ISCR Case 06-04084.h1

Case Headnote

ISCR Case No. 06-04084.h1

deniedJan 18, 2007· Hon. Joseph Testan· hearing

Summary

A 58-year-old defense contractor employee was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a history of numerous long-standing debts, totaling approximately $8,000, and a pattern of failing to consistently meet financial obligations.

Key issues included two Chapter 13 bankruptcy filings in 1995 and 1997, with the latter involving approximately $90,000 in debts, primarily a delinquent mortgage, leading to foreclosure in 1999. The applicant also wrote a bounced check in 1999, which was later made good, and the associated fraudulent check charge was dropped. Additionally, the applicant admitted to several outstanding collection debts, including $844.00 to Midland, $346.00 to Prime Rate Premium, and other debts ranging from $128.00 to $721.00, many handled by ECC. A past-due student loan debt of $5,150.21 as of September 2006 was under a repayment schedule. While some debts, including IRS obligations and a co-signed student loan, were satisfied, the overall financial history remained problematic.

Despite some efforts, including engaging a debt consolidation company, the applicant's persistent financial difficulties and failure to honor obligations led to the denial. The decision concluded that the applicant's financial situation adversely reflected on his judgment and reliability, suggesting he could not be relied upon to safeguard classified information.

Why the Applicant Was Denied

Applicant has numerous debts that have been past-due for many years.
Applicant's financial situation reflects adversely on his judgment and reliability.
Applicant's failure to honor financial obligations suggests he cannot be relied upon to safeguard classified information.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.3appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person’s Control
E2.A6.1.3.6rejectedThe Individual Has Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsApplicant did not follow through with the debt consolidation company.

Key Rule Quoted

“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”

Procedural Posture

SOR issuedAug 31, 2006
Answer filedOct 7, 2006
Hearing heldDec 28, 2006
Decision dateJan 18, 2007

Cite For

Financial Overextension as a Disqualifying Condition Under Guideline E
Failure to Meet Financial Obligations Reflecting Adversely on Judgment and Reliability
Mitigating Conditions Related to Financial Difficulties and Good-faith Efforts to Resolve Debts

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 filed a Chapter 13 bankruptcy petition in 1995. When he could no longer make the bankruptcy plan payments, the case was dismissed.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.b	In September 1997, applicant filed a second Chapter 13 bankruptcy petition, listing approximately $90,000.00 in debts. Most of this indebtedness related to a delinquent mortgage on his home. The bankruptcy case was dismissed in September 1999. Applicant lost the home through foreclosure in October 1999.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.c	In 1999, applicant wrote a check that bounced. When he was informed of the problem, he made good on the check. He was initially charged with Fraudulent Check, but the charge was dropped.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.d	Applicant admits that he is indebted to Midland in the approximate amount of $844.00 and that the debt was placed for collection.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.e	Applicant admits that he is indebted to Prime Rate Premium in the approximate amount of $346.00, and that the debt was placed for collection in about August 1999.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.f	Applicant had cosigned on a student loan for his son. The debt went delinquent but has since been satisfied by the son.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.g–1.h	2 sub-charges — specific text not stated in this decision (rulings shown). (low confidence)	Mixed		—		—	—	—
1.i	Applicant is indebted to this creditor in the approximate amount of $424.00. This debt was placed for collection in about March 2000, and is being handled by ECC.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.j	This past-due student loan debt stood at $5,150.21 as of September 15, 2006. Applicant worked out a repayment schedule with the creditor in mid-2006 which requires him to make monthly payments of $55.00 beginning on August 7, 2006.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.k	Applicant is indebted to this creditor in the approximate amount of $128.00. The account was placed for collection in 2001, and is being handled by ECC.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.l	Applicant is indebted to this creditor in the approximate amount of $199.00. The debt was placed for collection in 2001, and is being handled by ECC.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.m	Applicant is indebted to this creditor in the approximate amount of $200.00. This debt has been delinquent since May 2004, and is being handled by ECC.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
1.n	Applicant satisfied this $236.00 debt.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	—	—	—
1.o	Applicant is indebted to this creditor in the approximate amount of $721.00. This debt was placed for collection in April 2005, and is being handled by ECC.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Admitted	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

1.a

Applicant filed a Chapter 13 bankruptcy petition in 1995. When he could no longer make the bankruptcy plan payments, the case was dismissed.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.b

In September 1997, applicant filed a second Chapter 13 bankruptcy petition, listing approximately $90,000.00 in debts. Most of this indebtedness related to a delinquent mortgage on his home. The bankruptcy case was dismissed in September 1999. Applicant lost the home through foreclosure in October 1999.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.c

In 1999, applicant wrote a check that bounced. When he was informed of the problem, he made good on the check. He was initially charged with Fraudulent Check, but the charge was dropped.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.d

Applicant admits that he is indebted to Midland in the approximate amount of $844.00 and that the debt was placed for collection.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.e

Applicant admits that he is indebted to Prime Rate Premium in the approximate amount of $346.00, and that the debt was placed for collection in about August 1999.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.f

Applicant had cosigned on a student loan for his son. The debt went delinquent but has since been satisfied by the son.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.g–1.h

2 sub-charges — specific text not stated in this decision (rulings shown). (low confidence)

Mixed

—

1.i

Applicant is indebted to this creditor in the approximate amount of $424.00. This debt was placed for collection in about March 2000, and is being handled by ECC.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.j

This past-due student loan debt stood at $5,150.21 as of September 15, 2006. Applicant worked out a repayment schedule with the creditor in mid-2006 which requires him to make monthly payments of $55.00 beginning on August 7, 2006.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.k

Applicant is indebted to this creditor in the approximate amount of $128.00. The account was placed for collection in 2001, and is being handled by ECC.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.l

Applicant is indebted to this creditor in the approximate amount of $199.00. The debt was placed for collection in 2001, and is being handled by ECC.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.m

Applicant is indebted to this creditor in the approximate amount of $200.00. This debt has been delinquent since May 2004, and is being handled by ECC.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

1.n

Applicant satisfied this $236.00 debt.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

—

1.o

Applicant is indebted to this creditor in the approximate amount of $721.00. This debt was placed for collection in April 2005, and is being handled by ECC.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Admitted

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

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

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant filed a Chapter 13 bankruptcy petition in 1995. When he could no longer make the bankruptcy plan payments, the case was dismissed.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	In September 1997, applicant filed a second Chapter 13 bankruptcy petition, listing approximately $90,000.00 in debts. Most of this indebtedness related to a delinquent mortgage on his home. The bankruptcy case was dismissed in September 1999. Applicant lost the home through foreclosure in October 1999. $90,000	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	In 1999, applicant wrote a check that bounced. When he was informed of the problem, he made good on the check. He was initially charged with Fraudulent Check, but the charge was dropped.	For Applicant	Financial Fraud or Check Kiting	Admitted	—	—	—
1.d	Applicant admits that he is indebted to Midland in the approximate amount of $844.00 and that the debt was placed for collection. $844	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant admits that he is indebted to Prime Rate Premium in the approximate amount of $346.00, and that the debt was placed for collection in about August 1999. $346	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.f	Applicant had cosigned on a student loan for his son. The debt went delinquent but has since been satisfied by the son.	For Applicant	Student Loan Debt	Admitted	—	—	—
1.g	Exhibit C establishes that these IRS debts have been satisfied.	For Applicant	Tax Filing Failure	Unknown	—	—	—
1.h	Exhibit C establishes that these IRS debts have been satisfied.	For Applicant	Tax Filing Failure	Unknown	—	—	—
1.i	Applicant is indebted to this creditor in the approximate amount of $424.00. This debt was placed for collection in about March 2000, and is being handled by ECC. $424	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	This past-due student loan debt stood at $5,150.21 as of September 15, 2006. Applicant worked out a repayment schedule with the creditor in mid-2006 which requires him to make monthly payments of $55.00 beginning on August 7, 2006. $5,150	Against Applicant	Student Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Applicant is indebted to this creditor in the approximate amount of $128.00. The account was placed for collection in 2001, and is being handled by ECC. $128	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	Applicant is indebted to this creditor in the approximate amount of $199.00. The debt was placed for collection in 2001, and is being handled by ECC. $199	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.m	Applicant is indebted to this creditor in the approximate amount of $200.00. This debt has been delinquent since May 2004, and is being handled by ECC. $200	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.n	Applicant satisfied this $236.00 debt. $236	For Applicant	Unspecified Financial	Unknown	—	—	—
1.o	Applicant is indebted to this creditor in the approximate amount of $721.00. This debt was placed for collection in April 2005, and is being handled by ECC. $721	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed a Chapter 13 bankruptcy petition in 1995. When he could no longer make the bankruptcy plan payments, the case was dismissed.

Against Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

$90,000

Against Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.c

In 1999, applicant wrote a check that bounced. When he was informed of the problem, he made good on the check. He was initially charged with Fraudulent Check, but the charge was dropped.

For Applicant

Financial Fraud or Check Kiting

Admitted

—

1.d

Applicant admits that he is indebted to Midland in the approximate amount of $844.00 and that the debt was placed for collection.

$844

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.e

Applicant admits that he is indebted to Prime Rate Premium in the approximate amount of $346.00, and that the debt was placed for collection in about August 1999.

$346

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.f

Applicant had cosigned on a student loan for his son. The debt went delinquent but has since been satisfied by the son.

For Applicant

Student Loan Debt

Admitted

—

1.g

Exhibit C establishes that these IRS debts have been satisfied.

For Applicant

Tax Filing Failure

Unknown

—

1.h

Exhibit C establishes that these IRS debts have been satisfied.

For Applicant

Tax Filing Failure

Unknown

—

1.i

Applicant is indebted to this creditor in the approximate amount of $424.00. This debt was placed for collection in about March 2000, and is being handled by ECC.

$424

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.j

$5,150

Against Applicant

Student Loan Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.k

Applicant is indebted to this creditor in the approximate amount of $128.00. The account was placed for collection in 2001, and is being handled by ECC.

$128

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.l

Applicant is indebted to this creditor in the approximate amount of $199.00. The debt was placed for collection in 2001, and is being handled by ECC.

$199

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.m

Applicant is indebted to this creditor in the approximate amount of $200.00. This debt has been delinquent since May 2004, and is being handled by ECC.

$200

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.n

Applicant satisfied this $236.00 debt.

$236

For Applicant

Unspecified Financial

Unknown

—

1.o

Applicant is indebted to this creditor in the approximate amount of $721.00. This debt was placed for collection in April 2005, and is being handled by ECC.

$721

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

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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

SYNOPSIS

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES