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ISCR Case 15-05313.h1 — CASE

ISCR Case 15-05313.h1denied

Case Headnote

ISCR Case No. 15-05313.h1

deniedNov 8, 2016· Hon. Darlene Lokey Anderson· hearing

Summary

A 30-year-old Senior Electronics Technician with a Bachelor's degree was denied a security clearance under Guidelines E (Personal Conduct) and J (Criminal Conduct). The denial stemmed from a history of criminal conduct involving insurance fraud and a lack of candor regarding these legal issues.

The government alleged the applicant was ineligible due to engaging in criminal conduct and demonstrating questionable judgment, dishonesty, and an unwillingness to comply with rules. Specifically, the applicant engaged in a pattern of making fraudulent insurance claims. Furthermore, he failed to disclose the circumstances of his criminal charges to his employer, which was seen as a lack of candor and poor judgment.

The judge concluded that the applicant's actions demonstrated poor judgment and unreliability, raising significant concerns about his trustworthiness. Ultimately, the judge found that the applicant did not meet the eligibility requirements for access to classified information, and the security clearance was denied.

Why the Applicant Was Denied

The applicant engaged in a pattern of criminal conduct by making fraudulent insurance claims.
The applicant failed to disclose the circumstances of his criminal charges to his employer, demonstrating a lack of candor and poor judgment.
The applicant's conduct raised significant concerns about his reliability and trustworthiness.

Conditions Referenced

Disqualifying

31.(a)raisedA Single Serious Crime or Multiple Lesser Offenses
31.(c)raisedAllegation or Admission of Criminal Conduct
31.(d)raisedIndividual Is Currently on Parole or Probation
16.(c)raisedCredible Adverse Information in Several Adjudicative Issue Areas
16.(e)raisedPersonal Conduct or Concealment of Information

Key Rule Quoted

“A security clearance is a privilege, not a right.”

Procedural Posture

SOR issuedMar 27, 2016
Answer filedJun 7, 2016
Hearing heldSep 16, 2016
Decision dateNov 8, 2016

Cite For

Denial of Security Clearance Due to Criminal Conduct Under Guideline J
Lack of Candor and Personal Conduct Issues Under Guideline E
Importance of Full Disclosure in Security Clearance Processes

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 E (Personal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found against the applicant on personal conduct allegations under Guideline E, determining that the applicant engaged in conduct involving questionable judgment and lack of candor. The applicant failed to disclose the circumstances surrounding his criminal charges to his employer, which demonstrated poor judgment and untrustworthiness, leading to a denial of his security clearance.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	The Government alleges that the Applicant is ineligible for a security clearance because he has engaged in conduct involving questionable judgment, lack of candor, dishonesty, or an unwillingness to comply with rules and regulations.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	—	Denied	(c) credible adverse information across areas supporting a whole-person concern (e) personal conduct or concealment creating vulnerability to exploitation	—	—
not recovered from source	specific text not stated in this decision	Against Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

Descriptive standardized rendering of a decided public case (Guideline E). The verbatim source decision is shown in full below.

Standardized Decision Profile

SEAD-4 Guideline J (Criminal Conduct) · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The Administrative Judge found against the Applicant on allegations of criminal conduct under Guideline J. The Applicant was convicted of insurance fraud and admitted to making fraudulent claims, which raised significant concerns about his judgment and trustworthiness.

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
1.a	The Government alleges that the Applicant is ineligible for clearance because he has engaged in criminal conduct.	Against Applicant	Fraud or Deception Criminal	Convicted	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (c) currently on parole or probation (d) violation of parole/probation or failure to complete a court program	—	—
2.a	The Government alleges that the Applicant is ineligible for a security clearance because he has engaged in conduct involving questionable judgment, lack of candor, dishonesty, or an unwillingness to comply with rules and regulations.	Against Applicant	Unspecified Criminal Conduct	—	Denied	(c) currently on parole or probation (e) discharge or dismissal from the Armed Forces under less than honorable conditions	—	—

Descriptive standardized rendering of a decided public case (Guideline J). 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

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 15–05313 ) ) Applicant for Security Clearance )

For Government: Adrienne Driskill, Department Counsel For Applicant: Pro se

November 8, 2016

______________

STATEMENT OF CASE

______________

LOKEY ANDERSON, Darlene D., Administrative Judge:

Applicant submitted his Electronic Questionnaire for Investigations Processing dated December 15, 2014. (Government Exhibit 1.) On March 27, 2016, the Defense of Defense (DoD) issued a Statement of Reasons (SOR) detailing the security concerns under Guidelines J and E for Applicant. The action was taken under Executive Order 10865, “Safeguarding Classified Information within Industry” (February 20, 1960), as amended; Department of Defense Directive 5220.6, “Defense Industrial Personnel Security Clearance Review Program” (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the Department of Defense after September 1, 2006.

Applicant responded to the SOR on June 7, 2016, and he requested a hearing before a Defense Office of Hearings and Appeals Administrative Judge. This case was assigned to this Administrative Judge on August 8, 2016. A notice of hearing was issued on August 14, 2016, scheduling the hearing for September 16, 2016. At the hearing the Government presented thirteen exhibits, referred to as Government Exhibits 1 through 13. The Applicant presented two exhibits, which were admitted without objection, referred to as Applicant’s Exhibits A and B. The official transcript (Tr.) was received on September 26, 2016. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is denied.

FINDINGS OF FACT

The Applicant is 30 years old and is divorced. He has a Bachelor’s degree in Business Administration. He is employed by a defense contractor as a Senior Electronics Technician and a security clearance is necessary in connection with his employment.

Paragraph 1 (Guideline J - Criminal Conduct). The Government alleges that the Applicant is ineligible for clearance because he has engaged in criminal conduct. Applicant denied the allegation set forth under this guideline.

From May 2005 to May 2011, Applicant served in the United States Navy until he was honorably discharged. During his military career he received a number of awards and commendations, including at least four Navy Achievement Medals. He has held a security clearance since 2006. He has worked for his current employer since 2010.

Applicant is a car enthusiast, and his hobby is to modify cars and fix them up. He currently has about eight or nine cars. In the past, he has also had as much as three motorcycles at one time. He admits that he has made twelve insurance claims against his insurance company within the past ten years. These claims range from vandalism, theft, and robberies. Applicant stated that he has just had “bad luck.” He does admit, however, that some of the claims were fraudulent. (Tr. p. 34.) On one occasion Applicant failed to report that he recovered one of his motorcycles that he claimed had been stolen. He actually ended up reselling the motorcycle a few years later. On another occasion, Applicant’s vehicle was broken into and vandalized while in his brother’s custody. His brother made the police report, and stated that he had the vehicle in his possession, and it was parked when it was vandalized. Applicant also made a claim against the same vehicle and said that he had the vehicle, and it was parked within his possession. Some items were stolen from the vehicle, and Applicant actually recovered one of the items at a pawn shop. Applicant testified that in total he has had about fifteen separate vehicle break-ins. (Tr. p. 39.)

Applicant testified that his fraudulent claims were reported to the police by someone he knew. They contacted the police and reported that they thought Applicant was making fraudulent insurance claims. An investigation was conducted, and in June 2014, Applicant was charged with two counts of Insurance Fraud Claim, a felony, and one count of Insurance Fraud Statement, a felony. Applicant pled guilty to making a false statement, and was convicted of Insurance Fraud Statement, a misdemeanor. Applicant was sentenced to three years of probation, fined $285, and one day of jail. (Government Exhibits 5, 6, 7, 8, 9, 10, 11, and 15.) Paragraph 2 (Guideline E - Personal Conduct). The Government alleges that the Applicant is ineligible for a security clearance because he has engaged in conduct involving questionable judgment, lack of candor, dishonesty, or an unwillingness to comply with rules and regulations.

Applicant failed to inform his company of the circumstances surrounding his charges for Insurance fraud even after being informed of the implications of failing to provide that information. Applicant explained that he told the Facility Security Officer that he was charged with some felonies, but he could not provide any details concerning his case under the advice of his lawyer. (See, Government Exhibit 3, the incident report dated March 18, 2014). At the time, however, Applicant was not yet represented by counsel. Applicant was told by his company that if he did not disclose the circumstances of the charges he could possibly lose his job and his security clearance. Applicant refused to give any specifics and terminated the interview. He never told the company Security Officer the circumstances of the case. He states that he eventually told his supervisor in order to be able to take time off from work for court appearances.

A letter from Applicant’s supervisor dated August 28, 2016, indicates that Applicant is a talented electrician whose work is highly valued by the company. He states that the company was aware of Applicant’s situation and provided time off to attend court hearings and other associated matters. (Applicant’s Exhibit B.)

POLICIES

Enclosure 2 and Section E.2.2. of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case:

Guideline J (Criminal Conduct)

The Concern. Criminal activity creates doubt about a person’s judgment, reliability, and trustworthiness. By its very nature, it calls into question a person’s ability or willingness to comply with laws, rules and regulations.

Conditions that could raise a security concern:

31.(a) a single serious crime or multiple lesser offenses; and

31.(c) allegation or admission of criminal conduct, regardless of whether the person was formally charged, formally prosecuted or convicted; and

31.(d) individual is currently on parole or probation.

Condition that could mitigate security concerns:

None. Guideline E (Personal Conduct)

15. The Concern. Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process.

Conditions that could raise a security concern:

16.(c) credible adverse information is several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information; and

16.(e) personal conduct, or concealment of information about one’s conduct, that creates a vulnerability to exploitation, manipulation, or duress, such as (1) engaging in activities which, if known, may affect the person’s personal, professional, or community standing, or (2) while in another country, engaging in any activity that is illegal in that country or that is legal in that country but illegal in the United States and may serve as a basis for exploitation or pressure by the foreign security or intelligence service or other group.

Conditions that could mitigate security concerns:

None.

In addition, as set forth in Enclosure 2 of the Directive at pages 18-19, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors:

a. The nature, extent, and seriousness of the conduct;

b. The circumstances surrounding the conduct, to include knowledgeable participation;

c. The frequency and recency of the conduct;

d. The individual’s age and maturity at the time of the conduct;

e. The extent to which participation is voluntary;

f. The presence or absence of rehabilitation and other permanent behavioral changes; g. The motivation for the conduct;

h. The potential for pressure, coercion, exploitation or duress; and

i. The likelihood of continuation or recurrence.

The eligibility criteria established in the DoD Directive identify personal characteristics and conduct, which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an Applicant’s request for access to classified information.

The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence, which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order . . . shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the Applicant concerned.”

CONCLUSION

In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for clearance may be involved in criminal conduct and dishonesty that demonstrates poor judgment or unreliability.

It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant’s conduct and the continued holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation, which is sufficient to overcome or outweigh the Government’s case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant him a security clearance.

In this case the Government has met its initial burden of proving that the Applicant has engaged in criminal conduct (Guideline J); and poor personal conduct (Guideline E). The totality of this evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility. Considering all of the evidence, the Applicant has not introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case under the above mentioned guidelines.

The evidence shows that the Applicant engaged in a pattern of criminal conduct by making fraudulent claims against his insurance company. He admits to at least two incidents, but the truth of the matter is that he has made at least twelve claims in the past ten years. There is a great possibility that he committed fraud on other occasions in which he was not charged or convicted. Most recently, Applicant was charged, pled guilty, and convicted of making a false statement, a misdemeanor. He remains on probation for this offense until 2017. This crime is based on purposeful, intentional deceit, directed at his integrity or lack thereof. Given the seriousness and egregiousness of this conduct, I am not inspired with the confidence that he has changed his ways or shown sufficient mitigation.

Under Guideline J, Criminal Conduct, Disqualifying Conditions 31.(a) a single serious crime or multiple lesser offenses, and 31.(c) allegation or admission of criminal conduct, regardless of whether the person was formally charged, formally prosecuted or convicted, and 31.(d) individual is currently on parole or probation apply. None of the mitigating conditions are applicable.

Applicant also engaged in poor personal conduct by deliberately refusing to report his criminal conduct to his company security officer. Applicant intentionally kept his company in the dark as to the circumstances of his criminal case which shows bad judgment and untrustworthiness. Even when confronted with the fact that he could lose his security clearance and his job, he refused to disclose the facts of his criminal case. An applicant who is entrusted with the national secrets is required to do the right thing when no one else is watching, even if they might never get caught. Based upon his past history, this Applicant cannot be trusted to do the right thing even when no one is looking.

Under Guideline E, Personal Conduct, Disqualifying Condition 16.(c) credible adverse information is several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information; and 16.(e) personal conduct, or concealment of information about one’s conduct, that creates a vulnerability to exploitation, manipulation, or duress, such as (1) engaging in activities which, if known, may affect the person’s personal, professional, or community standing, or (2) while in another country, engaging in any activity that is illegal in that country or that is legal in that country but illegal in the United States and may serve as a basis for exploitation or pressure by the foreign security or intelligence service or other group apply. None of the mitigating conditions are applicable. Accordingly, I find against the Applicant under Guideline E, Personal Conduct. I have also considered the “whole-person concept” in evaluating the Applicant’s eligibility for access to classified information. I have considered all of the evidence, including the letter of recommendation written on his behalf. (Applicant’s Exhibit B.) Under the particular facts of this case, the totality of the conduct set forth under all of the guidelines viewed as a whole, support a whole-person assessment of poor judgment, untrustworthiness, unreliability, a lack of candor, an unwillingness to comply with rules and regulations, and/or other characteristics indicating that the person may not properly safeguard classified information.

A security clearance is a privilege, not a right. In order to meet the qualifications for access to classified information, it must determined that the Applicant is, and has been, sufficiently trustworthy on the job and in his everyday life to adequately protect the Government’s national interest. According to the standards set forth in the Directive, based upon the conduct outlined here, this Applicant has demonstrated that he is not trustworthy, and he does not meet the eligibility requirements for access to classified information.

On balance, it is concluded that the Applicant has failed to overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding against the Applicant as to the factual and conclusionary allegations expressed in Paragraphs 1 and 2 of the SOR.

FORMAL FINDINGS

Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are:

Paragraph 1: Against the Applicant. Subpara. 1.a.: Against the Applicant.

Paragraph 2: Against the Applicant. Subpara. 2.a.: Against the Applicant.

DECISION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue a security clearance for the Applicant.

Darlene Lokey Anderson Administrative Judge