ISCR Case 03-02912.h1

Case Headnote

ISCR Case No. 03-02912.h1

deniedFeb 18, 2005· Hon. Joseph Testan· hearing

Summary

A 36-year-old defense contractor was denied a security clearance due to issues under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). The denial stemmed from a history of significant financial difficulties, including over $11,000 in past-due debts, some of which were written off or placed for collection years ago. One debt of approximately $103.00, which the applicant claimed was included in a 1995 bankruptcy, was actually reaffirmed in bankruptcy court and remained outstanding. Additionally, a judgment debt of $5,371.00 was still owed despite a partial satisfaction in 1999.

Further concerns arose from the applicant's 1998 felony conviction for Making, Uttering, and Possessing Counterfeit Securities. He was sentenced to five years of probation and ordered to pay approximately $60,000.00 in restitution at $100.00 per month, but failed to make consistent payments. The applicant was also found to be less than candid with the Defense Security Service (DSS) regarding his role in this criminal conduct, and as of February 8, 2002, there were four outstanding arrest warrants for him.

While allegations of lying about his financial history on a Security Clearance Application were not sustained due to a lack of supporting evidence, the judge ultimately concluded that the applicant's financial irresponsibility, dishonesty, and criminal conduct undermined his reliability and trustworthiness, leading to the denial of his security clearance.

Why the Applicant Was Denied

Applicant has a history of significant financial difficulties, with over $11,000 in past-due debts.
Applicant's felony conviction for counterfeiting raises serious concerns about his judgment and reliability.
Applicant was less than candid about his criminal conduct and has outstanding arrest warrants.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedHistory of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts
E2.A10.1.2.2raisedA Single Serious Crime or Multiple Lesser Offenses
E2.A5.1.2.5raisedA Pattern of Dishonesty or Rule Violations

Key Rule Quoted

“Once the Government established a prima facie case under Guideline F, the burden shifted to applicant to show he has reformed.”

Procedural Posture

SOR issuedOct 24, 2003
Answer filedNov 28, 2003Applicant elected to proceed without a hearing.
Hearing held—Case determined on written record.
Decision dateFeb 18, 2005

Cite For

Denial Based on Financial Irresponsibility Under Guideline F
Impact of Felony Convictions on Security Clearance Under Guideline J
Consideration of Dishonesty and Untrustworthiness 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 is indebted to this creditor in the approximate amount of $567.00. This past-due debt was written off by the creditor.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Unknown	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	Applicant is indebted to this creditor in the approximate amount of $1,639.00. As of February 2002, this debt was at least 120 days delinquent.	Against Applicant	Pattern of Dishonesty or Rule Violations	Financial	Unknown	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.c	specific text not stated in this decision	For Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—
3.a	Applicant was less than candid with the DSS when discussing his role in this felonious conduct.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	Criminal Conduct	Unknown	(b) deliberately providing false information to an investigator or official	—	—
3.b	The Government alleges that on a Security Clearance Application (SCA) he executed on January 30, 2002, applicant lied about his financial history when, in response to both Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" and Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" he stated "no."	For Applicant	Lack of Candor in Interview	Financial	Unknown	—	—	—
3.c	specific text not stated in this decision	For Applicant	Unspecified Personal Conduct	—	Unknown	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant is indebted to this creditor in the approximate amount of $567.00. This past-due debt was written off by the creditor.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Unknown

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

—

2.b

Applicant is indebted to this creditor in the approximate amount of $1,639.00. As of February 2002, this debt was at least 120 days delinquent.

Against Applicant

Pattern of Dishonesty or Rule Violations

Financial

Unknown

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

—

2.c

specific text not stated in this decision

For Applicant

Unspecified Personal Conduct

—

Unknown

—

3.a

Applicant was less than candid with the DSS when discussing his role in this felonious conduct.

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

Criminal Conduct

Unknown

(b) deliberately providing false information to an investigator or official

—

3.b

The Government alleges that on a Security Clearance Application (SCA) he executed on January 30, 2002, applicant lied about his financial history when, in response to both Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" and Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" he stated "no."

