Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division
In the case of:
Department of Health and
Human Services
v.
Joseph R. Graves, Jr.
Defendant.
DATE: November 5, 1991
Docket No. C-413
DECISION
By a Complaint dated February 1, 1991, the Department of
Health and Human Services notified Joseph R. Graves, Jr.,
the Defendant in this proceeding, that it was seeking to
impose a civil penalty of $5000 for each of six allegedly
false, fictitious, or fraudulent claims, plus an assess-
ment of $4884 (corresponding to twice the amount
allegedly falsely claimed), for a total of $34,884. The
Department brought its action under the Program Fraud
Civil Remedies Act (PFCRA), 31 U.S.C. 3801 et seq.
(1988), as implemented by regulations contained in
45 C.F.R. Part 79 (1990).
The Complaint advised Defendant that he had the right to
request a hearing and that he could do so by filing an
answer within 30 days of receiving the Complaint.
Defendant did not file any response. Acting pursuant to
45 C.F.R. 79.10, the reviewing official referred the
Complaint to the Departmental Appeals Board and the case
was assigned to me.
By Orders dated July 25, 1991, and August 26, 1991, I
notified Defendant that, upon referral of a complaint
that had not been answered, the administrative law judge
was to assume as true the facts as alleged in the
complaint, and, if those facts establish the Defendant's
liability under 45 C.F.R. 79.3, the administrative law
judge was to issue a judgment by default in favor of the
Department. I informed Defendant that unless he could
show that extraordinary circumstances prevented him from
answering the Complaint in a timely fashion, I would be
issuing such a judgment against him.
Defendant has neither filed an answer to the Complaint
nor responded to my Orders, and the time is past for
doing so. I assume as true those facts alleged in the
Complaint, find that those facts establish Defendant's
liability, and enter judgment against Defendant.
ISSUE
The issue in this case is whether the facts as alleged in
the Complaint establish Defendant's liability under PFCRA
and 45 C.F.R. 79.3.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I assume the facts in Findings 1-13 to be true as alleged
in the Complaint.
1. The "Authority" under PFCRA bringing this complaint
is the U.S. Department of Health and Human Services.
45 C.F.R. 79.2, 79.13.
2. The Defendant is Joseph R. Graves, Jr.
3. Joseph Graves, Defendant's father, was a beneficiary
under the Social Security Administrations's Old-Age
Insurance Benefits program, 42 U.S.C. 402 et seq. Joseph
Graves died on October 16, 1982.
4. Joseph R. Graves, Jr., was born on August 10, 1933,
and has never been eligible for benefits under the Old-
Age Insurance Benefits program at any time relevant to
this action.
5. On or about December 9, 1986, Defendant presented
or caused to be presented to the Social Security
Administration two checks for Old-Age benefits in the
amount of $405.00 each, made payable to Defendant's
father, Joseph Graves.
6. The checks identified in paragraph 5 were deposited
into Defendant's checking account # 212-349-469 at
Horizon Financial, F.A., in Philadelphia, Pennsylvania.
7. On or about January 6, 1987, Defendant presented
or caused to be presented to the Social Security
Administration a check for Old-Age benefits in the amount
of $408.00, made payable to Defendant's father, Joseph
Graves. 1/
8. On or about February 6, 1987, Defendant presented
or caused to be presented to the Social Security
Administration a check for Old-Age benefits in the amount
of $408.00, made payable to Defendant's father, Joseph
Graves.
9. On or about March 5, 1987, Defendant presented
or caused to be presented to the Social Security
Administration a check for Old-Age benefits in the amount
of $408.00, made payable to Defendant's father, Joseph
Graves.
10. On or about April 6, 1987, Defendant presented or
caused to be presented to the Social Security Administra-
tion a check for Old-Age benefits in the amount of
$408.00, made payable to Defendant's father, Joseph
Graves.
11. The checks identified in paragraphs 7-10 were
deposited into Defendant's checking account # 43-2-158-4
at Continental Bank in Philadelphia, Pennsylvania.
12. Defendant presented or caused to be presented each
of the six claims described in paragraphs 5-11, and knew
or had reason to know that each of these claims was
false, fictitious, or fraudulent. 31 U.S.C. 3802(a)(1).
13. The total amount falsely claimed and received by
Defendant with respect to the six claims described in
paragraphs 5-11 is $2,442.00.
14. On the basis of the Findings 1 - 13, I find that
Defendant is liable under PFCRA and 45 C.F.R. 79.3.
15. Defendant is subject to civil penalties of $30,000,
plus an assessment of $4884, for total penalties and
assessment of $34,884.
ANALYSIS
This is a case of a complaint properly drawn and served,
but not responded to by the defendant. The regulations
in 45 C.F.R. Part 79 provide that in such a situation the
administrative law judge is to assume as true the facts
as alleged in the complaint. If those facts establish
liability, the administrative law judge is required to
impose the maximum amount of penalties and assessments
allowed under PFCRA.
The Complaint, drawn in accordance with 45 C.F.R. 79.7,
and a copy of the regulations was originally served on
Defendant by certified mail signed for by a "Joan C.
Graves." The Complaint, a June 3, 1991 letter containing
a minor amendment, another copy of the regulations, and
two notices from me regarding the impending default
judgment were personally served on Defendant on October
2, 1991. In my Superseding Order and Notice of Proposed
Default Judgment, dated August 26, 1991 (mailed to
Defendant on that date and personally served on Defendant
on October 2, 1991), I gave Defendant until October 22,
1991 to explain why he had not filed an answer to the
Complaint. I received no response.
Congress intended that a person who violates PFCRA should
be held liable and subject to penalties and an assess-
ment. The regulations properly provide a means for
imposing penalties and an assessment against a violator
who chooses not to respond to allegations of a violation.
Defendant has had ample notice and opportunity to assert
his defense and has not done so. Thus, without further
delay, I enter judgment against him.
CONCLUSION
For the reasons above stated, I conclude that Defendant
is liable under PFCRA for penalties of $30,000 and an
assessment of $4884, for total penalties and assessment
of $34,884.
_____________________________
Steven T. Kessel
Administrative Law Judge
1. The Complaint originally alleged that this check
was presented or caused to be presented on January 6,
1986. In a letter dated June 3, 1991, the reviewing
official corrected the date to January 6, 1987. This
letter was also personally served on Defendant on October
2, 1991, at the same time as he was personally served
with the Complaint, my Orders of July 25 and August 26,
1991, and a copy of the implementing regulations.