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ISCR Case 21-02259 — CASE

ISCR Case 21-02259granted

Case Headnote

ISCR Case No. 21-02259

grantedJan 29, 2024· Hon. Erin C. Hogan· hearing

Summary

This case involved an applicant, represented by counsel, facing security clearance allegations under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The Statement of Reasons alleged the applicant was terminated from a previous employer for theft/embezzlement of at least $5,000, making unauthorized expenditures of $18,000, and disrespectful treatment of both subordinate employees and customers. Additionally, it was alleged that the applicant falsified a September 23, 2019, electronic questionnaire by failing to disclose this termination for cause.

The Administrative Judge found insufficient evidence to support the allegations of embezzlement and other misconduct. The judge also determined that the applicant's failure to disclose her termination was not deliberate.

Considering these findings, along with favorable references and excellent job performance, the Administrative Judge applied mitigating conditions AG ¶ 20 and AG ¶ 21. Consequently, the applicant was GRANTED eligibility for access to classified information.

Why the Applicant Prevailed

The judge found the evidence insufficient to support allegations of embezzlement and misconduct.
The applicant's failure to disclose her termination was deemed not deliberate.
Favorable references and excellent job performance were noted, contributing to the decision.

Conditions Referenced

Mitigating

AG ¶ 20appliedMitigating ConditionsThe applicant provided substantial evidence to disprove the allegations.
AG ¶ 21appliedMitigating ConditionsThe applicant's duty performance is excellent and she is highly regarded by her supervisor.

Key Rule Quoted

“The evidence is insufficient to create doubt about her reliability, trustworthiness, good judgment, and ability to protect classified information.”

Procedural Posture

SOR issuedNov 20, 2021
Answer filed—
Hearing heldJan 11, 2024Originally scheduled for November 14, 2023, but continued.
Decision dateJan 29, 2024

Cite For

Insufficient Evidence to Support Allegations of Misconduct Under Guideline E
Failure to Disclose Termination Not Deemed Deliberate Under Guideline E
Consideration of Favorable References and Job Performance in Security Clearance Decisions.

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

Standardized Decision Profile

SEAD-4 Guideline E (Personal Conduct) · descriptive summary of a decided case

Posture: HearingDecided: granted

The judge found that the applicant's failure to disclose her termination for cause was not deliberate and that the evidence was insufficient to conclude that she engaged in theft or embezzlement. The applicant provided substantial evidence to disprove the allegations, leading to a decision in her favor regarding her eligibility for access to classified information.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
1.a	Applicant was terminated from a former employer for allegations of theft/embezzlement of at least $5,000; making unauthorized expenditures in the amount of $18,000; disrespectful treatment of subordinate employees; and disrespectful treatment of customers.	For Applicant	Rules Violation at Workplace	—	Denied	—	—	—
1.b	Applicant falsified a September 23, 2019, electronic questionnaire by not disclosing her termination for cause from her previous employment.	For Applicant	Omission or Failure to DiscloseNOT DELIBERATE	Employment History	Denied	—	—	Claimed Other

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: HearingDecided: granted

The judge found that the applicant did not have any financial issues and provided substantial evidence to disprove the allegations against her. Ultimately, the judge concluded that granting the applicant's security clearance was consistent with the national interest.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–2.a	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

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

HEARING

______________ ______________ DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Name Redacted] ) ISCR Case No. 21-02259 ) Applicant for Security Clearance ) Appearances For Government: Erin Thompson, Esq., Department Counsel For Applicant: Bonnie S. Gould, Esq. 01/29/2024 Decision ERIN C. HOGAN, Administrative Judge: On November 20, 2021, the Department of Defense (DOD) issued a Statement of Reasons to Applicant detailing security concerns under Guideline E, Personal Conduct, and Guideline F, Financial Considerations. The DOD acted under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on June 8, 2017. Applicant timely answered the SOR and requested a hearing. She denied all of the SOR allegations. The case was assigned to me on August 11, 2023. The hearing was originally scheduled on November 14, 2023, but was continued and held on January 11, 2024. At the close of the evidence and after receiving the electronic transcript of the proceedings, I proposed to the parties that this case was appropriate for a summary disposition in Applicant’s favor. Applicant’s counsel did not object. Department Counsel had 10 days to consider the matter. On January 19, 2024, Department Counsel provided notice that they had no objection.

[Names and other identifiers have been redacted from the decision in the interest of Applicant’s privacy. The case file contains the complete information.] Applicant was terminated from a former employer on February 10, 2019, for allegations of: theft/embezzlement of at least $5,000; making unauthorized expenditures in the amount of $18,000; disrespectful treatment of subordinate employees; and disrespectful treatment of customers. Applicant worked for over 15 years for a female employer. This employer did not have great book-keeping standards. She oversaw the business well into her 90swhen she began to have medical issues. Around 2016, the employer’s niece and her niece’s husband took over running the business. They were interested in turning the business into a for-profit enterprise. They gave Applicant additional duties of overseeing the financial operations in addition to her other duties. Applicant did not have a financial background. In early 2019, Applicant had a legitimate disagreement with one of her subordinates. After this occurred, the subordinate and another subordinate alleged that Applicant was mishandling money from the business for her own gain. The niece’s husband launched an investigation and concluded Applicant mishandled funds and embezzled money. Based on his conclusions, Applicant was terminated for cause. During the hearing, the niece’s husband testified, Applicant testified, two former customers who knew and worked with Applicant testified, and Applicant’s mother testified. Upon review of the testimony and case file, the evidence consisted of hearsay statements and unfounded allegations. While the niece’s husband sincerely believes Applicant embezzled funds from the business, the evidence was insufficient to conclude Applicant mishandled or embezzled funds. At most, there was evidence of negligence due to poor bookkeeping. The SOR also alleged that Applicant falsified a September 23, 2019, electronic questionnaires for investigations processing application in response to Section 13 A – Employment Activities when she did not list that she was terminated for cause from her previous employment. She listed that she left by mutual agreement following notice of unsatisfactory performance. She also provided the contact information of her former employer’s niece, who along with her husband was the one who terminated her. I conclude that Applicant’s failure to disclose that she was ‘terminated for cause” was not deliberate. There was no indication that she intended to mislead the government about her employment history. I find SOR ¶¶ 1.a, 1.band 2.a for Applicant. I note the favorable references Applicant received. I also note that Applicant was hired by a DoD contractor in May 2019. Her duty performance is excellent and she is highly regarded by her supervisor. She lives with her parents and has no financial issues. Based on the record evidence as a whole, I conclude that Applicant provided substantial evidence to disprove the allegations. The evidence is insufficient to create doubt about her reliability, trustworthiness, good judgment, and ability to protect

classified information. In reaching this conclusion, I weighed the evidence as a whole and considered if the favorable evidence outweighed the unfavorable evidence or vice versa. I also gave due consideration to the whole-person concept. Accordingly, I conclude that she met her ultimate burden of persuasion to show that it is clearly consistent with the national interest to grant her eligibility for access to classified information. This case is decided for Applicant. Erin C. Hogan Administrative Judge