FLORIDA DEPARTMENT OF FINANCIAL SERVICES FILED Chink FNANCIAL OFFICER APR 13 2007 STATE OF FLORIDA IN THE MATTER OF: eine OT DUdePe PAMELA A. DOWNER CASE NO: 87341-07-AG / ADMINISTRATIVE COMPLAINT TO: PAMELA A. DOWNER 8039 Garden Drive, Apt. 110 Seminole, Florida 33777 PAMELA A. DOWNER Robert Droubie P.A. 2240 Belleair Road Clearwater, Florida 33764 You, PAMELA A. DOWNER, 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 an insurance agent in this state as a result of which it is alleged that: GENERAL ALLEGATIONS 1. You, PAMELA A. DOWNER, are currently licensed in this state as a life and variable annuity insurance agent and as a life insurance agent. 2. At all times pertinent to the dates and occurrences referenced in this Administrative Complaint, you, PAMELA A. DOWNER, were licensed in this state as an insurance agent. 3. A viatical settlement purchase agreement is an investment contract expressly defined as a security under section 517.021(20)(q), Florida Statutes (2003). COUNT I | 4. Paragraphs one through three are realleged and incorporated herein by reference. 5. On or about October 15, 2003, you, PAMELA A. DOWNER, visited the home of S.C. of Clearwater, Florida and solicited her to invest $150,000.00 of her retirement savings in purchasing three viatical settlement purchase agreements issued by Mutual Benefits Corporation, Inc., a Florida corporation. 6. You, PAMELA A. DOWNER, represented to S.C. that the viatical settlement purchase agreements issued by Mutual Benefits Corporation complied with all Florida and Federal Securities laws and regulations. This representation was false and a material misstatement of fact. In fact, Mutual Benefits Corporation was not and never has been registered to sell securities in this state nor was its viatical settlement purchase agreements registered for sale in this state or exempt from such registration, all in violation of sections 517.051, 517.061, and 517.07, Florida Statutes. You, PAMELA A. DOWNER, were not registered in this state to sell securities, in violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER, were aware or should have been aware of these facts. 7. You, PAMELA A. DOWNER, failed to inform S.C. that you were not licensed to sell securities, that the viatical settlement purchase agreements being solicited by you were unregistered, were speculative and involved a very high degree of risk and should not be purchased by anyone who could not afford the loss of his or her entire investment. S.C. would not have invested her funds into the viatical settlement purchase agreements if she had been made aware of these facts. 8. In purchasing the Mutual Benefits viatical settlement purchase agreement, S.C. relied strictly and solely upon representations that the viatical agreements were guaranteed safe and secure, represented a good investment, and that she could not lose any portion of her $150,000 principal. These representations made by you, PAMELA A. DOWNER, were knowingly false or were made without knowledge as to their truth or accuracy. You, PAMELA A. DOWNER, were aware of the reliance of S.C. upon your representations concerning her decision to purchase the viaticals. 9. The Mutual Benefits Corporation viatical program has been determined to be a fraudulent financial scheme, and its principal organizers have been criminally prosecuted and convicted under federal law. A receiver has been appointed by the United States Court in and for the Southern District of Florida to administer Mutual Benefits Corporation and it is presently uncertain whether S.C. will be able to recover her funds or any portion thereof. IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Chief Financial Officer which constitute grounds for the suspension or revocation of your license(s) and eligibility for licensure: (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 permit. [Section 626.611(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 (2003)] (d) Violation of any provision of this code or of any other law applicable to the business of insurance in the course of dealing under the license or permit. [Section 626.621(2), Florida Statutes] (e) In the conduct of business under the license or permit, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes] (f) Knowingly: a. Filing with any supervisory or other public official, b. Making, publishing, disseminating, circulating, c. Delivering to any person, d. Placing before the public, e. Causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement. [Section 626.9541(1)(e)1, Florida Statutes] (g) A violation of [Chapter 626.991 et. seg.] is an unfair trade practice under ss. 626.9521 and 626.9541, Florida Statutes, and is subject to the penalties provided in the insurance code. Part X