beauty culture for 49 years. She impressed me as a person of uprightness, candor and honesty. I would consider her credibility seriously damaged if she had destroyed the attendance records. But there is nothing to show that the failure to produce the records had any element of fraud or willfulness. Indeed the evidence is that she cooperated fully with the Government's accountant in every other aspect of the audit. There is also evidence of the existence of confusion at the time, which is readily understandable. Those who worked on the records with defendant, as I saw them on the stand, impressed me as honest witnesses whose testimony was straight-forward and candid. I find that the failure to produce this one set of records was completely innocent.
Defendant's chief witness and present partner, Mrs. Anne E. Valeriani, impressed me very favorably for the honesty of her testimony and her very obvious bewilderment at the charge that the school had filed false claims with the Government. I am unwilling to find against the defendant on a claim such as this on such unsatisfactory evidence as the Government has produced. I am reinforced in this conclusion because the Government did not all in corroboration of its claim of overcharges a single one of the students whose hours of instruction are alleged to have been inflated. On the contrary, it is the defendant who called one of them, Samuel Segal, and he explained that he had received the number of hours for which the Veterans Administration had been billed. During this testimony, the inaccuracy of the Government's chief exhibit, the audit report, was made apparent (N.T. 224, 225). Further, defendant's witness, Mrs. Valeriani, satisfactorily explained the discrepancies in other instances and pointed to additional inaccuracies.
In these circumstances I find that the Government has failed to sustain its burden, and that there is no proof of overpayments made by the Veterans Administration or of any false claim by the defendant.
To the extent that what I have said constitutes Findings of Fact and Conclusions of Law, this Opinion shall be treated as containing them. In addition I affirm plaintiff's Requests for Findings of Fact Nos. 1-5 incl., 6 (excluding the portion following the words 'were not made available for audit'), 7 (excluding the words 'the only available'), and 9; and defendant's Requests for Findings of Fact Nos. 1-5 incl., 7-10 incl., 12-26 incl., 29-36 incl., and 38. I also affirm plaintiff's Request for Conclusion of Law No. 1, and defendant's Requests for Conclusions of Law Nos. 1, 2 and 3 (omitting in each the words 'in any degree'), 6-11 incl., and 14-17 inclusive. All other Requests for Findings of Fact and Conclusions of Law by either party not in harmony with those stated in this Opinion and not here expressly affirmed, are severally denied.
And Now, June 28, 1962, the action is dismissed and judgment is entered in favor of the defendant.