitted a Request for Payment of Domestic Mail Insurance, PS Form 3812, claiming payment for the loss of a parcel which allegedly had contained a torque wrench valued at $50. Ms. Naval again identified the contents of the missing parcel as a torque wrench on an Evidence of Value Supplement in support of the insurance claim. Durenda Naval knew or had reason to know that PS Form 3812 was a false, fictitious, or fraudulent claim because she knew or had reason to know that the parcel she mailed did not contain a torque wrench but, in fact, contained a handgun. The request for insurance payment for a torque wrench valued at $50 constitutes a "claim" for money within the meaning of 31 U.S.C. §3802(a)(1).
3. Respondent Durenda Naval is subject to a maximum civil penalty of $5000 for making a false claim for domestic mail insurance under 31 U.S.C. §3802(a)(1). The Reviewing Official has requested a single penalty of $5000 jointly and severally against Durenda and Raymond Naval. As shown above, however, the Complaint fails to establish that Raymond Naval engaged in any conduct that would amount to a false claim under 31 U.S.C. §3802(a)(1)-(2). Since Respondent Durenda Naval has failed to file a Petition in opposition to the Complaint, the allegation of liability is deemed admitted. See, 39 C.F.R. §962.4(a) and §962.15(a)(2) and (d).
4. Although Respondent Durenda Naval has technically admitted the amount of the penalty by failing to respond, the Administrative Law Judge has redetermined the amount of the penalty. The amount of the penalty must be determined in light of all of the circumstances surrounding the false claim, including all aggravating and mitigating factors. See, S. Rep. No. 99-212, 99th Cong., 1st Sess. 18 (1985). As noted above, the Reviewing Official has requested a single penalty of $5000 jointly and severally against Durenda and Raymond Naval, but the Complaint failed to establish liability with respect to Raymond Naval. It is not clear whether the Reviewing Official would have requested the same maximum penalty against Durenda Naval alone.
5. 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 in determining the amount of any civil penalty to be imposed. 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.
6. Respondent Durenda Naval knew that she was deceiving the government when she submitted the insurance claim stating that the missing package had contained a torque wrench. Ms. Naval's deception was particularly egregious because she was attempting to profit from her illegal actions in depositing a handgun in the mail. The deliberate nature of her false claim and the fact that she attempted to profit from her related criminal conduct are clearly aggravating factors.
7. The amount of money falsely claimed is also an important factor to consider. Here, the claim was for only $50 which the Postal Service never paid. It would be difficult to justify the imposition of a maximum penalty under these circumstances.
8. 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 (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, as noted above, the government suffered no loss as a result of the false claim because it did not pay the insurance claim. There is also no allegation in the Complaint that the Postal Service incurred any unusual expenses in investigating or litigating this case. The amount of the civil penalty would, however, serve the purpose of deterring future false claims and protecting the integrity of the insurance program of the Postal Service.
9. On balance, a reduction of the amount of the penalty is warranted in light of the above factors. The civil penalty is set at $1500. Accordingly, Respondent Durenda Naval is liable to the Postal Service under 31 U.S.C.
§3802(a)(1) for a civil penalty in the amount of $1500. The Complaint is dismissed with respect to Respondent Raymond Naval.
Judith A. Dowd Acting Chief Administrative Law Judge