In the Matter of the Complaint Against                   )
                                                                               )
KENNETH TOMCZYK                                              )
             and                                                            )
CLASSIC CHESS AND GAMES, INC.                      )
             and                                                            )
CLASSIC ELECTRONICS, INC.                                )
2468 Harbour Cove Drive                                      )
                                                                               )
             at                                                               )
                                                                               )
Ft. Pierce, FL 34949-1561                                      )  P.S. Docket No. PF 97-269

APPEARANCE FOR POSTAL SERVICE:                  Jeanette L. Bisson, Esq.
                                                                                Civil Practice Section
                                                                                United States Postal Service
                                                                               475 L'Enfant Plaza, SW
                                                                               Washington, DC 20260-1127

APPEARANCE FOR RESPONDENT:                        Kenneth Tomczyk
                                                                                2468 Harbour Cove Drive
                                                                                Ft. Pierce, FL 34949-1561

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 C.F.R. Parts 273 and 962. In the Complaint, the Postal Service alleged that Respondents violated 31 U.S.C. §3802(a)(1), by submitting false claims for mailing services, in that they knowingly used a postage meter to print postage that they knew had not been paid for, and thereafter deposited mail bearing metered postage into the mailstream. The Postal Service contends that Respondents are liable for an assessment equal to twice the amount of the unpaid postage - $11,123.98, plus a civil penalty of $5,000.00, for a total liability of $16,123.98.⁽¹⁾

The Complaint, along with a copy of 39 C.F.R. Part 962 and an explanatory cover letter, was sent to Respondents by Certified Mail on June 16, 1997. Three copies were mailed to 2468 Harbour Cove Drive - one to Mr. Tomczyk and one to each of the corporate Respondents. The three return receipts (PS Form 3811) were signed on June 23 and June 25, 1997. Respondents have failed to file a Petition for Hearing within thirty (30) days, as required by 39 C.F.R. §962.3. On July 28, 1997, the Postal Service moved for Judgment based on the information contained in the Complaint, and on July 29, 1997, the Judicial Officer referred the Complaint to the undersigned for processing in accordance with 39 C.F.R. §962.4.

In accordance with 39 C.F.R. §962.4(a), this Initial Decision is based on the information contained in the Complaint.

FINDINGS OF FACT

1. Respondent Kenneth Tomczyk is an individual who resides at 2468 Harbour Cove Drive, Ft. Pierce, Florida.

2. Respondents Classic Chess and Games, Inc. and Classic Electronics, Inc. are Florida corporations doing business at 2468 Harbour Cove Drive, Ft. Pierce, Florida. Mr. Tomczyk is their registered agent.

3. On June 14, 1991, Pitney Bowes postage meter number 962635 was licensed to Fidelity Electronics, Inc., a Florida corporation doing business at 8800 North West 23rd Street, Miami, Florida. Respondent Tomczyk was President and CEO of Fidelity Electronics, Inc.

4. On February 22, 1993, Respondent Tomczyk incorporated Classic Chess and Games, Inc. and Classic Electronics, Inc. Mr. Tomczyk is President of both corporations, which are run out of his home.

5. Fidelity Electronics, Inc. was administratively dissolved on August 26, 1994. On or before November 1994, Respondent Tomczyk began using postage meter 962635 on mailings for Classic Chess and Classic Electronics.

6. A postage meter has an ascending and a descending register. The ascending register shows a running total of all postage printed by that meter. The descending register shows the amount of purchased postage remaining on the meter. This is the amount available to the user. The control total is the sum of the ascending and descending registers. That number remains constant until more postage is purchased and added to the descending register.

7. All purchases of postage for a particular meter are recorded on Postal Service Form 3610. At all times relevant to this case, these records were available on a computerized records system called Centralized Automated Meter System (CAMS). CAMS records when and where a meter is set, or re-set, how much postage is purchased, the totals on the ascending and descending registers, and the control total.

8. Meter 962635 was last set by the Postal Service on August 19, 1992. On that date, $1,000.00 of postage was purchased. When the meter was re-set, the ascending register showed $50,503.27 and the descending register (with the $1,000.00 added) showed $1,009.03. The control total was $51,512.30.

9. On January 17, 1994, Pitney Bowes Company reported that meter 962635 was lost or stolen.

10. During a routine Postal Service mail verification procedure in November 1994, mail bearing meter number 962635 was identified. This mail had a return address of Classic Chess, 2468 Harbour Cove Drive, Ft. Pierce, FL 34949-1561.

11. On March 28, 1995, Postal Inspectors seized the meter from Respondent Tomczyk's home at 2468 Harbour Cove Drive, Ft. Pierce, FL 34949-1561. At that time, there was $57,074.29 on the ascending register and $929.01 on the descending register. The sum of these numbers is $58,003.30.

12. Comparison of these register numbers with the numbers shown on the CAMS records as of August 19, 1992 (see FOF 8), reveals that $5,561.99 in unpaid postage had been printed by meter 962635.

13. Meter 962635 was examined by the Postal Inspection Service Forensic and Technical Services Division, and again by Pitney Bowes Meter Performance. Both found that the meter had been tampered with.

14. Between November 22, 1994, and March 28, 1995, Respondent Tomczyk, acting for Classic Chess and Classic Electronics, mailed letters and/or parcels bearing metered postage for which the Postal Service had not been paid. Respondent Tomczyk knew, or had reason to know, that no one had paid for this postage.

CONCLUSIONS OF LAW

1. Depositing mail with the Postal Service constitutes a "claim" under the Program Fraud Civil Remedies Act (PFCRA). The Act defines a "claim" as "any request, demand, or submission . . . made . . . for . . services . . . ." 31 U.S.C. §3801(a) (3)(A).

2. Because Respondents knew they were using postage that had not been paid for, their continued use of the postage meter to print postage on mail to be deposited with the Postal Service demonstrates an intent to deceive the Postal Service, and constitutes a series of false claims.

3. As the Postal Service has proved that Respondents used the meter for $5,561.99 more postage than they paid for, it is not necessary that the Postal Service prove it was used on any specific piece of mail.

4. The Statute (31 U.S.C. §3802(a)(1)) calls for a maximum penalty of $5,000.00 per false claim, and an assessment of up to twice the amount of the false claim. In the Complaint, the Reviewing Official has requested these amounts.

5. The amount of the false claim in this case is $5,561.99 - the amount of unpaid postage that was used.

6. Because they failed to file a petition in opposition to the Complaint, Respondents are deemed to have admitted liability for the penalty and the assessment. 39 C.F.R. §962.4(a) and §962.15(a)(2) and (d).

7. On review of all the facts and circumstances, as presented in the Complaint, I find the requested penalty and assessment to be appropriate. Respondents are liable to the Postal Service under 31 U.S.C. §3802(a)(1) for a total amount of $16,123.98.

Bruce R. Houston
Chief Administrative Law Judge

1. The Postal Service apparently did not attempt to determine the number of separate pieces of mail on which Respondents may have used unpaid-for postage, but elected to charge the maximum penalty for a single false claim.