KEYWORD: Financial; Personal Conduct; Criminal Conduct
DIGEST: Applicant is a 63-year-old chief financial officer and partner with a business that contracts
with the federal government. He had a series of financial problems that arose in 1999-2000. He
accumulated over $100,000 of delinquent debts that remain unpaid. He decided to stop paying some
of his debts. He intentionally failed to list, on his security clearance application, that he had any debts
in the past seven years that were over 180 days delinquent. Applicant failed to mitigate the security
concerns raised under Guideline F, financial considerations, Guideline E, personal conduct, and
Guideline J, criminal conduct. Clearance is denied. 
CASENO: 06-21218.h1
DATE: 04/30/2007
DATE:  April 30, 2007
In re:
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SSN: -----------
Applicant for Security Clearance
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ISCR Case No. 06-21218
DECISION OF ADMINISTRATIVE JUDGE
CAROL G. RICCIARDELLO
APPEARANCES
FOR GOVERNMENT
Braden Murphy, Esq., Department Counsel
FOR APPLICANT
Dan Hargrove, Esq.
SYNOPSIS
2
Applicant is a 63-year-old chief financial officer and partner with a business that contracts
with the federal government. He had a series of financial problems that arose in 1999-2000. He
accumulated over $100,000 of delinquent debts that remain unpaid. He decided to stop paying some
of his debts. He intentionally failed to list, on his security clearance application, that he had any debts
in the past seven years that were over 180 days delinquent. Applicant failed to mitigate the security
concerns raised under Guideline F, financial considerations, Guideline E, personal conduct, and
Guideline J, criminal conduct. Clearance is denied.
STATEMENT OF THE CASE
The Defense Office of Hearings and Appeals (DOHA) declined to grant or continue a
security clearance for Applicant. As required by Department of Defense Directive 5220.6 ¶ E3.1.2
(Jan. 2, 1992), as amended, DOHA issued a Statement of Reasons (SOR) on November 1, 2006,
detailing the basis for its decision–security concerns raised under Guideline F (Financial
Considerations), Guideline E (Personal Conduct), and Guideline J (Criminal Conduct) of the revised
Adjudicative Guidelines (AG) issued on December 29, 2005, and implemented by the Department
of Defense effective September 1, 2006. The revised guidelines were provided to Applicant when
the SOR was issued. Applicant answered the SOR in writing on November 29, 2006, and elected to
have a hearing before an administrative judge. The case was assigned to me on January 18, 2007.
With the consent of the parties, I convened a hearing on March 20, 2007, to consider whether it is
clearly consistent with the national interest to grant or continue a security clearance for Applicant.
Department Counsel moved to amend the SOR to reflect the correct dollar amount in ¶ 1.l. There
being no objection, the amount was changed to reflect $8,230. The Government offered three
exhibits that were marked as GE 1-3 and admitted without objection. Applicant testified on his
behalf, had one witness testify, and offered twelve exhibits that were marked as AE A-L and were
admitted without objection. DOHA received the hearing transcript (Tr.) on March 30, 2007.
FINDINGS OF FACT
Applicant’s admissions to the allegations in the SOR are incorporated herein. In addition,
after a thorough and careful review of the pleadings, exhibits, and testimony, I make the following
findings of fact.
Applicant is 63 years old and the chief financial officer and partner, along with two other
partners for a business with approximately 27-30 employees. The three partners have been in
business together since 1987. The business contracts with commercial entities and the federal
government as resellers of high technology. Applicant and his partners hold top secret clearances.
Applicant has held his clearance since approximately 1997. Applicant is responsible for the
accounting and financial aspects of the business, including producing monthly and annual financial
statements, liasioning with banks to obtain and repay loans, and initiating large lines of credit with
AE A Affidavit from partner, sworn.1
Id.2
Tr. 68. 3
Tr. 66-81.4
AE F.5
Tr. 79-85; AE E and G. I have not considered Applicant’s debt to the IRS for disqualifying purposes, but have6
considered it when analyzing the whole person.
3
banks to maintain the company’s buying ability.  He is considered by his partners to be an expert in1
finances and handles his responsibilities in an honest and trustworthy manner and is accountable for
all of the business’ finances. His partners believe he has a keen sense of attention to detail and his
handling of the company’s finances is beyond reproach.2
In May 1998 Applicant married. His wife had two daughters from a previous marriage.
Applicant owned a home at the time, but purchased a different one so his stepdaughters could
continue to attend the same school they had previously. He leased his original home (House C) and
lived in House (T) with his family. Due to his wife’s mental problems the marriage ended in
September 1999. Applicant was ordered to support his ex-wife until the end of 1999, and allow her
to remain in House T until then. As an act of benevolence he continued to provide her support until
sometime in 2001. This included paying for living expenses, a car, and tuition for the stepdaughters’
education. 3
Sometime in 1998 Applicant acquired stock from another company in an exchange for other
stocks. He took the stock and deposited it in two different brokerage firms. There was a waiting
period before he could sell the stock. He used the stock as collateral on two margin loans. One
margin loan was for $150,000 based on the value of the stock at $416,917. The second margin loan
was for $300,000, based on stock value of approximately $780,000. A margin loan carries significant
risk in the event the stock falls below a certain value. The stock market is unpredictable. It is
commonly understood that the greater the risks, the greater the potential, but not guaranteed,
rewards. Applicant assumed this risk when he secured a margin loan. Although Applicant believed
it was unlikely that the stock would fall below margin, it was not totally unforeseeable. It was merely
a risk he was willing to take because of the greater rewards. Unfortunately for Applicant, the stock
fell below a predetermined threshold and there was a margin call. It resulted in the stock being sold
and it created a tax liability of more than approximately $100,000 for Applicant.  In addition, when4
Applicant borrowed $450,000 on margin, he took the money and lent it to a business acquaintance
because he believed he could yield a higher interest rate. The loan was unsecured and had no
collateral. Applicant believed he could make more money with the loan. The acquaintance
subsequently went bankrupt and Applicant lost the $450,000.  5
Applicant worked out a repayment plan with the Internal Revenue Service to pay the tax debt.
He refinanced his two houses and since tax years 1999 and 2000, he has been consistently repaying
his tax debts and has approximately $9,000 remaining to be paid for penalties and interest.  6
Tr. 88-98; AE K.7
AE I; These are the amounts that Applicant lists as his “actual” income. He lists his total income for 1999 as8
$272,771; 2000 as $299,595; 2001 as $52,837; 2002 as $50,178; 2003 as $109.990; 2004 as $224,963; 2005 $360,608.
Tr. 98.9
Tr. 98.10
Tr. 98. 11
Tr. 99; AE J.12
Tr. 174.13
4
Applicant continued to own two houses until December 2006, when he sold one of his
houses. He lived in House C beginning in 2000. He had attempted to sell House C in 2003 and again
in 2005, but it was in need of repair and the housing market was in a downturn, so he was unable to
sell the house. He did repairs on the house and it eventually sold in December 2006. Applicant paid
more than $16,000 to close on the house.  The monthly mortgage payments on the two houses were7
approximately $6,000.
Applicant and his business partners decided to pursue a new business venture in 2001. The
venture did not prove to be profitable and the partners’ income dropped. In 1999, Applicant listed
his adjusted income as $185,000. It dropped to $68,000 in 2000; $43,000 in 2001; $40,000 in 2002;
and then started to rise to $81,000 in 2003; $187,000 in 2004; and $325,000 in 2005.  When8
Applicant’s income went down he began using credit cards to maintain his expenses.  He claimed9
he could not afford his expenses because of the decrease in his salary.  The delinquent credit cards10
and other debts listed in the SOR are in excess of $104,000. Applicant disputes some of the amounts.
Applicant contacted some of the credit card companies in 1999 to negotiate lower payments
and they refused.  Applicant contracted with a credit consolidation service in October 2003 to work11
out a monthly repayment payment.  He was to pay $1,357 a month and it would be disbursed to12
seven creditors. He made four to six payments and then stopped because he stated he could not
afford the payments.  He continued to pay the mortgages on the two homes he owned. He spoke13
with a bankruptcy attorney in approximately 2002-2003, who advised him not to file bankruptcy.
Applicant stated the attorney advised him to not pay the credit cards with the highest balances. Some
of the delinquent credit card debts that Applicant owes have been charged off by the creditors. Some
of the debts were referred to collection agencies. In addition, Applicant stated he maintains other
credit cards that are not delinquent and pays them regularly. 
Applicant assumed financial responsibility for his girlfriend in 2001. He pays $400 a month
on a lease for a car for her. He pays for her gas, groceries, cell phone, insurance and all living
expenses. She contributes $1,000 annually to the household and expends $1,000 in supplies for her
art business. In addition, he has spent approximately $50,000 over two to three years to repair House
Tr. 176.14
Tr. 175.15
Tr. 134-137.16
Tr. 138.17
Tr. 137-138.18
Tr, 139.19
Tr. 140; GE 2 at 2.20
Tr. 10; GE 3 p 11.21
Tr. 143; GE 3 p. 4.22
Id.23
Tr. 143.24
5
C.  He has approximately $30,000 in savings he is holding in reserve to pay his taxes.  He also has14 15
approximately $70,000 in a 401k plan. He estimated his monthly expenses are approximately $5,000.
Applicant admits he owes the credit card debt in SOR 1.a, but disputes the amount, believing
he owes $22,099. The debt was charged off and Applicant has not paid it. He stated he is not paying
this debt because of insufficient funds.16
The debt in SOR 1. b is a credit card debt referred to collection November 2003. He believes
this debt is a duplication of 1. i. He has made no effort to repay it.  17
The debts in SOR 1. c and 1.d are both credit card debts that Applicant has elected not to
pay.  SOR 1.d is a $256 delinquent debt referred to a collection agency that remains unpaid.18
Applicant has not contacted the creditor to inquire about information concerning the debt or resolve
it.  19
SOR 1.f is a medical debt of $364. Applicant denies the debt because he has no information
as to the identity of the creditor. He has not taken any action to find out who the creditor is and if it
is a legitimate debt.  SOR debt 1.g is another debt that Applicant does not recognize, but has made20
no attempt to contact the creditor and resolve it.  This account was opened in April 2004. 21
SOR debt 1.h is a debt for $60 and the creditor has a local address.  Applicant stated he did22
not recognize the creditor and has not made contact to resolve it.  This debt was referred to23
collection in April 2004. SOR debt 1.i is a credit card debt charged off in May 2004 for $17,064.
Applicant stated he believed it is the same debt as SOR 1. b. He did not provide specific verification
to support his claim and has not done anything to pay the debt or contest its duplication.  24
GE 3 at 3.25
Tr. 144.26
GE 3 p.2.27
Tr. 145.28
Tr. 145.29
Tr. 146-147.30
GE 2; Tr. 147.31
Tr. 147-149.32
Tr. 172.33
Tr. 142.34
Tr. 17035
6
SOR debt 1. j is a debt for $400 to a local creditor.  Applicant stated he does not know who25
the creditor is. He has not done anything to resolve the debt.  It was sent to collection in June 2004.26
SOR debt 1. k is for $425 for an account referred for collection in July 2004.  Applicant stated he27
does not know who the creditor is and has done nothing to research or resolve the debt.  28
Applicant denies the debt in SOR 1.l because he cannot recall the account. It is a credit card
debt for $8,230 that was charged off in August 2004.  Applicant admits the debt in SOR 1.m. It is29
a credit card debt for $10,224 that was sent to collection in October 2004. He has not contacted the
creditor or done anything to resolve the debt.  30
Applicant does not know the medical creditor in SOR 1.n. He did not recall if he received
medical services. The amount owed is $175. Applicant has not paid it or attempted to resolve it.31
The debt in SOR 1.o is for satellite television service. Applicant contracted with the service
through a promotional offer. He later canceled the service and disputed the amount of $390 owed.32
He has not paid or resolved the debt. 
Applicant has not paid any of the debts owed in SOR 1.a-1.o. Some of the debts are charged
off and some remain in a collection status. Applicant stated he has not spent the time to find out what
the debts were incurred for.  Applicant has not contacted any of the creditors on the SOR since 199933
when he attempted to negotiate lower payment options with certain creditors.  He stated he intended34
to contact the creditors and work out payment plans, but has not done anything yet.35
Applicant completed and swore to his security clearance application renewal on January 12,
2005. Question 38 asked: Your Financial Delinquencies-180 Days, In the last 7 years, have you been
over 180 days delinquent on any debt(s)? Applicant responded “No.” Question 39 asked: Your
Financial Delinquencies-90 days, Are you currently over 90 days delinquent on any debt(s)?
Applicant answered “No.” Applicant stated the reason he did not state he had delinquent debts over
Tr. 155.36
Id.37
Tr. 157.38
Tr. 158.39
Tr. 164.40
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).41
Id. at 527.42
Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960). 43
ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002).44
7
180 days was because “I had talked to counsel, and they indicated that anything that had been
dismissed was not considered past due.”  He interpreted “dismissed” to mean “written off” or36
“charged off.”  Applicant stated he had sought this attorney’s advice regarding filing bankruptcy37
in 2002-2003. When asked if the attorney had told him that he did not have to list any of his debts
on his security clearance application or if Applicant discussed his responses to his security clearance
application with him, Applicant’s response was, “No, we didn’t talk specifically about this.”  He38
further stated, “It wasn’t in regard to the security clearance. It was just in general with creditors.” He
further stated: “We didn’t talk about [the] security application. I just asked him if a debt had been
charged off, was it considered past due.” Applicant never sought advice on how to answer questions
on his security clearance application.  He stated he made a mistake in not putting his debts on his39
security clearance application. Applicant did not write any explanation or clarification in Question
43, which asks: General Remarks-Do you have any additional remarks to enter in y our application?
He did not notify the government that he failed to list his delinquencies prior to being confronted by
a government investigator.  Based on the entire record of evidence, testimony and observation, I40
find Applicant was not credible and he deliberately and intentionally failed to list his delinquent
debts. 
POLICIES
“[N]o one has a ‘right’ to a security clearance.”  As Commander in Chief, the President has41
“the authority to . . . control access to information bearing on national security and to determine
whether an individual is sufficiently trustworthy to occupy a position . . . that will give that person
access to such information.”  The President authorized the Secretary of Defense or his designee to42
grant applicants eligibility for access to classified information “only upon a finding that it is clearly
consistent with the national interest to do so.”  An applicant “has the ultimate burden of43
demonstrating that it is clearly consistent with the national interest to grant or continue his security
clearance.”  “The clearly consistent standard indicates that security clearance determinations should44
Id.45
Id.; Directive, Enclosure 2, ¶ E2.2.2.46
Executive Order 10865 § 7.47
See Exec. Or. 10865 § 7.48
8
err, if they must, on the side of denials.”  Any reasonable doubt about whether an applicant should45
be allowed access to sensitive information must be resolved in favor of protecting such sensitive
information.  The decision to deny an individual a security clearance is not necessarily a46
determination as to the loyalty of an applicant.  It is merely an indication that the applicant has not47
met the strict guidelines the President and the Secretary of Defense have established for issuing a
clearance.48
The revised Adjudicative Guidelines set forth potentially disqualifying conditions (DC) and
mitigating conditions (MC) under each guideline. In evaluating the security worthiness of an
applicant, the administrative judge must also assess the adjudicative process factors listed in ¶ 6.3
of the Directive to be considered in evaluating a person’s eligibility to hold a security clearance.
Additionally, each security clearance decision must be a fair and impartial commonsense decision
based on the relevant and material facts and circumstances, the whole-person concept, along with
the factors listed in the Directive. Specifically these are: (1) the nature and seriousness of the conduct
and surrounding circumstances; (2) the frequency and recency of the conduct; (3) the age of the
applicant; (4) the motivation of the applicant, and the extent to which the conduct was negligent,
willful, voluntary, or undertaken with knowledge of the consequences; (5) the absence or presence
of rehabilitation; and (6) the probability that the circumstances or conduct will continue or recur in
the future. Although the presence or absence of a particular condition or factor for or against
clearance is not outcome determinative, the revised adjudicative guidelines should be followed
whenever a case can be measured against this policy guidance.
Based upon consideration of the evidence, I find the following adjudicative guidelines most
pertinent to the evaluation of the facts in this case:
Guideline F-Financial Considerations are a concern because failure or inability to live within
one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of
judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about
an individual’s reliability, trustworthiness and ability to protect classified information. An individual
who is financially overextended is at risk of having to engage in illegal acts to generate funds.
Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence
that cannot be explained by known sources of income is also a security concern. It may indicate
proceeds from financially profitable criminal acts.
Guideline E-Personal Conduct is a concern because conduct involving questionable
judgment, lack of candor, dishonest, or unwillingness to comply with rules and regulations can raise
questions about an individual’s reliability, trustworthiness and ability to protect classified
information. Of special interest is any failure to provide truthful and candid answers during the
security clearance process or any other failure to cooperate with the security clearance process.
9
Guideline J-Criminal Conduct is a security concern because criminal activity creates doubt
about a person’s judgment, reliability, and trustworthiness. By its very nature, it calls into question
a person’s ability or willingness to comply with laws, rules and regulations. 
Conditions that could raise a security concern and may be disqualifying, as well as those
which would mitigate security concerns, pertaining to the adjudicative guidelines are set forth and
discussed in the conclusions below.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards discussed above.
I reach the following conclusions regarding the allegations in the SOR.
Based on all the evidence, Financial Considerations Disqualifying Condition (FC DC) 19 (a)
(inability or unwillingness to satisfy debts) and FC DC 19 (c) (a history of not meeting financial
obligations), apply in this case. Applicant has more than $104,000 in delinquent credit cards and
other debts that he has not paid. He made a decision that he would not pay his large credit card debts.
The debts are charged off or in collection. He admits he owes most of the debts and has not made
payments on the debts. Those debts that he stated he was unaware of, whom the creditor was, or
what the debt was incurred for, he has not taken action to contact or research the debt to resolve it.
Many of his debts date back to 1999 through 2005. For a period of time Applicant may have been
unable to pay some of his debts, but based on all of the facts he is also unwilling to pay his debts and
has established a history of financial delinquency. 
I have considered all the Financial Considerations Mitigating Conditions (FC MC), and
especially considered FC MC 20 (a) (the behavior happened so long ago, was so infrequent, or
occurred under such circumstances that it is unlikely to recur and does not cast doubt on the
individual’s current reliability, trustworthiness, or good judgment), FC MC 20 (b) (the conditions
that resulted in the financial problem were largely beyond the person’s control (e.g., loss of
employment, a business downturn, unexpected medical emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances), FC MC 20 (c) (the
person received or is receiving counseling for the problem and/or there are clear indications that
the problem is being resolved or is under control), FC MC 20 (d) (the individual initiated a good-
faith effort to repay overdue creditors or otherwise resolve debts), FC MC 20 (e) (the individual has
a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem
and provides documented proof to substantiate the basis of the dispute or provides evidence of
actions to resolve the issue).
Applicant’s many delinquent debts are recent because they remain unpaid. Applicant went
through a period of financial crisis. He took out two large margin loans. The loans involved risk.
When the stocks went below margin and were sold, he had a significant tax liability. He lent a large
amount of money without any collateral in an unsecured loan. Both actions were risky financial
decisions made by Applicant, who is an astute businessman with a great deal of experience, as the
chief financial officer of a business. Although he had hoped to make money from his decisions, he
did not. Applicant did not have control over the financial markets and the acquaintance who
defaulted on a large loan, but he did have control over the risk he was willing to take to reap greater
rewards. Applicant did not have control over his divorce that caused additional financial problems.
He also did not have total control over the decision he and his partners made to pursue additional
10
opportunities that then failed and reduced his income for a period of time. Applicant did have control
over how he handled his personal finances during his financial problems. He made certain financial
choices in what to do about the two houses he owned. Because the housing market was weak, he kept
both houses and continued to make the payments on them. However, he decided to live off of credit
cards during this period. He failed to pay those credit cards listed in the SOR. His salary has
increased steadily since 2004, but he has not made an attempt to pay back the creditors in the SOR,
despite acknowledging he owes most of the debts. I find the debts are recent and unresolved and that
his lack of action to repay his creditors cast doubt about his judgment, reliability and trustworthiness.
Therefore FC MC 20 (a) does not apply. 
I have considered all of the financial issues that occurred that affected Applicant, including
all of those mentioned in the findings of fact and conclusions. I find that some of the conditions that
resulted in Applicant’s financial turmoil were beyond his control. I also find he did act responsibly
in setting up a payment plan for his tax liability and helping his ex-wife. I find he did not act
irresponsibly in his business’ decision to expand in a market that did not prove profitable. However,
I also find he did not act responsibly by living off of numerous credit cards and not making an effort
to repay them. He deliberately chose to not pay his credit cards and other bills that continue to
remain delinquent. He continues to maintain other credit cards, but has not made an effort to resolve
those debts listed on the SOR. He does not dispute most of them, but has not paid them. His salary
is at a level that he could make some payments. He pays for a car, insurance, subsistence and other
living expenses that are not reimbursed for his friend, but is unwilling to pay even the smallest of
the debts listed in the SOR. Therefore I find FC MC 20 (b) does not apply.
Applicant sought bankruptcy advice and started a credit repayment program, but failed to
continue the monthly payment plan. He has not made a good faith effort to repay his creditors nor
is there clear indications that the problem is being resolved. Applicant’s finances have improved, and
although he claimed he intended to resolve his debts, he has not shown a clear indication or action
to do so. I find FC MC 20 (c) and (d) do not apply.
Applicant disputes the amount of certain debts listed in the SOR and denies others. However,
he has not substantiated his claims. In 1999 he contacted some of the creditors to see if he could
negotiate lower payments. This was not a satisfactory plan to the creditors and since then Applicant
has not attempted any other resolution. I find FC MC 20 (e) does not apply. 
Based on all the evidence, Personal Conduct Disqualifying Condition (PC DC) 16 (a)
(deliberate omission, concealment, or falsification of relevant facts from any personnel security
questionnaire, personal history statement, or similar form used to conduct investigations, determine
employment qualifications, award benefits or status, determine security clearance eligibility or
trustworthiness, or award fiduciary responsibilities) applies. Applicant intentionally failed to list
he had delinquent debts over 180 days on his security clearance application. Applicant had been
going through a severe financial crisis since 1999. He admitted he was living off of credit cards. He
is familiar with the security clearance application and its purpose. Although he stated he spoke to
a bankruptcy attorney about listing charged off debts as it pertained to bankruptcy, it is simply not
credible that he believed he did not have to divulge any of his financial problems on his security
clearance application. Some of Applicant’s debts were not charged off, but were in collection.
Applicant is an astute savvy businessman with years of financial experience. The question is quite
clear: “In the last 7 years have you been over 180 days delinquent on any debt(s)?” Applicant’s
ISCR Case No. 01-06870, 2002 WL 32114535 (App. Bd. Sep. 13, 2002). 49
11
explanation for not listing his debts is simply not believable. Information is material if it would affect
a final agency decision or, if incorrect, would impede a thorough and complete investigation of an
applicant’s background.  An applicant’s financial history is a matter that could affect a final agency49
decision on whether to grant the applicant a clearance, and an applicant’s failure to disclose the
information would impede a thorough investigation of his background. At the time he completed the
security clearance application  Applicant was aware of his delinquent debts and that he was required
to list them, yet he deliberately failed to do so. Hence, the above disqualifying condition applies.
I have considered all of the Personal Conduct Mitigating Conditions (PC MC ) and especially
considered PC MC 17 (a) (the individual made prompt, good faith efforts to correct the omission,
concealment, or falsification before being confronted with the facts) and PC MC 17 (e) (the
individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation
or duress). There is no evidence to support any effort by Applicant to correct the falsifications before
being confronted with the facts. Applicant’s answers on his application regarding his debts were
deliberate falsifications with the intent to mislead. Applicant has not provided any information of
positive steps he has taken to reduce his vulnerability to exploitation, manipulation or duress. I find
PC MC 17 (a) and (e) do not apply.
Based on all the evidence, Criminal Conduct Disqualifying Condition (CC DC) 31(a) (a
single serious crime or multiple lesser offenses) and 31 (b) (allegations or admissions of criminal
conduct, regardless of whether the person was formally charged, formally prosecuted or convicted),
apply. Applicant intentionally and deliberately lied on his security clearance application, a felony
violation under Title 18 U.S.C.§ 1001.
I have considered all the mitigating conditions and especially considered Criminal Conduct
Mitigating Condition (CC MC) 32 (a) (so much time has elapsed since the criminal behavior
happened, or it happened under such unusual circumstances that it is unlikely to recur and does not
cast doubt on the individual’s reliability, trustworthiness, or good judgment), and CC MC 32 (d)
(there is evidence of successful rehabilitation; including but not limited to the passage of time
without recurrence of criminal activity, remorse or restitution, job training or higher education,
good employment record, or constructive community involvement). Applicant’s falsification of his
security clearance application casts doubt about his reliability, trustworthiness and good judgment.
His falsifications on an application to consider his trustworthiness to protect our nation’s secrets are
troubling. He had an opportunity to reflect on his falsifications before being interviewed and come
forward to correct them, but he did not. His actions cast doubt on his reliability, trustworthiness and
good judgment. I find there is insufficient evidence of successful rehabilitation. Therefore, I find CC
MC 32 (a) and (d) do not apply. 
Whole Person Analysis
In all adjudications, the protection of our national security is the paramount concern. The
objective of the security-clearance process is the fair-minded, commonsense assessment of a person’s
life to make an affirmative determination that the person is eligible for a security clearance. Indeed,
the adjudicative process is a careful weighing of a number of variables in considering the “whole
12
person” concept. It recognizes that we should view a person by the totality of their acts, omissions,
motivations and other variables. Each case must be adjudged on its own merits, taking into
consideration all relevant circumstances, and applying sound judgment, mature thinking, and careful
analysis.
I considered the whole person in evaluating the case. I considered Applicant’s credibility,
demeanor and responsiveness when testifying. I reviewed and considered the documentary evidence.
I also considered Applicant’s extensive financial experience and background, and ability to make
important decisions. Applicant had a series of financial crises occur that were unfortunate. Some
were because of risks he assumed and some he did not have control over. However, Applicant also
made choices regarding his finances and living expenses. He knew of his financial problems and
discussed them in great detail, but he also knew he was responsible for divulging them on his
security clearance application and intentionally did not. His explanation for why he did not was not
believable. He has made no effort to repay the debts listed in the SOR. 
After weighing the disqualifying and mitigating conditions and evaluating all the evidence
in the context of the whole person, I conclude Applicant has failed to mitigate the security concerns
based on his financial considerations, personal conduct and criminal conduct.
FORMAL FINDINGS
The following are my conclusions as to each allegation in the SOR:
Paragraph 1. Guideline F: AGAINST APPLICANT
Subparagraph 1.a:-1.p: Against Applicant
Paragraph 2. Guideline E: AGAINST APPLICANT
Subparagraph 2.a: Against Applicant
Subparagraph 2.b: Against Applicant
Paragraph 3. Guideline J: AGAINST APPLICANT
Subparagraph 3.a: Against Applicant
DECISION
In light of all of the circumstances in this case, it is not clearly consistent with the national
interest to grant or continue a security clearance for Applicant. Clearance is denied.
Carol G. Ricciardello
Administrative Judge