B-158905, MAY 26, 1966

B-158905: May 26, 1966

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THE FACTS PERTAINING THERETO ARE SET OUT IN DETAIL IN THE COPY OF THE "MEMORANDUM OF OPINION BY BOARD OF REVIEW. IT IS SUFFICIENT TO NOTE HERE THAT THE MONEY ORDERS WERE PURCHASED IN THE COURSE OF ILLEGAL CURRENCY TRANSACTIONS AND THAT THE CLAIMS OF FORMER S/SGT. WHICH WERE TAKEN FROM HIS POSSESSION. HAVE BEEN DISALLOWED. WHICH WERE SEIZED FROM ONE KO I. THE 62 ORDERS WERE FORWARDED TO THE DEPARTMENT OF JUSTICE FOR COLLECTION BY LETTER DATED SEPTEMBER 9. WERE DISHONORED BY THE CHASE MANHATTAN BANK. ATTEMPTS TO EFFECT COLLECTION FROM THE BANK HAVE CONTINUED. SUIT WAS FILED ON MARCH 11. IN THE EVENT A COURT OF COMPETENT JURISDICTION DETERMINES THAT TITLE OF THE INSTRUMENTS IS NOT IN THE UNITED STATES.

B-158905, MAY 26, 1966

TO THE SECRETARY OF THE AIR FORCE:

BY LETTERS OF MARCH 15 AND MAY 12, 1966, REFERENCE AFAAC-C, WITH ATTACHMENTS, MR. JOHN F. KILDUFF, CHIEF, CONTRACT FINANCING OFFICE, COMPTROLLER, USAF, REQUESTED OUR COMMENTS AND CONCURRENCE IN A PROPOSAL FOR THE SETTLEMENT OF THE GOVERNMENT'S CLAIM AGAINST THE CHASE MANHATTAN BANK OF NEW YORK FOR THE PROCEEDS OF 62 CHASE MANHATTAN BANK MONEY ORDERS TOTALLING $15,250.

THE LETTERS AND ATTACHMENTS INDICATE THAT THE MONEY ORDERS IN QUESTION CAME INTO AIR FORCE POSSESSION AS A RESULT OF A SEARCH AND SEIZURE BYOSI AGENTS IN NOVEMBER 1960. THE FACTS PERTAINING THERETO ARE SET OUT IN DETAIL IN THE COPY OF THE "MEMORANDUM OF OPINION BY BOARD OF REVIEW, AMC 17696, JANUARY 4, 1962," FORWARDED WITH THE LETTER OF MARCH 15, 1966, AND NEED NOT BE REPEATED HERE. IT IS SUFFICIENT TO NOTE HERE THAT THE MONEY ORDERS WERE PURCHASED IN THE COURSE OF ILLEGAL CURRENCY TRANSACTIONS AND THAT THE CLAIMS OF FORMER S/SGT. JOSEPH J. CALA FOR 42 OF THESE MONEY ORDERS, AMOUNTING TO $10,500, WHICH WERE TAKEN FROM HIS POSSESSION, HAVE BEEN DISALLOWED, THE MOST RECENT DISALLOWANCE BEING BY CERTIFICATE OF SETTLEMENT OF OUR CLAIMS DIVISION DATED DECEMBER 30, 1964, CLAIM NO. Z- 2225394. NO CLAIM HAS BEEN MADE FOR THE REMAINING 20 ORDERS TOTALLING $4,750, WHICH WERE SEIZED FROM ONE KO I. SEI AT THE TIME OF HIS APPREHENSION WITH CALA. THE 62 ORDERS WERE FORWARDED TO THE DEPARTMENT OF JUSTICE FOR COLLECTION BY LETTER DATED SEPTEMBER 9, 1965, ENDORSED TO THE CREDIT OF THE UNITED STATES, BUT WERE DISHONORED BY THE CHASE MANHATTAN BANK. ATTEMPTS TO EFFECT COLLECTION FROM THE BANK HAVE CONTINUED, AND SUIT WAS FILED ON MARCH 11, 1966, TO PREVENT THE RUNNING OF THE STATUTE OF LIMITATIONS (UNITED STATES V. THE CHASE MANHATTAN BANK, S.D.N.Y. 66 CIV. 556). THE BANK HAS NOW AGREED TO PAY THE MONEY ORDERS TO THE UNITED STATES WITHOUT FURTHER PROSECUTION OF THE SUIT, PROVIDED THAT EITHER THE DEPARTMENT OF JUSTICE OR THE DEPARTMENT OF THE AIR FORCE WRITES A LETTER TO THE BANK OUTLINING THE FACTS OF THE CASE AND PROMISING THAT, IN THE EVENT A COURT OF COMPETENT JURISDICTION DETERMINES THAT TITLE OF THE INSTRUMENTS IS NOT IN THE UNITED STATES, THE UNITED STATES WILL REFUND THE FACE AMOUNT OF THE INSTRUMENTS TO THE TRUE OWNER DESIGNATED BY THE COURT. THE AIR FORCE CONTEMPLATES DEPOSITING THE AMOUNT RECOVERED FROM THE BANK INTO THE GENERAL FUND OF THE TREASURY IN RECEIPT ACCOUNT ,571090--- FINES, PENALTIES AND FORFEITURES NOT OTHERWISE CLASSIFIED" AND BELIEVES THAT REFUND, IF SUBSEQUENTLY REQUIRED BY THE COURT, COULD BE CERTIFIED FOR PAYMENT FROM "21X1807--- REFUND OF MONIES ERRONEOUSLY RECEIVED AND COVERED" AS AN ERRONEOUS COLLECTION. HOWEVER, BEFORE PROCEEDING FURTHER WITH THIS PROPOSAL, IT WAS DEEMED NECESSARY TO OBTAIN THE COMMENT AND CONCURRENCE OF OUR OFFICE WITH THE CONTEMPLATED ACTION.

THERE WOULD APPEAR TO BE SOME QUESTION AS TO WHETHER A "PROMISE" CONTAINED IN A LETTER AS PROPOSED WOULD HAVE ANY LEGAL AND BINDING EFFECT UPON THE UNITED STATES. HOWEVER, THE ACTION WHICH IT IS PROPOSED TO "PROMISE" TO TAKE SEEMS TO BE NO MORE THAN WHAT THE UNITED STATES SHOULD DO IN ANY EVENT, PROMISE OR NO PROMISE, THAT IS, PAY THE AMOUNT OF THE MONEY ORDERS TO THE TRUE OWNER AS DESIGNATED BY A COURT OF COMPETENT JURISDICTION. ALSO, WHILE WE HAVE FREQUENTLY HELD THAT THE APPROPRIATION "REFUND OF MONIES ERRONEOUSLY RECEIVED AND COVERED" WAS NOT AVAILABLE FOR REFUNDING MONEY WHICH WAS PROPERLY RECEIVED AND COVERED AT THE TIME SUCH ACTION WAS TAKEN EVEN THOUGH SUBSEQUENT EVENTS MADE REFUND NECESSARY, IT WOULD APPEAR THAT A DETERMINATION BY A COURT OF COMPETENT JURISDICTION THAT SOMEONE OTHER THAN THE UNITED STATES WAS THE TRUE OWNER OF ALL OR PART OF THE MONEY ORDERS WOULD MEAN THAT THE UNITED STATES NEVER HAD TITLE THERETO AND, HENCE, THAT THE ACTION OF RECEIVING AND COVERING THE PROCEEDS THEREOF WAS ERRONEOUS AT THE TIME SUCH ACTION WAS TAKEN. THUS, THE APPROPRIATION WOULD BE AVAILABLE FOR REFUND.

HENCE, IF THE BANK IS WILLING TO PAY THE UNITED STATES THE FACE VALUE OF THE MONEY ORDERS ON THE STRENGTH OF SUCH A LETTER, AND IN VIEW OF THE OBVIOUS DESIRABILITY OF SETTLING THE MATTER WITHOUT SUIT IF POSSIBLE, WE WOULD HAVE NO OBJECTION TO THE PROPOSAL AS STATED IN PARAGRAPH 9 OF THE LETTER OF MARCH 15, 1966. HOWEVER, WE BELIEVE THAT THE LETTER SHOULD BE WRITTEN BY THE DEPARTMENT OF JUSTICE RATHER THAN BY THE DEPARTMENT OF THE AIR FORCE, SINCE THE FORMER IS THE OFFICIAL LEGAL AGENCY OF THE GOVERNMENT. WE ALSO BELIEVE THAT THE LETTER SHOULD INCLUDE A REQUIREMENT THAT THE BANK PROMPTLY NOTIFY THE UNITED STATES IF AND WHEN ANY SUIT FOR RECOVERY OF ALL OR PART OF THESE MONEY ORDERS IS FILED AGAINST IT, IN ORDER THAT THE UNITED STATES MAY JOIN IN THE SUIT TO PROTECT ITS INTERESTS IF IT SO DESIRES.