A-83391, MARCH 5, 1937, 16 COMP. GEN. 811

A-83391: Mar 5, 1937

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SAID AGENT WAS ENABLED TO NEGOTIATE THE RESULTING CHECKS DRAWN TO THE ORDER OF THE VETERAN. PRIMARILY BY MEANS OF IDENTIFYING PAPERS AND DATA THAT WOULD OTHERWISE ORDINARILY NOT HAVE BEEN IN HIS POSSESSION. 11 532 IT WAS DISCLOSED BY AN INVESTIGATION CONDUCTED BY THE SECRET SERVICE DIVISION. HERBERT HAS NEVER ADMITTED TO ME THAT HE GOT THE CHECK (NO. 232965) AND I NEVER ASKED HIM IF HE GOT IT BECAUSE I HAD TOLD HIM THAT HE COULD HAVE THE PROCEEDS OF THE FIRST CHECK IN PAYMENT FOR HIS SERVICES AS MY REPRESENTATIVE IN THE PROSECUTION OF MY CLAIM.'. - I HAVE MADE A CAREFUL EXAMINATION AND COMPARISON OF ALL THE WRITING SUBMITTED AND AS A RESULT OF THIS STUDY IT IS MY OPINION THAT THE PAYEE ENDORSED CHECKS NO. 9979392.

A-83391, MARCH 5, 1937, 16 COMP. GEN. 811

CHECKS - FORGERIES - RECLAMATION ABANDONMENT - NEGLIGENCE OF THE PAYEE WHERE, BECAUSE OF THE CONFIDENCE REPOSED IN ANOTHER BY THE PAYEE AND THE AUTHORIZATION GIVEN TO PROSECUTE THE INVOLVED PENSION CLAIM, SAID AGENT WAS ENABLED TO NEGOTIATE THE RESULTING CHECKS DRAWN TO THE ORDER OF THE VETERAN, PRIMARILY BY MEANS OF IDENTIFYING PAPERS AND DATA THAT WOULD OTHERWISE ORDINARILY NOT HAVE BEEN IN HIS POSSESSION, AND THERE EXISTS ALSO REASONABLE DOUBT WHETHER THE PAYEE DID NOT PARTICIPATE IN THE PROCEEDS OF THE FORGED CHECKS, THE PAYEE MUST BE CHARGED WITH THE LOSS, AND RECLAMATION PROCEEDINGS AGAINST THE INDORSERS MAY BE ABANDONED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE TREASURER OF THE UNITED STATES, MARCH 5, 1937:

YOUR LETTER OF NOVEMBER 12, 1936, AWS-C, REQUESTS ADVICE AS TO WHETHER YOU MAY BE RELIEVED OF FURTHER LIABILITY IN CONNECTION WITH THE FOLLOWING PENSION CHECKS DRAWN TO THE ORDER OF GEORGE MCALLISTER:

TABLE CHECK NO. DATE AMOUNT DRAWER SYMBOL

9979392 JAN. 4, 1933 $50.00 J. B. SCHOMMER -------- 11 532 11627575 MAY 4, 1933

50.00 J. B. SCHOMMER -------- 11-532 12034578 JUNE 4, 1933 50.00 J. B. SCHOMMER -------- 11-532

3049835 OCT. 8, 1935 80.00 G. F. ALLEN ----------- 11 561 11957165 NOV. 30, 1935

50.00 G. F. ALLEN ----------- 11-561

232965 AUG. 24, 1932 160.00 J. B. SCHOMMER -------- 11 532

234198 SEPT. 4, 1932 50.00 J. B. SCHOMMER -------- 11 532

8728110 OCT. 4, 1932 50.00 J. B. SCHOMMER -------- 11 532

9146210 NOV. 4, 1932 50.00 J. B. SCHOMMER -------- 11 532

IT WAS DISCLOSED BY AN INVESTIGATION CONDUCTED BY THE SECRET SERVICE DIVISION, TREASURY DEPARTMENT, AND OTHER FACTS OF RECORD, THAT GEORGE MCALLISTER, VETERAN OF THE WAR WITH SPAIN, APPOINTED JOHN D. HERBERT, ALIAS RICHARD W. BAKER, ALIAS JACK MCGOVERN, HIS AGENT, TO SECURE A PENSION AWARD FOR HIM WITH THE UNDERSTANDING THAT HERBERT WOULD BE RECOMPENSED FOR HIS SERVICES. IN THIS CONNECTION, IT APPEARS IN SEVERAL AFFIDAVITS EXECUTED BY MCALLISTER, HE STATED: "JOHN D. HERBERT, ALIAS RICHARD W. BAKER ACTED AS ATTORNEY OR CLAIM AGENT FOR ME IN THE PROSECUTION OF MY PENSION CLAIM" AND "JOHN D. HERBERT HAS NEVER ADMITTED TO ME THAT HE GOT THE CHECK (NO. 232965) AND I NEVER ASKED HIM IF HE GOT IT BECAUSE I HAD TOLD HIM THAT HE COULD HAVE THE PROCEEDS OF THE FIRST CHECK IN PAYMENT FOR HIS SERVICES AS MY REPRESENTATIVE IN THE PROSECUTION OF MY CLAIM.' MCALLISTER EXECUTED SEVERAL AFFIDAVITS RELATIVE TO THE NONRECEIPT AND NONNEGOTIATION OF THE CHECKS IN QUESTION DURING THE YEAR 1936--- THE FIRST AFFIDAVIT BEING DATED FEBRUARY 10, 1936.

WITH RESPECT TO CHECKS NOS. 9979392, 11627575, AND 12034578, THE EXAMINER OF QUESTIONED DOCUMENTS, TREASURY DEPARTMENT, REPORTED UNDER DATE OF NOVEMBER 2, 1936---

I HAVE MADE A CAREFUL EXAMINATION AND COMPARISON OF ALL THE WRITING SUBMITTED AND AS A RESULT OF THIS STUDY IT IS MY OPINION THAT THE PAYEE ENDORSED CHECKS NO. 9979392, NO. 11627575, AND NO. 12034578. * * *

WITH RESPECT TO CHECK NO. 232965, THE PAYEE BY HIS OWN ADMISSION HAD KNOWLEDGE OF ITS NEGOTIATION BY HERBERT AS WITNESS THE STATEMENT MADE IN RESPECT TO SUCH CHECK HERETOFORE CITED. SINCE CHECKS NOS. 9979392, 11627575, AND 12034578 APPEAR TO HAVE BEEN NEGOTIATED ON THE GENUINE ENDORSEMENT OF THE PAYEE AND CHECK NO. 232965 WAS NEGOTIATED WITH THE CONSENT OF THE PAYEE, YOU ARE ADVISED THAT CREDIT WILL BE ALLOWED IN THE TREASURER'S ACCOUNTS FOR THE AMOUNTS OF THE CHECKS AND YOU ARE AUTHORIZED TO DISCONTINUE RECLAMATION PROCEEDINGS AGAINST THE INDORSERS.

THE REMAINING FIVE CHECKS WERE APPARENTLY RECEIVED AND NEGOTIATED BY HERBERT AND SUCH NEGOTIATION WAS MADE POSSIBLE BY THE TRUST IMPOSED IN HERBERT BY THE PAYEE. ALL CORRESPONDENCE CONDUCTED WITH THE VETERANS' ADMINISTRATION WITH RESPECT TO THE PENSION AWARD WITH THE EXCEPTION OF THE "DECLARATION FOR PENSION" WAS IN THE HANDWRITING OF HERBERT. THERE IS QUOTED FROM AN AFFIDAVIT OF MCALLISTER THE FOLLOWING:

* * * I AUTHORIZED JOHN D. HERBERT TO WRITE LETTERS IN CONNECTION WITH THE PROSECUTION OF MY CLAIM AND TO SIGN MY NAME THERETO. * * *

