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    DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
  
  
 
 
In the matter of: ) 
 ) 
  )  ISCR Case No. 12-01701 
 ) 
Applicant for Security Clearance ) 
 
 
Appearances 
 
For Government: Candace L. Garcia, Esq., Department Counsel 
For Applicant: Pro se 
 
 
 
 
______________ 
 
Decision 
______________ 
 
 
HEINY, Claude R., Administrative Judge: 
 
Applicant contests the Department of Defense’s (DoD) intent to deny her 
eligibility for a security clearance to work in the defense industry. Applicant was the 
victim of a Ponzi-type scheme. She has mitigated the financial considerations security 
concerns. Clearance is granted.  
 
History of the Case 
 
 Acting under the relevant Executive Order and DoD Directive,1 on November 14, 
2012, the DoD issued an SOR detailing security concerns. DoD adjudicators could not 
find that it is clearly consistent with the national interest to grant or continue Applicant’s 
security clearance. On December 21, 2012, Applicant answered the SOR and 
requested a hearing. On April 5, 2013, I was assigned the case. On April 22, 2013, the 
                                                          
1 Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as 
amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program 
(January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DoD 
on September 1, 2006. 
 
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Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing for the 
hearing convened on May 3, 2013. I admitted Government’s Exhibits (Ex) 1 through 9 
and Applicant’s Exhibits A1 through A11, without objection. Applicant testified at the 
hearing. The record was held open to allow Applicant to submit additional information. 
Additional materials (Ex. B through G) were submitted and admitted into the record 
without objection. On May 10, 2013, DOHA received the hearing transcript (Tr.). 
 
Findings of Fact 
 
 In Applicant’s Answer to the SOR, she admitted the factual allegations in the 
SOR, and her admissions are incorporated herein. After a thorough review of the 
pleadings, exhibits, and testimony, I make the following additional findings of fact: 
 
 Applicant is a 42-year-old quality inspection manager who has worked for a 
defense contractor since October 2000, and seeks to maintain a security clearance. (Tr. 
19) Applicant’s coworkers, supervisors, and friends state Applicant is hard-working, 
intelligent, dedicated, compassionate, honest, and trustworthy. (Ex. A9) She is well 
respected, has a strong work ethic, is a mentor, and an invaluable member of the 
company. (Ex. A9) Her performance summaries describes her overall work performance 
as “Far Exceeds Requirements” and indicates she has “High Potential.” (Ex. A11, Tr. 
86) 
 
 Applicant and her husband became involved with an investment firm that was 
involved in a $142 million mortgage and securities fraud that bilked funds from more 
than 800 victims. (Ex. D, Ex. 6) The SOR lists three mortgage loans of concern. 
Applicant was 90 days or more past due on the first and second mortgage on her home 
and she was $26,000 past due on an investment property when it went to foreclosure.  
 
 Part of the investment firm’s services was to purchase real estate, sell it to 
investors, and then secure renters for the property. The investment firm claimed to have 
long lists of renters waiting to move into the properties. The investment firm, in collusion 
with sellers, would purchase property at inflated prices and sell them to investors. 
Investment home values were inflated by 20% to 30%. (Ex. 6) The real estate 
appraisers who inflated the homes’ value would be paid a larger than normal fee, 
sometimes ten times the normal fee, for the inflated appraisal. (Ex. 6)  
 
 As an example, the investment firm would find a house selling for $500,000 that 
could appraise at $600,000. The investment firm would then approach the homeowner, 
purchase the home, pay the seller a fee2 for services, and keep the difference in sales 
price when the investment firm sold the property to one of their investors at the inflated 
price. (Ex. D) The investment firm would later refinance the homes and keep the 
proceeds from second trust deed loans to be invested in the management firm. (Ex. 6)  
 
                                                          
2 This kickback to the seller of the home at an inflated price would appear in the escrow documents as a 
“commission.” (Ex. 6) 
 
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 The investment firm started obtaining investors in 2003 and was run by a 
professional scam artist accustomed to making false representations. (Ex. 6) In the 
spring of 2006, Applicant and her husband attended a seminar by the investment firm. 
(SOR Answer) Prior to investing, Applicant researched the investment firm. (Tr. 22) 
However, the investment firm used the name of, but was not associated with, a 
reputable, legitimate investment company. (Ex. 6) In December 2006, the legitimate 
wealth management firm brought suit for trademark infringement and unfair business 
practices against the investment firm. (Ex. A2) In July 2007, a class action was brought 
against the owners and managers of the fraudulent investment firm for unfair business 
practices, investment fraud, and fraudulent conveyance. (Ex. 6) In September 2007, a 
Corporation Commission brought a cease-and-desist action against the firm. (Ex. A1) 
The civil suits were on hold pending the outcome of the federal and state criminal 
actions. (Tr. 44)  
 
 In January 2011, the mastermind entered into plea bargain agreeing to a prison 
sentence of 19 years and 8 months. The firm’s chief lieutenant also entered into a plea 
agreement agreeing to six years in prison. (Ex. A8) In November 2009, the state filed 
criminal charges against other employees of the fraudulent investment firm. The trial 
stated in November 2012 on charges of grand theft, illegally selling securities and 
commodities, providing false information, and destruction of evidence during a federal 
probe. (Ex. H) One employee was convicted of 304 felony charges and another was 
convicted of 54 felony charges. Additional company employees were found guilty of 
felonies and received probation. The company’s assets were frozen, but Applicant has 
not received any compensation from those assets. (Tr. 27, 45) 
 
 In October 2006, Applicant submitted a loan application on the investment house 
to be purchased through the fraudulent investment firm. (Tr. 89) The house went to 
closing three months later in January 2007. (Ex. C, Tr. 43, Tr. 89) She later discovered 
the documents she signed and submitted on the loan applicant and the information 
submitted to the underwriter for approval were not the same. (Tr. 80) The investment 
firm’s employees changed the documents and provided false information when the loan 
application was submitted. (Tr. 49) Months later, when she was able to review the 
submitted documents, she discovered her income was reported to be $17,000 a month, 
which was untrue. (Tr. 81) At the time she signed the closing documents, she was told 
the monthly mortgage payment would be $1,250, which would be offset by the amount 
of rent received. (Tr. 81, 82) The investment company told her they already had a renter 
waiting to occupy the property who had signed a 12-month lease supposedly paying 
$1,500 monthly. (Tr. 82) When she received her monthly mortgage payment letter, the 
amount of the monthly payment was $3,800. (Tr. 37, 83)  
 
 Unknown to Applicant, the seller was an employee of the investment firm and 
had purchased the property for $424,900 and sold it to her through the firm for $569,000 
with a $455,000 mortgage. (Ex. C, Tr. 43) In February 2007, Applicant learned of the 
lawsuits filed against the investment firm and retained the services of the attorney who 
had filed a class action suit against the investment firm. (SOR Answer, Ex 6) The 
property was $26,000 past due when it went to foreclosure later the same year. (Tr. 50) 
 
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Her credit report reflects the $26,000 as past due. (Tr. 48) Applicant had written to 
inform the lender of the Ponzi-type scheme and provided her attorney’s contact 
information. (Tr. 38) Having discovered the fraud, no payments were made on the 
investment property. (Tr. 38) 
 
 On October 31, 2006, the Applicant refinanced her primary residence that she 
had purchased in 2002. (Tr.33) The investment firm steered her to the mortgage lender 
used in the refinance because they had individuals working with them at that mortgage 
company. Applicant intended to use some of the net equity to make home 
improvements and to invest some of the funds in the investment company. The closing 
documents directed the $57,000 in equity funds to be sent to Applicant’s personal bank 
account. (Ex. A4, Tr. 29) Upon receipt of the funds, she would choose how much to 
invest with the investment firm. (Tr. 31) Following the closing, the mortgage company 
handling the escrow sent all the equity funds to the fraudulent management firm. 
Starting in November 2006, Applicant made numerous requests asking the mortgage 
company to provide copies of the closing documents and mortgage documents. (Ex. A4, 
Tr. 30) To date, she has never received any of the equity funds from the refinance. (Tr. 
87)  
 
 In December 2006, Applicant was injured in a motor vehicle accident that 
required three back surgeries and 99 stitches to her head. The last surgery involved 
fusion of her lower spine. (Tr. 63) At that time, her primary focus was on her health and 
recovery. (Tr. 30) 
 
 Applicant received a copy of the requested closing documents and her review of 
those documents revealed a forged letter directing the funds be sent to the investment 
firm. (Ex. A5, Tr. 30) In March 2007, after learning the equity funds were sent to an 
investment company, Applicant asked the company about the transferred funds and 
asked the funds be sent to her. The investment company stated, “Unfortunately, I can 
not give you any information on this account as you are not a signer on the account.” 
(Ex. G) The investment company was an alter-ego of the defendants charged in the 
Ponzi-type scheme. (Ex. 6) 
 
 In September 2008, the mortgage lender who refinanced the property was sued 
by numerous victims of the fraud for unfair, false, and misleading business practices 
and negligence. (Ex. A3) Applicant was a party to this suit. (Ex. A3) A branch manager 
of the mortgage company had placed false information and other misleading information 
on loan applications to secure approval of the loans. (Ex. A3) The employees caused 
forged or false real property deeds to be executed and made false statements to those 
obtaining the loans as to the monthly payments on the loan. Additionally, the employees 
allowed the proceeds of the mortgages to be “invested” in unlicensed securities. (Ex. 
A3) 
 
 In October 2007, following an auction, the home transferred to the new owner for 
$421,691. (Ex. C) In November 2007, that purchaser sold it for $440,000. (Ex. C, O) 
Applicant made numerous telephone calls to the collection department of the initial 
 
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mortgage company asking for the balance owed on the property. (Ex. E) Having 
received no response, Applicant sent a letter certified return receipt requesting the 
same information. (Ex. F) 
 
 In November 2007, Applicant informed her company’s program security officer of 
the Ponzi-type scheme. (Ex. A6, Tr. 86) Also in 2007, she sought the assistance of a 
credit consolidation company. (Tr. 66) The plan was not to reduce what was owed, but 
to consolidate all of the various monthly debt payments into a single, payment. The 
consolidation plan required a monthly $1,290 payment. (Tr. 79) She was current on all 
her debts, except for the investment property, when she entered into the consolidation 
plan. (Tr. 67) Between 2007 and early 2012, Applicant paid all of her other obligations in 
a timely manner. Through the plan, she was able to pay $60,000 in debt. (Tr. 67)  
 
 In May 2012, Applicant realized she could no longer make the monthly mortgage 
payment and pay her other debts. Also in May 2012, the mortgage company informed 
her of an increase in her adjustable rate mortgage. The interest rate on the first 
mortgage increased to 10.3% and on the second mortgage to $13.77%. (Ex. 5, Tr. 36-
37, 52) The monthly mortgage payment increased from $1,700 to $2,462. (Tr. 54)  
 
 In June 2012, Applicant applied for a loan modification and assistance under a 
federal program to assist home owners, which was denied in July 2012. In July 2012, 
she requested a loan modification from the mortgage company, which was denied in 
August 2012. In April 2013, Applicant was notified that she did not qualify for the U.S. 
Treasury’s home Affordable Modification Program because the monthly payment would 
not be between 10% and 55% of her gross monthly income. (Ex. A5)  
 
 In September or October 2012, Applicant moved out of the home because she 
was not making monthly payments on the home. (Tr. 84) She wants to keep the home. 
(Tr. 34) Currently, she owes approximately $195,000 on the first mortgage and $49,000 
on the second mortgage. (Ex. 5, Tr. 36-37) Applicant estimates the fair market value of 
the house is $120,000. (Tr. 37) As of April 2013, her annual salary is $100,000. (Ex. 
A10)  
 
 In late 2006, Applicant’s husband retired from the U.S. Air Force as an E-6. His 
monthly service retirement is approximately $1,500. (Tr. 62) Following retirement, he 
started a printing business. Initially, the company had monthly income of $500 to 
$2,000. (Tr. 60) The business was dissolved the end of 2007 or in 2008. (Tr. 59) He 
sought full-time employment, went to truck-driving school for six weeks, and was 
employed for a year with a trucking firmed before resigning following a vehicle accident 
in 2009 or 2010. (Tr. 60, 61) He was unemployed until two months prior to the hearing 
when he secured a part-time job making $11 per hour and working 20 to 25 hours per 
week. (Tr. 61)  
 As of October 2012, Applicant and her husband earn approximately $8,000 
monthly. They have a $2,500 mortgage payment, pay $1,200 in rent, and make $1,100 
in vehicle payments. (Ex. 5) She purchased her vehicle because her back pain required 
 
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a vehicle with high seats allowing her to sit upright to ease the pain. (Tr. 63) Her 
husband purchased a motorcycle to replace his truck that was in need of repairs. (Tr. 
65) Their net monthly remainder (net monthly income less monthly expenses and debt 
payment) was approximately $1,000. (Ex. 5) Applicant obtains a copy of her credit 
report every three or four months to review it. (Tr. 44) She maintains three small 
department store credit cards. (Tr. 68) She also had a line of credit used to meet 
medical expenses. (Tr. 70) She is current on her monthly payments. (Tr. 66, 73)  
 
Policies 
 
 When evaluating an applicant’s suitability for a security clearance, the 
administrative judge must consider the adjudicative guidelines. In addition to brief 
introductory explanations for each guideline, the adjudicative guidelines list potentially 
disqualifying conditions and mitigating conditions, which must be considered in 
evaluating an applicant’s eligibility for access to classified information. 
 
These guidelines are not inflexible rules of law. Instead, recognizing the 
complexities of human behavior, these guidelines are applied in conjunction with the 
factors listed in the adjudicative process. The administrative judge’s overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 
2(c), the entire process is a conscientious scrutiny of a number of variables known as 
the “whole-person concept.” The administrative judge must consider all available, 
reliable information about the person, past and present, favorable and unfavorable, in 
making a decision. 
 
The protection of the national security is the paramount consideration. AG ¶ 2(b) 
requires that “[a]ny doubt concerning personnel being considered for access to 
classified information will be resolved in favor of national security.” In reaching this 
decision, I have drawn only those conclusions that are reasonable, logical, and based 
on the evidence contained in the record.  
 
Under Directive ¶ E3.1.14, the Government must present evidence to establish 
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, the applicant is 
responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, 
or mitigate facts admitted by applicant or proven by Department Counsel. . . .” The 
applicant has the ultimate burden of persuasion to obtain a favorable security decision.  
 
A person who seeks access to classified information enters into a fiduciary 
relationship with the Government predicated upon trust and confidence. This 
relationship transcends normal duty hours and endures throughout off-duty hours. The 
Government reposes a high degree of trust and confidence in individuals to whom it 
grants access to classified information. Decisions include, by necessity, consideration of 
the possible risk the applicant may deliberately or inadvertently fail to safeguard 
classified information. Such decisions entail a certain degree of legally permissible 
extrapolation of potential, rather than actual, risk of compromise of classified 
information. 
 
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Section 7 of Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination of the loyalty of the 
applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites 
for access to classified or sensitive information).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial problems: 
 
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. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and 
safeguarding classified information. Behaving responsibly or irresponsibly in one aspect 
of life provides an indication of how a person may behave in other aspects of life.  
 
A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed 
upon terms. Absent evidence of strong extenuating or mitigating circumstances, an 
applicant with a history of serious or recurring financial difficulties is in a position of risk 
that is inconsistent with holding a security clearance. An applicant is not required to be 
debt free, but is required to manage his finances to meet his financial obligations. 
 
 Applicant has a history of financial problems due to being a victim of a Ponzi 
scheme. The first and second mortgage on her residence are past due and the 
mortgage was past due on her investment property when it went to foreclosure. 
Disqualifying Conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts” and AG 
¶ 19(c), “a history of not meeting financial obligations,” apply.  
 
 Four Financial Considerations Mitigating Conditions under AG ¶¶ 20 are 
potentially applicable: 
 
(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; 
 
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(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; 
 
(d) the individual initiated a good-faith effort to repay overdue creditors or 
otherwise resolve debts; and 
 
(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. 
 
 
Before investing any money, Applicant did her due diligence in researching the 
company. However, the fraudulent investment company chose a name so similar to a 
reputable, legitimate investment company which made her research meaningless due to 
researching the wrong company. The scam artist running the fraud counted on a normal 
investor not recognizing the slight difference in names. In 2006, the legitimate wealth 
management firm brought suit for trademark infringement and unfair business practices 
against the fraudulent investment firm because of the similarity of names.  
 
Applicant entered into the investment property purchase before becoming aware 
of the fraud. She submitted closing documents that were later fraudulent by altered by 
the investment firm to secure the mortgage on the investment property. She had been 
told the monthly mortgage would be $1,250, and there was a signed 12-month lease 
with a renter paying $1,500 monthly.  After closing, she learned the monthly mortgage 
was $3,800, which was three times what she anticipated. She also learned there was no 
renter and the investment firm had inflated the purchase price of the house.  
 
 In 2007, Applicant became past due on the mortgage on the investment property 
and the property went to foreclosure that same year.  In 2012, the adjustable rate on the 
mortgage of her residence greatly increased. Her monthly mortgage payments 
increased by more than $750, which was a 45% increase in the monthly payment 
amount. Although the debts were incurred some time ago, they are considered recent 
because they remain unpaid. The debts were infrequent in that the only SOR debts 
relate to the mortgages on two properties. The debts arose under unusual 
circumstances. She refinanced her primary residence and all the equity from the 
refinance was stolen by an investment firm. The investment property was the result of 
fraud by the same investment firm. Having addressed all other debt, these mortgages 
do not cast doubt on Applicant’s current reliability, trustworthiness or good judgment. 
The evidence establishes AG ¶ 20(a). 
 
Under AG ¶ 20(b), financial concerns may be mitigating where the conditions that 
resulted in the financial problem were largely beyond the person’s control and the 
 
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individual acted responsibly under the circumstances. As noted above, Applicant and 
more than 800 other individuals were the victims of a $143 million Ponzi scheme. The 
principal individuals involved have been convicted of numerous felonies and many are 
serving prison sentences. Once Applicant was aware of the Ponzi scheme, she acted 
responsibly. She immediately hired an attorney, immediately informed the investment 
property mortgage holder of the scheme, and informed her employer of the problem. 
She is a party to lawsuits against both her mortgage company and the investment 
company. 
 
When Applicant’s monthly mortgage payment increased by 45% she immediately 
attempted to correct the problem by asking for a loan modification and applying for 
assistance under a federal program to assist homeowners. Applicant owes the 
mortgage on the residence, but $57,000 of the refinanced proceeds was wrongfully 
taken by the investment firm. The fraud was assisted by a mortgage company employee 
of the same mortgage company currently holding the mortgage. The mortgage company 
has been sued by not only Applicant, but by a large number of similarly situated victims 
of the fraud.  
 
In addition to the Ponzi scheme, Applicant and her husband incurred other 
conditions that contributed to their financial problem that were largely beyond their 
control. There was a business downturn.  After her husband retired from the Air Force, 
he started a printing business which failed. There were periods of unemployment 
following the business failure. He is now employed, but has only a part-time job. There 
was also an unexpected medical emergency.  In December 2006, Applicant was 
involved in a vehicle accident that resulted in 99 stitches to her head and three back 
surgeries, the last of which resulted in fusion of her lower spine. The evidence 
establishes AG ¶ 20(b).  
 
In addition to the mortgages, Applicant had a number of other debts. In 2007, she 
not only learned of the fraud, but also entered into a debt consolidation program 
allowing her to pay all her other debt with a single payment. Through that program she 
made monthly payments of approximately $1,300 and paid off $60,000 in debt. Having 
paid that significant amount of debt, I am confident she will continue with her actions to 
address the remaining mortgage issues. She has maintained continuous contact with 
the mortgage company on her residence. The investment property mortgage was 
$445,000 and in October 2007, the house sold for $421,691, which was $23,000 less 
than what she owed on the property.  Applicant has made numerous attempts to contact 
the mortgage company to determine the status of this debt. Keeping in contact with the 
two mortgage companies and her efforts to modify the loan or get approved for a federal 
homeowners’ assistance program are efforts to resolve the debt. The mitigating 
condition in AG ¶ 20(d) is established.  
 
Applicant has disputed the legitimacy of the debts. She and numerous others 
have filed lawsuits against the mortgage company and the investment company. She 
was the victim of a Ponzi scheme. I find AG ¶ 20(e) “the individual has a reasonable 
basis to dispute the legitimacy of the past-due debt which is the cause of the problem 
 
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and provides documented proof to substantiate the basis of the dispute or provides 
evidence of actions to resolve the issue” is established.  
 
Whole-Person Concept 
 
 Under the whole-person concept, the administrative judge must evaluate an 
Applicant’s eligibility for a security clearance by considering the totality of the Applicant’s 
conduct and all relevant circumstances. The administrative judge should consider the 
nine adjudicative process factors listed at AG ¶ 2(a): 
 
(1) the nature, extent, and seriousness of the conduct; (2) the 
circumstances surrounding the conduct, to include knowledgeable 
participation; (3) the frequency and recency of the conduct; (4) the 
individual’s age and maturity at the time of the conduct; (5) extent to which 
participation is voluntary; (6) the presence or absence of rehabilitation and 
other permanent behavioral changes; (7) the motivation for the conduct; 
(8) the potential for pressure, coercion, exploitation, or duress; and (9) the 
likelihood of continuation or recurrence. 
 
 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the whole-person concept.  
 
I considered the potentially disqualifying and mitigating conditions in light of all 
the facts and circumstances surrounding this case. The debts incurred were not the 
type that indicates poor self-control, lack of judgment, or unwillingness to abide by rules 
and regulations. Applicant did her due diligence in attempting to research the 
investment company before making any investment. However, this was defeated by the 
fraudulent investment company using the name of a legitimate wealth management 
firm.  The investment property mortgage loan was secured by fraudulent actions of the 
investment firm altering the closing documents submitted to the underwriter to qualify 
her for the loan.  
 
Money was not spent frivolously. The fraudulent investment company steered 
Applicant to the mortgage lender which refinanced her primary residence. Suit has been 
commenced against that lender in addition to the investment company. The proceeds of 
the refinance were wrongfully taken from her. She never received any of the proceeds 
of the refinancing. 
 
There has been no misconduct or irresponsible behavior by Applicant. Her debts 
arose in large part from factors beyond her control. When these problems first began 
she hired an attorney, notified the mortgage companies, and notified her employer. She 
acted reasonably. She hired a debt consolidation firm, which is a reasonable, 
responsible way to resolve her debts and improve her current finances. She is not living 
beyond her means. She is paying all her debts except for the mortgages. She is a 
mature, responsible adult who has exhibited reliability and sound judgment in her job.  
 
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The letters written on Applicant’s behalf indicate she is honest, straightforward, and 
trustworthy. Applicant exhibited a candid approach to her responsibilities and is acting 
to ensure her past financial difficulties will not recur. Since 2007, she was able to pay off 
$60,000 in debt other than the mortgages. She understands what she must do to 
maintain her financial responsibility.  
 
I considered Applicant’s favorable character evidence. I also considered the 
circumstances that led to her financial problems and the steps she has taken to address 
her issues. An applicant is not required to establish that she has paid every debt listed 
in the SOR. However, an applicant must demonstrate that she has a plan to resolve her 
financial problems and taken significant actions to implement that plan. Through the 
lawsuits and contact with the two mortgage lenders, she is trying to resolve her 
obligations. I am confident she will keep her promise to avoid future delinquent debt.   
 
The facts and circumstances presented do not pose an unacceptable risk to the 
interests of national security. Overall, the record evidence leaves me without questions 
or doubts about Applicant’s eligibility and suitability for a security clearance. For all 
these reasons, I conclude Applicant mitigated the security concerns arising from her 
financial considerations. 
 
 
Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, 
as required by section E3.1.25 of Enclosure 3 of the Directive, are: 
 
 Paragraph 1, Financial Considerations:  FOR APPLICANT 
 
  Subparagraphs 1.a – 1.c:   For Applicant 
   
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant a security clearance. 
Eligibility for access to classified information is granted.  
 
 
______________________ 
CLAUDE R. HEINY II 
Administrative Judge