A-84222, MARCH 11, 1937, 16 COMP. GEN. 837

A-84222: Mar 11, 1937

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VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - ERRONEOUS PAYMENTS - GOVERNMENT LIABILITY WHERE VETERAN CONTRIBUTIVELY NEGLIGENT WHERE THE UNLAWFUL PAYMENT OF AN ADJUSTED SERVICE CERTIFICATE ON ALLEGATION OF THE VETERAN'S DEATH WAS BROUGHT ABOUT BY THE INITIAL ACTION OF THE VETERAN IN TURNING OVER TO THE IMPOSTOR. NOTWITHSTANDING THE VETERAN WAS INNOCENT OF ANY INTENT TO DEFRAUD THE GOVERNMENT. IS AS FOLLOWS: ADJUSTED SERVICE CERTIFICATE NO. 1188377 IN THE AMOUNT OF $1. WAS ISSUED TO CHARLIE JOHNSON. A LETTER WAS ADDRESSED TO THIS ADMINISTRATION BY THE ST. THAT OFFICE WAS ADVISED ACCORDINGLY. AN AWARD WAS APPROVED IN FAVOR OF THE BENEFICIARY. 1933 FOR $489.37 WAS MAILED TO HER AT 240 WALNUT STREET.

A-84222, MARCH 11, 1937, 16 COMP. GEN. 837

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - ERRONEOUS PAYMENTS - GOVERNMENT LIABILITY WHERE VETERAN CONTRIBUTIVELY NEGLIGENT WHERE THE UNLAWFUL PAYMENT OF AN ADJUSTED SERVICE CERTIFICATE ON ALLEGATION OF THE VETERAN'S DEATH WAS BROUGHT ABOUT BY THE INITIAL ACTION OF THE VETERAN IN TURNING OVER TO THE IMPOSTOR, WHOM HE PERMITTED TO ACT FOR HIM, HIS DISCHARGE PAPERS AND PERTINENT CORRESPONDENCE, PAYMENT MAY NOT BE MADE TO THE VETERAN OF AN ADDITIONAL AMOUNT EQUAL TO THE PORTION OF THE PREVIOUS PAYMENT NOT TURNED OVER TO HIM BY THE IMPOSTOR, NOTWITHSTANDING THE VETERAN WAS INNOCENT OF ANY INTENT TO DEFRAUD THE GOVERNMENT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, MARCH 11, 1937:

YOUR LETTER OF FEBRUARY 24, 1937, IS AS FOLLOWS:

ADJUSTED SERVICE CERTIFICATE NO. 1188377 IN THE AMOUNT OF $1,072.00, EFFECTIVE JANUARY 1, 1925, WAS ISSUED TO CHARLIE JOHNSON, A-1847799, ON THE SECURITY OF WHICH HE OBTAINED LOANS FROM THIS ADMINISTRATION WHICH ON MARCH 11, 1931 TOTALED $536.00, THE FULL FIFTY PERCENT LOAN VALUE OF THE CERTIFICATE.

ON FEBRUARY 3, 1933, A LETTER WAS ADDRESSED TO THIS ADMINISTRATION BY THE ST. PETERSBURG, FLORIDA, OFFICE REQUESTING THE NAME OF THE DESIGNATED BENEFICIARY INASMUCH AS ADVICE OF THE VETERAN'S DEATH HAD BEEN RECEIVED. THAT OFFICE WAS ADVISED ACCORDINGLY, AND INFORMED THAT THE NECESSARY FORM FOR MAKING APPLICATION FOR ADJUSTED COMPENSATION BENEFITS HAD BEEN FORWARDED TO MISS SAHRA JOHNSON, GENERAL DELIVERY, DAYTONA, FLORIDA, THE BENEFICIARY DESIGNATED BY THE VETERAN. UPON RECEIPT OF A PROPERLY EXECUTED DEMAND FOR PAYMENT AND A CERTIFIED COPY OF THE PUBLIC RECORD OF DEATH OF ONE CHARLIE JOHNSON, AN AWARD WAS APPROVED IN FAVOR OF THE BENEFICIARY, AND CHECK NO. 244081 DATED MARCH 29, 1933 FOR $489.37 WAS MAILED TO HER AT 240 WALNUT STREET, DAYTONA BEACH, FLORIDA.

MR. GUY HURD, CHIEF OF POLICE, DAYTONA BEACH, FLORIDA, ADVISED THIS ADMINISTRATION ON APRIL 7, 1933 THAT CHARLIE JOHNSON, WHO SERVED IN HEADQUARTERS COMPANY, 804 PIONEER INFANTRY, WAS STILL LIVING AND IN CUSTODY, AND REQUESTED TO BE INFORMED WHETHER THE DEATH CLAIM OF CHARLIE JOHNSON, 240 WALNUT STREET, WAS PAID TO SAHRA JOHNSON, BENEFICIARY.

A STOP PAYMENT ORDER AGAINST THE CHECK WAS PLACED IMMEDIATELY. HOWEVER, THE TREASURER OF THE UNITED STATES ADVISED THAT THE CHECKS FOR $489.37 HAD BEEN PAID ON APRIL 7, 1933.

AN INVESTIGATION WAS INSTITUTED BY THE FEDERAL BUREAU OF INVESTIGATION, DEPARTMENT OF JUSTICE, AND DISCLOSED THE FOLLOWING FACTS:

THE VETERAN, CHARLIE JOHNSON, CLAIMED THAT IN THE LATTER PART OF 1932 HE SUSTAINED A BROKEN ARM, AND WAS SENT TO A HOSPITAL WHERE HE MET JAMES E. DUNCAN WHOM HE HAD KNOWN FOR A NUMBER OF YEARS. IN THE COURSE OF CONVERSATION HE INFORMED DUNCAN OF HIS SERVICE IN THE WORLD WAR AND THE FACT THAT HE WAS HOLDING AN ADJUSTED SERVICE CERTIFICATE ON WHICH HE HAD ALREADY BORROWED THE FULL FIFTY PERCENT LOAN VALUE. THE VETERAN FURTHER CLAIMED THAT DUNCAN INFORMED HIM THAT HE WAS ENTITLED TO MORE MONEY WHICH HE, DUNCAN, WOULD COLLECT FOR HIM PROVIDED THE VETERAN WOULD BE WILLING TO GIVE UP HALF OF THE MONEY HE RECEIVED. THE VETERAN AGREED TO THIS ARRANGEMENT, AND TURNED OVER TO DUNCAN HIS ARMY DISCHARGE CERTIFICATE AND CORRESPONDENCE HE HAD RECEIVED FROM THE VETERANS' ADMINISTRATION. APRIL 4, 1933, THE VETERAN CLAIMS THAT DUNCAN GAVE HIM $237.00, AND REQUESTED HIM TO LEAVE TOWN FOR A WHILE, WHICH HE REFUSED TO DO. JOHNSON STATED THAT HE WAS IN NO WAY AWARE OF THE FACT THAT DUNCAN HAD INTENDED TO PERPETRATE A FRAUD AGAINST THE GOVERNMENT, AND THAT IT WAS ONLY AFTER HIS ARREST THAT HE HAD BEEN INFORMED OF THE FACT THAT DUNCAN HAD REPRESENTED HIM TO THE ADMINISTRATION AS DEAD, ON THE BASIS OF A DEATH CERTIFICATE OF A CHARLIE JOHNSON WHO HAD DIED AT CLEWISTON, FLORIDA.

THE VETERAN DENIED KNOWLEDGE OF A SAHRA JOHNSON; HOWEVER, HE LATER RETRACTED THIS DENIAL WHEN SHOWN A PHOTOSTATIC COPY OF HIS APPLICATION FOR ADJUSTED COMPENSATION BENEFITS.

THE INVESTIGATION FURTHER DISCLOSED THAT THE DEMAND FOR PAYMENT WAS NOTARIZED ON FEBRUARY 27, 1933, BY JAMES E. DUNCAN. THE HANDWRITING WAS IDENTICAL WITH THAT ON THE ENVELOPE USED TO FORWARD THE CERTIFIED COPY OF THE PUBLIC RECORD OF VETERAN'S DEATH TO THIS ADMINISTRATION. IT WAS FURTHER DETERMINED THAT SAHRA JOHNSON WAS IN NO WAY AWARE OF THE FRAUD PERPETRATED BY JAMES E. DUNCAN, HAD NOT SHARED IN THE PROCEEDS OF THE CHECK MAILED IN HER NAME, AND WAS LIVING AT MOUNT DORA, FLORIDA, ON THE DATE THE CHECK WAS MAILED. THE ADDRESS 240 WALNUT STREET, DAYTONA BEACH, FLORIDA, PROVED TO BE THE ADDRESS OF JAMES E. DUNCAN.

MISS EDITH HOUSE, ASSISTANT UNITED STATES ATTORNEY, AUTHORIZED A COMPLAINT AGAINST DUNCAN, BUT IT COULD NOT BE DECIDED WHETHER THE VETERAN, CHARLIE JOHNSON, SHOULD BE HANDLED AS A DEFENDANT OR AS A WITNESS AGAINST DUNCAN. JAMES E. DUNCAN, ALIAS "DOC" DUNCAN, WAS INDICTED ON OCTOBER 5, 1933 AND CHARGED WITH VIOLATION OF SECTION 35 OF THE FEDERAL CRIMINAL CODE (SECTION 80, TITLE 18, U.S. CODE). HE WAS APPREHENDED AND TRIED ON NOVEMBER 23, 1934. THE TRIAL RESULTED IN THE VERDICT OF GUILTY, WHEREUPON THE DEFENDANT WAS SENTENCED TO THREE YEARS IMPRISONMENT.

THE IMPOSTOR, JAMES E. DUNCAN, HAS NOT BEEN IDENTIFIED AS A VETERAN OF THE WORLD WAR.

IT MAY BE ASSUMED THAT SINCE THE VETERAN WAS NOT INDICTED, IT WAS BELIEVED THAT SUCCESSFUL PROSECUTION FOR IMPLICATION IN THE FRAUD COULD NOT BE SUSTAINED AGAINST HIM, AND THAT THEREFORE HIS VALUE WOULD BE GREATER AS A WITNESS AGAINST DUNCAN THAN AS A DEFENDANT.

THE VETERAN HAS NOW FILED AN APPLICATION FOR SETTLEMENT OF HIS ADJUSTED SERVICE CERTIFICATE. IT IS REQUESTED THAT YOU ADVISE THIS ADMINISTRATION AS TO WHETHER THE AMOUNT PAID PRESUMABLY TO THE BENEFICIARY, LESS THE $237.00 RECEIVED BY THE VETERAN, MAY BE REMOVED AS A CHARGE AGAINST THE VETERAN'S ADJUSTED SERVICE CERTIFICATE, AND WHETHER CERTIFICATION MAY BE MADE TO THE TREASURY FISCAL OFFICE FOR THE BALANCE AS PROVIDED BY THE ADJUSTED COMPENSATION PAYMENT ACT, 1936.

ASIDE FROM THE CRIMINAL ASPECT OF THE CASE, THE FACTS STATED IN YOUR LETTER SHOW THAT THE UNLAWFUL PAYMENT TO THE IMPOSTOR WOULD NOT HAVE BEEN MADE HAD IT NOT BEEN FOR THE INITIAL ACTION OF THE VETERAN IN TURNING OVER HIS DISCHARGE PAPERS AND CERTAIN CORRESPONDENCE TO THE IMPOSTOR AND PERMITTING THE IMPOSTOR TO ACT FOR HIM. EVEN IF IT COULD BE ESTABLISHED THAT THE VETERAN WAS INNOCENT OF ANY INTENT TO DEFRAUD THE GOVERNMENT, NEVERTHELESS HIS PARTICIPATION IN THE TRANSACTION WAS RESPONSIBLE FOR THE UNLAWFUL PAYMENT, AND IN THIS CONNECTION IT IS WELL SETTLED THAT WHERE ONE OF TWO INNOCENT PERSONS MUST BEAR A LOSS IT WILL BE IMPOSED ON THE ONE WHO MADE THE LOSS POSSIBLE.

THE ADJUSTED SERVICE CERTIFICATE OF THE VETERAN SHOULD BE REGARDED AS PAID, AND, ACCORDINGLY, SETTLEMENT WITH HIM UNDER THE ADJUSTED COMPENSATION PAYMENT ACT OF 1936, IS NOT AUTHORIZED.