In the Matter of the Complaint Against:
SHARON BODDIE,
11 37th Place, S.E., Apt. 201,
Washington, DC 20019-3214

P.S. Docket No. PF-6

07/22/91

Mason, Randolph D.,Administrative Law Judge

APPEARANCE FOR COMPLAINANT:
Janet E. Noble, Esq.,
Office of Labor Law,
United States Postal Service,
475 L'Enfant Plaza West, SW,
Washington, DC 20260-1133

APPEARANCE FOR RESPONDENT:
Alfred E. Davis,
Union Representative,
4108 MLK Jr. Avenue, SW,
Washington, DC 20032-1325

INITIAL DECISION

This proceeding arises out of a Complaint issued on July 19, 1990 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. In the Complaint, the Reviewing Official ("Complainant") alleges that Sharon Boddie ("Respondent") violated 31 U.S.C. § 3802(a)(1) by altering time sheets, making 26 false claims for compensation for herself for hours which she did not work, plus three similar false claims on behalf of Christa Hall. In an additional claim, Respondent allegedly forged her supervisor's name in an attempt to change 32 hours of her own annual leave to work hours on a Form 2240.

First, Complainant contends that Respondent is liable for an assessment of $10,321.88, computed as follows: $19,321.88 (twice the amount of the alleged false claims) less $9,000 in restitution which has been ordered by the Superior Court of the District of Columbia. Second, Complainant alleges civil penalties of $82,500, as follows: $67,500 for the 27 false claims for herself, plus $15,000 for the three false claims for payment to Christa Hall. Thus Complainant asserts a total liability of $92,821.88.

On August 27, 1990, Respondent timely filed a Petition for Hearing, which was later amended, in which she denied the allegations of the Complaint.

After extensive discovery and the withdrawal of counsel for Respondent, a hearing was held by the Administrative Law Judge on May 10, 1991, in Washington, DC. Complainant was represented by counsel, and Respondent was represented by a union representative, Alfred E. Davis. Complainant presented the testimony of Richard B. Lake, General Manager of the Employee Development and Education Division of USPS; Patricia Del Guercio; and Postal Inspector Joseph Long. Respondent testified for herself. Both parties presented documentary evidence.

On June 10, 1991, both parties filed briefs which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. The findings of fact and conclusions of law set forth below are based on the entire record herein, including observation by the Administrative Law Judge of the witnesses and their demeanor, the briefs, stipulations, exhibits, and other relevant evidence adduced at the hearing:

FINDINGS OF FACT

1. During 1988 and 1989 Respondent Sharon Boddie was employed as a Data Processing Clerk, Training and Development Department, United States Postal Service, National Headquarters (PS-1). She had been a federal employee for about 15 years and employed by USPS since 1981 (Tr. 68).

Forged Request to Change Annual Leave to Work Hours

2. On July 11, 1989, Respondent submitted a PS Form 2240 for the purpose of attempting to have 32 hours of annual leave that she had taken during the first week of pay period 15 changed to 32 work hours (PS-1, Exh. 1, 8, 16; Tr. 79). In doing so, she forged the signature of her approving officer, Richard D. Lake (PS-1, Ex. 8, 16; Tr. 44).

3. At the time Respondent submitted the PS Form 2240, she knew that her claim that she worked the 32 hours in question was false (PS-1, Exh. 8, 16; Tr. 79). Respondent admitted to Postal Inspectors J. Long and S. F. Hadra on July 24, 1989 that her actions with regard to the PS Form 2240 were "premeditated" and motivated by "greed in trying to get one over on the Postal Service" (PS-1, Ex. 8; Tr. 44).

4. Respondent did not succeed in having her 32 hours of annual leave changed to work hours because her false claim was discovered before the adjustment was made (PS-1; Tr. 17-18).

Falsified Time Sheets

5. Respondent's duties included verifying the Time and Attendance Reporting Sheets (time sheets) upon which the timekeeper, Pat Del Guercio, had recorded the information from the time cards (Tr. 17, 38-39; PS-1, P11). After determining that the information on the time sheets was correct, Respondent was then required to deliver the time sheets to the Headquarters Disbursement Section (PS-1, P11; Tr. 39).

6. During the years 1988-1989, there were 26 discrepancies n1 between the hours Respondent worked, according to her time cards, and the hours for which she was paid, according to the payroll registers (PS-1, Exs. 13, 16; PS-2-4; Tr. 49, 50-52).

n1 The Complaint alleges 26 false claims of this nature. As Complainant notes (Brief, f.n. 2), there were additional false claims that were not included in the Complaint that will not be considered in determining assessments and penalties herein.

7. During the investigation in 1989, Respondent admitted to the Postal Inspectors that she made alterations to the time sheets she had been given to verify in order to be paid for work hours, overtime and night differential hours she did not work (PS-1 P19, Ex. 16; Tr. 45). She submitted the false claims for the amounts stated on the time sheets and received payment for the hours she submitted (Id.).

8. At the time Respondent submitted the falsified time sheets to USPS, she knew that her claims for payment were false (Id; Tr. 66, 78-79).

9. Respondent admitted to Postal Inspectors in October 1989 that she was motivated by "greed" and a desire to be "vindictive." She felt that she had been discriminated against because she had not received promotions she felt she deserved, and she took the money because the Postal Service would not give it to her (PS-1, Ex. 16).

10. Respondent was overpaid $8,683.72 as a result of making the 26 false claims in issue (PS-5: $8,975.80 less overpayments for pay periods 10 and 18 in 1988, which were not included in the Complaint).

False Claims Made for Christa Hall

11. Christa Hall was one of Respondent's co-workers. Postal Service records reveal four discrepancies between the hours Hall worked shown on her time cards and the hours for which she was paid (PS-1, Ex. 18, 19; PS-6).

12. Respondent admitted to Postal Inspectors in October 1989 that she falsified the time sheets to give extra hours to Christa Hall on three occasions in pay periods 10, 12, and 14 of 1989 (PS-1, Ex. 16).

13. Respondent admits to adding 89 work hours to the time sheet for Hall as follows: 18.5, 32.5, and 38 hours in pay periods 10, 12, and 14 of 1989, respectively (PS-6; PS-1 #21).

14. Since Hall's hourly salary during this period was $10.98, Hall was overpaid $977.22 due to the above false claims (PS-3).

15. Respondent knew at the time she submitted the above time sheets for Hall that the claims for payment were false (PS-1; Tr. 66, 78-79).

Respondent's Motivation

16. As previously stated, Respondent intentionally submitted the false claims due to greed and to avenge her alleged discrimination by the Postal Service. Her testimony that she submitted these claims because of an addiction to crack cocaine and alcohol (Tr. 66) is not credible, and contradicts her previous admission to the Postal Inspectors. It is also inconsistent with her contention that she deserved promotions during that period.

17. Further, the 26 false claims in issue were methodically made over a two year period, during a time when she was otherwise performing her role like a normal employee (Tr. 34-36). Although employees working closely with her did not notice any sign of alcohol or drug addiction (Tr. 19-20, 25, 33-36, 39-40), even if she had a substance abuse problem, it is clear that she knew exactly what she was doing. Since drugs and alcohol did not cause her to steal, the fact that she entered the Employee Assistance Program (EAP) and attended a drug/alcohol rehabilitation program after she was interviewed by Postal Inspectors does not constitute a mitigating circumstance.

18. Respondent admits that she submitted all of the false claims in issue knowing that they were false (Tr. 66, 78-79).

Prior Criminal Proceeding

19. Respondent was charged in the Superior Court for the District of Columbia for her criminal activity. She pleaded guilty to one count of Theft - I. She received a suspended sentence (two to six years) and five years probation and was ordered to pay $9,000 in restitution (Tr. 73-74, 78; Amended Petition, P19).

20. Respondent was discharged from the Postal Service in December of 1989 due to the above false statements (Tr. 66).

CONCLUSIONS OF LAW

Civil Penalties

1. The first issue is whether Respondent is subject to civil penalties in the amount of $67,500 under 31 U.S.C. § 3802(a)(1) n2 for making the 26 false claims on time sheets for work hours not performed and also attempting to convert annual leave to work hours on the PS Form 2240. Although the statute provides for up to $5,000 for each false claim, Complainant seeks a $2,500 penalty for each of these 27 claims. There is no dispute, and it is found, that Respondent's statements on the time sheets and on the Form 2240 concerning her work hours are materially false.

n2 2/ 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 payment has not been made by the Government on the claim, as provided by § 3802(a)(3)] ..., 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. Complainant also asserts that Respondent is subject to civil penalties in the amount of $15,000 for making three false claims ($5,000 for each claim) on behalf of Christa Hall on time sheets for work hours not performed. It is clear that Respondent's statements on the time sheets concerning Hall's work hours are materially false. It is also concluded that although Respondent may not have received any money from these three claims, she caused USPS to pay Christa Hall, and she is responsible for this payment. The Postal Service has no obligation to charge Hall with this liability, even though the latter knew of the false claims.

3. Respondent submitted all of the above statements in support of the claims knowing, or having reason to know, that they were false.

4. 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 the $2,500 requested by Complainant for each of her 27 false claims, and not more than $5,000 for each of the false claims submitted for the benefit of Christa Hall. Although Complainant seeks a total of $82,500 in penalties, the actual amount to be imposed must be determined by examining all of the circumstances surrounding the false claims, including all aggravating and mitigating factors. See, S. Rep. No. 99-212, 99th Cong., 1st Sess. 18 (1985). 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. E.g., 45 CFR § 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.

5. Respondent's conduct was clearly reprehensible. She repeatedly treated the Disbursement Section as her private bank account and knew exactly what she was doing. Her testimony that she was under the influence of drugs and alcohol when she made each of these false claims is not credible. She previously admitted that her actions were premeditated, vindictive, and motivated by greed.

6. The amount of money falsely claimed is also an important factor to consider. The statute provides for a maximum penalty of $5,000 where a single false claim is filed, even if that claim were, for example, $70,000. In the instant case, a total of $8,683.72 was falsely claimed in 27 claims for herself ranging from $30.40 to $733.54. The three claims for the benefit of Christa Hall totalled $977.22. It would be difficult to justify the imposition of an $82,500 penalty under such circumstances.

7. An aggravating circumstance exists where the false claims occur over a lengthy period of time or are large in number. Here, Respondent filed at least 30 false claims over a two year period, which presents an aggravating circumstance.

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, to deter the making of such claims in the future, and protect the integrity of the government program in question. S. Rep. No. 99-212, 99th Cong., 1st Sess. 2 (1985).

9. After considering all of the circumstances of these claims, it is concluded that Respondent is liable for civil penalties in the aggregate amount of $10,000.

Assessment

10. 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 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 false claims totalling $9,660.94, she is liable for an assessment of no more than $19,321.88. Since it is not unreasonable to assume that the damages of the Postal Service, including the cost of investigation and litigation, have exceeded this amount, and considering the aggravating and mitigating circumstances discussed above, it is concluded that Respondent is liable for the maximum assessment of $19,321.88. n3 However, to avoid double payment, this amount should be reduced by the $9,000 which she will pay as restitution in accordance with the order of the Superior Court, leaving a net assessment of $10,321.88.

n3 Although not binding herein, it is noted that the model regulations state that "[b]ecause of the intangible costs of fraud, the expense of investigating such conduct, and the need to deter others who might be similarly tempted, ordinarily double damages and a significant civil penalty should be imposed." E.g., 45 CFR § 79.31 (1988).

Double Jeopardy

11. In her Petition, Respondent argues that a judgment under the PFCRA exposes her to double jeopardy under the Fifth Amendment because she has already been tried and convicted in a criminal action in Superior Court. Generally, the double jeopardy clause protects against a second criminal prosecution for the same offense after acquittal or conviction and against multiple punishments for the same offense. North Carolina v. Pearce, 395 U.S. 711, 717 (1969). Since the "Program Fraud Civil Remedies Act" is civil and remedial rather than criminal, Cf. Chapman v. United States, Dept. of Health & Human Services, 821 F.2d 523 (10th Cir. 1987), a Respondent in a PFCRA case would not ordinarily be said to have been placed in double jeopardy. Helvering v. Mitchell, 303 U.S. 391 (1938); Rex Trailer Co. v. United States, 350 U.S. 148 (1956).

12. However, the amount of the penalty must be examined to complete the inquiry. The Supreme Court has held that a person convicted under the criminal False Claims Act was subjected to double jeopardy when the government subsequently brought a civil action under the False Claims Act, 31 U.S.C. § 3729, seeking $130,000 in penalties ($2,000 for each of 65 false claims) plus an assessment of twice the $585 which the Government had lost. United States v. Halper, 490 U.S. 435, 109 S. Ct. 1892 (1989). The disproportionate penalty constituted a second punishment. However, the Court concluded that this was a rare situation where the statute subjected a small guage offender to a sanction overwhelmingly disproportionate to the damages he caused.

13. The instant case clearly does not run afoul of Halper. As previously discussed, the Respondent is only subjected to a penalty of $10,000 plus an assessment of $10,321.88 (plus $9,000 already ordered as restitution). These amounts have a rational relation to the amounts falsely claimed by Respondent plus the cost of investigating and prosecuting the false claim. The amounts imposed herein do not constitute a second punishment for the purpose of double jeopardy analysis. Respondent's argument is rejected.

Conclusion

14. The findings and conclusions herein are based upon the preponderance of the evidence. 31 U.S.C. § 3803(f). In summary, Respondent is liable to the Postal Service under 31 U.S.C. § 3802(a)(1) for a civil penalty of $10,000 plus an assessment of $10,321.88 ($19,321.88 less $9,000 restitution to be paid), for a total liability of $20,321.88.