KWVA Response to Attached Insurance Co. letter of April 30, 1998:

[KWE Note: Revised wording of text in partial settlement document sent from KWVA to insurance company.]

Korean War Veterans Association, Inc.
Office of the President
Nicholas J. Pappas

MARKED: CONFIDENTIAL

May 20, 1998

Mr. Greg A. Ray, Esquire
Chubb Group of Insurance Companies
Fifth Avenue Place
120 Fifth Avenue - 21st Floor
Pittsburgh, PA 15222-3008

RE: KWVA Employee Theft Claim (Policy #8145-38-48)
REF: a. Chub Letter of 4/30/98 w/Partial Release & Assignment
REF: b. C.B. Anderson & Associates (C.P.A.) Letter of 1/22/98 to Chubb
REF: c. C.B. Anderson & Associates (C.P.A.) Letter of 4/21/98 to Chubb
REF: d. KWVA Letter of 10/28/97 to Chubb )Potential Claim Reports)
Encl: (1) Signed Partial Release and Assignment (Amended 5/19/98)

Your letter, reference (a), "acknowledges" a partial settlement ($131,879.19) of the KWVA claim, reference (d), for the "fraudulent" actions of its former National Treasurer, John Maison, in addition to your intention of closing the subject file on 15 June 1998, unless you receive further documentation.

The language in paragraph one (1) of your enclosed "Partial Release and Assignment" document has terms that are in conflict with the title of that document, as well as its cover letter, reference (a). The Terms as presented are a full and final release, not a partial release. The above action, coupled with the June 15, 1998 deadline, seems to indicate that is your intention. Closing our claim with the Federal Insurance Company will not preclude the KWVA from pursuing other legal avenues, if so required.

You must realize that additional work must be done by CPA Myrda to fully substantiate our claim, which is in concert with the ongoing investigation being conducted by the F.B.I. local office. Mr. John P. Maison is not available, nor would I expect Mr. Maison to answer any of the questions relating to the expenditures made by him, which the KWVA considers unrelated to the corporation’s operation. To respond to each and every item listed by Mr. Anderson requires information that only Mr. Maison can answer or document. Most of those expenditures were labeled, unauthorized, unrelated to the Corporation’s function, with no documentation to establish the "how, who, what, where, and why" of the expenditures and their relationships to the KWVA.

The matter of Mr. Maison’s authority was fully discussed in our claim and with Mr. Anderson. Upon receipt of Mr. Anderson’s report, reference (b), a telephone discussion (2/3/98) was held with him, whereby he acknowledged that some of his decisions were based on a misunderstanding of Mr. Maison’s position as the KWVA National Treasurer.

The second issue is Mr. Anderson’s assumption, contrary to what was stated in the "Potential Claim" report; that Mr. Maison had some responsibility to local chapters, local members, and/or local activities. This is far from the facts. Mr. Maison’s responsibility is spelled out in the KWVA Bylaws.

Mr. Maison, as KWVA National Treasurer, had the same fiscal responsibility as the President, Vice Presidents and other national officers/directors; that is only to the national organization, KWVA, Inc. They may or may not belong to a local Chapter where each resides, but they have no authority or national financial responsibilities/obligations to support local KWVA organizations, directly or indirectly. Any funds expended by a national officer/director to support/visit a local chapter, etc., are his own. Any national funds expended for travel, food, lodging, etc., to conduct KWVA business must be approved by the President and/or by the Executive Council as per KWVA policy.

The entertainment or purchase made by Mr. Maison listed in the potential claim books were for his own personal benefit and not for the KWVA. All of the above information has been provided within the documentation filed with the potential claim books forwarded to your office by reference (d).

Now to address each item listed in Mr. Anderson’s report, reference [c], concerning (1) inadequate investigation summary, (2) appears to benefit KWVA and (3) fundamentally denied, will require additional time. CPAs Mydra/Anderson also had a lengthy phone conversation (4/29/98) concerning reference [c].

As stated in the claim reports, (1) many items were not supported by invoices, and were not related on its fact to the functions or purposes of the KWVA, inc. (2) expenditures for which under IRC Section 162 and KWVA Bylaws were not authorized and were for the personal benefit of the said Treasurer or members of his family; (3) not authorized under Illinois State Statutes nor approved by the Board of Directors regarding "loans to national officers and directors."

Based on the above statements, the KWVA, Inc. requests an additional six (6) months to respond to the items denied in our claim by references [a], [b] and [c]. It must be understood that some of the items cannot be substantiated by documentation, because no documentation was in the files, but must stand on the basis that they were not related to, or authorized by the KWVA. Each of these items will be addressed, however. These items depend on the testimony of Mr. Maison to substantiate their relationship to the KWVA based on documentation.

However, the KWVA is entitled to that portion of the claim that has been substantiated and recognized by Chubb without prejudice to the remaining items filed or to be filed for the years of 1994 through 1997 as stated in reference [d].

Enclosure (1) is forwarded for your action. Please mail the accorded partial payment to my address.

Very respectfully,
Nicholas J. Pappas
President, KWVA

cc: Executive Council; Judge Advocate Magill, Esq.; Stan Myrda, CPA; C. Anderson, CPA; Huntleigh/McGehee; F.B.I.; Tom Maines