FILED — AUG 17 2011 CHIEF FINANCIAL OFFICER JEFF ATWATER Docketed by UL STATE OF FLORIDA IN THE MATTER OF: CASE NO. 117723-11-AG DOUGLAS WINFIELD SIMPSON, JR. / ADMINISTRATIVE COMPLAINT TO: DOUGLAS WINFIELD SIMPSON, JR. 13826 Clubhouse Circle Tampa, FL 33618 You, DOUGLAS WINFIELD SIMPSON, JR., 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, DOUGLAS WINFIELD SIMPSON, JR., are currently licensed in the state as a General Lines (2-20) and Health (2-40) insurance agent. 2. Atall times pertinent to the dates and occurrences referred to in this Administrative Complaint you, DOUGLAS WINFIELD SIMPSON, JR., were licensed as an insurance agent in this state. Filed September 13, 2011 1:42 PM Division of Administrative Hearings Sd) ) 3. Pursuant to Chapter 626, Florida Statutes, the Chief Financial Officer of the State of Florida and the Department of Financial Services (Department) has jurisdiction over your insurance licenses and your eligibility for licensure. 4, _ According to Department records you, DOUGLAS WINFIELD SIMPSON, JR., are not the owner, officer, or agent in charge of an insurance agency in Florida. 5. According to Department records you, DOUGLAS WINFIELD SIMPSON, JR., are not an officer of any insurance related Florida corporation. 6. | Onseveral occasions you, DOUGLAS WINFIELD SIMPSON, JR., have been under the employ of George W. Connley. 7. You, DOUGLAS WINFIELD SIMPSON, JR., have also transacted insurance business under the names Insure Florida, Whitestone Group, and Whitestone Keep. 8. . In 2004, you, DOUGLAS WINFIELD SIMPSON, JR., were employed by George W. Connley to manage J. C. Barnett Insurors, Inc. (the Barnett agency). 9. In 2005, you, DOUGLAS WINFIELD SIMPSON, JR., were employed by Mr. Connley to manage Freedom Insurors (the Freedom agency). 10. You, DOUGLAS WINFIELD SIMPSON, JR., were given authority to write checks on the Barnett agency Citrus Bank account ending in the numbers 949 and the Freedom agency First Citrus Bank account ending in the numbers 415 for business purposes only. 11. In February 2006, Mr. Connley, suspecting that you, DOUGLAS WINFIELD SIMPSON, JR., had misappropriated funds from the Barnett and Freedom agencies, retained the services of an accounting firm, CRI CPA’s & Business Advisors (CRI), and independent consultant Julie Lynn Messier of Vista Insurance Alliance, Inc. (Messier) to investigate. COUNT I 12.. The above General Allegations are hereby realleged and fully incorporated herein. 13. Colony Square/Platinum Ridge Florida Condominium, LLC (Platinum Ridge) has a condominium association located at 13125 Wilcox Rd., Largo, Florida 3374. 14. Onor about March 13, 2006, you, DOUGLAS WINFIELD SIMPSON, JR., falsely advised the Platinum Ridge association that they had insurance coverage bound with ACE Westchester Property and Casualty Insurance Company (ACE Westchester) and you provided fabricated evidence of such commercial property insurance coverage. You, DOUGLAS WINFIELD SIMPSON, JR., represented that this insurance coverage was in the amount of $15,175,950.00. 15. This risk was not placed with ACE Westchester and ACE Westchester had not even been approached to provide a quotation on the account. IT IS THEREFORE CHARGED that you, DOUGLAS WINFIELD SIMPSON, JR., have — violated or are accountable under the following provisions of the Florida Statutes and/or the Florida Administrative Code, which constitute sufficient grounds for suspension or revocation of your license(s) or appointment(s) as an insurance agent in this State: (a) Section 626.611(5), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to, either in person or by any form of dissemination of information or advertising, willfully misrepresent any insurance policy or annuity contract, or willfully deceive with regard to any such policy or contract. (b) Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (c) Section 626.611(9), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. (d) Section 626.621(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, in the conduct of business under the license or appointment, to engage in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise show oneself to be a source of injury or loss to the public interest. COUNT II 16: The above General Allegations are hereby realleged and fully incorporated herein. 17. Scott Steele is a managing partner of J. W. Edens & Company Commercial Insurance of Brevard, Inc. (Edens), an agency catering to the insurance needs of roofing, sheet metal and air conditioning contractors. 18. In 2009, you, DOUGLAS WINFIELD SIMPSON, JR., operating under the name Whitestone Group, advertised an exclusive insurance program to be made available through the Florida Roofing, Sheet Metal and Air Conditioning Contractors Association (FRSA). . 19. You, DOUGLAS WINFIELD SIMPSON, JR., falsely claimed that you had secured an insurance agent appointment with Mid-Continent Casualty Insurance Company (Mid- ) ) Continent) to provide exclusive property and casualty insurance coverage tailored to meet the . needs of FRSA insured. 20. As part of this fabricated insurance marketing scheme you, DOUGLAS WINFIELD SIMPSON, JR., solicited underwriting information, provided quotes, provided Mid-Continent policy numbers, and authorized the release of insurance binders on behalf of Mid-Continent. 21. In June 2009, relying on the above misinformation, Edens began submitting business to you, DOUGLAS WINFIELD SIMPSON, JR. on behalf of 23 businesses seeking property and casualty insurance. The total premium for these accounts, paid by Edens, was $122, 436.02. . 22. On August 27, 2009, Tom McDaniel of Mid-Continent informed Edens that you, DOUGLAS WINFIELD SIMPSON, JR., were not an appointed agent of Mid-Continent and that Mid-Continent had no business relationship with the Whitestone Group. 23. After first assuring Edens that you were an appointed agent for Mid-Continent, you, DOUGLAS WINFIELD SIMPSON, JR., later confessed to him that you had no such appointment and that you had placed the 23 risks with State National Insurance Company. In fact, you had not placed the risks with any insurance carrier. | 24. Edens demanded a full refund from you, DOUGLAS WINFIELD SIMPSON, JR. Instead you issued only a partial refund, withholding approximately $9,079.00. IT IS THEREFORE CHARGED that you, DOUGLAS WINFIELD SIMPSON, JR., have violated or are accountable under the following provisions of the Florida Statutes and/or the Florida Administrative Code, which constitute sufficient grounds for suspension or revocation of your license(s) or appointment(s) as an insurance agent in this State: (a) Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (b) Section 626.611(9), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. (c) Section 626.611(10), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative or managing general agent to misappropriate, convert, or unlawfully withhold moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. (d) Section 626.621(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, in the conduct of business under the license or appointment, to. engage in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise show oneself to be a source of injury or loss to the public interest. (e) Section 626.561(1), Florida Statutes, which provides that all premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. ) ) (® Section 626.112(1)(@), Florida Statutes, which provides that no person may be, act as, or advertise or hold himself or herself out to be an insurance agent, insurance adjuster, or customer representative unless he or she is currently licensed by the Department and appointed by an appropriate appointing entity or person. COUNT Jil 25. The above General Allegations are hereby realleged and fully incorporated herein. 26. Premium Assignment Corporation (PAC) is a premium finance company. 27. PAC is in the business of making premium finance loans through insurance agencies such as the Barnett agency according to the following arrangement: an insured executes a premium finance agreement, the insurance agency obtains the proceeds of the premium finance loan, the loan is used to pay the premium, and then the insured repays the loan to PAC. 28. In order to facilitate this process, PAC entrusted the Barnett agency with PAC’s blank drafts for the sole purpose of funding premium finance loans for Barnett agency’s customers. 29. On May 22, 2006, you, DOUGLAS WINFIELD SIMPSON, JR., endorsed PAC’s draft number 908475 in the amount of $73,301.13 and deposited the draft into Barnett agency’s First Citrus Bank account 949. The draft was supposedly intended for the purchase of insurance for Platinum Ridge pursuant to a premium finance loan. 30. You, DOUGLAS WINFIELD SIMPSON, JR., prepared the premium finance agreement for Platinum Ridge and you deposited the PAC check to either the Barnett agency or Freedom agency account. 31. You, DOUGLAS WINFIELD SIMPSON, JR., did not use the $73,301.13 to fund a premium finance loan. Instead, you, DOUGLAS WINFIELD SIMPSON, JR. used that sum as part of the $86,000 wire transfer described in detail under Count IV below. 