United States v. McNinch, Civ. A. No. 4859.

• Decision Date: 15 February 1956
• Docket Number: Civ. A. No. 4859.
• Citation: 138 F. Supp. 711
• Parties: UNITED STATES of America, Plaintiff, v. Howard A. McNINCH, d/b/a The Home Comfort Company, Rosalie McNinch and Garis P. Zeigler, Defendants.
• Court: U.S. District Court — District of South Carolina

138 F. Supp. 711

UNITED STATES of America, Plaintiff, v. Howard A. McNINCH, d/b/a The Home Comfort Company, Rosalie McNinch and Garis P. Zeigler, Defendants.

Civ. A. No. 4859.

United States District Court E. D. South Carolina, Columbia Division.

February 15, 1956.

N. Welsh Morrisette, Jr., U. S. Atty., Columbia, S. C., for plaintiff.

Nelson, Mullins & Grier, Columbia, S. C., for defendants.

TIMMERMAN, Chief Judge.

I have for consideration defendants' motions to dismiss this action. The motion of Howard A. McNinch and Rosalie McNinch and the motion of Garis P. Zeigler are both made upon the same ground, that the complaint fails to state a claim against the defendants for which relief can be granted.

The complaint alleges substantially the following facts: The defendant Howard A. McNinch operated a business known as The Home Comfort Company which had for its purpose the alteration, repair and improvement of homes. The defendant Rosalie McNinch was secretary of the business, and the defendant Garis P. Zeigler was employed as a salesman. At various times during the period from November, 1951, through January, 1953, the defendants submitted to the South Carolina National Bank, an institution approved by the Federal Housing Administration for insurance against losses sustained from the lending of money for home improvements, fraudulent FHA loan applications and credit reports pertaining to the financial condition of customers of the Home Comfort Company, and conspired thereby among themselves and their customers to defraud the United States by obtaining the approval of false and fictitious applications for loans insured by the Federal Housing Administration.

This action is brought under Sections 231 and 233 of Title 31 U.S.C.A. The pertinent part of Section 231 reads as follows:

"Any person * * * who shall make or cause to be made, or present or cause to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim, * * * shall forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act, together with the costs of suit; and such forfeiture and damages shall be sued for in the same suit."

It seems to me that the quoted part of Section 231 states three general categories under one or more of which an action must fall before it can be sustained thereunder. To come within the first category, it must appear from the complaint that the defendants made or caused to be made, or presented or caused to be presented, to a person or officer in the service of the United States a claim against the United States or some department thereof knowing such claim to be false, fictitious, or fraudulent....