Citation Nr: 1327182 Decision Date: 08/26/13 Archive Date: 08/29/13 DOCKET NO. 10-07 547 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania THE ISSUE Entitlement to a waiver of indebtedness in the calculated amount of $33,571.12. REPRESENTATION Veteran represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Andrea Johnson, Associate Counsel INTRODUCTION The Veteran had active military service from March 1967 to December 1970. This matter comes before the Board of Veteran's Appeals (Board) on appeal from a May 2009 decision of the VA Committee on Waivers and Compromises (Committee) at the Regional Office (RO) in Philadelphia, Pennsylvania. The Board must note that in reviewing this case the Board has not only reviewed the Veteran's physical claims file, but also his file on the "Virtual VA" system to ensure a total review of the evidence. FINDINGS OF FACT 1. A valid felony warrant for the Veteran was in effect from March 2006 to March 2007. 2. VA terminated the Veteran's VA compensation benefits from March 2006 to March 2007 under VA regulations that provide that compensation is not payable on behalf of a veteran for any period during which he is a fugitive felon. This created indebtedness in the amount of $33, 571.12. 3. The Veteran is not shown to have willfully committed fraud, misrepresentation, or an act of bad faith in the creation of the overpayment in question. 4. Recovery of this overpayment would subject the Veteran to undue financial hardship. 5. Denial of the waiver request would defeat the purpose of the award of VA disability compensation benefits. CONCLUSION OF LAW Recovery of indebtedness created by the overpayment of service connected compensation benefits in the amount of $33, 571.12 would be contrary to the principles of equity and good conscience. 38 U.S.C.A. §§ 5302, 5313B (West 2002); 38 C.F.R. §§ 1.956, 1.962, 1.963, 1.965, 3.665 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran is seeking a waiver for his overpayment of benefits. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. VA regulations provide that compensation is not payable on behalf of a veteran for any period during which he or she is a fugitive felon. 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 Federal or State law. 38 U.S.C.A. § 5313B(b)(1). 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. 38 U.S.C.A. § 5313B(a); 38 C.F.R. § 3.665(n). The Committee at the RO determined the Veteran was overpaid benefits from March 20, 2006 through March 30, 2007 due to his status as a fugitive felon during that time. The Veteran has contended that he was not a fugitive felon as he was unaware of the outstanding warrant until notified by the VA in March 2007 and at that time took immediate actions to remedy the outstanding warrant. As a threshold matter, the Veteran has been in receipt of VA benefits since 1995 with total disability rating for his service-connected post-traumatic stress disorder (PTSD). The Veteran is also service-connected for diabetes mellitus, type II. The record reflects the Veteran is totally disabled. Based on the evidence of record it appears in January 2006 the Veteran was arrested for trying to rob a house while naked, and after initially being sent to jail was transferred to the VA medical center for mental and psychiatric treatment. VA treatment records indicate the Veteran was treated for a diabetic coma, as well as delirium. After stabilization the Veteran reported he could not remember what happened to him, not only regarding the recent arrest but also the preceding holiday season. The Veteran expressed fear from his memory loss, and surprise that he may have been arrested. Following additional treatment he was discharged from the hospital on March 28, 2006. Based on the notification the VA received from the fugitive felon program it appears a warrant was issued for the Veteran conjunction with the pre-hospitalization burglary on March 20, 2006. However, an August 2009 letter from the Veteran's public defender stated the warrant was signed on January 31, 2006, while the Veteran was still hospitalized. Unfortunately, a copy of the warrant itself is not included in the evidence of record. Regardless of whether the warrant was issued in January or March of 2006, the VA was notified of the outstanding warrant by law enforcement authorities in March 2007. The VA provided notice to the Veteran and indicated the Veteran at least 60 days in which to resolve the matter and clear the warrant before benefits would be adjusted. That same month, March 2007, the Veteran filed a written statement explaining that while he was taken into custody for third degree burglary his actions were the fault of his service-connected PTSD. The Veteran stated he has no memory of the crime. However once notified of the warrant he was arrested on March 16, 2007 on the outstanding warrant and released on a promise to appear. The Veteran included a copy of his signed Promise to Appear. This documentation indicates the Veteran was charged with burglary in the third degree, a felony under Connecticut law. Conn. Gen. Stat. Ann. § 53a-103 (West 2013). Subsequent documentation from the public defender's office establishes that the charges brought against the Veteran on the warrant in question were all dropped in March 2007. In August 2007 the VA notified the Veteran that his VA benefits were terminated retroactive to March 20, 2006, the date the warrant was issued, and were resumed on March 30, 2007, the date the case was dismissed. This created overpayment of $33,571.12. The Veteran then filed a claim seeking waiver of his withheld benefits. The Veteran stated he had no knowledge of being arrested. He awoke in a VA medical facility and was held for a few months until he was released. The Veteran stated upon his release he was not informed of any warrant placed on him. The Veteran was finally informed of the warrant in March 2007 and took immediate actions to remedy the outstanding warrant. The Board finds that although all charges against the Veteran were dropped, for the period of March 2006 to March 2007 the Veteran met the definition of a fugitive felon under VA regulations. During this period the Veteran avoided prosecution for an offense which was a felony under the state laws. 38 U.S.C.A. § 5313B; 38 C.F.R. § 3.666. The Court of Appeals for Veterans Claims (Court) has determined that an adjudication of guilt is not required for an individual to be considered a fugitive felon under VA regulations, and actual knowledge of the warrant issued is irrelevant. Mountford v. Shinseki, 24 Vet. App. 443, 448 (2011). The Board acknowledges that although this case was specifically applying 38 U.S.C.A. § 5313B(b)(1)(B), pertaining to a fugitive by reason of violating a condition or probation or parole, the Board finds the same reasoning applies by analogy to 38 U.S.C.A. § 5313B(b)(1)(A), pertaining to a fugitive by reason of feeling to avoid prosecution. As such, the Veteran was a fugitive felon from March 2006 to March 2007 and was overpaid VA benefits during this time. However, recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962, 1.963. In making this determination, consideration will be given to the following elements, which are not intended to be all-inclusive: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA (3) undue hardship of collection on the debtor; (4) whether collection would defeat the purpose of an existing benefit to the veteran; (5) whether failure to collect a debt would result in the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his detriment in reliance upon a granted VA benefit. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a); Ridings v. Brown, 6 Vet. App. 544, 546 (1994). Here this is no indication in the record that the Veteran committed fraud or intentionally misrepresented facts. He has made seemingly credible statements that based on his mental condition during the time in question he had no knowledge of the outstanding warrant. Upon notification of the warrant the Veteran took immediately steps to resolve the issue. As such, the Board finds there is no evidence the Veteran committed fraud. The Board must next address the equitable consideration in this case, most persuasively the undue hardship of collection on the Veteran. In connection with his appeal the Veteran also completed a financial status report which indicated he was unemployable and did not receive any income other than his VA and social security benefits. The Veteran has also previously been adjudicated bankrupt in 2002. Additionally, VA treatment records suggest the Veteran was likely homeless shortly before the time period in question. As noted above, he is also rated totally disabled due to his service-connected PTSD, suggesting total occupation and social impairment. The facts of the crime appear to fully support the Veteran's recollection of facts, to the extent possible: This does not appear to have been a premeditative felonious act for profit (trying to rob a house while naked would appear to support this finding). As such, the Board finds the Veteran is clearly unable to work to supplement his income to repay his debt. Therefore, collection of the debt of over $30,000 would defeat the purpose of VA benefits, which is to compensate and ensure the health and welfare of the disabled veteran. While the Veteran was a fugitive felon under VA regulations during the period of March 2006 to March 2007, the Board finds forcing a totally disabled veteran of limited means to repay the debt in question would be against equity and good conscience. Accordingly, the Board finds that the Veteran is entitled to a waiver of the assessed overpayment. Duties to Notify and Assist The provisions regarding notification and evidentiary development assistance requirements established by the Veterans Claims Assistance Act of 2000 (VCAA) are not applicable to cases involving overpayment and indebtedness. Lueras v. Principi, 18 Vet. App. 435 (2004); Barger v. Principi, 16 Vet. App. 132 (2002). In addition, wavier of overpayment was granted, which constitutes a full grant of all benefits sought on appeal. As such, no further discussion of the duties to notify and assist is required. ORDER Waiver of recovery of the Veteran's debt in the amount of $33,571.12 is granted. ____________________________________________ JOHN J. CROWLEY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs