STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE ) COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-176

)

ED RICH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for administrative hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on July 16, 1983, in Ft. Lauderdale, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: Joel S. Fass, Esquire

626 Northeast 124th Street

North Miami Beach, Florida 33161

For Respondent: Ed Rich, pro se

1950 South Ocean Drive Hallendale, Florida 33009

This cause was initiated on an administrative complaint filed by the Petitioner against the Respondent, wherein the Petitioner seeks to suspend, revoke, or take other disciplinary action against the Respondent with regard to his licensure status as a registered real estate salesman. It is alleged that the Respondent was indicted by the U.S. District Court for the Eastern District of Wisconsin and charged with violation of Title 18, United States Code, Section 1343, specifically, with using wire communications in a scheme to defraud. It is alleged that on or about November 26, 1978, the Respondent pled nolo contendere to that charge and was found guilty as charged and placed on three years probation. Accordingly, the Petitioner charges that the Respondent has been found guilty of a crime directly relating to the activities of a licensed real estate salesman involving moral turpitude and fraudulent or dishonest dealing in violation of Subsection 475.25(1)(f), Florida Statutes.

At the hearing Petitioner presented one witness and two exhibits. The Respondent presented one witness and one exhibit. All exhibits were admitted into evidence. At the conclusion of the proceeding, the parties requested a transcript and the right to file proposed findings of fact and conclusions of law, which were timely filed by the Petitioner.

All proposed findings of fact and supporting arguments of the parties have been considered. To the extent that the proposed findings and conclusions submitted by the parties, and the arguments made by them, are in accordance with the findings, conclusions and views stated herein, they have been accepted, and to the extent that such proposed findings and conclusions of the parties, and such arguments made by the parties are inconsistent therewith, they have been rejected. Certain proposed findings and conclusions have been omitted as not relevant or as not necessary to a proper determination of the material issues presented.

The issue to be resolved concerns whether the Respondent is guilty of having committed a crime which relates directly to the activity of a real estate salesman and which involves moral turpitude and fraudulent or dishonest dealing such that a violation of Subsection 475.25(1)(f), Florida Statutes, has occurred and, if so, the extent of penalty warranted.

FINDINGS OF FACT

1. The Respondent is a licensed real estate salesman, having been issued license number 0073256 authorizing his practice in such a capacity in the State of Florida. The Petitioner is an agency of the State of Florida charged with enforcing the licensure and practice standards embodied in Chapter 475, Florida Statutes, for realtors in the State of Florida.

   
   

2. From approximately April 16, 1977, through November 17, 1977, the Respondent, acting in the capacity of a real estate salesman, was employed by a broker by the name of Irwin Kane and Wintex Realty Corporation of Miami, Florida. That entity with Broker Kane was involved in the advertisement, promotion and sale of parcels of unimproved land in west Texas. The Respondent's duties involved making long-distance telephone calls to prospective purchasers of that land (in Cochran County, Texas), attempting to induce them to buy one or more parcels. In the course of this telephone sales campaign, in which the Respondent participated with approximately 20 salesmen making such phone calls, the Respondent used a script prepared for him by Irwin Kane, his employing broker. The script, in general, extolled the attributes of the unimproved property in an arid region of west Texas, representing that the land possessed favorable climatic conditions, water supply and soil conditions for agricultural purposes and was near property in which oil companies were interested.

   
   

3. The Respondent contacted a potential buyer by phone who lived in Wisconsin and attempted to persuade the buyer to purchase a parcel of the property through use of the prepared "script" given him by his broker. That potential customer apparently became suspicious of the sales method, manner or assurances given by phone and ultimately was instrumental, along with the United State Attorney, in the filing of an indictment in the United States District Court for the Eastern District of Wisconsin, charging the Respondent (along with his broker, principals of the corporation and other salesmen) with the use of wire communication in furtherance of a scheme to defraud potential purchasers of real estate in violation of Title 18, United States Code, Section 1343.

   
   

4. In that proceeding, the Respondent initially professed his lack of knowledge of the truth or falsity of the representations made in the prepared script his broker gave him and required him to use concerning the attributes of the west Texas land involved. Due in part to a dearth of financial resources to devote to litigation, the Respondent ultimately pled nolo contendere on November 7, 1978, to the charge involving using wire communication in a scheme to

   defraud. He was ultimately found guilty and was placed on probation for three years, with imposition of a sentence of imprisonment being suspended by the court.

   
   

5. The Respondent had no part in the preparation of any written materials or "script" which he employed in making the telephone conversation and representations describing the supposed attributes of the property he was attempting to market on behalf of his employer, Broker Irwin Kane and Wintex Realty Corporation. That script was prepared by his broker or others and the Respondent read or consulted from it as he was communicating with prospective purchasers, but had no actual knowledge of its truthfulness or falsity with regard to the representations contained therein. He was shown to have made no representation or verbal communication which he knew to be false when he made it. The Respondent has been the subject of a disciplinary proceeding involving the same factual transaction in the past which culminated in a final order dismissing that administrative complaint. 1/

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1981).

   
   

7. The Respondent is charged with violation of Subsection 475.25(i)(f), Florida Statutes, which subsection provides in pertinent part as follows:

   
   

   1. The Board may deny an application for licensure or renewal, may suspend a license for a period not exceeding ten years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand, if it found that the licensee or applicant has:

      (f) Been found guilty, regardless of whether adjudication was withheld, of a crime against the laws of this state or of the United States, which crime directly relates to the activities of a licensed broker or salesman or involves moral turpitude or fraudulent or dishonest dealing. The record of a conviction certified or authenticated in such form as to be admissible in evidence under the laws of the state shall be admissible as prima facie evidence of such guilt. . .

      
      

8. The undisputed evidence in the record establishes that the Respondent relayed information by telephone, prepared by his superiors, of which he had no detailed knowledge at the time he was making the telephonic representations. His testimony that he had no direct knowledge that those representations were false was unrefuted. The Respondent thus may have had no actual intent to

   defraud, deceive, mislead, or make a dishonest representation to any prospective purchaser; however, he nevertheless pled nolo contendere and was convicted of the above-cited Federal Statute involving use of wire communication in a scheme to defraud. Culpability of such a charge involving fraud must be predicated on a showing of a misrepresentation made which is material and with knowledge by the one making the misrepresentation that it is indeed false; however, the conviction of the crime having been established, the judgment must be presumed

   correct and cannot here be "collaterally attacked" based upon the Respondent's testimony, for purposes of this proceeding, that, in effect, it was improvidently entered. Moral turpitude has been recently defined as a crime having as its essential element the intent by the perpetrator to defraud or deceive another. Winestock v. Immigration and Naturalization Services, 576 Fed.2d 234. Conviction of the federal crime of "wire fraud" is by definition, a "crime of moral turpitude" and the charge predicated on that clause of paragraph

   (f) of the above statutory authority has been proven.

   
   

9. It has moreover been established that his conviction of the crime, that is "wire fraud," (pursuant to Title 18, United States Code, Section 1343) is a crime directly related to the business of a real estate salesman. The evidence and testimony is undisputed that the Respondent's federal plea and subsequent conviction grew out of a nefarious telephone real estate sales campaign organized and mounted by the principals of Wintex Realty Corporation. Thus, the Petitioner has proven the charge related to that clause of the above paragraph (f).

   
   

10. There has been no demonstration that the Respondent has ever been subjected to disciplinary action previously, with the exception of the administrative complaint filed in the case mentioned in the above footnote, which involves the same real estate transaction as that involved here and the same factual pattern. Even though the Respondent was convicted of a crime involving fraud and moral turpitude, it has been held, in Kopf v. Florida Real Estate Commission, 379 So.2d 1327 (1980), that a fraudulent representation in a single real estate transaction did not constitute a "course of conduct" warranting revocation of a license. The penalty of suspension and especially revocation is a severe one which should be meted out sparingly and cautiously due to the severe, long lasting effect on the ability of the accused to earn his livelihood. Brod v. Jernigan, 188 So.2d 575 (Fla. 2nd DCA 1966). It is thus concluded that the Respondent is guilty of the violation charged pursuant to the above subsection, but that in view of the totality of the circumstances found above, revocation of licensure is not warranted.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law and the evidence in the record, it is

RECOMMENDED:

That the Respondent, Ed Rich, be found guilty of a violation of Section 475.25(i)(f), Florida Statutes, and that the penalty of a two (2) year suspension of licensure be imposed.

DONE and ENTERED this 31st day of October, 1983, in Tallahassee, Florida.

P. MICHAEL RUFF Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 1983.

COPIES FURNISHED:

Joel S. Fass, Esquire

626 Northeast 124th Street North Miami, Florida 33161

Mr. Ed Rich

1950 South Ocean Drive Hallendale, Florida 33009

Randy Schwartz, Esquire Assistant Attorney General Department of Legal Affairs Suite 212

400 West Robinson Street Orlando, Florida 32801

Fred M. Roche, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 83-000176

Orders for Case No: 83-000176