A former Augusta man imprisoned for stealing more than $47,000 in benefits from the U.S. Department of Veterans Affairs has lost an appeal of a civil court claim that he was unlawfully denied a promotion within the VA.

Mark Stephen Palmquist, 45, who is serving 18 months at the Federal Prison Camp in Duluth, Minn., had accused the VA of retaliating against him for complaining about disability discrimination.

The U.S. District Court for the 1st Circuit cleared the VA of the claim, upholding 3-0 an earlier decision by U.S. District Court Judge John Woodcock.

Palmquist, who was discharged in 1988 after four years in the Marine Corps, was hired as a medical support assistant at the VA medical center in Iron Mountain, Mich., in 2004. Six months later, he sought a promotion at the same site but did not receive it.

Two years later, he applied for a promotion to a Tennessee VA hospital and again was unsuccessful. Later, he transferred to the VA hospital in Togus, where he worked as a patient claims representative, according to his attorney, David Webbert.

Palmquist sued the VA in 2007, claiming he was a victim of disability discrimination, and the case was tried in Maine.

In an opinion issued Thursday, Judge Bruce M. Selya wrote that the appeals court was asked, “Does the Rehabilitation Act of 1973 … entitle a plaintiff to relief when retaliation for his complaints about disability discrimination is a motivating factor in, but not the but-for cause of, an adverse employment action?”

The court said it does not.

Webbert said federal circuit courts have split on this issue.

“It’s very likely this will go to the Supreme Court,” said Webbert.

The government was represented by Daniel Tenny of the U.S. Department of Justice in Washington, D.C. He referred questions to the media relations department.

“We’re not going to have any comment,” said Charles Miller, spokesman for the civil division of the U.S. Department of Justice. “This could be ongoing.”

In the criminal case, Palmquist pleaded guilty to making a false claim for VA benefits and theft of government property.

Palmquist “fraudulently submitted a false and fabricated document in applying for service-connected VA benefits,” according to a sentencing memoranda prepared by the prosecutor, Assistant U.S. Attorney James Moore, before the November sentencing.

The memo also said Palmquist “made other false statements to the VA and another agency of the federal government as well as to businesses, news media and a professional baseball player,” who is identified in documents as former Red Sox third baseman Mike Lowell.

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