ISCR Case 17-03839

Case Headnote

ISCR Case No. 17-03839

grantedApr 22, 2019· Hon. Carol G. Ricciardello· hearing

Summary

A 41-year-old defense contractor was granted a security clearance despite concerns under Guideline F (Financial Considerations) related to his divorce. The applicant admitted to allegations that his wife had failed to file federal and state tax returns from 2012-2015 and refused to pay the mortgage or vacate their marital home, leading to foreclosure proceedings. He took legal action to stay the foreclosure, fixed the house for sale, and, after his wife refused to close, obtained an emergency motion to appoint a trustee to complete the sale. The sale resolved the past-due mortgage debt and other financial obligations, including a student loan for which he was a co-signor and a judgment had been issued.

The applicant demonstrated responsible actions to resolve all financial delinquencies. He filed and paid all delinquent federal and state income taxes, providing supporting documentation. He also credibly testified that a small debt was paid in 2016 and that he was unaware of other minor debts because invoices were sent to the marital home after he had moved out.

The Administrative Judge concluded that the applicant had taken responsible actions to resolve all financial delinquencies, including filing and paying all past-due federal and state taxes. He also presented a detailed budget showing a significant surplus after expenses. Based on these mitigating factors, the Judge granted eligibility for access to classified information, determining it was consistent with national security interests.

Why the Applicant Prevailed

The applicant took responsible actions to resolve all financial delinquencies.
He filed and paid all delinquent federal and state taxes.
The applicant provided a detailed budget showing a significant surplus after expenses.

Conditions Referenced

Mitigating

AG ¶ 20(a)appliedMitigating Condition 20(a)The circumstances were unique and unlikely to recur.
AG ¶ 20(b)appliedMitigating Condition 20(b)The applicant sought assistance to resolve financial problems.
AG ¶ 20(c)appliedMitigating Condition 20(c)The applicant paid all delinquent debts and taxes.
AG ¶ 20(d)appliedMitigating Condition 20(d)The applicant demonstrated a clear plan for financial responsibility.
AG ¶ 20(g)appliedMitigating Condition 20(g)The applicant's financial issues do not cast doubt on his reliability.

Key Rule Quoted

“The concerns over Applicant’s finances do not create doubt about his current reliability, trustworthiness, good judgment, and ability to protect classified information.”

Procedural Posture

SOR issuedMar 8, 2018
Answer filedJun 13, 2018Applicant requested a hearing.
Hearing heldApr 8, 2019Hearing was rescheduled from March 13, 2019.
Decision dateApr 22, 2019

Cite For

Mitigation of Financial Issues Under Guideline F
Responsible Actions Taken to Resolve Financial Delinquencies
Impact of Unique Circumstances on Financial Reliability Assessments

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	his wife had failed to file their federal and state income tax returns for tax years 2012- 2015.	For Applicant	Tax Filing Failure	Unknown	—	—	—
1.b	his wife remained in the marital home, but refused to pay the mortgage or vacate it so it could be sold and resolve some financial issues.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.c	Applicant took legal action to stay the foreclosure, which was granted.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.d	Applicant fixed the house for sale and retained a buyer, but his wife refused to appear to close on the house.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Applicant took legal action through an emergency motion to appoint a trustee to stand in her place so Applicant could close on the house.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Included in the closing were payoffs to different entities, including Applicant’s wife’s student loan, for which he was a co-signor.	For Applicant	Student Loan Debt	Unknown	—	—	—
1.g	There had been a judgment against both Applicant and his wife for the loan.	For Applicant	Judgment Against Applicant	Unknown	—	—	—
1.h	Applicant filed and paid all delinquent federal income taxes.	For Applicant	Tax Unpaid	Unknown	—	—	—
1.i	Applicant has filed his past-due state tax returns for State A and paid the delinquent taxes.	For Applicant	Tax Unpaid	Unknown	—	—	—
1.j	Applicant provided supporting documents to show all of his federal and state income tax returns are filed and the taxes paid.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	Applicant also provided documentation to show the past-due mortgage debt was resolved through the sale of the property, as were other debts.	For Applicant	Mortgage or Home Loan Debt	Unknown	—	—	—
1.l	He credibly testified that one small debt was paid in 2016, and he requested the creditor provide him a receipt.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.m	He credibly testified that some of the smaller debts’ invoices were mailed to the marital home when he was not living there, and he was unaware of them.	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

his wife had failed to file their federal and state income tax returns for tax years 2012- 2015.

For Applicant

Tax Filing Failure

Unknown

—

1.b

his wife remained in the marital home, but refused to pay the mortgage or vacate it so it could be sold and resolve some financial issues.

For Applicant

Unspecified Financial

Unknown

—

1.c

Applicant took legal action to stay the foreclosure, which was granted.

For Applicant

Unspecified Financial

Unknown

—

1.d

Applicant fixed the house for sale and retained a buyer, but his wife refused to appear to close on the house.

For Applicant

Unspecified Financial

Unknown

—

1.e

Applicant took legal action through an emergency motion to appoint a trustee to stand in her place so Applicant could close on the house.

For Applicant

Unspecified Financial

Unknown

—

1.f

Included in the closing were payoffs to different entities, including Applicant’s wife’s student loan, for which he was a co-signor.

For Applicant

Student Loan Debt

Unknown

—

1.g

There had been a judgment against both Applicant and his wife for the loan.

For Applicant

Judgment Against Applicant

Unknown

—

1.h

Applicant filed and paid all delinquent federal income taxes.

For Applicant

Tax Unpaid

Unknown

—

1.i

Applicant has filed his past-due state tax returns for State A and paid the delinquent taxes.

For Applicant

Tax Unpaid

Unknown

—

1.j

Applicant provided supporting documents to show all of his federal and state income tax returns are filed and the taxes paid.

For Applicant

Unspecified Financial

Unknown

—

1.k

Applicant also provided documentation to show the past-due mortgage debt was resolved through the sale of the property, as were other debts.

For Applicant

Mortgage or Home Loan Debt

Unknown

—

1.l

He credibly testified that one small debt was paid in 2016, and he requested the creditor provide him a receipt.

For Applicant

Unspecified Financial

Unknown

—

1.m

He credibly testified that some of the smaller debts’ invoices were mailed to the marital home when he was not living there, and he was unaware of them.

For Applicant

Unspecified Financial

Unknown

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

FORMAL FINDINGS

CONCLUSION