Fraudulent Insurance Claim Sinks Clearance Applicant
I recently came across a rather unusual security clearance appeal case involving an applicant who had filed a false insurance claim on his wife’s lost ring. Here is a summary of the Defense Office of Hearing and Appeals (DOHA) case:
In 2017 the applicant bought his wife a $2,000 ring with a moissanite stone in it. He later took out a private property insurance policy on it and falsely described it as a two-karat diamond stone and set the replacement value of the ring at $18,000. In 2019 his wife lost the ring at some point, and the applicant filed a claim with the insurance company and provided them a forged receipt showing he had paid $19,000 for it. Well, the insurance company had already gotten a copy of the original receipt and turned it over to the state prosecutor’s office, who then charged the applicant with fraudulent insurance act and forgery, both felonies. The applicant ended up pleading guilty to lesser offenses, misdemeanors, and was put on probation for two years.
During the DOHA hearing the applicant claimed he was advised by an insurance claims adjuster to inflate the value of the ring so he could get more money back on it since the insurance company buys diamonds wholesale. This was the first time the applicant had said anything about a claims adjustor providing him advice, and the judge did not find this credible. In addition to the false insurance claim, the applicant was also queried about 16 delinquent accounts totaling $28,000 that were opened by his brother-in-law in the applicant’s name. Once the applicant found out about the accounts, he confronted his brother-in-law and had him start paying the debts. The judge did not find that the criminal conduct or financial concerns were mitigated, and had even further concerns about the applicant’s honesty and trustworthiness – appeal denied.