In the Matter of the Complaint Against:

FILOMENA P. WINSLOW,
278 Barham Avenue
at
Santa Rosa, CA 95407-7053

P.S. Docket No. PF-5

Mason, Randolph D., Administrative Law Judge

APPEARANCES FOR THE POSTAL SERVICE: Stephen E. Alpern, Esq.,
Howard J. Kaufman, Esq., Office of Labor Law, United States Postal
Service, 475 L'Enfant Plaza, S.W., Washington, DC 20260-1130

INITIAL DECISION

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 CFR Parts 273 and 962. The Complaint was dated and mailed to Filomena Winslow ("Respondent") on December 1,

1989. By letter to the Recorder dated January 9, 1990, Respondent indicated that she had received a copy of the Complaint on December 15, 1989, and requested an extension of time for filing a Petition. The Judicial Officer granted her an extension to February 7, 1990. To date, Respondent has failed to file a Petition as required by 39 CFR § 962.3.

By Order dated March 12, 1990, the Judicial Officer referred the Complaint to the Administrative Law Judge for processing in accordance with 39 CFR § 962.4.

In the Complaint, the Reviewing Official alleged that Respondent is liable to the Postal Service for an assessment of $26,568.78 plus a civil penalty of $10,000 under 31 U.S.C § 3802(a)(1). In response to a request for clarification by the Administrative Law Judge, the Reviewing Official now concedes that the civil penalty should be limited to a maximum of $5,000 since it is based upon a single claim form. The Complaint is deemed amended to reflect that concession.

In accordance with 39 CFR § 962.4(a), this Initial Decision is based upon the information contained in the Complaint.

FINDINGS OF FACT

1. Respondent Filomena Myers Winslow, 689 Plum Drive, Santa Rosa, California 95402, is an individual previously employed as a distribution clerk in the Northbay General Mail Facility in Petaluma, CA.

2. On May 16, 1988, Respondent completed and submitted a Department of Labor Form 1032 which was used to determine Respondent's eligibility for continued compensation benefits. That form states in Part A that "[e]arnings from self-employment (such as farming, sales, service, operating a store, business, etc.) must be reported. . . ." In response to the question "Were you self-employed during any time covered by this form?" Respondent answered "No." The Respondent was expected to provide information relating to employment, commissions received, or self-employment.

3. Respondent was a part-owner of Karens Silk Flowers and Vases ("company") in Santa Rosa, CA, from approximately January 1, 1988, through May 16, 1988, and for a period of time thereafter.

4. On the above Form 1032, Respondent claimed compensation from January 1 through May 16, 1988, and failed to disclose, in response to the questions in Part A, her partial ownership in the company during that period.

5. Thereafter, Respondent continued to receive compensation for disability from May 16, 1988, to September 11, 1989. During the latter period Respondent again failed to disclose that she was either an employee or owner of the company. The compensation which she received during that period was also based upon the above false statement contained in the May 16, 1988, Form 1032.

6. Based upon the above false claim, and the false statement made in support thereof, the Respondent received $13,284.39 in disability compensation and continuation of pay.

CONCLUSIONS OF LAW

1. The first issue is whether Respondent is subject to a $5,000 penalty under 31 U.S.C. § 3802(a)(1) n1 for making a false claim for disability compensation. It is concluded that her statement on the Form 1032 that she was not self-employed is materially false. Also, it is reasonable to infer that she submitted that statement in support of her claim knowing, or having reason to know, that it was false.

n1 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 no payment has been made by the Government on the claim] . . . , 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.

2. 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 for her false claim. Since Respondent has failed to file a Petition in opposition to the Complaint, the allegation of liability for a $5,000 penalty is deemed admitted. See 39 CFR § 962.4(a) and § 962.15(a)(2) & (d). Moreover, no mitigating circumstances have been presented, and the amount of the penalty is further justified by the amount of compensation falsely claimed. Accordingly, Respondent is liable for the maximum penalty of $5,000.

3. 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 $13,284.39, she is liable for an assessment of not more than $26,568.78. Again, her liability for the maximum assessment is deemed admitted, and no mitigating circumstances have been presented. Accordingly, Respondent is liable for the maximum assessment of $26,568.78.

4. In conclusion, Respondent is liable to the Postal Service under 31 U.S.C. § 3802(a)(1) for a civil penalty of $5,000 plus an assessment of $26,568.78.