Citation Nr: 21003674 Decision Date: 01/22/21 Archive Date: 01/22/21 DOCKET NO. 09-12 243 DATE: January 22, 2021 ORDER TO VACATE Historically, a VA Regional Office (RO) granted the Veteran a TDIU, effective December 16, 2008. In a September 2012 rating decision, the RO proposed to terminate the TDIU. In an October 2013 rating decision, the RO terminated the TDIU, effective from December 16, 2008. The Veteran appealed the termination. In a decision issued in April 2019, the Board granted restoration of the Veteran’s TDIU rating. After the April 2019 Board decision was issued, the Board became aware of a January 2020 OIG Investigation Report, which found that the Veteran’s TDIU rating was granted based on incorrect information. In August 2020, the Board, on its own motion, issued an Order to Reconsider as to the April 2019 decision, pursuant to 38 C.F.R. § 20.1001(c). Because of the Board’s Order for Reconsideration, the April 2019 Board decision is vacated as a matter of law. Accordingly, this decision, by an expanded panel, will constitute the final Board decision on the Veteran’s appeal. 38 U.S.C. § 7103 (b)(1)(B)(3); VAOPGCPREC 70-91, 57 Fed. Reg. 2,316 (1992); VAOPGCPREC 89-90, 56 Fed. Reg. 1,225 (1991). ORDER Restoration of the Veteran’s total disability based on individual unemployability (TDIU) rating is denied. FINDING OF FACT The Veteran’s business continued after December 2008, and the evidence clearly and convincingly establishes that he remained “actually employable” thereafter. CONCLUSION OF LAW The criteria to terminate TDIU, effective December 16, 2008, were lawfully met; therefore, the criteria for restoration of the TDIU have not been met. 38 U.S.C. §§ 1155, 5112; 38 C.F.R. §§ 3.105(e), 3.343. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from July 1965 to May 1969. As an initial matter, service connection for PTSD was granted in a September 2020 Agency of Original Jurisdiction (AOJ) decision. A 70 percent rating was assigned, effective December 23, 2016. This rating does not affect the outcome of the Veteran’s TDIU claim. The Veteran’s PTSD was not yet service-connected at the time of the April 2019 Board decision granting restoration of TDIU benefits. Moreover, this rating did not become effective until after the association of evidence forming the basis for revising the April 2019 Board decision. Accordingly, the Veteran’s PTSD symptoms are not part of this reconsideration of the April 2019 Board decision. Finally, while the April 2019 Board decision addressed other issues, the August 2020 Order of Reconsideration limits reconsideration in this case to review of the issue of entitlement to restoration of TDIU. Whether the termination of a TDIU rating was proper In a September 2009 rating decision, the RO granted the Veteran a TDIU rating, effective December 16, 2008. In a September 2012 notification letter, the RO proposed to terminate the TDIU rating. In an October 2013 rating decision, the RO terminated the TDIU rating, effective December 16, 2008. The Veteran appealed the termination. He maintains that from December 2008, his service-connected disabilities, especially his back disability, have made him unemployable. In reducing a TDIU, the provisions of 38C.F.R. §3.105 are for application, but caution must be exercised in such a determination that actual employability is established by clear and convincing evidence. 38 C.F.R. § 3.343(c). The “clear and convincing” standard regarding actual employability requires that capacity for work be proven to a “reasonable certainty” but not necessarily be “undebatable.” Vanerson v. West, 12 Vet. App. 254, 258 (1999). The clear and convincing standard of proof is an intermediate standard between preponderance of the evidence and beyond a reasonable doubt. Fagan v. West, 13 Vet. App. 48, 55 (1999); Olson v. Brown, 5 Vet. App. 430, 434 (1993). In this case, the Board finds that termination, or severance, of the TDIU was indeed warranted, as the evidence shows clear and convincing evidence of employability. Generally, when a rating reduction is contemplated, the RO must issue a rating action proposing the reduction and setting forth all material facts and reasons for the reduction. The Veteran must then be given 60 days to submit additional evidence and to request a predetermination hearing. Then a rating action will be taken to effectuate the reduction. 38 C.F.R. § 3.105(e). The effective date of the reduction will be the last day of the month in which a 60-day period from the date of notice to the Veteran of the final action expires. 38 C.F.R. § 3.105 (e), (i)(2)(i). When a RO reduces a veteran’s disability rating without following the applicable regulations, the reduction is void ab initio. Greyzck v. West, 12 Vet. App. 288 (1999). Further, while the law provides that where a rating reduction was made without observance of law, although a remand for compliance with that law would normally be an adequate remedy, in a rating reduction case the erroneous reduction must be vacated, and the prior rating restored. Schafrath v. Derwinski, 1 Vet. App. 589 (1991). Nonetheless, the beginning of 38 C.F.R. § 3.105 provides that these notice provisions do not apply where an award was based on an act of commission or omission by the payee [the Veteran in this case], or with his knowledge. Under 38 C.F.R. § 3.500, an award will be discontinued on the effective date of award or day preceding act, whichever is later, but not prior to the date entitlement ceased, on an erroneous award based on an act of