In the Matter of the Complaint Against:

DANIEL L. SOYKE,
11 Vine Street,
Binghamton, NY 13903-1816
and at
P.O. Box 245 SV,
Binghamton, NY 13903-0245
and
GLOBAL, Box 341,
Vestal, NY 13851-0341,
and
"TRP", P.O. Box 245 SV,
Binghamton, NY 13903-0245

P.S. Docket No. 34/158

10/21/91

Cohen, James A., Judicial Officer

APPEARANCE FOR COMPLAINANT: Jennifer Yopes Angelo, Esq.,
Consumer Protection Division, Law Department,
United States Postal Service, Washington, DC 20260-1144

APPEARANCE FOR RESPONDENTS: Daniel L. Soyke, 11 Vine Street,
Binghamton, NY 13903-1816

POSTAL SERVICE DECISION

Respondent, Daniel Soyke doing business as Global and TRP, has appealed from an Initial Decision in which an Administrative Law Judge found that Respondent is engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.

Background

The General Counsel of the United States Postal Service (Complainant) initiated this proceeding by filing a Complaint alleging that Respondent seeks remittances through the mail by means of solicitations for loans and credit cards which make materially false representations in violation of 39 U.S.C. $S3005. Specifically, Complainant alleges in paragraph 6 of the Complaint that Respondent falsely represents that his companies:

"a)...will obtain a loan for persons who buy their service;

b)... will obtain a major credit card for persons who buy their service;

c)...will provide the names of lending institutions which are likely to provide loans and/or credit cards by mail to persons who have difficulty obtaining credit;

d)...will provide the names and addresses of persons or institutions which directly make loans and/or provide credit cards;

e)...will perform a service beyond the provision of printed information to consumers; and

f)...have a relationship with lenders which they will use to benefit persons responding to their advertisement."

Respondent filed a timely Answer in which he admitted making the representation alleged in paragraph 6(d) of the Complaint but denied making the representations alleged in the remainder of the Complaint. Respondent opposed the issuance of the orders requested in the Complaint asserting that he had done business with thousands of customers over a number of years and received no consumer complaints. Respondent further advised that he would not appear at a hearing, but requested that the matter be considered on the record.

A hearing was held at which Complainant presented documentary evidence and called one witness to testify on its behalf. Following submittal of Respondent's documentary evidencen1 and Complainant's brief containing proposed findings of fact and conclusions of law, the Administrative Law Judge issued an Initial Decision in which he found that Respondent makes the representations alleged in the Complaint and, with the exception of certain portions of representations (c) and (d) pertaining to credit cards, found the representations to be materially false. Accordingly, the Administrative Law Judge concluded that Respondent is engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. § 3005.

n1 Respondent submitted for inclusion in the record two "Loan-By-Mail Information Service Application[s]" dated 1981 and 1989, and a consent agreement executed by Respondent on February 24, 1982.

Respondent filed a timely appeal in which he takes issue with the Administrative Law Judge's findings and conclusions. Complainant opposes Respondent's appeal.

Discussion & Exceptions

Respondent contends that the Administrative Law Judge failed to take into consideration the absence of consumer complaints and relied on evidence pertaining to an out-dated circular. Respondent in addition argues that his solicitations are not misleading and that he is being singled out and harassed inasmuch as others are continuing to make the same representations. Finally, Respondent challenges certain findings of fact proposed by Complainant in its prehearing brief and questions the authority of Postal Inspectors to confiscate his typewriters.

While Respondent is correct that the Administrative Law Judge did not address his argument that no consumer complaints had been filed, no reversible error was committed since proof of actual deception or consumer complaints is not required to support an action under 39 U.S.C. § 3005. See Farley v. Heininger, 105 F.2d 79, 84 (D.C. Cir.), cert. denied, 308 U.S. 587 (1939); The Washington Mint, Inc., P.S. Docket No. 30/42 at 17 (P.S.D. June 1, 1989); Gilles J. Bitbol, P.S. Docket No. 12/158 at 4 (P.S.D. Aug. 24, 1982). The issue to be decided in a § 3005 proceeding is whether materially false representations are being used to solicit remittances of money or property through the mail. See The Washington Mint, Inc., at 17; Gilles J. Bitbol, at 4.

Contrary to Respondent's contention the Administrative Law Judge did not err in relying on the 1988 edition of "Financial Sources" (CX-8) or testimony based on an investigation regarding that circular (I.D., FOF ##4 & 11-12). The circular was furnished to a Postal Inspector by Respondent and until the appeal was filed, Respondent has not even alleged that he had discontinued using that circular or that an updated edition of the circular was currently being distributed. See Rush Indus., Inc., P.S. Docket No. 7/50 at 9 (P.S.D. April 10, 1980); Universal Life Church, Inc. #, P.S. Docket No. 7/62 at 5-7 (P.S.D. Feb. 14, 1980). Accordingly, Respondent's contention that he is not longer distributing the 1988 edition of "Financial Sources" is not supported by the record.

While Respondent claims that his solicitations clearly and understandably represent that he will furnish lending "information," not lending services, the impression conveyed to the ordinary reader by Respondent's loan application, when read together with his classified advertisement and "Dear Preferred Applicant" letter, is that Respondent's companies are associated with, or are, a lending service. See Donaldson v. Read Magazine, Inc., 333 U.S. 178, 189 (1948); Peak Laboratories, Inc. v. U.S.P.S., 556 F.2d 1387, 1389 (5th Cir. 1977). The use of the word "information" in the application does not alter the overall impression created by the documents as a whole and would not lead the ordinary reader to believe that he or she was purchasing information rather than applying for a loan. See Borg-Johnson Electronics, Inc. v. Christenberry, 169 F. Supp. 746, 751 (S.D.N.Y. 1959); G.J. Howard Co. v. Cassidy, 162 F. Supp. 568, 572 (E.D.N.Y. 1958). Therefore, the Administrative Law Judge did not err in concluding that Respondent falsely represents that he will provide lending services to members of the general public.

Respondent's contention that he is being singled out and harassed is also without merit. Loan-by-mail and credit card promotions have previously been the subject of § 3005 proceedings. See e.g. Equisystems California, Inc., P.S. Docket No. 33/115 (P.S.D. July 10, 1991); Credit Card Authorizations CTR., P.S. Docket No. 30/77 (P.S.D. April 5, 1989); Continental, P.S. Docket No. 2/169 (P.S.D. June 19, 1974); David Notestine, P.S. Docket No. 29/156 (I.D. April 18, 1989); Spectrum, P.S. Docket No. 13/154 (I.D. Aug. 17, 1982). Furthermore, the Postal Service has broad discretion in deciding whether and against whom to initiate § 3005 proceedings. See Heckler v. Chaney, 470 U.S. 821, 831 (1985); Water Transp. Ass'n v. I.C.C, 715 F.2d 581, 594 (D.C. Cir. 1983), cert. denied 465 U.S. 1006 (1984); The Washington Mint, Inc., at 18. See e.g. F.T.C. v. Universal-Rundle Corp., 387 U.S. 244 (1967); Gottlieb v. Schaffer, 141 F. Supp. 7 (S.D.N.Y. 1956); Universal Life Church, Inc., P.S. Docket No. 7/62 (P.S.D. Feb. 14, 1980). Respondent has not shown, nor does the record reflect, that he has been singled out or harassed by the Postal Service.

Finally, Respondent's disagreement with Complainant's proposed findings of fact do not merit consideration on appeal since these findings were not adopted by the Administrative Law Judge. Similarly, Respondent's complaint that his typewriters were confiscated by Postal Inspectors does not serve as grounds for granting an appeal. Even if the removal was improper, the Judicial Officer has no authority to order the return of the property.

Conclusion

Based on a review of the entire record and Respondent's exceptions on appeal, it is concluded that Respondent is engaged in conducting a scheme or device for obtaining money or property through the mail by means of materially false representations in violation of 39 U.S.C. § 3005. Accordingly, the Initial Decision is affirmed and the orders authorized by 39 U.S.C. § 3005 are issued with this decision.