Citation Nr: 1111430 Decision Date: 03/22/11 Archive Date: 04/05/11 DOCKET NO. 10-34 530 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania THE ISSUE Entitlement to a waiver of the recovery of an overpayment of nonservice-connected pension benefits in the calculated amount of $42,103.77, to include whether the debt was properly created. REPRESENTATION Appellant represented by: Michael J. Kelley, Attorney WITNESS AT HEARINGS ON APPEAL None ATTORNEY FOR THE BOARD S. Mishalanie, Counsel INTRODUCTION The Veteran served on active military duty from February 1969 to February 1973. This case came to the Board of Veterans' Appeals (Board) on appeal from a May 2009 decision of the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (COWC) at the Debt Management Center (DMC) in Fort Snelling, Minnesota, which determined that the Veteran's request for waiver of the recovery of an overpayment of nonservice-connected pension benefits was untimely. In May 2010, a hearing was scheduled before the COWC at the Regional Office (RO) in Philadelphia, Pennsylvania; however, the Veteran's attorney indicated that the Veteran was unavailable. The Veteran's attorney presented argument on behalf of the Veteran, requesting that the Veteran's request for a waiver be considered timely due to extenuating circumstances involving the Veteran's health and his homeless status. In a June 2010 decision, the COWC at the Philadelphia RO deemed the Veteran's request for a waiver timely based on his extenuating circumstances, but denied the waiver based on his "fugitive felon" status. The Philadelphia RO has maintained jurisdiction over this appeal. In October 2010, a videoconference hearing was scheduled before the undersigned Veterans Law Judge of the Board. At that hearing, the Veteran's attorney said that he had attempted to locate the Veteran, who is homeless, but was unable to find him. The Veteran's attorney presented argument on behalf of the Veteran. FINDINGS OF FACT 1. The Commonwealth of Massachusetts issued a felony warrant for the Veteran's arrest effective February [redacted], 2004; VA determined that the Veteran was a fugitive felon and retroactively discontinued his nonservice-connected pension benefits from that date, resulting in an overpayment. 2. According to the Veteran, he was arrested and incarcerated in Arkansas in June 2008 for failure to pay child support; thereafter, he said he returned to Massachusetts to resolve the warrant, which was cancelled effective July [redacted], 2008. 3. Prior to June 2008, the evidence does not show that the Veteran was aware of the felony warrant or that he was being sought for prosecution in Massachusetts. 4. The evidence does not reflect that the Veteran was either fleeing to avoid prosecution or custody or confinement after conviction for a felonious offense, or attempting to commit a felonious offense, or that the Veteran was violating a condition of probation or parole imposed for commission of a felony. CONCLUSION OF LAW The determination that the Veteran was a fugitive felon, which resulted in the discontinuance of nonservice-connected pension payments from February [redacted], 2004 until July [redacted], 2008, and the creation of an overpayment, was not proper. 38 U.S.C.A. § 5313B (West 2002 & Supp. 2009), 38 C.F.R. § 3.665(n)(2) (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION VCAA The Veterans Claims Assistance Act (VCAA) describes VA's duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2010). This statute, however, is not applicable to waiver claims. Barger v. Principi, 16 Vet. App. 132 (2002). Governing Law and Regulations The issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). The VA General Counsel has reinforced this obligation by holding that where the validity of the debt is challenged, that issue must be developed before the issue of entitlement to a waiver of the debt can be considered. See VAOPGCPREC 6-98 (April 24, 1998). In order for the Board to determine that the overpayment was properly created, it must be established that the Veteran was not legally entitled to the benefits in question, or, if there was no legal entitlement, then it must be shown that VA was solely responsible for the Veteran erroneously being paid benefits. On December 27, 2001, Congress enacted the Veterans Education and Benefits Expansion Act of 2001, Pub. L. No. 107-103, 115 Stat. 976 (Act). Section 505(a)(1) of the Act added 38 U.S.C.A. § 5313B, which provides (in pertinent part) that a veteran who is otherwise eligible for a benefit under chapter 15 of title 38 may not be paid or otherwise provided such benefit for any period during which such veteran is a fugitive felon. See 38 U.S.C.A. § 5313B. The implementing regulation, 38 C.F.R. § 3.665(n), provides: Fugitive Felons: (1) Compensation is not payable on behalf of a veteran for any period during which he or she is a fugitive felon. Compensation or dependency and indemnity compensation (DIC) is not payable on behalf of a dependent of a veteran for any period during which the veteran or the dependent is a fugitive felon. (2) For purposes of this section, the term fugitive felon means a person who is a fugitive by reason of: (i) 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 (ii) Violating a condition of probation or parole imposed for commission of a felony under the Federal or State law. (3) For purposes of paragraph (n) of this section, the term felony includes a high misdemeanor under the laws of a State which characterizes as high misdemeanors offenses that would be felony offenses under Federal law. (4) For purposes of paragraph (n) of this section, the term dependent means a spouse, surviving spouse, child, or dependent parent of a veteran. 38 C.F.R. § 3.665(n). While the term fugitive is not specifically defined by the governing statute and regulation, Black's Law Dictionary (8th Ed. 2004) defines fugitive as a person who flees or escapes; a refugee; or as a criminal suspect or a witness in a criminal case who flees, evades, or escapes arrest, prosecution, imprisonment, service of process, or the giving of testimony, especially by fleeing the jurisdiction or by hiding. In addressing how fugitive felon status affected payment of VA benefits to dependents, in an opinion, VA's General Counsel 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. VAOPGCPREC 7-2002 (December 3, 2002). It was 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. The SSA's fugitive felon provision is essentially identical to the VA provision cited above. See 42 U.S.C.A. § 1382(e)(4)(A). The VA Adjudication Manual provides that a "beneficiary or dependent who is the subject of a valid outstanding felony arrest warrant is presumed to be a fugitive felon for VA purposes." M21-1MR, Part X, Chapter 16, (1)(c). VA has also issued guidance entitled "Impact of the Fugitive Felon Act on Committees on Waivers and Compromises", OF Bulletin 04GC1.08, providing that "[a] person who has an outstanding warrant for a felony offense is considered to be a 'fugitive felon' whether or not he or she is literally fleeing." See also, "Further Instructions on the Impact of the fugitive Felon Act on Committees on Waivers and Compromises", OF Bulletin 05GC1.01. Factual Background and Legal Analysis According to the July 2010 Statement of the Case, in October 2007, the RO was notified that there was an active warrant for the Veteran's arrest effective February [redacted], 2004. Correspondence in the claims file indicates the arrest warrant was issued by the Commonwealth of Massachusetts on felony no support changes. In April 2008, the RO determined that the Veteran was a "fugitive felon" and retroactively terminated his nonservice-connected pension benefits, which created an overpayment in the calculated amount of $43,934.74. In September 2008, the RO received notice that the warrant had been cancelled on July [redacted], 2008; the RO reinstated his benefits effective from that date, reducing the calculated overpayment to $42,103.77. In October 2010 the Veteran's attorney appeared for an informal conference before the undersigned Veterans' Law Judge, as his client, the Veteran, failed to appear for a hearing scheduled for that day. The attorney indicated that the Veteran's arrest warrant stemmed from the Veteran's failure to pay child support in Florida, and that the Veteran was unaware of the pending warrant. He stated that VA made no attempt to ascertain the facts surrounding the warrant or whether the Veteran knew about the warrant. He argued that VA's interpretation of the Fugitive Felon Act was unconstitutional and noted that several courts had found SSA's similar interpretation to be improper. He cited to various cases. As the evidence does not indicate that Veteran 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. The Board notes that the controlling statute and the regulation specifically include the intentional act of "fleeing to avoid prosecution" as a condition of finding fugitive felon status. Furthermore, courts examining the SSA statute have found that a person must have knowledge that his apprehension be sought and there must be a finding of flight in order for benefits to be severed. See Oteze Fowlkes v. Adamec, 432 F.3d 90, 96-97(2d Cir. 2005)(finding the SSA's interpretation of the statute to suspend benefits without a finding of flight was improper); see also Garnes v. Barnhardt, 352 F. Supp. 2d 1059, 1065-1066 (N.D. Cal. 2004) and Hull v. Barnhart, 336 F. Supp. 2d 1113 (D.Or. 2004)(finding the SSA's interpretation that the mere presence of a warrant was sufficient to establish fugitive felon status was in contradiction to the underlying statute and regulations applicable to SSA benefits). In light of the above decision, the SSA issued a Notice of Social Security Acquiescence Ruling in April 2006. See 71 Fed. Reg. 17,551-17,552 (April 6, 2006). The ruling noted the holding of the court and that the agency could not conclude that an individual was fleeing to avoid prosecution, custody, or confinement from the mere fact that there was an outstanding felony arrest warrant or similar order. As noted above, VA's Adjudication Manual provides a presumption of fugitive felon status when a veteran is subject of a valid outstanding felony arrest warrant. The Board points out that it does not have the authority to invalidate VA regulations or adjudicative manuals. See 38 U.S.C.A. § 7104(c) (the Board is bound in its decisions by the regulations of the department and instructions of the Secretary). Here, however, the Board finds that the record contains sufficient evidence to overcome the presumption of fugitive felon status. In this case, the Veteran's attorney has argued that the Veteran was unaware of the existence of the outstanding warrant. Although the Veteran, himself, has not testified in this matter, the Board notes that the circumstantial evidence indicates that he did not have knowledge of the outstanding warrant until June 2008. The following month, he returned to Massachusetts and the arrest warrant was cancelled. VA treatment records from the Albuquerque VA Medical Center (VAMC) indicate the Veteran was treated at that facility through May 2008. These records note that the Veteran had been homeless for at least 8 years and had spent some time in early 2008 in Las Vegas, Nevada, attempting to find temporary housing. A July 2008 VA social work note from the Boston VAMC indicates the Veteran said he was incarcerated in Arkansas for being in arrears for child support. He said he was in a car accident in June 2008 when the guard fell asleep while driving. He denied any legal problems other than his legal issues and incarceration for nonpayment of child support. The Veteran's arrest warrant was cancelled effective July [redacted], 2008. In September 2008, the Veteran requested that jurisdiction of his claims file be transferred to the RO in Boston, Massachusetts. During a November 2008 VA examination for posttraumatic stress disorder (PTSD), the Veteran said that he had been "on the road" for 20 years. He said that after undergoing a triple bypass in July 2003, he was incarcerated for three and half weeks. While being transported in Arkansas in June 2008, he said he was involved in a car accident when the guard who was transporting fell asleep while driving. He said that he fractured his tibia and pelvis in that accident. He said that he then returned to Massachusetts to straighten out his life, and also because there was a warrant for his arrest in Massachusetts. He said that he discovered after a period of time that there was a warrant for his arrest for nonsupport and that he turned himself in. The evidence of record suggests that the Veteran first became aware of the felony warrant when he was arrested in Arkansas in June 2008. It is unclear whether the Veteran had notice of the outstanding warrant prior to his arrest. The Board notes that he has been homeless for many years and that much of the correspondence from VA addressed to him has been returned by the U.S. Postal Service. The addresses provided by him tend to be transient in nature, usually in care of various homeless shelters. Under these circumstances, although VA notified him of the warrant in correspondence dated in January 2008, it cannot be presumed that he actually received such notification and it is unlikely that the law enforcement agency that issued the warrant was able to provide such notification. Certainly no mention of the warrant is made in his treatment records until July 2008. Significantly, the Board points out that in the month following the Veteran's arrest, he returned to Massachusetts with the apparent intent to get his life together and take care of the outstanding warrant. Hence, it can hardly be said that he was fleeing in an attempt to avoid prosecution. In fact, the evidence indicates that the warrant was cancelled in July 2008, a month after he was arrested. Given these circumstance, the Board finds that there is no evidence that the Veteran knew that his apprehension was sought. The record does not show that the Veteran received any notice that there was a warrant issued. Without such notice, there can be no finding that he engaged in the intentional act of "fleeing." Furthermore, the Veteran's actions during the relevant time period reflect he was not "fleeing." Most significantly, shortly after he arrested in Arkansas for nonsupport, he returned to Massachusetts to resolve the warrant. Such actions do not reflect the intentional act of "flight from prosecution" necessary to establish fugitive felon status. Consequently, the Veteran cannot be considered to have been a fugitive felon under the controlling statute and regulation. As the Veteran is not shown to have been a fugitive felon from February [redacted], 2004 to July [redacted], 2008, the discontinuance of his disability compensation payments for that period of time was not warranted. Hence, the creation of an overpayment in the calculated amount of $42,103.77 resulting from the retroactive discontinuance of compensation benefits was improper, and the Veteran's appeal is granted. As the alleged overpayment was improperly created, the issue of a waiver of the recovery of the debt is now moot. ORDER An overpayment of nonservice-connected pension benefit payments in the calculated amount of $42,103.77 was not properly created; the appeal is granted. ____________________________________________ RENÉE M. PELLETIER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs