A-93712, MAY 13, 1938, 17 COMP. GEN. 948

A-93712: May 13, 1938

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WAS ADMITTEDLY ISSUED ON OTHER THAN THE APPLICATION OF THE VETERAN OR "HIS PROMISSORY NOTE" AS REQUIRED BY SECTION 502 OF THE WORLD WAR ADJUSTED COMPENSATION ACT. INVESTIGATION INDICATES THE CHECK WAS RECEIVED AND NEGOTIATED BY THE PERSON WHO DEALT WITH THE GOVERNMENT. 009 WAS ISSUED TO THE CAPTIONED VETERAN (PRICE. UPON SUBMISSION OF AN ACCEPTABLE BOND OF INDEMNITY HE WAS ISSUED DUPLICATE ADJUSTED SERVICE CERTIFICATE NO. 3. WHICH CERTIFICATE WAS PLEDGED WITH THE VETERANS' ADMINISTRATION OFFICE. WAS ISSUED IN PAYMENT THEREOF. 009 WAS PLEDGED WITH THE VETERANS' ADMINISTRATION. THE FOLLOWING DESCRIBED CHECK WAS ISSUED IN PAYMENT THEREOF: CHECK NO. 1031006. CERTIFICATION IN THE AMOUNT OF $615.71 WAS INADVERTENTLY MADE ON THE ORIGINAL ADJUSTED SERVICE CERTIFICATE INSTEAD OF THE DUPLICATE CERTIFICATE.

A-93712, MAY 13, 1938, 17 COMP. GEN. 948

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - LOANS - FORGERIES - DISBURSING OFFICER'S LIABILITY WHERE, AFTER A LOAN TO A VETERAN ON A DUPLICATE ADJUSTED SERVICE CERTIFICATE, ANOTHER CHECK IN PAYMENT OF AN APPLICATION FOR A LOAN ON THE ORIGINAL CERTIFICATE UNDER THE EMERGENCY ADJUSTED COMPENSATION ACT, 1931, 46 STAT. 1429, WAS ADMITTEDLY ISSUED ON OTHER THAN THE APPLICATION OF THE VETERAN OR "HIS PROMISSORY NOTE" AS REQUIRED BY SECTION 502 OF THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, AND INVESTIGATION INDICATES THE CHECK WAS RECEIVED AND NEGOTIATED BY THE PERSON WHO DEALT WITH THE GOVERNMENT; THAT THE BANK WHICH CASHED THE CHECK HAS BEEN DEFUNCT FOR SEVERAL YEARS, AND THAT THERE APPEARS DOUBT WHETHER RECOVERY MAY BE HAD FROM THE INDORSERS, THE VOUCHER INVOLVED MUST BE DISALLOWED IN THE DISBURSING OFFICER'S ACCOUNTS AND RECOVERY HAD FROM HIM OR THE SURETY ON HIS BOND FOR THE AMOUNT OF THE UNAUTHORIZED AND ILLEGAL PAYMENT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE ADMINISTRATOR, VETERANS' AFFAIRS, MAY 13, 1938:

BY LETTER DATED FEBRUARY 27, 1937, TO THE CHIEF DISBURSING OFFICER, TREASURY DEPARTMENT, FORWARDED TO THIS OFFICE LETTER ADDRESSED TO THE DIVISION OF DISBURSEMENT BY YOUR DIRECTOR OF FINANCE, DATED DECEMBER 30, 1936, AS FOLLOWS:

ADJUSTED SERVICE CERTIFICATE NO. 578,009 WAS ISSUED TO THE CAPTIONED VETERAN (PRICE, MORRIS, A-1,194,198) IN THE AMOUNT OF $1,254.00 ON JANUARY 1, 1925. ON JULY 14, 1928, THE VETERAN SUBMITTED AFFIDAVIT (FORM 6920) REPORTING HIS ORIGINAL ADJUSTED SERVICE CERTIFICATE AS LOST OR STOLEN, AND UPON SUBMISSION OF AN ACCEPTABLE BOND OF INDEMNITY HE WAS ISSUED DUPLICATE ADJUSTED SERVICE CERTIFICATE NO. 3,613,075, WHICH CERTIFICATE WAS PLEDGED WITH THE VETERANS' ADMINISTRATION OFFICE, MANILA, PHILIPPINE ISLANDS, ON APRIL 27, 1931, AS SECURITY FOR A LOAN OF $627.00. CHECK NO. 17,463, IN THE SUM OF $627.00, DATED APRIL 27, 1931, SYMBOL NO. 89,876, WAS ISSUED IN PAYMENT THEREOF.

ON MAY 6, 1931, THE VETERAN'S ORIGINAL ADJUSTED SERVICE CERTIFICATE NO. 578,009 WAS PLEDGED WITH THE VETERANS' ADMINISTRATION, WASHINGTON, D.C., AS LOAN COLLATERAL, AND THE FOLLOWING DESCRIBED CHECK WAS ISSUED IN PAYMENT THEREOF:

CHECK NO. 1031006; DATE, 5/6/31; AMOUNT, $627.00; DISBURSING OFFICER, J. B. SCHOMMER; SYMBOL, 99-220.

THE VETERAN MADE APPLICATION FOR SETTLEMENT OF HIS ADJUSTED SERVICE CERTIFICATE UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, AND UNDER DATE OF JUNE 15, 1936, CERTIFICATION IN THE AMOUNT OF $615.71 WAS INADVERTENTLY MADE ON THE ORIGINAL ADJUSTED SERVICE CERTIFICATE INSTEAD OF THE DUPLICATE CERTIFICATE.

THE RECORDS INDICATE THAT THE VETERAN WAS LOCATED AT MANILA, PHILIPPINE ISLANDS, AT THE TIME THE APPLICATION FOR A LOAN ON THE ORIGINAL CERTIFICATE WAS RECEIVED FROM KNOXVILLE, IOWA. THE CASE, THEREFORE, IS BEING REFERRED FOR INVESTIGATION AND REPORT.

IN THE EVENT RECLAMATION IS ACCOMPLISHED FROM THE ENDORSER OF CHECK NO. 1031006, THE AMOUNT SO RECOVERED SHOULD BE DEPOSITED TO THE RECLAMATION SUSPENSE ACCOUNT OF THE TREASURER OF THE UNITED STATES, PENDING THE ASCERTAINMENT OF ALL FACTS IN CONNECTION THEREWITH AS A RESULT OF THE SECRET SERVICE INVESTIGATION.

THERE ARE ENCLOSED FOR YOUR USE PHOTOSTATIC COPIES OF THE VETERAN'S APPLICATION FOR ADJUSTED COMPENSATION BENEFITS, AFFIDAVIT (FORM 6920), NOTES (FORM 1185), COVERING THE LOANS MADE ON BOTH THE ORIGINAL AND DUPLICATE CERTIFICATES, AND APPLICATION (FORM 1701) EXECUTED BY THE VETERAN FOR SETTLEMENT OF HIS ADJUSTED SERVICE CERTIFICATE UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936.

IT IS STATED IN LETTER DATED JANUARY 11, 1937, ADDRESSED TO THE CHIEF, SECRET SERVICE, TREASURY DEPARTMENT, BY YOUR CHIEF, INVESTIGATION DIVISION, THAT UPON SUBMISSION OF AN ACCEPTABLE BOND OF INDEMNITY, DUPLICATE ADJUSTED SERVICE CERTIFICATE NO. 3613075 WAS ISSUED AND FORWARDED TO THE VETERAN ON FEBRUARY 7, 1931, AND THAT A LOAN OF $627 WAS MADE ON THE DUPLICATE CERTIFICATE BY THE VETERANS' ADMINISTRATION OFFICE, MANILA, P.I., BY CHECK NO. 17463, DATED APRIL 27, 1931. ON MAY 6, 1931, 3 MONTHS AFTER THE DUPLICATE ADJUSTED SERVICE CERTIFICATE HAD BEEN MAILED FROM THE WASHINGTON, D.C., OFFICE OF THE VETERANS' ADMINISTRATION, THE WASHINGTON OFFICE APPROVED A LOAN ON THE ORIGINAL ADJUSTED SERVICE CERTIFICATE FOR $627 PURSUANT TO AN APPLICATION EXECUTED BY SOME PERSON OTHER THAN THE VETERAN.

THE INVESTIGATION OF THE CIRCUMSTANCES SURROUNDING THE NEGOTIATION OF CHECK NO. 1031006 DATED MAY 6, 1931, FOR $627 PURSUANT TO AN APPLICATION EXECUTED BY SOME PERSON OTHER THAN THE VETERAN.

THE INVESTIGATION OF THE CIRCUMSTANCES SURROUNDING THE NEGOTIATION OF CHECK NO. 1031006 DATED MAY 6, 1931, FOR $627 DRAWN TO THE ORDER OF MORRIS PRICE UNDER SYMBOL NO. 99-220 OF J. B. SCHOMMER, WHICH CHECK WAS DRAWN IN PAYMENT OF THE LOAN MADE ON THE ORIGINAL ADJUSTED SERVICE CERTIFICATE AFTER THE DUPLICATE CERTIFICATE HAD BEEN ISSUED, FAILS TO DISCLOSE BY WHOM THE CHECK WAS NEGOTIATED. HOWEVER, THE MAHASKA COUNTY STATE BANK OF IOWA, WHO CASHED THE CHECK, HAS BEEN DEFUNCT SINCE 1932. IN VIEW OF THIS FACT AND THE FURTHER FACT THAT THE INVESTIGATION INDICATES THAT THE CHECK WAS RECEIVED AND NEGOTIATED BY THE PERSON WHO DEALT WITH THE GOVERNMENT, THERE APPEARS AT LEAST DOUBT WHETHER RECOVERY MAY BE HAD FROM THE ENDORSERS.

IT FURTHER APPEARS THAT THE CHECK NO. 1031006 FOR $627 WAS DRAWN IN PAYMENT OF AN APPLICATION AND PROMISSORY NOTE SUBMITTED TO THE VETERANS' ADMINISTRATION FOR A 50-PERCENT LOAN ON THE VETERAN'S ADJUSTED SERVICE CERTIFICATE UNDER THE EMERGENCY ADJUSTED COMPENSATION ACT, 1931, 46 STAT. 1429. UNDER THE PROVISIONS OF SECTION 502 OF THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, SUCH LOANS ARE ONLY AUTHORIZED TO BE MADE PURSUANT TO THE APPLICATION OF THE VETERAN UPON THE SECURITY OF THE VETERAN'S ADJUSTED SERVICE CERTIFICATE AND HIS PROMISSORY NOTE. IT IS ADMITTED THE LOAN REPRESENTED BY THIS CHECK WAS NOT ISSUED PURSUANT TO APPLICATION OF THE VETERAN OR "UPON HIS PROMISSORY NOTE.' ACCORDINGLY, THERE WAS NO AUTHORITY FOR THE DRAWING OF THE SAID CHECK AND IT CONSTITUTES AN ILLEGAL PAYMENT FROM PUBLIC FUNDS.

THE VOUCHER ON WHICH THE CHECK WAS ISSUED MUST NOW BE DISALLOWED IN THE ACCOUNTS OF J. B. SCHOMMER UNDER SYMBOL NO. 99-220, AND A RECOVERY HAD IN THE USUAL MANNER FROM HIM OR THE SURETY ON HIS BOND FOR THE AMOUNT OF SUCH UNAUTHORIZED AND ILLEGAL PAYMENT.