14-43 430
14-43 430
Board of Vet. App.Jun 30, 2016Background
- Veteran served in USAF 1965–1970; VA compensation was paid but later found to have been paid while he was a "fugitive felon."
- VA OIG reported an outstanding South Carolina warrant issued August 14, 2009 for a parole violation tied to a 2007 felony bank fraud conviction requiring restitution.
- VA sent notice proposing termination of compensation in April 2010; hearing was requested late and scheduled for June 2011, but the Veteran failed to appear.
- Parole office confirmed the warrant existed from August 14, 2009 until it was cleared on August 5, 2010 after restitution arrangements; documentation shows unpaid balance during that period.
- VA calculated an overpayment of $31,274 for compensation paid from August 14, 2009 to August 5, 2010 and recouped that amount from a later retroactive payment.
- The Board found the debt valid but remanded the waiver and recoupment issues to the RO for a Statement of the Case (SOC) and further adjudication.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of overpayment based on fugitive felon status | Veteran: he was not avoiding prosecution, parole officer knew he moved, he made restitution payments and lacked knowledge of any warrant | VA: warrant existed for parole violation tied to unpaid restitution; statute disqualifies payment during fugitive felon status | Debt valid: Veteran was a fugitive felon Aug 14, 2009–Aug 5, 2010; $31,274 overpayment upheld |
| Entitlement to waiver of the $31,274 overpayment | Veteran: special circumstances, relied on benefits to pay CNA, detrimental reliance and equitable considerations | VA: threshold is validity of debt; waiver claim needs formal AOJ adjudication and SOC | Remanded: Board ordered SOC and further AOJ adjudication on waiver claim |
| Properness of recoupment (offset from retroactive payment) | Veteran: offset was premature/improper when VA withheld $31,274 from ~$53,705 retro award | VA: recouped debt from retroactive award per procedures after demand letter and determination | Remanded: issue inextricably intertwined with waiver claim; AOJ to address in SOC and decide |
Key Cases Cited
- Schaper v. Derwinski, 1 Vet. App. 430 (1991) (threshold determination of debt validity precedes waiver adjudication)
- Mountford v. Shinseki, 24 Vet. App. 443 (2011) (violation of probation/parole renders one a fugitive felon; no knowledge requirement)
- Manlincon v. West, 12 Vet. App. 238 (1999) (SOC required before Board consideration of appellate issues)
- Smallwood v. Brown, 10 Vet. App. 93 (1997) (procedural rule on return to Board after AOJ action)
- Archbold v. Brown, 9 Vet. App. 124 (1996) (procedural rule on return to Board after AOJ action)
- Narron v. West, 13 Vet. App. 223 (1999) (rules on recoupment and offsets against VA payments)
- Bruce v. Principi, 15 Vet. App. 27 (2001) (further guidance on recoupment and procedural protections)