In the Matter of the Complaint Against

GEORGE M. ERNST, JR. d/b/a
MANY INTERESTED SAVERS, INC.
P. O. Box 361
at Georgetown, KY 40324-0361

P.S. Docket No. 13/88;

08/04/82

Cohen, James A.

APPEARANCES FOR COMPLAINANT:
HildaRosenberg, Esq.
Steven B. Caver, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260

APPEARANCE FOR RESPONDENT:
George M. Ernst, Jr.
P. O. Box 361
Georgetown, KY 40324-0361

POSTAL SERVICE DECISION

In an Initial Decision of an Administrative Law Judge dated June 9, 1982, it was concluded that Respondent is engaged in conducting a scheme to obtain remittances of money through the mails by means of materially false representations in violation of 39 U.S.C. § 3005. The Administrative Law Judge therefore recommended the issuance of a False Representation Order in the form attached to the Initial Decision.

Respondent did not file an appeal to the Judicial Officer in the form prescribed in the Rules of Practice (39 C.F.R. Part 952). However, in letters addressed to the Administrative Law Judge, Respondent has stated his disagreement with the findings and conclusions of the Initial Decision. The first letter of Respondent received after issuance of the Initial Decision was treated as an appeal to the Judicial Officer and a reply thereto was timely filed by Complainant. Although a subsequent letter stated that Respondent was not filing an appeal, nonetheless, since Respondent has expressed disagreement with the Administrative Law Judge's Initial Decision, the matter will be considered on appeal.

While the matter was pending on appeal, Complainant filed a "Motion for Supplemental Order." Inasmuch as no False Representation Order had been issued, the Motion was premature and dismissed without prejudice.

The enterprise which is the subject of this proceeding is a club called Many Interested Savers, Inc., for which memberships are solicited for a certain price with promises of monetary returns in various amounts. In general, the Complaint alleges that the represented monetary returns will not be realized by club members. The specific allegations of the Complaint, as amended, are enumerated in Finding of Fact 3 of the Initial Decision. The Initial Decision concluded that Respondent makes the representations alleged in the Complaint, as amended, and that those representations are materially false.

Respondent in effect argues that the Initial Decision is not based on the facts or the law, and that the representations are not false because the monetary return to club members will be realized over a period of time. Despite Respondent's arguments to the contrary the record supports the Administrative Law Judge's conclusions that the representations are made and that they are false. The evidence cited in the Initial Decision supports the finding that persons remitting a membership fee to Respondent will not realize the monetary returns represented. The promise of a refund to dissatisfied members does not vitiate the effect of the misrepresentations. Farley v. Heininger, 105 F.2d 79, 84 (D.C. Cir. 1939); Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746, 751 (S.D.N.Y. 1959).

Accordingly, after consideration of the entire record, the Administrative Law Judge's finding that Respondent is in violation of 39 U.S.C. § 3005 is affirmed. A remedial order under the cited statute is issued with this decision.