In the Matter of the Petition by ) April 12, 1995 ) DEBRA A. MOLINE ) 7029 Payte Lane ) ) at ) ) Fort Worth, TX 76180-3514 ) P.S. Docket No. AO 94-217 APPEARANCE FOR PETITIONER: Davis McCown, Esq. 7337 Airport Freeway Fort Worth, TX 76118-6902 APPEARANCE FOR RESPONDENT: Andrew C. Jagusiak, Esq. Associate Counsel Postal Inspection Service 475 L'Enfant Plaza, S.W. Washington, D.C. 20260-2181
INITIAL DECISION
By letter dated September 7, 1994, the Postal Inspection Service initiated this matter by demanding that Petitioner pay $14,052.10, for losses "as a result of your embezzlement while you were employed by the United States Postal Service." On September 19, 1994, Petitioner requested reconsideration, asked that money in her civil service retirement fund be released to her, and also asked the Postal Inspector in Charge to provide information as to how the figure $14,052.10 was arrived at. The Postal Inspector responded on September 29, 1994, stating that $13,786.50 was based on a shortage disclosed by audits on January 28 and February 11, 1991;(1) $236.60 was based on an audit shortage on November 10, 1993; and $29.00 was based on a coil of 29 cent stamps being unaccounted for on November 4, 1993. The Postal Inspector provided a copy of an Investigative Memorandum, dated November 18, 1993, to Petitioner's attorney. On October 5, 1994, Petitioner supplemented her request for reconsideration, arguing primarily that the evidence did not establish any loss by the Postal Service. By letter dated October 25, 1994, the Postal Inspection Service reaffirmed its position and reissued its demand for $14,052.10, along with a statement of Petitioner's right to petition for review under 39 C.F.R. Part 966.
Ms. Moline's Petition for Review was received on November 28, 1994. She did not request an oral hearing. Respondent's Answer, with attached documents,(2) was filed on December 16, 1994. On January 10, 1995, via conference call with the attorneys for each side, the parties agreed that the case would be decided on the written record, with briefs to be filed by both parties. Petitioner's brief was received on February 14, 1995, and Respondent replied on March 2, 1995. Attached to Petitioner's brief is a sworn affidavit from Ms. Moline denying any wrongdoing and asserting that she has no liability to the Postal Service. The following Findings of Fact are based on the written record, including all documents submitted by the parties.
FINDINGS OF FACT
1. Debra A. Moline was employed by the United States Postal Service from October 1974 to August 1994. At the times pertinent to this case, Ms. Moline worked as a window clerk at the Watauga Finance Unit Postal Station (1991) and at the Haltom City Branch (1993), both being in the suburbs of Fort Worth, Texas.
2. On January 7, 1992, Ms. Moline reported that she had been robbed at gunpoint by an unidentified person as she was closing the Watauga station in the early evening. A subsequent audit showed a significant shortage at the Watauga station.(3) Because suspicion arose over whether this robbery actually occurred, the Postal Inspection Service began an investigation into Ms. Moline's accountability for postal funds and stamp stock.
3. Amounts of cash and stamp stock assigned to individual window clerks are recorded, and each clerk is responsible and accountable for the assigned amounts.
4. Whenever any employee's stock is counted, a Postal Service Form 3294, Cash and Stamp Stock Count and Summary, is used to record the count.
The February 1991 Shortage - $13,582.50(4)
5. A Form 3294, dated January 28, 1991, showed Ms. Moline's total stamp stock to be $52,436.39, plus $90.38 cash, for a total count of $52,526.77.(5) The form was signed by a supervisor, Sonya Hill, and by Ms. Moline, indicating that she agreed with the count.
6. The breakdown by denomination on this January 28, 1991 count showed that it included the following 25 cent stamps: 7086 stamps; 2053 books of stamps @ $5 per book; 460 coils of stamps @ $25 per coil. The total value of these stamps was $23,536.50.
