A-87362, SEPTEMBER 2, 1937, 17 COMP. GEN. 209

A-87362: Sep 2, 1937

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THAT THE VETERAN WAS AWARE OF THE RELATIONSHIP EXISTING BETWEEN HIS WIFE AND THE FORGER. THE GOVERNMENT IS NOT OBLIGATED TO BEAR THE LOSS COMPLAINED OF BY THE VETERAN. PARTICULARLY WHERE HE DID NOT MAKE DEMAND FOR A DUPLICATE CERTIFICATE UNTIL MORE THAN SIX YEARS AFTER ALLEGED LOSS OF THE ORIGINAL AND WHERE HE AND HIS WIFE ARE NOW LIVING TOGETHER. AS FOLLOWS: THE FOLLOWING FACTS RELATIVE TO A FRAUDULENT LOAN GRANTED ON THE SECURITY OF THE ADJUSTED SERVICE CERTIFICATE OF THE ABOVE NAMED VETERAN ARE FURNISHED FOR CONSIDERATION AS TO WHETHER THE LOAN MAY BE REMOVED AS A CHARGE AGAINST THE VETERAN'S ACCOUNT. WAS ISSUED ADJUSTED SERVICE CERTIFICATE NO. 2. THE CERTIFICATE WAS PLEDGED AS SECURITY FOR A LOAN OF $150.00 GRANTED THEREON BY THE VETERANS' ADMINISTRATION.

A-87362, SEPTEMBER 2, 1937, 17 COMP. GEN. 209

VETERANS' ADMINISTRATION--- ADJUSTED COMPENSATION LOANS--- FORGERIES--- GOVERNMENT AND ENDORSERS' LIABILITY WHERE THE RECORD INDICATES A VETERAN'S WIFE DELIVERED HIS ADJUSTED SERVICE CERTIFICATE TO ANOTHER, WHO OBTAINED A LOAN ON SECURITY THEREOF BY FORGING THE VETERAN'S NAME, AND FURTHER INDICATES THAT THE WIFE ASSISTED THE ALLEGED FORGER IN PROCURING THE LOAN AND PARTICIPATED IN THE PROCEEDS, AND THAT THE VETERAN WAS AWARE OF THE RELATIONSHIP EXISTING BETWEEN HIS WIFE AND THE FORGER, THE GOVERNMENT IS NOT OBLIGATED TO BEAR THE LOSS COMPLAINED OF BY THE VETERAN, PARTICULARLY WHERE HE DID NOT MAKE DEMAND FOR A DUPLICATE CERTIFICATE UNTIL MORE THAN SIX YEARS AFTER ALLEGED LOSS OF THE ORIGINAL AND WHERE HE AND HIS WIFE ARE NOW LIVING TOGETHER, AND THE CHARGE RAISED AGAINST THE VETERAN'S CERTIFICATE SHOULD BE ALLOWED TO STAND, NO RECLAMATION PROCEEDINGS BEING REQUIRED ON THE INVOLVED CHECK ON THE PRESENT RECORD.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, SEPTEMBER 2, 937:

CONSIDERATION HAS BEEN GIVEN THE LETTER DATED APRIL 13, 1937, FROM YOUR ADMINISTRATION, DBB-D, INVOLVING THE WORLD WAR ADJUSTED COMPENSATION CASE OF STEFAN HURON, A-3,615,357, AS FOLLOWS:

THE FOLLOWING FACTS RELATIVE TO A FRAUDULENT LOAN GRANTED ON THE SECURITY OF THE ADJUSTED SERVICE CERTIFICATE OF THE ABOVE NAMED VETERAN ARE FURNISHED FOR CONSIDERATION AS TO WHETHER THE LOAN MAY BE REMOVED AS A CHARGE AGAINST THE VETERAN'S ACCOUNT.

THE RECORDS OF THE VETERANS' ADMINISTRATION SHOW THAT THE VETERAN, STEFAN HURON, WAS ISSUED ADJUSTED SERVICE CERTIFICATE NO. 2,694,794, DATED JUNE 1, 1925, IN THE AMOUNT OF $1,260.00. THE CERTIFICATE WAS PLEDGED AS SECURITY FOR A LOAN OF $150.00 GRANTED THEREON BY THE VETERANS' ADMINISTRATION, NEWARK, NEW JERSEY, NOW LOCATED AT LYONS, NEW JERSEY. CHECK NO. 10203, DATED NOVEMBER 17, 1928, COVERING THE LOAN, WAS ISSUED BY JAS. GALLAGHER, FORMER DISBURSING OFFICER, VETERANS' ADMINISTRATION, NEWARK, NEW JERSEY, SYMBOL 99-136, FROM THE UNITED STATES GOVERNMENT LIFE INSURANCE FUND OT-875, AND MAILED TO 161 BELMONT AVENUE, NEWARK, NEW JERSEY.

UNDER DATE OF APRIL 18, 1936, THE VETERAN EXECUTED AN AFFIDAVIT (FORM 6920) ALLEGING THAT HIS ADJUSTED SERVICE CERTIFICATE WAS LOST. INFORMATION RELATIVE TO THE LOAN GRANTED ON THE SECURITY OF HIS CERTIFICATE WAS FURNISHED THE VETERAN. ON JUNE 6, 1936, THE VETERAN SUBMITTED AN AFFIDAVIT ALLEGING THAT HE DID NOT APPLY FOR THE LOAN GRANTED ON THE SECURITY OF HIS CERTIFICATE, OR NEGOTIATE CHECK NO. 10203, ISSUED TO COVER THE LOAN.

COPIES OF REPORTS DATED JANUARY 7, FEBRUARY 17, AND FEBRUARY 24, 1937, RECEIVED FROM THE SECRET SERVICE DIVISION, TREASURY DEPARTMENT, WHICH ARE ENCLOSED HEREWITH, INDICATE THAT ONE HENRY MARKOWITZ, ALIAS HENRY BRUSELOFF, OF 463 EAST 171ST STREET, BRONX, NEW YORK, RECEIVED, FORGED, AND CASHED CHECK NO. 10203 AS A RESULT OF FORGERY OF THE VETERAN'S NOTE.

IN VIEW OF THE ABOVE STATED FACTS, IT IS REQUESTED THAT THE VETERANS' ADMINISTRATION BE INFORMED AS TO WHETHER THE AMOUNT OF CHECK NO. 10203, DATED NOVEMBER 17, 1928, $150.00, DRAWN FROM THE UNITED STATES GOVERNMENT LIFE-INSURANCE FUND OT-875 BY JAS. GALLAGHER, FORMER DISBURSING OFFICER, NEWARK, NEW JERSEY, SYMBOL 99-136, MAY BE REMOVED AS A CHARGE AGAINST THE VETERANS' ADJUSTED-SERVICE CERTIFICATE.

THE SECRET SERVICE AGENT, IN HIS REPORT OF JANUARY 7, 1937, EXPRESSED THE VIEW THAT THE FRAUDULENT LOAN WAS OBTAINED THROUGH THE CONNIVANCE OF THE VETERAN'S WIFE WITH ONE HENRY BRUSELOFF (MARKOWITZ). REGARDING THE INTERVIEW HAD WITH THE VETERAN'S WIFE, THE AGENT'S REPORT STATES:

* * * INTERVIEWED PAYEE AND HIS WIFE, MARY, TODAY, THE LATTER CLAIMING THAT DURING 1928 SHE HAD BEEN ON VERY FAMILIAR TERMS WITH ONE HENRY BRUSELOFF, AND IT APPEARS THAT SHE LIVED WITH THIS MAN FOR SOME TIME WHILE MARRIED TO THE PAYEE. SHE CLAIMS THAT BRUSELOFF SOUGHT TO BORROW MONEY FROM HER IN NOVEMBER 1928, AND WHEN SHE TOLD HIM THAT SHE HAD NO MONEY HE SUGGESTED THAT SHE TURN OVER TO HIM HER HUSBAND'S ADJUSTED SERVICE CERTIFICATE SO THAT HE, BRUSELOFF, COULD FORGE HER HUSBAND'S NAME AND PROCURE A LOAN; THAT SHE TURNED OVER THE CERTIFICATE TO BRUSELOFF, AND ON NOV. 16, 1928, APPEARED WITH HIM BEFORE HERBERT J. STRAHAN, A NOTARY PUBLIC, WHERE BRUSELOFF REPRSENTED THAT HE WAS THE LAWFUL HOLDER OF THE CERTIFICATE AND IN HER PRESENCE SIGNED THE NAME "STEFAN HURAN" THERETO: THAT ABOUT NOV. 18, 1928, BRUSELOFF CALLED ON MRS. HURAN AT 161 BELMONT AVE., NEWARK, N.J., STATING THAT THERE WAS A LETTER IN THE MAIL BOX FOR WHICH SHE HAD THE KEY; THAT SHE OPENED THE MAILBOX AND BRUSELOFF EXTRACTED A LETTER, OPENED SAME, AND FOUND SUBJECT CHECK THEREIN; THAT HE TOOK THE CHECK, PROMISING TO REPAY THE $150 TO HER AT A LATER TIME AFTER HE HAD SET UP A GOING BUSINESS; THAT DESPITE REPEATED DEMANDS BY HER FOR THE MONEY, BRUSELOFF HAS NOT MADE ANY PAYMENT TO HER TO DATE; THAT THE LAST TIME SHE SAW HIM WAS IN AUGUST 1936, AT WHICH TIME HE WAS RESIDING WITH HIS WIFE AND THREE CHILDREN AT 463 E. 171 ST., BRONX, N.Y., APT.

THE STATEMENT OF HENRY BRUSELOFF (HENRY MARKOWITZ) IN REGARD TO THIS MATTER, OBTAINED BY THE SECRET SERVICE AGENT UNDER DATE OF FEBRUARY 13, 1937, IS IN PERTINENT PART AS FOLLOWS:

Q. TELL ME IN YOUR OWN WORDS ALL THE CIRCUMSTANCES LEADING UP TO THE CASHING OF THIS CHECK JUST AS YOU REMEMBER THEM. TELL ME HOW IT FIRST ORIGINATED.

A. SEE, THE ORIGIN OF THE CASE IS THIS--- IT WAS WHEN MRS. HURON'S HUSBAND FORGED SOME CHECKS IN NEWARK, N.J., AND WAS PROSECUTED, RECEIVING A SUSPENDED SENTENCE. HE WAS PUT ON PROBATION, PROVIDED HE REPAID THE AMOUNT OF THE FORGED CHECKS WITH WEEKLY PAYMENTS. SHE CAME TO ME AND ASKED ME IF I COULD HELP HER OUT FINANCIALLY.

INASMUCH AS HER HUSBAND WAS REGULARLY EMPLOYED, RECEIVING $50.00 TO $60.00 WEEKLY, I ASKED HER WHAT SHE DID WITH THE MONEY, TO WHICH SHE REPLIED,"I DO NOT CARE FOR MY HUSBAND.' I HAD JUST LEFT A JOB IN A REAL ESTATE OFFICE AND KNEW, THROUGH THIS, THAT SHE HAD SOME PROPERTY, SO I TOLD HER THAT I PROBABLY COULD ASSIST HER, ALTHOUGH NOT TO THE EXTENT SHE ASKED, AND LOANED HER $25.00, ASKING HER WHEN SHE WOULD RETURN IT. I GAVE HER THIS MONEY IN THE PRESENCE OF MY WIFE AND MR. AND MRS. HURLEY, OF, I BELIEVE, 464 OR 646 HUNTERDON STREET, NEWARK, N.J. SHE TOLD ME SHE HAD SOME MONEY IN THE LOAN ASSOCIATION WHICH SHE WOULD WITHDRAW AND GIVE ME.

THAT SAME NIGHT AT HER HOUSE WITH A COUPLE OF OTHER PEOPLE, ONE OF WHOM IS NOW DEAD, I BELIEVE--- HER CHILD'S FATHER-IN-LAW--- WE STARTED DRINKING, AND HER HUSBAND MADE A BET WITH ME THAT HE WOULD GET EVEN WITH ME FOR SOMETHING I HAD DONE. THE SOMETHING, HE CLAIMED, WAS THAT I HAD FORCED THEM INTO PURCHASING MORE REAL ESTATE THAN THEY COULD CONVENIENTLY CARRY, ETC.

THREE WEEKS LATER WE AGAIN MET AND DRANK HEAVILY, AND HER HUSBAND SAID THAT HIS VETERANS' ADJUSTED SERVICE CERTIFICATE WAS MISSING, AND CLAIMED THAT I KNEW WHERE THEY WERE. I TOLD HIM I DID NOT KNOW.

THREE DAYS LATER MRS. HURON SHOWED ME THE ADJUSTED SERVICE CERTIFICATE AND ASKED ME TO AID HER IN CASHING IT BY GOING DOWNTOWN TO A NOTARY PUBLIC, WHICH I DID. SHE WAS ACCOMPANIED ON THIS OCCASION BY ANOTHER MAN, ONE SAM WARNER. THIS WAS ON OR ABOUT NOVEMBER 16, 1928.

Q. DID YOU SIGN THIS APPLICATION AS BEING STEPHAN HURON?

A. NO; I SIGNED MY OWN NAME AS A WITNESS ONLY.

Q. DID YOU SIGN AS HENRY BRUSILOFF OR HENRY MARKOWITZ?

A. AS HENRY MARKOWITZ.

Q. GO ON.

A. THEN A WEEK OR THREE DAYS AFTERWARD WE WENT DOWNTOWN, AND SHE GAVE ME THE CHECK. SAM WARNER WAS NOT WITH HER ON THIS OCCASION. WE WENT INTO THE HOUSEHOLD FINANCE CORPORATION, AND THEY CASHED THE CHECK. I TOOK OUT THE $25.00 WHICH SHE OWED ME AND RETURNED THE BALANCE TO HER, AND THAT IS AS FAR AS I CAN GO WITH THE CHECK PROPOSITION.

Q. DID YOU SIGN THE CHECK WITH YOUR NAME, HENRY MARKOWITZ?

A. YES.

Q. IN OTHER WORDS, YOU MERELY ENDORSED THE CHECK AT THE HOUSEHOLD FINANCE CO., WHERE YOU WERE KNOWN AS HENRY MARKOWITZ, AND DID NOT PURPORT TO BE STEFAN HURON?

A. YES. I ENDORSED IT IN MRS. HURON'S PRESENCE AS HENRY MARKOWITZ.

Q. YOU DID NOT SIGN THE NAME STEFAN HURON?

A. NO.

Q. HERE IS A PHOTOSTATIC COPY OF THE ORIGINAL UNITED STATES VETERANS' BUREAU CHECK NO. 10203, SIGNED BY JAMES GALLAGHER, DISBURSING OFFICER, OVER SYMBOL NO. 99-136, AND DRAWN TO THE ORDER OF STEFAN HURON, 161 BELMONT AVENUE, NEWARK, N.J., AND DATED NOVEMBER 17, 1928. IS THIS THE CHECK YOU SIGNED?

A. NO; I SIGNED MY NAME, HENRY MARKOWITZ, ON THE CHECK THAT I CASHED.

Q. YOU STATED YOU WERE DRINKING QUITE HEAVILY AROUND THIS TIME. ISN T IT POSSIBLE THAT YOU WERE UNDER THE INFLUENCE OF LIQUOR AT THE TIME THAT YOU CASHED OR ENDORSED THIS CHECK, AND THAT YOU ACTUALLY DID SIGN THE NAME OF STEFAN HURON INSTEAD OF YOUR OWN?

A. NO; I DO NOT RECALL EVER DOING SUCH A THING. I DO NOT THINK IT WOULD BE POSSIBLE FOR ME TO DO THAT. I WOULD TELL YOU IF I DID. I AM FORCED TO DENY THAT MY SIGNATURE IS ON THE APPLICATION OR ON THE CHECK. MY ORIGINAL SIGNATURE SHOULD BE ON THE CHECK, AND I THINK IT WOULD BE ADVISABLE FOR YOU TO GET THE ORIGINAL CHECK BACK FROM WASHINGTON, D.C., WHERE YOU SAY IT IS. YOU WILL FIND THAT I AM THE SECOND ENDORSER OF THE CHECK, AND THAT ON THE APPLICATION I WAS ONLY A WITNESS.

Q. THIS IS THE SAME AS THE ORIGINAL CHECK, BEING A PHOTOSTATIC COPY. THIS IS ALSO A PHOTOSTATIC COPY OF THE ORIGINAL APPLICATION. THEY ARE THE EXACT, SAME THING AS THE ORIGINALS.

A. I DON-T THINK SO; I SIGNED AS WITNESS AND ENDORSER.

THE APPLICATION FOR THE LOAN DOES NOT SHOW THAT BRUSELOFF (MARKOWITZ) SIGNED IT AS WITNESS, AS ALLEGED BY HIM. THE APPLICATION, IN FACT, MAKES NO PROVISION FOR ANY WITNESS' SIGNATURE. NEITHER DOES THE CHECK SHOW AN ENDORSEMENT BY HIM IN HIS OWN NAME, AS ALLEGED--- THE ENDORSEMENTS ON THE CHECK BEING AS FOLLOWS:

1. PAYEE'S NAME.

2.PAY TO THE ORDER OF

PORT NEWARK NATIONAL BANK

NEWARK, N.J.

MONROE LOAN SOCIETY.

