STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3024

)

LEMAR BONNE HALL, )

)

)

Respondent. )

) DEPARTMENT OF INSURANCE AND ) TREASURER, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3025

)

LEMAR BONNE HALL, )

)

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on September 12, 1990, in Tallahassee, Florida.

The parties were represented as follows:

APPEARANCES

For Petitioner: David D. Hershel, Esquire

Department of Insurance Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

For Respondent: Mark Zilberberg, Esquire

217-19 East 6th Avenue Tallahassee, Florida 32303

STATEMENT OF THE ISSUES

The issue addressed in this proceeding is whether Respondent's life and health insurance agent's licenses should be suspended, revoked, or otherwise disciplined for alleged violations of Chapter 626, Florida Statutes and whether Respondent is eligible for renewal of his life insurance agent's license.

PRELIMINARY STATEMENT

On March 19, 1990, Petitioner, the Department of Insurance and Treasurer, denied Respondent's Lemar Bonne Hall, application for licensure as a life insurance agent. Additionally, on April 10, 1990, Petitioner filed a one-count Administrative Complaint, against Respondent. The license denial and the Administrative Complaint were based on allegations that Respondent had pled guilty to felony charges in the United States District Court for the Northern District of Florida, Tallahassee, Division. Respondent disputed the reasons for denial of his application and the allegations of the Administrative Complaint and requested a formal administrative hearing in both cases. Respondent's requests were forwarded to the Division of Administrative Hearings.

At the hearing, Petitioner did not call any witnesses, but offered four exhibits into evidence. Respondent testified in his own behalf and offered nine exhibits into evidence.

Petitioner submitted its Proposed Recommended Order on November 14, 1990.

Respondent did not submit a Proposed Recommended Order. The Petitioner's Proposed Findings of Fact have been considered and utilized in the preparation of this Recommended Order except where the Petitioner's proposals were not shown by the evidence, or were immaterial, cummulative or subordinate. Specific rulings on the Petitioner's Proposed Findings of Fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Respondent, Lemar Bonne Hall, is a licensed life and health insurance agent in the state of Florida. He has been so licensed for more than 10 years. Respondent has made application for the renewal of his life insurance agents license pursuant to Chapter 626, Florida Statutes.

   
   

2. In the early 1980's, Respondent and his wife began experiencing credit difficulties due to some inaccurate information on their individual credit reports. The nature of the inaccuracy was not disclosed by the evidence presented at the hearing. Respondent and his wife could not get the inaccurate information removed from their credit reports and in 1983 sought the help of a credit repair service located in Houston, Texas. After paying the credit repair service $1,800.00, the service advised the Halls to create alternate credit reports through the use of different social security numbers. The credit repair service represented that this tactic was legal as long as there was no intent to defraud a financial institution. The credit repair service gave the Hall's a list of social security numbers to use. The social security numbers were numbers of various relatives of the Halls and included Mr. Hall's military identification number.

   
   

3. It was not until 1988 that the Halls implemented the repair service's program of creating alternate credit reports. In 1988 the Halls made application to several financial institutions for loans of differing amounts. The loan officers Mr. Hall dealt with had been acquainted with him for several

   years. Mr. Hall testified that he gave these various officers all of his social security numbers. However, when the loan officer's secretary typed in the information on the loan application, the secretary only inserted one of the many numbers he had given. No substantial evidence was submitted to rebut Mr. Hall's testimony.

   
   

4. The Halls made regular payments on the loans until they filed for bankruptcy in 1989. Payments on the loans eventually resumed. The bankruptcy was filed because of a potential judgment which might result from tort litigation involving Mr. Hall. At that time the bankruptcy trustee discovered the anomalous social security numbers and contacted the FBI. Mr. Hall cooperated with the FBI in every respect and is one of the government's witnesses in a nationwide investigation of credit repair services advising people to use the file segregation method of credit repair.

   
   

5. However, on August 3, 1989, Respondent was indicted on seven (7) counts of violating Title 18, United States Code, Section 1014, and with seven (7) counts of violating Title 42, United States Code, Section 408(g)(2). All the counts involved felonies, punishable by more than one year imprisonment, and were generally related to obtaining or attempting to obtain a loan from a federally insured financial institution by the use of false social security numbers, misrepresentation or fraud with the intent to defraud such institution. Respondent's wife was also indicated on similar counts.

   
   

6. Throughout the FBI investigation and in particular after the Halls' indictment, Ms. Hall's health began to seriously fail her due to the embarrassment and pressure she felt from the criminal charges she and her husband were facing. Therefore, on November 29, 1989, Respondent sacrificed himself for the sake of his wife and entered a plea of guilty to three (3) counts of violating Title 18, United States Code, Section 1014, and three counts of violating Title 42, United States Code, Section 408(g)(2), as charged in the indictment in Case No. TCR-04036. As part of the plea agreement entered into by Mr. Hall, all charges were dropped against Ms. Hall.

   
   

7. The plea of guilty, involved in this case, was entered for the convenience of the Halls and not because Mr. Hall had committed any crimes involving moral turpitude. In fact, the evidence did not demonstrate that the Halls had any intent to defraud the financial institutions they dealt with and did not demonstrate that Mr. Hall was untrustworthy or lacked the fitness necessary to engage in the business of insurance. However, the evidence did demonstrate that Mr. Hall violated Section 626.621(8), Florida Statutes, by pleading guilty to a felony or a crime punishable by more than one year imprisonment. Respondent is, therefore, subject to discipline for the violation outlined above.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1987).

   
   

9. Petitioner has the burden to prove by clear and convincing evidence the allegations of the Administrative Complaint. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

10. The Administrative Complaint alleges that Respondent violated Sections 626.611(7), 626.611(14), 626.621(1), and 626.621(8), Florida Statutes. These provisions provide as follows:

    
    

    626.611 Grounds for compulsory refusal, suspension, or revocation of agent's solicitor's or adjuster's license or . . . permit.--The department shall deny, suspend, revoke, or refuse to renew or continue the license of any agent, solicitor, or adjuster

    . . . and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one of the following applicable grounds exist:

    (7) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance.

    (14) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.

    * * * 626.621 Grounds for discretionary refusal, suspension, or revocation of agent's, solicitor's, or adjuster's license or . . . permit.--The department may, in its discretion, deny, suspend, revoke, or refuse

    to renew or continue the license of any agent, solicitor, or adjuster . . . and it may suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the applicant, licensee, or permittee any one of the following applicable grounds exist under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under s. 626.611:

    (1) Any cause for which issuance of the license or permit could have been refused had it then existed and been known to the department.

    (8) Having been found guilty of or having pleaded guilty or nolo contendere to a felony or a crime punishable by imprisonment of 1 year or more under the law of the United States of America or of any state thereof or under the law of any other country, without regard to whether a judgment of conviction has been entered by the court having jurisdiction of such cases.

11. In this case, Petitioner demonstrated that Respondent pled guilty to three (3) counts of violating Title 18, United States Code, Section 1014 and three (3) counts of violating Title 42, United States Code, Section 408(g)(2). Respondent in those counts was variously charged with knowingly making false statements in order to influence federally issued banking institutions upon applications for loans and with falsely representing his Social Security number with intent to deceive in order to obtain bank loans. All of the counts involved felonies punishable by more than one year imprisonment. On these facts, the Petitioner has established by clear and convincing evidence that Respondent violated Section 626.621(8), Florida Statutes, involving the discretionary imposition of disciplinary action. However, Petitioner has not demonstrated by clear and convincing evidence that Mr. Hall is factually guilty of committing crimes involving moral turpitude since the evidence presented at hearing did not demonstrate any intent to defraud or deceive on the part of the Halls. Similarly, the evidence did not clearly and convincing demonstrate that Respondent was untrustworthy or was unfit to engage in the business of insurance.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED:

That the Respondent be found guilty of the violating Section 626.621(8), Florida Statutes, and that his licenses and eligibility for licensure be suspended for a period of six (6) months, after which Respondent's licenses and eligibility for licensure be reinstated without prejudice.

DONE and ORDERED this 14th day of January, 1991, in Tallahassee, Florida.

DIANE CLEAVINGER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1991.

APPENDIX TO RECOMMENDED ORDER

1. The facts contained in paragraphs 1, 2, 3, 4, 5 and 6 are adopted in substance, in so far as material.

COPIES FURNISHED:

Tom Gallagher

State Treasurer and Insurance Commissioner

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

David D. Hershel, Esquire Department of Insurance Division of Legal Services

412 Larson Building

Tallahassee, Florida 32399-0300

Mark Zilberberg, Esquire 217-19 East 6th Avenue Tallahassee, Florida 32302

Don Dowdell General Counsel

The Capitol, Plaza Level Tallahassee, Florida 32399-0300

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AGENCY FINAL ORDER

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OFFICE OF THE TREASURER DEPARTMENT OF INSURANCE

IN THE MATTER OF:

DOAH CASE NO.: 90-3024

LEMAR BONNE HALL Case No.: 90-L-152DDH

/

FINAL ORDER

THIS CAUSE came on before the undersigned Treasurer of the State of Florida, acting in his capacity as Insurance Commissioner, for consideration and final agency action. On March 19, 1990 the Department denied the Mr. Hall's application for appointment as a life insurance agent. On April 10, 1990, an Administrative Complaint was filed charging him with various violations of the Insurance Code. The agent then timely filed a request for a formal proceeding pursuant to Section 120.57(1), Florida Statutes. Pursuant to notice, the matter was heard before the Honorable Dianne Cleavinger, Hearing Officer, Division of Administrative Hearings on September 12, 1990.

After consideration of the evidence, argument and testimony presented at hearing, and subsequent written submissions by the parties, the hearing officer issued her Recommended Order. (Attached as Exhibit A) The hearing officer recommended that Agent Hall current insurance licenses and eligibility for licensure as an agent be suspended for a period of six (6) months. Neither

party filed exceptions to the Recommended Order. Upon careful consideration of the record, the submissions of the parties and being otherwise advised in the premises, it is

ORDERED:

1. The Findings of Fact of the hearing officer are adopted as the Department's Findings of Fact with the exception of the hearing officer's Finding of Fact #7. This finding is, in actuality, a conclusion of law in that it purports to require the Department to retroactively prove the agent's specific intent to defraud the financial institutions to whom he supplied false information, in order for the Department to establish that the Respondent committed a crime involving "moral turpitude".

   
   

   However, this position is untenable, as it is incontro- vertible that the Respondent expressly pled guilty to "knowingly" and "with intent to deceive" making false representations to obtain bank loans. (Petitioner's Exhibits 2, 3 and 4) Thus, the agent specifically pled guilty to not only the crime itself, but to the intent to deceive the financial institutions from whom he received loans. Moreover, the hearing officer expressly acknowledges this fact in her Conclusion of Law #4.

   
   

   Notwithstanding this fact, to require an administrative agency to attempt to affirmatively prove evidence of actual intent (after many years may have elapsed between the crime and the administrative action) is at odds with all applicable case law and would impose an impossible burden upon a regulatory agency seeking to protect the public. Rather, it is axiomatic that certain crimes by their nature involve moral turpitude. For example, the crime of theft has "always been held to involve moral turpitude, regardless of the sentence imposed or the amount stolen." (Emphasis supplied.) Soetarto v. Immigration and Naturalization Service, 516 F.2d 778, 780 (7th Cir. 1975). See also, 27A Words

   and Phrases, 185 1990 Ed.

   
   

   In State ex rel. Tullidge v. Hollingsworth, 146 So. 660, 661 (Fla. 1933), the Florida Supreme Court established the generally accepted definition of moral turpitude. The Court held that "moral turpitude involves the idea of inherent baseness or depravity in private social relations or duties owed by man to man or by man to society. (Citations omitted) It has also been defined as anything done contrary to justice, honesty, principle, or good morals..." See also, Pearl v. Florida Board of Real Estate, 394 So.2d 189, 191 (Fla. 3rd DCA 1981).

   
   

   Furthermore, courts have always held that "a crime in which fraud is an ingredient involves moral turpitude." Jordan v. DeGeorge, 341 U.S. 233, 71 S.Ct. 703, 95 L.Ed. 886 (1951). And it cannot be plausibly maintained that intentionally deceiving banks to obtain loans by providing them with false information does not involve the requisite "ingredient" of fraud. Therefore, it is clear that the Agent Hall committed a crime involving moral turpitude, thus subjecting himself to the mandatory suspension or revocation provisions of Section 626.611, Florida Statutes. Accordingly and for the reasons stated herein, Finding of Fact #7 is REJECTED.

   
   

2. The Conclusions of Law of the hearing officer are adopted as the Department's Conclusions of Law with the exception of Conclusion of Law #4. Here, the hearing officer again concludes that the Department did not prove that Mr. Hall committed a crime involving moral turpitude punishable as provided in Section 626.611(14), Florida Statutes, because the Department did not prove any

   express intent to defraud or deceive. Accordingly and based upon the same reasons addressed in paragraph 1. above, the hearing officer's Conclusion of Law #4 is likewise REJECTED.

   
   

3. The hearing officer's Recommendation that the agent's insurance licensure and eligibility for licensure as a life and health agent be suspended for a period of six (6) months is approved and accepted as being the appropriate disposition of this case.

ACCORDINGLY, all licenses and eligibility for licensure held by LEMAR BONNE HALL are hereby SUSPENDED for a period of six (6) months.

Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order pursuant to section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a Notice of Appeal with the General Counsel, acting as the Agency Clerk, at 412 Larson Building, Tallahassee, Florida 32399-0300, and a copy of the same and the filing fee with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.

DONE and ORDERED this 2 day of March , 1991.

Tom Gallagher Treasurer and Insurance Commissioner

COPIES FURNISHED TO:

Diane Cleavinger, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

Lemar Bonne Hall, Sr.

P. O. Box 4314 Tallahassee, Florida 32315

Mark Zilberberg, Esquire 217-19 E. 6th Avenue Tallahassee, FL 32303

David D. Hershel, Esquire Division of Legal Services

412 Larson Building Tallahassee, Florida 32399-0300

Docket for Case No: 90-003024

Orders for Case No: 90-003024