ISCR Case 01-18881.h1

Case Headnote

ISCR Case No. 01-18881.h1

deniedMay 16, 2003· Hon. James A. Young· hearing

Summary

A 53-year-old computer systems administrator was denied a security clearance due to concerns under Guideline E (Personal Conduct), Guideline F (Financial Considerations), and Guideline J (Criminal Conduct). The applicant had a history of financial issues, including multiple delinquent debts. Specific allegations included paying off a $1,264 debt charged off in 1996, a $303 credit card debt charged off in 1996, and settling a debt of over $7,000 with a bank for $722.26. Other settled debts included a $231 federal bank account, a $75 hospital bill, and a medical practice debt of over $250. An $86 debt from 1994 remained unsatisfied because the applicant could not locate the creditor.

Additionally, the applicant accrued over $35,000 in taxes, interest, and penalties with the IRS for failing to file federal income tax returns from 1993-2001. He also willfully failed to file federal income tax returns for 1997, 1998, and 1999, violating 26 U.S.C. § 7203. The applicant also deliberately falsified answers on his security clearance application regarding his debts.

The judge determined that the applicant did not sufficiently mitigate these security concerns, leading to the denial. The denial was based on the willful failure to file federal income tax returns for three years, a history of unsatisfied debts and a lack of good faith in addressing them, and the deliberate falsification of his security clearance application regarding his debts.

Why the Applicant Was Denied

Applicant willfully failed to file federal income tax returns for three years.
Applicant had a history of unsatisfied debts and demonstrated a lack of good faith in addressing them.
Applicant deliberately falsified his security clearance application regarding his debts.

Conditions Referenced

Disqualifying

E2.A5.1.1raisedPersonal Conduct
E2.A6.1.1raisedFinancial Considerations
E2.A10.1.1raisedCriminal Conduct

Mitigating

E2.A5.2.1rejectedPersonal ConductThe mitigating conditions listed under Guideline E are not applicable.
E2.A6.3.1rejectedFinancial ConsiderationsThe timing of his efforts to pay off debts suggests they were not good faith efforts.
E2.A10.3.1rejectedCriminal ConductNo clear evidence of successful rehabilitation was presented.

Key Rule Quoted

“"[N]o one has a 'right' to a security clearance."”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedDec 13, 2002
Answer filedJan 24, 2003
Hearing heldApr 3, 2003
Decision dateMay 16, 2003

Cite For

Denial Based on Willful Failure to File Tax Returns Under Guideline J
Lack of Good Faith in Addressing Financial Obligations Under Guideline F
Deliberate Falsification of Security Clearance Application 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	Applicant deliberately falsified answers on his security clearance application to question number 38.	Against Applicant	Falsification Security FormFOUND DELIBERATE	—	Denied	—	—	—
2.b	Applicant deliberately falsified answers on his security clearance application to question number 37.	For Applicant	Falsification Security Form	—	Denied	—	—	—
2.c	Applicant willfully failed to file state income tax returns for 1997, 1998, and 1999.	Against Applicant	Questionable Judgment GeneralFOUND DELIBERATE	—	Denied	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant deliberately falsified answers on his security clearance application to question number 38.

Against Applicant

Falsification Security FormFOUND DELIBERATE

—

Denied

—

2.b

Applicant deliberately falsified answers on his security clearance application to question number 37.

For Applicant

Falsification Security Form

—

Denied

—

2.c

Applicant willfully failed to file state income tax returns for 1997, 1998, and 1999.

Against Applicant

Questionable Judgment GeneralFOUND DELIBERATE

—

Denied

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	In January 2003, Applicant paid off a debt of approximately $1,264 that had been charged off by the creditor in 1996 because of delinquency. $1,264	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	In January 2001, Applicant paid off a credit card debt of approximately $303 that had been charged off by the creditor in 1996 because of delinquency. $303	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	In December 2002, Applicant settled his debt of over $7,000 with a bank by paying $722.26 to a creditor who had purchased the debt from the bank. $722	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	In May 2002, Applicant settled a delinquent account of approximately $231 with a federal bank by paying a collection agency. $231	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	In May 2002, Applicant settled a delinquent account of $75 with a hospital. $75	Against Applicant	Medical Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant has not satisfied a debt of $86 that has been delinquent since 1994 because he cannot find the creditor. $86	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	On 22 May 2002, Applicant paid a collection agency over $250.00 in settlement of a debt he owed a medical practice. $250	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	In January 2003, Applicant settled a debt with a creditor for a debt of over $900 that the Government alleged was the result of a judgment obtained in 1996. $900	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	Applicant accrued over $35,000 in taxes, interest, and penalties with the IRS because he failed to pay his federal income tax returns from 1993-2001. $35,000	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Applicant has a positive cash flow and can pay the remaining tax debts over time.	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

In January 2003, Applicant paid off a debt of approximately $1,264 that had been charged off by the creditor in 1996 because of delinquency.

$1,264

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

In January 2001, Applicant paid off a credit card debt of approximately $303 that had been charged off by the creditor in 1996 because of delinquency.

$303

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

In December 2002, Applicant settled his debt of over $7,000 with a bank by paying $722.26 to a creditor who had purchased the debt from the bank.

$722

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

In May 2002, Applicant settled a delinquent account of approximately $231 with a federal bank by paying a collection agency.

$231

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

In May 2002, Applicant settled a delinquent account of $75 with a hospital.

$75

Against Applicant

Medical Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Applicant has not satisfied a debt of $86 that has been delinquent since 1994 because he cannot find the creditor.

$86

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

On 22 May 2002, Applicant paid a collection agency over $250.00 in settlement of a debt he owed a medical practice.

$250

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

In January 2003, Applicant settled a debt with a creditor for a debt of over $900 that the Government alleged was the result of a judgment obtained in 1996.

$900

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

Applicant accrued over $35,000 in taxes, interest, and penalties with the IRS because he failed to pay his federal income tax returns from 1993-2001.

$35,000

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

Applicant has a positive cash flow and can pay the remaining tax debts over time.

For Applicant

Unspecified Financial

Unknown

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
3.a	Willfully failed to file his federal income tax returns for tax year 1997, in violation of 26 U.S.C. § 7203.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
3.b	Willfully failed to file his federal income tax returns for tax year 1998, in violation of 26 U.S.C. § 7203.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
3.c	Willfully failed to file his federal income tax returns for tax year 1999, in violation of 26 U.S.C. § 7203.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Admitted	(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

3.a

Willfully failed to file his federal income tax returns for tax year 1997, in violation of 26 U.S.C. § 7203.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Admitted

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

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

—

3.b

Willfully failed to file his federal income tax returns for tax year 1998, in violation of 26 U.S.C. § 7203.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Admitted

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

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

—

3.c

Willfully failed to file his federal income tax returns for tax year 1999, in violation of 26 U.S.C. § 7203.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Admitted

(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

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES