B-122660, APRIL 14, 1955, 34 COMP. GEN. 517

B-122660: Apr 14, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

POST OFFICE DEPARTMENT - REFUND OF OVERCHARGES - NOTIFICATION TO PROSPECTIVE CLAIMANTS THE AUTHORITY IN 39 U.S.C. 300 FOR REFUNDING POSTAGE OVERCHARGES DOES NOT PRECLUDE THE POSTMASTER GENERAL FROM ADVISING PATRONS OF THEIR ENTITLEMENT TO THE PAYMENT OF SPECIFIED AMOUNTS WHICH WERE FRAUDULENTLY COLLECTED AS EXCESS POSTAGE AND WHICH HAVE BEEN REMITTED BY FORMER EMPLOYEES. 1955: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 19. THE CIRCUMSTANCES INVOLVED ARE STATED IN YOUR LETTER AS FOLLOWS: THE SUM OF $2. 942 WAS ACQUIRED IN THE FOLLOWING MANNER: TWO EMPLOYEES OF THE NEW YORK CITY POST OFFICE FRAUDULENTLY OVERCHARGED THE HOTEL TAFT BY THE RE-USE OF POSTAGE-DUE STAMPS. THE SUCCESS OF THE SCHEME WAS MADE POSSIBLE WHEN THE EMPLOYEES OF THE HOTEL TAFT PAID THE AMOUNT REQUESTED BY THE POSTAL EMPLOYEES WITHOUT CHECKING AGAINST THE POSTAGE-DUE BILL.

B-122660, APRIL 14, 1955, 34 COMP. GEN. 517

POST OFFICE DEPARTMENT - REFUND OF OVERCHARGES - NOTIFICATION TO PROSPECTIVE CLAIMANTS THE AUTHORITY IN 39 U.S.C. 300 FOR REFUNDING POSTAGE OVERCHARGES DOES NOT PRECLUDE THE POSTMASTER GENERAL FROM ADVISING PATRONS OF THEIR ENTITLEMENT TO THE PAYMENT OF SPECIFIED AMOUNTS WHICH WERE FRAUDULENTLY COLLECTED AS EXCESS POSTAGE AND WHICH HAVE BEEN REMITTED BY FORMER EMPLOYEES, AND SUCH ACTION BY THE POSTMASTER GENERAL WOULD NOT BE IN VIOLATION OF 18 U.S.C. 283, WHICH PROHIBITS OFFICERS FROM AIDING OR ASSISTING IN THE PROSECUTION OF CLAIMS AGAINST THE UNITED STATES.

COMPTROLLER GENERAL CAMPBELL TO THE POSTMASTER GENERAL, APRIL 14, 1955:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 19, 1955, REQUESTING A DECISION WHETHER REFUND OF OVERPAYMENTS OF POSTAGE DUE ON MAIL MATTER AND PAYMENT OF FUNDS IMPROPERLY WITHHELD IN THE REDEMPTION OF SOILED AND UNUSED POSTAL CARDS AND GOVERNMENT STAMPED ENVELOPES MAY BE MADE UNDER THE PROVISIONS OF 39 U.S.C. 300, IN THE ABSENCE OF THE RECEIPT OF A CLAIM THEREFOR FROM THE INDIVIDUAL POST-OFFICE PATRONS.

THE CIRCUMSTANCES INVOLVED ARE STATED IN YOUR LETTER AS FOLLOWS:

THE SUM OF $2,942 WAS ACQUIRED IN THE FOLLOWING MANNER: TWO EMPLOYEES OF THE NEW YORK CITY POST OFFICE FRAUDULENTLY OVERCHARGED THE HOTEL TAFT BY THE RE-USE OF POSTAGE-DUE STAMPS. THE SUCCESS OF THE SCHEME WAS MADE POSSIBLE WHEN THE EMPLOYEES OF THE HOTEL TAFT PAID THE AMOUNT REQUESTED BY THE POSTAL EMPLOYEES WITHOUT CHECKING AGAINST THE POSTAGE-DUE BILL, FORM 3582-A. THE POSTAL EMPLOYEES ESTIMATED THAT BY MEANS OF THIS SCHEME THEY OBTAINED ABOUT $17 PER WEEK IN EXCESS POSTAGE-DUE FUNDS, WHICH EXCESS WAS FRAUDULENTLY CONVERTED TO THEIR OWN USE. THE EMPLOYEES WHO ESTIMATED THAT THE TOTAL EXCESS FRAUDULENT OVERCHARGES AMOUNTED TO $2,992 WERE INDICTED FOR VIOLATION OF TITLE 18, U.S.C. SECTION 1711, ADMITTED THE CHARGE AND WERE SENTENCED TO PRISON. AT THE TIME OF HIS ARREST, $50 WAS TAKEN FROM ONE EMPLOYEE. OF THIS AMOUNT, HOTEL TAFT MADE CLAIM FOR $15.89 AND $34.11 WAS DEPOSITED AS MISCELLANEOUS RECEIPTS. THEREAFTER AT THE DEPARTMENT'S REQUEST THE POSTAL EMPLOYEES TURNED OVER AN ADDITIONAL $2,942 FOR THE PURPOSE OF ENABLING THE DEPARTMENT TO MAKE FULL RESTITUTION TO THE HOTEL TAFT. THE TOTAL LOSS WHICH THE HOTEL TAFT HAS BEEN ABLE TO PROVE, HOWEVER, IS ONLY $15.89, AND THE HOTEL HAS FILED A FORMAL CLAIM FOR ONLY THAT AMOUNT.

