B-223375, SEP 9, 1986, OFFICE OF GENERAL COUNSEL

B-223375, SEP 9, 1986, OFFICE OF GENERAL COUNSEL

DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIALS UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM THE NEGOTIATION OF TWO CHECKS DRAWN ON CLOSED BANK ACCOUNTS AS PART OF A FRAUDULENT CHECK CASHING SCHEME. PROPER PROCEDURES WERE FOLLOWED IN THE PAYMENT OF THE CHECKS AND THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND HIS SUBORDINATES.

MR. CLYDE E. JEFFCOAT:

PRINCIPLE DEPUTY COMMANDER

U.S. ARMY FINANCE AND ACCOUNTING CENTER

DEPARTMENT OF THE ARMY

INDIANAPOLIS, INDIANA 46249

THIS RESPONDS TO YOUR REQUEST FOR RELIEF UNDER 31 U.S.C. SEC. 3527(C) FOR LIEUTENANT COLONEL (LTC) R. K. RANKIN, FINANCE CORPS, DSSN 6451, 501ST AREA FINANCE SUPPORT CENTER, NEW YORK, SERGEANT (SGT) DANIEL HEINZELMAN AND SPECIALIST FOUR (SP4) CHANNING MALLORY, JR., IN THE AMOUNT OF $1,400. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

ON JUNE 10, 1985, AN UNIDENTIFIED MAN POSING AS SGT ROBERT E. LOTT OBTAINED AN ACTIVE DUTY IDENTIFICATION CARD (ID) BEARING THE NUMBERS 1492614 AND THE UNIDENTIFIED MAN'S PICTURE IN FORT GORDON, GEORGIA. AROUND JUNE 11, 1985, THE MAN POSING AS SGT LOTT OPENED A SERIES OF CHECKING ACCOUNTS IN BOTH MARYLAND AND SOUTH CAROLINA. A SHORT TIME LATER HE BOARDED A FLIGHT TO RAMSTEIN AIR BASE, RAMSTEIN, GERMANY. UPON ARRIVAL, HE BEGAN CASHING CHECKS DRAWN ON THE MARYLAND AND SOUTH CAROLINA BANKS AT VARIOUS UNITED STATES MILITARY INSTALLATIONS THROUGHOUT GERMANY. AT PRESENT WE ARE CONCERNED ONLY WITH THE TWO $700 DISHONORED CHECKS DRAWN ON THE SOUTH CAROLINA NATIONAL BANK, COLUMBIA, SOUTH CAROLINA. THE TWO CHECKS IN QUESTION WERE CASHED ON JUNE 18 AND JUNE 19 AT THE 501ST AREA FINANCE CENTER, WHERE LTC (THEN MAJOR) RANKIN WAS FINANCE OFFICER AND SGT HEINZELMAN AND SP4 MALLORY WERE CASHIERS. IN BOTH INSTANCES THE STANDARD OPERATING PROCEDURES WERE ADEQUATE AND THE PROPER CHECK CASHING PROCEDURES WERE FOLLOWED.

CHECK CASHING PROCEDURES REQUIRE THAT ALL PERSONAL CHECKS BE MADE PAYABLE TO THE FINANCE OFFICER, U.S. ARMY, 501ST AREA FINANCE CENTER. ADDITIONALLY, CASHIERS MUST CHECK THE ID CARDS OF THE INDIVIDUAL WRITING SUCH CHECKS TO VERIFY THAT THEY ARE ON ACTIVE MILITARY DUTY, INDIVIDUALS ARE NOT ON A BAD CHECK LIST. ALTHOUGH THE OFFICERS FOLLOWED THESE PROCEDURES, ON JULY 11 THE TWO CHECKS WERE DISHONORED BECAUSE THE BANK ACCOUNTS ON WHICH THE CHECKS WERE DRAWN HAD BEEN CLOSED. ON JULY 25, LTC RANKIN'S OFFICE RECEIVED A MESSAGE ALERTING THEM THAT THE MAN POSING AS ROBERT E. LOTT WAS AN IMPOSTER.

UNDER 31 U.S.C. SEC. 3527(C) A DISBURSING OFFICER MAY BE RELIEVED OF LIABILITY WHEN THE COMPTROLLER GENERAL DECIDES AN IMPROPER PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE. IT IS THE ARMY'S POSITION THAT NONE OF THE ABOVE NAMED OFFICIALS ACTED IN BAD FAITH OR WITHOUT REASONABLE CARE AND THEREFORE SHOULD BE RELIEVED OF LIABILITY.

WE AGREE WITH THIS EVALUATION AND GRANT RELIEF. IN BOTH INSTANCES THE PROPER CHECK CASHING PROCEDURES WERE FOLLOWED. THE IMPOSTER'S ID AND THE BAD CHECK LIST WERE EXAMINED AND THERE WERE NO IRREGULARITIES TO ALERT THE CASHIERS OF THE FRAUD. THE IMPOSTER HELD A VALID ID CARD WITH HIS PICTURE AND SIGNATURE. HIS NAME WAS NOT ON THE "BAD CHECK" LIST AND THE MESSAGE ALERTING THEM OF THE IMPOSTER DID NOT ARRIVE UNTIL JULY 25, APPROXIMATELY ONE MONTH AFTER THE CHECKS HAD ALREADY BEEN CASHED.

THE IMPROPER PAYMENTS IN THIS CASE WERE THE RESULT OF CRIMINAL ACTIVITY IN WHICH A TOTAL OF 15 CHECKS IN THE SUM OF $7,129 HAVE BEEN CASHED THROUGHOUT GERMANY. THIS IS BEYOND THE CONTROL OF LTC RANKIN, SGT HEINZELMAN OR SP4 MALLORY. THEY DID NOT ACT IN BAD FAITH OR WITHOUT REASONABLE CARE. FOR THESE REASONS, RELIEF IS GRANTED.