Citation Nr: 20004862 Decision Date: 01/22/20 Archive Date: 01/21/20 DOCKET NO. 19-28 817 DATE: January 22, 2020 ORDER Entitlement to waiver of recovery of an overpayment of the Department of Veterans Affairs (VA) compensation benefits in the amount of $22,960.93 is denied. FINDINGS OF FACT 1. On July 12, 1995, a warrant was issued in Santa Clara, California, for the Veteran’s arrest. The Veteran was not arrested pursuant to the warrant. 2. From July 12, 1995, the Veteran met the definition of a fugitive felon. 3. In November 2017, VA retroactively terminated the Veteran’s compensation for the period from December 27, 2001, based on his fugitive felon status. This retroactive termination resulted in an overpayment of $22,960.93. 4. The Veteran was solely at fault in the creation of the overpayment, and failure to recover the overpaid benefits would result in an unfair gain to him. CONCLUSION OF LAW The criteria for entitlement to a waiver of recovery of overpayment of VA compensation benefits from December 27, 2001 have not been met. 38 U.S.C. § 5302(a); 38 C.F.R. §§ 1.963(a), 1.965, 3.666(e). REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from January 1971 to April 1974. This appeal comes before the Board of Veterans’ Appeals (Board) from a January 2019 administrative decision issued by the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (COWC) at the RO in Philadelphia, Pennsylvania, in Reno, Nevada. The issue of whether termination of VA compensation benefits was proper for the period from December 27, 2001 to present, based on fugitive felon status, is addressed in a separate decision under a different docket number. 1. Entitlement to waiver of recovery of an overpayment of the VA compensation benefits in the amount of $22,960.93. The Veteran seeks a waiver of indebtedness for an overpayment in the amount of $22,960.93. 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 C.F.R. § 1.962. 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 overpayment. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). As noted above, a veteran may not be paid compensation benefits for any period during which he or she is a fugitive felon. . .A “fugitive felon” also includes a person who is a fugitive by reason of “violating a condition of probation or parole imposed for commission of a felony under Federal or State law.” 38 U.S.C. § 5313B(b)(1)(B). The statute barring veterans from receiving VA benefits while they are fugitive felons does not require an adjudication of guilt or knowledge of the outstanding arrest warrant. Mountford v. Shinseki, 24 Vet. App. 443 (2011). 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. § 5302(c); 38 C.F.R. §§ 1.962, 1.963. In the present case, the RO became aware in 2017 that the Veteran had been the subject of a warrant issued in the state of Texas for the offense of parole violation: warrant OCA # 02379336 (hereinafter #9336), dated July 12, 1995. See Office of Inspector General (OIG) Notification (rec'd May 25, 2018). In September 2017, the RO notified the Veteran that it 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 for parole violation. The Veteran was given 60 days in which to clear the warrant or advise VA if he believed he was not the person identified in the warrant or his benefits would be terminated. In November 2017, the RO notified the Veteran it had terminated the Veteran’s benefits effective December 27, 2001 because he had been identified as a fugitive felon. In a May 2019 correspondence, the Veteran states “the case in Texas is a result of mistaken identity. I have a lawyer helping me prove it. I just don’t know how long it will take.” Notwithstanding the Veteran’s contentions, there is no evidence to support that the state of Texas court system has specifically determined that the warrant was void from its inception because of mistaken identity or a defect in the warrant. Nor is there any evidence that the warrant has been dismissed, or that the Veteran had been released from the obligations imposed by virtue of his parole from incarceration. As such, the Board finds that the warrant, certified as an active warrant in November 2017, is still active and the Veteran is in violation of his parole. As of the January 2019 administrative decision, the Veteran had not been arrested, and the warrant was still valid. Accordingly, the Veteran met the definition of a fugitive felon. 38 U.S.C. § 5313B (b); 38 C.F.R. § 3.666(e)(2) (stating that a fugitive felon means a person who is a fugitive by reason of, inter alia, violating a condition of probation or parole imposed for the commission of a felony under Federal or State law); see also Mountford, supra (noting that the statute barring veterans from receiving VA benefits while they are a fugitive felon does not require an adjudication of guilt or knowledge of the outstanding arrest warrant). Because the Veteran met the definition of a fugitive felon from July 12, 1995 and a veteran may not be paid compensation benefits for any period during which he or she is a fugitive felon, the Board finds that the $22,960.93 debt created when VA retroactively terminated the Veteran’s compensation benefits, is valid. See 38 U.S.C. § 5313B; 38 C.F.R. § 3.665(n). As such, the Board will proceed to the merits of the waiver request. Recovery of overpayments of any benefits made under the laws administered by VA shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver and if the recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963(a), 1.965. In this case, the Board has not found any evidence of fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the overpayment. The next question is whether the facts dictate that a waiver should be granted under the standard of “equity and good conscience.” The phrase “equity and good conscience” means the arrival at a fair decision between the obligor and the Government. In making this determination, consideration will be given to the following elements (which are not intended to be all-inclusive): (1) fault of the debtor, (2) balancing of faults between the debtor and VA, (3) undue hardship of collection on the debtor, (4) defeat of the purpose of an existing benefit to the appellant, (5) unjust enrichment of the appellant, and (6) whether the appellant changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C. § 5302; 38 C.F.R. § 1.965(a). The first and second elements pertain to the fault of the debtor versus the fault of VA. In this case, the Board finds that the fault in creating the debt is entirely with the Veteran. There is no evidence that VA is at fault for the incurrence of this debt. With respect to the first element, the Board initially finds that the fault in the creation of the overpayment at issue lies exclusively with the appellant, as it was caused by his failure to adhere to the terms and conditions of his parole, resulting in the issuance of a warrant for his arrest. The appellant’s actions were the sole cause of the overpayment in this case. The second element concerns “balancing of faults.” 38 C.F.R. § 1.965(a)(2). This element requires weighing the fault of the debtor against the fault of VA. In this regard, the debt in this case was created after a warrant was issued for the appellant’s arrest based on his failure to adhere to the terms and conditions of his parole, and it remained outstanding until he was arrested. The Board finds that VA bears no fault in the creation of this debt. In fact, the record shows that VA took prompt action to terminate the appellant’s compensation once it received notification of his fugitive felon status. The next element to be considered is “undue hardship,” described as “[w]hether collection would deprive debtor or family of basic necessities.” 38 C.F.R. § 1.965(a)(3). In this respect, the record shows that the appellant is in receipt of Social Security Administration (SSA) benefits of $1027.00 per month. He has also been granted VA compensation. However, his VA compensation has been terminated since there is an active warrant against the Veteran. The Board notes that the evidence does not indicate that the Veteran has taken steps to have the warrant dismissed, which would enable the restoration of his VA benefits. The October 2018 Financial Status Report indicates that the appellant’s expenses, which include a $470 monthly rent, $100 for food, $125 for utilities and heat, $5 for water, and $15 for a sewer bill. He also has $169.38 in an installment plan for court costs. With the inclusion of the $154.05 monthly debt as a result of the overpayment, the Veteran’s expenses exceed his income by $11.43. With consideration of his income from SSA, the Board finds that the evidence of record fails to demonstrate that collection of the debt at issue here would result in undue financial hardship or result in undue hardship. The Veteran’s reported monthly expenses include an unpaid balance of $338.75 for court costs, with two-month payments of $169.38 remaining as of October 13, 2018. With the reduction of the $169.38 monthly payment, the Veteran’s monthly expenses would reduce to $869.05, with an excess of $157.95, after the payment of the outstanding VA debt. Based on the information available, the Board finds undue hardship has not been established. Regardless, as set forth above, the Board concludes that the substantial element of fault and the unjust enrichment would outweigh any other factor, including financial hardship. The next element to be considered is whether recovery of the overpayment at issue would defeat the purpose for which the benefits were intended. 38 C.F.R. § 1.965(a)(4). In this case, the appellant was not legally entitled to VA compensation during the period in question. Rather, he was statutorily prohibited from receiving VA compensation during the period he was a fugitive felon pursuant to the legislation intended to deny fugitives the means to maintain themselves in that status. See e.g. VAOPGCPREC 7-2002 (Dec. 3, 2002). The Board finds that the purpose and intent of the fugitive felon statute outweighs any consideration as to the purpose of VA compensation benefits in this case. In other words, repayment of the debt at issue would not conflict with the objective underlying the appellant's VA compensation benefits, as he was legally barred from receiving those benefits during the time period in which that debt was granted. The fifth element involves “unjust enrichment,” i.e., the concept that failure to make restitution would result in unfair gain to the debtor. 38 C.F.R. § 1.965(a)(5). In this case, the appellant received VA compensation to which he was not legally entitled. Waiver of this debt would therefore result in a windfall and produce unfair gain to the appellant. The failure of the Government to insist on its right to repayment of this debt would result in the appellant's unjust enrichment at the expense of the taxpayer, and it would negatively impact other VA beneficiaries as resources for their care are not unlimited. The final element to be considered is whether reliance on VA benefits resulted in the appellant relinquishing a valuable right or incurring a legal obligation. 38 C.F.R. § 1.965(a)(6). It has not been contended that the appellant relinquished any right or incurred any legal obligation in reliance on receipt of compensation benefits, nor is there any evidence that he did. After carefully weighing all relevant factors set forth above, and considering the benefit of the doubt doctrine set forth in 38 U.S.C. § 5107, the Board finds that recovery of the compensation indebtedness in the calculated amount of $22,960.93 does not violate the principles of equity and good conscience. As discussed above, the Board finds that the significant fault on the part of the appellant and the unjust enrichment which would accrue from a waiver outweigh any factors that would tend to support a waiver of recovery of the overpayment in this case, including claimed financial hardship. Under such circumstances, the request for waiver is denied. 38 U.S.C. § 5302; 38 C.F.R. §§ 1.962, 1.963. T. Mainelli Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Michael J. O’Connor The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential, and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.