ISCR Case 04-12150.h1

Case Headnote

ISCR Case No. 04-12150.h1

deniedAug 31, 2006· Hon. Joseph Testan· hearing

Summary

A 52-year-old defense contractor employee 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 difficulties, including a Chapter 7 bankruptcy in 1995 that discharged $25,200 in debts. Subsequent financial issues arose around 2002, which the applicant attributed to a layoff and his wife's medical problems.

Specific financial concerns included an $8,482 debt to GMAC following a vehicle repossession and a disputed $2,995 T-Mobile debt. While some debts, such as two Capital One accounts and another for approximately $964, were satisfied in October 2005, the applicant still had approximately $11,400 in unresolved debts. Additionally, the applicant issued a "bad" check in 2002, which involved law enforcement, though he stated he later made good on it.

Although some allegations regarding false statements on his security clearance application were found in the applicant's favor due to insufficient evidence of intent or timing, the overall pattern of unresolved financial obligations led to the denial. The decision highlighted the applicant's failure to repay or address the majority of his past-due debts as reflecting adversely on his judgment and reliability.

Why the Applicant Was Denied

Applicant has a history of financial difficulties and is still indebted to two creditors for approximately $11,400.
Applicant's failure to repay or address the majority of his past-due debts reflects adversely on his judgment and reliability.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts

Mitigating

E2.A6.1.3.3appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's Control
E2.A6.1.3.6rejectedThe Individual Has Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsApplicant has not satisfied the two largest debts alleged in the SOR.

Key Rule Quoted

“It is not clearly consistent with the national interest to grant or continue a security clearance for applicant.”

Procedural Posture

SOR issuedOct 27, 2005
Answer filedNov 28, 2005Applicant elected to have his case determined on a written record.
Hearing held—No hearing; case determined on written record.
Decision dateAug 31, 2006

Cite For

Denial Based on Unresolved Financial Obligations Under Guideline F
Application of Mitigating Conditions Related to Financial Difficulties
Consideration of Factors Beyond the Applicant's Control Affecting Financial Status

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	In response to Question 35, applicant denied having any property repossessed during the previous seven years.	For Applicant	Falsification Security Form	—	Denied	—	—	—
2.b	In response to Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" applicant stated "no."	For Applicant	Falsification Security Form	—	Denied	—	—	—
2.c	In response to Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" applicant stated "no."	For Applicant	Falsification Security FormNOT DELIBERATE	—	Denied	—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

In response to Question 35, applicant denied having any property repossessed during the previous seven years.

For Applicant

Falsification Security Form

—

Denied

—

2.b

In response to Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" applicant stated "no."

For Applicant

Falsification Security Form

—

Denied

—

2.c

In response to Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" applicant stated "no."

For Applicant

Falsification Security FormNOT DELIBERATE

—

Denied

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant filed a Chapter 7 bankruptcy petition in 1995. His $25,200.00 in debts were discharged in June 1995. $25,200	Against Applicant	Bankruptcy Filing	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant was indebted to this creditor in the approximate amount of $964.00. The debt had gone delinquent and had been placed for collection sometime prior to October 28, 2002. Applicant satisfied the debt in October 2005. $964	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant issued a "bad" check to a store in 2002. Law enforcement became involved, but the extent of the involvement is unclear. Applicant states he subsequently made good on the check.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	Applicant had two accounts with Capital One, and both went delinquent. Applicant satisfied both debts in October 2005.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	Applicant disputes this $2,995.00 T-Mobile debt. In a February 2004 signed, sworn statement that he gave to the Defense Security Service (DSS), applicant stated that he had a T-Mobil account but that it was current. He then speculated that this may be a former Verizon account that he had previously disputed with Verizon and refused to pay. In his response to the SOR, applicant denied this debt, explaining, "I had reported it lost." Applicant's reference to Verizon is nothing more than speculation, and as such, is not credible evidence. His explanation that he had "reported it lost" is confusing. However, even if it is taken to mean he reported the phone lost and therefore should not have been liable for the debt, this statement does not help applicant. This debt had gone delinquent in or before October 2002; applicant's statement that he "reported it lost," made for the first time three years after the debt had gone delinquent, is not credible. $2,995	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant leased a vehicle from GMAC that was eventually repossessed. Following the repossession, applicant became indebted to GMAC in the amount of $8,482.00. $8,482	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	Applicant had two accounts with Capital One, and both went delinquent. Applicant satisfied both debts in October 2005.	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	Applicant leased a vehicle from GMAC that was eventually repossessed. Following the repossession, applicant became indebted to GMAC in the amount of $8,482.00. $8,482	Against Applicant	Auto Loan Debt	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	In a February 2004 Personal Financial Statement, applicant indicated he had a positive monthly cash flow of $1,847.00. After applicant's bankruptcy discharge in 1995, he apparently had no further financial difficulties until 2002. Applicant blames these subsequent financial difficulties on two factors. In 1999 or 2000, he was laid off, and although he was rehired, his monthly income declined by at least $800.00. Second, his wife experienced severe medical problems in 2003 and was unable to work for about eight months.	Against Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed a Chapter 7 bankruptcy petition in 1995. His $25,200.00 in debts were discharged in June 1995.

$25,200

Against Applicant

Bankruptcy Filing

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant was indebted to this creditor in the approximate amount of $964.00. The debt had gone delinquent and had been placed for collection sometime prior to October 28, 2002. Applicant satisfied the debt in October 2005.

$964

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant issued a "bad" check to a store in 2002. Law enforcement became involved, but the extent of the involvement is unclear. Applicant states he subsequently made good on the check.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

Applicant had two accounts with Capital One, and both went delinquent. Applicant satisfied both debts in October 2005.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

Applicant disputes this $2,995.00 T-Mobile debt. In a February 2004 signed, sworn statement that he gave to the Defense Security Service (DSS), applicant stated that he had a T-Mobil account but that it was current. He then speculated that this may be a former Verizon account that he had previously disputed with Verizon and refused to pay. In his response to the SOR, applicant denied this debt, explaining, "I had reported it lost." Applicant's reference to Verizon is nothing more than speculation, and as such, is not credible evidence. His explanation that he had "reported it lost" is confusing. However, even if it is taken to mean he reported the phone lost and therefore should not have been liable for the debt, this statement does not help applicant. This debt had gone delinquent in or before October 2002; applicant's statement that he "reported it lost," made for the first time three years after the debt had gone delinquent, is not credible.

$2,995

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Applicant leased a vehicle from GMAC that was eventually repossessed. Following the repossession, applicant became indebted to GMAC in the amount of $8,482.00.

$8,482

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

Applicant had two accounts with Capital One, and both went delinquent. Applicant satisfied both debts in October 2005.

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

Applicant leased a vehicle from GMAC that was eventually repossessed. Following the repossession, applicant became indebted to GMAC in the amount of $8,482.00.

$8,482

Against Applicant

Auto Loan Debt

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

In a February 2004 Personal Financial Statement, applicant indicated he had a positive monthly cash flow of $1,847.00. After applicant's bankruptcy discharge in 1995, he apparently had no further financial difficulties until 2002. Applicant blames these subsequent financial difficulties on two factors. In 1999 or 2000, he was laid off, and although he was rehired, his monthly income declined by at least $800.00. Second, his wife experienced severe medical problems in 2003 and was unable to work for about eight months.

Against Applicant

Unspecified Financial

Unknown

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
1.a	Applicant issued a "bad" check to a store in 2002. Law enforcement became involved, but the extent of the involvement is unclear. Applicant states he subsequently made good on the check.	Against Applicant	Unspecified Criminal Conduct	Conduct No Charge	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
1.b–1.i	8 sub-charges — specific text not stated in this decision (for the applicant). (low confidence)	For Applicant		—		—	—	—
2.a	In response to Question 35, applicant denied having any property repossessed during the previous seven years. The Government alleges this response was false because his GMAC financed vehicle had been repossessed. Since it is unclear from the evidence if the vehicle was repossessed before or after applicant completed the SCA, this allegation is found for applicant. (low confidence)	For Applicant	Unspecified Criminal Conduct	—	Unknown	—	—	—
2.b	In response to Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" applicant stated "no." Applicant denies that his responses were false. There is no definitive evidence that applicant had been over 180 days delinquent on any debt during the seven years prior to his completion of the SCA. Accordingly, SOR Allegation 2b is found for applicant. (low confidence)	For Applicant	Unspecified Criminal Conduct	—	Unknown	—	—	—
2.c	In response to Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" applicant stated "no." Applicant denies that his responses were false. Although it is unclear from the evidence if his debts to Fingerhut (SOR Allegation 1b) and T-Mobil (SOR Allegation 1e) were over 90 days delinquent when he completed the SCA, the evidence establishes that one of his debts to Capital One was more than 90 days delinquent when he completed the SCA. Accordingly, the proper response to Question 39 was "yes." However, based on the evidence in the record, I cannot conclude that applicant knew that one of the Capital One debts was more than 90 days delinquent when he completed the SCA. Accordingly, the evidence does not support a finding that applicant intentionally provided the false response to Question 39. (low confidence)	For Applicant	Unspecified Criminal Conduct	—	Unknown	—	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

1.a

Applicant issued a "bad" check to a store in 2002. Law enforcement became involved, but the extent of the involvement is unclear. Applicant states he subsequently made good on the check.

Against Applicant

Unspecified Criminal Conduct

Conduct No Charge

Denied

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

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

—

1.b–1.i

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

For Applicant

—

2.a

In response to Question 35, applicant denied having any property repossessed during the previous seven years. The Government alleges this response was false because his GMAC financed vehicle had been repossessed. Since it is unclear from the evidence if the vehicle was repossessed before or after applicant completed the SCA, this allegation is found for applicant. (low confidence)

For Applicant

Unspecified Criminal Conduct

—

Unknown

—

2.b

In response to Question 38, which asked, "In the last 7 years, have you been over 180 days delinquent on any debt(s)?" applicant stated "no." Applicant denies that his responses were false. There is no definitive evidence that applicant had been over 180 days delinquent on any debt during the seven years prior to his completion of the SCA. Accordingly, SOR Allegation 2b is found for applicant. (low confidence)

For Applicant

Unspecified Criminal Conduct

—

Unknown

—

2.c

In response to Question 39, which asked, "Are you currently over 90 days delinquent on any debt(s)?" applicant stated "no." Applicant denies that his responses were false. Although it is unclear from the evidence if his debts to Fingerhut (SOR Allegation 1b) and T-Mobil (SOR Allegation 1e) were over 90 days delinquent when he completed the SCA, the evidence establishes that one of his debts to Capital One was more than 90 days delinquent when he completed the SCA. Accordingly, the proper response to Question 39 was "yes." However, based on the evidence in the record, I cannot conclude that applicant knew that one of the Capital One debts was more than 90 days delinquent when he completed the SCA. Accordingly, the evidence does not support a finding that applicant intentionally provided the false response to Question 39. (low confidence)

For Applicant

Unspecified Criminal Conduct

—

Unknown

—

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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