7. Effective February 3, 1991, the postage rate for first-class letters increased from 25¢ to 29¢.
8. A Postal Service Form 17, dated January 29, 1991, shows that Petitioner turned in the following quantities of 25¢ stamps for destruction: 5,600 stamps; 1,150 books @ $5 each; and 110 coils @ $25 each. The total value adds to $9,900.00.
9. A Postal Service Form 3294, dated February 11, 1991, showed Petitioner's total stamp stock to be $50,993.14, plus $2278.65 cash, for a total count of $53,271.79.
10. Compared to the opening balance shown on this form - $52,949.83,(6) this February 11 count showed an overage of $321.96. However, the count of individual denominations of stock shown on the February 11 Form 3294 shows that there were no 25¢ stamps on hand in Petitioner's account, either as coils, books, or in any other form. It is upon this apparent shortage that the Postal Service has based its allegation of liability. Ignoring the arithmetical errors, which are relatively insignificant, the $13,582.50 claim is arrived at by subtracting the value of the 25¢ stock turned in on January 29, 1991 (see para. 8 above), from the value of the 25¢ stock that was present on January 28, 1991 (see para. 6 above). As will be discussed in more detail later, Respondent's theory of liability is not that Petitioner stole these particular stamps, but that she misappropriated postal funds over a period of time. The value of these 25¢ stamps was used as the basis of liability because these stamps, or the proceeds from their sale, are unaccounted for.
11. Despite the "missing" 25¢ stamp stock disclosed by the February 11, 1991 count, Petitioner's total count on February 11 exceeded the opening balance by $321.96, and exceeded the January 28 count by $745.02. This was because she had greater quantities of other stock on February 11, most notably 29¢ stamps, books and coils, than were present in her account on January 28. There are no accounting records that show how, when, or in what quantities, Petitioner received 29¢ stamp stock between January 28 and February 11.
12. Petitioner was interviewed by Postal Inspectors Aarons and Till on November 10, 1993. Most of the interview dealt with the November 1993 shortages, but the inspectors also challenged her claim that she was robbed in January 1992. Petitioner admitted that there had been some shortages in her account during 1991, but insisted that her report of the Watauga station robbery was true. Petitioner stated that she had access to the main stock during that time, and that she had covered shortages in her account by moving stock from the main stock prior to a count. She referred to a count in September 1991 and said that she was approximately $3,000 short, but covered it by moving coils from the main stock. She said this shortage resulted mostly from her taking money orders to pay bills, without putting in sufficient cash to pay for them. She said she did not believe she was ever short more than $3,000. In a sworn, written statement made after this portion of the interview, Ms. Moline stated, "While I was talking to the Inspectors, I told them I knew my drawer was going to be short (No more than $3,000)." She then went on to deny any participation in the robbery.
13. In a sworn, written statement given to the postal inspectors on November 17, 1993, Sonya Hill stated that she was the acting supervisor at the Watauga station for a time in 1991, and that she had observed Petitioner remove coils of stamps from the main stock safe so that they could be counted as part of Petitioner's stock. Ms. Hill stated that Petitioner explained at the time that the coils were part of her stock even though they were stored in a compartment belonging to another clerk, Ms. Owens. Ms. Hill recalled that this incident happened in connection with the January 28, 1991 count.
14. In her affidavit, dated February 7, 1995, Petitioner did not comment specifically on the inspectors' summary of their interview with her, but she did say, "I have not misappropriated any stock of the U.S. Postal Service," and,"I did not embezzle or misapply any items from the main stock of the vault."
The November 10, 1993 Shortage - $236.60
15. Inspector Aarons conducted an audit of Petitioner's account at the Haltom City branch on November 10, 1993. The Postal Service Form 3294 shows the opening balance to be $21,954.14 and the total count of stock and cash on hand to be $21,717.54, for a shortage of $236.60.
16. During the interview by the postal inspectors, also on November 10, 1993, Petitioner admitted that she had taken a money order without paying for it. Her sworn, written statement (the second of three given on November 10) said, "On Nov 9, 1993 I made a money order for $210.00 I forgot about the money order and didn't put the money in my drawer which caused me to be short on my audit today."
17. On August 25, 1994, probably in connection with Petitioner's resignation from employment with the Postal Service, another audit of her account was conducted by postal inspectors. The Postal Service Form 3294, dated August 25, 1994, showed an opening balance of $21,519.14 and the total count of stock and cash to be $22,021.13, for an overage of $501.99. Petitioner argues that this should negate the alleged shortage on November 10, 1993 because the account had been "sealed." Respondent says the account was not sealed, and that the August 1994 count is irrelevant. Neither side has submitted any other evidence to support their position or to explain the significance, or lack of significance, of the August 1994 count.
The Missing $29 Coil - November 4, 1993
18. On November 4, 1993, while Petitioner was working as a window clerk at the Haltom City branch and was under surveillance by postal inspectors, Inspector Durst gave Petitioner a $29 coil of stamps and told her he had found them in the lobby. It is not clear from the record whether this was done as part of the surveillance, Petitioner not knowing who Inspector Durst was, or whether the inspector really did find the coil. Petitioner placed the coil in her drawer.
19. During the November 10, 1993 interview concerning the events of November 8-10, Inspector Aarons asked Petitioner if anyone had turned in lost stamps prior to the counts that were done on November 8 and November 10.(7) Petitioner said she was not sure, but if that had happened she would have placed the stamps in an envelope, annotated the time and place, and given the envelope to a supervisor. There is no evidence that Petitioner actually followed this procedure, and she has never claimed that she did. There are no records that trace the whereabouts of the coil, or the proceeds from the sale if it was sold.
20. In her February 7, 1995 affidavit, Petitioner said, "I did not 'embezzle' a .29 cent coil from the Postal Service on November 4, 1993. A coil may have been presented to me as 'lost' by a Postal Inspectors (sic). It is my recollection that a customer did report losing a coil within a short period of that time. Assuming that the coil belonged to this customer, I feel certain that it was returned."
DISCUSSION AND CONCLUSIONS OF LAW
The February 1991 Shortage - $13,582.50
Respondent argues some plausible theories as to why Ms. Moline took money from the Postal Service, her method of doing so, and how she was able to avoid discovery. These include her admitted personal financial troubles, the series of postal money orders purportedly purchased by her husband and used to make payments to a bankruptcy trustee (see fn. 2, items e. and f.), and Petitioner's admission, corroborated by witness Sonya Hill, that she moved stock from the main stock to cover shortages. There are some missing links, however, in tying the evidence of record to these theories, especially as to the specific amount alleged to have been embezzled.
It nearly goes without saying that, in order to hold an employee liable for a shortage of postal stock or cash, the Postal Service must prove that there has been an actual loss. Bessie M. Kohn, P.S. Docket No. DCA-174 (December 8, 1993); Leslie H. Eldredge, P.S. Docket No. AO-7 (P.S.D. January 25, 1991). Except for Petitioner's admission of approximated shortages, at unspecified times, the evidence does not show a loss. The fact that the denominations of stamp stock in an account changed from one audit to the next does not prove that anything was lost or stolen. The two audit counts done on January 28, 1991 and February 11, 1991 both show an overage in Petitioner's account. While there is a basis for the suspicion that these overages may not be genuine because Petitioner moved stock that was not hers into her account, there was apparently never any audit that showed a shortage in the main stock. Respondent's explanation for this is that Petitioner's shell game went undiscovered for more than a year. Assuming that is true, it still leaves the specific allegation, i.e., that $13,582.50 was missing, founded mostly on speculation. Respondent attempts to fill this gap by relying on Petitioner's admission that she moved stock from the main stock prior to audits. Because of this, Respondent argues, the fact that the audits did not show a shortage is not significant. The flaw in this is that there is no evidence by which to make the amounts, or the timing, match up. For example, the inspectors' comparative analysis of the 25¢ stock and the 29¢ stock that was present in Petitioner's account on January 28 and February 11, 1991,(8) asserts that the February 11 audit showed more 29¢ stock "than Clerk Moline legitimately received." Even if one were to accept this as proof of what is asserted, the value of the stock not "legitimately received" is only $1577.
