ae sf FILED ALEX SIN MAY 13 2010 CHIEF FINANCIAL OFFICER el Docketedby__ & STATE OF FLORIDA IN THE MATTER OF: CASE NO. 106034-10-AG ‘ JOHN DANIEL MUELLER / ADMINISTRATIVE COMPLAINT TO: JOHN DANIEL MUELLER 32 S. Osprey Avenue, Suite 102 Sarasota, FL 34239 JOHN DANIEL MUELLER 2608 Hibiscus Street Sarasota, FL 34239-4707 You, JOHN DANIEL MUELLER, 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. You, JOHN DANIEL MUELLER, are currently licensed in the state as a life agent (2-16), a life & health agent (2-18), and a health insurance agent (2-40). 2. At all times pertinent to the dates and occurrences referred to in this Administrative Complaint you, JOHN DANIEL MUELLER, were licensed as an insurance agent in this state. 3. You, JOHN DANIEL MUELLER, have operated out of various insurance agencies at different locations, namely: Suncoast International (or International) Agency, located at 6553 Filed June 14, 2010 3:03 PM Division of Administrative Hearings. Superior Avenue, Sarasota, Florida 34238 or 2102 Hillview Street, Sarasota, FL 34239; National Service Insurance Agency, located at 7021 S. Tamiami Trail, Unit B, Sarasota, EL 34231; and Matos Financial Inc. (or Gulf Shore Insurance of Sarasota, Inc.), located at 2245 Bee Ridge Road, Suite B, Sarasota, FL 34239-5552 or 32 South Osprey Avenue, Suite 102, Sarasota, FL 34236. ) 4. Pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida and the Department of Financial Services has jurisdiction over your insurance licenses and yout eligibility for licensure and appointment. 5. 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 69B-215.210, Florida Administrative Code] 6. . All of the insurance consumers described in each of the counts below trusted you, JOHN DANIEL MUELLER, and you abused that trust. ) 7. Misrepresentations are declared to be unethical. No person shall make, issue, .circulate, or cause to be made, issued, or circulated, any estimate, circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or make any false or misleading statement as to the dividends or share of surplus previously paid on similar policies, or make the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates, or use any name or title of any policy or class of policies misrepresenting the true nature thereof. [Chapter 69B-215.230(1), Florida Administrative Code] 8. No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, any , advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading. [Chapter 69B-215.230(2), Florida Administrative Code] 9. The conduct and actions described below constitute unfair and deceptive acts or practices in violation of Section 626.9541, Florida Statutes of the Unfair Insurance Trade Practices Act. [Section 626.951, Florida Statutes} COUNT I 10. The above General Allegations numbered one through nine are hereby realleged and fully incorporated herein by reference. 11. In January 2006, you, JOHN DANIEL MUELLER, came to the home of Margaret Alice Schepp, then age 82, (now deceased) unannounced. Present with her at that time and place was her son, Steve Schepp, who was then caring for his mother’s mental, physical and financial needs. 12. During that unannounced visit you, JOHN DANIEL MUELLER, solicited the sale of an Allianz Life Insurance Company of North America (Allianz) annuity, by touting a “bonus” payment of approximately $10,000 and a first year return of approximately 14%. Steve Schepp 3 gave his mother, Margaret Schepp, explicit directions not to sign anything without him (Steve Schepp) being present. 13. Steve Schepp gave you, JOHN DANIEL MUELLER, explicit directions that any decisions or actions involving his mother had to go through him, Steve Schepp, first. 14.. You, JOHN DANIEL MUELLER, ignored Steve Schepp’s directive as described above, returned to the Schepp residence in February 2006, and had Mrs. Schepp sign one or more insurance related forms without first advising her son, Steve Schepp, of any such insurance . transactions. 15. Unbeknownst to Steve Schepp, you, JOHN DANIEL MUELLER, effected a transfer of approximately $120,000 dollars from Mrs. Schepp’s previously owned Bankers Life and Casualty Company (Bankers) policy into the new Allianz policy numbered 70393230 (Allianz 230) which you sold her. A $10,000 “bonus” was added to the Allianz policy; however, an immediate surrender of that policy would result in a $35,000 penalty. 16. Although an attempt was made on or about February 8, 2006, to stop the Bankers transfer of funds, it was too late, and Mrs. Schepp incurred a $4,000 surrender penalty on the transfer of the Bankers policy. | 17. In the process of inducing the sale and purchase of the Allianz 230, you, JOHN DANIEL MUELLER, willfully misrepresented and/or omitted material information regarding the annuities. The misrepresentations, both by omission of material information and commission of false statements, include, but are not limited to, the following: (a) You, JOHN DANIEL MUELLER, never advised the Schepps that if Mrs. Schepp wanted to cash out the Allianz 230, she would have to wait ten years or pay a substantial surrender penalty fee. (b) You, JOHN DANIEL MUELLER, never advised the Schepps that if Mrs. Schepp chose, at any time, to cash out her policy, she would not receive the $10,000 bonus. (c) You, JOHN DANIEL MUELLER, never advised the Schepps that the only way Mrs. Schepp would receive the $10,000 bonus is if she chose to annuitize her investment, (d) You, JOHN DANIEL MUELLER, falsely told the Schepps that the Allianz 230 would earn 14% annual interest. (e) You, JOHN DANIEL MUELLER, falsely assured the Schepps that the Allianz 230 was suitable to Mrs. Schepp’s needs. (f) You, JOHN DANIEL MUELLER, intentionally concealed the final sale of the Allianz 230 from Steve Schepp so that Mr. Schepp would not be able to advise his mother against the purchase. 18. The willful misrepresentations and omissions made by you, JOHN DANIEL MUELLER, described herein were false and material misstatements of fact. You, JOHN DANIEL MUELLER, were fully aware of these falsehoods. 19. Mrs. Schepp justifiably relied on the representations and information conveyed to them by you, JOHN DANIEL MUELLER, concerning the Bankers and Allianz annuities. The Allianz 230 would not have been purchased but for your misrepresentations. 20.. The sale of the Allianz 230 to the Mrs. Schepp was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstances, was without demonstrable benefit to her, and was done for the sole purpose of obtaining a fee, commission, money of other benefit from the insurance company totaling $8,835.42. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code. 21. As.a result of the sale, Mrs. Schepp suffered financial harm by not being able to utilize and access her retirement assets for housing or health care costs or general living expenses without incurring substantial surrender charges. . IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated. or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) In recommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section 627.4554(4)(a), Florida Statutes]; (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.61 1(5), Florida Statutes]; (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part [X of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes]; (j) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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]; (k) Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes]. 7 COUNT II 22. The above General Allegations numbered one through nine are hereby realleged and fully incorporated herein by reference. 23. Robert Campbell met with you, JOHN DANIEL MUELLER, in March 2007. 24. At that time Mr. Campbell owned a $15,000 tax qualified Glenbrook Life and Annuity Company (Glenbrook) annuity purchased in 1995, and an AIG Sun America (Sun America) annuity valued at approximately $44,000.00, purchased in 1999, _ 25. Although Mr. Campbell desired to invest the Sun America proceeds in one or more Certificates of Deposit (CDs), you, JOHN DANIEL MUELLER, falsely told Mr. Campbell: (a) that a Conseco Insurance Company (Conseco) annuity would pay 2% per annum more than a CD without explaining how the per annum interest would be offset by withdrawal penalties and a failure to annuitize; (b) that Mr. Campbell could cancel the entire policy after one year and receive a return of the entire principal amount invested, but not any interest payments; (c) that after holding the Conseco annuity for one year Mr. Campbell would receive a “bonus”, but failed to explain the conditions under which the bonus would be retained. 26. You, JOHN DANIEL MUELLER, had Mr. Campbell execute an annuity application for Conseco policy number A070815 (Conseco #815) on March 15, 2007, at which time Mr. Campbell, at your direction, authorized the total surrender of the Glenbrook annuity. 27. In deciding upon the purchase of Conseco #815, Mr. Campbell told you, JOHN DANIEL MUELLER, to fund the purchase with Sun America proceeds, but not to use all of the Glenbrook proceeds for such purpose. 28. On May 16, 2007, Mr. Campbell telephoned your, JOHN DANIEL MUELLER’S, office and left a message with your secretary to cancel the transactions. On that same day, in response to an inquiry from Conseco initiated by Mr. Campbell as to his understanding of the Conseco #815, you, JOHN DANIEL MUELLER, falsely advised that Mr. Campbell understood the annuity, but wasn’t sure what tax bracket he was in. 29, On or about May 17, 2007, you, JOHN DANIEL MUELLER, told Mr. Campbell that it was too late to cancel the Sun America liquidation. 30. On or about May 21, 2007, you, JOHN DANIEL MUELLER, told Mr. Campbell that the entire proceeds from the Sun America liquidation were being utilized to fund the Conseco #815 purchase, but only some of the Glenbrook proceeds were being used. However, you, JOHN DANIEL MUELLER, used all of the Glenbrook proceeds contrary to Mr. Campbell’s express directions to you. 31. Conseco #815 was issued on May 24, 2007. You, JOHN DANIEL MUELLER, never advised Mr. Campbell as to the existence of any cancellation or “free look” grace period with respect to any of the above transactions and deliberately ignored Mr. Campbell’s repeated requests to cancel the Conseco #815 purchase. 32. Mr. Campbell justifiably relied on the representations and information conveyed to him by you, JOHN DANIEL MUELLER, concerning the Conseco #815 purchase and related transactions. Conseco #815 would not have been purchased but for your willful misrepresentations. 33. The sale of the Conseco #815 to Mr. Campbell was not in his best interest, was neither necessary nor appropriate for a person of his financial circumstances, was without demonstrable benefit to him, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust as described in Rule 69B-215.210, Florida Administrative Code. 34. As a result of the sales, Mr. Campbell has suffered financial harm by not being able to utilize and access retirement assets, now held in the Conseco annuity, for housing or health care costs or general living expenses, without incurring substantial surrender charges. IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or _are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) In recommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section . 627.4554(4)(a), Florida Statutes]; | (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.61 1(5), Florida Statutes]; (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes}; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; 10 (63) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes}; (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes); (j) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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]; (k) Twisting is defined as knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance 11 policy or to take out a policy or insurance in another insurer. [Section 626.9541(1)(), Florida Statutes] If a person is accountable for “twisting,” that person commits a misdemeanor of the first degree, punishable as provided s. 775.082, and an administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $40,000 shall be imposed for each willful violation. [Section 626.9521(3)(a), Florida Statutes]; ad Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes]. COUNT III | | 35. The above General Allegations numbered one through nine.are hereby realleged and fully incorporated herein by reference. 36. In 2002, Jytte Kandrup, then age 75, owned funds held by Franklin Templeton Investments (Franklin) and John Hancock Financial Services (Hancock), bequeathed to her by her deceased husband. 37. Ms. Kandrup was born in Denmark. English is her second language. She has no formal education beyond the sixth grade. Prior to her husband’s death, she had no prior investment experience. 38. On or about October 15, 2002, Ms. Kandrup was solicited by you, JOHN DANIEL MUELLER, to purchase Midland National Life Insurance Company (Midland) annuities numbered 8500111401 (Midland #401) and 85001141146 (Midland #146), touting the 5% “bonus” that would be paid on each of the contracts. 12 39. In order to fund the purchase of the Midland annuities, you, JOHN DANIEL MUELLER, convinced Ms. Kandrup to surrender Hancock annuity numbered RV02014423 (Hancock #423) that had been issued to her in June 2001. This transaction resulted in Ms. Kandrup incurring a net loss on Hancock #423 of $8,343.26, including a $4,063.20 surrender charge, 40. At your direction, JOHN DANIEL MUELLER, the $71,656.74 Hancock #423 balance was then used to provide the initial premium for purchasing Midland #401, providing you, JOHN DANIEL MUELLER, with a commission of $9,315.38. 41. The Midland #401 annuity you, JOHN DANIEL MUELLER, sold to Ms. Kandrup, provided for fifteen years of surrender charges, the first five years carrying 20% surrender charge per annum. Additionally, the Midland #401 annuity had a maturity date of 2027, when Ms. Kandrup would be 100 years old. 42, On or about October 30, 2002, you, JOHN DANIEL MUELLER, convinced Ms. Kandrup to purchase Midland #146. Ms. Kandrup funded this annuity with an initial premium of $19,000, later followed by additional premium payments of $25,897.19 and $25,588.85, earning you, JOHN DANIEL MUELLER, a total commission on Midland #146 sale of $9,163.18. 43. The latter two additional Midland #146 premium payments were accomplished by you, JOHN DANIEL MUELLER, convincing Ms. Kandrup in July 2003, that she should liquidate her $52,000 Franklin portfolio and transfer the funds to Midland #146. 44, The Midland #146 annuity you, JOHN DANIEL MUELLER, sold to Ms. Kandrup, provided for fifteen years of surrender charges, the first five years carrying 20% surrender charges per annum. Additionally, Midland #146 annuity had a maturity date of 2027, when Ms. Kandrup would be 100 years old. At the end of ten years, the Midland #146 initial premium payment, assuming no withdrawals or additions, had an effective annual rate of return, of -0.41%, é 13 45. On November 29, 2004, Ms. Kandrup, having further need of funds to meet her current living expenses, withdrew $2,300 from the Midland #401. 46. On November 2, 2005, Ms. Kandrup, having need of funds to meet her current living expenses, withdrew $8,053.79 from the Midland #146. 47. On November 8, 2005, Ms. Kandrup, having further need of funds to meet her current living expenses, withdrew $7,254.01, from the Midland #146. 48. On May 9, 2007, Midland notified Ms. Kandrup that because she had multiple non- qualifying annuity contracts that were issued in the same calendar year 2002 by the same company to the same policyholder, they wouldhave to be treated as a single contract to determine tax consequences, for which she was urged to seek tax or legal advice. 49, Upon retention of a private attorney and following an investigation by this Department, Midland agreed to cancel annuities #401 and #146 and thereafter issued Ms. Kandrup two checks in the amounts of $67,392.79 and $68,198.44 on September 24, 2008, thereafter cancelling the commissions which you, JOHN DANIEL MUELLER, earned on those sales. 50. In the process of inducing the sales and purchases of the two Midland annuities, you, JOHN DANIEL MUELLER, willfully misrepresented and/or omitted material information regarding the annuities. The misrepresentations, both by omission and commission, include, but are not limited to, the following: (a) You, JOHN DANIEL MUELLER, failed to explain to Ms. Kandrup that she had twenty days within which to cancel the annuity purchases following receipt of the policy. '(b) You, JOHN DANIEL MUELLER, never advised Ms. Kandrup that if she wanted to cash out the policy, she would have to wait ten years or pay a substantial surrender penalty fee. (c) You, JOHN DANIEL MUELLER, never advised Ms. Kandrup that if she wanted to receive a periodic installment payment on her Midland policies, she could not do so for at least five years. (d) You, JOHN DANIEL MUELLER, told Ms. Kandrup that the Midland annuities would earn a 5% premium “bonus”, but you failed to explain to her that the bonuses would be offset by surrender charge percentages greater than 5% through the first twelve years of the contracts. (e) You, JOHN DANIEL MUELLER, failed to explain the Midland “Buyer’s Guide to Fixed Deferred Annuities” to Ms. Kandrup. (@® You, JOHN DANIEL MUELLER, told Ms. Kandrup that each of the Midland annuities would earn a 5% premium “bonus”, but you failed to explain to her that the “bonus” was not applicable to either the Cash Value or the Guaranteed Minimum value and that unless Ms. Kandrup chose to annuitize her investment, she would never receive the 5% bonus. (g) You, JOHN DANIJEL MUELLER, falsely assured Ms. Kandrup that the Allianz annuity was suitable to her needs when you knew or should have known that it was unsuitable. 51. The misrepresentations and omissions made by you, JOHN DANIJEL MUELLER, described herein were false, willful and material misstatements of fact. You, JOHN DANIEL MUELLER, were fully aware of these falsehoods. 52. Ms, Kandrup justifiably relied on the representations and information conveyed to her . by you, JOHN DANIEL MUELLER, concerning the Allianz annuity. The Allianz annuity would not have been purchased but for your willful misrepresentations. 