ISCR Case 12-03150.h1

Case Headnote

ISCR Case No. 12-03150.h1

deniedJul 1, 2012· Hon. Philip S. Howe· hearing

Summary

A 46-year-old president of a defense contractor was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant had significant unresolved debts totaling over $63,000, in addition to an unpaid mortgage of approximately $84,000. While some debts, including a dental judgment and a motorcycle loan, were resolved, numerous others remained unpaid, such as amounts owed to U.S. Bank, Midland MCM, Wells Fargo, LVNV Funding, CitiFinancial, and AT&T.

A key factor in the denial was the applicant's history of falsifying information on his security clearance application (e-QIP). He initially denied any delinquent debts, judgments, or collection actions, but later admitted to deliberately falsifying his answers regarding 14 specific debts. The judge found his explanations for both his financial situation and the omissions on the e-QIP unpersuasive, raising serious doubts about his reliability and trustworthiness.

The applicant demonstrated a lack of knowledge and responsibility concerning his financial obligations, including an unpaid mortgage since 2006 and a foreclosed home he claimed not to know about despite evidence to the contrary. His failure to provide proof of attempts to resolve debts and his general lack of credibility ultimately led to the denial of his security clearance.

Why the Applicant Was Denied

The applicant has 17 delinquent debts totaling $63,524 and an unpaid mortgage of approximately $84,000.
The applicant admitted to falsifying information on his e-QIP regarding his financial obligations and debts.
The applicant demonstrated a lack of knowledge and responsibility regarding his financial situation, undermining his credibility.

Conditions Referenced

Disqualifying

F.1.araisedInability or Unwillingness to Satisfy Debts
F.1.braisedIndebtedness Caused by Frivolous or Irresponsible Spending
F.1.craisedA History of Not Meeting Financial Obligations
E.2.araisedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

F.2.dappliedThe Individual Initiated a Good-faith Effort to Repay Overdue CreditorsThe applicant paid three debts in 2012.
F.2.crejectedThe Person Has Received or Is Receiving Counseling for the ProblemThe applicant consulted a financial counseling service but did not implement their plan.

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedJul 11, 2012
Answer filedAug 23, 2012
Hearing heldNov 29, 2012
Decision dateJan 2, 2013

Cite For

Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
Falsification of Information on Security Clearance Application Under Guideline E
Lack of Credibility in Financial Responsibility Claims Affecting 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	Applicant denied any delinquent debts, judgments, collection actions, charged-off credit card accounts, payment delays, or repossessions in his answers to Question 26 on the e-QIP. He claims ignorance of those debts at the time he completed that document.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	He denied knowing about 14 debts listed and found to be unpaid and unresolved. He admitted he deliberately falsified his answers to Question 26 in Subparagraphs 2.c to 2.f of the SOR.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.c	Applicant did not list any financial debts, charge off of credit cards, repossessions, foreclosure of his mortgage, or any tardiness in paying his debts.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.d–2.f	3 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant		—		—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant denied any delinquent debts, judgments, collection actions, charged-off credit card accounts, payment delays, or repossessions in his answers to Question 26 on the e-QIP. He claims ignorance of those debts at the time he completed that document.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

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

—

2.b

He denied knowing about 14 debts listed and found to be unpaid and unresolved. He admitted he deliberately falsified his answers to Question 26 in Subparagraphs 2.c to 2.f of the SOR.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

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

—

2.c

Applicant did not list any financial debts, charge off of credit cards, repossessions, foreclosure of his mortgage, or any tardiness in paying his debts.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Financial

Denied

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

—

2.d–2.f

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

Against Applicant

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant owed $629 to a dentist. This debt was reduced to a judgment. Applicant paid this debt on August 20, 2012. This debt is resolved. $629	For Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.b	The SOR contains a duplicative listing of Applicant’s motorcycle loan for $6,588. Applicant stopped making payments on the loan in 2006 and the bank never repossessed it. Applicant settled the debt for $6,000 on August 21, 2012. This debt is resolved. $6,000	For Applicant	Auto Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.c	Applicant owes $1,095 to U.S. Bank. He does know for what purchase or purpose this debt was incurred. He has not paid it. The debt is unresolved. $1,095	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Applicant owes a $325 cable television debt. He does not think he owed this debt. Applicant claimed he had an installment payment agreement with the collector, but had no proof of payment or evidence that he disputed the debt. This debt is unresolved. $325	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.e	A debt to Midland MCM for $7,272 is not resolved. Applicant has done nothing to try to repay this debt. The amount owed has now increased to $7,920. $7,272	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.f	Wells Fargo Bank wants to be repaid the $2,344 Applicant borrowed on a loan. The credit reports show the debt is now $4,022. Applicant states he does not know anything about this debt. It is not resolved. $2,344	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.g	Applicant owes LVNV Funding $1,114 on a credit card debt. This debt is unpaid and unresolved. $1,114	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.h	Applicant owes another debt to LVNV Funding in the amount of $1,123 on a Dillard’s Department Store credit card. This debt is unpaid and unresolved. $1,123	Against Applicant	Credit Card Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Applicant owes $7,300 to CitiFinancial. The amount owed is now $7,449. This debt is unpaid and unresolved. $7,300	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.k	AT&T is the creditor on a $1,048 debt. Applicant states he does not know the origin of this debt. It is unpaid and unresolved. $1,048	Against Applicant	Utility or Phone Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.l	Applicant owed a $26 medical debt. He paid this debt and it is resolved. $26	For Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.m	Applicant has not paid his home mortgage since 2006. He lives in the house at the present time and has since purchasing it. He sent the U.S. Bank a partial payment of 75% of the arrearages two years ago. The bank, according to Applicant, returned his check. He spent the money instead of saving it to make future payments. His mortgage was foreclosed in 2009. He claimed he did not know about the foreclosure and sheriff’s sale. Yet Applicant’s documents resulting from his discussions with the Consumer Credit Counseling Service (CCCS) in 2011 show he knew about that action in 2011, before he completed his e-QIP. His acknowledgement of the debt is documented in paperwork from the CCCS he consulted to resolve his delinquent debts. Applicant testified he thought his mortgage was undergoing a loan modification process, but had no documents to support his contention. A sheriff’s sale of his home was ordered in 2009 but never took place. Applicant owes $84,000 to U.S. Bank on his mortgage. This debt is unresolved. $84,000	Against Applicant	Mortgage or Home Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.n	Applicant owes Wells Fargo Bank $27,129 on a car loan. The car was not repossessed by the bank. Applicant claims he is trying to negotiate a settlement. He did not submit any proof that such attempts were being made. Applicant stopped making payments on the car in September 2007. This debt is unresolved. $27,129	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.o	Applicant owes $203 on his car insurance from 2008. This debt is unpaid and unresolved. $203	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.p	Applicant denies knowing the nature of the WFF Cards debt for $1,361. He has not contacted the creditor. This debt is unpaid and unresolved. $1,361	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.q	The final SOR debt is a medical account in the amount of $1,451. Applicant’s Answer stated the debt would be paid by September 30, 2012. At the hearing he stated he is not certain about the status of the debt. This debt is unpaid and unresolved. $1,451	Against Applicant	Medical Debt	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant owed $629 to a dentist. This debt was reduced to a judgment. Applicant paid this debt on August 20, 2012. This debt is resolved.

$629

For Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Credited

Debt Paid in Full

1.b

The SOR contains a duplicative listing of Applicant’s motorcycle loan for $6,588. Applicant stopped making payments on the loan in 2006 and the bank never repossessed it. Applicant settled the debt for $6,000 on August 21, 2012. This debt is resolved.

$6,000

For Applicant

Auto Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Credited

Debt Paid in Full

1.c

Applicant owes $1,095 to U.S. Bank. He does know for what purchase or purpose this debt was incurred. He has not paid it. The debt is unresolved.

$1,095

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.d

Applicant owes a $325 cable television debt. He does not think he owed this debt. Applicant claimed he had an installment payment agreement with the collector, but had no proof of payment or evidence that he disputed the debt. This debt is unresolved.

$325

Against Applicant

Utility or Phone Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.e

A debt to Midland MCM for $7,272 is not resolved. Applicant has done nothing to try to repay this debt. The amount owed has now increased to $7,920.

$7,272

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.f

Wells Fargo Bank wants to be repaid the $2,344 Applicant borrowed on a loan. The credit reports show the debt is now $4,022. Applicant states he does not know anything about this debt. It is not resolved.

$2,344

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.g

Applicant owes LVNV Funding $1,114 on a credit card debt. This debt is unpaid and unresolved.

$1,114

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.h

Applicant owes another debt to LVNV Funding in the amount of $1,123 on a Dillard’s Department Store credit card. This debt is unpaid and unresolved.

$1,123

Against Applicant

Credit Card Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.j

Applicant owes $7,300 to CitiFinancial. The amount owed is now $7,449. This debt is unpaid and unresolved.

$7,300

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.k

AT&T is the creditor on a $1,048 debt. Applicant states he does not know the origin of this debt. It is unpaid and unresolved.

$1,048

Against Applicant

Utility or Phone Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.l

Applicant owed a $26 medical debt. He paid this debt and it is resolved.

$26

For Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Credited

Debt Paid in Full

1.m

Applicant has not paid his home mortgage since 2006. He lives in the house at the present time and has since purchasing it. He sent the U.S. Bank a partial payment of 75% of the arrearages two years ago. The bank, according to Applicant, returned his check. He spent the money instead of saving it to make future payments. His mortgage was foreclosed in 2009. He claimed he did not know about the foreclosure and sheriff’s sale. Yet Applicant’s documents resulting from his discussions with the Consumer Credit Counseling Service (CCCS) in 2011 show he knew about that action in 2011, before he completed his e-QIP. His acknowledgement of the debt is documented in paperwork from the CCCS he consulted to resolve his delinquent debts. Applicant testified he thought his mortgage was undergoing a loan modification process, but had no documents to support his contention. A sheriff’s sale of his home was ordered in 2009 but never took place. Applicant owes $84,000 to U.S. Bank on his mortgage. This debt is unresolved.

$84,000

Against Applicant

Mortgage or Home Loan Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.n

Applicant owes Wells Fargo Bank $27,129 on a car loan. The car was not repossessed by the bank. Applicant claims he is trying to negotiate a settlement. He did not submit any proof that such attempts were being made. Applicant stopped making payments on the car in September 2007. This debt is unresolved.

$27,129

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.o

Applicant owes $203 on his car insurance from 2008. This debt is unpaid and unresolved.

$203

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.p

Applicant denies knowing the nature of the WFF Cards debt for $1,361. He has not contacted the creditor. This debt is unpaid and unresolved.

$1,361

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.q

The final SOR debt is a medical account in the amount of $1,451. Applicant’s Answer stated the debt would be paid by September 30, 2012. At the hearing he stated he is not certain about the status of the debt. This debt is unpaid and unresolved.

$1,451

Against Applicant

Medical Debt

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

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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