ISCR Case 12-02450.h1

Case Headnote

ISCR Case No. 12-02450.h1

grantedJan 6, 2014· Hon. Robert Robinson Gales· hearing

Summary

A 33-year-old defense contractor and former U.S. Marine was granted a security clearance despite concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant faced allegations of falsifying his SF-86 by answering "no" to questions about delinquent debts, when in fact, he had several. These debts included a $115 medical bill, a $735 university account, a $10,614 post-repossession auto loan balance, a student loan with a $706 past-due balance, a $29 music club account, a $200 medical bill, a $647 high-interest credit card, and a $449 insurance bill.

The applicant's financial difficulties were attributed to personal circumstances, including medical expenses and untreated ADHD. However, he took significant steps to resolve these issues. He settled the medical and university accounts, paid off the auto loan with a settlement of $5,207.44, and has been making payments on the student loan. He disputed and had the music club and credit card accounts removed from his credit reports, and paid the remaining medical and insurance debts.

The judge found that the applicant had resolved multiple delinquent debts before the hearing and demonstrated a commitment to financial responsibility by not incurring new debt for several years. These mitigating factors, coupled with the link between his financial issues and personal circumstances, led to the decision to grant his security clearance.

Why the Applicant Prevailed

Applicant resolved multiple delinquent debts prior to the hearing.
He demonstrated a commitment to financial responsibility and did not incur new debt for several years.
The applicant's financial issues were linked to personal circumstances, including medical conditions.

Conditions Referenced

Disqualifying

F.3raisedInability to Satisfy Debts
E.2raisedFalsification of Material Facts

Mitigating

F.2appliedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Applicant's Control
E.2appliedThe Applicant Did Not Intend to Falsify Information on His Security Clearance Application
F.3appliedThe Applicant Has Taken Significant Steps to Resolve His Financial Issues

Key Rule Quoted

“Eligibility for a security clearance and access to classified information is granted only upon a finding that it is clearly consistent with the national interest to do so.”
— U.S. Supreme Court

Procedural Posture

SOR issuedJul 31, 2013
Answer filedOct 28, 2013
Hearing heldDec 17, 2013
Decision dateJan 6, 2014

Cite For

Mitigation of Financial Issues Under Guideline F Due to Personal Circumstances
Resolution of Debts as a Factor in Granting Security Clearance
Lack of Intent to Falsify Information Under Guideline E

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	On November 16, 2011, when Applicant completed his SF 86, he responded to a series of questions in § 26 (Delinquency Involving Routine Accounts) pertaining to the past seven years of his financial record, including: defaulted on any type of loan; bills or debts turned over to a collection agency; account or credit card suspended, charged off, or cancelled for failing to pay as agreed; or been over 120 days delinquent on any debt. Applicant answered “no.” He certified that the responses were “true, complete, and correct” to the best of his knowledge, but the responses to the above series of questions were, in fact, false.	For Applicant	Falsification Security FormNOT DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form (c) credible adverse information across areas supporting a whole-person concern	(a) prompt, good-faith correction before being confronted	Claimed Explanation of Omission Credible

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

On November 16, 2011, when Applicant completed his SF 86, he responded to a series of questions in § 26 (Delinquency Involving Routine Accounts) pertaining to the past seven years of his financial record, including: defaulted on any type of loan; bills or debts turned over to a collection agency; account or credit card suspended, charged off, or cancelled for failing to pay as agreed; or been over 120 days delinquent on any debt. Applicant answered “no.” He certified that the responses were “true, complete, and correct” to the best of his knowledge, but the responses to the above series of questions were, in fact, false.

For Applicant

Falsification Security FormNOT DELIBERATE

Financial

Denied

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

(c) credible adverse information across areas supporting a whole-person concern

(a) prompt, good-faith correction before being confronted

Claimed

Explanation of Omission Credible

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	This refers to a medical account with an unidentified medical provider with a high credit of $100 and an unpaid balance of $115 that was placed for collection in July 2011. Applicant was unaware of anything pertaining to the debt and attempted to obtain validation of the debt from the collection agent, but it refused, claiming it was not responsible for furnishing written validation of the debt. He eventually learned the medical services were provided for his son, and Applicant settled the account and paid the collection agent $100. The account has been resolved. $115	For Applicant	Medical Debt	Admitted	—	—	—
1.b	This refers to an account with a university with a high credit and past-due balance of $735 that was placed for collection and charged off in 2008. Applicant was unaware of a past-due balance until the investigator from the U.S. Office of Personnel Management (OPM) interviewed him. Applicant initially thought the balance was consolidated with his remaining student loans, and since he is current on his payments for the consolidated loans, he thought the matter was settled. The account was actually transferred or sold to two other collection agents. Applicant contacted the most recent collection agent and immediately paid it $734.80. His balance for this particular loan is zero. The account has been resolved. $735	For Applicant	Student Loan Debt	Admitted	—	—	—
1.c	This refers to what appears to be an automobile financing account with a high credit of $23,659 and a post-repossession unpaid balance (after the vehicle was sold at auction) of $10,614 that was placed for collection. The account was eventually transferred or sold to two different collection agents. Applicant attempted to obtain a repayment agreement with the original creditor, but it would not accept anything less than the entire amount in one payment. In October 2013, the most recent collection agent agreed to a full and final settlement in the amount of $5,207.44. Applicant made the initial payment of $4,166 on October 15, 2013. He made two additional payments, each for $937.35, and the creditor considered the account to have been paid in full. The account has been resolved. $5,207	For Applicant	Auto Loan Debt	Admitted	—	—	—
1.d	This refers to a student loan account, in an unspecified amount, opened with a bank that was apparently comingled with Applicant’s other student loans. Those loans were classified as either Stafford subsidized or Stafford unsubsidized loans. The loans were transferred to a student loan servicer. At that point, the loans were in a deferred status. After Applicant stopped attending school, he attempted to set up a forbearance on the loans, but somehow, before accomplishing his goal, the account became 180 days past due. The account, with a high credit of $5,180, a past due balance of $706, and an unpaid balance of $5,180, was transferred back to “the government.” The student loans have been placed in a grace period status, deferred status, in forbearance status, in repayment status, in defaulted and unresolved status, and in paid in full status. In September 2013, the balance of the student loan was $718.72, and the account was in a repayment status. Applicant has been making monthly payments since January 2012, and as of November 23, 2013, the unpaid balance was $707.54. The account is in a repayment status, and is in the process of being resolved. $707	For Applicant	Student Loan Debt	Admitted	—	—	—
1.e	This refers to a music club account with a past due balance of $29 that was placed for collection in 2011. The account was eventually transferred or sold to another collection agent. Applicant had no knowledge of the account and denied ever opening an account with that particular creditor or ever purchasing merchandise from it. He disputed the account with the credit reporting agencies, and the listing was removed from his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. The account has been resolved. $29	For Applicant	Unspecified Financial	Denied	—	—	—
1.f	This refers to a medical account with an unidentified medical provider with a high credit, past due balance, and unpaid balance of $200 that was placed for collection in 2010. Applicant was unaware of anything pertaining to the debt and attempted to obtain validation of the debt from the collection agent, but it refused to furnish him any specifics as to patient identity or date of service. Applicant later learned that the balance was a combination of unpaid copays generated by his children’s visits to the pediatrician. He paid the collection agent $200 on September 18, 2013. The account has been resolved. $200	For Applicant	Medical Debt	Admitted	—	—	—
1.g	This refers to a high interest credit card account with high credit of $646 and an unpaid balance of $647 that was placed for collection in 2008. When interviewed by the OPM investigator in January 2012, Applicant indicated the account was used by his wife and he was unaware it was delinquent. He also indicated he intended to pay the account off by the end of the quarter (April 2012). However, Applicant subsequently indicated he had paid off the account in 2009, shortly after receiving his income tax refund. He submitted no documentation to support his contention that he had paid off the account. Applicant disputed the account status listed on his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. Accordingly, although there is no evidence that Applicant has paid the creditor, I conclude the account has been resolved. $647	For Applicant	Credit Card Debt	Denied	—	—	—
1.h	This refers to an account with an insurance company with an unpaid balance of $449 that was placed for collection in 2010, and transferred or sold to a collection agent. Applicant changed insurance companies and advised his old company (the creditor). Rather than correcting the error, the creditor reported Applicant’s failure to pay for continuing coverage as a delinquency. Applicant repeatedly contacted the creditor and was finally advised the matter could be cleared up upon receipt of proof of the new insurance coverage. Applicant disputed the account status listed on his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. Nevertheless, in order to correct the entry on his credit reports and to satisfy proof of payment for his security clearance hearing, on September 18, 2013, Applicant paid the collection agent $485.91. The account has been resolved. $449	For Applicant	Unspecified Financial	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This refers to a medical account with an unidentified medical provider with a high credit of $100 and an unpaid balance of $115 that was placed for collection in July 2011. Applicant was unaware of anything pertaining to the debt and attempted to obtain validation of the debt from the collection agent, but it refused, claiming it was not responsible for furnishing written validation of the debt. He eventually learned the medical services were provided for his son, and Applicant settled the account and paid the collection agent $100. The account has been resolved.

$115

For Applicant

Medical Debt

Admitted

—

1.b

This refers to an account with a university with a high credit and past-due balance of $735 that was placed for collection and charged off in 2008. Applicant was unaware of a past-due balance until the investigator from the U.S. Office of Personnel Management (OPM) interviewed him. Applicant initially thought the balance was consolidated with his remaining student loans, and since he is current on his payments for the consolidated loans, he thought the matter was settled. The account was actually transferred or sold to two other collection agents. Applicant contacted the most recent collection agent and immediately paid it $734.80. His balance for this particular loan is zero. The account has been resolved.

$735

For Applicant

Student Loan Debt

Admitted

—

1.c

This refers to what appears to be an automobile financing account with a high credit of $23,659 and a post-repossession unpaid balance (after the vehicle was sold at auction) of $10,614 that was placed for collection. The account was eventually transferred or sold to two different collection agents. Applicant attempted to obtain a repayment agreement with the original creditor, but it would not accept anything less than the entire amount in one payment. In October 2013, the most recent collection agent agreed to a full and final settlement in the amount of $5,207.44. Applicant made the initial payment of $4,166 on October 15, 2013. He made two additional payments, each for $937.35, and the creditor considered the account to have been paid in full. The account has been resolved.

$5,207

For Applicant

Auto Loan Debt

Admitted

—

1.d

This refers to a student loan account, in an unspecified amount, opened with a bank that was apparently comingled with Applicant’s other student loans. Those loans were classified as either Stafford subsidized or Stafford unsubsidized loans. The loans were transferred to a student loan servicer. At that point, the loans were in a deferred status. After Applicant stopped attending school, he attempted to set up a forbearance on the loans, but somehow, before accomplishing his goal, the account became 180 days past due. The account, with a high credit of $5,180, a past due balance of $706, and an unpaid balance of $5,180, was transferred back to “the government.” The student loans have been placed in a grace period status, deferred status, in forbearance status, in repayment status, in defaulted and unresolved status, and in paid in full status. In September 2013, the balance of the student loan was $718.72, and the account was in a repayment status. Applicant has been making monthly payments since January 2012, and as of November 23, 2013, the unpaid balance was $707.54. The account is in a repayment status, and is in the process of being resolved.

$707

For Applicant

Student Loan Debt

Admitted

—

1.e

This refers to a music club account with a past due balance of $29 that was placed for collection in 2011. The account was eventually transferred or sold to another collection agent. Applicant had no knowledge of the account and denied ever opening an account with that particular creditor or ever purchasing merchandise from it. He disputed the account with the credit reporting agencies, and the listing was removed from his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. The account has been resolved.

$29

For Applicant

Unspecified Financial

Denied

—

1.f

This refers to a medical account with an unidentified medical provider with a high credit, past due balance, and unpaid balance of $200 that was placed for collection in 2010. Applicant was unaware of anything pertaining to the debt and attempted to obtain validation of the debt from the collection agent, but it refused to furnish him any specifics as to patient identity or date of service. Applicant later learned that the balance was a combination of unpaid copays generated by his children’s visits to the pediatrician. He paid the collection agent $200 on September 18, 2013. The account has been resolved.

$200

For Applicant

Medical Debt

Admitted

—

1.g

This refers to a high interest credit card account with high credit of $646 and an unpaid balance of $647 that was placed for collection in 2008. When interviewed by the OPM investigator in January 2012, Applicant indicated the account was used by his wife and he was unaware it was delinquent. He also indicated he intended to pay the account off by the end of the quarter (April 2012). However, Applicant subsequently indicated he had paid off the account in 2009, shortly after receiving his income tax refund. He submitted no documentation to support his contention that he had paid off the account. Applicant disputed the account status listed on his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. Accordingly, although there is no evidence that Applicant has paid the creditor, I conclude the account has been resolved.

$647

For Applicant

Credit Card Debt

Denied

—

1.h

This refers to an account with an insurance company with an unpaid balance of $449 that was placed for collection in 2010, and transferred or sold to a collection agent. Applicant changed insurance companies and advised his old company (the creditor). Rather than correcting the error, the creditor reported Applicant’s failure to pay for continuing coverage as a delinquency. Applicant repeatedly contacted the creditor and was finally advised the matter could be cleared up upon receipt of proof of the new insurance coverage. Applicant disputed the account status listed on his credit reports. The account was listed in Applicant’s December 2011 Combined Credit Report, but is not listed in his May 2013 Equifax credit report, and is not listed in his December 2013 TransUnion credit report. Nevertheless, in order to correct the entry on his credit reports and to satisfy proof of payment for his security clearance hearing, on September 18, 2013, Applicant paid the collection agent $485.91. The account has been resolved.

$449

For Applicant

Unspecified Financial

Admitted

—

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Case Profile

Summary

Why the Applicant Prevailed

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

FOOTNOTES