Citation Nr: 0813209 Decision Date: 04/22/08 Archive Date: 05/01/08 DOCKET NO. 05-37 034 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Columbia, South Carolina THE ISSUE Entitlement to waiver of recovery of an overpayment of disability compensation benefits, in the calculated amount of $17,652.13, to include the validity of the debt. REPRESENTATION Appellant represented by: John S. Nichols, Attorney ATTORNEY FOR THE BOARD M. Vavrina, Counsel INTRODUCTION The veteran served on active duty from July 1970 to July 1990. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a February 2005 decision issued in March 2005 by the Committee on Waivers and Compromises (Committee) at the RO, which denied a request for waiver of recovery of compensation overpayment calculated in the amount of $17,652.13. As explained below, the underlying issue in this case concerns the propriety of the creation of the debt in the first place. That issue must be decided before the waiver issue can be addressed; therefore, the Board has recharacterized the issue on appeal as described on the title page. In his substantive appeal (VA Form 9) received in October 2005, the veteran requested a hearing before a Veterans Law Judge of the Board at the RO (Travel Board hearing). A Travel Board hearing was scheduled for March 8, 2006; however, the appellant failed to appear on the scheduled hearing date. In view of the circumstances of the following remand, if this matter is ultimately returned to the Board for appellate review, the veteran is free to request another Board hearing. For the reasons expressed below, the matter on appeal is being remanded to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the veteran when further action, on his part, is required. REMAND Initially, the Board notes that the evidentiary record indicates some of that the assessed indebtedness in question may have been recouped. Nevertheless, in accordance with Franklin v. Brown, 5 Vet. App. 190 (1993), the Board must consider the entire amount calculated, plus interest. Preliminary review of the record in this case indicates that the overpayment in issue resulted from a retroactive termination of the veteran's disability compensation benefits from December 27, 2001 to May 23, 2004 based on information received by the RO that there was an outstanding warrant issued by the Cayce Police Department in South Carolina for the veteran on February 7, 1999. The provisions of 38 U.S.C.A. § 5313B (West 2002) specifically prohibit the payment of Chapter 11 compensation benefits for any period during which a veteran is a fugitive felon. The term "fugitive felon" means a person who is a fugitive by reason of (A) fleeing to avoid prosecution, or custody or confinement after conviction, for an offense, or an attempt to commit an offense, which is a felony under the laws of the place from which the person flees, or (B) violating a condition of probation or parole imposed for commission of a felony under Federal or State law. 38 U.S.C.A. § 5313B; 38 C.F.R. § 3.665(n)(2) (2007). In a March 2004 letter, the RO informed the veteran that VA had been advised by law enforcement authorities that he had been identified as a fugitive felon because he was the subject of an outstanding warrant and gave him an opportunity to clear the warrant with the agency that issued it or to advise VA if he believed that VA had identified the wrong person. The RO instructed him to contact the Cayce Police Department as soon as possible to determine what must be done to clear the warrant and, when that had been accomplished, to send official documentation establishing that the warrant had been cleared to the RO. If VA did not receive evidence establishing that the warrant had been cleared within 60 days of the date of the letter, the RO informed the veteran that VA was required to stop his compensation benefits as of December 27, 2001, the effective date of the fugitive felon provisions, and that he could request a hearing or submit further evidence. This letter was not returned as undeliverable; the veteran did not respond. The RO sent the veteran another letter dated June 24, 2004, indicating that VA proposed to stop his compensation payments effective December 27, 2001, because the RO had received evidence that he had been identified as a fugitive felon. The VA proposed to adjust the veteran's payments after 60 days, during the interim the veteran could request a hearing or submit evidence that VA should not make the adjustment. The RO added that any adjustment would likely result in an overpayment. This letter was not returned as undeliverable; the veteran did not respond. In a letter dated June 29, 2004, the RO terminated the veteran's compensation payments effective December 27, 2001, based on the veteran's identified status as a fugitive felon and advised him of his appellate rights. In a September 30, 2004 letter, the RO notified the veteran that his compensation payments had been resumed as of May 23, 2004, the date of the veteran's arrest, because he was no longer considered a fugitive felon and that termination of his compensation had created an overpayment. In a statement dated and received on November 10, 2004, the veteran indicated that this decision had created an overpayment of $12,948 and that he wanted to appeal the decision. In support, the veteran stated that he was found "not guilty" by the court on June 10, 2004 and he felt that he was being punished by VA for an offense that he did not commit. Eight days later, the veteran submitted a VA Form 5655, Financial Status Report, which was construed as a request for a waiver of overpayment. In a letter from the VA Debt Management Center (DMC) to the Committee on Waivers and Compromises, dated November 24, 2004, it was reported that the debt considered for waiver was $17, 652.13. This document also indicated that the first letter to the veteran, evidently informing him of the creation of the debt, was sent on July 11, 2004. The Board observes that a copy of this July 11, 2004 notice is not of record. A February 2005 audit also shows that the original amount of overpayment as $17,652.13. It also determined that the then current overpayment balance was calculated as $10, 221.99. In a February 2005 decision issued in March 2005, the Committee denied the veteran's waiver request, noting that he was at fault in the creation of the debt as records indicated that the veteran's criminal activities caused the debt and no extenuating circumstances were presented to the Committee. In a June 2005 notice of disagreement and an October 2005 substantive appeal, the veteran's attorney argues that: (1) the veteran was not in fact a "fugitive" as he was always living at the same address, his whereabouts were known at all times by the law enforcement agency, there was no attempt on his part to avoid service of the warrant, and he, in no sense of the word, fled from the authorities; (2) the charge that was contained in the warrant was not a "felony" under state law as high misdemeanors are not recognized by South Carolina; and (3) the veteran was not a "fugitive felon" as defined by 38 U.S.C.A. § 5313B, because he was not charged with a felony, there was no evidence that he was "fleeing to avoid prosecution, or custody or confinement" after "conviction" because he was found not guilty at a bench trial. The veteran's attorney concluded that the warrant was baseless, and should never have been issued, and that, during the five-year period between issuance in 1999 and RO notification in 2004, the Cayce Police Department never tried to serve it. In addition, the attorney added that VA had been garnishing $917 monthly from the veteran's compensation payments to reduce the debt, which has worked an extreme hardship on the veteran and his family making him unable to meet their basic needs. The underlying argument continuously advanced on behalf of the veteran is that an overpayment should not have been created because he was not in fact a fugitive felon as defined by 38 C.F.R. § 3.665(n)(2), and if the debt is found to be valid, the amount of the debt. As such, the appellant has consistently challenged the validity of the debt. The Court has held that when the validity of the debt is challenged, a threshold determination must be made on that question prior to a decision on the waiver of indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1) (2007); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. As such, the Board believes that further action by the Committee to determine whether the creation of the debt at issue was proper and, if so, the correct amount is needed prior to further appellate consideration. The Board reiterates that the veteran's claims file does not contain a copy of the letter from the VA Debt Management Center (DMC), supposedly dated July 11, 2004, informing the veteran of the amount of his indebtedness. On remand, VA must obtain copies of all available records related to the matter on appeal to include a copy of the DMC letter notifying the veteran of the amount of the overpayment incurred and his right to request a waiver, and set forth a written paid and due audit of the veteran's compensation benefits for the period of the overpayment. In determining whether the debt was proper in this case, the RO should consider VA Office of General Counsel opinion, VAOPGCPREC 7-2002, which noted that the VA fugitive felon provision was modeled after Public Law No. 104-193, which barred fugitive felons from receiving Supplemental Security Insurance from the Social Security Administration (SSA) and food stamps from the Department of Agriculture. In that opinion the General Counsel noted that Public Law No. 104-193 "was designed to cut off the means of support that allows fugitive felons to continue to flee." Id. As the veteran was not convicted of a felony in this matter, and there is no contention that he has violated the conditions of a parole or probation, the only definition of fugitive felon that may apply in this case is the one providing that a fugitive felon is a person "fleeing to avoid prosecution" for an offense or an attempt to commit