ISCR Case 17-01823.h1

Case Headnote

ISCR Case No. 17-01823.h1

deniedMar 29, 2018· Hon. Paul J. Mason· hearing

Summary

A 58-year-old male applicant was denied a security clearance under Guideline F (Financial Considerations) due to ongoing and unresolved financial difficulties. His financial problems, totaling over $40,000 in delinquent debt, were primarily attributed to spousal and child support obligations following a July 2008 divorce.

Specific debts included an unpaid $6,000 deficiency balance from a 2010 car purchase, which became delinquent in January 2012, and an unidentified payday loan debt delinquent since December 2013. Other unpaid debts included a credit card account delinquent since January 2017, an education account delinquent since January 2012, and several medical accounts, with delinquencies dating back to January 2010. Additionally, the applicant failed to file his 2009 federal tax return, citing his divorce, and the back taxes remain unpaid.

The judge denied the application because the applicant failed to provide sufficient evidence of efforts to resolve his financial issues or to substantiate claims of payments made on debts. This lack of resolution and documentation raised concerns about his judgment and trustworthiness.

Why the Applicant Was Denied

The applicant incurred over $40,000 in delinquent debt, primarily due to spousal and child support obligations.
He failed to provide evidence of efforts to resolve his financial issues or to substantiate claims of payments made on debts.
The applicant's financial problems raised doubts about his judgment and trustworthiness.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Pay Taxes

Mitigating

AG ¶ 20(b)appliedConditions Largely Beyond ControlThe applicant's financial problems were primarily caused by his divorce.
AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsThe applicant only demonstrated a good-faith effort regarding child support payments, not for other debts.
AG ¶ 20(e)rejectedDispute of Legitimacy of DebtThe applicant provided no evidence to substantiate his dispute over the deficiency balance for a car.

Key Rule Quoted

“Eligibility for access to classified information is denied when financial problems raise doubts about an individual's judgment and trustworthiness.”

Procedural Posture

SOR issuedJun 7, 2017
Answer filedAug 14, 2017Applicant elected for a written record decision.
Hearing held—No hearing; case decided on written record.
Decision dateMar 29, 2018

Cite For

Denial of Security Clearance Due to Significant Delinquent Debt Under Guideline F
Lack of Evidence to Mitigate Financial Concerns
Impact of Personal Circumstances on Financial Obligations

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

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant explained that his divorce from his first wife in July 2008 caused his financial problems. (SOR 1.a) The decree required him to pay a large sum of money for spousal support that he could not pay.	For Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant explained that SOR 1.b is a deficiency balance on a car that is unresolved. He purchased the car in 2010. The car accumulated many mechanical problems that the dealer would not fix. The dealer resold the car after Applicant voluntarily surrendered the car to them. After the dealer resold the car, Applicant determined that he owed about a $6,000 deficiency balance. He claimed that he was disputing the deficiency balance for a car that had mechanical problems the dealer would not fix. Applicant provided no documentation of the person or entity on the other side of the dispute. The account became delinquent in January 2012. The debt is unpaid. (Items 4, 5) $6,000	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant could not recall the debt identified at SOR 1.c. Based on the name of the business that includes the words “speedy cash,” I find that the creditor is a payday loan operation that executes loans at high rates of interest. The debt became delinquent in December 2013. The debt is unpaid. (Items 4, 5)	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The credit card account in (SOR 1.d) became delinquent in January 2017. Though Applicant claimed he was making payments on the account, he provided no evidence to support his claim. (Item 6; answer to SOR) The debt is unpaid.	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	From June 2010 to July 2012, Applicant attended part-time online college courses at two satellite campuses. The education account became delinquent in January 2012. (SOR 1.e) Applicant indicated that he paid the balance in September 2016, but he provided no supporting evidence to bolster his claim. (Items 4, 5) The account is unpaid.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	The debts identified at SOR 1.f ($94) and 1.h ($180) are medical accounts that are unpaid. The SOR 1.h account became delinquent in January 2010 while the SOR 1.f account became delinquent in January 2014. (Items 5, 6) The accounts are unpaid. $94	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	The account identified at SOR 1.g is a collection account that became delinquent in September 2013. (Item 5) The account is unpaid.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	The debts identified at SOR 1.f ($94) and 1.h ($180) are medical accounts that are unpaid. The SOR 1.h account became delinquent in January 2010 while the SOR 1.f account became delinquent in January 2014. (Items 5, 6) The accounts are unpaid. $180	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant did not file his 2009 federal tax return nor pay his federal taxes for the year (SOR 1.i) because he was having financial problems related to the July 2008 divorce. Though he claimed in his March 2016 e-QIP that the IRS was garnishing his wages to satisfy the back taxes, he admitted in his September 2016 PSI that the earlier garnishment claim did not occur. His explanation was that during the divorce proceedings, he and his first wife agreed that he would deduct one child on his tax return and his wife would deduct the other child on her return. Instead, his former wife deducted both children on her return, and Applicant lost the deduction resulting in the federal tax debt. Applicant indicated that he intended to contact a tax attorney and establish a payment plan. There is no documentation establishing that he contacted an attorney or set up a plan. (Item 4) The federal back taxes for 2009 are unpaid.	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant explained that his divorce from his first wife in July 2008 caused his financial problems. (SOR 1.a) The decree required him to pay a large sum of money for spousal support that he could not pay.

For Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant explained that SOR 1.b is a deficiency balance on a car that is unresolved. He purchased the car in 2010. The car accumulated many mechanical problems that the dealer would not fix. The dealer resold the car after Applicant voluntarily surrendered the car to them. After the dealer resold the car, Applicant determined that he owed about a $6,000 deficiency balance. He claimed that he was disputing the deficiency balance for a car that had mechanical problems the dealer would not fix. Applicant provided no documentation of the person or entity on the other side of the dispute. The account became delinquent in January 2012. The debt is unpaid. (Items 4, 5)

$6,000

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant could not recall the debt identified at SOR 1.c. Based on the name of the business that includes the words “speedy cash,” I find that the creditor is a payday loan operation that executes loans at high rates of interest. The debt became delinquent in December 2013. The debt is unpaid. (Items 4, 5)

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

The credit card account in (SOR 1.d) became delinquent in January 2017. Though Applicant claimed he was making payments on the account, he provided no evidence to support his claim. (Item 6; answer to SOR) The debt is unpaid.

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

From June 2010 to July 2012, Applicant attended part-time online college courses at two satellite campuses. The education account became delinquent in January 2012. (SOR 1.e) Applicant indicated that he paid the balance in September 2016, but he provided no supporting evidence to bolster his claim. (Items 4, 5) The account is unpaid.

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

The debts identified at SOR 1.f ($94) and 1.h ($180) are medical accounts that are unpaid. The SOR 1.h account became delinquent in January 2010 while the SOR 1.f account became delinquent in January 2014. (Items 5, 6) The accounts are unpaid.

$94

Against Applicant

Medical Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

The account identified at SOR 1.g is a collection account that became delinquent in September 2013. (Item 5) The account is unpaid.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

$180

Against Applicant

Medical Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

Applicant did not file his 2009 federal tax return nor pay his federal taxes for the year (SOR 1.i) because he was having financial problems related to the July 2008 divorce. Though he claimed in his March 2016 e-QIP that the IRS was garnishing his wages to satisfy the back taxes, he admitted in his September 2016 PSI that the earlier garnishment claim did not occur. His explanation was that during the divorce proceedings, he and his first wife agreed that he would deduct one child on his tax return and his wife would deduct the other child on her return. Instead, his former wife deducted both children on her return, and Applicant lost the deduction resulting in the federal tax debt. Applicant indicated that he intended to contact a tax attorney and establish a payment plan. There is no documentation establishing that he contacted an attorney or set up a plan. (Item 4) The federal back taxes for 2009 are unpaid.

Against Applicant

Tax Unpaid

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

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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