A-66221, NOVEMBER 16, 1935, 15 COMP. GEN. 415

A-66221: Nov 16, 1935

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CHECKS - VETERAN'S ADJUSTED COMPENSATION CERTIFICATE - FORGED VETERAN'S NOTE AND CHECK INDORSEMENT WHERE A CHECK REPRESENTING A GOVERNMENT LOAN ON A VETERAN'S ADJUSTED COMPENSATION CERTIFICATE IS FRAUDULENTLY OBTAINED BY A PERSON POSING AS THE WIFE OF A VETERAN. WHO AT THE TIME WAS CONFINED IN A PENITENTIARY. YOU WERE AUTHORIZED BY LETTER OF THIS OFFICE DATED JUNE 17. THE RECLAMATION PROCEEDINGS ARE BEING RESISTED BY THE CASHING INDORSER. IT BEING ASSERTED THAT EXTREME CARE WAS EXERCISED IN ESTABLISHING THE GENUINENESS OF THE PAYEE'S INDORSEMENT BEFORE CASHING THE CHECK. STATING THAT SHE WAS IN GREAT NEED OF MONEY. THAT HE COULD PAY THIS MONEY BACK WHEN HE WAS RELEASED. WHO STATED THAT THE SUBJECT CHECK WAS BROUGHT TO HIM BY A WOMAN KNOWN TO HIM AS IRENE BOHANNON.

A-66221, NOVEMBER 16, 1935, 15 COMP. GEN. 415

CHECKS - VETERAN'S ADJUSTED COMPENSATION CERTIFICATE - FORGED VETERAN'S NOTE AND CHECK INDORSEMENT WHERE A CHECK REPRESENTING A GOVERNMENT LOAN ON A VETERAN'S ADJUSTED COMPENSATION CERTIFICATE IS FRAUDULENTLY OBTAINED BY A PERSON POSING AS THE WIFE OF A VETERAN, TO WHOM THE VETERAN, WHO AT THE TIME WAS CONFINED IN A PENITENTIARY, HAD TURNED OVER SAID CERTIFICATE AS SECURITY FOR A PRIVATE LOAN TO BE OBTAINED BY HER, THE BREACH OF TRUST ON THE PART OF THE WOMAN CONSTITUTES NO REASON FOR IMPOSING A LIABILITY FOR THE AMOUNT OF THE CHECK ON AN INNOCENT INDORSER, OR A LIABILITY ON THE GOVERNMENT FOR THE ISSUANCE OF A SECOND PAYMENT TO THE VETERAN.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, NOVEMBER 16, 1935:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF SEPTEMBER 10, 1935, (AWS- C), REQUESTING DECISION WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES HEREINAFTER SET FORTH RECLAMATION PROCEEDINGS SHOULD BE ABANDONED ON ADJUSTED-SERVICE CERTIFICATE LOAN CHECK NO. 88102 FOR $697, DRAWN DECEMBER 15, 1932, TO THE ORDER OF ROBERT HENRY BOHANNON, BY H. S. KNAPP, SPECIAL DISBURSING AGENT, VETERANS' ADMINISTRATION, SEATTLE, WASH., UNDER SYMBOL NO. 99-215.

YOU WERE AUTHORIZED BY LETTER OF THIS OFFICE DATED JUNE 17, 1935, TO RECLAIM THE AMOUNT OF THE CHECK AND DEPOSIT SAME TO THE APPLICABLE APPROPRIATION, THE EVIDENCE ESTABLISHING THAT THE CHECK HAD BEEN ISSUED UPON A FORGED APPLICATION FOR A LOAN AND HAD BEEN NEGOTIATED WITHOUT GENUINE INDORSEMENT BY THE PAYEE. THE RECLAMATION PROCEEDINGS ARE BEING RESISTED BY THE CASHING INDORSER, IT BEING ASSERTED THAT EXTREME CARE WAS EXERCISED IN ESTABLISHING THE GENUINENESS OF THE PAYEE'S INDORSEMENT BEFORE CASHING THE CHECK.

A SECRET-SERVICE AGENT INTERVIEWED THE PAYEE IN REPORT THEREOF OCTOBER 18, 1933, STATING AS FOLLOWS:

THE PAYEE STATED THAT ON MARCH 31, 1933, HE HAD BEEN RELEASED ON PAROLE FROM THE U.S. PENITENTIARY, MCNEIL ISLAND, WASH., WHERE HE HAD BEEN CONFINED SINCE DECEMBER 8, 1931, ON A CHARGE OF SMUGGLING NARCOTICS; THAT PRIOR TO HIS ARREST HE HAD BEEN LIVING WITH ONE IRENE LOWMAN, WHO POSED AS HIS WIFE; THAT IN DECEMBER 1932 THE LOWMAN WOMAN VISITED HIM AT THE PENITENTIARY, AT MCNEIL ISLAND, STATING THAT SHE WAS IN GREAT NEED OF MONEY; THAT SHE HAD BEEN ILL, AND OWED A HOTEL BILL. SHE STATED THAT SHE KNEW A PRIVATE PARTY WHO WOULD LOAN HER $250 ON BOHANNON'S ADJUSTED- SERVICE CERTIFICATE; THAT HE COULD PAY THIS MONEY BACK WHEN HE WAS RELEASED, OR WHEN HE OBTAINED A LOAN THROUGH THE REGULAR CHANNELS. * * *

AND REGARDING THE INTERVIEW WITH THE CASHING INDORSER, THE REPORT FURTHER SAYS:

