B-4028, JULY 20, 1939, 19 COMP. GEN. 77

B-4028: Jul 20, 1939

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VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - LOANS - FORGERIES - VETERAN'S LIABILITY WHERE THE CIRCUMSTANCES SURROUNDING THE LOSS OCCASIONED THE GOVERNMENT IN CONNECTION WITH THE ERRONEOUS MAILING AND DELIVERY OF A CHECK ISSUED UNDER AN ADJUSTED SERVICE CERTIFICATE ARE SUCH THAT THE COMPARATIVELY SHORT DELAY ON THE PART OF THE VETERAN IN NOTIFYING THE GOVERNMENT AS TO HIS CHANGE OF ADDRESS IN CONNECTION WITH THE ISSUANCE OF THE CERTIFICATE WAS IN NO LEGAL SENSE A CAUSE OF THE PAYMENT OF THE CHECK TO THE IMPOSTOR SOME MONTHS LATER BUT SIMPLY ONE OF A SERIES OF ANTECEDENT EVENTS WITHOUT WHICH THE LOSS MAY NOT HAVE HAPPENED. THE VETERAN WAS IN NOWISE INVOLVED IN THE ISSUANCE OR NEGOTIATION OF THE CHECK AND DID NOT PARTICIPATE IN THE PROCEEDS.

B-4028, JULY 20, 1939, 19 COMP. GEN. 77

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - LOANS - FORGERIES - VETERAN'S LIABILITY WHERE THE CIRCUMSTANCES SURROUNDING THE LOSS OCCASIONED THE GOVERNMENT IN CONNECTION WITH THE ERRONEOUS MAILING AND DELIVERY OF A CHECK ISSUED UNDER AN ADJUSTED SERVICE CERTIFICATE ARE SUCH THAT THE COMPARATIVELY SHORT DELAY ON THE PART OF THE VETERAN IN NOTIFYING THE GOVERNMENT AS TO HIS CHANGE OF ADDRESS IN CONNECTION WITH THE ISSUANCE OF THE CERTIFICATE WAS IN NO LEGAL SENSE A CAUSE OF THE PAYMENT OF THE CHECK TO THE IMPOSTOR SOME MONTHS LATER BUT SIMPLY ONE OF A SERIES OF ANTECEDENT EVENTS WITHOUT WHICH THE LOSS MAY NOT HAVE HAPPENED, AND THE VETERAN WAS IN NOWISE INVOLVED IN THE ISSUANCE OR NEGOTIATION OF THE CHECK AND DID NOT PARTICIPATE IN THE PROCEEDS, THE AMOUNT OF THE CHECK MAY BE REMOVED AS A CHARGE AGAINST THE VETERAN'S ADJUSTED COMPENSATION ACCOUNT AND PAYMENT MADE OF THE BALANCE DUE.

COMPTROLLER GENERAL BROWN TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, JULY 20, 1939:

CONSIDERATION HAS BEEN GIVEN YOUR LETTER DATED APRIL 24, 1939, AS FOLLOWS:

PURSUANT TO CERTIFICATION OF ADJUSTED SERVICE CREDIT BY THE WAR DEPARTMENT, ADJUSTED SERVICE CERTIFICATE NO. 3735884, EFFECTIVE MARCH 1, 1931, IN THE AMOUNT OF $548.00, WAS ISSUED IN FAVOR OF WILLIAM HENRY OLIVER, A-4447655, AND MAILED TO HIM AT 290 UNION AVENUE, NEW ROCHELLE, NEW YORK, THE ADDRESS SHOWN ON HIS APPLICATION FOR ADJUSTED COMPENSATION ( WWC FORM NO. 1). ON NOVEMBER 8, 1931, THE VETERAN DIRECTED A COMMUNICATION TO THE ADJUTANT GENERAL'S OFFICE, WAR DEPARTMENT, WHICH WAS REFERRED TO THE VETERANS' ADMINISTRATION FOR REPLY, STATING THAT HE HAD MOVED TO 128 WEST 126TH STREET, NEW YORK, NEW YORK. IN REPLY TO A LETTER DATED DECEMBER 7, 1931, FROM THIS ADMINISTRATION, INFORMING HIM THAT HIS CERTIFICATE HAD BEEN MAILED ON OCTOBER 10, 1931, TO THE NEW ROCHELLE ADDRESS, THE VETERAN ADVISED THAT HE HAD NEVER RECEIVED THE CERTIFICATE. THE POSTMASTER AT NEW ROCHELLE, NEW YORK, WAS UNABLE TO STATE WHAT DISPOSITION HAD BEEN MADE OF THE CERTIFICATE BUT ADVISED THAT WM. F. OLIVER OF 290 UNION AVENUE HAD FILED A FORWARDING ADDRESS ON DECEMBER 10, 1931, TO 128 WEST 126TH STREET, NEW YORK, NEW YORK. THE POSTMASTER AT NEW YORK, NEW YORK, REPORTED ON JANUARY 25, 1932, THAT THERE WAS NO RECORD OF THE CERTIFICATE BEING HELD IN THE NEW YORK POST OFFICE.

IN COMPLIANCE WITH THE REQUEST OF THIS ADMINISTRATION THE VETERAN EXECUTED AN AFFIDAVIT ( FORM 6920) ON JANUARY 25, 1932, ALLEGING THE NONRECEIPT OF THE CERTIFICATE. ACCORDINGLY, DUPLICATE CERTIFICATE NO. 3829216 WAS ISSUED ON FEBRUARY 15, 1932, WITHOUT THE REQUIREMENT OF A BOND OF INDEMNITY. THE DUPLICATE CERTIFICATE WAS PLEDGED AUGUST 16, 1932, WITH THE NEW YROK, NEW YORK FIELD STATION OF THE VETERANS' ADMINISTRATION AS SECURITY FOR A LOAN IN THE AMOUNT OF $274.00, THE COVERING CHECK NO. 466413 BEING MAILED TO THE VETERAN AT 26 WEST 127TH STREET, NEW YORK, NEW YORK, THE ADDRESS SHOWN ON THE NOTE FILED IN APPLICATION FOR THE LOAN.

ON AUGUST 20, 1932, THE ORIGINAL CERTIFICATE WAS HYPOTHECATED WITH THE NEW YORK, NEW YORK, FIELD STATION FOR A LOAN IN THE AMOUNT OF $274.00. CHECK NO. 467077 ISSUED TO COVER THE LOAN WAS MAILED TO THE ADDRESS GIVEN ON THE NOTE, NAMELY, 290 UNION AVENUE, NEW ROCHELLE, NEW YORK.

WHEN IT WAS DISCOVERED IN APRIL 1936 THAT BOTH THE ORIGINAL AND DUPLICATE CERTIFICATES HAD BEEN HYPOTHECATED, NO ACTION WAS TAKEN BY THE NEW YORK FIELD STATION ON THE VETERANS'S APPLICATION ( FORM 1701) WHICH HE EXECUTED ON MAY 13, 1936, FOR SETTLEMENT OF THE DUPLICATE CERTIFICATE. THE DIVISION OF DISBURSEMENT, TREASURY DEPARTMENT, WAS REQUESTED ON AUGUST 22, 1936, TO GIVE CONSIDERATION TO THE MATTER OF RECLAMATION ON THE CHECK COVERING THE FRAUDULENT LOAN, AND ON AUGUST 26, 1936, THE CASE WAS REFERRED TO THE SECRET SERVICE DIVISION OF THE TREASURY DEPARTMENT FOR INVESTIGATION AND REPORT.

A SECRET SERVICE REPORT DATED OCTOBER 1, 1936, DISCLOSED THAT THE CHECK COVERING THE LOAN GRANTED ON THE ORIGINAL CERTIFICATE WAS DEPOSITED IN THE NATIONAL CITY BANK, NEW ROCHELLE, NEW YORK, ENDORSED IN THE NAMES OF WILLIAM HENRY OLIVER AND JOHN J. JOHNSON. IT WAS FOUND THAT ON AUGUST 22, 1932, A SAVINGS ACCOUNT HAD BEEN OPENED IN THE NAME OF WILLIAM HENRY OLIVER, HIS IDENTIFYING WITNESS BEING JOHN J. JOHNSON, AND THAT ALL THE MONEY IN THE ACCOUNT HAD BEEN WITHDRAWN BY AUGUST 25, 1932. THE REPORT FURTHER DISCLOSED THAT THE NATIONAL CITY BANK WAS TAKEN OVER BY THE FIRST NATIONAL BANK OF NEW ROCHELLE AFTER THE FORMER BANK CLOSED IN MARCH 1933. WHEN INTERVIEWED BY THE SECRET SERVICE AGENT, THE VETERAN STATED THAT HE HAD NEVER RECEIVED CHECK NO. 467077 NOR HAD ANY IDEA WHO HAD NEGOTIATED IT. THE SECRET SERVICE AGENT REPORTED THAT HE OBTAINED SPECIMENS OF THE VETERAN'S HANDWRITING BUT THAT HIS HANDWRITING DID NOT RESEMBLE THE ENDORSEMENT ON THE CHECK.

A SECRET SERVICE REPORT DATED SEPTEMBER 14, 1937, RECEIVED IN HE VETERANS' ADMINISTRATION MAY 20, 1938, STATED THAT ON SEPTEMBER 11, 1937, ONE JOHN J. JOHNSON AND ONE RESSLEY WHITLEY WERE TAKEN INTO CUSTODY FOR THE FRAUDULENT NEGOTIATION OF CHECK NO. 467077. THE REPORT IS IN PERTINENT PART AS FOLLOWS:

"PROCEEDED TO NEW ROCHELLE, N.Y., WITH AGENT LIEBERMAN, AND QUESTIONED WHITLEY AND JOHNSON, BOTH OF WHOM ADMITTED NEGOTIATING THE SUBJECT CHECK BY JOHNSON WHO STATED THAT HE BELIEVED THAT WHITLEY WAS THE REAL PAYEE. WHITLEY DENIED THIS STATING THAT JOHNSON HAD KNOWN HIM FOR YEARS AND ADVISED HIM AS TO THE METHOD OF NEGOTIATING THE CHECK; HAD TAKEN HIM TO THE VETERANS ADMINISTRATION, WHITE PLAINS, N.Y., TO PUT THE CHECK THROUGH AND ALSO STATED THAT JOHNSON SPLIT THE PROCEEDS WITH HIM.

"BOTH OF THESE MEN WERE TAKEN TO THE OFFICE OF ASS-T. U.S. ATTORNEY MAHONEY, SOUTHERN DISTRICT OF NEW YORK, NEW YORK CITY, WHO STATED THAT NO PROSECUTION WOULD ENSUE AS THE STATUTE OF LIMITATIONS HAD ELAPSED; ALSO THE STATE STATUTE OF LIMITATIONS. BOTH OF THE MEN PROMISED TO MAKE RESTITUTION TO THE BANKS BUT SINCE THEY ARE ON RELIEF IT IS DOUBTFUL THAT ANY PAYMENT WILL BE FORTHCOMING.'

THE FINGERPRINTS OF THE IMPOSTOR, JOHN J. JOHNSON, TAKEN AT THE TIME HE WAS ARRESTED FOR THE FRAUDULENT NEGOTIATION OF CHECK NO. 467077, WERE FOUND TO BE IDENTICAL WITH THE FINGERPRINTS OF THE WORLD WAR VETERAN, JOHN J. JOHNSON, A-4336383, WHO WAS ISSUED AN ADJUSTED SERVICE CERTIFICATE IN THE AMOUNT OF $1,452.00. JOHN J. JOHNSON, A 4336383, HOWEVER, HAS RECEIVED THE FULL FACE VALUE OF HIS OWN CERTIFICATE BY OBTAINING A LOAN AND FINAL SETTLEMENT THEREON. THE TREASURY DEPARTMENT REPORTS THAT THE ADJUSTED SERVICE BONDS AND CHECK COMPRISING THE SETTLEMENT HAVE BEEN PAID. THE FINGERPRINTS OF THE IMPOSTER, RESSLEY WHITLEY ( F.B.I. 973671), HAVE NOT BEEN IDENTIFIED AS THOSE OF ANY VETERAN WHO SERVED IN THE ARMY, NAVY, OR COAST GUARD.

AS THE SECRET SERVICE REPORTS DID NOT DISCLOSE HOW THE IMPOSTORS CAME INTO POSSESSION OF THE ORIGINAL CERTIFICATE AND CONSEQUENTLY WHETHER THE VETERAN WAS IN ANY WAY RESPONSIBLE FOR THE FRAUDULENT HYPOTHECATION, THE CASE WAS RESUBMITTED TO THE SECRET SERVICE DIVISION TO CLARIFY THESE POINTS. A SUPPLEMENTAL REPORT DATED FEBRUARY 23, 1939, HAS BEEN RECEIVED WHICH IS IN PERTINENT PART AS FOLLOWS:

"IN ACCORDANCE WITH THE REQUEST OF THE VETERANS' ADMINISTRATION, THE PERSONS INVOLVED WERE AGAIN INTERVIEWED, AND RESSLEY WHITLEY STATED THAT AT THE TIME OF THE MAILING OF THE ORIGINAL ADJUSTED SERVICE CERTIFICATE NO. 3735884, ON OCTOBER 10TH, 1931, HE RESIDED AT 290 UNION AVENUE, NEW ROCHELLE, N.Y., THAT THERE WERE NO LETTER BOXES FOR THE DELIVERY OF MAIL IN THE HALLWAY, AND THAT THE LETTER CARRIER WOULD LEAVE ALL MAIL ON A RACK; THAT THE PAYEE, WILLIAM HENRY OLIVER, HAD MOVED FROM THAT ADDRESS A FEW WEEKS BEFORE, AND THAT WHEN THE ORIGINAL ADJUSTED SERVICE CERTIFICATE ARRIVED, HE, WHITLEY, TOOK SAME AND HELD IT; THAT A FEW MONTHS LATER, NOT HAVING SEEN OLIVER, HE MENTIONED TO JOHN J. JOHNSON OF 109 WINTHROP AVENUE, NEW ROCHELLE, N.Y., THAT HE WAS HOLDING OLIVER'S CERTIFICATE, AND THAT JOHNSON THEREUPON STATED THAT HE WOULD SHOW WHITLEY HOW TO CASH SAME, PROVIDED HE, WHITLEY, WOULD DIVIDE THE PROCEEDS WITH HIM; THAT HE AND JOHNSON LATER CALLED AT THE WHITE PLAINS OFFICE OF THE VETERANS' ADMINISTRATION, WHERE JOHNSON INTRODUCED WHITLEY AS THE TRUE HOLDER OF THE CERTIFICATE AND WHITLEY SIGNED THE NAME WILLIAM HENRY OLIVER TO SAME; THAT IN AUGUST 1932 WHITLEY IN THE SAME MANNER OBTAINED FROM THE MAIL THE ORIGINAL CHECK IN THE AMOUNT OF $274 BEARING NO. 467077, WHICH HAD BEEN DELIVERED TO 290 UNION AVENUE, NEW ROCHELLE, N.Y. WHITLEY STATED THAT HE RECEIVED THE CHECK FROM THE MAIL CARRIER, TO WHOM HE HAD REPRESENTED THAT HE WAS THE ADDRESSEE; THAT HE CASHED SAME WITH THE COOPERATION OF JOHNSON, TO WHOM HE GAVE HALF OF THE PROCEEDS; THAT WILLIAM HENRY OLIVER DID NOT KNOW OF THIS THEFT, HAD NO PART IN THE NEGOTIATIONS AND RECEIVED NONE OF THE PROCEEDS AND HAS NOT BEEN SEEN BY WHITLEY OR JOHNSON SINCE HE MOVED FROM 290 UNION AVENUE, NEW ROCHELLE, N.Y., THE LATTER PART OF SEPTEMBER, 1931.'

THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE ( REFERENCE SYMBOL MISC: F-0613914-MEW) ADVISED THE VETERANS ADMINISTRATION ON AUGUST 7, 1937, THAT THE TREASURER OF THE UNITED STATES HAD BEEN AUTHORIZED TO MAKE RECLAMATION OF THE AMOUNT OF CHECK NO. 467077. IN A COMMUNICATION DATED OCTOBER 6, 1938, THE TREASURY DEPARTMENT ADVISED THAT THE AMOUNT OF $123.30 HAD BEEN RECLAIMED ON THE CHECK IN QUESTION FROM THE NATIONAL CITY BANK, NEW ROCHELLE, NEW YORK, LEAVING A BALANCE OF $150.70 UNRECLAIMED. INFORMATION WAS RECEIVED FROM THE TREASURY DEPARTMENT BY TELEPHONE ON APRIL 13, 1939, THAT NO FURTHER AMOUNT HAD BEEN RECLAIMED.

IT IS REQUESTED THAT THIS ADMINISTRATION BE ADVISED WHETHER THE CHARGE INCURRED THROUGH THE FRAUDULENT NEGOTIATION OF THE ORIGINAL CERTIFICATE MAY BE REMOVED FROM THE ADJUSTED COMPENSATION ACCOUNT OF WILLIAM HENRY OLIVER, A-4477655, AND SETTLEMENT MADE IN HIS FAVOR UNDER THE ADJUSTED COMPENSATION PAYMENT ACT, 1936, PRIOR TO THE COMPLETION OF THE RECLAMATION PROCEEDINGS.

IT APPEARS FROM THE RECORD THAT THE ORIGINAL ADJUSTED SERVICE CERTIFICATE APPLIED FOR BY THE VETERAN ON MARCH 10, 1931, AND ISSUED ON OCTOBER 10, 1931, NEVER CAME INTO HIS POSSESSION AND THAT HE WAS IN NOWISE INVOLVED IN THE ISSUANCE OR NEGOTIATION OF THE CHECK COVERING THE ILLEGAL LOAN THEREON IN THE AMOUNT OF $274 WHICH WAS OBTAINED BY THE IMPOSTOR. ALSO, IT APPEARS THAT THE VETERAN DID NOT PARTICIPATE IN THE PROCEEDS OF SAID CHECK. NOTWITHSTANDING THE FACT THAT THE VETERAN BY LETTER DATED NOVEMBER 8, 1931, ADVISED YOUR ADMINISTRATION OF THE NONRECEIPT OF THE CERTIFICATE AND OF HIS CHANGE OF ADDRESS FROM 290 UNION AVENUE, NEW ROCHELLE, NEW YORK, AND FILED A FORWARDING ADDRESS WITH THE POSTMASTER AT THAT PLACE ON DECEMBER 10, 1931, THE CHECK WHICH WAS ISSUED TO THE IMPOSTOR ON AUGUST 20, 1932, WAS MAILED TO AND DELIVERED AT THE SAID NEW ROCHELLE ADDRESS.

IN VIEW OF THE FACTS OF THIS CASE IT WOULD SEEM THAT THE COMPARATIVELY SHORT DELAY ON THE PART OF THE VETERAN IN 1931 IN NOTIFYING THE GOVERNMENT AS TO HIS CHANGE OF ADDRESS WAS IN NO LEGAL SENSE A CAUSE OF THE PAYMENT THE CHECK TO THE IMPOSTOR IN AUGUST 1932. IT WAS SIMPLY ONE OF A SERIES OF ANTECEDENT EVENTS WITHOUT WHICH THE LOSS MAY NOT HAVE HAPPENED. BETWEEN THE VETERAN AND THE GOVERNMENT THE LOSS WAS DUE NOT TO ANY FAULT ON THE VETERAN'S PART BUT TO THE ERRONEOUS MAILING AND DELIVERY OF THE CHECK CONTRARY TO THE INFORMATION AND INSTRUCTIONS FURNISHED BY THE VETERAN TO THE GOVERNMENT SOME 8 MONTHS PREVIOUSLY.

ACCORDINGLY, YOU ARE ADVISED THAT THE AMOUNT OF THE CHECK PAID TO THE IMPOSTOR MAY BE REMOVED AS A CHARGE AGAINST THE VETERANS' ADJUSTED COMPENSATION ACCOUNT AND SETTLEMENT MAY BE MADE WITH THE VETERAN IN ACCORDANCE WITH THE PROVISIONS OF THE ADJUSTED COMPENSATION ACT OF 1936, FOR THE BALANCE DUE ON HIS DUPLICATE CERTIFICATE, IN THE ABSENCE OF ANY OTHER OBJECTION.