What does the message bad return address mean?

When the Klondike Gold Rush had begun in 1897, Soapy Smith moved his operations to Skagway, Alaska. He set up his third empire in much the way he had in Denver and Creede. He put the Deputy US Marshal on his payroll, and began collecting allies for a take-over. Soapy opened a fake telegraph office, in which the wires went as far as the wall, and no further. Not only did the telegraph office obtain fees for "sending" messages, but cash laden victims soon found themselves losing even more money in a poker game with new found "friends." Soapy opened a saloon, and named it Jeff Smith's Parlor. There was no gambling inside, as the saloon was used as his office, in which to run his operations from. Although Skagway already had a city hall building, Soapy's saloon became known as "the real city hall". Skagway was gaining a bad reputation as a "hell on earth," chock full of danger for the unwary.