IN THE CASE OF:  	  

		BOARD DATE:  6 November 2014	  

		DOCKET NUMBER:  AR20130019794 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests correction of his records to establish full entitlement to a $20,000 Critical Skills Retention Bonus (CSRB) and the Student Loan Repayment Program (SLRP).  He further requests relief from repayment of funds that he has already been paid and/or were paid on his behalf.

2.  The applicant states:

	a.  He initially enlisted in the California Army National Guard (CAARNG) in 1992 and completed his obligation after transferring to the Nevada (NV) ARNG.  He later reenlisted in the NVARNG in 2002 with the intent of becoming a commissioned officer, which he did in 2004, and then transferred back to the CAARNG in 2005.

	b.  Through the CAARNG Incentives Task Force (ITF) audit process, he was made aware of various issues pertaining to both his CSRB and SLRP incentives. He states, in effect:

		(1)  CSRB:  According to the ITF Audit Form, no addendum was found on file and he was presumed to have received an Officer Accession Bonus (OAB).

		(2)  SLRP:  He actually entered into a contract during his original enlistment in 1992.  For unknown reasons, it was not entered into the interactive Personnel Electronic Record Management System (iPERMS) until much later in 2005.  No additional addendum was found for his reenlistment and he began accruing loan debt in 1997.
	c.  These incentives were handled for him by Master Sergeant (MSG) J, the State Bonus and Incentive Manager for the CAARNG, between 2005 and 2006.  While attending flight school training, he was put in contact with MSG J who informed him that he was entitled to both the CSRB and the SLRP.  MSG J only asked that he send his loan documents to ensure that they would be eligible [for payment], which he did.  Next, MSG J assured him the bonuses would be paid once he had completed his Officer Basic Course (OBC) and submitted his DD Form 1059 (Academic Evaluation Report).  Upon graduation, he did just that and he received his SLRP payment in 2007 and the CSRB in 2008.  He never received a copy of the addenda and presumed they would be filed in iPERMS.

	d.  As a result of MSG J's misunderstanding or manipulation of National Guard and Department of Defense policy, he entered into an agreement trusting that he would be eligible for the CSRB and the SLRP.  Per items presented to him, he has fully performed on his end of the contract, and continues to provide his skills to the CAARNG to include State and Federal emergencies and deployment to Afghanistan.

	e.  Further recoupment would cause a severe financial strain on his family.  It has been over 5 years since he received his bonuses and this has been an unforeseeable expense to be saddled with at this stage.

	f.  He respectfully requests any correction necessary to his records be made to reflect the agreement he entered into and relieve him of repayment of the funds that he was paid through the CSRB and SLRP.

3.  The applicant provides:

* seven memoranda and associated enclosures
* enlistment documents
* appointment documents
* promotion documents
* an ARNG Retirement Points History Statement

CONSIDERATION OF EVIDENCE:

1.  On 6 March 1992, while still attending high school, the applicant enlisted in the CAARNG with a projected active duty service date of 23 June 1992.  It appears that one of the specific options for which he enlisted was the SLRP.  Although the entry "SLRP" is handwritten on several documents, his SLRP Addendum is not certified and/or authenticated by a service representative.  Additionally, the SLRP Addendum was not posted to iPERMS along with his enlistment documents in 1992, but instead on 19 July 2005.  On 2 October 1996, he transferred from the CAARNG to the NVARNG where he continued to serve until he was honorably discharged from the ARNG on 5 March 1998 and transferred to the U.S. Army Reserve Control Group (Reinforcement) for the completion of his statutory option.

2.  On 5 September 2002, the applicant enlisted in the NVARNG for a period of 3 years under the Officer Candidate School option.  On 29 August 2004, he was honorably discharged from the NVARNG for the purpose of accepting an appointment as a commissioned officer.

3.  The applicant was appointed as a second lieutenant (2LT)/O-1 Reserve commissioned officer in the NVARNG and executed an Oath of Office on 30 August 2004.  His record is void of any contractual documents pertaining to the terms of his commissioned service obligation or incentives with the NVARNG.

4.  On 22 February 2005, the applicant was granted an interstate transfer and was conditionally released from the NVARNG on the condition that he join the CAARNG within 90 days.  The applicant was appointed as a 2LT Reserve commissioned officer in the CAARNG in the Aviation branch and executed an Oath of Office on 16 March 2005.  His record is void of any contractual documents pertaining to the terms of his commissioned service obligation or incentives with the CAARNG. 

5.  He began the Aviation Basic Officer Leadership Course (BOLC) on 20 April 2006 and was promoted to first lieutenant (1LT)/O-2 on 22 December 2006.  He completed BOLC on 8 August 2007.

6.  The applicant provides a memorandum addressed to the U.S. Property and Fiscal Office (USPFO) for California, Subject:  Transmittal of SLRP Bonus Incentive Documentation, rendered by MSG J on 14 November 2007.  This memorandum shows, in part, that MSG J transmitted SLRP incentive documents pertaining to four of the applicant's student loans.  This memorandum had the following attachments pertaining to the applicant:

	a.  His Direct Loans Billing Statement for payment due 14 November 2007, which shows he had a balance due of $4,385.08 at the time.

	b.  Four Loan Repayment Program installment requests (all signed by MSG J on 14 November 2007) for retroactive payment to the Department of Education on the applicant's behalf in the following amounts with the due dates shown:

* $1,500, 5 July 1999
* $1,500, 5 July 2000
* $1,500, 5 July 2001
* $500, 5 July 2002

7.  On 26 November 2007, the applicant completed pilot training for the UH-60 (Blackhawk Helicopter) and was awarded primary additional skill identifier B2 (UH-60 Pilot).

8.  On 27 February 2008, a representative of the Department of Defense, Defense Finance and Accounting Service (DFAS)/SLRP sent a facsimile (fax) to MSG J informing her the following documents pertaining to a check returned by the lender on behalf of the applicant.  The taxes had been adjusted and any further action would be at her discretion.  The documents show the applicant's student loan debt was $4,195.18 and DFAS had paid $5,000; therefore, a check in the amount of $804.82 had been sent to DFAS as a result of overpayment of the applicant's student loans.  

9.  The applicant was promoted to captain (CPT)/O-3 on 5 May 2010.

10.  The applicant provides a memorandum, dated 13 April 2012, from the CAARNG ITF Commander, then Lieutenant Colonel (LTC) P, who stated:

	a.  The ITF audited the applicant's bonus and/or SLRP incentive payments, and noted a discrepancy.  The ITF had taken all available measures prior to notification; however, they could not resolve the discrepancy without the applicant's assistance.

	b.  The information regarding his recoupment was as follows:

		(1)  Incentive types:  OAB and SLRP.

		(2)  Recoupment amount:  $14,195.18.

		(3)  Reason for recoupment:  No contract, payment made in violation of Federal law.



		(4)  Discrepancy references:

* Army Regulation 135-7 (ARNG and Army Reserve Incentive Programs), paragraph 1.7(a) and paragraph 5-1.4.1(b)(2)
* ARNG Selective Reserve Incentive Program (SRIP) Policy Guidance 05-01
* ARNG SRIP Policy Guidance 07-06 (10 August 2007 to 28 February 2009)
* National Guard Regulation 600-7 (SRIP), paragraph 2-5(a)
* Title 10 U.S. Code (10 USC), Section 16301(a)(1)(a-d)

	c.  The ITF determined that he may be eligible for an exception to policy (ETP), or the supporting documentation to support his incentive payments were absent from his personnel file.  He was advised to contact the ITF either telephonically or via email for further detailed information regarding his specific incentives.  He was given a suspense of 30 days from the date of the memorandum to either submit his ETP request or to provide the required supporting documentation.

	d.  He was advised that if he was eligible for an ETP, he could submit his ETP request to the ITF either via email, fax, or mail.  He was further advised that requests for an ETP must be detailed in nature and contain official copies of service and incentive documentation.  In addition, there must be substantiating documentation that indicates extenuating circumstances to be considered regarding termination without recoupment.  He was also advised that he may have the right to consult with a Legal Assistance Attorney at no cost.

	e.  The attached ITF Bonus Audit Form, dated 26 March 2012, shows:

* he was paid a bonus in the amount of $10,000 which appears to be either an OAB or half of a CSRB
* he was not eligible to contract for an OAB at the time of his appointment
* his current area of concentration (15A Aviation) was eligible for the SRIP at the time of his appointment 
* he had received prior incentives
* he was duty military occupational specialty qualified (DMOSQ)
* he had participated in the SLRP
* his record was void of a Bonus Control Number (BCN)
* his record was void of a Bonus Addendum
* he was not currently slotted in a valid position and was considered "excess"
* he was not eligible for bonus payment
* his bonus eligibility was lost on 6 February 2008 based upon the absence of a written agreement
* recoupment in the amount of $10,000 

	f.  The Senior Reviewer of the audit form summarized:  "He has no contract for an incentive.  He received $10,000 on 6 February 2008.  This payment appears to be either an OAB or half a CSRB.  At the time of payment SM (service member) was only a 1LT and was not eligible for the CSRB.  SM was appointed as a 2LT on 30 August 2004 into the NVARNG.  SM came to the CAARNG on 16 March 2005.  SM needs to submit an addendum and supporting documents for this incentive or SM will be recouped.  SM is subject to full recoupment of $10,000."

11.  On 28 May 2013, Commander, ITF, CAARNG addressed a memorandum to the Army Board for Correction of Military Records (ABCMR), Subject:  ABCM Appeal for CPT [the applicant].  The commander stated the ITF had audited the applicant's bonus payments and concluded he received a $10,000 bonus he was not eligible to contract for or receive.  In addition, although he was eligible to contract for the SLRP, he was not eligible for payment.  There is no evidence of fraud on the part of the applicant.  He received a $10,000 bonus in two installments of $5,000 on 6 and 8 February 2008 after being informed by MSG J, the State Incentives Manager, that he was entitled to an officer bonus and the SLRP.  A bonus addendum in support of these payments was never coded as required by law nor was a BCN issued as per regulation.  The officer did not produce a signed contract.  The bonus payment (as audited) was thought to be an OAB based on the payment of $10,000, and the policy in place in 2008.  The applicant contends this was the first installment of a CSRB, a $20,000 incentive.

	a.  CSRB:

        (1)  To receive a CSRB, the applicant should have completed a bonus addendum, with a valid BCN issued and listed on the contract.  The policy in effect at the time also required the officer to hold the rank/grade of CPT/O-3, be in a valid position vacancy designated Critical Skill AOC (CSAOC) in an eligible unit for a period of not less than 3 years and have more than 6 but less than 12 years of commissioned service from the date of commission.  If the officer was eligible for a CSRB, he would be entitled to $20,000, payable in two 
50 percent installments.

		(2)  The applicant did not meet the minimum eligibility requirements to contract for a CSRB.  He was still a 1LT on 28 August 2009 and thus would not have held the rank of CPT at the time of contracting.  He was not in a valid position vacancy; he was coded over-strength on 25 January 2008.  Moreover, the applicant was appointed as an officer in the NVARNG on 30 August 2004 and did not have at least 6 years of commissioned service at the time of payment in February 2008.

	b.  OAB:  The applicant accepted his commission as a 2LT in the NVARNG on 30 August 2004.  At the time of his appointment, there were no officer incentives available (the OAB was authorized in February 2005, per SRIP Policy Guidance 05-04).

	c.  SLRP:  

        (1)  The applicant contracted for the SLRP on 6 March 1992 while in the NVARNG and was fully eligible to do so at the time, yet his SLRP Addendum was not uploaded into iPERMS until 19 July 2005, nor was it signed by a certified representative or dated.  A Soldier is required to provide valid loan documents, to include a DD Form 2475 (Department of Defense Educational Loan Repayment Program Annual Application).  Per SRIP Policy Guidance 05-01 (policy in effect when the SLRP addendum was added to his personnel file), the Soldier is not entitled to the SLRP upon commissioning, nor can the Soldier claim entitlement to the SLRP beyond the statutory time period.  A SLRP contract authorized on 6 March 1992 would authorize the member to submit for loan repayment after each year of qualifying service (i.e., March 1993 through March 1998) not to exceed 15 percent (per year) of the loan value (not to exceed $10,000 or annual payments of $1,500).

		(2)  The applicant was eligible to contract for the SLRP but was not eligible for the $5,000 SLRP payment ($804.82 of which the loan holder returned to DFAS for overpayment) he received on 20 November 2007 (9 years after the last payment was authorized, and 3 years after the contract would have been terminated based upon his appointment as an officer in August 2004).  There is no DD Form 2475 in the applicant's record and the loan documents provided did not sufficiently support his eligibility for the SLRP.

	d.  Although there is no evidence of fraud on the part of the applicant, his ineligibility to contract for the $10,000 bonus he received and his ineligibility for the $4,195.18 SLRP payment are based upon numerous Federal law violations making relief from recoupment the only favorable action with regard to the incentives received.

12.  On 17 July 2013, a Judge Advocate lawyer addressed a memorandum to the ABCMR, Subject:  ABCMR Appeal for [the applicant].  The lawyer recommended that the applicant be permitted to retain both the $10,000 bonus and the $4,195.18 paid under the SLRP.  The basis for his recommendation is that no evidence suggests any wrongdoing on the part of the applicant and that he acted in good faith based upon the guidance he received from MSG J.  According to the applicant's sworn statement, many other officers were receiving the same incentives and this claim is supported by the audit conducted by the ITF.  MSG J is currently serving a prison sentence for administering fraudulent incentives.  She plead guilty to over $15 million of fraudulent incentives from 2007-2009.

	a.  The applicant's bonus incentive was paid in two $5,000 installments on 6 and 8 February 2008.  The dates of these payments fall within the timeframe in which MSG J pled guilty to paying out fraudulent incentives.  The applicant was in no position of control or authority over the incentives or the monetary disbursements.  The proximate cause of the $10,000 paid to the applicant without proper procedure is directly the mishandling of incentives by MSG J.

	b.  The SLRP appears to have originated in 1992; however, it was not uploaded into iPERMS until much later, in 2005, for reasons unknown.  Additionally, the contract was missing dates and the signature of a certified representative.  The payment of $5,000 ($804.82 being returned for overpayment) was made in November 2007.  While the payment is clearly past the contract term, it appears MSG J acknowledged the agreement and ratified the contract, despite the missing information.  The payment would correspond with earlier service years, prior to the applicant accepting his commission.

	c.  The applicant had no knowledge that he was not entitled to the OAB or the SLRP payments.  Nor should he have known.  He reasonably relied upon the knowledge and subject matter expertise of MSG J, the CAARNG State Incentives Manager.  Therefore, a stance toward unjust enrichment is out of place, in consideration of the detrimental reliance the applicant took applying the funds over 5 years ago.  The applicant has served with the Guard honorably, including deployment to Afghanistan in 2010.  In the interest of justice, the lawyer suggested that the applicant be allowed to retain the incentives of $10,000 and $4,195.18, respectively.

13.  In the processing of this case, on 6 November 2013, an advisory opinion was obtained from the Chief, Personnel Policy Division, National Guard Bureau (NGB).  The advisory official recommended partial approval of the applicant's request.  The advisory official opined, in part, that:

	a.  Recommend relief from recoupment of the CSRB.  Although the applicant was ineligible at the time he received the bonus, he later met the criteria to receive a CSRB by serving at least 6 years in critical specialty 15A in accordance with ARNG SRIP Guidance for Fiscal Years 2007, 2008, and 2009, 10 August 2007-30 September 2009 (Policy Number 07-06).  The applicant followed the guidance he was provided and there is no evidence of wrongdoing on his part.

	b.  Recommend recoupment of $4,195.18 he received under the SLRP.  The applicant originally contracted for the SLRP in 1992.  However, payment was not made until 2011 (i.e., 2007).  There is no record of eligible loans as of the enlistment date in 1992, according to the NGB Incentives Oversight Branch.  In accordance with 10 USC, Section 16301, paragraph (1)(2), loans are only eligible for repayment if they were made prior to the term of service for which they are being repaid.  Upon reenlisting in 2002, he was not authorized the SLRP because the incentive was only available for non-prior service enlistees at the time.  He received $4,195.18 in SLRP benefits in 2007 which were applied to loans incurred after the original SLRP contract, which were not covered by any contract.  The applicant believed he was eligible for SLRP benefits because he relied on the information provided to him by the State Incentives Manager.

	c.  Due to the circumstances, consideration should be given to relief from recoupment in order to not create financial hardship for the Soldier because this error was through no fault of his own.  The government failed to properly follow procedures in administering both the CSRB and the SLRP to the applicant.  For both incentives in this case, consideration should be given that when the erroneous payment is the fault of the government, the recoupment may be waived in accordance with 10 USC, Section 2774, paragraph (s), which states, "A claim of the United States against a person arising out of an erroneous payment of any pay or allowances...the collection of which would be against equity and good conscience and not in the best interest of the United States, may be waived in whole or in part...."

	d.  The CAARNG states the applicant was ineligible to contract for these incentives but recommends relief from recoupment for both the CSRB and the SLRP due to no fault of the Soldier.

14.  The applicant was provided a copy of the advisory opinion, but did not render a response by the established suspense date. 

15.  Title 37, U.S. Code, section 308j(b), states the Secretary concerned may pay an accession bonus under this section to an eligible person who enters into an agreement with the Secretary to:  (a) accept an appointment as an officer in the Armed Forces, and (b) to serve in the Selected Reserve of the Ready Reserve in a skill designated under paragraph (2) for a period specified in the agreement.  Paragraph (2)(a) states the Secretary concerned shall designate for an Armed Force under the Secretary's jurisdiction the officer skills to which the authority under this subsection is to be applied.  Paragraph (2)(b) states a skill may be designated for an Armed Force under subparagraph (a) if, to mitigate a current or projected significant shortage of personnel in that Armed Force who are qualified in that skill, it is critical to increase the number of persons accessed into that armed force who are qualified in that skill or are to be trained in that skill.  Paragraph (b) states an accession bonus payable to a person pursuant to an agreement under this section accrues on the date on which that agreement is accepted by the Secretary concerned.

16.  The well-documented and publicized case of the United States of America versus TLJ (formerly known as MSG J) shows that she entered into a plea agreement with the U.S. Attorney's Office for the Central District of California in the investigation of false claims submitted to the United States in connection with loan repayments, bonuses, and other incentives for California National Guardsmen while serving as the State Bonus and Incentives Manager for the CAARNG.  Beginning in at least the fall of 2007 and continuing to on or about 6 October 2009, she regularly and routinely submitted claims to the USPFO that she knew were false, fraudulent, and/or fictitious.  For example, she submitted claims to the USPFO to pay bonuses to members of the CAARNG that she knew were not eligible to receive such bonuses.  She also regularly and routinely submitted false, fraudulent, and fictitious claims to the USPFO for student loan repayments.  A reasonable estimate of the actual loss to the U.S. Department of Defense for purposes of restitution is $15,200,000.

17.  A Principal Deputy Under Secretary of Defense memorandum delegates to the Secretary concerned a determination on a case-by-case basis that debt repayment will not be required, if it is determined that such repayment would be contrary to a personnel policy or management objectives, against equity and good conscience, or contrary to the best interest of the United States.  

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that his records should be corrected to show he was entitled to a $20,000 CSRB and the SLRP.  He further requests relief from repayment of funds that he has already been paid and/or funds that were paid to his creditors in his behalf.

2.  Although the applicant was eligible for participation in the SLRP at the time of his initial enlistment, the evidence clearly shows the applicant was not eligible for either the CSRB or the SLRP at the time of his appointment as a commissioned officer in the NVARNG or subsequent transfer to the CAARNG.  It is quite evident that numerous errors were committed in the processing of both his CSRB and SLRP payments.

3.  The State determined and the NGB verified that the errors in processing the applicant's incentive entitlements were committed by MSG J, the State Bonus and Incentives Manager for the CAARNG at the time and that there was absolutely no wrongdoing on the part of the applicant.

4.  Notwithstanding the advisory opinion, what is clear is that the applicant acted in good faith and has fulfilled all the requirements to receive the CSRB and that he had every reason to believe that he was entitled to participated in the SLRP.  He relied on the subject matter expertise of retention officials to properly process the required paperwork for receipt of the CSRB and SLRP.  Through no fault of his own, the retention official did not follow the established procedures for verifying the applicant's eligibility for either CSRB or SLRP or submitting the proper documentation.  Therefore, he should not be penalized for an error committed by ARNG retention officials and he should be entitled to relief from recoupment.

5.  The applicant did not hold the proper grade or a valid position vacancy at the time of his appointment in the NVARNG or subsequent transfer to the CAARNG, to be eligible for the CSRB.  Although MSG J offered him the CSRB at a later date, this was done in error.  Therefore, he is not entitled to the full $20,000 CSRB.  Despite being offered the bonus in error, he received the first half of this bonus and eventually fulfilled the requirements for receipt of a CSRB for critical skill 15A and he continues to serve the contractual obligations stipulated in his contract.

6.  He now risks the recoupment of the first half of his CSRB and the entire amount of his student loan repayment.  This is unjust.  Debt repayment is not required if it is determined that such repayment would be contrary to a personnel policy or management objectives, against equity and good conscience, or contrary to the best interest of the United States.  Therefore, his records should be corrected to show he submitted an ETP to the NGB to retain the first half of this bonus and the SLRP payment and the NGB approved his request.  

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

____X___  ____X___  ____X___  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION

BOARD DETERMINATION/RECOMMENDATION:

1.  The Board determined that the evidence presented was sufficient to warrant a recommendation for partial relief.  As a result, the Board recommends that all Department of the Army and State Army National Guard records of the individual concerned be corrected by:

* showing he submitted an exception to policy through the CAARNG to the NGB to retain the first half of his CSRB ($10,000) and SLRP ($4,195.18)
* showing the NGB timely received his exception to policy request, approved it, and authorized him to retain these incentives

2.  The Board further determined that the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to paying him the full amount of the CSRB ($20,000) or any further SLRP payments.



      __________X___________
               CHAIRPERSON
      
I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.
ABCMR Record of Proceedings (cont)                                         AR20130019794



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ABCMR Record of Proceedings (cont)                                         AR20130019794



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