Judges: WILLIAM E. WILLIAMS
Agency: Department of Business and Professional Regulation
Latest Update: Sep. 14, 1984
Summary: Respondents was not guilty of falsifying applications and concealing ownership of certain horses.
84-0644STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BUSINESS )
REGULATION, DIVISION OF )
PARI-MUTUEL WAGERING, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0644
)
ROZEN, INC., )
)
Respondent. )
) DEPARTMENT OF BUSINESS )
REGULATION, DIVISION OF )
PARI-MUTUEL WAGERING, )
)
Petitioner, )
)
vs. ) CASE NO. 84-0645
)
PETER KOURKOUMELIS, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in these causes on March 7, 1984, in Miami, Florida.
APPEARANCES
For Petitioner: Elliot H. Henslovitz, Esquire
Department of Business Regulation Division of Pari-Mutuel Wagering
1350 Northwest 12th Avenue, Suite 332
Miami, Florida 33136-2169
For Respondent: Joel S. Fass, Esquire
626 Northeast 124th Street North Miami, Florida 33161
By Administrative Complaints dated February 15, 1984, the Department of Business Regulation, Division of Pari-Mutuel Wagering ("Petitioner"), initiated formal administrative proceedings against the pari-mutuel occupational licenses of Respondents Peter Kourkoumelis ("Kourkoumelis") and Rozen, Inc. ("Rozen"). The Administrative Complaints charged the Respondents with violations of Rules
7E-1.03(22), 7E-1.05(5), and 7E-1.21(16) Florida Administrative Code, by allegedly having falsified license applications and concealing the ownership interest of another person in certain horses, with an intent to defraud, either individually or in concert with others.
These causes were originally noticed for hearing on March 2, 1984, but were heard instead on March 7, 1984, and were consolidated by agreement of the parties. At the final hearing, Petitioner dismissed those portions of the complaints pertaining to Rule 7E-1.21(16), Florida Administrative Code, and a corresponding references to the horses "White Walls," "Red North," and "Four For Music."
At the final hearing, Petitioner called Carol Ross, Martin J. Lann, Cynthia Elliott, and Clarence Hofher as witnesses. Petitioner offered Petitioner's Exhibits 1 through 14 and 16 through 31, which were received into evidence. At the conclusion of Petitioner's case, Respondents moved for the entry of a recommended order of summary disposition, which motion was denied by order dated May 16, 1954. Respondents called Linda J. Hart as their sole witness at the hearing. In addition, Respondents submitted Respondents' Exhibits 1 through 3, which were received into evidence, and after the final hearing, with concurrence of counsel for Petitioner, Respondents submitted the written summary of the testimony of three additional witnesses.
Counsel for each of the parties have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that those proposed findings are not included in this Recommended Order, they have been specifically rejected as being irrelevant to the issues involved in this cause, or as not having been supported by evidence of record.
FINDINGS OF FACT
On or about November 9, 1983, the Respondents submitted applications to petitioner for the issuance of thoroughbred horse owner's licenses. On the application, Kourkoumelis represented that he owned 100 percent interest in Rozen, Inc., and further represented that Rozen, Inc., owned four thoroughbred race horses, including the horse "Hexgreave Star." The applications were processed by Petitioner, and Kourkoumelis was issued license Number 0171691, and Rozen, Inc., was issued license Number 0231210.
The foal papers on Hexgreave Star, which are the official ownership papers of the horse, reflect that the horse was acquired by Rozen, Inc., from Cynthia Elliott on August 7, 1983. That date reflects the last transfer of the horse listed on the foal papers, up to and including the date of the hearing.
Hexgreave Star was foaled in England and shipped to the United States sometime around November of 1982. A statement from the International Horse Services reveals that K. Richardson of Jubilee Farms was billed for the shipping expenses. However, there is no competent credible evidence of record to establish the identity of the true owner of Hexgreave Star at the time he was shipped from England. The horse was subsequently vaned from its port of entry in New York to Hialeah Race Track in the care of trainer Robert Elliott, the husband of Cynthia Elliott.
On November 10, 1982, the Jockey Club issued foal papers to Robert Elliott, registering him as the first owner of the horse in the United States. Elliott was the owner of record of Hextreave Star until February 7, 1983, when ownership of the horse was transferred to his wife, Cynthia Elliott, for "$1.00 and other consideration." From that date forward, until August 7, 1983, Cynthia Elliott was the listed owner of Hexgreave Star.
Financial support for Hexgreave Star was initially provided by a wire transfer into the Elliotts' joint bank account in the amount of $2,000 on or about November 22, 1982. This money was wired from an account in Liechtenstein maintained in the name of an organization known as "Fallig Finanz." There is no evidence of record in this cause to connect the operation of Fallig Finanz with either Kenneth Richardson, Kourkoumelis, or the Elliotts.
A second $2,000 was wired into the Elliotts' account from Fallig Finanz at the end of the month of November, 1982. Part of this money was used to open a trainer's account for Hexgreave Star in Robert Elliott's name. Checks from that account were used to pay for the care of Hextreave Star in December, 1952, and January, 1953. During the months of November and December of 1982 and January of 1983, Hexgreave Star raced in Florida under Robert Elliott's name. The ownership of the horse was transferred to Cynthia Elliott on February 7, 1983, in anticipation of Robert Elliott's return to England. No money was exchanged between Mr. and Mrs. Elliott at the time of the transfer.
After the transfer of the horse's ownership from Mr. Elliott to Mrs. Elliott, Kenneth Richardson and Cynthia Elliott opened a joint checking account at the Southeast Bank. Richardson initially deposited $2,000 into that account which was used for the upkeep and maintenance of Hexgreave Star. The account was generally used as a horseman's account from March until June, 1983. On April 1, 1983, an additional $2,000 was wired into the account from Liechtenstein.
After February 7, 1983, Hexgreave Star raced under Cynthia Elliott's name in Florida; at Monmouth Park, New Jersey; Penn National Race Track in Pennsylvania; and Belmont Park in New York. The racing accounts of Hexgreave Star reflect that the horse earned in excess of $47,000 in purses during that time. Approximately $30,000 of that money was paid to Kenneth Richardson by Mrs. Elliott in two separate payments on July 28 and August 4, 1983.
Cynthia Elliott met Peter Kourkoumelis through her husband, Robert Elliott, on January 31, 1982. Mrs. Elliott saw Kourkoumelis with Kenneth Richardson on two occasions at Gulfstream Park in 1983.
Throughout the time that Cynthia Elliott was racing Hexgreave Star under her own name, she was frequently in contact with Kenneth Richardson. During the summer of 1983, beginning with the Hialeah meeting, questions regarding the identity and ownership of Hexgreave Star were raised with Cynthia Elliott by the Thoroughbred Racing Protective Bureau (TRPB) and the Jockey Club. Beginning in June of 1983, Mrs. Elliott notified Richardson of these inquiries, and continued to keep Richardson apprised as the TRPB continued its investigation.
In the last week of July, 1983, Cynthia Elliott met with Kenneth Richardson, his son Andrew, and Peter Kourkoumelis at the Floral Park Motel in Belmont, New York, to discuss the fortunes of Hexgreave Star. In a subsequent meeting, Mrs. Elliott presented Kenneth Richardson with a list of expenses and deductions, and the remaining funds from the horse's winnings.
Rozen, Inc., was incorporated in Florida on August 1983. Kourkoumelis was listed as the corporation's sole director and officer.
On August 3, 1983, Cynthia Elliott signed a bill of sale purporting to transfer her interest in Hexgreave Star to Rozen, Inc. Also on August 3, 1983, an agreement was entered into between Cynthia Elliott and Rozen, Inc., for the care and training of Hexgreave Star. Present at the signing of the agreement were Cynthia Elliott; Peter Kourkoumelis, who signed the agreement as president of Rozen, Inc.; and Kenneth Richardson and Andrew Richardson. By the terms of the agreement, Cynthia Elliott was authorized to train Hexgreave Star, but Rozen, Inc., was to make major managerial decisions concerning the horse. The agreement provided that the horse ". . . is the sole property of Rozen, Inc.", and that all prize money won by the horse was payable to Rozen, Inc., less 10 percent in fees, $30 per day training fees, and blacksmith and veterinarian bills.
After the execution of the August 3, 1983, agreement, Cynthia Elliott continued to pay for the care and upkeep of Hexgreave Star from funds left in the track account. On August 9, 1983, Mrs. Elliott purchased an insurance policy on Hexgreave Star in the amount of $50,000. The horse was insured in the name of Rozen, Inc., and the premium of $3,612.50 was paid by Mrs. Elliott from funds left in the track account.
Through the middle of September, 1983, Mrs. Elliott provided for the care and maintenance of Hexgreave Star through funds that were left in the track account. She itemized her expenses and showed them to Richardson on August 19, 1983, in England.
By separate letters dated September 22, 1983, Cynthia Elliott notified Kenneth Richardson and Peter Kourkoumelis of her decision to resign her position with Rozen, Inc. There is no evidence of record to establish what, if any, transaction occurred concerning Hexgreave Star between September 22, 1983, and November 9, 1983, the date on which Kourkoumelis and Rozen, Inc., allegedly falsified their license applications.
There is no direct evidence, or, indeed, any credible evidence at all, to establish that Kourkoumelis was aware of the manner in which Hexgreave Star had been handled between Kenneth Richardson, and Robert and Cynthia Elliot. Further, there is no competent credible evidence of record to establish either that anyone other than Peter Kourkoumelis and Rozen, Inc., owned Hexgreave Star on November 9, 1983.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 120.57(1), Florida Statutes.
Rule 7E-1.03(22), Florida Administrative Code, provides, in part, that:
[f]alsification of any part of a license application may be grounds for a fine or revocation of said license....
Rule 7E-1.05(5), Florida Administrative Code, provides that:
No person shall conspire with any other person for the commission of, or connive with any other person
in any corrupt or fraudulent practice in relation to racing nor shall he commit such an act on his own account.
Rule 7E-1.21(16), Florida Administrative Code, provides that:
All ownership in a horse, except the trainer's percentage of his winnings, shall be filed with the racing secretary, before the horse shall start, as also shall every change in ownership thereafter during the meeting.
In Bowling v. Department of Insurance, 394 So.2d 165, 171-172 (Fla. 1st DCA 1981), the court held that:
In a proceeding under a penal statute for suspension or revocation of a valuable business or professional license, the term 'substantial com- petent evidence' takes on vigorous implications that are not so clearly present on other occasions for agency action under Chapter 120. Although all questions of fact as distinguished from policy are determinable under
the Administrative Procedure Act by substantial competent evidence . . . we differentiate between evidence which 'substantially' supports con- ventional forms of regulatory action and evidence which is required to support 'substantially' a retro- spective characterization of conduc requiring suspension or revocation of the actor's license. Evidence which 'is substantial' for one purpose may be less so on another, graver occasion. . . .
. . . Now we recognize also that in both form and persuasiveness evidence may 'substantially' support some types of agency action, yet be wanting as
a record foundation for critical finding in license revocation . . .
[W]e glean a requirement for more substantial evidence from the very nature of license discipline pro- ceedings; when the standards of con- duct to be enforced are not explicitly
fixed by statute or by rule . . .;
when the conduct to be assessed is past, beyond the actor's power to conform
it to agency standards announced pros- pectively; and when the proceeding may result in the loss of a valuable business or professional license,
the critical matters in issue must
be shown by evidence which is indubitably as 'substantial' as the consequences
. . . .
In anyone's judgment, a judge's no less than any other, certain factors present 'in the record' of penal pro- ceedings fairly detract from the substantiality of evidence which is weighty enough for less consequential purposes. One such factor is a grave penalty. In determining 'the substan- tiality of evidence,' which is to say in ascertaining what we call the facts, a judge takes the penalty into account for the same reason that compels him, in ascertaining the law, to impose a 'strict' construction on the penal statute. . . .
. . . [T]he violation of a penal statute is not to be found on loose interpreta- tions and problematic evidence, but the violation must in all its implications be shown by evidence which weighs as 'sub- stantially' on a scale suitable for evidence as the penalty does on the scale of penalties. In other words, in a world ensnarled by false assumptions and hasty judgments, let the prospector's proof be as serious-minded as the intended penalty is serious. (Emphasis added.)
When viewed in light of the stringent requirements of Bowling quoted above, it is specifically concluded that the record in this cause fails to establish, as alleged in the Administrative Complaints, that Kenneth J. Richardson was at any time the true owner of Hexgreave Star; that either Kourkoumelis or Rozen, Inc., conspired in any manner to commit a corrupt or fraudulent practice; or that any entity other than Kourkoumelis or Rozen, Inc., owned any interest in Hexgreave Star as of November 9, 1983. Accordingly, Petitioner having failed to establish the allegations contained in the Administrative Complaints, it is
RECOMMENDED:
That a Final Order be entered by the State of Florida, Department of Business Regulation, Division of Pari-Mutuel Wagering, dismissing the Administrative Complaints against Peter Kourkoumelis and Rozen, Inc.
DONE AND ENTERED this 14th day of September, 1984, at Tallahassee, Florida.
WILLIAM E. WILLIAMS
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 14th day of September, 1984.
COPIES FURNISHED:
Elliot H. Henslovitz, Esquire Department of Business
Regulation
1350 Northwest 12th Avenue, Suite 332
Miami, Florida 33136-2169
Joel S. Fass, Esquire 626 N.E. 124th Street
North Miami, Florida 33161
Robert M. Smith, Jr., Director Division of Pari-Mutuel Wagering Department of Business Regulation 1350 N.W. 12th Avenue, Suite 332
Miami, Florida 33136-2169
Gary R. Rutlege, Secretary Department of Business
Regulation
725 South Bronough Street Tallahassee, Florida 32301
Docket for Case No: 84-000644
Orders for Case No: 84-000644
| Issue Date |
Document |
Summary |
|
Sep. 14, 1984 |
Recommended Order
|
Respondents was not guilty of falsifying applications and concealing ownership of certain horses.
|