an offense that is a felony under the laws under the place from which the person flees. Accordingly, further appellate consideration will be deferred and the case is REMANDED for the following action: 1. Obtain, and associate with the claims file, copies of all available records related to the matter on appeal held by the VA Debt Management Center (DMC), to include a copy of any letter to the veteran notifying him of the amount of the overpayment incurred and her right to request a waiver. See OF BULLETIN 99.GC1.04 (May 14, 1999). If a copy of this letter cannot be obtained, the RO should, to the extent possible, obtain from the DMC (1) verification in the form of a signed, written certification from the DMC identifying the date of dispatch of the initial notice of indebtedness and right to request waiver, and when and where it was sent and whether it was returned as undeliverable; and (2) a printout of the screen from the Centralized Accounts Receivable Online System (CAROLS) that reflects the date of dispatch of the DMC's initial notice to the veteran with a statement that explains the details of the screen and a copy of the type of form letter sent to the veteran. The VA should document its efforts to obtain these records. 2. Following completion of the above, the RO shall produce a written paid and due audit of the veteran's compensation account for the period of the overpayment, from December 27, 2001 to May 23, 2004. This audit should reflect, on a month-by-month basis, the amounts actually paid to the veteran, as well as the amounts properly due. A copy of the written audit should be inserted into the claims file and another provided to the veteran and his attorney. 3. The Committee should then adjudicate the issue of whether the overpayment of compensation benefits at issue was properly created, including consideration of whether the overpayment was due to sole VA administrative error, and the amount of any overpayment. In particular, as the veteran was found not guilty, the Committee should address whether the veteran is a fugitive felon as defined by VA law and regulation, that is, is a person "fleeing to avoid prosecution" for an offense or an attempt to commit an offense that is a felony under the laws under the place from which the person flees. A comprehensive explanation of the Committee's reasons and bases for that decision should be prepared and incorporated into the claims file, to include a discussion of any information obtained from the Cayce Police Department and the veteran or his attorney. If it is determined that any or all of the overpayment at issue was improperly created, award action should be taken to rectify the error. In any case, the veteran and his attorney should be informed of the decision made and should be allowed the requisite period of time for a response. 4. Thereafter, if an overpayment is found to have been properly created, the veteran should be allowed an opportunity to submit additional evidence pertinent to his request for waiver of recovery of the assessed overpayment, including a complete financial status report, citing all current income, expenses, and assets. 5. After the actions requested above have been completed, the case should be referred to the Committee to review the record and reconsider the veteran's request for waiver pursuant to the principals of equity and good conscience. A formal, written record of the Committee's decision, including an analysis of the various elements to be considered, should be prepared and placed in the claims file. A supplemental statement of the case (SSOC) is not the appropriate means for accomplishing this task, under proper appellate guidelines. 6. If the Committee's determination remains unfavorable to the veteran, he and his attorney should be furnished an SSOC, which specifically addresses the issue of creation of the overpayment and which contains a recitation of the pertinent law and regulations governing the issue of proper creation, including 38 U.S.C.A. § 5112 (West 2002); 38 C.F.R. § 1.965(a) (2007). This document should further reflect detailed reasons and bases for the decision reached. When the above development has been completed, the veteran should be afforded the opportunity to respond thereto. Thereafter, the case should be returned to the Board for further appellate consideration, if otherwise in order. The purpose of this REMAND is to afford due process; it is not the Board's intent to imply whether the benefits requested should be granted or denied. The veteran need take no action until otherwise notified, but he and his attorney may furnish additional evidence and/or argument during the appropriate time frame. See Kutscherousky v. West, 12 Vet. App. 369 (1999); Colon v. Brown, 9 Vet. App. 104, 108 (1996); Booth v. Brown, 8 Vet. App. 109 (1995); Quarles v. Derwinski, 3 Vet. App. 129, 141 (1992). The appeal must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2007). _________________________________________________ JONATHAN B. KRAMER Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2007).