Respondent's theory, as argued in their brief, is that Ms. Moline took money "over a period of time prior to the audits," i.e., for some unspecified period in 1990, or early 1991. In support of this, they point to the several money orders bearing the name Albert Moline, dated between December 8, 1989 and May 16, 1991. However, if it is to be the "missing" 25¢ stamps that provide the basis for liability, those stamps had to have been sold, stolen, or unlawfully converted between January 28, 1991 and February 11, 1991. Their unexplained whereabouts cannot constitute proof of a specific amount of embezzlement that took place over some other period of time. It need not be decided whether Petitioner's arguments as to how these stamps may have been legitimately disposed of, or Respondent's counters to those arguments, are more persuasive. The record does not show, by a preponderance of evidence, that the Postal Service had a loss of $13,582.50 as of February 11, 1991.
This does not leave Petitioner home free, however. Despite the general denials of wrongdoing in her February 7, 1995 affidavit, she did admit to the postal inspectors on November 10, 1993 that she had shortages in her account in 1991, that these shortages were caused by her writing money orders without paying for them, and that she covered shortages prior to audits by moving stock from the main stock. These admissions are corroborated by the statement of Sonya Hill that Petitioner had access to the main stock and, to some extent, by the money orders. I find this sufficient to establish a loss of $3,000.00 - the amount of shortage admitted by Petitioner, and that Petitioner was responsible for that loss.
The November 10, 1993 Shortage - $236.60
As a general rule, postal employees are strictly accountable for shortages in funds and stock assigned to them, unless the evidence shows that they exercised reasonable care in the performance of duties related to those shortages. Philip J. Clerkin, Sr., P.S. Docket No. DCA 94-151 (November 22, 1994); Kevin Kay, P.S. Docket No. AO-20 (I.D. February 18, 1992). The audit on November 10, 1993 showed a shortage of $236.60 in Ms. Moline's account. Her admission that she made a $210 money order for herself on the previous day and forgot to put money in her drawer to pay for it clearly establishes that there was an actual loss, and that it was attributable to her failure to exercise reasonable care in managing her account. Having thus proved a shortage of $236.60, and Petitioner having failed to demonstrate that she exercised reasonable care, Petitioner is liable for the entire shortage, even though her admission does not account for that precise amount. This is different from the 1991 situation, where no audit showed a shortage of the amount alleged.
Petitioner's argument on the August 1994 audit, which showed an overage, does not help her. In some cases employees are entitled to have an overage on one count offset against a shortage on another, see Leslie H. Eldredge, P.S. Docket No. AO-7 (P.S.D. January 25, 1991), but that cannot apply when Petitioner's admission demonstrates that there could be no connection between the shortage alleged, and the overage some ten months later.
The Missing $29 Coil - November 4, 1993
Respondent's theory is that Petitioner used this $29 coil to reduce the shortage that she knew was in her account at the time, and that she did this by not reporting it to a supervisor as being a "found" item, as proper procedure apparently would require.(9) In support of this, Respondent points to a slip of paper that, in the opinion of those who were conducting surveillance, Petitioner had "secreted" near her cash drawer. Petitioner was observed to remove this paper and write on it, shortly after Inspector Durst gave her the coil. Respondent opines that Petitioner was keeping track of the shortage in her account, and any reductions she was able to make to that shortage. This small piece of paper was made part of the investigative file (Tab 12, Ex. 24). It contains three printed numbers and four handwritten numbers - a series of additions and subtractions, but as the number "29" does not appear, nor does any other number that corresponds to any alleged shortage, it proves nothing about the $29 coil.