commission or omission by a payee or with the payee’s knowledge. In this case, the Veteran’s TDIU award was based on the omission of key facts in his 2009 application and the accompanying letter. Specifically, the Veteran’s colleague, L.R., reported to an OIG Special Agent in October and November 2011 interviews that he completed the Form 21-4192 on which the grant of TDIU was based. After initially stating that nobody told him how to complete the form, L.R. admitted that he entered $26,000 at the Veteran’s request, without knowing how the Veteran arrived at that figure. Indeed, L.R. admitted in a 2011 interview with an OIG Special Agent that the Veteran supplied the $26,000 figure, and that as far as he could tell, the Veteran appeared to be earning substantially more. The January 2020 OIG investigation report shows that the Veteran reported an income of $283,159 on his joint tax return filed with his then-wife, E.S. In addition, records subpoenaed by the SSA-OIG from the City of Phoenix for the timeframe January 2008 to November 2012 revealed that “[REDACTED], DBA: [REDACTED]” continued to operate his business while claiming to VA and SSA he was retired and unemployed. Specifically, [REDACTED] received $48,432.95 in disbursements for work performed for the City of Phoenix in 2009. This income was not reported to the VA or SSA. The Veteran reported this income to neither VA nor SSA, both of which were paying him benefits. The Veteran’s checking account activity, as described in the January 2020 report, corroborates the conclusion that the Veteran was earning income during the time frame he was receiving TDIU benefits. In particular, the Special Agent conducting the investigation found that from 2009 to 2012, $1,235,831.52 was transferred into the Veteran’s business account. The Veteran then removed E.S.’s name from the account, leaving his name on the account alone. During the same time frame, the Veteran transferred $99,536.87 to his personal account. None of this income was reported on the Veteran’s TDIU application or the following Income Verification Report. Thus, the grant of TDIU was based on an omission of the Veteran’s true income. The TDIU award was also based on the Veteran’s statement that he was too medicated to retain the mental capacity for work. A September 2009 letter signed by L.R. as the Veteran’s supervisor, but which L.R. admitted in 2011 that he did not write, indicates that the Veteran’s leg and back disabilities had limited him to part time work. He also reported that strong pain medications impaired the Veteran’s medical capacity for work. This statement is undercut by several interviews with former customers in the January 2020 investigation report. Indeed, the Veteran continued to conduct business after December 2008. The Veteran’s arguments centering on his diminished cognition due to pain medication also conflict with contemporaneous treatment records. Records from 2007 to 2013 show the Veteran’s normal cognitive functioning. Moreover, the January 2020 investigation report mentions checks written by [VETERAN] as owner of [VETERAN] Equipment in Vancouver, WA, on 12/09/2010. These checks were written by the Veteran and made out to L.R., D.S., L.O., and N.S. as sub-contractors, from November-December 2010. This evidence contradicts the statement of mental incapacity upon which the grant of TDIU was based. Further, interviews with several customers of the Veteran show that as of January 2012, he was able to stand and walk unaided, and inspect lifts and related equipment. According to L.O., a former employee, the Veteran was still running his business in Arizona as of December 2011. Moreover, G.C., K.V., M.H., T.R., and K.H., former customers and business partners, all report seeing the Veteran walking, standing, and performing lift inspection services. In fact, K.V., who was at the Veteran’s dealership in mid-2011, saw him walking around the lift without impairment, and received a call from the Veteran the previous day asking if he needed anything. Finally, information found in a search of the Veteran’s home includes two purchase orders created by the Veteran, signed in April 2009 and January 2010. In records dated September 2009, May 2010 and throughout the appeal period, the Veteran’s cognition is found intact. These records contain no indication that his cognition was affected by back pain medication. The above evidence shows that contrary to his 2009 TDIU application, the Veteran retained the mental and physical capacity for work. The Board thus finds that the Veteran’s TDIU award was based on key omission of fact from his 2009 application. Accordingly, though it did so, VA was not required to follow the procedures outlined in § 3.105(e) in reducing the Veteran’s award. Next, the record shows clear and convincing evidence of employability when the Veteran applied for TDIU. See 38 C.F.R. § 3.343(c). Specifically, the medical and lay evidence of record weighs against finding that the Veteran’s pain medication rendered him incapable of the mental ability required for work. Again, the January 2020 investigation revealed that the Veteran continued to conduct business after December 2008. Despite the arguments of the Veteran and his counsel to the contrary, the Board places significant probative value on the Veteran’s grossly normal mental functioning during the appeal period. The Veteran’s arguments centering on his diminished cognition due to pain medication conflict with contemporaneous treatment records. Indeed, records from 2007 to 2013 show the Veteran’s normal cognitive functioning. Moreover, the January 2020 investigation report mentions checks written by [VETERAN] as owner of [VETERAN] Equipment in Vancouver, WA on 12/09/20. These checks were written by the Veteran and made out to L.R., D.S., L.O., and N.S. as sub-contractors, from November-December 2010. It is therefore reasonable to infer that if the Veteran were mentally incapable of work and needed others to run his business, that he would have the authority to write checks to sub-contractors. Further, interviews with several former customers and business partners of the Veteran show that as of January 2012, he retained the ability to do his job. Specifically, was able to stand and walk unaided, and inspect lifts and related equipment. According to L.O., the Veteran was still running his business in Arizona in December 2011. Moreover, G.C., K.V., M.H., T.R., and K.H., customers in different metro areas, all report seeing the Veteran walking, standing, and performing lift inspection services. In fact, K.V., who was at the Veteran’s dealership in mid-2011, saw him walking around the lift without impairment, and received a call from the Veteran the previous day asking if he needed anything. Finally, information found in a lawful search of the Veteran’s home includes two purchase orders by the Veteran, signed in April 2009 and January 2010. In records dated September 2009, May 2010 throughout the appeal period, the Veteran’s cognition was found intact, despite his taking pain medication. The lay and medical evidence suggesting that the Veteran was unemployable is outlined in the Board’s previous April 2019 decision. Specifically, the Veteran’s therapist, in May 2013, reported that the Veteran was incapable of work due to physical and mental disabilities, and gave business to others and occasionally advised without pay. Also, the Veteran’s first ex-wife, from whom he was divorced in 1987, recalled his being only able to work shortened days even in his twenties and thirties due to back and leg pain. Further, the SSA found the Veteran disabled from December 16, 2008 in January 2010. March 2010 VA records show that the Veteran used a motorized wheelchair and could only walk 20 to 25 feet. Lastly, an April 2014 statement of K.L.W., a former associate in Arizona, and friend since 1990, is of note. K.L.W. narrates that he traveled with the Veteran in 2011 to visit old contacts to drum up business. After a few hours, the Veteran needed two days off his feet. Notably, K.L.W. found that the Veteran’s medication made him unable to express a complex thought, and moderate exertion left him incapacitated for days. Despite the Board’s April 2019 finding of no clear and convincing evidence of unemployability, the January 2020 investigation report, conducted by trained OIG investigators, is more recent, greater in probative value, and weighs in favor of showing that the Veteran’s TDIU was obtained through false pretenses. Specifically, the Veteran’s claim that his pain medication diminished his capacity to the point where he could not work, conflicts with interviews with several of the Veteran’s former business associates, who reported under oath to Special Agents that they witnessed the Veteran conducting business while he was collecting TDIU benefits from VA. It also conflicts with the Veteran’s movement of money into his bank accounts while claiming he was incapable of substantially gainful employment. At best, this evidence shows that the Veteran is capable of employment where he consults and does not have to exert himself. July 2013 statements by Mr. R. and the Veteran at his DRO hearing indicate that in 2008 he tried to make telephone contacts and continue in telephone sales, but was unable to do so as he could not clearly and productively communicate with customers. Again, this conflicts with Vet Center records from 2007 to 2012 indicating that the Veteran did not display any thought or communication disorder. These inconsistencies diminish the credibility of the above statements. The Veteran and his attorney, C.K., assert that the procedures of §3.105 were not followed, and that the delay in implementing the April 2019 restoration is extralegal, as there is no procedure for a Regional Office to request reconsideration. Notably, however, the RO did not request reconsideration – the Board did, pursuant to 38 C.F.R. § 20.1001(c). Moreover, as outlined above, the procedures described in § 3.105(e) are inapplicable to this case, as the award was based on omission of material facts. Lastly, the Veteran appears to attribute the federal investigation of his statements to VA in connection with his TDIU to a revenge report from his ex-wife. Unfortunately, the Board is unable to accept this account as it is not corroborated by tangible evidence of record. In any event, regardless of the source of the tip that led to the January 2020 investigation, the investigation revealed new evidence that has led the Board to revise its earlier decision to restore TDIU benefits. (Continued on the next page) On balance, the evidence, including the January 2020 report, establishes by clear and convincing evidence that the Veteran was not unemployable. Therefore, restoration of the Veteran’s TDIU rating is not warranted. 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. B.T. KNOPE Veterans Law Judge Board of Veterans’ Appeals L. B. CRYAN Veterans Law Judge Board of Veterans’ Appeals WILLIAM H. DONNELLY Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Z. Maskatia