Citation Nr: 0810698 Decision Date: 04/01/08 Archive Date: 04/14/08 DOCKET NO. 05-25 802 ) DATE ) ) On appeal from the Department of Veterans Affairs Medical and Regional Office Center in Wichita, Kansas THE ISSUES 1. Entitlement to restoration of accreditation to represent claimants before the Department of Veterans Affairs (VA). 2. Entitlement to stay of cancellation of accreditation to represent claimants before VA, pending completion of all administrative and judicial review. REPRESENTATION Appellant represented by: Kenneth M. Carpenter, attorney WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD J. H. Nilon, Associate Counsel INTRODUCTION This matter comes before the Board of Veterans' Appeals (Board) on appeal from a July 2003 decision by the VA Office of General Counsel (VAOGC) that cancelled the appellant's accreditation to represent claimants before VA. The appellant filed a Notice of Disagreement (NOD) in August 2003 requesting reinstatement of his accreditation, and also requesting that the cancellation of accreditation be stayed until all administrative and judicial review had been completed. VAOGC sent the appellant a letter in October 2003 stating that, because the Board does not have jurisdiction to review decisions that are not related to claims for VA benefits, and because the cancellation of accreditation is not a matter subject to VA administrative review, the appellant's August 2003 letter was not considered to be a valid NOD, and a Statement of the Case (SOC) would not be issued. The appellant thereupon submitted a Petition for Writ of Mandamus to the United States Court of Appeals for Veterans Claims (Court), requesting the Court to compel VA to issue an SOC. A decision by the Court in October 2003 denied the appellant's petition, based on a finding that the issue of a challenge to termination of accreditation is not within the jurisdiction of the Board. Bates v. Principi, 17 Vet. App. 443 (2004) The appellant thereupon appealed to the United States Court of Appeals for the Federal Circuit (Federal Circuit), which issued a mandate in June 2005 that reversed the Court's decision and directed the Court to issue the requested writ. The Federal Circuit's decision found that the Board has jurisdiction to review a VA accreditation-cancellation decision. Bates v. Nicholson, 398 F.3d 1355 (Fed. Cir. 2005). In June 2005, in compliance with the order of the Federal Circuit, the Court issued a Writ of Mandamus directing VA to provide the appellant with an SOC. VAOGC issued the SOC in July 2005 that addressed both issues characterized on the title page, and the appellant filed a substantive appeal in July 2005. FINDINGS OF FACT 1. The VA General Counsel's decision to cancel the appellant's accreditation to represent claimants before VA contains no identified errors of law or fact. 2. There is clear and convincing evidence of record that the appellant accepted unlawful compensation for preparing, presenting and prosecuting claims for VA benefits; solicited and contracted for illegal fees; and, misled and deceived claimants to VA benefits. 3. A stay of implementation of cancellation of the appellant's accreditation to represent claimants before VA, pending completion of all administrative and judicial review, would be inconsistent with the nature of the findings against the appellant and with VA's duty to administer its programs in the best interest of veterans and other claimants. CONCLUSIONS OF LAW 1. The appellant is not entitled to restoration of accreditation to represent claimants before VA. 38 U.S.C.A. §§ 5904, 5905 (West 2002 & Supp. 2006); 38 C.F.R. §§ 14.633, 20.609 (2007). 2. The criteria for a stay in the implementation of cancellation of the appellant's accreditation to represent claimants before VA, pending completion of all administrative and judicial review, are not met. 38 U.S.C.A. § 5904 (West 2002 & Supp. 2006); 38 C.F.R. § 14.633 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS PROCEDURAL DUE PROCESS Jurisdiction In Bates v. Nicholson, 398 F.3d 1355 (Fed. Cir. 2005), the U.S. Court of Appeals for the Federal Circuit held that the Board has jurisdiction to review this case. Perfection of the Appeal to the Board After the appellant was notified of the adverse determination by the VA General Counsel, terminating his accreditation to represent claimants for benefits before VA, the appellant filed a notice of disagreement in August 2003. In response to the statement of the case, dated in July 2005, the appellant filed a substantive appeal in July 2005, which perfected the appeal to the Board. 38 C.F.R. § 20.200. In his substantive appeal, the appellant indicated that he did not want a hearing before the Board. 38 C.F.R. § 20.700. Veterans Claims Assistance Act of 2000 (VCAA) The VCAA, codified in part at 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2007), and implemented in part at 38 C.F.R § 3.159 (2007) amended VA's duties to notify and to assist a claimant in developing information and evidence necessary to substantiate a claim. Section 5904 of Chapter 59 of Title 38 of the United States Code (Agents and Attorneys) governs the recognition by VA of an individual as an agent for the preparation, presentation, and prosecution of claims under the laws administered by the Secretary. As the recognition by VA of an individual as an agent is not a benefit as defined under Chapter 51 (Claims, Effective Dates, and Payments), the VCAA does not apply. See Lueras v. Principi, 18 Vet. App. 435 (2004) (The notice provisions of the VCAA do not apply to claims under Chapter 53 of Title 38 of the United States Code as the appellant is not seeking a benefit as defined under Chapter 51 (Claims, Effective Dates, and Payments). Notice under 38 C.F.R. § 14.633(e) Notwithstanding that the notice provisions of the VCAA do not apply, 38 C.F.R. § 14.633(e), implementing 38 U.S.C.A. § 5904, contains its own notice provisions as to notice required in terminating the accreditation of an agent. Under 38 C.F.R. § 14.633(e), in terminating the accreditation of an agent, upon receipt of information from any source indicating failure to meet the requirements of accreditation under 38 C.F.R. § 14.629, the Regional Counsel of the jurisdiction shall initiate an inquiry into the matter. If the result of the inquiry justifies further action, the Regional Counsel shall take the following action as to agents: notify the agent of an intent to cancel accreditation, including the reasons for the impending cancellation, and inform the agent of the right to request a hearing on the matter or to submit additional evidence within 10 working days of receipt of such notice, and such time may be extended for a reasonable period upon a showing of sufficient cause. The record shows that the Inspector General of the Department of Veterans Affairs (VAOIG) began investigating the appellant consequent to a complaint regarding the appellant's representation, received in 1996. In December 2000 the VA Regional Counsel notified the appellant of the Regional Counsel's intent to cancel the appellant's accreditation to represent claimants before VA. Notice was made via a 15-page Notice of Intent to Cancel Accreditation (NICA) listing six specific charges, as follows: (1) charging, or allowing to be paid by a claimant, for services rendered before the date on which the Board first makes a final decision on the case, in violation of 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c); (2) charging veterans an unreasonable fee in light of the services rendered, in violation of 38 C.F.R. § 20.609(e); (3) directly or indirectly soliciting, contracting for, charging, receiving, or attempting to solicit, contract for, charge, or receive any fee of compensation from a veteran for services rendered before VA, in violation of 38 U.S.C.A. § 5905(1); (4) contracting directly with a veteran, and indirectly using legal fee payer arrangements, before the Board issued a final decision, in violation of 38 U.S.C.A. § 5905(1); (5) engaging in a practice that was deceitful, misleading, and/or threatening to any actual prospective client, in violation of 38 U.S.C.A. § 5904(b)(5); and, (6) acting in an unprofessional and unethical manner in violation of 38 C.F.R. § 14.633(c)(4). Each of the six charges on the NICA listed specific violations. The NICA advised the appellant of his right to request a hearing on the matter or to submit additional evidence within 10 working days of receipt of the notice, and a copy of the NICA was provided to the appellant's attorney. In accordance with 38 C.F.R. § 14.633(f), the Director of the Chicago RO appointed an employee of the Roanoke, Virginia RO to conduct the hearing. The hearing was conducted from January 22-29, 2002 at the Chicago RO. As required by § 14.633(f), a member of the Regional Counsel's office presented the evidence; the appellant was represented by his current attorney. During the hearing the parties were afforded the opportunity to present evidence and argument, to examine witnesses, and to cross-examine witnesses of the adverse party. The parties also submitted post-hearing briefs. The Hearing Officer submitted a 282-page Recommended Finding to the Regional Counsel in May 2002 stating that the Hearing Officer recommended revocation of the appellant's accreditation; a copy of the Recommended Finding was sent to appellant's attorney. The Regional Counsel reviewed the report of the Hearing Officer and forwarded the case to VAOGC in May 2002 for final agency decision. In July 2003 the VAOGC issued the action on appeal. In summary, the record shows that the appellant was afforded the procedural safeguards of notice under 38 C.F.R. § 14.633(e) and the opportunity to be heard and to submit additional argument. For these reasons, the veteran has received the benefit of full due process, and no further statutory or regulatory due process development is required. Laws and Regulations As a threshold matter, the Board notes that 38 U.S.C.A. § 5904 was changed effective December 2006 during the course of this appeal. Where a law or regulation changes after a claim has been filed, but before the administrative or judicial appeal process has been concluded, the version most favorable to the appellant applies, unless Congress provided otherwise or permitted VA to do otherwise, and VA does so. Marcoux v. Brown, 9 Vet. App. 289 (1996); VAOPGCREC 11-97 (Mar. 24, 1997). However, revised statutory or regulatory provisions may not be applied to any time period prior to the effective date of the change. 38 U.S.C.A. § 7104(c) (West 2002); VAOPGCPREC 3-2000 (April 10, 2000); Rhodan v. West, 12 Vet. App. 55, 57 (1998). The intent of these provisions is to compensate claimants who might have been unaware or less diligent in filing a claim for benefits to which they were otherwise entitled by enactment of the liberalizing legislation. McCay v. Brown, 106 F.3d 1577, 1580 (Fed. Cir. 1997). In this case, there is no indication that Congress intended the revised provisions of 38 U.S.C.A. § 5904, as in effect from December 2006, to have retroactive effect. The Board has accordingly applied the provisions of 38 U.S.C.A. § 5904 as in effect prior to December 2006 in the adjudication of the appeal. In a related matter, the Board finds that appellate review may proceed in this case without awaiting finalization of proposed new attorney fee regulations, as these will only effectuate the December 2006 legislative changes and will not have retroactive effect on the appellant's current appeal before the Board. Attorney accreditation Under the statutes and regulations in effect prior to December 2006, the Secretary may recognize any individual as an agent or attorney for the preparation, presentation, and prosecution of claims under laws administered by the Secretary. The Secretary may require that individuals, before being recognized under this section, show that they are of good moral character and in good repute, are qualified to render claimants valuable service, and otherwise are competent to assist claimants in presenting claims. 38 U.S.C.A. § 5904(a). The Secretary, after notice and opportunity for a hearing, may suspend or exclude from further practice before the Department any agent or attorney recognized under this section if the Secretary finds that such agent or attorney: (1) Has engaged in any unlawful, unprofessional, or dishonest practice; (2) Been guilty of disreputable conduct; (3) Is incompetent; (4) Has violated or refused to comply with any of the laws administered by the Secretary, or with any of the regulations or instructions governing practice before the Department; or (5) Has in any manner deceived, misled, or threatened any actual or prospective claimant. 38 U.S.C.A. § 5904(b). Accreditation shall be canceled when the General Counsel finds, by clear and convincing evidence, one of the following: (1) Violation of or refusal to comply with the laws administered by the Department of Veterans Affairs or with the regulations governing practice before the Department of Veterans Affairs; (2) Knowingly presenting or prosecuting a fraudulent claim against the United States, or knowingly providing false information to the United States; (3) Demanding or accepting unlawful compensation for preparing, presenting, prosecuting, or advising or consulting, concerning a claim; (4) Any other unlawful, unprofessional, or unethical practice. (Unlawful, unprofessional, or unethical practice shall include but not be limited to the following-deceiving, misleading or threatening a claimant or prospective claimant; neglecting to prosecute a claim for 6 months or more; failing to furnish a reasonable response within 90 days of request for evidence by the Department of Veterans Affairs, or willfully withholding an application for benefits.) 38 C.F.R. § 14.633(c). Upon receipt of information from any source indicating failure to meet the requirements of §14.629, improper conduct, or incompetence, the Regional Counsel of jurisdiction shall initiate an inquiry into the matter. If the result of the inquiry does not justify further action, the Regional Counsel will close the inquiry and maintain the record for 3 years. 38 C.F.R. § 14.633(e)(1). If the result of the inquiry justifies further action, the Regional Counsel shall inform the General Counsel of the result of the inquiry and notify the agent or attorney of intent to cancel accreditation. The notice will also state the reason(s) for the impending cancellation and inform the party of a right to request a hearing on the matter or to submit additional evidence within 10 working days of receipt of such notice. Such time may be extended for a reasonable period upon a showing of sufficient cause. 38 C.F.R. § 14.633(e)(2). If a hearing is requested, a hearing officer will be appointed by the Director of the regional office involved. The hearing officer shall not be from the Office of the Regional Counsel. The hearing officer will have authority to administer oaths. A member of the Regional Counsel's office will present the evidence. The party requesting the hearing will have a right to counsel, to present evidence, and to cross-examine witnesses. Upon request of the party requesting the hearing, an appropriate Department of Veterans Affairs official may issue subpoenas to compel the attendance of witnesses and the production of documents necessary for a fair hearing. 38 C.F.R. § 14.633(f). The hearing shall be conducted in an informal manner and court rules of evidence shall not apply. Testimony shall be recorded verbatim. The hearing officer shall submit the entire hearing transcript, any pertinent records or information, and a recommended finding to the Regional Counsel within 10 working days after the close of the hearing. The Regional Counsel will immediately forward the entire record to the General Counsel for decision. 38 C.F.R. § 14.633(f). The decision of the General Counsel is final. The effective date for termination of accreditation shall be the date upon which a final decision is rendered. The records of the case will be maintained in the General Counsel's office for 3 years. 38 C.F.R. § 14.633(g). Attorney representation In connection with a proceeding before the Department with respect to benefits under laws administered by the Secretary, a fee may not be charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which the Board of Veterans' Appeals first makes a final decision in the case. Such a fee may be charged, allowed, or paid in the case of services provided after such date only if an agent or attorney is retained with respect to such case before the end of the one-year period beginning on that date. The limitation in the preceding sentence does not apply to services provided with respect to proceedings before a court. 38 U.S.C.A. § 5904(c)(1). Attorneys-at-law and agents may charge claimants or appellants for their services only if both of the following conditions have been met: (i) A final decision has been promulgated by the Board of Veterans' Appeals with respect to the issue, or issues, involved; and (ii) The attorney-at-law or agent was retained not later than one year following the date that the decision by the Board of Veterans' Appeals with respect to the issue, or issues, involved was promulgated. 38 C.F.R. § 20.609(c). Whoever (1) directly or indirectly solicits, contracts for, charges, or receives, or attempts to solicit, contract for, charge or receive, any fee or compensation except as provided in 38 U.S.C.A. §§ 5904 or 1984, or (2) wrongfully withholds from any claimant or beneficiary any part of a benefit or claim allowed and due to the claimant or beneficiary, shall be fined as provided in title 18 of the U.S. Code, or imprisoned for not more than one year, or both. 38 U.S.C.A. § 5905. II. Factual Background The VAOGC action on appeal canceled the appellant's accreditation to represent claimants before VA based on the following findings: First, that the appellant had violated 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c) by charging and receiving attorney fees from 11 named claimants for his services prior to the issuance of a final decision by the Board. The VAOGC found specifically that the appellant circumvented the regulation by using a putative "third party fee payer" in eight situations (claimants BA, DB, LC, BH, JL, FS, JV, RW) and by characterizing money received by claimants as a "gift" rather than as a fee in three situations (claimants DC, FH, GH). Second, that the appellant had violated 38 U.S.C.A. § 5905(1) by soliciting illegal fees from client FS and by contracting for illegal fees from client BF. In both cases, the fees were solicited prior to issuance of a final decision by the Board. Third, that the appellant had used misleading and deceptive practices in attempting to induce claimant FS to pay a fee. Specifically, the appellant communicated to FS and to FS' wife (who was the third party "legal fee payer") that prompt payment of a fee to the appellant would protect the claimant's disability rating from potential future reduction. In conclusion, the VAOGC found clear and convincing evidence that the appellant had engaged in unlawful practice and violated laws administered by VA; in particular, the appellant had accepted unlawful compensation for preparing, presenting and prosecuting claims for VA benefits in violation of 38 U.S.C.A. § 5904(c)(1), that the appellant had solicited and contracted for illegal fees in violation of 38 U.S.C.A. § 5905(1), and that the appellant had misled and deceived a claimant. VAOGC further found that clear and convincing evidence established that in committing these acts the appellant had engaged in conduct that should result in cancellation of accreditation under 38 U.S.C.A. § 5904(b)(4) and (5) as implemented by 38 C.F.R. § 14.633(c)(1), (3) and (4). In response to the above, the appellant's NOD cites five specific instances of alleged unlawful behavior by VA in the action under appeal, as follows. First, that VA impermissibly used the office of the VA Inspector General (VAOIG) to investigate and substantiate the allegations against the appellant. Second, that the Hearing Officer failed to apply the Administrative Procedures Act (APA) to the adjudicatory hearing. Third, that VA failed to provide the appellant adequate pre- enforcement notification and the opportunity to conform his behavior to VA regulations. Fourth, that VA lacked authority to review fee agreements between the appellant and the disinterested third parties who retained the appellant to pursue claims before VA. Fifth, that 38 C.F.R. § 14.633(g) is invalid because it is more restrictive than the underlying statute. The appellant's substantive appeal added five issues on appeal not identified on the NOD, as follows. First, that the appellant's fee agreements during the period 1995 to 1999, the period in question, did not violate 38 C.F.R. § 20.609(g) as then in effect. Second, that VA's action is unlawful use of a criminal statute (38 U.S.C.A. § 5905) in an administrative context. Third, that the VA Hearing Officer wrongfully denied the appellant access to records pertaining to VA's investigation, including Grand Jury testimony. Fourth, that the appellant did not actually mislead or deceive any client. Fifth, that VA has not shown the appellant intended to mislead or deceive any client. The appellant's substantive appeal also stated that, in addition to the specific arguments made therein, the appellant intended to dispute every allegation or inference in the rating decision and SOC that are inconsistent with the appellant's position on the issues or expressly admitted by the appellant. III. Analysis The Board is obligated to analyze the credibility and probative value of all evidence, account for the evidence that it finds persuasive or unpersuasive, and provide reasons for its rejection of any material evidence favorable to the veteran. Eddy v. Brown, 9 Vet. App. 52 (1996); Meyer v. Brown, 9 Vet. App. 425 (1996); Gabrielson v. Brown, 7 Vet. App. 36 (1994); Masors v. Derwinski, 2 Vet. App. 181 (1992); Wilson v. Derwinski, 2 Vet. App. 614,618 (1992); Hatlestad v. Derwinski, 1 Vet. App. 164 (1991). However, the Board is not required to discuss all evidence when the Board has supported its decision with thorough reasons and bases regarding the relevant evidence. Dela Cruz v. Principi, 15 Vet. App. 143, 148-49 (2001). The Board's findings on each of the issues raised by the appellant are articulated below. Appellant's issue # 1: Whether 38 C.F.R. § 14.633(c) is valid The appellant contends 38 C.F.R. § 14.633(c) is more restrictive than the underlying statute and accordingly invalid on its face. The underlying statute, 38 U.S.C.A. § 5904(b), states that VA, after notice and opportunity for a hearing, may suspend or exclude from further practice before the Department any agent or attorney based on a finding that the attorney has committed one of five specified violations. (Emphasis added.) The implementing regulation, 38 C.F.R. § 14.633(c), states that accreditation shall be cancelled when the VAOGC finds that one of four specified violations was committed by the attorney. (Emphasis added.) The appellant specifically contends that 38 C.F.R. § 14.633(c) is more restrictive than 38 U.S.C.A. § 5904(b) in that the statute provides for two remedies - either "suspension" or "exclusion" - but the regulation provides for only one remedy, "cancellation." The appellant further argues that since the regulation is therefore invalid on its face, VA's action against the appellant under color of that regulation is necessarily invalid as a matter of law. The Board disagrees, for the reasons below. The statute does not define "suspension" or "exclusion." Similarly, the regulation does not define "cancellation." Although the term "suspension" arguably implies a banishment that is more temporary (and accordingly less onerous) than the other two terms, neither the statute nor the regulation distinguishes between the three terms with regard to the practical effects such as possibility of eventual reinstatement, imposition of other sanctions, etc. There is accordingly no indication that the regulation on its face is more restrictive than the statute, or in any way inconsistent with the statute. The Board accordingly finds no reason to hold that 38 C.F.R. § 14.633(c) is invalid and should not be applied in adjudication of the case on appeal. Appellant's issue # 2: Whether VAOGC's decision is consistent with 38 C.F.R. § 20.609(g) (1995-1999) The appellant concedes that his fee agreements would be in violation of the current version of 38 C.F.R. § 20.609(g), but argues that his fee agreements during the period 1995 to 1999, the period in question, did not violate 38 C.F.R. § 20.609(g) as then in effect. Accordingly, the appellant argues that VA's action is ex post facto application of an amendment to the regulation and invalid as a matter of law. The appellant also contends that the VAOGC's findings regarding the appellant's violations of 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c) are inconsistent with 38 U.S.C.A. § 20.609(g) as applicable during the period 1995- 1999. The provisions of 38 C.F.R. § 20.609(g) in effect prior to and after 2002 are essentially identical, except that the current version added the language shown in italics: All agreements for the payment of fees for service of attorneys-at-law and agents (including agreements involving fees or salary paid by an organization, governmental entity or other disinterested third party) must be in writing and signed by both the claimant or appellant and the attorney-at- law or agent. The agreement must include the name of the veteran, or appellant if other than the veteran, the name of each disinterested third-party payer, the applicable VA file number, and the specific terms under which the amount to be paid for the services of the attorney-at-law or agent will be determined. A copy of the agreement must be filed with the Board within 30 days of its execution. On review, the Board cannot find any VAOGC findings that assert a connection between the appellant's violations of 38 U.S.C.A. § 5904(c)(1) and 38 C.F.R. § 20.609(c) on the one hand, and the provisions of 38 C.F.R. § 20.609(g) (as in effect before or after 2002) on the other. Similarly, the Board cannot find any indication that the VAOGC decision was based on any finding that the appellant had somehow violated 38 C.F.R. § 20.609(g), effective before or after 2002. The Board accordingly finds no indication whatsoever that the VAOGC's action on appeal is inconsistent with 38 C.F.R. § 20.609(g) as in effect before or after 2002. (The Board notes that 38 C.F.R. § 20.609(d)(2) was also amended in 2002 in regard to third-party fee contracts. That amendment prohibited contingency fees, defined "disinterested third party" (to exclude spouses, parents and cohabitants), made the provisions of section (g) specifically applicable to third-party fee agreements, and imposed obligatory certification by the attorney that there was no agreement requiring the claimant to reimburse the third-party payer for fees paid. Issues surrounding 38 C.F.R. § 20.609(d)(2) are discussed in Issue # 9 below.) Appellant's issue # 3: Whether VA unlawfully prosecuted the appellant under 38 U.S.C.A. § 5905 The VAOGC found "clear and convincing evidence" that the appellant had violated 38 U.S.C.A. § 5905 by soliciting and contracting for illegal fees from claimants. The appellant argues that the VAOGC's application of 38 U.S.C.A. § 5905 is legally insufficient for two reasons. First, the appellant asserts that 38 U.S.C.A. § 5905 is a criminal statute for which the government's burden of proof should be "beyond a reasonable doubt" rather than "clear and convincing evidence." Second, the appellant asserts that suspected violations of 38 U.S.C.A. § 5905 must be resolved by indictment and criminal trial, not by a VA administrative proceeding. Accordingly, the appellant asserts that the VAOGC's findings in regard to violation of 38 U.S.C.A. § 5905 are invalid as a matter of law. In support of the appellant's contention, a law professor testified during the hearing that he was aware of no statute that would create an administrative action (versus criminal prosecution) to pursue a violation of 38 U.S.C.A. § 5905. He also testified that in his opinion VA could not suspend or exclude an attorney under the provisions of 38 U.S.C.A. § 5904 for unlawful practice including violation of elements of 38 U.S.C.A. § 5905, because the two sections "stand apart" from each other (which he defined as having separate histories and interpretations). The Board disagrees, for the reasons below. As noted above, the underlying statute, 38 U.S.C.A. § 5904(b)(1), provides for the suspension of an attorney who is found by VA to have engaged in unlawful, unprofessional, or dishonest practice. The implementing regulation, 38 C.F.R. § 14.633(c)(1) and (4), requires VA to find by "clear and convincing evidence" practices including violation of or refusal to comply with the laws administered by VA, and any other unlawful, unprofessional or unethical practice. Accordingly, the statute and the regulation clearly intend VA to find by clear and convincing evidence whether conduct is illegal and to thereupon act to cancel accreditation. The Board emphasizes in this regard that 38 C.F.R. § 14.633 is an implementing regulation of 38 U.S.C.A. § 5904, not 38 U.S.C.A. § 5905. 