In the Matter of the Complaint                                 ) 
Against                                                                   )
                                                                               )
Sharon Boddie                                                        )
Apt. 201                                                                  )
411 37th Place, S.E.                                               )
                                                                               )
at                                                                            )
                                                                               )
Washington, DC 20019-3214                                 )  P. S. Docket No. PF-6

APPEARANCES FOR POSTAL SERVICE: Stephen E. Alpern, Esq. Janet E. Noble,
 Esq. Nan K. McKenzie, Esq. United States Postal Service Washington, DC
 20260-1130 APPEARANCE FOR RESPONDENT: Alfred Davis 4108 MLK Jr. Avenue,
 S.W. Washington, DC 20032-1325

POSTAL SERVICE DECISION

Sharon Boddie (Respondent) has filed an appeal from the Initial Decision of an Administrative Law Judge in which it was concluded that Respondent is liable to the Postal Service under the Program Fraud Civil Remedies Act (PFCRA), 31 U.S.C. § § 3801-3812, for an assessment and civil penalty in the total amount of $20,321.88. The Postal Service opposes Respondent's appeal.

Background

The General Counsel, United States Postal Service (Complainant), initiated this proceeding by filing a Complaint alleging that Respondent submitted to the Postal Service 30 false claims on behalf of herself and a co-worker.^1/ The false claims referred to in the Complaint included the altera- tion of time sheets resulting in excess payments to Respondent and the co-worker, and a falsified leave form converting annual leave to work hours and thereby increasing Respondent's leave balance. The Complaint requested that Respondent be ordered to pay the Postal Service an assessment of twice the amount of the compensation Respondent received ($8,975.80 x 2 = $17,951.60), less the amount of any criminal restitution ordered ($9,000),^2/ plus a civil penalty of $2,500 for each of the 27 false claims submitted by Respondent on her own behalf ($67,500.00), for a total amount of $76,451.60. The Complaint further requested that Respondent and her co-worker be held jointly and severally liable for an assessment of twice the amount of compensation paid to the co-worker ($977.22 x 2 = $1,954.44), plus a civil penalty of $5,000 for each of the 3 false claims submitted on the co-worker's behalf ($15,000), for a total amount of $16,954.44. The combined assessments and penalties sought in the Complaint totalled $93,406.04.

Respondent filed a timely Answer and Petition For Hearing, in which she admitted submitting false claims to the Postal Service on behalf of herself and the co-worker, but alleged that she should not be held liable for an assessment or penalty since the fraudulent activities were a direct result of her drug addiction. Respondent in addition asserted that the Complaint violates the Double Jeopardy Clause of the Fifth Amendment, is a prohibited personnel action, and constitutes a discriminatory act against a handicapped person.

At a hearing before the Administrative Law Judge, both parties called witnesses and introduced documentary evidence. Following the submission of proposed findings of fact and conclusions of law, the Administrative Law Judge issued the Initial Decision in which he concluded that Respondent had submitted the false claims alleged in the Complaint and that she was liable to the Postal Service for an assessment in the amount of $10,321.88,^3/ plus a civil penalty of $10,000,^4/ for total liability of $20,321.88 (I.D., COL ¶ 14). Thereafter, Respondent filed this appeal taking exception to the findings and conclusions of the Initial Decision. Complainant filed a timely reply to the appeal in which it requests that the appeal be dismissed as untimely or denied on the merits.

Exceptions and Discussion

Respondent's primary contention on appeal is that the Administrative Law Judge erroneously concluded that her actions in making the false claims were premeditated, vindic- tive and motivated by greed, rather than by her substance abuse. According to Respondent, this erroneous conclusion was reached because the Administrative Law Judge ignored her per- suasive testimony regarding her substance abuse and failed to properly consider such abuse as a mitigating circumstance. Respondent, in addition, contends the assessment and penalty are punitive in nature since she has already been terminated from her Postal Service employment and required to pay $9,000 in restitution from her retirement fund. Respondent also con- tends that because of the termination of her Postal Service employment, she is unable to pay the assessment and penalty found to be due and owing by the Administrative Law Judge.

Finally, Respondent contends she cannot be held liable for false statements submitted on her co-worker's behalf since her co-worker has not been prosecuted nor ordered to pay the Postal Service for the money she received as the result of the false claims.

Complainant in response asserts that Respondent's appeal should be dismissed as untimely because it was not filed until two months after the Initial Decision was issued. Alternatively, Complainant contends that Respondent's conduct should not be excused due to the alleged substance abuse since her testimony on this issue lacks credibility. Complainant, in addition, argues that the amount of the assessment and penalty in this case is not unreasonable nor punitive in nature, since it is rationally related to the loss sustained by the Postal Service and far less than the maximum amount for which Respondent could be held liable. Complainant also contends that Respondent's financial problems should not be considered in determining the amount of her liability since they are due to her own greed and outrageous behavior. Finally, Complainant argues that Respondent may be held liable for the false claims made on behalf of her co-worker since she was responsible, as a "co-conspirator," for submitting those claims.

As Complainant contends, Respondent's appeal was not timely filed. The Initial Decision and accompanying Notice of Right to Appeal were sent to Respondent's representative by certified mail as required by 39 C.F.R. § 962.23. Although notices of attempted delivery of the decision were left with Respondent's representative, he failed to claim a copy of the decision before it was returned to sender. The failure of Respondent's representative to claim a copy of the Initial

Decision, after he was notified of its attempted service, does not excuse the untimely filing. Nevertheless, the entire record has been reviewed to determine whether the Initial Decision was properly decided. Based on this review, it is concluded that the Administrative Law Judge correctly determined that Respondent is liable to the Postal Service for a total assessment and penalty in the amount of $20,321.88.

The Administrative Law Judge considered Respondent's testimony concerning substance abuse, but concluded her testimony lacked credibility, since it was inconsistent with previous admissions and her methodical submission of the false claims over a two-year period (I.D., Findings of Fact (FOF) ¶ ¶ 9 & 16-17). The Administrative Law Judge's credibility findings are supported by the record.^5/ Moreover, the Administrative Law Judge properly determined that even if Respondent did have a substance abuse problem, she was fully aware of what she was doing when she submitted the false claims. This conclusion is also supported by the record. Therefore, the Administrative Law Judge correctly concluded that Respondent's substance abuse and rehabilitation efforts did not constitute a mitigat- ing circumstance in this proceeding.^6/

Respondent also incorrectly contends that since she has already been ordered to pay $9,000 in restitution in the criminal proceeding, the civil sanctions in this case are punitive in nature. However, contrary to Respondent's contention, an order of restitution in a criminal proceeding does not preclude the imposition of civil penalties in a PFCRA case. Cf. United States v. Fliegler, 756 F. Supp. 688, 695 (E.D.N.Y. 1990); United States v. Loesche, 688 F. Supp. 649, 651 (CIT 1988); Teachers Ins. & Annuity Ass'n v. Green, 636 F. Supp. 415, 418 (S.D.N.Y. 1986). Rather, Respondent's require- ment to make restitution may be set off against any civil penalty for which she is found liable. Id. Thus, the Administrative Law Judge properly offset Respondent's maximum allowable assessment with the $9,000 restitution ordered in the criminal proceeding.

Moreover, civil sanctions are punitive only if they are so disproportionate to the damages caused that they bear no rational relation to the goal of compensating the government for its loss. See United States v. Halper, 490 U.S. 435, 449-50 (1989). Consequently, an assessment and penalty in excess of the actual damages sustained are generally permissible since the government's injuries include not only the fraud itself but also ancillary costs such as detection, investigation, litigation and enforcement. Id. at 445; Helvering v. Mitchell, 303 U.S. 391, 401 (1938); United States v. A Parcel of Land, 884 F.2d 41, 44 (1st Cir. 1989); United States v. United States Fishing Vessel Maylin, 725 F. Supp. 1222, 1223 (S.D. Fla. 1989); Neldie E. Nelson, P.S. Docket No. PF-3 at 11-12 (P.S.D. August 19, 1992). In this case, the Postal Service paid Respondent and her co-worker $9,660.94 as a result of Respondent's submittal of false claims, and expended over $4,500 in the detection and investigation of those claims (Exh. PS-8; Tr. at 55-60). It is not unreason- able to assume that substantial additional sums were expended in litigating the false claims in both this and the criminal proceeding. The Administrative Law Judge considered the amount of restitution ordered as well as the appropriate miti- gating factors, and substantially reduced the assessment and penalty for which he concluded Respondent should be liable. The total assessment and penalty of $20,321.88 for which Respondent was found to be liable is not so disproportionate to the damage caused by Respondent to be considered punitive in nature.

Respondent contends her inability to pay the assessment and her termination from employment with the Postal Service are mitigating factors which should have been considered in determining her liability under the PFCRA. Respondent has not established that she is unable to pay the total amount assessed.^7/ Moreover, ability to pay and termination of employment are not generally considered mitigating factors since they are a direct result of the improper conduct.

Respondent also contends that the assessment and penalty should be reduced because the Postal Service would have agreed to a reduction if she had agreed to withdraw her pending Equal Employment Opportunity Complaint. However, settlement negotiations should not be considered in determining the amount of liability under the PFCRA. Moreover, as previously stated, the Administrative Law Judge substantially reduced the amount of Respondent's liability from that originally claimed in the Complaint.

Respondent's final contention is that she may not be held liable for the false claims submitted on behalf of her co-worker since she did not receive any money as the result of those claims and the co-worker has not been found liable to the Postal Service. The Postal Service is not required to take action against both Respondent and the co-worker. Respondent submitted the false claims on behalf of the co-worker and therefore was directly responsible for the loss incurred as a result of those claims. Under such circumstances, Respondent may be held liable for the consequences of her actions even though Complainant has not sought to obtain reimbursement from the co-worker. See United States v. Board of Ed. of Union City, 697 F. Supp. 167, 177 (D.N.J. 1988); United States v. Heck, Civ. A. No. 86-0875(SSB), slip. op. at 3-4 (D.N.J. 1987); United States v. Cripps, 460 F. Supp. 969, 975 (E.D. Mich. 1978); United States v. American Packing Corp., 125 F. Supp. 788, 790 (D.N.J. 1954).

Conclusion

After consideration of the entire record and Respondent's exceptions, it is concluded that Respondent is liable to the Postal Service, under the PFCRA, 31 U.S.C. § § 3801-3812, for an assessment of $10,321.88, plus a civil penalty in the amount of $10,000.00, for total liability of $20,321.88. Accord- ingly, Respondent's appeal is denied and the Initial Decision is affirmed.

James A. Cohen
Judicial Officer

1/ While the co-worker's name was originally included in the caption of the Complaint, the co-worker did not file a petition for hearing nor otherwise participate in this proceeding.

2/ Respondent, after pleading guilty to one count of theft in the Superior Court for the District of Columbia, was ordered to pay $9,000 in restitution, in addition to receiving a suspended sentence and five years probation.

3/ The Administrative Law Judge determined that as a result of Respondent's alteration of time sheets, she received $8,683.72 (not the $8,975.80 alleged in the Complaint), and her co-worker received $977.22, for total compensation paid of $9,660.94. After concluding that Respondent was liable for a maximum assessment of $19,321.88 ($9,660.94 x 2), the Administrative Law Judge reduced that amount by the $9,000 restitution assessed in the criminal proceeding (I.D., Conclusions of Law (COL) ¶ 10).

4/ Although Complainant sought a total penalty of $82,500, the Administrative Law Judge reduced the penalty to $10,000 after considering both aggravating and mitigating factors (I.D., COL ¶ ¶ 1-9).

5/ An Administrative Law Judge's findings on credibility are generally afforded great weight. See Johnson v. Director, OWCP, 911 F.2d 247, 251 (9th Cir. 1990), cert. denied, Todd Pacific Shipyards Corp. v. Director, OWCP, 113 L.Ed. 646 (1991); Henry v. Department of Navy, 902 F.2d 949, 953 (Fed. Cir. 1990); NLRB v. Creative Food Design Ltd., 852 F.2d 1295, 1297 (D.C. Cir. 1988); Brewer v. USPS, 647 F.2d 1093, 1096 (Ct. Cl. 1981), cert. denied, 454 U.S. 1144 (1982). Since the Administrative Law Judge's credibility findings in this case are consistent with the other evidence in the record, no basis exists for disturbing his findings.

6/ Even though Respondent's substance abuse and rehabilitation was not considered a mitigating factor by the Administrative Law Judge, he substantially reduced the total amount of Respondent's liability under the PFCRA to $20,321.88.

7/ While Respondent testified that she only earns $14,000 annually, she also testified she would try to pay any sums owed, in addition to the $9,000 criminal restitution, by giving up the money in her retirement fund (Tr. at 69 & 74-75).