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ISCR Case 16-02124.h1 — CASE

ISCR Case 16-02124.h1granted

Case Headnote

ISCR Case No. 16-02124.h1

grantedFeb 28, 2017· Hon. LeRoy F. Foreman· hearing

Summary

A pro se applicant successfully retained his security clearance despite allegations under Guideline F (Financial Considerations). The Statement of Reasons cited a single unpaid debt of $34,807 that had been placed for collection.

The judge determined that the debt was not indicative of the applicant's judgment or reliability. This was because the debt originated from fraudulent actions by a car dealer, a situation deemed beyond the applicant's control. Furthermore, the applicant demonstrated good-faith efforts to resolve the debt and possessed the financial means to pay it if required.

The decision to grant the clearance was also supported by the applicant's ten-year history of holding a security clearance without any prior incidents. Based on these mitigating factors, the judge concluded that the security clearance should be granted.

Why the Applicant Prevailed

The unpaid debt was the result of fraud by a car dealer, which was beyond the applicant's control.
The applicant demonstrated good-faith efforts to resolve the debt and has the financial means to pay it if necessary.
The applicant has held a security clearance for ten years without incident.

Conditions Referenced

Mitigating

AG ¶ 20(a)appliedThe Behavior Was Not Recent and Was Caused by Circumstances Beyond the Applicant's Control.
AG ¶ 20(b)appliedThe Applicant Acted Responsibly Under the Circumstances.
AG ¶ 20(d)appliedThe Applicant Has Shown a Willingness to Pay the Debt If Necessary.

Key Rule Quoted

“A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure.”
— ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010.)

Procedural Posture

SOR issuedSep 11, 2016
Answer filed—
Hearing heldFeb 28, 2017
Decision date—Summary disposition issued after record closed.

Cite For

Mitigating Conditions Under Guideline F Related to Debts Caused by Fraud
Evaluation of Good-faith Efforts in Financial Matters
Consideration of Long-standing Security Clearance History Without Incidents

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 F · descriptive summary of a decided case

Posture: Decision on RecordDecided: granted

The judge found that the applicant had a single unpaid debt of $34,807 to Credit Union A, which arose from a fraudulent transaction involving a car dealer. The applicant demonstrated good-faith efforts to resolve the debt and was willing and able to pay it if necessary, leading to a decision in favor of the applicant under Guideline F.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	unpaid debt placed for collection of $34,807 $34,807	For Applicant	Unspecified Financial	Admitted	—	(a) behavior happened long ago / infrequent / unlikely to recur (b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	Claimed Other

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: ) ) [Redacted] ) ISCR Case No. 16-02124 ) Applicant for Security Clearance )

Appearances

For Government: Benjamin R. Dorsey, Esq., Department Counsel For Applicant: Pro se

02/28/2017 ______________

Decision

______________

FOREMAN, LeRoy F., Administrative Judge:

Applicant submitted a security clearance application on October 6, 2015, seeking to continue a security clearance he has held since 2005. On September 11, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F (Financial Considerations). The DOD CAF acted under Executive Order 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 September 1, 2006. The adjudicative guidelines are codified in 32 C.F.R. § 154, Appendix H (2006), and they replace the guidelines in Enclosure 2 to the Directive.

Applicant timely answered the SOR and requested a hearing before an administrative judge, and the case was assigned to me on November 10, 2016. I convened the hearing as scheduled. Government Exhibits (GX) 1 through 4 and Applicant’s Exhibits (AX) A through I were admitted in evidence without objection. Applicant testified and presented the testimony of two witnesses. I kept the record open until January 6, 2017, to enable Applicant to submit additional documentary evidence. He timely submitted AX J through M, which were admitted without objection. After the record closed, I informed Department Counsel of my intent to issue a summary disposition in Applicant’s favor. Department Counsel informed me in writing that he did not object. (Hearing Exhibit I.)

The SOR alleges a single unpaid debt placed for collection of $34,807, which Applicant admitted. Department Counsel submitted credit reports establishing the debt. Applicant submitted evidence that he agreed to purchase a car from a dealer highly recommended by a longtime friend. The dealer suggested that he obtain loans from multiple lenders and use the loan with the best terms. Applicant obtained a loan in his own name from Credit Union A, which issued a check payable to the dealership. Applicant gave the check from Credit Union A to the dealer, and he then obtained a loan with better terms from Credit Union B, which also issued a check payable to the dealership. Applicant gave the check from Credit Union B and told the dealer to use it to pay for the car. The dealer delivered the car after about three months, after cashing both checks.

The dealer told Applicant that he would pay off the loan with Credit Union A, which was not used to buy the car. After months of text messages with the dealer, Applicant determined that the dealer had no intention to pay off the loan. He contacted Credit Union A, who advised Applicant to notify the police, and Applicant complied. Credit Union A charged off the loan and sold it to a collection agency. The collection agency has not attempted to collect the loan from Applicant. After talking to Credit Union A and filing a complaint with the police, Applicant believed that the credit union and the police would collect the debt from the dealer. The delinquent loan from Credit Union A is the sole debt alleged in the SOR.

Applicant discovered that the dealer has a long history of fraudulent transactions. Local criminal court dockets reflect that he has been charged with uttering forged checks, obtaining money under false pretenses, money laundering, forging or altering title certificates, and selling motor vehicles without a license. His dealer’s license has been revoked and civil penalties have been assessed against him. He has left the state and cannot be found.

Applicant testified that he is willing to pay off the loan obtained from Credit Union A, if necessary. His has the financial means to pay the debt. He paid off the loan from Credit Union B, which he used to purchase the car.

A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010.) The debt alleged in the SOR was the result of fraud, an unusual circumstance making it unlikely to recur and a condition beyond Applicant’s control. Applicant remained in contact with the Credit Union A and made good-faith efforts to ensure that the loan was paid, and he is willing and able to pay it necessary. The unpaid debt in this case does not raise concerns about Applicant’s judgment, reliability, and trustworthiness. The mitigating conditions in AG ¶¶ 20(a), 20(b), and 20(d) apply. I have weighed the evidence and given due consideration to the whole-person concept. Applicant was candid, sincere, and credible at the hearing. He has held a security clearance for ten years, apparently without incident. I conclude that Applicant has met his burden of persuasion to show that it is clearly consistent with the national interest to continue his eligibility for access to classified information. This case is decided for Applicant.

LeRoy F. Foreman Administrative Judge