38 U.S.C.A. § 5905 provides for criminal penalties as provided in Title 18 (monetary fine, or imprisonment for not more than one year, or both) for persons who directly or indirectly solicit, contract for, charge or receive, or attempt to charge or receive any fee or compensation except as provided in 38 U.S.C.A. § 5904. To the degree that 38 U.S.C.A. § 5905 criminalizes certain conduct, it is a criminal statute as the appellant contends. However, in this case 38 U.S.C.A. § 5905 is not being used by VA to impose criminal sanctions. The VAOGC is within its jurisdiction to find, by clear and convincing evidence, that the appellant accepted fees outside those permissible under 38 U.S.C.A. § 5904; by definition of 38 U.S.C.A. § 5905, any such fees are unlawful. The appellant argues that VAOGC is attempting to impose criminal sanctions by taking advantage of administrative process, including a lower burden of proof. However, cancellation of representation is not an imposition of criminal sanctions, but rather an administrative action. Further, the VAOGC action on appeal does not subject the appellant to criminal penalties such as monetary fine or imprisonment. Although VAOGC identified 38 U.S.C.A. § 5905 as the basis for its finding that the appellant had accepted "unlawful" fees, in fact the VAOGC's actual actions and sanctions on appeal were administrative actions appropriately taken under the provisions of 38 U.S.C.A. § 5904, not § 5905. Appellant's issue # 4: Whether the VA Hearing Officer unlawfully denied the appellant access to records pertaining to VA's investigation The appellant contends that the VA Hearing Officer violated fundamental fairness by withholding items of evidence developed during VA's investigation. The appellant argues that denial of access to these records prejudiced his ability to represent himself adequately, and that since 38 U.S.C.A. § 5905 is a criminal statute he should have been afforded access to all investigative records (apparently raising a Brady due process argument that he was entitled to any evidence that may be exculpatory, including records of the Federal grand jury proceedings). The Board disagrees, for the reasons below. Review of the file shows that the appellant was notified of all records that VA intended to consider as evidence during the hearing, and was provided copies of most if not all of those records. To the extent that any investigative records existed that were not provided to the appellant, the file does not show that any such records were used by either the Hearing Officer or the VAOGC in adjudicating the issue on appeal. It is therefore not prejudicial to the appellant, or fundamentally unfair, if there were any existent investigative records that were not provided to him. Further, as noted in the discussion of Issue # 3 above, the action on appeal disaccrediting the appellant is not a criminal prosecution, but rather an administrative action. In denying the appellant's demand for the investigative records, the Hearing Officer cited as analogy the protection afforded to grand jury proceedings, but such an analogy does not turn an administrative action into a criminal proceeding. The action on appeal is administrative, not criminal, and Brady does not apply. The record shows that the appellant insisted that Regional Counsel provide him with records from a Federal grand jury investigation. The Regional Counsel advised the appellant repeatedly that any ongoing grand jury investigation was being conducted by the Department of Justice, not by VA, and that VA would not consider an outside investigation, such as that by the grand jury, in its determination in this case. One of the witnesses at the hearing, a VAOIG agent, had apparently participated in a grand jury investigation, but his testimony was restricted to the issues identified in the NICA (Transcript, pg. 62). It appears that all documents associated with the testimony of that witness were provided to the appellant, and the appellant had the opportunity to cross-examine that witness. The Board can find nothing in the Hearing Officer's file, as reviewed by the VAOGC in making the determination on appeal, that shows any association with a grand jury investigation or other investigation, that was not provided to the appellant for appropriate challenge. Appellant's issue # 5: Whether the appellant misled or deceived any claimant The VAOGC concluded that the appellant had deceived and misled claimant FS and had thus violated 38 U.S.C.A. § 5904(b)(2) and (4). The VAOGC's conclusion was based on evidence that the appellant sent letters to FS and to FS' wife (who had a third-party-payer fee agreement with the appellant) immediately after FS was awarded an increase in disability compensation, advising them that VA is required to conduct periodic reexaminations of service-connected disabilities, and that compensation could be reduced if the condition was found to have improved. The letters urged FS to contact the appellant as soon as he received his back-award check in order to prevent future reduction in benefits. Further, the letter to FS' wife stated in bold letters that the veteran's disability rating was total but not permanent, that it would be necessary for the appellant to bring another proceeding to try to make the rating permanent, and that VA would want to reexamine FS because the rating was not permanent. The VAOGC noted, however, that the appellant was aware - or should have been aware - that FS had been rated "permanently disabled" and the RO had already expressly declined to schedule a routine future examination. The VAOGC also noted that contrary to the appellant's reference to a proceeding to make the rating permanent, there is no such thing as a "permanent rating" and no proceeding to affect such a rating. Accordingly, the VAOGC concluded that appellant's letters to FS and to FS' wife were deceptive and misleading because they misstated legal requirements, left the impression that it was necessary for FS to retain the appellant in order to insure that his disability rating would not be reduced in the future, sought to induce payment of the appellant's fee by providing inaccurate information about possible future reevaluation of rating, and offered help with a proceeding that in fact could not be brought. The appellant contends that the letters to FS and his spouse were not inherently misleading, but that VAOGC chose to misinterpret those letters in order to discredit the appellant. The appellant also argues that there is no evidence that in fact either FS or his spouse was actually misled or deceived. The Board has reviewed the April 2000 rating decision that awarded FS a 100 percent rating for PTSD; that rating decision clearly stated, "The veteran's posttraumatic stress disorder is now rated as 100 percent and no future examination has been scheduled. Therefore, this condition is considered to be a total disability permanent in nature." The Board has also reviewed the correspondence sent by the appellant to FS and his wife, and finds that the letters are boilerplate letters essentially identical to letters of record that the appellant sent to other claimants after VA benefits were approved; the appellant in fact testified that the fee agreement with FS' wife does not differ in any way from his usual retainer agreement (Transcript pgs. 531-532). As noted by the Hearing Officer and the VAOGC, the letters are inherently misleading because they assert that VA would want to reexamine FS at a future date, and deceptive because they assert the appellant could somehow obtain a nonexistent "permanent rating" for FS. In regard to the question of whether claimant FS and his wife were actually deceived by the appellant's correspondence, the nature of this adjudication requires a finding that an attorney's practices were inherently deceptive and misleading, not that anyone was actually deceived or misled. However, the Board has reviewed the testimony regarding FS and his wife (Transcript Pgs. 189-194, 463-464, 477) and notes that they both testified to the effect that they were worried, based on the appellant's letters, that FS could lose his VA disability benefits unless the appellant received his fee. This testimony shows that FS and his wife were in fact deceived and misled by the appellant's letters. The Board notes that private attorney BK testified that the veteran, FS, was not injured by being represented by the appellant, and that in fact FS had benefited by that representation (Transcript, pgs. 795-802). Attorney BK also testified that the appellant's correspondence to FS and his wife was not deceptive or misleading, based on BK's understanding that a "permanent rating" removes the beneficiary from future examinations and allows other benefits such as adaptive housing (Transcript, pgs. 875-876). The Board finds, contrary to the testimony of attorney BK, that it is not particularly relevant that a claimant was/was not injured by, or did/did not benefit from, an attorney's representation. Neither the statute nor the regulation requires a determination of actual injury or absence of actual benefit. The statute and the regulation simply require that the claimant has been deceived or misled, and the Board has found that to be the case in this instance. The Board also notes that BK's understanding of "permanent rating" is fundamentally flawed. As was made abundantly clear during the hearing, while VA may determine that a physical disability is "permanent," the rating associated with that disability may fluctuate upward or downward according to the severity of symptoms. There is accordingly no such thing as a "permanent rating," and any advertisement that an attorney or agent could help procure such a rating is inherently deceptive and misleading. Appellant's issue # 6: Whether there is evidence of intent to mislead or deceive As noted above, the VAOGC concluded that the appellant had deceived and misled claimant FS and had thus violated 38 U.S.C.A. § 5904(b)(2) and (4). The appellant argues that there is no evidence of actual intent on his part to mislead and deceive FS. Arguably, criminal prosecution for a violation of 38 U.S.C.A. § 5905 would require evidence of intent, but finding misleading and deceiving practice under 38 U.S.C.A. § 5904(b)(2) and (4) is an administrative action resulting in an administrative sanction. If a communication from an attorney is found to be deceptive and/or misleading, there is no requirement to show actual intent on the part of the issuing attorney. However, in this case the letter sent by the appellant to FS' wife, in which the appellant stated that it would be necessary for the appellant to bring another proceeding to try to make the rating permanent, was very obviously intended to induce FS to retain the appellant for a nonexistent cause of action. FS' wife testified that the letter frightened her into paying the appellant's fee, for fear that FS' rating was in jeopardy. The Board finds that this letter was clearly intended to mislead FS as to his legal options and to deceptively induce FS into paying the appellant's fee. Appellant's issue # 7: Whether VA improperly relied on VA Office of the Inspector General (VAOIG) to investigate the appellant The appellant contends the VAOGC improperly utilized the VAOIG to investigate allegations against the appellant. The VAOGC's decision on appeal noted the appellant had raised this objection before the Hearing Officer, but found the objection insufficient to set aside any part of the proceedings. The VAOIG performs the functions, has the responsibilities, and exercises the powers derived from the Inspector General Act of 1978, codified as amended at 5 U.S.C.A. Appendix 3. See 38 U.S.C.A. § 312(a). VAOIG must conduct investigations relating to the programs and operations of VA, and must conduct activities for the purpose of preventing and detecting fraud and abuse in VA programs and operations. See 5 U.S.C.A. Appendix 3, § 4(a)(1), (3). In addition to the above, in carrying out its duties under the Inspector General Act the VAOIG is authorized to make such investigations and reports relating to the administration of the programs and operations of VA as are, in the judgment of the Inspector General, necessary and desirable. See 5 U.S.C.A. Appendix 3, § 6(a)(1)(2). The Inspector General Act authorizes the VAOIG to receive and investigate complaints from VA employees concerning the possible existence of an activity constituting a violation of laws, or regulations. See 5 U.S.C.A. Appendix 3, § 7(a). Review of the file shows that the VAOIG involvement in this case consisted of determining whether various third-party payer agreements between the appellant and various parties were fraudulent. On several occasions, VAOIG investigators determined that putative third-party payers had entered into contingency fee agreements with the appellant, but those third parties understood at the time that they were not actually responsible for payment of the fees (and, in fact, the fees were paid directly by the veterans after the past- due benefits were paid, not by the third parties). VAOIG investigators also discovered instances in which third parties were listed as "legal fee payers" although those third parties, and/or the veteran/claimants, believed at the time that the third parties were merely acting as witnesses; again in these instances the eventual payers of the fees were the veterans themselves. Based in large part on the investigation of the VAOIG, the VAOGC determined that it had been shown by clear and convincing evidence that the appellant's use of third-party payer agreements was a "sham" to facilitate the appellant's receipt of fees from claimants for service rendered prior to the first final Board decisions on the respective claims. The VAOG also used the investigation of the VAOIG in large part to determine that in at least some instances the purported disinterested third parties were not in fact disinterested. Based on its review of the file, the Board finds that the VAOIG's investigation was entirely appropriate, as was the subsequent use of the reports of investigation by the VAOGC. As noted above, 38 C.F.R. § 14.633(e) requires the Regional Counsel to initiate an inquiry upon receipt of information from any source indicating failure to meet the requirements of accreditation under 38 C.F.R. § 14.629. In the attorney accreditation cases that have been reviewed by the Board, it has been a matter of routine that the requisite inquiry has been conducted by VAOIG on behalf of the Regional Counsel. As noted above, the VAOIG is authorized under the Inspector General Act authorizes the VAOIG to receive and investigate complaints from VA employees (such as Regional Counsel) concerning the possible existence of an activity constituting a violation of laws or regulations; see 5 U.S.C.A. App. 3, § 7(a). To the extent that the appellant believes the VA's use of its OIG to conduct inquiries in attorney accreditation cases is ultra vires and violative of constitutional due process, the Board finds that the participation of VAOIG in this particular matter is within the jurisdiction of the VAOIG and is in accord with VA's internal policies and procedures. The Board accordingly finds no constitutional due process basis on which the fruits of the VAOIG investigation should be invalidated. Appellant's issue # 8: Whether the Hearing Officer wrongfully failed to apply the Administrative Procedures Act The appellant contends the Hearing Officer wrongfully refused to apply the procedures of the Administrative Procedures Act (APA), 5 U.S.C.A. § 551 et seq., and that he consequently was denied procedural due process in conjunction with preparation for and conduct of the hearing. The United States Supreme Court has defined the APA as "formal" in nature. Wong Yong Sung v. McGrath, 339 U.S. 33, 49 (1950). Prior to his hearing, the appellant filed a request for formal ruling regarding the applicability of the APA to the projected hearing (Vol. I, Pleading # 13). The appellant argued therein that the APA applied because VA is a Federal agency, because the scheduled hearing would be a formal-on- the-record adjudication of specific alleged violations, and because the scheduled hearing would necessarily be adversarial. Regional Counsel denied the appellant's motion based on VA's position that the Hearing Officer would be bound in the projected hearing to follow 38 C.F.R. § 14.633(f), which provides sufficient procedural due process safeguards (Vol. III, Pleading # 33). There followed subsequent responsive motions by the appellant (Vol. III, Pleading # 34) and by Regional Counsel (Vol. III, Pleading # 35) arguing Congressional intent, regulatory consistency, due process, whether or not the hearings would necessarily be "adversarial," applicability of the Freedom of Information Act (FOIA), nuances of Federal rulemaking and agency discretion, case law, and related issues. The Board will not repeat all of the arguments put forth by the parties on this matter. The Board simply finds that the hearing was clearly held under the provisions of 38 C.F.R. 14.633(f), which does not require an on-the-record hearing prior to adjudication, and clearly states that hearings if requested shall be conducted in an informal manner, and court rules of evidence shall not apply. See 38 C.F.R. § 14.633(f) (emphasis added). Accordingly, application of the APA would clearly be inconsistent with 38 C.F.R. § 14.633(f) and not appropriate. On review of the hearing transcript, the Board finds that the appellant was afforded a hearing in which he was represented by counsel and had the right to cross-examine witnesses and produce evidence. The appellant was in all respects afforded a hearing that fully conforms to the requirements articulated in 38 C.F.R. § 14.633; whether or not application of the APA would have been advantageous to the appellant is moot. To the extent that the appellant is arguing that his due process was violated by the procedures of the hearing, to include the Hearing Officer's refusal to utilize the APA, the Board notes that prior to the hearing Regional Counsel voluntarily furnished the appellant with copies of VA exhibits 1 through 1281 to be introduced during the hearing. The Regional Counsel also afforded the appellant an opportunity prior to the hearing to review the claims files of every veteran named in the NICA, and to make copies of any relevant documents therein. Finally, the appellant was advised of his right to subpoena witnesses and documents for presentation at the hearing. The Board accordingly finds that the APA was not for application during the appellant's hearing, and that the appellant nonetheless received appropriate safeguards of his right to procedural due process. Appellant's issue # 9: Whether VA provided adequate pre- enforcement notification The appellant contends VA failed to provide the appellant with pre-enforcement notification, thus violating the appellant's due process. The VAOGC's decision on appeal noted the appellant had raised this objection before the Hearing Officer, but found the objection insufficient to set aside any part of the proceedings. It appears that this issue grows out of the appellant's argument during the hearing to the effect that the term "disinterested party" as applied to third-party payers was not defined in 38 C.F.R. § 20.609(d)(2) during the period in question, and that he accordingly did not receive adequate pre-enforcement notice that he was in violation of an existing regulation, and/or the type of conduct that would be required to bring him into compliance with that regulation. Specifically, under the provisions of 38 C.F.R. § 20.609(d) in effect since 2002, in third-party-payer situations, (i) the attorney may not charge contingency fees, (ii) a person is presumed not to be "disinterested" if that person is the spouse, child, parent or cohabitant of the claimant, and (iii) provisions relating to filing fee agreements with the Board apply. These specific provisions were not in the versions of 38 C.F.R. § 20.609(d) prior to 2002, and a law professor testified during the hearing that an attorney who entered into a third-party payer agreement, even with a claimant's spouse, would not be in violation of 38 C.F.R. § 20.609(d) as then in effect (Transcript pg. 685). In support of his position, the appellant obtained the testimony of two law professors to the effect that the then- current version of 38 C.F.R. § 20.609(d)(2) did not define "disinterested third party" (Transcript pgs. 679-685, 943- 949, 963-976, 996-1006). Accordingly, the appellant argues that he was not on notice that his then-current third party payer agreements would be considered illegal by VA. The Board has found no support in statute or regulation for the appellant's contention that VA was required to advise him prior to initiation of the investigation that he was suspected of violating VA procedures, and of the actions that would be required to bring him into compliance with those procedures. The record proves conclusively that the appellant was provided ample notice prior to the enforcement as required by 38 C.F.R. § 14.633(d). Upon receipt of information from any source indicating failure of an attorney to meet the requirements for representation of claimants before VA as specified in 38 C.F.R. § 14.629, improper conduct, or incompetence, the VA Regional Counsel of jurisdiction must initiate an inquiry into the matter. If the inquiry justifies further action, the Regional Counsel must inform VAOGC of the result of the inquiry and also notify the attorney of intent to cancel accreditation. 