FLORIDA _ DEPARTMENT OF FINANCIAL SERVICES TOM GALLAGHER CHIEF FINANCIAL OFFICER FILED STATE OF FLORIDA SEP 28 2004 — IN THE MATTER OF: Docketed by ELL RUSSELL GARDNER WOLVEN ADMINISTRATIVE COMPLAINT O S ~ O Y) PL TO: RUSSELL G. WOLVEN 1790 The 12th Fairway Wellington, Florida 33414 RUSSELL G. WOLVEN 1982 North Rainbow Boulevard Suite 266 Las Vegas, Nevada 89108-2797 You, RUSSELL G. WOLVEN, license I.D. #D032540, are hereby notified that, pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1, Pursuant to Chapter 626, Florida Statutes, you, RUSSELL G. WOLVEN, are currently licensed in this state as a nonresident life, health, & variable annuity (8-15) agent, nonresident life (8-16) agent, and nonresident life & health (8-18) agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, RUSSELL G. WOLVEN, were licensed in the state of Florida as a nonresident insurance agent. 3. The Business of Life Insurance is declared to be a public trust, in which all agents of all companies have a common obligation to work together in serving the best interests of the insuring public, by understanding and observing the laws governing Life Insurance by presenting accurately and completely every fact essential to a client’s decision, and by being fair in all relations with colleagues and competitors, always placing the policyholder’s interests first. [Chapter 690-215.210, Florida Administrative Code]. 4, At all times pertinent to the dates and occurrences referred to herein, you, RUSSELL G. WOLVEN, were associated with and acted as a “sales representative” for a company known as Universal Luxury Coaches, LLC. (“ULC”) located at 4441 Orange Blvd, Sanford, FL 32771. In that capacity, you, RUSSELL G. WOLVEN, solicited and sold investments in ULC’s Affinity Rental Program, Option 4 (“Option 4”), an unregistered security. 5. ULC’s Option 4 is an investment contract inasmuch as the plan involves an investment of money in a common enterprise with the expectation of profits to be derived from the managerial efforts of others. Investment contracts are statutorily defined as securities pursuant to Section 517.021(20), F lorida Statutes. 6. ULC’s Option 4 is a security, but it is not registered with the State of Florida, Office of Financial Regulation. Section 517.07, Florida Statutes, requires that all securities sold in or into Florida be registered with the Office or exempt from registration. ULC’s Option 4 is not exempt from such registration requirements under the provisions of Sections 517.051 or 517.061, Florida Statutes. 7. ULC’s Option 4 is not a timeshare plan and does not qualify for the exemption set forth in section 721.23, Florida Statutes. 8. You, RUSSELL G. WOLVEN, aided and abetted agent Ray Henwood, of Senior Citizens Insurance Company (“Senior Citizens”), in the marketing and sale of ULC’s Option 4. 9. As to each of the transactions described below, you, RUSSELL G. WOLVEN, used your position as an insurance agent to willfully misrepresent investments, mainly to elderly insureds, thereby, causing pecuniary harm to them. 10. Pursuant to Chapter 626, Florida Statutes, the Florida Department of F inancial Services has jurisdiction over your insurance licenses and appointments. COUNT I 11. The above General Allegations are hereby realleged and fully incorporated by reference. 12. On or about May 20, 2003, you, RUSSELL G. WOLVEN, and agent Ray Henwood of Senior Citizens, visited E.M. (age 85) for the purpose of soliciting investments in ULC’s Option 4. E.M. had never met you, RUSSELL G. WOLVEN, or agent Henwood prior to this visit. 13. Prior to this visit you, RUSSELL G. WOLVEN, gained access to E.M.’s financial information, which included investment accounts she maintained with Allianz and Fidelity. You, RUSSELL G. WOLVEN, also had prior knowledge of the current balances of these accounts. 14, During this visit, you, RUSSELL G. WOLVEN, represented to E.M. that ULC’s Option 4 was a safe investment; that E.M. would receive a check each month; that the investment would pay a 10% return; that E.M. “could not lose her money”; and that ULC would reimburse her for any surrender charges incurred. Although E.M. never fully understood the investment, you, RUSSELL G. WOLVEN, convinced her to surrender an Allianz annuity and purchase $72,000.00 worth of ULC’s Option 4. For this sale, you, RUSSELL G. WOLVEN received a substantial fee, commission or other benefit. 15. During the month of September 2003, you, RUSSELL G. WOLVEN, visited EM. several more times, for the purpose of soliciting investments in ULC’s Option 4. During these visits, you, RUSSELL G. WOLVEN, convinced E.M. to purchase an additional $37,550.00 worth of ULC’s Option 4. For these sales, you, RUSSELL G. WOLVEN received a substantial fee, commission or other benefit. NER OTRO A A AE SERENE = = 16. Inconclusion, you, RUSSELL G. WOLVEN, used your position as an agent to knowingly mislead E.M. into purchasing approximately $119,550.00 worth of an unregistered security, for the purpose of obtaining a fee, commission, or other benefit. IT IS THEREFORE CHARGED that you, RUSSELL G. WOLVEN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (b) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; (c) Sale of an unregistered security that was required'to be registered pursuant to Chapter 517. [Section 626.611(16), Florida Statutes]; (d) Asa life agent, a violation of the code of ethics. [Section 626.621(9), Florida Statutes]; (e) Knowingly aiding or abetting insurance agents in the violation of a provision of the insurance code or any order or rule of the department, commission, or office. [Section 626.621(12), Florida Statutes]. COUNT I 17. The above General Allegations are hereby realleged and fully incorporated by reference. 