For Applicant

Lack of Candor in Interview

Financial

Unknown

—

3.c

specific text not stated in this decision

For Applicant

Unspecified Personal Conduct

—

Unknown

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant is indebted to this creditor in the approximate amount of $567.00. This past-due debt was written off by the creditor. $567	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant is indebted to this creditor in the approximate amount of $1,639.00. As of February 2002, this debt was at least 120 days delinquent. $1,639	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	Applicant is indebted to this creditor in the approximate amount of $1,506.00. This debt is past-due. $1,506	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	Applicant is indebted to this creditor. He claims that this was a judgment debt that he paid. Although Exhibit 8 (at page 1) indicates applicant satisfied a judgment debt to this creditor in 1999, it also indicates (at page 2) that applicant is still indebted to this creditor in the past-due amount of $5,371.00. $5,371	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.g	Applicant was indebted to this creditor in the approximate amount of $103.00. In a June 4, 2002 signed, sworn statement that he gave to the Defense Security Service (DSS), applicant stated that this debt was included in his 1995 bankruptcy. However, the bankruptcy records (Exhibit 9) indicate that applicant reaffirmed this debt in bankruptcy court. This fact, and the fact that a February 2002 credit report (Exhibit 7) indicates that applicant is still indebted to this creditor, leads me to conclude that he is still indebted to this creditor. $103	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.h	Applicant is indebted to this creditor in the amount of $703.00. The debt was placed for collection years ago. $703	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.j	Applicant is indebted to this creditor in the approximate amount of $248.00. This debt is past-due. $248	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.k	Applicant is indebted to this creditor in the approximate amount of $170.00. This debt is past-due. $170	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.l	Applicant is indebted to this creditor in the approximate amount of $161.00. This debt was placed for collection years ago. $161	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
2.a	In 1998, applicant pleaded guilty to Making, Uttering, and Possessing Counterfeit Securities, a felony. He was sentenced to five years of probation, and ordered to pay approximately $60,000.00 in restitution, at the rate of $100.00 per month. Applicant has not made the required restitution payments on a consistent basis. $60,000	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
2.b	As of February 8, 2002, there were four separate arrests warrants out for applicant.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
3.a	The Government alleges that on a Security Clearance Application (SCA) he executed on January 30, 2002, applicant lied about his financial history when, in response to both Question 38, which asked, 'In the last 7 years, have you been over 180 days delinquent on any debt(s)?' and Question 39, which asked, 'Are you currently over 90 days delinquent on any debt(s)?' he stated 'no.'	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
3.b	Applicant's multiple statements in response to these allegations indicate that he (1) really did not recall how he responded to the financial questions on this SCA, and (2) adamantly denied intentionally providing false information. Based on these facts, applicant's SOR responses cannot be deemed admissions that he knowingly falsified his responses to Questions 38 and 39.	For Applicant	Unspecified Financial	Unknown	—	—	—
3.c	Without any other evidence to support these allegations, they are found for applicant.	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant is indebted to this creditor in the approximate amount of $567.00. This past-due debt was written off by the creditor.

$567

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

Applicant is indebted to this creditor in the approximate amount of $1,639.00. As of February 2002, this debt was at least 120 days delinquent.

$1,639

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.d

Applicant is indebted to this creditor in the approximate amount of $1,506.00. This debt is past-due.

$1,506

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.e

Applicant is indebted to this creditor. He claims that this was a judgment debt that he paid. Although Exhibit 8 (at page 1) indicates applicant satisfied a judgment debt to this creditor in 1999, it also indicates (at page 2) that applicant is still indebted to this creditor in the past-due amount of $5,371.00.

$5,371

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.g

Applicant was indebted to this creditor in the approximate amount of $103.00. In a June 4, 2002 signed, sworn statement that he gave to the Defense Security Service (DSS), applicant stated that this debt was included in his 1995 bankruptcy. However, the bankruptcy records (Exhibit 9) indicate that applicant reaffirmed this debt in bankruptcy court. This fact, and the fact that a February 2002 credit report (Exhibit 7) indicates that applicant is still indebted to this creditor, leads me to conclude that he is still indebted to this creditor.

$103

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.h

Applicant is indebted to this creditor in the amount of $703.00. The debt was placed for collection years ago.

$703

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.j

Applicant is indebted to this creditor in the approximate amount of $248.00. This debt is past-due.

$248

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.k

Applicant is indebted to this creditor in the approximate amount of $170.00. This debt is past-due.

$170

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.l

Applicant is indebted to this creditor in the approximate amount of $161.00. This debt was placed for collection years ago.

$161

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

2.a

In 1998, applicant pleaded guilty to Making, Uttering, and Possessing Counterfeit Securities, a felony. He was sentenced to five years of probation, and ordered to pay approximately $60,000.00 in restitution, at the rate of $100.00 per month. Applicant has not made the required restitution payments on a consistent basis.

$60,000

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

2.b

As of February 8, 2002, there were four separate arrests warrants out for applicant.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

3.a

The Government alleges that on a Security Clearance Application (SCA) he executed on January 30, 2002, applicant lied about his financial history when, in response to both Question 38, which asked, 'In the last 7 years, have you been over 180 days delinquent on any debt(s)?' and Question 39, which asked, 'Are you currently over 90 days delinquent on any debt(s)?' he stated 'no.'

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

3.b

Applicant's multiple statements in response to these allegations indicate that he (1) really did not recall how he responded to the financial questions on this SCA, and (2) adamantly denied intentionally providing false information. Based on these facts, applicant's SOR responses cannot be deemed admissions that he knowingly falsified his responses to Questions 38 and 39.

For Applicant

Unspecified Financial

Unknown

—

3.c

Without any other evidence to support these allegations, they are found for applicant.

For Applicant

Unspecified Financial

Unknown

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
1	specific text not stated in this decision	Against Applicant	Unspecified Criminal Conduct	—	Unknown	—	—	—
2.a	In 1998, applicant pleaded guilty to Making, Uttering, and Possessing Counterfeit Securities, a felony. He was sentenced to five years of probation, and ordered to pay approximately $60,000.00 in restitution, at the rate of $100.00 per month. Applicant has not made the required restitution payments on a consistent basis.	Against Applicant	Fraud or Deception Criminal	Convicted	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability	—	—
2.b	As of February 8, 2002, there were four separate arrests warrants out for applicant.	Against Applicant	Unspecified Criminal Conduct	—	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability	—	—
2.c–3.c	5 sub-charges — specific text not stated in this decision (2 against, 3 for the applicant).	Mixed		—		—	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

specific text not stated in this decision

Against Applicant

Unspecified Criminal Conduct

—

Unknown

—

2.a

Against Applicant

Fraud or Deception Criminal

Convicted

Admitted

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

—

2.b

As of February 8, 2002, there were four separate arrests warrants out for applicant.

Against Applicant

Unspecified Criminal Conduct

—

Denied

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

—

2.c–3.c

5 sub-charges — specific text not stated in this decision (2 against, 3 for the applicant).

Mixed

—

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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

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES