ISCR Case 17-02979

Case Headnote

ISCR Case No. 17-02979

deniedDec 13, 2018· Hon. Gregg A. Cervi· hearing

Summary

A 52-year-old aircraft mechanic was denied a security clearance due to concerns under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). The Statement of Reasons alleged the applicant was a defendant in a civil suit for embezzling $627,000 from a former employer. Additionally, he was accused of falsifying his 2014 security clearance application by failing to disclose two prior arrests for driving while intoxicated (DWI) in 2002 and 2011, as well as the civil embezzlement lawsuit.

Financial concerns included the embezzlement incident and approximately $20,000 in delinquent credit accounts that were charged-off or in collections. The applicant was also indebted to a credit card company for about $14,943 on a charged-off account. Evidence of criminal conduct included the civil suit for embezzlement and the DWI arrests.

The denial was based on the applicant's involvement in the embezzlement scheme, his failure to disclose criminal history and civil litigation on his application, and his guarded testimony, which lacked full acknowledgment of his criminal conduct. The judge concluded that the applicant's actions raised significant doubts about his trustworthiness and reliability, making a clearance inconsistent with national security interests.

Why the Applicant Was Denied

The applicant was involved in an embezzlement scheme resulting in significant financial loss to his employer.
He failed to disclose relevant criminal history and civil litigation on his security clearance application.
The applicant's testimony was guarded and lacked full acknowledgment of his involvement in criminal conduct.

Conditions Referenced

Disqualifying

AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts
AG ¶ 19(d)appliedDeceptive or Illegal Financial Practices Such as Embezzlement
AG ¶ 31(d)appliedEvidence of Criminal Conduct

Mitigating

AG ¶ 17(c)rejectedThe Offense Is so Minor, or so Much Time Has Passed, or the Behavior Is so InfrequentThe applicant's participation in the theft scheme was extensive and not mitigated by time.
AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant's financial issues stemmed from his own criminal conduct.
AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue CreditorsSome debts were resolved post-hearing.

Key Rule Quoted

“No one has a ‘right’ to a security clearance.”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedJan 19, 2018
Answer filedMar 20, 2018
Hearing heldJul 11, 2018
Decision dateDec 13, 2018

Cite For

Denial of Clearance Due to Embezzlement and Falsification of Information
Impact of Criminal Conduct on Security Clearance Eligibility
Failure to Disclose Relevant Information During the Application Process

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

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a	Applicant was a defendant in a civil suit for embezzlement of $627,000 from his former employer.	Against Applicant	Questionable Judgment General	—	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation (g) association with persons involved in criminal activity	—	—
1.b	Applicant falsified his 2014 SCA by failing to disclose his arrests in 2002 and 2011 for driving while intoxicated (DWI), and the civil lawsuit described above.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Criminal Conduct	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation (g) association with persons involved in criminal activity	—	—
1.d	specific text not stated in this decision	Against Applicant	Falsification Security Form	—	Unknown	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation (g) association with persons involved in criminal activity	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

1.a

Applicant was a defendant in a civil suit for embezzlement of $627,000 from his former employer.

Against Applicant

Questionable Judgment General

—

Denied

(a) deliberate omission, concealment, or falsification on a security form

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

(g) association with persons involved in criminal activity

—

1.b

Applicant falsified his 2014 SCA by failing to disclose his arrests in 2002 and 2011 for driving while intoxicated (DWI), and the civil lawsuit described above.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Criminal Conduct

Denied

(a) deliberate omission, concealment, or falsification on a security form

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

(g) association with persons involved in criminal activity

—

1.d

specific text not stated in this decision

Against Applicant

Falsification Security Form

—

Unknown

(a) deliberate omission, concealment, or falsification on a security form

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

(g) association with persons involved in criminal activity

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
2.a	The SOR alleges the embezzlement incident, and three delinquent credit accounts that have been charged-off or are in collections, totaling approximately $20,000. $20,000	Against Applicant	Unspecified Financial	Unknown	—	—	—
2.b	the SOR alleges that Applicant is indebted to a credit card company on an account that has been charged-off for about $14,943. $14,943	For Applicant	Credit Card Debt	Unknown	—	—	—
2.c–2.d	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

2.a

The SOR alleges the embezzlement incident, and three delinquent credit accounts that have been charged-off or are in collections, totaling approximately $20,000.

$20,000

Against Applicant

Unspecified Financial

Unknown

—

2.b

the SOR alleges that Applicant is indebted to a credit card company on an account that has been charged-off for about $14,943.

$14,943

For Applicant

Credit Card Debt

Unknown

—

2.c–2.d

2 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
3.a	Evidence of criminal conduct, including a civil suit for embezzlement and DWI arrests.	Against Applicant	DUI or DWI Criminal	Conduct No Charge	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction (d) violation of parole/probation or failure to complete a court program (e) discharge or dismissal from the Armed Forces under less than honorable conditions	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

3.a

Evidence of criminal conduct, including a civil suit for embezzlement and DWI arrests.

Against Applicant

DUI or DWI Criminal

Conduct No Charge

Denied

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

(d) violation of parole/probation or failure to complete a court program

(e) discharge or dismissal from the Armed Forces under less than honorable conditions

—

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Case Profile

Summary

Why the Applicant Was Denied

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

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION