United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

A.A., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Bryan, TX, Employer 

__________________________________________ 

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Docket No. 14-121 

Issued: September 18, 2014 

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

MICHAEL E. GROOM, Alternate Judge 

JURISDICTION 

On November 27, 2013 appellant filed a timely appeal from an October 29, 2013 merit 

decision of the Office of Workers’ Compensation Programs (OWCP) finding an overpayment of 

compensation for which she was found to be at fault due to forfeiture. Pursuant to the Federal 

Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has 

jurisdiction over the merits of the claim. 

ISSUES 

The issues are: (1) whether OWCP properly determined that appellant forfeited her right 

to compensation for the period November 2, 2004 to May 13, 2008 as she knowingly failed to 

report her employment activities; (2) whether OWCP properly determined that appellant 

received a $116,749.43 overpayment of compensation for the period November 2, 2004 to 

May 13, 2008 based on her forfeiture of compensation; and (3) whether OWCP properly found 

that appellant was at fault in creating the $116,749.43 overpayment, such that it was not subject 

to waiver. 

                                                             1

 5 U.S.C. § 8101 et seq. 
2

On appeal, appellant asserts that she signed Forms EN1032 while her judgment was 

impaired by prescription drugs. She acknowledged signing “receiving papers,” writing checks 

and executing a “Doing Business As” agreement. Appellant contended that, as she never 

physically worked for the business, she did not consider herself involved. 

FACTUAL HISTORY 

OWCP accepted that on or before April 17, 2001 appellant, then a 42-year-old city letter 

carrier, sustained an aggravation of low back pain. It later accepted the claim for displacement 

of a lumbar intervertebral disc. Following a period of light duty, appellant stopped work in 

2004. OWCP placed her on the periodic compensation rolls effective August 7, 2004. 

In a January 19, 2005 letter accompanying a direct deposit authorization, appellant 

advised OWCP that she had not received any compensation or money from any source of work 

since July 10, 2004 to present. She asserted that she had not worked outside the employing 

establishment or did voluntary work of any kind. 

In a February 10, 2005 letter, appellant was notified that, if she obtained work, she must 

immediately notify OWCP regarding the identity of her employer, type of work performed, dates 

of employment and any monies received. 

On August 15 and 18, 2005 appellant underwent a two-stage lumbar fusion with 

hardware and allograft fixation. OWCP approved the procedures. 

In Forms EN1032 completed on February 2, 2006, January 31, 2007 and January 22, 

2008, appellant attested that she had no employment, self-employment or earnings from 

employment activities during the 15-month period prior to completing each form.2

 She remained 

under medical care through April 2008. Appellant returned to full-time light-duty work on 

May 14, 2008. 

On January 10, 2013 the employing establishment’s investigative unit submitted 

documents demonstrating that on July 12, 2007 appellant executed a “Doing Business As” 

agreement as a general partner in Sandblast Specialties, a sandblast and painting business. 

Appellant executed a “Doing Business As” agreement on August 1, 2007 as the owner of 

Sandblast Specialties and appointed a business agent on June 26, 2007. She also wrote checks, 

ordered supplies, completed tracking forms and applied for permits for a wild animal sanctuary 

from January 7 to October 19, 2007. In memoranda dated January 7, 2008 and March 18, 2009, 

investigative officers listed $250,602.50 in bank deposits made by appellant related to the two 

businesses from 2004 through October 9, 2007. In a March 18, 2009 interview, appellant 

acknowledge to signing the checks but contended that she did not perform work or receive 

wages. She also admitted feeding animals, purchasing supplies and transporting tiger cubs for 

the wildlife sanctuary. 

On October 17, 2012 appellant signed a pretrial diversion agreement acknowledging that 

she made false statements relating to health care matters, in violation of 18 U.S.C. § 1035. 

                                                             2

 This covers the period from November 2, 2004 to January 22, 2008. 
3

OWCP reviewed compensation payment logs and determined that, from November 2, 

2004 to May 13, 2008, appellant received a total of $116,749.43 in temporary total disability 

compensation. 

By decision dated March 1, 2013, OWCP found that appellant forfeited her right to 

compensation for the period November 2, 2004 to May 13, 2008 as she knowingly failed to 

report work activities on EN1032 forms signed and dated on February 2, 2006, January 31, 2007 

and January 22, 2008. It terminated her medical benefits effective that day. 

By notice dated March 1, 2013, OWCP advised appellant of its preliminary determination 

that she was overpaid $116,749.43 as her compensation was forfeit from November 2, 2004 to 

May 13, 2008 because she knowingly failed to report employment activities and earnings from 

participation in the wildlife sanctuary businesses. It found that, on EN1032 forms dated 

February 2, 2006, January 31, 2007 and January 22, 2008, she knowingly failed to report her 

work activities and the income received therefrom. 

