Summary
A 62-year-old defense contractor with a long employment history was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from significant financial mismanagement, primarily involving the transfer of $428,000 to individuals he had never met, contacted primarily via Facebook, under the false promise of receiving a $900,000 return. This substantial loss was not disclosed to his family or girlfriend.
This poor financial judgment led to approximately $100,000 in delinquent federal and state income tax liabilities, incurred from 401(k) withdrawals. Additionally, the applicant defaulted on multiple loans, including one with a $31,117 balance that was $2,441 past due, another with a $29,867 balance that was $1,129 past due, and a third with a $7,798 balance that was $263 past due. An account was also charged off for $42,232.
The judge found serious doubts regarding the applicant's judgment and reliability, citing the transfer of a large sum to unknown individuals under false pretenses, the resulting tax liabilities, and the defaulted loans. Consequently, the applicant's security clearance was denied.
Why the Applicant Was Denied
- The applicant exhibited poor financial judgment by transferring $428,000 to an unknown individual under false pretenses.
- He incurred approximately $100,000 in federal and state tax liabilities due to 401(k) withdrawals.
- The applicant defaulted on multiple loans and failed to disclose significant financial losses to his family.
Conditions Referenced
- AG ¶ 19(a)appliedInability to Satisfy Debts
- AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
- AG ¶ 19(e)appliedConsistent Spending Beyond One’s Means or Frivolous or Irresponsible Spending
- AG ¶ 19(f)appliedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required
Key Rule Quoted
“A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence.”
Procedural Posture
- SOR issuedDec 12, 2016
- Answer filedJan 12, 2017Applicant was pro se at this time.
- Hearing heldMay 22, 2017
- Decision dateNov 29, 2017
Cite For
- Financial Mismanagement Leading to Security Clearance Denial Under Guideline F
- Impact of Undisclosed Financial Losses on Personal Conduct Under Guideline E
- Judgment and Reliability Concerns Stemming From Significant Financial Transactions