ISCR Case 13-00786.h1

Case Headnote

ISCR Case No. 13-00786.h1

deniedJan 7, 2014· Hon. Noreen A. Lynch· hearing

Summary

A 61-year-old defense contractor with a long-held security clearance was denied renewal due to significant financial considerations under Guideline F. The applicant faced allegations concerning approximately $231,000 in delinquent debts, primarily stemming from his wife's real estate investments.

Specific debts included a 2011 credit card judgment for about $12,413, which was paid in March 2012. A $99,000 past-due second mortgage on an investment property remained unresolved, with the applicant attempting to confirm its status after a foreclosure. Another $99,000 past-due amount on his personal residence, with a total loan balance of $886,000, was attributed to late payments in 2011, but its resolution lacked clear evidence. Additionally, a $15,000 debt from interest on a 2009 foreclosed investment was settled for $11,232.29. A charged-off account for $872 was recently paid, and a disputed 2013 judgment for $2,182 was also paid in full.

The denial was based on the applicant's substantial delinquent debts and his admitted lack of awareness and delayed action regarding these financial issues, which began as early as 2011. The judge found that his failure to responsibly address these obligations and provide sufficient documentation for the resolution of two significant debts raised doubts about his judgment and reliability.

Why the Applicant Was Denied

The applicant had significant delinquent debts totaling approximately $231,000, which he admitted were primarily due to his wife's real estate investments.
The applicant was aware of financial issues as early as 2011 but did not investigate or address them until 2013, raising concerns about his judgment.
The applicant failed to provide sufficient documentation to confirm the resolution of two significant debts, leaving them unresolved.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”
— AG ¶ 2(b)

Procedural Posture

SOR issuedAug 7, 2013
Answer filedTimely
Hearing heldNov 22, 2013Postponed from November 15, 2013
Decision dateJan 7, 2014

Cite For

Financial Responsibility Under Guideline F
Impact of Spouse's Financial Actions on Security Clearance
Judgment and Reliability Concerns Due to Financial Issues

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The 2011 judgment alleged in SOR 1.a for approximately $12,413 is the result of a credit card account that was opened in the 1990s. There were no difficulties in paying the account until Applicant’s wife used a credit card check to make two mortgage payments for one of her investment homes. The judgment has been paid as of March 26, 2012. $12,413	For Applicant	Credit Card Debt	Admitted	—	—	—
1.b	The past-due account in the amount of $99,000 alleged in SOR 1.b is a second mortgage on an investment property. Applicant explained that he later learned that his wife would often use a second mortgage to cover the entire debt incurred to purchase some of their real estate investments. Applicant is currently working with the restoration company to ascertain the status of the debt. He was told that the second mortgage might have been resolved with the foreclosure of the house. He has not received any documentation to confirm his assertion. As of this date, it is unresolved and appears on his credit report. $99,000	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	The past-due account alleged in SOR 1.c as having a past due amount of $99,000 with a total loan balance of $886,000 is based on Applicant’s personal residence that was purchased in 2005. He acknowledged that in 2011, he was late with approximately six monthly payments on the loan due to his wife’s real estate investments, but that the payments were made and nothing happened. There is not sufficient clear evidence that this debt is resolved. $99,000	Against Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	The past-due account alleged in SOR 1.d for $15,000 is the result of interest on a 2009 foreclosed real estate investment. Applicant believes this account was opened in 2006. A settlement offer of $11,000 was made. Applicant sent a check in the amount of $11,232.29. $15,000	For Applicant	Unspecified Financial	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.e	A charged-off account in the amount of $872 (SOR 1.e) was paid recently. Applicant acknowledged the store account, but stated that he had no knowledge of a balance until the OPM interview. $872	For Applicant	Unspecified Financial	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.f	The debt alleged in SOR 1.f is a 2013 judgment in the amount of $2,182. Applicant disputes this charge. He stated he had not been to court on this matter. However, he paid the amount in full. $2,182	For Applicant	Unspecified Financial	Denied	—	—	Documented Debt Paid in Full

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The 2011 judgment alleged in SOR 1.a for approximately $12,413 is the result of a credit card account that was opened in the 1990s. There were no difficulties in paying the account until Applicant’s wife used a credit card check to make two mortgage payments for one of her investment homes. The judgment has been paid as of March 26, 2012.

$12,413

For Applicant

Credit Card Debt

Admitted

—

1.b

The past-due account in the amount of $99,000 alleged in SOR 1.b is a second mortgage on an investment property. Applicant explained that he later learned that his wife would often use a second mortgage to cover the entire debt incurred to purchase some of their real estate investments. Applicant is currently working with the restoration company to ascertain the status of the debt. He was told that the second mortgage might have been resolved with the foreclosure of the house. He has not received any documentation to confirm his assertion. As of this date, it is unresolved and appears on his credit report.

$99,000

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

The past-due account alleged in SOR 1.c as having a past due amount of $99,000 with a total loan balance of $886,000 is based on Applicant’s personal residence that was purchased in 2005. He acknowledged that in 2011, he was late with approximately six monthly payments on the loan due to his wife’s real estate investments, but that the payments were made and nothing happened. There is not sufficient clear evidence that this debt is resolved.

$99,000

Against Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

The past-due account alleged in SOR 1.d for $15,000 is the result of interest on a 2009 foreclosed real estate investment. Applicant believes this account was opened in 2006. A settlement offer of $11,000 was made. Applicant sent a check in the amount of $11,232.29.

$15,000

For Applicant

Unspecified Financial

Denied

—

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

Documented

Debt Paid in Full

1.e

A charged-off account in the amount of $872 (SOR 1.e) was paid recently. Applicant acknowledged the store account, but stated that he had no knowledge of a balance until the OPM interview.

$872

For Applicant

Unspecified Financial

Admitted

—

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

Documented

Debt Paid in Full

1.f

The debt alleged in SOR 1.f is a 2013 judgment in the amount of $2,182. Applicant disputes this charge. He stated he had not been to court on this matter. However, he paid the amount in full.

$2,182

For Applicant

Unspecified Financial

Denied

—

Documented

Debt Paid in Full

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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

FOOTNOTES