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ISCR Case 08-03620.a1 — CASE

ISCR Case 08-03620.a1unknown

Case Headnote

ISCR Case No. 08-03620.a1

May 6, 2009· Hon. Jeffrey D. Billett· appeal

Summary

This case involves a U.S. Army retiree and psychologist whose security clearance was challenged under Guideline J (Criminal Conduct) due to a guilty plea for Medicare fraud. The fraud involved submitting false claims over a four-year period, leading to the application of Disqualifying Condition J1.

While Mitigating Conditions J2 and J3 were considered, the Appeal Board ultimately reversed an initial favorable decision. The Board found the applicant's denial of criminal intent inconsistent with his guilty plea. Furthermore, the Board determined that the Judge's conclusion regarding mitigation lacked substantial evidentiary support.

Specifically, the applicant's claims of stress were not sufficiently connected to his misconduct to serve as a mitigating factor. Consequently, no mitigating conditions were found to apply, and the security clearance was not granted.

Conditions Referenced

Disqualifying

J1raisedCriminal Conduct

Mitigating

J2rejectedThe Person Was Pressured or Coerced Into Committing the ActThe record did not support a conclusion that the applicant's stress amounted to pressure or coercion.
J3rejectedThe Criminal Behavior Was Minor and Committed Under Extreme DuressThe applicant's repeated submissions of false claims over four years undermined claims of minor behavior.

Key Rule Quoted

“Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance.”
— Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991).

Procedural Posture

SOR issuedAug 12, 2008
Answer filed—
Hearing heldFeb 23, 2009
Decision dateMay 6, 2009Appeal Board decision reversed the initial ruling.

Cite For

Inconsistencies in Denial of Criminal Intent Under Guideline J
Reversal of Favorable Decisions Based on Lack of Substantial Evidence
The Strong Presumption Against Granting Security Clearances After Criminal Conduct.

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

Appeal at a glance· Full written decision

Reversed

The appeal involved a security clearance denial based on criminal conduct under Guideline J. The Administrative Judge initially granted the clearance, but the Department Counsel appealed, arguing that the Judge's conclusions were not supported by the evidence. The Appeal Board found harmful errors in the Judge's analysis and reversed the decision, concluding that the applicant did not demonstrate rehabilitation or mitigate the security concerns raised by his criminal conduct.

Appealed bythe Government (Department Counsel)

Applicant representationPro se (self-represented)

Judge belowPaul J. Mason — granted the clearance

Decided ona hearing

Guidelines belowGuideline J

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the Government (Department Counsel)Error sustained
The Judge's favorable decision did not consider significant contrary record evidence.
Decision arbitrary, capricious, or contrary to law — raised by the Government (Department Counsel)Error sustained
The Judge's whole-person analysis was flawed.

Why the Board ruled this way

The Board found that the Judge's favorable conclusion regarding mitigation was not sustainable due to significant contrary evidence in the record, including the applicant's guilty plea to Medicare fraud and his inconsistent claims regarding intent.

Ignored material evidenceNo rational connection between facts and conclusion

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Michael Y. Ra’anan — Chair
Jeffrey D. Billett
James E. Moody

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

SYNOPSIS

KEYWORD: Guideline J DIGEST: Applicant’s denial of a criminal state of mind was not consistent with his plea of guilty to a charge of Medicare fraud. In light of this and the other contrary evidence in the record, the Judge’s favorable conclusion as to mitigation is not sustainable. Favorable decision reversed. CASENO: 08-03620.a1 DATE: 05/06/2009 DATE: May 6, 2009 In Re: ---------------- Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 08-03620

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James F. Duffy, Esq., Department Counsel FOR APPLICANT Pro Se The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security clearance. On August 12, 2008, DOHA issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline J (Criminal Conduct) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On February 23, 2009, after the hearing, Administrative Judge Paul J. Mason granted Applicant’s request for a security clearance. Department Counsel appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Department Counsel raised the following issues on appeal: whether the Judge’s application of the pertinent mitigating conditions was error and whether the Judge’s whole-person analysis was error. Finding error, we reverse. Whether the Record Supports the Judge’s Factual Findings A. Facts The Judge made the following pertinent findings of fact: Applicant is a psychologist. He served with the U.S. Army, retiring in the late 1990s. After his retirement he worked for three different companies. He worked for three because he was not certain as to how long any one contract would last. Applicant was not able to manage the administrative requirements of his position as a psychologist, especially preparing paperwork for submission to Medicare for payment. He determined that the submissions he made contained “billing errors,” (Decision at 3) i.e., claims for services not rendered. Beginning in the early 2000s, he experienced numerous health problems, including bladder and eye infections; a stroke, and a degenerative spine and joint disorder. As a result of a federal investigation into the billing errors between 2000 and 2004, he was indicted. Subsequently he pled guilty to one count of felony health care fraud (18 U.S.C. § 1347). The court sentenced Applicant to five months confinement, followed by three years supervised release to probation; restitution of $63,332.12 to Medicare; and a special assessment fine of $100. Applicant enjoys an excellent reputation for the quality of his job performance, as evidenced by the testimony of several witnesses at his hearing as well as by written letters of reference. However, his supporting evidence also states that Applicant is disorganized and does not always keep adequate records. He is also susceptible to stress. B. Discussion The Appeal Board’s review of the Judge’s findings of facts is limited to determining if they are supported by substantial evidence–“such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” Directive ¶ E3.1.32.1. “This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). In evaluating the Judge’s findings, we defer to the Judge’s credibility determinations. Directive ¶ E3.1.32.1. Department Counsel’s brief contends that the Judge’s favorable decision did not consider significant contrary record evidence. The Board will address this contention in the discussion below. Whether the Record Supports the Judge’s Ultimate Conclusions A Judge is required to “examine the relevant data and articulate a satisfactory explanation for” the decision, “including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 Government Exhibit 5, Criminal Docket, states that Applicant was prosecuted for Health Care Fraud, a violation of 18 U.S.C. 1347. This statute reads as follows: “Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice (1) to defraud any health care benefit program; or (2) to obtain, by means of false of fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items or services, shall be fined . . . or imprisoned[.]” See also Government Exhibit 3, Plea Agreement: “[Applicant] admits that he is in fact guilty of the offense charged in the indictment and acknowledges that he has been advised and does fully understand the nature of the charges to which the plea is offered[.]” (1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). “The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). The Appeal Board may reverse the Judge’s decision to grant, deny, or revoke a security clearance if it is arbitrary, capricious, or contrary to law. Directive ¶¶ E3.1.32.3 and E3.1.33.3. Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9 Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents th evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. “The application of disqualifying and mitigating conditions and whole person factors does not turn simply on a finding that one or more of them apply to the particular facts of a case. Rather, their application requires the exercise of sound discretion in light of the record evidence as a whole.” See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20, 2006). In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board will review the Judge's decision to determine whether: it does not examine relevant evidence; it fails to articulate a satisfactory explanation for its conclusions, including a rational connection between the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere difference of opinion. In deciding whether the Judge's rulings or conclusions are contrary to law, the Board will consider whether they are contrary to provisions of Executive Order 10865, the Directive, or other applicable federal law. See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2, 2006). In holding in Applicant’s favor, the Judge relied upon the length of time which had elapsed between the last criminal conduct and the close of the record; stress that Applicant experienced in performing three jobs; and his excellent work record, to include psychological counseling for families of deceased service members. While these were matters the Judge was bound to consider, Department Counsel argues persuasively that the favorable decision is undermined by contrary record evidence. For example, although Applicant pled guilty to defrauding the Federal Government, thereby admitting each element of the offense, including its knowing and willful nature, his presentation at the hearing included repeated denials that his conduct was deceitful. See Tr. at 98: “Because I was so busy I allowed things to get very disjointed. I still have to take responsibility for that; I put that in motion. I can’t say that I’m not guilty of that, because I am. I didn’t have the criminal intent”; Tr. at 107: “. . . I just want you to understand this, that was the hardest thing I ever had to do, go into a court and say something that, basically . . . was saying I had the intent, which I never had intent to do.” Compare with Applicant’s Reply Brief, submitted after the close of the record in response to the Government’s Appeal Brief. Although generally denying intent, the Brief does state that “my systemic, though occasional submission for services that I had clearly not provided resulted in unforgivable acts in which I was reimbursed beyond what I was entitled to. As a result, I violated a sacred trust with my Government that I served practically all my life.” See also Applicants Exhibits A2,C1, C3, D, D2, and D9, which each offer an “administrative burden” defense to the criminal allegations. See, e.g., Decision at 3: “Applicant was unable to manage the administrative requirements (paperwork) of [his] employers, primarily the Medicare paperwork for the nursing homes . . . He tried to correct mistakes he discovered, but the paperwork overwhelmed him . . . He first determined there were billing errors . . . but never asked for help or advice.” The Judge analogized Applicant’s confusion regarding paperwork to pressure or coercion. Decision at 7. See Directive ¶ E2.32(b), which mitigates Criminal Conduct security concerns when “the person was pressured or coerced into committing the act . . .” Government Exhibit 2, Interrogatories, includes a summary of Applicant’s subject interview. “Investigators . . . found that sometimes a patient was billed but on the date billed [the] were not there or were already deceased.” See also Tr. at 109: “I had billing errors that went in for people that . . . were deceased.” Rather, he attributed the behavior that led to his conviction to poor record keeping, stress, etc.2 Although the Judge found that Applicant’s case raised Guideline J security concerns, he does appear to have relied on this explanation in evaluating Applicant’s case for mitigation. The Judge does not explain why he finds this to be plausible, given record evidence that Applicant submitted Medicare claims for, inter alia, providing psychological services to persons who, at the time of the alleged treatment, were deceased. Applicant’s denial of a criminal mens rea could be interpreted by a reasonable person as merely self serving. When considered in light of other record evidence that (1) Applicant submitted false claims repeatedly over a four-year period; (2) he obtained over $63,000 from Medicare as result of these claims; (3) he was still on probation at the close of the record; and (4) he had not finished making restitution at the close of the record, this denial significantly undermines the Judge’s conclusion that Applicant has demonstrated rehabilitation. Even if Applicant had completed his sentence, his denial of criminal intent would significantly undercut his claims of rehabilitation. It is inconsistent to contend that one has demonstrated positive behavioral changes from a previous pattern of deceit while at the same time denying that deceit ever occurred. Moreover, the record does not demonstrate a connection between, on one hand, the stress Applicant claimed to have experienced as result of illness and overwork and, on the other, the misconduct for which he was convicted. As a matter of common sense, repeated submissions of false claims for payment, committed over a four-year period, are unlikely to have resulted from inattention or confusion. In addition, there is a paucity of record evidence in support of Applicant’s claim that his alleged stressors would have diminished or impaired his capacity for specific intent. The record does not support a conclusion that these stressors amounted to pressure or coercion resulting in less culpability for the commission of a series of knowing and willful acts. The record, viewed as a whole, does not support a conclusion that Applicant has met his burden of persuasion under the Egan standard. The Judge’s decision, viewed in its entirety, is contrary to the weight of the record evidence and is not sustainable.

ORDER

The Judge’s favorable security clearance decision is REVERSED. Signed: Michael Y. Ra’anan Michael Y. Ra’anan Administrative Judge Chairman, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board