18. On or about April 2, 2003, you, RUSSELL G. WOLVEN, and agent Ray Henwood of Senior Citizens, visited V.B. (age 88) for the purpose of soliciting the sale of investments in ULC’s Option 4. 19. During this visit, you, RUSSELL G. WOLVEN, and agent Henwood represented to V.B. that the ULC investment was FDIC insured. 20. Acting on your advice, V-B. invested $30,400.00 in ULC’s Option 4. These transactions were all willfully done with your knowledge and upon your advice, for the purpose of obtaining a fee, commission, money, or other benefit. 21. In conclusion, you, RUSSELL G. WOLVEN, used your position as an insurance agent to knowingly mislead V.B. into purchasing approximately $30,400.00 worth of an unregistered security, for the purpose of obtaining a fee, commission, or other benefit. IT IS THEREFORE CHARGED that you, RUSSELL G. WOLVEN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: Sections 626.611(7); 626.611(9); 626.611(16); 626.621(9); and 626.621(12), Florida Statutes, as more fully described under Count I above. COUNT I 22. The above General Allegations are hereby realleged and fully incorporated by reference. 23. Onor about April 16, 2003, agent Ray Henwood of Senior Citizens introduced you, RUSSELL G. WOLVEN, to G:S. (age 88), for the purpose of soliciting investments in ULC’s Option 4. You RUSSELL G. WOLVEN, represented to G.S. that investing in ULC’s Option 4 would facilitate her future health insurance premium payments while saving her money, and that she would be able to get her money back after ten years. 24. Acting on this information, G.S. purchased $10,000.00 worth of ULC’s Option 4. GS. also purchased $5,000.00 worth of ULC’s Option 4 as a gift for her husband. In addition, G.S.’s daughter was induced into purchasing $5,000.00 worth of ULC’s Option 4 as a gift for GS. 25. Inconclusion, you, RUSSELL G. WOLVEN, used your position as an insurance agent to knowingly mislead G.S. into purchasing approximately $20,000.00 worth of an unregistered security, for the purpose of obtaining a fee, commission, or other benefit. IT IS THEREFORE CHARGED that you, RUSSELL G. WOLVEN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: Sections 626.611(7); 626.61 1(9); 626.611(16); and 626.621(9), Florida Statutes, as more fully described under Count I above. COUNT IV 26. The above General Allegations are hereby realleged and fully incorporated by reference. 27. On or about March 8, 2000, you, RUSSELL G. WOLVEN, applied for and were later granted licensure as a nonresident life, health, & variable annuity (8-145) agent, nonresident life (8-16) agent, and nonresident life & health (8-18) agent. 28, On or about December 1, 2000, you, RUSSELL G. WOLVEN, submitted an application for Ad Valorem Tax Exemption with the state of Florida. This application establishes that you became a permanent resident of the state of Florida in December 2000. 29. You, RUSSELL G. WOLVEN, held multiple appointments with insureds within the state of Florida during the years 2001 through 2004, while holding a nonresident license. IT IS THEREFORE CHARGED that you, RUSSELL G. WOLVEN, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) The licensee shall, throughout the existence of the Florida nonresident life license and appointment, hold a license as a resident life agent in his or her state of residence. The authority of the nonresident license is limited to the specific lines of authority granted in the license issued by the agent's state of residence and further limited to the specific lines authorized under the nonresident license issued by this state [Section 626.792 (5), Florida Statutes]; (b) Any individual who holds a Florida nonresident agent's license, upon becoming a resident of this state may, for a period not to exceed 90 days, continue to transact insurance in this state under the nonresident license and appointment. Such individual must make application for tesident licensure and must become licensed as a resident agent within 90 days after becoming a resident of this state [Section 626.792 (7), Florida Statutes]. WHEREFORE, you, RUSSELL G. WOLVEN, are hereby notified that the Chief Financial Officer intends to enter an order suspending or revoking your license(s) and eligibility for licensure as an insurance agent or to impose such lesser penalties as may be provided under the provisions of Chapter 626, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to Sections 120.569 and 120.57, Florida Statutes, and Rule 28-107, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel as acting Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN AND AN ORDER OF REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-107.004, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name and address of the party making the request, for purpose of service; (b) A statement that the party is requesting a hearing involving disputed issues of material fact, or a hearing not involving disputed issues of material fact; and (c) A reference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. However, if you dispute material facts that are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before a State administrative law judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department of Financial Services. DATED and SIGNED this 23" day of Seabmber ,2004. KAREN CHANDLER Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF RIGHTS has been furnished to: Russell G. Wolven, 1790 The 12th Fairway, Wellington, FL 33414; Russell G. Wolven, 1982 North Rainbow Boulevard Suite 266, Las Vegas, NV 89108-2797 by Certified Mail this 23" day of Seglember , 2004. 10 DAVID BUSCH Florida Bar Number 0140945 Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-033 Phone: 850-413-4146

Docket for Case No: 05-000142PL

Orders for Case No: 05-000142PL