I LOCATED AND INTERVIEWED MR. WARREN SHORTS, AT THE CALEDONIAN HOTEL, 1326 7TH AVENUE, SEATTLE, WHO STATED THAT THE SUBJECT CHECK WAS BROUGHT TO HIM BY A WOMAN KNOWN TO HIM AS IRENE BOHANNON, WHO HAD BEEN A GUEST AT HIS HOTEL FOR SOME TIME, AND OWED HIM QUITE A LARGE HOTEL BILL; THAT PREVIOUS TO HER BRINGING THE CHECK, SHE STATED THAT HER HUSBAND WAS GETTING A LOAN ON HIS ADJUSTED-SERVICE CERTIFICATE, WHICH HE WAS HAVING SENT, CARE OF F. E. MULNIX, 800 LIGGETT BUILDING, SEATTLE. MR. MULNIX IS AN OFFICIAL OF THE DISABLED VETERANS' ORGANIZATION, AND HAD DESK ROOM IN THE VETERANS' BUREAU OFFICE, IN THE LIGGETT BUILDING. THE CHECK, IN FACT, WAS BROUGHT TO THE CALEDONIAN HOTEL ON DECEMBER 16, 1932, BY MR. MULNIX, WHO DELIVERED SAME TO IRENE BOHANNON IN HIS PRESENCE, THE WOMAN STATING THAT SHE WOULD HAVE TO MAKE ANOTHER TRIP TO MCNEIL ISLAND TO GET BOHANNON TO INDORSE IT. LATE ON THE AFTERNOON OF DECEMBER 16TH THE LOWMAN WOMAN RETURNED TO THE CALEDONIAN HOTEL WITH THE PURPORTED INDORSEMENT OF THE PAYEE IN ITS PROPER PLACE ON THE BACK OF THE CHECK. AT THIS TIME SHE STATED THAT SHE HAD BEEN LUCKY; THAT SHE HAD FOUND BOHANNON AT WORK ON THE WHARF AT THE PENITENTIARY; THAT SHE HAD BEEN PERMITTED TO HAVE HIM INDORSE THE CHECK AND RETURN TO THE MAINLAND IMMEDIATELY, WHICH PERMITTED HER TO RETURN TO SEATTLE ON THE SAME DAY. MR. SHORT NOT HAVING $697, THE AMOUNT OF THE CHECK, AT THE HOTEL AT THAT TIME, TOOK IT TO THE NATIONAL BANK OF COMMERCE THE FOLLOWING DAY AND HAD THE CHECK CASHED, RETURNING TO HIS HOTEL, AND GAVE THE MONEY TO IRENE LOWMAN, WHO PAID HER HOTEL BILL AND SHORTLY THEREAFTER LEFT THE CALEDONIAN HOTEL, FOR PARTS UNKNOWN.

ALSO THAT:

ON AUGUST 2, 1933, I VISITED THE U.S. PENITENTIARY, MCNEIL ISLAND, WASH., WHERE I EXAMINED THE VISITORS' BOOK, WHICH SHOWS DURING THE MONTH OF DECEMBER 1932 THAT BOHANNON WAS VISITED BY HIS WIFE ON THE 9TH AND 12TH, ONLY, AND BY HIS MOTHER ON DECEMBER 14TH. THERE WERE NO OTHER VISITORS FOR BOHANNON DURING THAT MONTH. THE RECORD ALSO SHOWS THAT BOHANNON WAS AT NO TIME A MEMBER OF ANY CREW ASSIGNED TO WORK ON THE WHARF. THIS RECORD SHOWS PLAINLY THAT BOHANNON COULD NOT HAVE EXECUTED THE VETERAN'S NOTE ON DECEMBER 13, 1933, AT SEATTLE, WASH., BEFORE WALTER METZENBAUM, NOTARY PUBLIC; NOR DID IRENE LOWMAN VISIT BOHANNON AT THE PENITENTIARY ON DECEMBER 16, 1932, AS SHE STATED TO MR. SHORTS.

IT THUS APPEARS CLEAR FROM THE RECORD THAT THE PAYEE INTRUSTED HIS ADJUSTED-SERVICE CERTIFICATE TO A WOMAN WHOM HE REPRESENTED TO BE HIS WIFE AND WITH WHOM HE HAD BEEN LIVING UNDER SUCH RELATIONSHIP PRIOR TO HIS CONFINEMENT AT THE PENITENTIARY, IN ORDER TO ENABLE HER TO OBTAIN SOME MONEY ON THE SECURITY OF HIS CERTIFICATE FOR THE PURPOSE OF PAYING ALLEGED HOTEL, MEDICAL, ETC., BILLS CONTRACTED BY HER. WHILE IT MAY BE THAT MEANS USED WERE IMPROPER IN OBTAINING A LOAN ON THE SECURITY OF HIS ADJUSTED- SERVICE CERTIFICATE AND OTHERWISE BREACHED THE TRUST IMPOSED UPON HER BY THE PAYEE, YET THE FACT IS INESCAPABLE THAT IT WAS HIS ACTION WHICH MADE POSSIBLE THE MATTER NOW COMPLAINED OF BY HIM. A BREACH OF TRUST UNDER CIRCUMSTANCES SUCH AS INVOLVED HERE CONSTITUTES NO REASON FOR IMPOSING A LIABILITY UPON AN INNOCENT PERSON OR OTHERWISE UPON THE GOVERNMENT FOR THE ISSUANCE OF A SECOND PAYMENT--- IT BEING A WELL-KNOWN RULE OF LAW THAT WHERE ONE OF TWO INNOCENT PERSONS MUST BEAR A LOSS IT WILL BE IMPOSED UPON THE ONE WHO MADE THE LOSS POSSIBLE.

ACCORDINGLY, THE CHECK HERE WILL BE TREATED AS A PROPERLY PAID CHECK, AND YOU ARE AUTHORIZED TO ABANDON RECLAMATION PROCEEDINGS ON THE SUBJECT CHECK.