In the Matter of the Petition by                          )
                                                                         )
NORMAN L. MELENDEZ                                   )
11208-014 Aus                                                )
P.O. Box 901                                                     )
                                                                         )
         at                                                             )
                                                                         )
Ray Brook, NY 12977-0300                             ) P.S. Docket No. AO 95-269

APPEARANCE FOR PETITIONER:                     Norman L. Melendez, Pro Se
                                                                         11208-014 Aus
                                                                         P.O. Box 901
                                                                         Ray Brook, NY 12977-0300

APPEARANCE FOR RESPONDENT:                  Andrew C. Jagusiak
                                                                         Associate Counsel
                                                                         Postal Inspection Service
                                                                         475 L'Enfant Plaza, S.W.
                                                                         Washington, DC 20260-2181

INITIAL DECISION

By letter dated June 6, 1995, the Postal Inspection Service initiated this matter by demanding that Petitioner pay $16,820.52 for losses "as a result of your depredation⁽¹⁾ while employed by the United States Postal Service." On June 21, 1995, Petitioner requested reconsideration, stating that he believed the action was unjustified, and asking for an itemized listing complete with dates for the alleged depredations. The Postal Inspector in Charge, Boston Division, replied on July 10, 1995, reaffirming the demand, and stating that it was based on Petitioner's "violation of the rules and regulations governing the operation of the Postal Service and the conduct of its employees." This letter also included a statement of Mr. Melendez' right to petition for review under 39 C.F.R. Part 966.

Mr. Melendez' Petition for Review was received on August 10, 1995. He requested a decision based on written submissions. Respondent's Answer, with attached documents, was filed on September 6, 1995.⁽²⁾ By Order, dated September 13, 1995, the parties were given 30 days to file any additional evidence, or arguments, they wished to have considered. Nothing further has been filed by either side. The following Findings of Fact are based on the written record, which consists of the Petition, Respondent's Answer, and the documents attached to the Answer.

FINDINGS OF FACT

1. From July 1983 to June 9, 1993, Norman L. Melendez worked for the United States Postal Service as a distribution clerk. In September 1992 he worked in proximity to, and had access to, the "registry room" in the New Haven General Mail Facility, 50 Brewery Street, New Haven, Connecticut. The "registry room" is a secure area in which cash and check deposits from various post office branches in the New Haven area are kept (Tab 7).

2. On September 5, 1992 three canvas pouches containing cash and checks were secured in a safe in the registry room. When the safe was opened in the normal course of business on September 8, 1992, two of the pouches were missing. Post Office records showed that the missing pouches contained $477,812.00 in cash, and $224,255.33 in checks, for a total of $702,067.33 (Tab 13).

3. Investigation focused on Mr. Melendez, and on September 11, 1992 a search warrant for his residence was obtained by Postal Inspectors (Tab 14). This warrant was based, in large part, on a sworn statement provided by an acquaintance of Mr. Melendez, who said that Melendez told him that he (Melendez) had taken over $400,000 from the registry room. This witness also turned over $15,000 in $20 bills that he said Melendez had given him.⁽³⁾ The search of Mr. Melendez' residence uncovered approximately $100,000 in cash hidden in a wall, and $85,000 in cash in a paper bag found in a bedside stand (Tabs 7 and 11).

4. On June 7, 1993, Petitioner entered into a plea agreement with the United States Attorney for the District of Connecticut. He agreed to plead guilty to one count of violation of 18 U.S.C. §641 - theft, or embezzlement, of money or property of the United States or one of its agencies (Tab 12). The plea agreement did not state the exact amount stolen. The allegation was stated simply as more than $100.00, because that determined the maximum allowable punishment.

5. On October 29, 1993, Petitioner was sentenced to a prison term of 70 months, to be followed by probation for three years. He was also ordered to pay restitution in the amount of $210,577.00. In September 1994 the prison term was reduced to 63 months (Tab 8).

6. The funds in Petitioner's Postal Service retirement account were frozen as of September 29, 1992. He was given a letter so informing him by the Inspection Service on that date (Tab 13). As of September 1, 1993, this fund contained $15,244.33 (Tab 10).

POSITIONS OF THE PARTIES

The Postal Service calculates the amount demanded from Petitioner as follows:

Total original loss: $702,067.33

Amount recovered: - 474,669.81

Court ordered restitution: - 210,577.00

Demanded in this action: $16,820.52

The "amount recovered" includes the cash found in Petitioner's residence, other cash recovered from people to whom Petitioner had given cash, and forfeiture of several pieces of jewelry, furniture, appliances and an automobile, purchased by various people with the stolen cash. It also includes nearly $190,000 in checks re-written by the makers, the originals apparently not having been negotiated (Tabs 7 and 8). The Postal Service, therefore, argues that once the amount recovered and the restitution amount ordered by the Court are subtracted from the total amount stolen, the remainder - $16,820.52 - is a loss to the Postal Service that may be recovered, to the extent possible, from Petitioner's retirement account.

Petitioner's position is that there has not been a sufficient accounting to support the alleged debt, that he only stole what he was convicted of, and that the New Haven Postal Inspectors are using him as a scapegoat to close all pending cases.

CONCLUSIONS OF LAW

1. The only issue to be resolved is whether the Postal Service (Respondent) has proved the alleged loss, i.e., that at least $16,820.52 of the total amount stolen by Petitioner remains unrecovered, and is also not included within the amount of restitution ordered by the District Court. See Genesis Rodriguez Custodio, P.S. Docket No. AO-4 (I.D. March 7, 1990).

2. Respondent has established a prima facie case that Petitioner stole $477,812.00 in cash and $224,255.33 in checks from the New Haven post office, and that far less than all of this amount was recovered. It is impossible to know precisely what amount was recovered, because much of the cash had been converted into jewelry and other items. It is also unclear how the District Court Judge arrived at the $210,577.00 figure for restitution, although it seems likely that he intended it to be the difference between what had been stolen and what had been recovered, based on information available at that time - October 1993. It is unnecessary to attempt to calculate these amounts to the penny, however. There can be little doubt that at least an amount equal to that in Petitioner's retirement account remains unrecovered, and that this constitutes a loss to the Postal Service. Because Respondent has presented specific calculations, as of October 1994, to show that the amount of restitution ordered does not cover the entire loss, and because Petitioner has offered no contradictory evidence, I find that the preponderance of evidence supports Respondent's claim.

3. Therefore, Respondent is entitled to collect by administrative offset any amount contained in Petitioner's retirement fund, up to $16,820.52.⁽⁴⁾ The Petition is denied.

Bruce R. Houston
Acting Chief Administrative Law Judge

1. Depredation - "The act of preying upon or plundering." Random House

Dictionary of the English Language, Second Edition, Unabridged.

2. Documents filed by the Postal Service include the following, tabbed as numbered:

7. "Prosecution Version" - a summary of the investigation into theft of cash and checks from the Registry Room of the General Post Office facility in New Haven, Connecticut in early September 1992.

8. Postal Inspection Service Collection Report, dated October 6, 1994, including a copy of the criminal sentence imposed on Petitioner in United States District Court, District of Connecticut.

9. Postal Inspection Service Collection Report, dated May 20, 1994.

10. Printout showing funds available in Petitioner's Civil Service Retirement Account.

11. Letter dated June 9, 1993, directing that Mr. Melendez be removed from Postal Service employment rolls, and newspaper article.

12. Plea Agreement, June 7, 1993.

13. Postal Inspector's Investigative Memorandum, October 26, 1992.

14. Application for search warrant, September 11, 1992.

15. Postal Inspector's memorandum of interview with Mr. Melendez, September 10, 1992.

3. It was eventually determined that this "witness" had participated in planning the theft.

4. Although Petitioner has made no "double jeopardy" argument, it is noted that there is no language in his plea agreement that can be construed to bar this administrative action. In fact, there is language that specifically leaves room for the Postal Service to bring this action (Tab 12, page 5).