Citation Nr: 21005220 Decision Date: 01/29/21 Archive Date: 01/29/21 DOCKET NO. 19-24 831 DATE: January 29, 2021 ORDER The debt created by placing the Veteran in fugitive felon status for the period of February 3, 2016 to July 9, 2016 is invalid. 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 $17,761.85 was created. CONCLUSION OF LAW The Veteran did not meet the definition of a fugitive felon from February 3, 2016 through July 9, 2016, and the debt created based on fugitive felon status was therefore invalid. 38 U.S.C. §§ 5312, 5313B; 38 C.F.R. §§ 1.963, 1.965, 1.967, 3.665(n) (2019). REASONS AND BASES FOR FINDING AND CONCLUSION 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; 38 C.F.R. § 1.962. 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). 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. The term “felony” includes a high misdemeanor under the laws of a state which characterizes as high misdemeanor offenses that would be felony offenses under Federal law. 38 C.F.R. § 3.666(e)(3). VBA will discontinue benefits based on fugitive felon status only if: a judge issued a felony arrest warrant with a NCIC offense code indicating flight or a probation or parole violation; VA provided the beneficiary notice regarding the reason for the warrant and an opportunity to present evidence, such as an acknowledgment of the validity of the warrant or failure to respond to the due process notification, or that he or she did not flee from justice or did not violate any condition of probation or parole; and VA determines, based upon the warrant and evidence submitted by the beneficiary (if any), that the beneficiary was fleeing from justice or violated a condition of probation or parole. 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; 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); 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 February 3, 2016 through July 9, 2016. In September 2018, 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. The warrant was issued on February 3, 2016; July 9, 2016 is the date the Veteran was arrested on this warrant. Following the receipt of the September 2018 notification of an outstanding warrant from the VA, the Veteran subsequently hired an attorney who submitted a statement that reads as follows: “I am not sure where the miscommunication is or has been, but in regard to [the Veteran’s] arrest in Case No. [redacted], he was arrested July 9, 2016 (as shown on the Officer’s Return on the Warrant for Arrest attached hereto), was bonded out the same day (his bond is also attached), and was thereafter dismissed by the State of Missouri on October 21, 2016 (also attached). [The Veteran] was never ‘incarcerated,’ nor was he ever considered a ‘fugitive felon’ by any State authority. This case was disposed of by a dismissal of the charges against him.” Moreover, the Veteran presented lay statements indicating he did not know of an outstanding warrant and was not actively eluding law enforcement; indeed, he was picked up on the warrant at his residence and had continued to participate in normal activities and routines during the period in question. There is no evidence that indicates that the Veteran was aware of the warrant prior to his arrest. 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. It would not be in the interest of due process for the Veteran to be indebted $17,761.85 (thus creating hardship) when he was not actively eluding law enforcement. 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. Mary E. Rude Acting Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Victoria A. Banis, Associate Counsel 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.