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Special to Military.com. This is part two in a series of threearticles about identify theft and its effect on security clearance.
"I see a little glimmer of light at the end of the tunnel and then something comes to black it out." These are the words of Zane Purdy, an ID theft victim who lost his job after being caught in an identity theft ring's criminal web.
It's been a long haul for Purdy, a major in the Air National Guard. Identity theft hit him hard in 2010 although he didn't know it until February 2012 when being a victim of this vicious crime cost him a coveted job. At the time, Purdy, who now lives in Trussville Alabama, was employed as a program manager for General Dynamics Information Technology branch. GD is a major defense contractor. He was pulling in a six-figure salary and he held a Top Secret security clearance even though his job at GD didn't involve classified work.
Purdy first learned he had a problem when his clearance was suspended due to "derogatory financial information". He received a Statement of Reasons (SOR) that outlined the problem. That document explained why his security clearance was being revoked. Not long after, he received a phone call from the government. Someone with the US Attorney's Office called to say, "We think you've been the victim of identity theft."
"Then the IRS contacted me and told me that they suspected I had been a victim of tax return fraud," Purdy told idRADAR News. The alleged perpetrator of the crime turned out to be someone half his age-- Rhashima Deramus, now 23, of Montgomery.
"When the IRS raided Ms. Deramus' home, my information was sitting on the top of a stack (of documents). That's why they called me," Purdy said.
In just a couple years, a ring of identity thieves decimated Purdy's credit score; Deramus was its ringleader. The theft had been ongoing for some time before his credit score dropped enough to throw up a red flag. Low creditworthiness is considered a security risk—the government believes an impoverished individual is more susceptible to bribes--and can cost anyone a top clearance.
The Department of Defense publishes Guidelines for Determining Eligibility For Access to Classified Information. Some offenses involving personal conduct—drugs, DUIs, alcohol—are obvious concerns but it's Section F that outlines the issues with poor credit scores or too much debt. That section states that a big debt load could indicate,"(P)oor lack of self-control, lack of judgment and 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."
Nowhere in this DoD guidance is the issue of identity theft specifically addressed. It's covered in very general terms that reference problems 'beyond a person's control".
Purdy certainly qualified as being unable to control the situation. His life was turned upside down. He'd done nothing to trigger the incident and yet was unable to stop it. It appears he conducted himself professionally in the face of identity theft but that wasn't enough. Ironically, it was the DoD that eventually cost him his job.
"(GD) tried to keep me on. The job that I did for them did not involve classified material. But the government client wanted me to have a clearance so they had to let me go," he said.
That termination came on February 29, 2012. What followed was a seven-month battle with unemployment. Purdy finally landed a job at a Krystal's restaurant selling fast food—for less than $8 an hour. For almost a year now, Purdy has worked at Krystal's while also teaching computer classes at a technical college at night. His wife had to quit nursing school and his five children have all endured the consequences of a major financial blow.
When the US Attorney's Office for Middle Alabama prosecuted Deramus, Angeline Austin and Chiquita Smith, Purdy appeared in court in May 2013 to testify about the damages their identity theft had done. He drove an old car to the courthouse. Deramus arrived in style.
"To get there to court I had to borrow money for gas and then my vehicle broke down. My vehicle is still in Montgomery because I can't afford to fix it. We're now down to one vehicle. She showed up to court driving a Dodge Charger. She even comes to court driving a nice car," he recalled with some bitterness.
The US Attorney's office estimated the crime ring had hauled in over $1,000,000 in gains. A total of 7,000 stolen names and personal identifiers of other people were discovered during the investigation. Deramus is now serving a 10-year jail sentence. She apologized to victims during her trial, which left Purdy feeling angry. Her time in jail brings him no relief. The low point in his struggle came a month before the sentencing when his suspended clearance was finally cancelled.
Purdy's clearance now shows as revoked. "Employers say, "There's nothing we can do," he said. Hundreds of job applications have yielded the same response.
Efforts to revive his security clearance underscore a 'Catch-22' in the government's approach to identity theft and its impact on security clearances. It was the US government—as client to General Dynamics—that required all workers to have a clearance and it was the US government—a Federal judge, the IRS and the US Attorney—who determined Purdy had been the victim of identity theft. Yet the two sides have no formal mechanism to talk to each other and rectify Purdy's dilemma despite a judge's order to assist this man in reclaiming his livelihood. The US Attorney's office says they have made an effort to assist in that recovery.
USAO spokeswoman Clark Morris said, "We have a victim assistance office. What we have done is made sure he got a taxpayer advocate to assist him. We want to get rid of those liens on his property."
Morris' office is knee deep in identity theft prosecutions since Alabama has a big problem with stolen identities but she thinks that the loss of a security clearance is rare.
"This district is heavily military. The fact that I haven't heard of another case (of lost security clearance) makes me believe that this is an anomaly," she said.
For Purdy, the result is the same. Lost opportunities, lost income, lost life as he once knew it—even a lost promotion.
"In April of (2014), they will be able to do a new investigation. I am eligible for lieutenant colonel (with the National Guard) but this has held up my promotion too," Purdy said. "The commander of my Guard unit has been very, very helpful. At this point I cannot work with classified material but he has found things for me to do that doesn't involve it."
Purdy's unit—he's now assigned to 286th Air Components Squadron in Meridian Mississippi --has never dealt with this sort of identity theft issue before. The possibility of an interim reinstatement has been discussed but the resolution has already dragged on for months after the identity thieves were locked up in jail.
The IRS agent on the case recently informed Purdy that he might have to endure another sort of clearance to get that security rating reinstated.
"The IRS Agent has called me several times since (the sentencing). He said I may have to be audited for several years to clear things up. There are three IRS tax liens against me," said Purdy.
The prospect of multiple IRS audits hasn't lifted his spirits but time is Purdy's bigger enemy. At age 48, every month that goes by without work at his former level reduces the odds he'll ever be able to bounce back financially.
The ID theft ring that hit Purdy accessed an estimated 880 records from Troy Hospital. An administrator at the facility testified at Deramus' hearing that the hospital feared lawsuits from victims would put it out of business. Purdy's information came from a different data source.
"My information did not come from the hospital. It came from (Human Resources) in the City of Montgomery. I hadn't worked for them but I had applied for several jobs with them," the former contractor said.
Today, Purdy and his wife work multiple jobs—travaeling as far as they can for work while sharing their one remaining car. Facing a mountain of debt and no timeline for getting his top secret rating back, Prudy predicts the family's income will stay depressed in coming years—making the repayment of some new bills even more challenging.
"My credit score now is 479. The gang made 1.9 million off this scam," he stated with understandable bitterness. That score makes it hard to rent an apartment and impossible to get any credit. Sentencing for Deramus, Smith and Austin included mandatory restitution but from prison, those individuals won't have the resources to make payments.
The sad irony of having one job application cost him another job isn't lost on Purdy. Today he describes himself as a very protective man when it comes to his personal data.
"I am very, very leery. I ask if it is required to have my Social Security number to apply for any position. I'm very cautious in giving out my home address or phone number. If they can find just one piece of information on you, it can lead to the other pieces," he believes.
After serving his country for 18 years, the former contractor has this advice for others who hold a precious clearance.
"Monitor your credit report often. More often than you normally would if you were just an ordinary citizen. If you hold a top-secret clearance, monitor it. I am looking at my credit report once a month," he reported.
Sadly, just looking at his reports won't make those unsatisfactory scores rise. Purdy's poor credit score will take years to recover. That's far longer than it took identity thieves to make it plummet.
Purdy's story is all too familiar to John Sileo, a well-known identity theft speaker and author. Sileo knows from his own experience as a victim that a timely discovery of the theft is key to a rapid and positive recovery. He has spoken at many military bases about the higher risk many servicemen and women face. His recommendation--constant monitoring.
"Using an identity and privacy monitoring product like I do greatly increases your chances of identifying false criminal records as well as the abuse of your financial identity whether through falsely established credit, or the cyber trafficking of your personal information," Sileo warned.
(Find details of 24/7 monitoring here)
Today, Purdy is just plugging along trying to sort through the debris the theft ring left behind. He is one of the millions of Americans who depend on a clearance for their employment. Lives and families are built around those clearances and destroyed when the government documents are revoked.
Attorney Alan Edmunds has represented individuals with clearance challenges for three decades. He recommends a proactive approach but sees lots of clients, who believe since they've done nothing wrong, everything will be fine. That can backfire.
"The government is not there to help you. The government attorneys will lull these people into thinking everything's ok until the hearing. I hear it all the time. This is their career and this is their reputation and they think they can handle things themselves. They go in like lambs to the slaughter," he said.
If there are problems, Edmunds urges avoiding debt consolidation offers which could accomplish little. "I recommend that every time they get an SF 86 (clearance renewal) and have to fill it out, they pull their credit reports."
Adverse information can be mitigated but you may have to dispute every single error at each of the three big reporting bureaus. While the Big 3 are supposed to share information, there's no guarantee that the process will work as stated.
For most folks with a clearance, the presumption is 'This cannot happen to me' because I'm an honest worker with good performance reviews. Purdy remembers all too well the days when he felt he was immune too.
"I had 18 years of (military) service and had never had any issues," he recalled. "I never thought about identity theft until this happened. I think it can happen to anyone."