THE SUM OF $800 WAS OBTAINED FROM A POSTAL CLERK IN THE ATLANTA, GEORGIA, POST OFFICE. THE POST OFFICE DEPARTMENT REDEEMS FROM THE PUBLIC SOILED AND UNUSED POSTAL CARDS AND EMBOSSED STAMPED ENVELOPES. STAMPED ENVELOPES ARE REDEEMABLE FOR THE FACE VALUE OF THE STAMPS. POSTAL CARDS ARE REDEEMABLE AT 75 PERCENT OF THEIR FACE VALUE. IT APPEARS THAT WHENEVER PATRONS TURNED IN UNUSED STAMPED ENVELOPES AND POSTAL CARDS, THE POSTAL EMPLOYEE WOULD PAY THEM LESS THAN THE AMOUNT DUE THEM. THE EMPLOYEE ADMITTED DEFRAUDING VARIOUS PATRONS IN THE SUM OF ABOUT $800, AND PAID $800 TO THE DEPARTMENT FOR THE PURPOSE OF MAKING RESTITUTION. THE EMPLOYEE WAS INDICTED, PLEADED GUILTY AND WAS PLACED ON PROBATION. THIS $800 ON DEPOSIT, THIS DEPARTMENT HAS SATISFACTORY PROOF THAT CERTAIN PATRONS WERE DEFRAUDED IN SPECIFIED AMOUNTS. THE PROVABLE EMBEZZLEMENTS AMOUNT TO $785.01 LEAVING ONLY $14.99 ON DEPOSIT IN WHICH UNCERTAINTY EXISTS. NO FORMAL CLAIM HAS BEEN FILED BY THESE PATRONS.

YOU STATE IT IS THE VIEW OF THE DEPARTMENT THAT PAYMENT SHOULD BE MADE TO THE HOTEL TAFT AND TO THE ATLANTA, GEORGIA, GROUP EVEN THOUGH NO FORMAL CLAIM HAS BEEN FILED; ALSO, THAT IF PAYMENT IS CONDITIONED UPON THE FILING OF A CLAIM BY THE PATRONS, INFORMATION OF THE PERTINENT FACTS TO ENABLE SUCH ACTION PROPERLY MAY BE COMMUNICATED TO THEM. SUCH A VIEW IS PREMISED UPON THE REASONS THAT ,/1) THE MONEY WAS COLLECTED FROM THE FORMER EMPLOYEES FOR THE EXPRESS PURPOSE OF REIMBURSING THE PATRON (THUS, THE UNITED STATES WOULD SEEM TO BE IN THE POSITION OF A TRUSTEE), (2) THE UNITED STATES ITSELF SUFFERED NO LOSS ON ACCOUNT OF THE ACTIVITIES OF ITS FORMER EMPLOYEES AND (3) 39 U.S.C. SECTION 300 PROVIDES THAT THE POSTMASTER GENERAL MAY, UPON EVIDENCE SATISFACTORY TO HIM THAT AN OVERCHARGE HAS BEEN MADE, AUTHORIZE A REFUND.'

THE DOUBT AS TO THE PROPRIETY OF MAKING PAYMENT TO THE POST OFFICE PATRONS IS SAID TO ARISE BECAUSE THE MONEYS IN QUESTION SEEM TO BE PUBLIC FUNDS UNDER THE HOLDING IN THE DECISION, 23 COMP. GEN. 723, AND, THEREFORE, THERE IS INVOLVED CONSIDERATION OF THE PROVISIONS OF 18 U.S.C. 283. THAT STATUTE PROHIBITS ANY OFFICER OR EMPLOYEE OF THE UNITED STATES FROM AIDING OR ASSISTING IN THE PROSECUTION OR SUPPORT OF ANY CLAIM AGAINST THE UNITED STATES OTHERWISE THAN IN THE PROPER DISCHARGE OF HIS OFFICIAL DUTIES. AS TO SUCH CODE PROVISION, YOU RECOGNIZE THAT IT IS CRIMINAL IN NATURE AND THAT QUESTIONS INVOLVING A DETERMINATION OF VIOLATIONS THEREOF ARE WITHIN THE JURISDICTION OF THE DEPARTMENT OF JUSTICE.

THE DECISION REPORTED AT 23 COMP. GEN. 723, REFERRED TO BY YOU, ANNOUNCED THE PRINCIPLE THAT " ALL AMOUNTS RECEIVED FOR POSTAGE BY A POSTAL EMPLOYEE IN HIS OFFICIAL CAPACITY--- REGARDLESS OF THE MANNER BY WHICH THEY ARE OBTAINED--- MUST BE REMITTED OR ACCOUNTED FOR AS POSTAL REVENUES AND, AS SUCH, CONSTITUTE "PUBLIC FUNDS.'" HENCE, THERE CAN BE NO DOUBT THAT THE MONEYS IN QUESTION--- AS BETWEEN THE GOVERNMENT AND THE POSTAL EMPLOYEES-- - ARE IN SUBSTANCE THOSE OF THE UNITED STATES AND ARE SUBJECT TO SUCH LAWS AND REGULATIONS AS MAY BE APPLICABLE TO PUBLIC FUNDS IN GENERAL. SEE POSTAL MANUAL 1954, CHAPTER XXII, ARTICLE I.

THE AUTHORITY FOR REFUNDING "POSTAGE" IS SET FORTH IN 39 U.S.C. 300, QUOTED IN YOUR LETTER, AS FOLLOWS:

WHENEVER IT SHALL BE SHOWN TO THE SATISFACTION OF THE POSTMASTER GENERAL THAT ANY POSTAGE IS PAID ON ANY MAIL MATTER FOR WHICH SERVICE IS NOT RENDERED, OR IS COLLECTED IN EXCESS OF THE LAWFUL RATE, HE MAY, IN HIS DISCRETION, AUTHORIZE THE POSTMASTER AT THE OFFICE WHERE PAID TO REFUND THE PROPER AMOUNT OUT OF THE POSTAL RECEIPTS IN THE POSSESSION OF THE POSTMASTER.

BY ADMISSION OF THE POSTAL EMPLOYEES INVOLVED, THE HOTEL TAFT WAS CHARGED POSTAGE IN EXCESS OF THE LAWFUL RATE. IN THE ATLANTA, GEORGIA, CASE THE IRREGULAR REDEMPTION OF POSTAL CARDS AND GOVERNMENT STAMPED ENVELOPES REASONABLY MAY BE REGARDED AS ANALOGOUS TO THE COLLECTION OF EXCESS POSTAGE. IT IS INDICATED THAT THE EMBEZZLEMENTS BY THE FORMER POSTAL EMPLOYEES DID NOT RESULT IN A LOSS TO THE GOVERNMENT BUT TO CERTAIN POST- OFFICE PATRONS; ALSO, THAT THE EMPLOYEES REMITTED THE INVOLVED AMOUNTS TO YOUR DEPARTMENT FOR THE PURPOSE OF EFFECTING REIMBURSEMENT TO THE PATRONS DEFRAUDED.

ACCORDINGLY, AND WITHOUT DECIDING WHETHER A TRUST, EXPRESS OR IMPLIED, WAS IMPOSED UPON THE FUNDS INVOLVED, IT IS THE VIEW HERE, AS SUGGESTED IN YOUR LETTER, THAT IT WOULD BE INEQUITABLE FOR THE UNITED STATES TO RETAIN SUCH FUNDS, AND THAT THE PROPER EXERCISE OF THE DISCRETIONARY AUTHORITY VESTED IN THE POSTMASTER GENERAL WOULD SEEM TO REQUIRE DISBURSEMENT OF THE FUNDS TO THE INDIVIDUAL PATRONS WHO HAVE SUSTAINED THE LOSS. SEE UNITED FRUIT CO. V. UNITED STATES, 33 F.2D 664; UNITED STATES V. NATIONAL SURETY CORPORATION, 23 F.1SUPP. 411.

WHILE THE QUOTED STATUTE AND THE POSTAL REGULATIONS PROMULGATED IN PURSUANCE THEREOF ( CHAPTER XXII, ARTICLE 74) APPEAR TO REQUIRE THAT A CLAIM BE MADE FOR REFUND OF POSTAGE COLLECTED IN EXCESS OF THE LAWFUL RATE (11 COMP. DEC. 672), NO PROVISION THEREIN EXPRESSLY PRECLUDES THE POSTMASTER GENERAL FROM NOTIFYING A PATRON OF AN ERRONEOUS PAYMENT OF POSTAGE AND THE FURNISHING OF ADVICE TO FILE A CLAIM THEREFOR. HAVING REGARD FOR THE CIRCUMSTANCES ATTENDING THE TRANSACTIONS UNDER CONSIDERATION AND THE FACT THAT THE PATRONS HAVE NO MEANS OF BEING AWARE THEREOF, YOU ARE ADVISED THAT, SO FAR AS THE GENERAL ACCOUNTING OFFICE IS CONCERNED, NO OBJECTION WILL BE MADE TO THE NOTIFICATION OF THE PATRONS OF THEIR ENTITLEMENT TO THE PAYMENT OF A SPECIFIED SUM UPON THE FILING OF A CLAIM THEREFOR, SINCE SUCH ACTION, UNDER THE TERMS OF 39 U.S.C. 300, WOULD BE IN DISCHARGE OF PROPER OFFICIAL DUTIES AND NOT IN APPARENT VIOLATION OF THE CITED CRIMINAL STATUTE.