We do know, however, that Petitioner received a coil that was turned in as a "lost" item, and did not take proper steps to have it added to her account. If she should have done this, and if her account had otherwise been in balance, the audits done on November 8 and November 10, 1993 presumably would have shown a $29 overage. In essence then, Respondent's position is that the account was actually short by $29 more than the audit of November 10, 1993 revealed. The argument that Petitioner puts forth now is that this coil actually belonged to a customer, and was simply returned to that customer, thereby obviating any need for Petitioner to report a "found" item. For several reasons, this story is not credible. First, Petitioner did not tell this to the inspectors on November 10, 1993, when it should have been fresh in her mind. Second, she admitted that she knew her account was short during this time, and admitted that she had first been untruthful with the inspectors when discussing her use of a $600 check on November 8, 1993 to make up a shortage (see her first two written statements of November 10; Tab 13, Exhibits 28 and 29). Third, it is unlikely that a clerk who knew her account was already short would simply give a $29 coil to a customer without making any record of it. Considering all the facts and circumstances, I find the evidence sufficient to establish a loss of $29, and that Petitioner is responsible for the loss.
CONCLUSION
I find that the record shows, by a preponderance of evidence, that the Postal Service incurred losses of $3,265.60, and that Petitioner is responsible for those losses. Petitioner is liable to the Postal Service for $3,265.60.
Bruce R. Houston
Acting Chief Administrative Law Judge
1. 1 Respondent's brief acknowledges that there was an arithmetical error in the calculation of this figure, and that it should be $13,582.50, making Petitioner's total liability equal $13,848.10. These new calculations contain another arithmetical error but, as this one favors Petitioner by $54, there has been no objection, and the demand upon Petitioner is now $13,848.10.
2. 2 The documents filed by the Postal Service include the following, which are appended to the Answer at Tab 13 (a nearly identical set of documents is also found at Tab 12):
a. Investigative Memorandum, dated November 18, 1993.
b. PS Forms 3294, dated January 28, 1991 and February 11, 1991.
c. Comparative analysis of the differences between the counts done on January 28 and February 11 (prepared by postal inspector).
d. PS Form 17 showing stamp stock turned in by Petitioner on January 29, 1991.
e. Copies of 17 postal money orders purchased by Petitioner's husband, Albert Moline, in 1990 and 1991.
f. An analysis of some of these money orders, as to amount of sales compared to cash received (prepared by postal inspector).
g. A $600 check payable to Debra Moline, dated November 5, 1993.
h. PS Form 3294, dated November 10, 1993.
i. Three sworn statements by Petitioner, given to postal inspectors on November 10, 1993.
j. A sworn statement from Sonya Hill to postal inspectors on November 17, 1993.
3. 3 The Postal Inspector's Investigative Memorandum puts this figure at $58,159.12. However, as there is no documentation in the file to support this figure, and as the alleged liability against Petitioner is not based on it, except very indirectly, it will only be assumed that some shortage was found.
4. 4 As amended in Respondent's Reply Brief, March 2, 1995.
5. 5 This showed an overage of $23.24 from the previous count. We do not know when the previous count was done, but it does not seem to be relevant. It is the January 28, 1991 count that provides a baseline for this case.
6. 6 It is noted that this opening balance does not equal the January 28, 1991 count. There are no documents that show what changes occurred in the interim, but this difference is not deemed to be relevant.
7. 7 The Investigative Memorandum (paragraph 6) makes reference to an audit of Petitioner's account on November 8, 1993, done by a supervisor named Olson, which disclosed a shortage of $24.31. Olson is reported to have said that Petitioner attributed this shortage to a $29 coil being given to a customer who claimed she had purchased it earlier. Olson also is reported to have said that Petitioner never mentioned a coil found in the lobby being turned in to her on November 4. As there is no Form 3294 for this November 8 audit, and no statement from Supervisor Olson, and as Respondent does not argue that the alleged $29 loss is tied to this audit, no reliance has been placed on this paragraph of the Investigative Memorandum.
8. 8 See the table of numbers at Tab 13, Exhibit 3.
9. 9 Other than the inspectors' Investigative Memorandum, summarizing what Petitioner told them she would have done with a "found" item, there is no evidence that shows that this is the procedure that clerks are instructed to follow. As Petitioner has not challenged it, however, it is accepted that the evidence shows this to be the prescribed procedure for having the $29 added to her account.