MEMORANDUM OF CONSIDERATION


         IN THE CASE OF:
        


         BOARD DATE: 5 March 2002
         DOCKET NUMBER: AR2001064807

         I certify that hereinafter is recorded the record of consideration of the Army Board for Correction of Military Records in the case of the above-named individual.

Mr. Carl W. S. Chun		Director
Mr. Joseph A. Adriance		Analyst

The following members, a quorum, were present:

Mr. Fred N. Eichorn		Chairperson
Mr. Thomas b. Redfern, III		Member
Mr. Donald P. Hupman, Jr.		Member

         The Board, established pursuant to authority contained in 10 U.S.C. 1552, convened at the call of the Chairperson on the above date. In accordance with Army Regulation 15-185, the application and the available military records pertinent to the corrective action requested were reviewed to determine whether to authorize a formal hearing, recommend that the records be corrected without a formal hearing, or to deny the application without a formal hearing if it is determined that insufficient relevant evidence has been presented to demonstrate the existence of probable material error or injustice.

         The applicant requests correction of military records as stated in the application to the Board and as restated herein.

         The Board considered the following evidence:

         Exhibit A - Application for correction of military
records
         Exhibit B - Military Personnel Records (including
         advisory opinion, if any)

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APPLICANT REQUESTS: In effect, that he be released from his debt to the Army.

APPLICANT STATES: In effect, he continued to receive pay and allowances after his release from active duty in March 1992, which continued until January 1993. He claims that he is requesting dismissal of his debt to the Defense Finance and Accounting Service (DFAS) because it was the result of the Army’s antiquated pay and allowance system and poor reporting system during Operation Desert Storm. He further states that if this debt cannot be dismissed, he requests a waiver of all administrative fees and interest, and that arrangements be made for a payment plan, less all monies already collected, that would be manageable to all parties concerned.

EVIDENCE OF RECORD: The applicant's military records show:

On 17 September 1990, while serving in the United States Army Reserve (USAR) as a lieutenant colonel (LTC), he entered active duty in support of Operation Desert Storm. He served in Southwest Asia from 7 October 1990 to 21 December 1991.

On 28 March 1992, he was honorably released from active duty (REFRAD), after completing 1 year, 6 months, and 12 days on that period of active duty service, and he was returned to his USAR unit.

Subsequent to his REFRAD, the applicant continued to receive active duty pay and allowances through March 1993, and as a result he became indebted to the Army. The available evidence does not include the original indebtedness documents or any documentation in regard to the processing or appeal of the debt dated prior to August 2001.

On 25 August 2001, a claims examiner of the Directorate of Debt and Claims Management, DFAS, Denver, Colorado, informed the applicant by letter that a temporary reduction/suspension of collection action would be considered, if the applicant submitted a Department of Justice (DOJ) Financial Status Form. The letter further advised him that if he were requesting reduced payment due to a financial hardship, he would have to indicate the amount he could pay on the back of the form. If he were requesting a suspension of payments, he would have to so indicate that on the form.

On 27 September 2001, a DFAS, Denver, claims examiner sent the applicant a letter indicating that that they were unable to suspend his debt in the amount of $108,058.04. Therefore, the applicant was asked to contact them within 30 days and make payment arrangements for his debt.

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The applicant sent an electronic mail (e-mail) note to the DFAS, Denver office, dated 10 October 2001, Subject, Financial Hardship/Reduce Payment. In this note, he indicated that his debt to the government was $108,058.04, which included interest and penalties incurred over a period of years. He further commented that his original debt of $60,000.00 was the result of an antiquated pay and allowance system and poor reporting by the military after the Gulf War. He further stated that for the past six months, his wife had been on long term disability due to surgery and a subsequent accident, and was only drawing
60 percent of her monthly salary. He also commented that they had incurred numerous medical expenses not covered by their insurance and based on these circumstances and it would present a hardship to pay the debt within a 36 month period. He finally requested a reduced payment or a one time payment of the original debt, less any payments that had been credited to his account.

On 11 October 2001, the applicant again sent an e-mail note to the DFAS, Denver office. He first restated the amount of his debt and his opinion of what the reason for the debt was. He further commented that in August 1990, just two months prior to the Gulf War, he started a new business. In September 1990, he was called to active duty and deployed to Saudi Arabia, and he remained on active duty until March 1992. Upon his REFRAD, he was unemployed and did not have a business to return to, and he had also lost equipment that cost him in excess of $50,000.00. He further indicated that it was 18 months after his REFRAD before he was able to find work, at slightly over minimum wage, until he was promoted to a management position in January 1997. He also indicated that just prior to the events of August 1990, his spouse had to leave her position with the Louisiana National Guard to care for her aging father, and she was unable to return to work until October 1992, at minimum wage, until her promotion to management in June 1999. He also indicated that for the six months preceding his note, his wife had been on long term disability due to surgery and a subsequent accident. She remained in rehabilitation, only drawing 60 percent of her monthly salary, and they had incurred numerous medical expenses not covered by their insurance. Due to these circumstances, the applicant indicated payment of his debt would present a hardship and he requested that the debt be dissolved or that special arrangements be made to settle the situation that would be favorable to all parties.

On 15 October 2001, the applicant completed a DOJ financial status form in which he listed his income and financial obligations. This form indicated that he and his spouse had a monthly income of $5,700.00, his monthly household expenses were $950.00, his other expenses totaled $900.00, and he owed a financial institution $17,000.00. This form also indicated that he had incurred numerous medical expenses during the preceding 7 months that totaled approximately $25,000.00.

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On 24 October 2001, a DFAS, Denver, claims examiner responded to a
letter from the applicant, in which he had claimed that his $108.297.55 debt was erroneous. The claims examiner provided the applicant a copy of an application to this Board (DD Form 149) and advised him that he could apply if he disputed the debt.

Army Regulation 37-104-4 (Military Pay and Allowances Policy and Procedures-Active Component) provides Department of the Army (DA) policies for entitlements and collections of pay and allowances for active duty soldiers. It is used in conjunction with Department of Defense Financial Management Regulation (DoDFMR), Volume 7, Part A (Vol 7A) DOD 7000.14-R. Paragraph 28-2 states, in pertinent part, that if the Secretary of Defense or any designee determines that a soldier is indebted to the U.S. Government as a result of an erroneous payment made to or on behalf of the soldier by an agency of the
U.S. Government, the amount of the debt may be collected from the soldier's pay.

Paragraph 32-3 contains time limitations for requesting waivers and it states, in pertinent part, that a claim of the United States against a soldier or former soldier, arising out of an erroneous payment of pay and allowances may be considered for waiver within 3 years from the date of discovery, when collection of the erroneous payment would be against equity and good conscience, and not in the best interest of the United States.

Paragraph 32-4 contains guidance on the requirement for a notice of waiver rights. It states, in pertinent part, that this requirement applies only to U.S. claims for erroneous payments of pay and allowances, to or on behalf of a soldier or former soldier. The following standard notice of waiver rights will be used to stress that a waiver is not automatic when an erroneous payment results from administrative error: "This claim is subject to waiver under Public Law 92-453 if there is no evidence of fraud, misrepresentation, fault, or lack of good faith." However, the claim may not be waived merely because it resulted from administrative error. It further specifies that any significant unexplained increase in pay or allowances that would prompt an inquiry concerning the correctness of the payment ordinarily would preclude a waiver when the employee or soldier fails to bring the matter to the attention of the appropriate officials. No one is entitled to unearned compensation, and only in very unusual circumstances would equity and good conscience suggest that an individual should keep an overpayment. Before a claim can be waived, the facts must clearly establish that collection would not serve the best interests of the United States.

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Paragraph 32-11 contains guidance on appeal procedures and it states that a denial of a waiver may be appealed if a material mistake of law or fact in the original ruling can be shown; or if appealing the validity of the debt, the amount, or the liability for it. The applicant must sign the appeal and send it to the Director, DFAS.

DISCUSSION: Considering all the evidence, allegations, and information presented by the applicant, together with the evidence of record, applicable law and regulations, it is concluded:

1. The Board considered the applicant’s request that he be released from his debt to the government or that all administrative fees and interest be waived and that an arrangement be made for a payment plan, less all monies already collected, that would be manageable to all parties concerned. However, the Board finds insufficient evidence and/or mitigating factors that would warrant granting the requested relief.

2. By law and regulation, any significant unexplained increase in pay or allowances that would prompt an inquiry concerning the correctness of the payment ordinarily would preclude a waiver of the debt if the soldier fails to bring the matter to the attention of the appropriate officials. Further, it is stipulated that no one is entitled to unearned compensation. In addition, a denial of a waiver of appeal may only be appealed if a mistake of law or fact in the original ruling can be shown; or the validity of the debt, amount, or the liability for it is being challenged.

3. The Board considered the applicant’s claim that the overpayment was due to the Army’s poor pay and reporting systems during Operation Desert Storm; however, it finds this factor is not sufficiently mitigating to warrant a waiver of his debt. Although incomplete, the available evidence in this case confirms, and by the applicant’s own admission, he was erroneously overpaid active duty pay and allowances for approximately 10 months after he had been REFRAD.

4. In the opinion of the Board, it is unreasonable to presume that that the applicant was not aware he was inappropriately receiving active duty pay and allowances subsequent to his REFRAD. In addition, he fails to provide any explanation or evidence regarding his failure to bring the overpayment to the attention of appropriate officials while he was receiving it. Therefore, the Board is forced to conclude that he knowingly accepted unearned compensation, and it concludes that its intervention in the debt collection process at this time would not be appropriate.

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5. In view of the foregoing, there is no basis for granting the applicant's request.

DETERMINATION: The applicant has failed to submit sufficient relevant evidence to demonstrate the existence of probable error or injustice.

BOARD VOTE:

________ ________ ________ GRANT

________ ________ ________ GRANT FORMAL HEARING

__FNE__ _ _TBR__ __DPH DENY APPLICATION

                  Carl W. S. Chun
                  Director, Army Board for Correction
of Military Records

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INDEX

CASE ID	AR2001064807
SUFFIX
RECON
DATE BOARDED	2002/03/05
TYPE OF DISCHARGE	N/A
DATE OF DISCHARGE	N/A
DISCHARGE AUTHORITY	N/A
DISCHARGE REASON	N/A
BOARD DECISION	DENY
REVIEW AUTHORITY
ISSUES 1. 283	128.0000
2. 1021	129.0100
3.
4.
5.
6.