38 USC 5905 - Penalty for certain acts

Collapse to view only § 5905. Penalty for certain acts

§ 5901. Prohibition against acting as claims agent or attorney
§ 5902. Recognition of representatives of organizations
§ 5903. Recognition with respect to particular claims
§ 5904. Recognition of agents and attorneys generally
§ 5905. Penalty for certain acts
§ 5906. Availability of legal assistance at Department facilities

§ 5901. Prohibition against acting as claims agent or attorney

(a)In General.—Except as provided by section 500 of title 5, no individual may act as an agent or attorney in the preparation, presentation, or prosecution of any claim under laws administered by the Secretary unless such individual has been recognized for such purposes by the Secretary.

(b)Warnings About Potential Predatory Practices.—

(1) The Secretary shall ensure that, each time a claimant under a law administered by the Secretary logs in to a website or online tool of the Department, such website or online tool issues to the claimant, in plain language—

(A) a warning about individuals who seek to act in violation of this chapter;

(B) a link to an online tool of the Department through which the claimant may report such an individual;

(C) a link to an online tool of the Department through which the claimant may search for a recognized agent, attorney, or other entity recognized by the Secretary for the preparation, presentation, or prosecution of any claim under laws administered by the Secretary; and

(D) a link to a website or an online tool of the Department providing final decisions on discipline of agents, attorneys, and entities, described in subparagraph (C), by the Secretary for violations of this chapter.

(2) The Secretary shall provide all information under paragraph (1) in the following languages:

(A) English.

(B) Spanish.

(D) The seven other languages most commonly spoken in the United States.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1238, § 3401; Pub. L. 91–24, § 12(a), June 11, 1969, 83 Stat. 34; Pub. L. 99–576, title VII, § 701(79), Oct. 28, 1986, 100 Stat. 3298; renumbered § 5901, Pub. L. 102–40, title IV, § 402(b)(1), May 7, 1991, 105 Stat. 238; Pub. L. 102–83, § 4(a)(1), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 403–405; Pub. L. 118–21, § 3(a), Nov. 13, 2023, 137 Stat. 110.)

§ 5902. Recognition of representatives of organizations

(a)

(1) The Secretary may recognize representatives of the American National Red Cross, the American Legion, the Disabled American Veterans, the United Spanish War Veterans, the Veterans of Foreign Wars, and such other organizations as the Secretary may approve, in the preparation, presentation, and prosecution of claims under laws administered by the Secretary.

(2) The Secretary may, in the discretion of the Secretary, furnish, if available, space and office facilities for the use of paid full-time representatives of national organizations so recognized.

(b)

(1) No individual shall be recognized under this section—

(A) unless the individual has certified to the Secretary that no fee or compensation of any nature will be charged any individual for services rendered in connection with any claim; and

(B) unless, with respect to each claim, such individual has filed with the Secretary a power of attorney, executed in such manner and form as the Secretary may prescribe.

(2) An individual recognized under this section shall be subject to the provisions of section 5904(b) of this title on the same basis as an individual recognized under section 5904(a) of this title.

(c)

(1) Unless a claimant specifically indicates in a power of attorney filed with the Department a desire to appoint only a recognized representative of an organization listed in or approved under subsection (a), the Secretary may, for any purpose, treat the power of attorney naming such an organization, a specific office of such an organization, or a recognized representative of such an organization as the claimant’s representative as an appointment of the entire organization as the claimant’s representative.

(2) Whenever the Secretary is required or permitted to notify a claimant’s representative, and the claimant has named in a power of attorney an organization listed in or approved under subsection (a), a specific office of such an organization, or a recognized representative of such an organization without specifically indicating a desire to appoint only a recognized representative of the organization, the Secretary shall notify the organization at the address designated by the organization for the purpose of receiving the notification concerned.

(d) Service rendered in connection with any such claim, while not on active duty, by any retired officer, warrant officer, or enlisted member of the Armed Forces recognized under this section shall not be a violation of sections 203, 205, 206, or 207 of title 18.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1238, § 3402; Pub. L. 91–24, § 12(b), June 11, 1969, 83 Stat. 34; Pub. L. 98–160, title VII, § 703(5), Nov. 21, 1983, 97 Stat. 1010; renumbered § 5902, Pub. L. 102–40, title IV, § 402(b)(1), May 7, 1991, 105 Stat. 238; Pub. L. 102–83, § 4(a)(1), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 403–405; Pub. L. 104–275, title V, § 508(a), Oct. 9, 1996, 110 Stat. 3343; Pub. L. 109–461, title I, § 101(a)(2), Dec. 22, 2006, 120 Stat. 3406.)

§ 5903. Recognition with respect to particular claims

(a)In General.—The Secretary may recognize any individual for the preparation, presentation, and prosecution of any particular claim for benefits under any of the laws administered by the Secretary if—

(1) such individual has certified to the Secretary that no fee or compensation of any nature will be charged any individual for services rendered in connection with such claim; and

(2) such individual has filed with the Secretary a power of attorney, executed in such manner and in such form as the Secretary may prescribe.

(b)Suspension.—An individual recognized under this section shall be subject to the provisions of section 5904(b) of this title on the same basis as an individual recognized under section 5904(a) of this title.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1238, § 3403; renumbered § 5903, Pub. L. 102–40, title IV, § 402(b)(1), May 7, 1991, 105 Stat. 238; Pub. L. 102–83, § 4(a)(1), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 403–405; Pub. L. 109–461, title I, § 101(a)(3), Dec. 22, 2006, 120 Stat. 3407.)

§ 5904. Recognition of agents and attorneys generally

(a)Recognition.—

(1) Except as provided in paragraph (4), the Secretary may recognize any individual as an agent or attorney for the preparation, presentation, and prosecution of claims under laws administered by the Secretary.

(2) The Secretary shall prescribe in regulations (consistent with the Model Rules of Professional Conduct of the American Bar Association) qualifications and standards of conduct for individuals recognized under this section, including a requirement that, as a condition of being so recognized, an individual must—

(A) show that such individual is of good moral character and in good repute, is qualified to render claimants valuable service, and is otherwise competent to assist claimants in presenting claims;

(B) have such level of experience or specialized training as the Secretary shall specify; and

(C) certify to the Secretary that the individual has satisfied any qualifications and standards prescribed by the Secretary under this section.

(3) The Secretary shall prescribe in regulations requirements that each agent or attorney recognized under this section provide annually to the Secretary information about any court, bar, or Federal or State agency to which such agent or attorney is admitted to practice or otherwise authorized to appear, any relevant identification number or numbers, and a certification by such agent or attorney that such agent or attorney is in good standing in every jurisdiction where the agent or attorney is admitted to practice or otherwise authorized to appear.

(4) The Secretary may not recognize an individual as an agent or attorney under paragraph (1) if such individual has been suspended or disbarred by any court, bar, or Federal or State agency to which the individual was previously admitted to practice and has not been subsequently reinstated.

(5) The Secretary may prescribe in regulations reasonable restrictions on the amount of fees that an agent or attorney may charge a claimant for services rendered in the preparation, presentation, and prosecution of a claim before the Department. A fee that does not exceed 20 percent of the past due amount of benefits awarded on a claim shall be presumed to be reasonable.

(6)

(A) The Secretary may charge and collect an assessment from an individual recognized as an agent or attorney under this section in any case in which the Secretary pays to the agent or attorney, from past-due benefits owed to a claimant represented by the agent or attorney, an amount as a fee in accordance with a fee arrangement between the claimant and the agent or attorney.

(B) The amount of an assessment under subparagraph (A) shall be equal to five percent of the amount of the fee required to be paid to the agent or attorney, except that the amount of such an assessment may not exceed $100.

(C) The Secretary may collect an assessment under subparagraph (A) by offsetting the amount of the fee otherwise required to be paid to the agent or attorney from the past-due benefits owed to the claimant represented by the agent or attorney.

(D) An agent or attorney who is charged an assessment under subparagraph (A) may not, directly or indirectly, request, receive, or obtain reimbursement for such assessment from the claimant represented by the agent or attorney.

(E) Amounts collected under this paragraph shall be deposited in the account available for administrative expenses for veterans’ benefits programs. Amounts so deposited shall be merged with amounts in such account and shall be available for the same purpose, and subject to the same conditions and limitations, as amounts otherwise in such account.

(b)Suspension of Agents and Attorneys.—The Secretary, after notice and opportunity for a hearing, may suspend or exclude from further practice before the Department any agent or attorney recognized under this section if the Secretary finds that such agent or attorney—

(1) has engaged in any unlawful, unprofessional, or dishonest practice;

(2) has been guilty of disreputable conduct;

(3) is incompetent;

(4) has violated or refused to comply with any of the laws administered by the Secretary, or with any of the regulations or instructions governing practice before the Department;

(5) has in any manner deceived, misled, or threatened any actual or prospective claimant;

(6) has presented to the Secretary a frivolous claim, issue, or argument, involving conduct inconsistent with ethical standards for the practice of law;

(7) has been suspended or disbarred by any court or bar to which such agent or attorney was previously admitted to practice, or has been disqualified from participating in or appearing before any Federal agency, and has not been subsequently reinstated;

(8) has charged excessive or unreasonable fees, as determined by the Secretary in accordance with subsection (c)(3)(A); or

(9) has failed to comply with any other condition specified in regulations prescribed by the Secretary for purposes of this subsection.

(c)

(1) Except as provided in paragraph (4), in connection with a proceeding before the Department with respect to benefits under laws administered by the Secretary, a fee may not be charged, allowed, or paid for services of agents and attorneys with respect to services provided before the date on which a claimant is provided notice of the agency of original jurisdiction’s initial decision under section 5104 of this title with respect to the case. The limitation in the preceding sentence does not apply to fees charged, allowed, or paid for services provided with respect to proceedings before a court.

(2) A person who, acting as agent or attorney in a case referred to in paragraph (1) of this subsection, represents a person before the Department or the Board of Veterans’ Appeals after a claimant is provided notice of the agency of original jurisdiction’s initial decision under section 5104 of this title with respect to the case shall file a copy of any fee agreement between them with the Secretary pursuant to regulations prescribed by the Secretary.

(3)

(A) The Secretary may, upon the Secretary’s own motion or at the request of the claimant, review a fee agreement filed pursuant to paragraph (2) and may order a reduction in the fee called for in the agreement if the Secretary finds that the fee is excessive or unreasonable.

(B) A finding or order of the Secretary under subparagraph (A) may be reviewed by the Board of Veterans’ Appeals under section 7104 of this title.

(C) If the Secretary under subsection (b) suspends or excludes from further practice before the Department any agent or attorney who collects or receives a fee in excess of the amount authorized under this section, the suspension shall continue until the agent or attorney makes full restitution to each claimant from whom the agent or attorney collected or received an excessive fee. If the agent or attorney makes such restitution, the Secretary may reinstate such agent or attorney under such rules as the Secretary may prescribe.

(4) A reasonable fee may be charged or paid in connection with any proceeding before the Department in a case arising out of a loan made, guaranteed, or insured under chapter 37 of this title. A person who charges a fee under this paragraph shall enter into a written agreement with the person represented and shall file a copy of the fee agreement with the Secretary at such time, and in such manner, as may be specified by the Secretary.

(d)Payment of Fees Out of Past-Due Benefits.—

(1) When a claimant and an agent or attorney have entered into a fee agreement described in paragraph (2), the total fee payable to the agent or attorney may not exceed 20 percent of the total amount of any past-due benefits awarded on the basis of the claim.

(2)

(A) A fee agreement referred to in paragraph (1) is one under which the total amount of the fee payable to the agent or attorney—

(i) is to be paid to the agent or attorney by the Secretary directly from any past-due benefits awarded on the basis of the claim; and

(ii) is contingent on whether or not the matter is resolved in a manner favorable to the claimant.

(B) For purposes of subparagraph (A), a claim shall be considered to have been resolved in a manner favorable to the claimant if all or any part of the relief sought is granted.

(3) To the extent that past-due benefits are awarded in any proceeding before the Secretary, the Board of Veterans’ Appeals, or the United States Court of Appeals for Veterans Claims, the Secretary may direct that payment of any fee to an agent or attorney under a fee arrangement described in paragraph (1) be made out of such past-due benefits. In no event may the Secretary withhold for the purpose of such payment any portion of benefits payable for a period after the date of the final decision of the Secretary, the Board of Veterans’ Appeals, or Court of Appeals for Veterans Claims making (or ordering the making of) the award.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1238, § 3404; Pub. L. 99–576, title VII, § 701(80), Oct. 28, 1986, 100 Stat. 3298; Pub. L. 100–687, div. A, title I, § 104(a), Nov. 18, 1988, 102 Stat. 4108; renumbered § 5904 and amended Pub. L. 102–40, title IV, § 402(b)(1), (d)(1), May 7, 1991, 105 Stat. 238, 239; Pub. L. 102–83, § 4(a)(1), (3), (4), (b)(1), (2)(E), Aug. 6, 1991, 105 Stat. 403–405; Pub. L. 102–405, title III, § 303(a), Oct. 9, 1992, 106 Stat. 1985; Pub. L. 103–446, title V, § 504(a), Nov. 2, 1994, 108 Stat. 4663; Pub. L. 105–368, title V, § 512(a)(1), Nov. 11, 1998, 112 Stat. 3341; Pub. L. 109–461, title I, § 101(a)(1), (b), (c)(1), (d)–(f), Dec. 22, 2006, 120 Stat. 3405, 3407, 3408; Pub. L. 115–55, § 2(n), Aug. 23, 2017, 131 Stat. 1110.)

§ 5905. Penalty for certain acts

Whoever wrongfully withholds from any claimant or beneficiary any part of a benefit or claim allowed and due to the claimant or beneficiary, shall be fined as provided in title 18, or imprisoned not more than one year, or both.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1239, § 3405; Pub. L. 99–576, title VII, § 701(81), Oct. 28, 1986, 100 Stat. 3298; Pub. L. 100–687, div. A, title I, § 104(b), Nov. 18, 1988, 102 Stat. 4109; renumbered § 5905 and amended Pub. L. 102–40, title IV, § 402(b)(1), (d)(1), May 7, 1991, 105 Stat. 238, 239; Pub. L. 102–83, § 5(c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 109–461, title I, § 101(g), Dec. 22, 2006, 120 Stat. 3408.)

§ 5906. Availability of legal assistance at Department facilities

(a)In General.—Not less frequently than three times each year, the Secretary shall facilitate the provision by a qualified legal assistance clinic of pro bono legal assistance described in subsection (c) to eligible individuals at not fewer than one medical center of the Department of Veterans Affairs, or such other facility of the Department as the Secretary considers appropriate, in each State.

(b)Eligible Individuals.—For purposes of this section, an eligible individual is—

(1) any veteran;

(2) any surviving spouse; or

(3) any child of a veteran who has died.

(c)Pro Bono Legal Assistance Described.—The pro bono legal assistance described in this subsection is the following:

(1) Legal assistance with any program administered by the Secretary.

(2) Legal assistance associated with—

(A) improving the status of a military discharge or characterization of service in the Armed Forces, including through a discharge review board; or

(B) seeking a review of a military record before a board of correction for military or naval records.

(3) Such other legal assistance as the Secretary—

(A) considers appropriate; and

(B) determines may be needed by eligible individuals.

(d)Limitation on Use of Facilities.—Space in a medical center or facility designated under subsection (a) shall be reserved for and may only be used by the following, subject to review and removal from participation by the Secretary:

(1) A veterans service organization or other nonprofit organization.

(2) A legal assistance clinic associated with an accredited law school.

(3) A legal services organization.

(4) A bar association.

(5) Such other attorneys and entities as the Secretary considers appropriate.

(e)Legal Assistance in Rural Areas.—In carrying out this section, the Secretary shall ensure that pro bono legal assistance is provided under subsection (a) in rural areas.

(f)Definition of Veterans Service Organization.—In this section, the term “veterans service organization” means any organization recognized by the Secretary for the representation of veterans under section 5902 of this title.

(Added Pub. L. 116–283, div. A, title V, § 548(a)(1), Jan. 1, 2021, 134 Stat. 3617.)