of this chapter applies to a licensee under this act or a transaction subject to this act as if a viatical settlement contract and a viatical settlement purchase agreement were an insurance policy. [Section 626.9927(1), Florida Statutes] (h) (1) It is unlawful for any person: (b) In the solicitation of a viatical settlement purchase agreement: 1. To employ any device, scheme, or artifice to defraud: 2. To obtain money or property by means of an untrue statement of a material fact or by any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or 3. To engage in any transaction, practice or course of business which operates or would operate as a fraud or deceit upon a person. [Section 626.99275(1)(b), Florida Statutes] @ A person may not represent that an investment in a viatical settlement purchase agreement is “guaranteed,” that the principal is “safe”, or that the investment is free of risk. [Section 626.99277(6), Florida Statutes (2003)] COUNT II 10. Paragraphs one through three are realleged and incorporated herein by reference. 11. On or about April 22, 2003, you, PAMELA A. DOWNER, visited the home of D.H. of Safety Harbor, Florida and solicited him to invest $ 20,000.00 of his personal retirement savings in purchasing a viatical settlement purchase agreement issued by Mutual Benefits Corporation, Inc., a Florida corporation. 12. You, PAMELA A. DOWNER, represented to D.H. that the viatical settlement purchase agreement issued by Mutual Benefits Corporation complied with all Florida and federal securities laws and regulations. This representation was false and a material misstatement of fact. In fact, Mutual Benefits Corporation was not and never has been registered to sell securities in this state nor was its viatical settlement purchase agreements registered for sale in this state or exempt from such registration, all in violation of sections 517.051, 517.061, and 517.07, Florida Statutes. You, PAMELA A. DOWNER, were not registered in this state to sell securities, in violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER, were aware or should have been aware of these facts. 13. You, PAMELA A. DOWNER, failed to inform D.H. that you were not licensed to sell securities, that the viatical settlement purchase agreement being solicited by you was unregistered, was speculative and involved a very high degree of risk. and should not be purchased by anyone who could not afford the loss of his or her entire investment. D.H. would not have invested his funds into the viatical settlement purchase agreement if he had been made aware of these facts. 14. The Mutual Benefits viatical settlement purchase agreements were not an appropriate investment for individuals of D.H.’s age, financial circumstances and investment experience. These transactions were neither necessary nor in the purchaser’s best interest. You, PAMELA A. DOWNER were aware or should have been aware of these facts. 15. In purchasing the Mutual Benefits viatical settlement purchase agreement, D.H. relied strictly and solely upon representations that the viatical agreement was guaranteed safe and secure, represented a good investment, and that he could not lose any portion of his $20,000 principal. These representations made by you, PAMELA A. DOWNER, were knowingly false or were made without knowledge as to their truth or accuracy. You, PAMELA A. DOWNER, were aware of the reliance of D.H. upon your representations concerning his decision to purchase the viatical. 16. The Mutual Benefits Corporation viatical program has been determined to be a fraudulent financial scheme, and its principal organizers have been criminally prosecuted and convicted under federal law. A receiver has been appointed by the United States Court in and for the Southern District of Florida to administer Mutual Benefits Corporation and it is presently uncertain whether D.H. will be able to recover his funds or any portion thereof. IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Chief Financial Officer which constitute grounds for the suspension or revocation of your license(s) and eligibility for licensure: Sections 626.611(7); 626.611(9); 626.611(16); 626.621(2); 626.621(6); 626.9541(1)(e)1; 626.9927(1); 626.99275(1)(b) and 626.99277(6), Florida Statutes as more particularly alleged in Count I above. COUNT Ill 17. Paragraphs one through three are realleged and incorporated herein by reference. . 18. Onor about April, 2003, you, PAMELA A. DOWNER, visited the home of J.S. of Clearwater, Florida and solicited him to invest $ 20,000.00 of his personal retirement savings in purchasing a Viatical settlement purchase agreement issued by Mutual Benefits Corporation, Inc., a Florida corporation. 19. You, PAMELA A. DOWNER, represented to J.S. that the viatical settlement purchase agreement issued by Mutual Benefits Corporation complied with all Florida and federal securities laws and regulations. This representation was false and a material misstatement of fact. In fact, Mutual Benefits Corporation was not and never has been registered to sell securities in this state nor was its viatical settlement purchase agreements registered for sale in this state or exempt from such registration, all in violation of sections 51 7.051, 517.061, and 517.07, Florida Statutes. You, PAMELA A. DOWNER, were not registered in this state to sell securities, in violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER, were aware or should have been aware of these facts. 20. You, PAMELA A. DOWNER, failed to inform J.S. that you were not licensed to sell securities, that the viatical settlement purchase agreement being solicited by you was. unregistered, was speculative and involved a very high degree of risk and should not be purchased by anyone who could not afford the loss of his or her entire investment. J.S. would not have invested his funds into the viatical settlement purchase agreement if he had been made aware of these facts. 21. The Mutual Benefits viatical settlement purchase agreements were not an appropriate investment for individuals of J.S.’s age, financial circumstances and investment experience. These transactions were neither necessary nor in the purchaser’s best interest. You, PAMELA A. DOWNER were aware or should have been aware of these facts. 22. ‘In purchasing the Mutual Benefits viatical settlement purchase agreement, J.S. relied strictly and solely upon representations that the viatical agreement was guaranteed safe and secure, represented a good investment, and that she could not lose any portion of her $20,000 principal. These representations made by you, PAMELA A. DOWNER, were knowingly false or were made without knowledge as to their truth or accuracy. You, PAMELA A. DOWNER, were aware of the reliance of J.S. upon your representations concerning his decision to purchase the viatical. 23. _ The Mutual Benefits Corporation viatical program has been determined to be a fraudulent financial scheme, and its principal organizers have been criminally prosecuted and convicted under federal law. A receiver has been appointed by the United States Court in and for the Southern District of Florida to administer Mutual Benefits Corporation and it is presently uncertain whether J.S. will be able to recover his funds or any portion thereof. IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Chief Financial Officer which constitute grounds for the suspension or revocation of your license(s) _ and eligibility for licensure: Sections 626.61 1(7); 626.611(9); 626.611(16); 626.621(2); 626.621(6); 626.9541(1)(e)1; 626.9927(1); 626.99275(1)(b) and 626.99277(6), Florida Statutes as more particularly alleged in Count I above. WHEREFORE, you, PAMELA A. DOWNER, are hereby notified that the Chief Financial Officer intends to enter an Order revoking or suspending your licenses and eligibility for licensure or to impose such penalties as may be proper under the provisions of Sections 626.611, 626.621, 626.681, 626.691, 626.692 and 626.9521 Florida Statutes, under the procedures and rules set forth in this Administrative Complaint. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department of Financial Services ("Department") pursuant to Sections 120.569 and 120.57, Florida Statutes, and Rule 28-106, 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 acting as 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 SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, 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, address, and telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent"). (b) The name, address, telephone number, facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. (c) A statement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate. (d) A statement of when the respondent received notice of the administrative complaint. (e) A statement including the file number to the administrative complaint. Ifa 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 cail upon your request. 10 However, if you dispute material facts which 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. DATED and SIGNED this _| 3" day of Ae <4 , 2007. ‘N CHANDLER Deputy Chief Financial Officer 11 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail to: PAMELA A. DOWNER, 8039 Garden Drive, Apt. 110, Seminole, Florida 33777 and c/o Robert Droubie P.A., 2240 Belleair Road, Clearwater, Florida 33764 on this ioe day of cv\ 2007. AMES A. BOSSART, ESQUI Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4124 12

Docket for Case No: 07-003438PL