38 C.F.R. § 14.633(d). The notice to the attorney from Regional Counsel must state the reasons for the impending cancellation and inform the party of the right to request a hearing or to submit evidence. 38 C.F.R. § 14.633(d)(2). Review of the file shows that the Regional Counsel provided pre-enforcement notice to the appellant fully compliant with the requirements of 38 C.F.R. § 14.633(d)(2) above. The NICA ran to 15 pages, listed the specific charges in detail citing the relevant statutes and regulations, and identified the specific violations on which each charge was based in detail (including dates, times, and names). The NICA also notified the appellant of his entitlement to a hearing. Accordingly, as a "due process" matter, the appellant was clearly informed in detail of the allegations against him in December 2000, and he had 13 months in which to prepare his response prior to the hearing in January 2002. After the hearing, the veteran had ample opportunity to present post-hearing argument prior to the Hearing Officer's recommendation in May 2002, and in fact the enforcement action on appeal (VAOGC termination of accreditation) was performed in July 2003, two-and-one-half years after the NICA. The Board accordingly finds that the appellant has been afforded full and fair pre-enforcement notice in the matter under appeal. Appellant's issue # 10: Whether VA has authority to review third-party fee agreements The appellant contends VA lacks authority to review third- party fee agreements. In support of this position, a law professor testified during the hearing that he could find no authority for VA to review third-party payer agreements under any VA regulation (Transcript pgs. 690-691). The genesis of this issue is that attorneys may not charge for their services prior to the date the Board issues a final decision on the case. See 38 C.F.R. § 20.609(c). However, an attorney may receive a fee or salary from an organization, governmental entity, or other disinterested third party for representation of a claimant or appellant even though the conditions of paragraph (c) are not met. 38 C.F.R. § 20.609(d)(2). The appellant admitted during his hearing that he entered representation agreements with a number of specific persons prior to a final decision by the Board (Transcript pg. 259). However, the appellant asserts that such fee agreements represent contracts between himself and persons who are not the claimants; accordingly, VA does not have authority to review those agreements. The Board disagrees. Subsequent to the January 2002 hearing, in which the law professor testified that he knew of no regulation giving VA authority to review third-party payer contracts, the Federal Circuit issued the decisions Carpenter, Chartered v. Secretary of Veterans Affairs, 343 F.3d 1347, 1351-53 (2003). The Federal Circuit found in Carpenter that VA has the authority to regulate fee agreements involving third parties, particularly when (as in this case) VA's actions are intended to prevent circumvention of the limitations on payment of attorney's fees in veterans benefit matters. Additional issue raised on appeal: General disagreement with the rating decision and SOC The appellant's substantive appeal stated that, in addition to the ten issues detailed above, the appellant intended to dispute every allegation or inference in the rating decision and SOC that is inconsistent with the appellant's position on the issues or expressly admitted by the appellant. As noted above, the Board is not required to discuss all evidence relating to this appeal, when the Board has supported its decision with thorough reasons and bases regarding the relevant evidence. Dela Cruz, 15 Vet. App. at 148-49. The Board has carefully reviewed the hearing transcript, the Hearing Officer's decision, the VAOGC decision on appeal, and the SOC, as well as the NOD and substantive appeal submitted by the appellant's representative. Based on review of these documents, the Board finds that clear and convincing evidence shows the appellant committed the acts cited in the VAOGC decision on appeal. First, clear and convincing evidence shows that the veteran committed multiple acts of entering into representation of claimants prior to a final decision by the Board. These were typically in the form of third-party fee agreements in which another party - typically a family member - would agree to pay the appellant's fee, usually one-third of benefits recovered. The appellant has not denied the existence of such agreements, but contends that they were not wrongful under the regulations then in force regarding disinterested third-party payers. However, the appellant's correspondence shows that he was aware such actions were wrongful even prior to the change in the regulations. Second, clear and convincing evidence shows that the appellant solicited illegal fees from claimant BF in that he entered into representation of the claimant prior to a final decision by the Board via a third-party fee arrangement with a friend of the claimant, although he was fully aware at the time that the fee would in fact be paid from the VA benefits to be paid to BF. Finally, as discussed in detail in Issue # 5 above, clear and convincing evidence shows that the appellant used misleading and deceptive practices to induce claimant FS to pay his fee. Additional issue raised on appeal: Entitlement to stay of cancellation of accreditation pending completion of review Under the terms of 38 C.F.R. § 14.633(g), the decision of the VAOGC on cancellation of accreditation is final, and the effective date of termination of accreditation is the date on which a final decision is rendered. There is nothing in the regulation that provides for a stay of the VAOGC's final decision pending completion of administrative and/or judicial review. The Board notes in this regard that a decision to terminate accreditation by the VAOGC necessarily connotes a finding of extreme malfeasance and/or extreme incompetence in the representation of claimants. In this case, the VAOGC and the Board have found by clear and convincing evidence that the appellant solicited, contracted for, charged and received fees from claimants not in accordance with law, and that the appellant used misleading and deceptive practices in an attempt to induce payment of a fee by a claimant; the grant of a stay at this point would be inconsistent with the very nature of these findings. The appellant's practices, if continued for the months and years associated with full administrative and judicial appellate review, would expose veterans or other claimants to the risk of actual harm, and it would accordingly be contrary to the best interests of VA's client community. Further, during the pendency of appellate review the appellant is not deprived of his livelihood in pursuing any other field of law. Equitable balance of interests accordingly weighs against the grant of a stay. ORDER Restoration of accreditation to represent claimants before VA is denied. A stay of cancellation of accreditation to represent claimants before VA, pending completion of all administrative and judicial review, is denied. ____________________________________________ D. C. Spickler Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs