United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.C., Appellant 

and 

DEPARTMENT OF THE NAVY, MARINE 

CORPS BASE, Camp Lejeune, NC, Employer 

__________________________________________ 

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Docket No. 16-1058 

Issued: July 10, 2017 

Appearances: Oral Argument April 25, 2017 

W. Ellis Boyle, Esq., for the appellant1

Catherine P. Carter, Esq. and Arien Parham., Esq., for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

ALEC J. KOROMILAS, Alternate Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On April 25, 2016 appellant, through counsel, filed a timely appeal from a March 2, 2016 

merit decision of the Office of Workers’ Compensation Programs (OWCP). Pursuant to the 

Federal Employees’ Compensation Act2

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

has jurisdiction over the merits of this case. 

ISSUES 

The issues are: (1) whether OWCP properly found that appellant forfeited his entitlement 

to compensation from October 17, 2006 to December 18, 2012 because he knowingly failed to 

 1

 In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for 

legal or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. 

§ 501.9(e). No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An 

attorney or representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject 

to fine or imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation. 

2

 5 U.S.C. § 8101 et seq. 
2

report employment activities; (2) whether he received a $228,311.94 overpayment of 

compensation from October 17, 2006 to December 18, 2012 because he forfeited his entitlement 

to compensation for this period; (3) whether appellant was at fault in creating the overpayment; 

and (4) whether OWCP properly determined that it would recover the overpayment by deducting 

$100.00 from continuing compensation payments. 

FACTUAL HISTORY 

On June 30, 1994 appellant, then a 38-year-old electronics industrial controls mechanic, 

filed a traumatic injury claim (Form CA-1) alleging that on June 13, 1994 he sustained injuries 

when a tray fell on his head and shoulder. OWCP accepted the claim for a concussion, neck 

sprain, aggravation of degeneration of a cervical disc, organic brain syndrome, and other 

specified visual disturbances. It paid appellant compensation for total disability beginning 

August 17, 1994 on the periodic rolls. 

OWCP provided appellant with Forms EN1032 to complete regarding his earnings and 

employment activity for the previous 15 months. The forms explained that a claimant must 

report all self-employment or involvement in any business enterprise, including, but not limited 

to, farming, sales work, operating a business or providing services in exchange for money, goods 

or other services. In addition, the EN1032 forms advised appellant that, if duties were performed 

in any business enterprise for which he was not paid, he was to report the rate of pay it would 

have cost to hire someone to perform such duties. The forms contained certification clauses 

which informed him of the consequences of inaccurately reporting his employment activities, 

such as being subjected to criminal penalties and losing the right to receive workers’ 

compensation. Appellant completed and signed Forms EN1032 on December 17, 2007, 

December 4, 2008, December 4, 2009, January 11, and December 9, 2011, and 

December 18, 2012. On the forms, he indicated that he performed no work, including volunteer 

work, for the previous 15-month period. 

On November 4, 2014 the employing establishment’s investigative service submitted an 

investigative summary. It advised that surveillance established that appellant participated in 

unreported farming activities from 2007 to 2012. The summary provided that investigators 

questioned him on October 4, 2012 regarding the farm registration license plate on his vehicle, 

while covertly recording the interview. Appellant told them that he had performed farming 

activities on his son’s farm since 2003 and that he needed the license plate to tow farm 

equipment and trailers. He received no income from his son for assisting with the farm. In a 

May 9, 2013 interview, appellant reviewed the EN1032 forms with the investigators and again 

indicated that he had not received earnings for helping his son. He admitted assisting with 

“miscellaneous jobs that needs done in support of the farming operation.” Appellant required 

farm registration license plates “to tow various farm equipment and unlicensed farm trailers, 

while relocating farm equipment or hauling grain and hay rolls.” He informed the investigators 

that he performed farming activities, including plowing, planting, mowing, and towing, for 

around 75 to 80 hours each year between 2007 and 2012. 

The employing establishment, in the investigative summary, related that it conducted 43 

surveillance attempts from October 7, 2010 and April 8, 2013, which yielded 17 observations of 

appellant. It described each observation, which included him driving a farm grain truck and 
3

delivering a load of grain on October 22, 2010, using a tractor on October 27, 2010 to mow a 

corn plot, getting corn seed on April 21, 2011, and picking up an agricultural sprayer on 

April 14, 2011. The surveillance also showed appellant driving to places such as a grocery store, 

tobacco shop, and drug store. 

The investigative summary further described interviews with appellant’s son, C.C., on 

October 4, 2012 and May 9, 2013. On May 9, 2013 C.C. related that his father helped with 

planting, grain delivery, harvesting, and picking up agricultural supplies. He indicated that he 

did not pay appellant but, did buy him gas for his vehicle and sometimes bought him lunch. The 

investigators spoke to owners of a crop production service who confirmed that appellant had 

purchased agricultural supplies and seed for the past few years. The investigators described 

interviews with other individuals who had witnessed him assisting his son with various farm 

activities. Two employees of an agricultural supply store indicated that appellant had picked up 

seeds and agricultural supplies. An individual advised that he saw him load hay that he had 

purchased onto his trailer and another indicated that he “routinely helps [his son] with planting, 

harvesting crops, grain delivery, prepping fields, moving/towing farm equipment, and picking up 

agricultural supplies and seed.” 

With the investigative summary, the employing establishment submitted descriptions of 

surveillances conducted from 2010 to 2013, photographs, and investigative reports describing the 

interviews conducted by the investigators. In an October 26, 2012 investigative report, M.G., an 

investigator, summarized the oral interview with appellant on October 4, 2012, ostensibly about 

his use of a farm tag on his vehicle. He related that appellant advised that he worked about 20 

hours a week helping with farming activities and that he had not received any money for his 

assistance or earned any income, especially considering his use of fuel for his truck. M.G. 

reported that appellant and his sons harvested and sold hay rolls. 

On October 4, 2012 M.G. related that he had conducted a consensual wire intercept by 

telephone of appellant’s son, C.C., on October 4, 2012. C.C. indicated that appellant helped 

“during crop harvesting, picking up farm supplies and assist[ing] by moving various farm 

equipment from location to location.” 

M.G., in an October 26, 2012 interim report of investigation, related that investigators 

believed that appellant assisted his sons, C.C. and D.C., to maintain a farm. In a wire intercept 

obtained October 4, 2012, C.C. related that appellant helped him about 10 hours a week with 

farming about 500 acres. The lease for the farm was in C.C.’s name. He had not paid either 

appellant or D.C. for their help and did not have any other employees. On October 22, 2012 

C.C. told investigators he would send them any paperwork showing his father’s participation on 

the farm. 

 In a June 19, 2013 investigative report, M.G. provided a summary of second interviews 

conducted with appellant. On May 9, 2013 two investigators showed appellant copies of his 

EN1032 forms. Appellant told the investigators that he lost money helping his son with farming 

activities. In 2010 he helped his son plowing, planting, and mowing hay but had not done any 

farming in 2011 or 2012. In 2013 appellant picked up liquid fertilizer from a business and 

transported it to a farm equipment shed. After surgery in 2012 his health deteriorated and he 

could not do many activities. Appellant advised that a few years earlier he had assisted his son 
4

with farming. He helped with planting during spring of 2010. Appellant related that he also 

moved grain to a storage facility in 2010 and earlier. A few days earlier he took a nitrogen tank 

to a supply store and then returned the tank to his shed. Appellant also picked up corn seed. His 

son did not pay him any money or provide him with gasoline, but did pay for the farm supplies. 

Appellant asserted that he performed no farming in 2012, but in 2009 to 2011 plowed, picked up 

fertilizer, and seeds. He later indicated that he helped with farming activities for around 75 to 80 

hours from approximately 2007 to 2012. M.G. also described interviews with other individuals 

regarding appellant’s farming activities. 

The employing establishment submitted an April 22, 2010 farmer affidavit for a farm 

truck registration plate. Appellant advised on the affidavit that he was engaged in raising and 

growing farm products, that the farm was under his management or control, and that the vehicle 

would be used to transport farm supplies to his farm operation. 

By decision dated December 11, 2014, OWCP forfeited appellant’s entitlement to 

compensation from October 17, 2006 to December 18, 2012 as he knowingly failed to report 

work activity on Forms EN1032. It determined that he admitted working 75 hours a year from 

2007 through 2012 performing farming activities. 

On December 17, 2014 OWCP informed appellant of its preliminary determination of 

overpayment of compensation in the amount of $228,311.94 for the period October 17, 2006 to 

December 18, 2012 based on the forfeiture and that he was at fault in creating the overpayment. 

It advised appellant that he was at fault in the creation of the overpayment and requested that 

appellant complete the enclosed overpayment recovery questionnaire and submit supporting 

financial documents. Additionally, OWCP notified him that, within 30 days of the date of the 

letter, he could request a telephone conference, a final decision based on the written evidence, or 

a prerecoupment hearing. 

Appellant requested an oral hearing before an OWCP hearing representative on the 

forfeiture decision, which was held on August 12, 2015. At the telephone hearing, he denied 

engaging in employment after his June 13, 1994 work injury. Appellant related that after his 

injury he experienced difficulties with his memory, with anxiety, and in social situations. He 

advised that he could perform tasks such as mowing the yard or lifting sacks of dog food. 

Appellant indicated that he would run errands for his son when asked, including picking up parts, 

fertilizer, and seed. He denied receiving any compensation for the errands from 2007 through 

2012. Appellant asserted that he believed that he accurately completed the Forms EN1032 dated 

2007 to 2012 as he did not believe performing errands for his son constituted work. He advised 

that farming in his location was a serious occupation and that he did not consider his actions 

farming. 

The employing establishment, on September 1, 2015, described the dates that appellant 

was observed performing activities that included purchasing corn seed, operating a grain truck or 

tractor, and towing an agricultural sprayer. 

On September 30, 2015 counsel contended that OWCP had failed to establish that 

appellant was engaged in farming. Appellant maintained that he assisted his son with errands. 

Counsel noted that the employing establishment conducted two and a half years of surveillance 
5

which only showed appellant running a few errands on seven occasions. He also argued that the 

summaries of interviews were not admissible as they did not constitute written statements under 

oath. Counsel asserted that appellant did not knowingly make a false statement as he did not 

view the activities as farming. 

In a decision dated October 27, 2015, OWCP’s hearing representative affirmed the 

December 11, 2014 decision. She found that appellant had failed to negate his responsibility to 

report such activities. 

Appellant, on November 25, 2015, submitted the overpayment recovery questionnaire 

and requested a telephone conference. At the conference, he discussed his assets and income. 

By decision dated March 2, 2016, OWCP finalized its preliminary determination, finding 

that appellant received an overpayment of compensation in the amount of $228,311.94 due to his 

forfeiture of compensation from October 17, 2006 through December 18, 2012 and that he was at 

fault in creating the overpayment. It determined that it would recover the overpayment by 

deducting $100.00 every 28 days from continuing compensation. 

On appeal counsel contends that OWCP relied upon inadmissible evidence as the only 

evidence provided by the investigators were summaries of interviews with appellant and other 

witnesses without the opportunity for cross examination. He also asserts that, even if appellant 

had performed some tasks, he did not believe that it was work that required reporting on EN1032 

forms. Counsel further contends that there is no evidence supporting work activities for years 

other than 2011 and 2012. 

The Director, on appeal, argues that appellant completed EN1032 forms from 

December 2007 to December 2012 indicating that he did not work, but on May 9, 2013 when 

interviewed by investigators with the employing establishment, he advised that he worked 75 to 

80 hours performing farming activities from 2007 through 2012. Appellant’s son verified his 

work activity and indicated that he paid him gas for his vehicle and an occasional lunch. The 

Director observes that the investigators submitted documentation supporting the farming activity, 

including photographs, observations of him making deliveries, and an April 22, 2010 farmer 

affidavit. He also advises that in 1995 appellant reported volunteer work at school, but failed to 

document his farm work activity on the latter forms. The Director maintains that surveillance 

showed 17 observations of him performing farming activities. He further contends that appellant 

was at fault in creating the overpayment as he failed to report his employment activity on 

EN1032 forms. The Director notes that the investigative summary and appellant’s admission 

supports that the period of the forfeiture should be from 2007 to 2012 and not only 2011 and 

2012 as argued by his counsel. 

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 right 

to compensation with respect to any period for which the affidavit or report was required.3

 3

 5 U.S.C. § 8106(b). 
6

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

earnings or unemployment. Appellant can be subjected to the forfeiture provisions of 5 U.S.C. 

§ 8106(b) only if he “knowingly” failed to report employment or earnings.4

 The term 

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

consciously, willfully, or intentionally.”5 

Section 10.5(g) of OWCP’s implementing federal regulations defines earnings from 

employment or self-employment as follows: 

“(1) Gross earnings or wages before any deduction and includes the value of 

subsistence, quarters, reimbursed expenses and any other goods or services 

received in kind as remuneration; or 

“(2) A reasonable estimate of the cost to have someone else perform the duties of 

an individual who accepts no remuneration. Neither lack or profits, nor the 

characterization of the duties as a hobby, removes an unremunerated individual’s 

responsibility to report the estimated cost to have someone else perform his or her 

duties.”6 

An employee can only be subjected to the forfeiture provision of 5 U.S.C. § 8106(b) if he 

knowingly omitted or understated earnings. It is not enough to merely establish that there were 

unreported earnings. OWCP procedures recognize that forfeiture is a penalty.7

 As a penalty 

provision, it must be narrowly construed.8 To meet this burden, OWCP is required to examine 

closely appellant’s activities and statements. It may meet this burden without an admission by an 

employee if the circumstances of the case establish that he failed to reveal fully and truthfully the 

full extent of his employment activities and earnings.9

The Board has held that OWCP may not base its application of the forfeiture provision 

strictly on conclusions drawn in an investigation; rather, the evidence of record must establish 

that the claimant had unreported earnings from employment that were knowingly not reported.10 

ANALYSIS -- ISSUE 1 

OWCP determined that appellant forfeited his right to compensation from October 17, 

2006 to December 18, 2012 because he knowingly failed to report work activities on EN1032 

 4 Barbara L. Kanter, 46 ECAB 165 (1994). 

5

 20 C.F.R. § 10.5(n). 

6 Id. at § 10.5(g). 

7

 Federal (FECA) Procedure Manual, Part 2 -- Claims, Forfeiture, Chapter 2.1402.8 (May 2012). 

8 See Christine P. Burgess, 43 ECAB 449, 458 (1992). 

9 Terry A. Geer, 51 ECAB 168 (1999). 

10 B.Y., Docket No. 11-1798 (issued July 24, 2012); Louis P. McKenna, Jr., 46 ECAB 328 (1994). 
7

forms dated December 17, 2007 through December 18, 2012. The Board finds, however, that it 

has not established that he forfeited entitlement to compensation for any period other than 

October 11, 2009 to January 11, 2011. 

In finding that appellant forfeited compensation from October 17, 2006 to October 10, 

2009 and from January 12, 2011 to December 18, 2012, OWCP relied upon summaries of 

interviews obtained by investigators with the employing establishment’s Office of the Inspector 

General (OIG). The investigators described surveillance they conducted from 2007 to 2012. 

The observations included observing appellant delivering grain on October 22, 2010, mowing a 

corn plot on October 27, 2010, picking up corn seed on April 21, 2011, and using an agricultural 

sprayer on April 14, 2011. The OIG investigators summarized interviews conducted with 

appellant on October 4, 2012 and May 9, 2013 and with C.C., his son who owned and operated 

the farm. Investigators also summarized interviews with witnesses, some of whom described 

him picking up seeds and agricultural supplies, loading hay, moving equipment, and helping in 

the fields. The record, however, does not contain any transcripts detailing the questions asked of 

either appellant or the witnesses or the actual responses made by those interviewed. There are 

also no individual statements signed by any of the parties questioned. 

In Claudia J. Thibault,

11 the Board found that OWCP relied only upon a memorandum in 

which an agent with the employing establishment’s OIG memorialized a telephone interview 

with a witness who commented on the employee’s activities in finding forfeiture. The Board 

noted that a special agent wrote the memorandum instead of the person interviewed. It 

determined that this was insufficient evidence to outweigh the employee’s testimony that she did 

not have earnings. 

In the case of R.W.,12 the Board found that OWCP based its forfeiture determination on 

memorandum in which a special agent from the employer’s OIG provided summaries of 

interviews conducted with the employee and several witnesses. The memorandum did not 

specify the actual questions asked of the witnesses or contain the actual answers provided. There 

was nothing signed by any of the individuals attesting to the accuracy of the information 

provided. The Board found that the evidence was insufficient to support the forfeiture decision. 

The facts of this case are substantially similar to R.W. for the periods October 17, 2006 to 

October 10, 2009 and January 12, 2011 to December 18, 2012. Given the absence of the actual 

signed statements of those interviews and the transcripts of the interviews, there is inadequate 

evidence to establish that appellant was engaged in employment activities which required 

reporting on the Forms EN1032 covering the periods September 17, 2006 to October 10, 2009 

and January 12, 2011 to December 18, 2012.13

The Board finds, however, that appellant forfeited entitlement to compensation for the 

15-month period covered by the January 11, 2011 EN1032 form, October 11, 2009 to 

 11 40 ECAB 836 (1989). 

12 Docket No. 09-1607 (issued July 26, 2010). 

13 See D.O., Docket No. 13-1809 (issued September 11, 2014). 
8

January 11, 2011. He signed a farmer affidavit dated April 22, 2010 acknowledging that he 

engaged in farming activities, that he had a farm under his management and control, and that he 

used his vehicle to transport farm supplies. Appellant’s signing of the farmer affidavit 

constitutes probative evidence that he in fact engaged in farming activities during the period 

covered by the January 11, 2011 EN1032 form. If an EN1032 form is improperly completed 

resulting in a finding of forfeiture, the period of forfeiture is the entire 15-month period covered 

by the form in question.14 Appellant, consequently, forfeited his entitlement to compensation 

from October 11, 2009 to January 11, 2011. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8102(a) of FECA provides that the United States shall pay compensation for the 

disability or death of an employee resulting from personal injury sustained while in the 

performance of his duty.15 Section 8129(a) of FECA provides, in pertinent part, “When an 

overpayment has been made to an individual under this subchapter because of an error of fact or 

law, adjustment shall be made under regulations prescribed by the Secretary of Labor by 

decreasing later payments to which an individual is entitled.”16 

ANALYSIS -- ISSUE 2 

 As discussed, the Board modified OWCP’s forfeiture determination to find that appellant 

forfeited compensation from October 11, 2009 to January 11, 2011 rather than September 17, 

2006 to December 18, 2012. OWCP’s finding of an overpayment of compensation in the 

amount of $228,311.94 was based on a forfeiture finding that has now been modified; 

consequently, the case must be remanded to OWCP to recalculate the overpayment based on his 

forfeiture of compensation for this period.17

LEGAL PRECEDENT -- ISSUE 3 

Section 8129(b) of FECA18 provides that “[a]djustment or recovery 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.” Section 10.433 of OWCP’s implementing regulations 

provides that in determining whether a claimant is at fault, it will consider all pertinent 

circumstances. An individual is with fault in the creation of an overpayment who: 

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

should have known to be incorrect; or 

 14 See R.B., Docket No. 15-1946 (issued September 2, 2016); Martin James Sullivan, 50 ECAB 158 (1998). 

15 5 U.S.C. § 8102(a). 

16 Id. at § 8129(a). 

17 See J.A., Docket No. 14-1863 (issued July 7, 2015). 

18 5 U.S.C. § 8129(b). 
9

“(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.”19

ANALYSIS -- ISSUE 3 

The Board finds that appellant was at fault in the creation of the overpayment which 

occurred due to his forfeiture of compensation for the period October 11, 2009 to 

January 11, 2011. He verified on a farming affidavit that he engaged in farming during the 

period in question, but did not report such employment activities on the January 11, 2011 

EN1032 form submitted to OWCP. The explicit language of the EN1032 form clearly shows 

that he knew or should have known that the nature of his farming activities would require him to 

report such employment activities on the forms.20 Appellant’s signing of strongly-worded 

certification clauses on the EN1032 form dated January 11, 2011 demonstrated that he was 

aware of the materiality of his failure to report his employment. As he was at fault in the 

creation of the overpayment, OWCP properly determined that he was not entitled to waiver of 

recovery.

21 It will calculate the precise amount of the overpayment on remand of the case.22 

CONCLUSION 

The Board finds that appellant forfeited his entitlement to compensation for the period 

October 11, 2009 to January 11, 2011, but did not forfeit entitlement to compensation for the 

periods September 17, 2006 through October 10, 2009 and January 12, 2011 to 

December 18, 2012. The Board further finds that he was at fault in the creation of the 

overpayment by this forfeiture thereby precluding waiver of recovery of the overpayment. The 

case is remanded to OWCP for calculation of the exact dollar amount of the overpayment and 

issuance of an appropriate decision. 

 19 20 C.F.R. § 10.433. 

20 Id. at § 10.433(c). 

21 See supra note 18. 

22 In view of the Board’s disposition of the amount of overpayment, it is premature to consider whether OWCP 

properly required recovery of the overpayment by deducting $100.00 from appellant’s continuing compensation 

payments. 
10

ORDER 

IT IS HEREBY ORDERED THAT the March 2, 2016 decision of the Office of 

Workers’ Compensation Programs is affirmed, as modified. 

Issued: July 10, 2017 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board