15 53. The sale of the Allianz annuity to the Ms, Kandrup was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstances, was without demonstrable benefit to her, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code. 54, Asa result of the sale, Ms. Kandrup suffered financial harm by not being able to utilize and access her retirement assets for housing or health care costs or general living expenses without ’ incurring substantial surrender charges. IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) Inrecommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section 627.4554(4)(a), Florida Statutes]; (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; 16 (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes); (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to bea source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; | (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes]; G) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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]; 17 (k) Twisting is defined as knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy or insurance in another insurer. [Section 626.9541(1)(1), Florida Statutes] Ifa person is accountable for “twisting,” that person commits a misdemeanor of the first degree, punishable as provided s. 775.082, and an administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $40,000 shall be imposed for each willful violation. [Section 626.9521(3)(a), Florida Statutes]; (1) Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes}. COUNT IV 55, The above General Allegations numbered one through nine, and those under Count III above, are hereby realleged and fully incorporated herein by reference. 56. On or about July 7, 2004, you, JOHN DANIEL MUELLER, met with 77 year-old Ms. Kandrup and convinced her to sell her Hancock annuity numbered GPO6002061 (Hancock #2061), the value of which was approximately $63,000, and purchase an Allianz annuity numbered 70106510 (Allianz #510), for which sale you received a commission of approximately $4,400. Since Ms. Kandrup had purchased the Hancock annuity in January 2002, and it was not due to mature until January 14, 2022, she suffered substantial surrender penalties by this transaction. 18 57. As part of the Allianz #510 application, you, JOHN DANIEL MUELLER, had Ms. Kandrup sign a statement acknowledging receipt of a “Statement of Understanding” and “MasterDex 10 Annuity consumer brochure”, neither of which you explained to her. 58. On November 30, 2005, Ms. Kandrup, having need of living expense funds which you, JOHN DANIEL MUELLER, should have reasonably foreseen, requested a partial withdrawal of $30,000 from the Allianz #510, thereby incurring penalty charges totaling over $9,000, and requiring the reporting of approximately $13,649.50 to the IRS as taxable income to her. 59. In the process of inducing the sale and purchase of the Allianz #510, you, JOHN DANIEL MUELLER, willfully misrepresented and/or omitted material information regarding the annuity. The misrepresentations, both by omission and commission, include, but are not limited to, the following: (a) You, JOHN DANIEL MUELLER, failed to explain to Ms. Kandrup that she had twenty days within which to cancel the Allianz #510 purchase following receipt of the . policy. You, JOHN DANIEL MUELLER, failed to deliver the Allianz #510 policy to Ms. Kandrup until August 4, 2004, during which period you provided no clarification as to its terms. (b) You, JOHN DANIEL MUELLER, never advised Ms. Kandrup that if she wanted to cash out the Allianz #510 policy, she would have to wait ten years or pay a surrender penalty fee. (c) You, JOHN DANIEL MUELLER, falsely asserted that you had explained the Allianz #510 “Statement of Understanding” to Ms. Kandrup, particularly with respect to the differences between the annuity’s Annuitization Value, Cash Value and Guaranteed Minimum Value. (d) You, JOHN DANIEL MUELLER, told Ms. Kandrup that the Allianz #510 annuity would earn a 12% premium “bonus”, but you failed to explain to her that the “bonus” was not applicable if she were to cash out of the policy. You, JOHN DANIEL MUELLER, failed to explain to Ms. Kandrup that the only way she would receive the 12% bonus is if she chose to annuitize her investment. Given Ms. Kandrup’s age and financial circumstances, you knew that it was ali but impossible for her to ever realize the 12% bonus. (ec) You, JOHN DANIEL MUELLER, falsely assured the Ms. Kandrup that the Allianz #510 annuity was suitable to her needs. 60. The misrepresentations and omissions made by you, JOHN DANIEL MUELLER, described herein were false, willful and material misstatements.of fact. You, JOHN DANIEL MUELLER, were fully aware of such falsehoods. 61. Ms. Kandrup justifiably relied on the representations and information conveyed to her by you, JOHN DANIEL MUELLER, concerning the Allianz annuity. The Allianz annuity would not have been purchased but for your willful misrepresentations. 62. The sale of the Allianz #510 annuity to the Ms. Kandrup was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstances, was without demonstrable benefit to her, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative . Code. 63. Asa result of the sale, Ms. Kandrup, suffered financial harm by not being able to utilize and access her retirement assets for housing or health care costs or general living expenses without incurring substantial surrender charges. 20 IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) In recommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section 627.4554(4)(a), Florida Statutes]; (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; ' (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes}; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; 21 (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes]; g) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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]; (k) Twisting is defined as knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy or insurance in another insurer, [Section 626.9541(1)(D, Florida . Statutes} If a person is accountable for “twisting,” that person commits a misdemeanor of the first degree, punishable as provided s. 775.082, and an administrative fine not greater than 22 $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $40,000 shall be imposed for each willful violation. [Section 626.9521(3)(a), Florida Statutes]; . (1) Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes]. COUNT V 64. The above General Allegations numbered one through nine, and those contained under Counts III and IV above, are hereby realleged and fully incorporated herein by reference. 65. At the time that you, JOHN DANIEL MUELLER, had insurance business dealings with Ms. Kandrup, she owned her house at 4025 Via Mirada, Sarasota, Florida 34238, 66. Having largely exhausted Ms. Kandrup’s liquid assets through the annuity sales described above, you, JOHN DANIEL MUELLER, determined that Ms. Kandrup could fund another annuity by taking out a home equity loan on her personal residence. 67. In order to convince Ms. Kandrup of the “reasonableness” of such action, you, JOHN DANIEL MUELLER, falsely represented to Ms. Kandrup that she would be taking out a reverse mortgage on her property. 68. In order to facilitate the bank loan transaction, you, JOHN DANIEL MUELLER, on or about May 25, 2007, drove Ms. Kandrup to a branch location of the RBC Centura Bank (bank). 69. Upon arrival at the bank, you, JOHN DANIEL MUELLER, introduced Ms. Kandrup to bank officer Jack Sandleman who completed the banking loan transaction papers and had Ms. Kandrup execute them. The gross loan amount totaled some $502,500. Settlement charges for the loan totaled nearly $20,000. 23 70. Upon distribution ‘of the loan funds, you, JOHN DANIJEL MUELLER, convinced Ms. Kandrup to invest a total of $149,000 in the purchase of EquiTrust Life Insurance Company annuity EQ0001067685F (EquiTrust 685F), the application for which was completed on May 29, 2007, shortly after the loan proceeds were distributed, that included a $100,000 cash draw to Ms. Kandrup. 71. The initial premium payment in that amount ($100,000) was accomplished by Ms. Kandrup’s personal check dated June 6, 2007. An additional premium payment of $49,000 was attempted by Ms. Kandrup’s personal check dated July 25, 2007, which was returned for insufficient funds. Ms. Kandrup’s substitute check dated August 10, 2007, cleared and was credited to EquiTrust 685F as an additional premium payment. 72. This sale earned you, JOHN DANIEL MUELLER, a commission of $15,272.50 which, upon rescission of the contract as noted below, you incurred a 50% commission chargeback. 73. Upon retention of a private attorney and following an investigation by this Department, EquiTrust 685F was rescinded and the $149,000 premium payments refunded by EquiTrust check dated April 22, 2008. 74. In the process of inducing the sale and purchase of the EquiTrust 685F annuity, you, JOHN DANIEL MUELLER, willfully misrepresented and/or omitted material information regarding the annuity. The misrepresentations, both by omission and commission, include, but are not limited to, the following: (a) You, JOHN DANIEL MUELLER, failed to explain to Ms. Kandrup that she had taken out a loan on her property (not a reverse mortgage) and that she would have to pay back the loan with regular monthly sums. 24 (b) You, JOHN DANIEL MUELLER, failed to explain to Ms. Kandrup that she had fifteen days within which to cancel the EquiTrust 685F annuity purchase following receipt of the policy. (c) You, JOHN DANIEL MUELLER, never advised Ms. Kandrup that if she wanted to cash out the EquiTrust 685F policy, she would have to wait ten years or pay a surrender penalty fee. (d) You, JOHN DANIEL MUELLER, falsely asserted that you had explairied the EquiTrust “Flexible Premium Fixed and Indexed Deferred Annuity Contract” document to Ms. Kandrup, particularly with respect to the surrender charges, contract values and interest rates, (e) You, JOHN DANIEL MUELLER, were fully aware that Ms. Kandrup had been forced to make partial withdrawals on the Midland and Allianz contracts as described above, in order to meet housing or health care costs or general living expenses, and realizing that she would now have the additional financial burden of making regular mortgage repayments on the loan described above, nevertheless advised her to purchase the EquiTrust 685F, knowing that it was unsuitable and not in her best interest. 75. The misrepresentations and omissions made by you, JOHN DANIEL MUELLER, described herein were false, willful and material misstatements of fact. You, JOHN DANIEL MUELLER, were fully aware of such falsehoods. 76. Ms. Kandrup justifiably relied on the representations and information conveyed to her by you, JOHN DANIEL MUELLER, concerning the EquiTrust 685F. It would not have been purchased but for your willful misrepresentations. 25 77. The sale of the EquiTrust 685F annuity to the Ms. Kandrup was not in her best interest, was neither necessary nor appropriate for a person of her age and financial circumstances, was without demonstrable benefit to her, and was done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code. ) 78. Asa result of the sale, Ms. Kandrup suffered financial harm by not being able to utilize and access her retirement assets, held in the EquiTrust 685F annuity, for housing or health care costs or general living expenses without incurring substantial surrender charges. IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) In recommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section 627.4554(4)(a), Florida Statutes]; (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; 26 (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (f) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]; (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes]; G) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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]; 27 (k) Twisting is defined as knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy or insurance in another insurer. [Section 626.9541(1)(), Florida Statutes] Ifa person is accountable for “twisting,” that person commits a misdemeanor of the first degree, punishable as provided s, 775.082, and an administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $40,000 shall be imposed for each willful violation. [Section 626.9521(3)(a), Florida Statutes]; (1) Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes]. COUNT VI 79. The above General Allegations numbered one through nine are hereby realleged and fully incorporated herein by reference. 80. Glenn J. Rolling and Paula M. Rolling are husband and wife. Mr. Rolling was born on May 26, 1924. Mrs. Rolling was born on May 17, 1924. 81. Prior to meeting you, JOHN DANIEL MUELLER, Mr. and Mrs. Rolling held certain life insurance policies, including annuities, described as follows: (a) West Coast Life Insurance Company whole life policy number OWC800145 (W. Coast #145) issued in 1997. In 2000, Mr. Rolling exercised the reduced paid up provision, 28 thereby reducing the death benefit from $325,658.00 to $212,003.00. Thus, the policy was completely paid up and had a cash surrender value of $161,989.51. (b) - EquiTrust annuity number EQ00010007563F (EquiTrust #563F) issued in 2004, having as its final value $27,033.93. (c) American Skandia annuity number 495471 (AS #471), date of issue uncertain. Its final value was $39,979.66. . (d) EquiTrust annuity number EQ00010009914 (EquiTrust #914) issued in 2005. Its . final value was $38,421.40. (ec) EquiTrust annuity number EQ0001007566F (EquiTrust #566F) issued in 2004. The initial premium deposit was for $249,249.97. A partial withdrawal in the amount of $29,263.00 was.effected on April 16, 2007. 82. On or about July 25, 2007, you, JOHN DANIEL MUELLER, met with the Rollings and sold Mr. Rolling Allianz life insurance policy number 60024855 (Allianz #855) listing Mrs. Rolling as the beneficiary. The death benefit was listed as $114,800. The Rollings paid an initial premium of $100,000 for Allianz #855, earning you, JOHN DANIEL MUELLER, a commission of 83. On August 13, 2007, Allianz sent Mr. Rolling a letter informing him that Allianz #855 qualified as a Modified Endowment Contract and was therefore subject to imposition of a 10% excise tax upon certain actions. The Allianz #855 policy was therefore cancelled. 84. On or about July 28, 2007, you, JOHN DANIEL MUELLER, effected the rollover of the $100,000 refund on the Allianz #855 into Allianz annuity number 70583158 (Allianz #158). This initial Allianz #158 premium payment was followed by two others. 29 85. On or about August 15, 2007, you, JOHN DANIEL MUELLER, convinced the Rollings to take a partial surrender of $100,000 from EquiTrust #566F. In doing so they incurred an additional surrender charge. Pursuant to your instructions, the $100,000 was then placed into Allianz #158, as the second premium payment. 86. On or about September 10, 2007, you, JOHN DANIJEL MUELLER, convinced the Rollings to make an additional $100,000 cash deposit into Allianz #158, the third premium payment. You, JOHN DANIEL MUELLER, earned a total commission of $24,000 on the total $300,000 sale of Allianz #158. 87. Meanwhile, on or about August 23, 2007, you, J OHN DANIEL MUELLER, had Mr. Rolling apply for Hancock Flexible Premium Adjustable Life Insurance policy number 93712313 (Hancock #313), having a proposed death benefit on his life of $240,000. The Hancock #313 life policy was issued by Hancock on November 12, 2007. 88. You, JOHN DANIEL MUELLER, completed the Hancock #313 application form wherein you falsely indicated that: a) Mr. Rolling was not subject to backup tax withholding and b) that the Hancock #313 policy would be funded by a 1035 exchange from W. Coast #145, when you knew that the W. Coast #145 cash value had been targeted by you to fund another policy referred to in paragraph 89. 89. You, J OHN DANIEL MUELLER, knowing that Mr. Rolling’s Hancock #313 application was pending approval by the company, had Mrs. Rolling complete an application on or about September 28, 2007, to purchase Allianz annuity number 70598491 (Allianz #491), using as an initial premium $161,989.51 obtained from surrendering W. Coast #145. This transaction produced a commission to you, JOHN DANIEL MUELLER, of $23,139.27, while eliminating the 30 W. Coast #145 $212,000 death benefit payable to Mrs. Rolling, leaving her with the Allianz #491 annuity having an initial cash value of only $144,859.00, which would not mature until 2017. 90. You, JOHN DANIEL MUELLER, continued to urge the Rollings to place additional funds into Allianz #491 so as to bring its allocated value as of April 2009 to $335,976.16. On April 20, 2009, the Rollings, in dire need for cash to meet living expenses, obtained a taxable “maximum free withdrawal” from Allianz #491 in the gross amount of $30,198.95. 91. On or about January 10, 2008, you, JOHN DANIEL MUELLER, attempted to sell Allianz annuity number 70625945 (Allianz #945) to Mr. Rolling by having him complete an application. You intended to fund Allianz #945 by surrendering Mr. Rolling’s EquiTrust 563F annuity, purchased by him in 2004. You, JOHN DANIEL MUELLER, facilitated the full surrender of EquiTrust 563F on January 25, 2008 that had an accumulated value of $27,033.93, but after surrender charges in the amount of $5,136.45 and about a $1,000 “market value adjustment”, left Mr. Rolling with a net taxable withdrawal amount of $22,884.39. 92. However, when Allianz officials reviewed the Allianz #945 application, they decided not to issue a policy for suitability reasons, largely because the premium source for Allianz #945 was EquiTrust 563F, an annuity “that offered similar rates and features that the Allianz policy would have offered and the client would have incurred a surrender charge in order to move the funds to Allianz.” 93. On or about January 16, 2008, you, JOHN DANIEL MUELLER, sold Mrs. Rolling Constitution Life Insurance Company whole life policy number 980094132 (CLIC #132) having a face death benefit of $10,000 and requiring that she make monthly premium payments of $157.51 until she reached age 100. 31 94. On or about March 4, 2008, you, JOHN DANIEL MUELLER, sold Mrs. Rolling American Pioneer Life Company whole life policy number OS1 188936 (AP #936) having a face death benefit of $10,000 and requiring that she make annual premium payments of $1,853.00 until she reached age 99, Assuming Mrs. Rolling lives until 2024, she will have made total premium payments of $29,648 for a policy having a guaranteed cash value of $8,000 by that date. 95. The misrepresentations and omissions made by you, JOHN DANIEL MUELLER, described herein were false, willful and material misstatements of fact. You, JOHN DANIEL MUELLER, were fully aware of such falsehoods. 96. Mr. and Mrs. Rolling justifiably relied on the representations and information conveyed to them by you, JOHN DANIEL MUELLER, concerning the various insurance policies you sold them. They would not have been purchased but for your willful misrepresentations. 97. The sales of these insurance policies were not in the Rollings’ best interest, were neither necessary nor appropriate for persons of their age and financial circumstances, were without demonstrable benefit to them, and were done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code. 98. Asa result of these sales, Mr. and Mrs. Rolling suffered financial harm by not being able to utilize and access their retirement assets for housing or health care costs or general living expenses without incurring substantial surrender charges. IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: 32 (a) In recommending to a senior consumer the purchase of an annuity ... an insurance agent ... shall have reasonable grounds for believing that the recommendation is suitable for the senior consumer on the basis of the facts disclosed by the senior consumer as to his or her investments and other insurance products and as to his or her financial situation and needs [Section 627.4554(4)(a), Florida Statutes]; (b) An insurer or insurance agent’s recommendation subject to subparagraph 1. shall be reasonable under all the circumstances actually known to the insurer or insurance agent at the time of the recommendation [Section 627.4554(4)(c)2., Florida Statutes]; (c) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done éither in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; (d) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; | . (e) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (ff) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes]; (g) 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 appointment. [Section 626.621(2), Florida Statutes]; (h) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this 33 chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes}; (i) Knowingly making, issuing, circulating, or causing to be made, issued, or circulated, any estimate, illustration, circular, statement, sales presentation, omission, or comparison, which misrepresents the benefits, advantages, conditions, or terms of any insurance policy. [Section 626.9541(1)(a) 1, Florida Statutes]; Gj) Knowingly filing with any supervisory or other public official; knowingly making, publishing, disseminating, circulating; knowingly delivering to any person; knowingly placing before the public; or knowingly 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}; (k) Twisting is defined as knowingly making any misleading representations or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy or insurance in another insurer. [Section 626.9541(1)(), Florida Statutes] Ifa person is accountable for “twisting,” that person commits a misdemeanor of the first degree, punishable as provided s. 775.082, and an. administrative fine not greater than $5,000 shall be imposed for each nonwillful violation or an administrative fine not greater than $40,000 shall be imposed for each willful violation. [Section 626.9521(3)(a), Florida Statutes}; (1) Except as provided in subsection (3), any person who violates any provision of this part [Unfair Insurance Trade Practices] is subject to a fine in an amount not greater than $5,000 34 for each nonwillful violation and not greater than $40,000 for each willful violation ... The fines may be imposed in addition to any other applicable penalty. [Section 626.9521(2), Florida Statutes]. COUNT VII 99. The above General Allegations numbered one through nine, and those under Count VI above, are hereby realleged and fully incorporated herein by reference. 100. On January 21, 2008, you, JOHN DANIEL MUELLER, when the Rollings were each 83 years of age, had yourself appointed as Trustee of the Glenn and Paula Rolling Revocable Trust (Rolling Trust). 101. The 2008 insurance transactions described above occurred either immediately before . or following your appointment as Trustee of the Rolling Trust. By these sales you, JOHN DANIEL MUELLER, continued to willfully waste the Rollings assets by effecting the sales of insurance products that were not in their best interests through fraud and artifice so as to violate the tenets of Rule Chapter 69B-215.210, Florida Administrative Code, as quoted in paragraph 5 above. 102. You, JOHN DANIEL MUELLER, continued to profit from such sales by receiving additional insurance sales commissions. 103. AP #936 lapsed on December 15, 2009 due to nonpayment of premium. You, JOHN DANIEL MUELLER, knew that the sales of CLIC #132 and AP #936 would require timely periodic payments to avoid lapsing. Were it not for an investigation by the Florida Department of Children and Families and the Circuit Court appointment of Lutheran Services Florida as plenary guardian of Mr. Rolling, the Rollings assets would have continued to be wasted because of your needless, continuous, and ill advised insurance sales to this aged and vulnerable couple acting as Trustee of the Rolling Trust. 35 104. The misrepresentations and omissions made by you, JOHN DANIEL MUELLER, described herein were false, willful and material misstatements, of fact. You, JOHN DANIEL MUELLER, were fully aware of such falsehoods. 105. Mr. and Mrs. Rolling justifiably relied on the representations and information conveyed to them by you, JOHN DANIEL MUELLER, concerning the various insurance policies you sold them. They would not have been purchased but for your willful misrepresentations. 106. The sales of these insurance policies were not in the Rollings? best interest, were neither necessary nor appropriate for persons of their age and financial circumstances, were without demonstrable benefit to them, and were done for the sole purpose of obtaining a fee, commission, money or other benefit from the insurance company. You, JOHN DANIEL MUELLER, have violated a public trust in violation of Rule 69B-215.210, Florida Administrative Code. 107. As a result of these sales, Mr. and Mrs. Rolling suffered financial harm by not being able to utilize and access their retirement assets for housing or health care costs or general living expenses without incurring substantial surrender charges. IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) 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 69B-215.210, Florida Administrative Code] 36 (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; | (c) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (d) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of the Insurance Code. [Section 626.611(13), Florida Statutes); (e) In the conduct of business under the license or appointment, engaging in unfair methods of competition or unfair or deceptive acts or practices, as prohibited by part IX of this chapter, or having otherwise shown himself or herself to be a source of injury or loss to the public. [Section 626.621(6), Florida Statutes]. COUNT VII 108. The above General Allegations numbered one through nine are hereby realleged and fully incorporated herein by reference. 109. At various times material to the transactions described above, you, JOHN DANIEL MUELLER, operated out of an unlicensed and unregistered insurance agency known as National Service Insurance Agency having a business address of 7021 S. Tamiami Trail Unit B, in Sarasota, Florida. 110. At various times material to the transactions described above, you, JOHN DANIEL MUELLER, operated out of an unlicensed and unregistered insurance agency known as Suncoast International Agency having a business address of 6553 Superior Avenue, in Sarasota, Florida. 37 IT IS THEREFORE CHARGED that you, JOHN DANIEL MUELLER, have violated or are accountable under the following provisions of the Florida Insurance Code which constitute grounds for the suspension or revocation of your licenses as an insurance agent in the state: (a) Effective October 1, 2006, no individual, firm, partnership, corporation, association, or any other entity shall act in its own name or under a trade name, directly or indirectly, as an insurance agency, unless it complies with s. 626.172 with respect to possessing an insurance agency license for each place of business at which it engages in any activity which may be performed only by a licensed insurance agent. Each agency engaged in business in this state before January 1, 2003, which is wholly owned by insurance agents currently licensed and appointed under this chapter, each incorporated agency whose voting shares are traded on a securities exchange, each agency designated and subject to supervision and inspection asa branch office under the rules of the National Association of Securities Dealers, and each agency whose primary function is offering insurance as a service or member benefit to members of a nonprofit corporation may file an application for registration in lieu of licensure in accordance with s. 626.172(3). Each agency engaged in business before October 1, 2006, shall file an application for licensure or registration on or before October 1, 2006. WHEREFORE, you, JOHN DANIEL MUELLER, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses, appointments and your eligibility for licensure as an insurance agent in this state or to impose such penalties as may be provided under the provisions of Sections 626.611, 626.621, 626.681, 626.691, 626.692, and 626.9521, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. You are further notified that the Department intends to seek aggravation of all such penalties in accordance with the provisions of Rule 69B-231.160, 38 Florida Administrative Code, and 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 tight 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 Julie Jones, Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. 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. Tf 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". 39 (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. 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 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 40 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. . 2th DATED and SIGNED this _{3"' dayot Ma m , 2010. 41 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Administrative Complaint has been furnished by U.S. Certified Mail to: JOHN DANIEL MUELLER, 32 S. Osprey Avenue, Suite 102, Sarasota, FL 34236 and to JOHN DANIEL MUELLER, 2608 “Hy Hibiscus Street, Sarasota, FL 34239-4707, on this 13 day of M oO 4 2010. Pane Qt Laura Anstead . Managing Attorney Division of Legal Services 612 Larson Building Tallahassee, FL 32399-0333 (850) 413-4211 Attorney for the Department 42 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: * JOHN DANIEL MUELLER CASE NO. 106034-10-AG / ELECTION OF PROCEEDING I have received and have read the Administrative Complaint filed by the Florida Department of Financial Services ("Department") against me, including the Notice of Rights contained therein, and I understand my options, I am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1.0] I do not dispute any of the Department’s factual allegations and I do not desire a hearing. I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my licenses and appointments as may be appropriate. 2. I do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120,57(2), Florida Statutes. In this regard, I desire to (CHOOSE ONE): [J Submit a written statement and documentary evidence in lieu of a hearing; or [] Personally attend a hearing conducted by a department hearing officer in Tallahassee; or tj Attend that same hearing by way of a telephone conference call. 3. [] I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. I have attached to this election form the information required by Rule 28-106.2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights. Specifically, I have identified the disputed issues of material fact. TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE ‘COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. The address for filing is: Julie Jones, Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390, Signature Print Name Date: Address; Date Administrative Complaint Received: If you are represented by an attorney or qualified Phone No.: representative, please attach to this election form his or her name, address, telephone and fax numbers Fax No.: 43

Docket for Case No: 10-003206PL