In a March 27, 2013 letter, appellant requested an oral hearing regarding the forfeiture 

determination and a prerecoupment hearing regarding the overpayment determination. She 

contended that there was no overpayment and that any overpayment occurred through no fault of 

her own. Appellant argued that the pretrial agreement did not state that she would lose any 

benefits. OWCP scheduled a telephonic hearing. Appellant did not call in at the required time. 

By decision dated and finalized October 29, 2013, an OWCP hearing representative 

affirmed the March 1, 2013 forfeiture decision, finding that appellant knowingly failed to report 

her work activities with the wildlife sanctuary for the period November 2, 2004 to May 13, 2008. 

The hearing representative found that OWCP met its burden of proof by submitting 

documentation of appellant’s business activities and her statements acknowledging those 

activities. He also finalized the finding of an $116,749.43 overpayment of compensation for the 

period November 2, 2004 to May 13, 2008. The hearing representative further found that 

appellant was at fault in creation of the overpayment as she forfeited her compensation by 

committing compensation fraud, as she failed to report earnings from the wildlife sanctuary 

businesses on EN1032 forms dated February 2, 2006, January 31, 2007 and January 22, 2008. 

Therefore, the overpayment was not subject to waiver. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8106(b) of FECA provides that an employee who “fails to make an affidavit or 

report when required or knowingly omits or understates any part of his earnings; forfeits his or 

her right to compensation with respect to any period for which the affidavit or report was 

required.”3

The Board has held that it is not enough merely to establish that there was unreported 

employment or earnings. A claimant can only be subjected to the forfeiture provision of 

5 U.S.C. § 8106(b) if he or she “knowingly” failed to report employment or earnings.4

 The term 

                                                             3

 5 U.S.C. § 8106(b). 

4 Harold F. Franklin, 57 ECAB 387 (2006). 
4

“knowingly” as defined in OWCP’s implementing regulations, means with knowledge, 

consciously, willfully or intentionally.5 The Board has found that OWCP can meet this burden 

of proof in several ways, including by a claimant’s own admission to OWCP that he or she failed 

to report employment or earnings which he or she knew he or she should report or by 

establishing that a claimant has pled guilty to violating applicable federal statutes by falsely 

completing the affidavits in the Forms EN1032.6

ANALYSIS -- ISSUE 1 

OWCP accepted that appellant sustained a displaced lumbar disc and an aggravation of 

low back pain. Appellant received total disability compensation on the periodic rolls beginning 

on August 7, 2004. On Forms EN1032 dated February 2, 2006, January 31, 2007 and 

January 22, 2008, she certified that she had no employment, self-employment or earnings from 

employment activities during the 15-month period prior to completing the forms. The Board 

notes that appellant made similar assertions in a January 19, 2005 letter. However, the 

employing establishment investigation documented that, from 2004 through October 2007, she 

owned or operated a sandblasting business and a wildlife sanctuary. 

The evidence of record establishes that appellant knowingly concealed her earnings and 

employment activities from OWCP. Appellant admitted to her business activities, including 

feeding and transporting tiger cubs, during a March 18, 2009 investigative interview. On 

October 17, 2012 she signed a pretrial diversion agreement acknowledging her false statements. 

The Board finds that these statements constitute persuasive evidence that appellant knowingly 

omitted her earnings and employment activities when she completed the EN1032 forms affidavit 

on February 2, 2006, January 31, 2007 and January 22, 2008. The provisions of 5 U.S.C. 

§ 8106(b)(2) therefore apply to the period covered by the affidavits, November 2, 2004 to 

January 22, 2008. This period is therefore appropriately subject to forfeiture. 

The record does not reflect any additional affidavits in which appellant failed to report 

her income and employment activities from January 22 to May 13, 2008. The forfeiture 

provision is a penalty provision and is thus narrowly construed.7

 As there are no Form EN1032 

affidavits on which to base a forfeiture of compensation payments for the period January 22 to 

May 13, 2008, the Board will reverse the findings of forfeiture for that period. 

LEGAL PRECEDENT -- ISSUE 2 

Section 10.529 of OWCP’s implementing regulations provide as follows: 

“(a) If an employee knowingly omits or understates any earnings or work activity 

in making a report, he or she shall forfeit the right to compensation with respect to 

any period for which the report was required. A false or evasive statement, 

                                                             5

 20 C.F.R. § 10.5(n). 

6 Harold F. Franklin, supra note 4. 

7 M.C., Docket No. 10-881 (issued February 7, 2011); Karen Spurling, 56 ECAB 189, 194 fn. 9 (2004). 
5

omission, concealment or misrepresentation with respect to employment activity 

or earnings in a report may also subject an employee to criminal prosecution. 

“(b) Where the right to compensation is forfeited, [OWCP] shall recover any 

compensation already paid for the period of forfeiture pursuant to 5 U.S.C. [§] 

8129 [recovery of overpayments] and other relevant statues.”8

ANALYSIS -- ISSUE 2 

OWCP regulations provide that it may declare an overpayment of compensation for the 

period of a given forfeiture of compensation. If a claimant has any earnings during a period 

covered by a Form EN1032, which she knowingly fails to report, she is not entitled to any 

compensation for any portion of the period covered by the report, even though he or she may not 

have had earnings during a portion of that period.9 OWCP paid appellant compensation in the 

amount of $116,749.43 for the period November 2, 2004 to May 13, 2008. It properly found that 

she forfeited her entitlement to compensation from November 2, 2004 to January 22, 2008 

because she failed to report employment activities and earnings related to her business ownership 

and activities on Forms EN1032. Therefore, the compensation issued during this period 

constitutes an overpayment of compensation. 

The Board finds that, although the fact of overpayment is well established, the amount of 

the overpayment is not in posture for a decision. OWCP predicated the $116,749.43 amount of 

overpayment on the total compensation received and forfeited from November 2, 2004 to 

May 13, 2008. As stated above, there is no Form EN1032 of record covering the period 

January 22 to May 13, 2008. The compensation paid during this period should not have been 

included in the amount of forfeiture and therefore may not be included in the overpayment. On 

return of the case, OWCP should undertake appropriate development to recalculate the amount 

of the overpayment. 

On appeal, appellant asserts that prescription medications and health issues rendered her 

unable to understand the reporting requirements. Moreover, she did not consider writing checks, 

executing a “Doing Business As” agreement and completing workplace documents to be work 

activities. However, no physician of record found that appellant was mentally incompetent or 

impaired at any time. Reporting such earnings or activities was required. 

LEGAL PRECEDENT -- ISSUE 3 

Section 8129(a) of FECA provides that where an overpayment of compensation has been 

made “because of an error of fact or law,” adjustment shall be made by decreasing later 

payments to which an individual is entitled.10 The only exception to this requirement is a 

situation, which meets the tests set forth as follows in section 8129(b): “Adjustment or recovery 

                                                             8

 20 C.F.R. § 10.529. See also Harold F. Franklin, supra note 4. 

9 Robert Ringo, 53 ECAB 258 (2001). 

10 5 U.S.C. § 8129(a). 
6

by the United States may not be made when incorrect payment has been made to an individual 

who is without fault and when adjustment or recovery would defeat the purpose of this 

subchapter or would be against equity and good conscience.”11 No waiver of payment is 

possible if the claimant is not “without fault” in helping to create the overpayment. 

In determining whether an individual is “without fault,” section 10.433(a) of OWCP’s 

federal regulations provide, in relevant part: 

“A recipient who has done any of the following will be found at fault with respect 

to creating an overpayment-- 

(1) Made an incorrect statement as to a material fact, which he or she 

knew or should have known to be incorrect; or 

(2) Failed to provide information, which he or she knew or should have 

known to be material; or 

(3) Accepted a payment, which he or she knew or should have known to 

be incorrect. (This provision applies only to the overpaid individual.)”12 

ANALYSIS -- ISSUE 3 

In this case, the Board finds that appellant was at fault under the first standard as she 

made incorrect statements as to a material fact, which she knew or should have known to be 

incorrect. The Board notes that, in the October 17, 2012 pretrial diversion agreement, she 

admitted making false statements. Appellant accepted payments of compensation from 

November 2, 2004 to January 22, 2008 which she knew or should have known to be incorrect.13 

She received and signed multiple Forms EN1032, which directed her to return any and all 

payments to which she was not entitled. However, appellant accepted incorrect compensation 

payments for the period November 2, 2004 to January 22, 2008. Therefore, she is at fault in 

creation of the overpayment, such that it was not subject to waiver.14

CONCLUSION 

The Board finds that OWCP properly determined that appellant forfeited her right to 

compensation for the period November 2, 2004 to January 22, 2008 as she knowingly failed to 

report her employment activities. The Board further finds that there is no forfeiture of 

compensation for the period January 22, 2008 to May 13, 2008 as there are no EN1032 affidavits 

covering this period. The Board further finds that appellant received an overpayment of 

compensation for the period November 2, 2004 to January 22, 2008 based on her forfeiture of 

                                                             11 Id. at § 8129(b). 

12 20 C.F.R. § 10.320(b). 

13 See Bob R. Gilley, 51 ECAB 377 (2000). 

14 Albert Pineiro, 51 ECAB 310 (2000). 
7

compensation. There is no overpayment established for the period January 22 to May 13, 2008. 

The Board further finds that OWCP properly found appellant at fault in creating the 

overpayment, such that it was not subject to waiver. 

ORDER 

IT IS HEREBY ORDERED THAT the decision of the Office of Workers’ 

Compensation Programs dated October 29, 2013 is affirmed as modified. 

Issued: September 18, 2014 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board