IT IS APPARENT THAT CORRESPONDENCE AND DATA SUPPORTING MCALLISTER'S CLAIM FOR PENSION WERE IN THE POSSESSION OF HERBERT BY AGREEMENT WITH MCALLISTER. THE POSSESSION OF SUCH DOCUMENTS AND THE PERMISSION GRANTED BY MCALLISTER TO HERBERT TO SIGN MCALLISTER'S NAME PLACED HERBERT IN THE POSITION OF BEING ABLE TO REPRESENT MCALLISTER TO THE EXTENT OF SECURING AND NEGOTIATING THE CHECKS. WHILE THE CHECKS MAY NOT HAVE BEEN ENDORSED BY THE PAYEE AND HE NOW CLAIMS HERBERT WAS NOT AUTHORIZED TO ENDORSE THE CHECKS, IT IS APPARENT THAT THEIR NEGOTIATION WAS MADE POSSIBLE BY THE TRUST HE PLACED IN HIS AGENT, AS BUT FOR THE PAYEE'S APPOINTMENT OF HERBERT TO ACT AS HIS AGENT AND TO SIGN HIS NAME THERE MIGHT HAVE BEEN NO FORGERY OF SUCH CHECKS. HERBERT WAS ABLE TO POSE AS THE PAYEE AND TO SECURE AND NEGOTIATE THE CHECKS PRIMARILY THROUGH IDENTIFYING PAPERS AND DATA THAT ORDINARILY WOULD HAVE BEEN IN POSSESSION OF THE PAYEE AND THE POSSESSION OF WHICH WOULD LEAD AN INNOCENT THIRD PARTY TO BELIEVE THE PERSON WITH WHOM HE WAS DEALING WAS THE PERSON DESCRIBED IN SUCH PAPERS.

FURTHERMORE, NOTWITHSTANDING THE FACT THAT THE PAYEE KNEW HE HAD BEEN AWARDED A PENSION IN 1932, 4 YEARS ELAPSED BEFORE HE EXECUTED AFFIDAVITS ALLEGING IRREGULARITIES IN THE HANDLING OF HIS CHECKS. IN THIS RESPECT HE STATED:

* * * I WAS FINALLY ADVISED, ON A DATE WHICH I CANNOT NOW RECALL THAT I HAD BEEN GRANTED A PENSION AT THE RATE OF $50 PER MONTH COMMENCING APRIL 28, 1932. * * * AND---

* * * FROM THAT TIME ON I RECEIVED MY PENSION CHECKS REGULARLY EXCEPT FOR THE PERIOD THAT THE ECONOMY ACT WAS IN EFFECT, IN MY CASE, UNTIL JUNE 30, 1933, PAYMENTS BEING STOPPED AFTER THAT DATE UNTIL AUGUST 13, 1935, WHEN CHECK FOR $80, AWARDED ME, BUT RECEIVED BY HERBERT. * * *

IT WOULD APPEAR FROM THESE STATEMENTS THAT THE PAYEE KNEW OF THE ISSUANCE OF THE CHECKS AND ACQUIESCED IN THEIR RECEIPT AND NEGOTIATION BY HERBERT OR THAT HE PARTICIPATED IN THE PROCEEDS OF THOSE CHECKS ISSUED PRIOR TO JUNE 30, 1933. ASIDE FROM THIS, HOWEVER, IT APPEARS FROM THE RECORD THAT THE LOSS WHICH OCCURRED THROUGH THE ERRONEOUS NEGOTIATION OF THE CHECKS BY HERBERT WAS A DIRECT CONSEQUENCE OF THE ACTION OF THE PAYEE IN APPOINTING HERBERT AS HIS AGENT. THEREFORE, THE PAYEE MUST BE CHARGED FOR SUCH LOSS AND, ACCORDINGLY, UPON THE FACTS SHOWN IN THE RECORD, YOU ARE ADVISED THAT CREDIT WILL ALSO BE ALLOWED IN THE TREASURER'S ACCOUNTS FOR THE AMOUNTS OF THE CHECKS NEGOTIATED BY HERBERT AND YOU ARE AUTHORIZED TO DISCONTINUE RECLAMATION PROCEEDINGS AGAINST THE ENDORSERS.