ISCR Case 04-09750.h1

Case Headnote

ISCR Case No. 04-09750.h1

deniedJan 23, 2007· Hon. Wilford H. Ross· hearing

Summary

A 66-year-old defense contractor was denied a security clearance due to significant financial issues, personal conduct concerns, alcohol consumption, and criminal conduct. The applicant faced allegations of intentionally falsifying material aspects of his personal background during the clearance screening process, specifically regarding his delinquent debts. He falsely stated he had not been 180 days delinquent on any debts within the previous seven years and misrepresented the extent of his current delinquencies.

The applicant's financial history included a judgment from a 1988 divorce agreement, where he failed to pay his second wife $40,235.00, resulting in a judgment that grew to over $22,524.93 by 1999, with approximately $25,000.00 still owed from the original agreement. He also owed a collection agency at least $177,201.11 and had a judgment against him for $15,737.00, which grew to $20,000.00, though he claimed partial payments from property sales. While some past due property taxes and insufficient fund checks were resolved, the applicant still owed at least $252,675.11 to 39 creditors.

The denial was based on the applicant's extensive history of unpaid debts, lack of credible plans to address them, and intentional misrepresentation on a government questionnaire, which constituted a violation of felony criminal provisions. The judge found that these issues outweighed any mitigating factors, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant owes at least $252,675.11 to 39 different creditors with no valid plans to pay off these debts.
The applicant falsified a government questionnaire regarding his financial situation, which was deemed intentional misrepresentation.
The applicant's extensive history of financial irresponsibility and lack of credible evidence to mitigate the concerns led to denial.

Conditions Referenced

Disqualifying

E2.A6.1.2.1appliedA History of Not Meeting Financial Obligations
E2.A6.1.2.3appliedInability or Unwillingness to Satisfy Debts
E2.A5.1.2.2appliedThe Deliberate Omission, Concealment, or Falsification of Relevant and Material Facts

Key Rule Quoted

“The Government relies heavily upon the integrity and honesty of clearance holders, and it is a negative factor for security clearance purposes where an Applicant has deliberately provided false information about material aspects of his or her personal background.”

Procedural Posture

SOR issuedSep 14, 2005
Answer filedOct 10, 2005
Hearing heldOct 4, 2006via video teleconference
Decision dateJan 23, 2007

Cite For

Financial Irresponsibility Leading to Security Clearance Denial
Intentional Falsification of Government Forms as a Disqualifying Factor
The Impact of Extensive Debt on Security Clearance Eligibility

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
2.a	The Applicant intentionally falsified material aspects of his personal background during the clearance screening process.	For Applicant	Falsification Security FormNOT DELIBERATE	—	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
2.b	The Applicant stated that he had not been 180 days delinquent on any debts within the previous seven years; this was a false answer.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official	—	—
2.c	The Applicant stated that he was currently 90 days delinquent only on a medical debt for $25,000.00; this was a false answer.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(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

2.a

The Applicant intentionally falsified material aspects of his personal background during the clearance screening process.

For Applicant

Falsification Security FormNOT DELIBERATE

—

Denied

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

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

—

2.b

The Applicant stated that he had not been 180 days delinquent on any debts within the previous seven years; this was a false answer.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

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

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

—

2.c

The Applicant stated that he was currently 90 days delinquent only on a medical debt for $25,000.00; this was a false answer.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

(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	The Applicant has been married four times. When he was divorced from his second wife in 1988, they agreed that he would pay her $40,235.00 in exchange for the second wife relinquishing her rights to real property the two of them owned. According to the written divorce agreement, the Applicant was to pay his second wife $305.00 per month beginning in April 1988. The Applicant did not make any payments and his second wife went to court in 1992 to have the divorce decree enforced. A judgement was entered for the second wife on May 27, 1992, in the amount of $17,165.71. By 1999, the last year for which records are available, the judgment debt had grown from $17,165.71 to $22,524.93. In addition to the past due amount, the Applicant still owes his second wife approximately $25,000.00 from the original agreement. $22,524	Against Applicant	Judgment Against Applicant	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	This is the Applicant’s largest creditor, a collection agency. The Applicant owes them at least $177,201.11. The underlying creditors consist of medical and non-medical entities. Over the years, the records indicate that the Applicant has paid approximately $8,000.00 towards this indebtedness. This remains a valid debt of the Applicant. $177,201	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c–1.d	2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.e	The Applicant admits that he has a judgment against him in the amount of $15,737.00. The judgment has grown to $20,000.00. He further states that $10,000.00 of this judgment has been paid when he sold two pieces of land in October and November 2005. The Applicant submitted an Earnest Money Receipt and Purchase Agreement concerning a third piece of property. He testified that $5,000.00 of the $41,000.00 selling price of that third property will be used to pay this judgment down to $5,000.00. The final $5,000.00 will be paid when he sells another piece of his real property. $20,000	For Applicant	Judgment Against Applicant	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full
1.f–1.x	19 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant			—	—	—
1.y	These past due debts were property taxes owed by the Applicant to the local government. They were paid off under the terms of his first property sale in October 1995.	For Applicant	Tax Filing Failure	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full
1.z–1.jj	11 sub-charges — specific text not stated in this decision (10 against, 1 for the applicant). (low confidence)	Mixed			—	—	—
1.kk	The Applicant testified that he had made good this past due debt for $186.00, related to an insufficient fund check. $186	For Applicant	Unspecified Financial	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full
1.ll	specific text not stated in this decision	Against Applicant	Unspecified Financial	Unknown	—	—	—
1.mm	The Applicant testified that he had made good this past due debt for $120.00, related to an insufficient fund check. $120	For Applicant	Unspecified Financial	Admitted	—	(g) arrangements made with the tax authority; in compliance	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The Applicant has been married four times. When he was divorced from his second wife in 1988, they agreed that he would pay her $40,235.00 in exchange for the second wife relinquishing her rights to real property the two of them owned. According to the written divorce agreement, the Applicant was to pay his second wife $305.00 per month beginning in April 1988. The Applicant did not make any payments and his second wife went to court in 1992 to have the divorce decree enforced. A judgement was entered for the second wife on May 27, 1992, in the amount of $17,165.71. By 1999, the last year for which records are available, the judgment debt had grown from $17,165.71 to $22,524.93. In addition to the past due amount, the Applicant still owes his second wife approximately $25,000.00 from the original agreement.

$22,524

Against Applicant

Judgment Against Applicant

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

This is the Applicant’s largest creditor, a collection agency. The Applicant owes them at least $177,201.11. The underlying creditors consist of medical and non-medical entities. Over the years, the records indicate that the Applicant has paid approximately $8,000.00 towards this indebtedness. This remains a valid debt of the Applicant.

$177,201

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c–1.d

2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)

Against Applicant

—

1.e

The Applicant admits that he has a judgment against him in the amount of $15,737.00. The judgment has grown to $20,000.00. He further states that $10,000.00 of this judgment has been paid when he sold two pieces of land in October and November 2005. The Applicant submitted an Earnest Money Receipt and Purchase Agreement concerning a third piece of property. He testified that $5,000.00 of the $41,000.00 selling price of that third property will be used to pay this judgment down to $5,000.00. The final $5,000.00 will be paid when he sells another piece of his real property.

$20,000

For Applicant

Judgment Against Applicant

Admitted

—

(g) arrangements made with the tax authority; in compliance

Documented

Debt Paid in Full

1.f–1.x

19 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)

Against Applicant

—

1.y

These past due debts were property taxes owed by the Applicant to the local government. They were paid off under the terms of his first property sale in October 1995.

For Applicant

Tax Filing Failure

Admitted

—

(g) arrangements made with the tax authority; in compliance

Documented

Debt Paid in Full

1.z–1.jj

11 sub-charges — specific text not stated in this decision (10 against, 1 for the applicant). (low confidence)

Mixed

—

1.kk

The Applicant testified that he had made good this past due debt for $186.00, related to an insufficient fund check.

$186

For Applicant

Unspecified Financial

Admitted

—

(g) arrangements made with the tax authority; in compliance

Documented

Debt Paid in Full

1.ll

specific text not stated in this decision

Against Applicant

Unspecified Financial

Unknown

—

1.mm

The Applicant testified that he had made good this past due debt for $120.00, related to an insufficient fund check.

$120

For Applicant

Unspecified Financial

Admitted

—

(g) arrangements made with the tax authority; in compliance

Documented

Debt Paid in Full

¶	Allegation	Finding	Incident	Response	Disqualifying (¶22)	Mitigating applied (¶23)	Mitigation
3	The Applicant is ineligible for clearance because he abuses intoxicants to excess.	For Applicant	DUI or DWI Alcohol	Admitted	(e) failure to follow treatment advice once diagnosed	(b) acknowledges the pattern and has established modified use or abstinence	—
3.a	specific text not stated in this decision	Unknown	Unspecified Alcohol Incident	Unknown	—	—	—

Allegation

Finding

Incident

Response

Disqualifying (¶22)

Mitigating applied (¶23)

Mitigation

The Applicant is ineligible for clearance because he abuses intoxicants to excess.

For Applicant

DUI or DWI Alcohol

Admitted

(e) failure to follow treatment advice once diagnosed

(b) acknowledges the pattern and has established modified use or abstinence

—

3.a

specific text not stated in this decision

Unknown

Unspecified Alcohol Incident

Unknown

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
4.a	The Government alleges in this paragraph that the Applicant is ineligible for clearance because he has engaged in criminal acts.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
4.b	As found above, the Applicant knowingly and willfully provided false material information to DoD during the clearance screening process. In so doing the Applicant violated the felony criminal provisions of 18 U.S.C. §1001.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
4.c	The arrest and conviction set forth under paragraph 3, above, will be considered under this paragraph as well.	Against Applicant	DUI or DWI Criminal	Convicted	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

4.a

The Government alleges in this paragraph that the Applicant is ineligible for clearance because he has engaged in criminal acts.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Denied

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

4.b

As found above, the Applicant knowingly and willfully provided false material information to DoD during the clearance screening process. In so doing the Applicant violated the felony criminal provisions of 18 U.S.C. §1001.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Denied

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

4.c

The arrest and conviction set forth under paragraph 3, above, will be considered under this paragraph as well.

Against Applicant

DUI or DWI Criminal

Convicted

Denied

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

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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

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES