Citation Nr: 1827481 Decision Date: 05/01/18 Archive Date: 05/14/18 DOCKET NO. 14-01 972 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Detroit, Michigan THE ISSUE Entitlement to waiver of recovery of an overpayment of Department of Veterans Affairs (VA) compensation benefits in the amount of $145,038.00, to include the issue of whether the underlying debt was validly created. REPRESENTATION Veteran represented by: Barbara Bosler, Attorney WITNESSES AT HEARING ON APPEAL Veteran and his spouse ATTORNEY FOR THE BOARD P. Daugherty, Associate Counsel INTRODUCTION The Veteran served in the United States Marine Corps with active duty from February 1968 to June 1970. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a March 2013 determination of the Committee of Waiver and Compromises (Committee) of the Department of Veterans Affairs (VA) Debt Management Center (DMC) in St. Paul, Minnesota, and a November 2013 statement of the case from the VA Regional Office (RO) in Milwaukee, Wisconsin. Jurisdiction of the Veteran's appeal belongs to the RO in Detroit, Michigan. In September 2015, the Veteran testified at a videoconference hearing before the undersigned Veterans Law Judge. A transcript of that hearing has been associated with the record. This claim was previously before the Board in January 2016, at which time it was determine that the Veteran's request for waiver was timely filed, and the matter of entitlement to waiver of recovery of an overpayment of VA compensation benefits, to include whether the underlying debt was validly created, was remanded to the AOJ. As substantial compliance with the January 2016 remand directives has been completed, the claim has now returned to the Board for further appellate action. Stegall v. West, 11 Vet. App. 268 (1998). FINDING OF FACT The evidence reflects that the Veteran was not fleeing to avoid prosecution, or custody or confinement after conviction, of a felony during the period when the alleged overpayment of 145,038.00 was created. CONCLUSION OF LAW Fugitive felon status is not established and the $145,038.00 debt based on an overpayment of benefits is not valid. 38 U.S.C. §§ 5312, 5313B (2012); 38 C.F.R. §§ 1.963, 1.965, 1.967, 3.665(n) (2017) REASONS AND BASES FOR FINDING AND CONCLUSION I. Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations imposes obligations on VA to provide claimants with notice and assistance. 38 U.S.C. §§ 5102, 5103, 5103A, 5107 (2002); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2017). However, the VCAA is not applicable to cases involving overpayment of indebtedness. Barger v. Principi, 16 Vet. App. 132 (2002). II. Waiver of Overpayment of Benefits An overpayment of benefits is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See, 38 U.S.C § 5302 (2012); 38 C.F.R. § 1.962 (2017). An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, educational assistance benefits, subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. 38 C.F.R. § 1.956(a) (2017). Pursuant to 38 C.F.R. § 3.655(n), compensation is not payable on behalf of a veteran for any period during which he or she is a fugitive felon. For purposes of this section, the term fugitive felon means a person who is a fugitive by reasons 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. In cases where a debt has been created by overpayment of VA benefits, a claimant has the right to dispute the existence and amount of a debt. 38 U.S.C. §501 (2012); 38 C.F.R. § 1.911(c). In determining whether a waiver of overpayment is appropriate, the inquiry is based on three distinct questions. First, VA must determine if the overpayment at issue was validly created. Schaper v. Derwinski, 1 Vet. App. 430 (1991). Second, if the debt is valid, VA must determine if fraud, misrepresentation, or bad faith played a role in its creation. If it did, waiver of the overpayment is automatically precluded and further analysis is not warranted. 38 U.S.C. § 502; 38 C.F.R. §§ 1.963(a), 1.965(b). Finally, if VA determines that the debt is valid and that fraud, misrepresentation, and/or bad faith had no part in its creation, VA must then consider whether collection of the debt would be against equity and good conscience. See, 38 U.S.C. § 5302(a)(2012); 38 C.F.R. §§ 1.962, 1.963, 1.965. The decision reached should not be unduly favorable or adverse to either side. The phrase equity and good conscience means arriving at a fair decision between the obligor and the U.S. Government. In making this determination of whether recovery would be against equity and good conscience, 38 C.F.R. § 1.965(a) requires consideration of each of the following factors, which are not intended to be all inclusive: (1) the fault of the debtor; (2) balance of faults between the debtor and VA; (3) undue hardship; (4) whether collection would defeat the purpose of the benefits; (5) unjust enrichment; and (6) whether the debtor changed position to his own detriment through reliance on the benefit. See, 38 C.F.R. § 1.965. The dispositive issue in this case is whether the Veteran was a fugitive felon from the date of his VA compensation benefits in October 2007 through September 2012. In September 2011, the Veteran was informed by VA that he had been identified as a fugitive felon because he was the subject of an outstanding warrant and was given sixty days to provide evidence that the warrant was cleared, otherwise his benefits would be terminated. The Veteran argues that he is not a fugitive felon and that the debt is therefore invalid. Following the receipt of the September 2011 notification of an outstanding warrant from the VA, the Veteran subsequently hired an attorney in the jurisdiction of the outstanding warrant. The warrant was cleared in September 2012, and the Veteran's attorney in that matter submitted a statement that reads as follows: "[the] Order reflects the Court's finding that Mr. [REDACTED] had complied with the terms of his probation and the matter was officially closed. It appears that the outstanding warrant and probation violation was a clerical error committed at a time before computers, when everything was hand recorded. The disposition of this matter was simply not properly recorded almost 40 years ago." See, letter from attorney M.W. dated September 2012. The Veteran and his representative provided testimony to the same effect during his September 2015 videoconference hearing, stating that the Veteran did not know of an outstanding warrant and had believed that everything had been resolved regarding the situation from which the warrant arose from. The Veteran's representative also pointed out that the name for the individual on the warrant is spelled slightly differently from the Veteran's name, and on the FFP-3 VA Investigative Summary Form, which shows the outstanding warrant; the date of birth for the Veteran is also incorrect. See, 2011 FFP-3 Form. As stated above, the record indicates that the warrant for the Veteran cleared in September 2012, shortly after the Veteran received what he says was his first notification of any outstanding warrants in his name. There is no evidence that indicated that the Veteran was aware of the pending charges prior to the September 2011 VA letter notifying him of his fugitive felon status. Accordingly, the Board finds that there is no evidence showing that the Veteran was fleeing to avoid prosecution, and the Veteran can only be considered a fugitive felon if he was fleeing to avoid prosecution. The record also contains evidence raising the possibility that the warrant was created by a clerical error and by no fault of the Veteran. Therefore, after resolving all doubt in favor of the Veteran, the Board finds that he was not a fugitive felon and the debt was not validly created. The Veteran is therefore entitled to waiver of the recovery of the debt created by a purported overpayment of compensation benefits in the amount of $145,038.00. ORDER Entitlement to a waiver of the recovery of a debt created by an overpayment of compensation benefits in the amount of $145,038.00 is granted. ____________________________________________ Michael J. Skaltsounis Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs