[Code of Federal Regulations]
[Title 38, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR42.10]

[Page 744]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
          CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS (CONTINUED)
 
PART 42--STANDARDS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES ACT--Table 
of Contents
 
Sec. 42.10  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time 
prescribed in Sec. 42.9(a) of this part, the reviewing official may 
refer the complaint to the ALJ.
    (b) Upon the referral of the complaint, the ALJ shall promptly serve 
on the defendant in the manner prescribed in Sec. 42.8 of this part, a 
notice that an initial decision will be issued under this section.
    (c) The ALJ shall assume the facts alleged in the complaint to be 
true, and, if such facts establish liability under Sec. 42.3 of this 
part, the ALJ shall issue an initial decision imposing the maximum 
amount of penalties and assessments allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to file 
a timely answer, the defendant waives any right to further review of the 
penalties and assessments imposed under paragraph (c) of this section, 
and the initial decision shall become final and binding upon the parties 
30 days after it is issued.
    (e) If, before the initial decision becomes final, the defendant 
files a motion with the ALJ seeking to reopen on the grounds that 
extraordinary circumstances prevented the defendant from filing an 
answer, the initial decision shall be stayed pending the ALJ's decision 
on the motion.
    (f) If, on such motion, the defendant can demonstrate extraordinary 
circumstances excusing the failure to file a timely answer, the ALJ 
shall withdraw the initial decision in paragraph (c) of this section, if 
the decision has been issued, and shall grant the defendant an 
opportunity to answer the complaint.
    (g) A decision of the ALJ denying a defendant's motion under 
paragraph (e) of this section is not subject to reconsideration under 
Sec. 42.38 of this part.
    (h) The defendant may appeal to the Secretary the decision denying a 
motion to reopen by filing a notice of appeal with the Secretary within 
15 days after the ALJ denies the motion. The timely filing of a notice 
of appeal shall stay the initial decision until the Secretary decides 
the issue.
    (i) If the defendant files a timely notice of appeal with the 
Secretary, the ALJ shall forward the record of the proceeding to the 
Secretary.
    (j) The Secretary shall decide expeditiously whether extraordinary 
circumstances excuse the defendant's failure to file a timely answer 
based solely on the record before the ALJ.
    (k) If the Secretary decides that extraordinary circumstances excuse 
the defendant's failure to file a timely answer, the Secretary shall 
remand the case to the ALJ with instructions to grant the defendant an 
opportunity to answer.
    (l) If the Secretary decides that the defendant's failure to file a 
timely answer is not excused, the Secretary shall reinstate the initial 
decision of the ALJ, which shall become final and binding upon the 
parties 30 days after the authority head issues such decision.