3. PAY TO THE ORDER OF

ANY BANK, BANKER OR TRUST CO.

PRIOR ENDORSEMENTS GUARANTEED

NOV. 20, 1928

THE PORT NEWARK NATIONAL BANK OF NEWARK

ARTHUR B. JOHNSTON, CASHIER.

4. RECEIVED PAYMENT FROM

THE TREASURER OF THE UNITED STATES

NOV. 21, 1928

FEDERAL RESERVE BANK OF NEW YORK.

THE RECORD DISCLOSES THAT THE PORT NEWARK NATIONAL BANK, NEW JERSEY, IS NOW DEFUNCT--- THE BANK HAVING GONE INTO RECEIVERSHIP ON AUGUST 8, 1930. WITH REGARD TO THE CRIMINAL PHASE OF THE CASE THE SECRET SERVICE REPORT OF FEBRUARY 17, 1937, STATES:

MARKOWITZ WAS THEN TAKEN TO THE OFFICE OF THE UNITED STATES ASSISTANT ATTORNEY FRANK MAHONEY, SOUTHERN DISTRICT, NEW YORK, NEW YORK, WHO ADVISED AFTER BEING ACQUAINTED WITH THE CIRCUMSTANCES AND FACTS SURROUNDING THIS CASE, THAT THE STATUTE OF LIMITATIONS HAD EXPIRED AND THERE WERE NO GROUNDS FOR HOLDING MARKOWITZ.

THE VETERAN AND HIS WIFE HAVE MADE STATEMENTS TO THE EFFECT THAT THE LOAN REPRESENTED BY THE SUBJECT CHECK WAS OBTAINED WITHOUT THE VETERAN'S KNOWLEDGE OR CONSENT. IN HIS APPLICATION OF APRIL 18, 1936, FOR A DUPLICATE ADJUSTED-SERVICE CERTIFICATE THE VETERAN STATED THAT THE LOSS OF HIS CERTIFICATE WAS FIRST DISCOVERED "ABOUT 6 YEARS AGO" AND THAT "IT IS POSSIBLE THAT MY WIFE, MARY HURON, TOOK IT WHEN SHE LEFT ME.' IT IS STATED IN THE SECRET SERVICE REPORT OF JANUARY 7, 1937, THAT THE VETERAN AND HIS WIFE ARE LIVING TOGETHER.

FROM THE FACTS AND CIRCUMSTANCES ABOVE SHOWN THERE HAS NOT BEEN ESTABLISHED THE FACT THAT THE VETERAN TOOK PROPER STEPS TO SAFEGUARD HIS ADJUSTED-SERVICE CERTIFICATE FROM IMPROPER HYPOTHECATION. FURTHERMORE, THE RELATIONSHIP BETWEEN THE VETERAN'S WIFE AND THE ALLEGED FORGER, AND THE VETERAN'S APPARENT KNOWLEDGE OF SUCH RELATIONSHIP, AND THE FACT THAT THE VETERAN DID NOT MAKE DEMAND FOR A DUPLICATE CERTIFICATE UNTIL AFTER 6 YEARS AFTER ITS ALLEGED LOSS, THAT THE VETERAN'S WIFE APPEARS TO HAVE PARTICIPATED IN THE PROCEEDS OF THE CHECK, THAT THE VETERAN AND HIS WIFE ARE NOW LIVING TOGETHER, AND THE CONFLICT IN FACTS IN VARIOUS AND SUNDRY PARTICULARS PRESENT CONDITION RAISING SERIOUS DOUBT WHETHER THE GOVERNMENT IS LEGALLY OR OTHERWISE OBLIGATED TO BEAR THE LOSS COMPLAINED OF BY THE VETERAN. ACCORDINGLY, THERE APPEARS NO AUTHORITY OF LAW FOR RELIEVING THE VETERAN OF ANY SUCH LOSS.

ON THE BASIS OF THE PRESENT RECORD, THEREFORE, RECLAMATION PROCEEDINGS ON THE SUBJECT CHECK WILL NOT BE DIRECTED BY THIS OFFICE, AND IN ANSWER TO THE QUESTION STATED IN THE CONCLUDING PARAGRAPH OF YOUR LETTER YOU ARE ADVISED THAT THE CHARGE ASSERTED AGAINST THE VETERAN'S CERTIFICATE ON ACCOUNT OF THE ISSUANCE OF THE SUBJECT CHECK MAY NOT BE REMOVED.