30. PAC never received a premium finance agreement for the purported Platinum Ridge loan. Upon discovering that you, DOUGLAS WINFIELD SIMPSON, R, did not use the PAC funds to purchase insurance, PAC demanded repayment from the Barnett agency. PAC later sued the Barnett agency and recovered $55,000. PAC suffered a financial loss of $18, 301.13, plus attorney’s fees due to your unauthorized personal use of the PAC draft. JT IS THEREFORE CHARGED that you, DOUGLAS WINFIELD SIMPSON, JR., have violated or are accountable under the following provisions of the Florida Statutes and/or the Florida Administrative Code, which constitute sufficient grounds for suspension or revocation of your license(s) or appointment(s) as an insurance agent in this State: | (a) Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (b) Section 626.611(9), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to exhibit fraudulent or dishonest practices in the conduct of business under the license or appointment. (c) Section 626.611(10), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative or managing general agent to misappropriate, convert, or unlawfully withhold moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. (d) Section 626.621 (6), Florida Statutes, which provides that it is a violation for any ) ) applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, in the conduct of business under the license or appointment, to engage in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise show oneself to be a source of injury or loss to the public interest. (e) Section 626.561(1), Florida Statutes, which provides that all premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adjuster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. COUNT IV 33. The above General Allegations are hereby realleged and fully incorporated herein. 34. On or about May 24, 2006, you, DOUGLAS WINFIELD SIMPSON, JR., authorized the wire transfer of $86,000.00 by debiting the Freedom. Agency account with First Citrus Bank ending with the numbers 415 and crediting the Town Square Title Company account numbered with United Heritage Bank of Orlando ending with the numbers 242. 35. In addition to your, DOUGLAS WINFIELD SIMPSON, JR.’s, signature, the forged signature of Robert Cusmano, bookkeeper for the Freedom Agency, also appeared on the First Citrus Bank wire transfer request. 36. Neither Robert Cusmano nor the owner of the Freedom Agency, Mr. Connley, ever authorized the transfer of that sum, either explicitly or by implication. 37. You, DOUGLAS WINFIELD SIMPSON, JR., and your agent Town Square Title Company, used that sum solely for your personal benefit. » ) IT IS THEREFORE CHARGED that you, DOUGLAS WINFIELD SIMPSON, JR., have violated or are accountable under the following provisions of the Florida Statutes and/or the Florida Administrative Code, which constitute sufficient grounds for suspension or revocation of your license(s) or appointment(s) as an insurance agent in this State: (a) Section 626.611(7), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent to demonstrate a lack of fitness or trustworthiness to engage in the business of insurance. (b) Section 626.611(9), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative or managing general agent to misappropriate, convert, or unlawfully withhold moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. (c) Section 626.611(10), Florida Statutes, which provides that itis a violation for any applicant, agent, title agency, adjuster, customer representative, service representative or managing general agent to misappropriate, convert, or unlawfully withhold moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. (d) Section 626.621(6), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, in the conduct of business under the license or appointment, to engage in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part IX of this chapter, or otherwise show oneself to be a source of injury or loss to the public 10 interest. (e) Section 626.611(10), Florida Statutes, which provides that it is a violation for any applicant, agent, title agency, adjuster, customer representative, service representative or managing general agent to misappropriate, convert, or unlawfully withhold moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. (f) Section 626.561(1), Florida Statutes, which provides that all premiums, return premiums, or other funds belonging to insurers or others received by an agent, solicitor, or adj uster in transactions under his license shall be trust funds so received by the licensee in a fiduciary capacity; and the licensee in the applicable regular course of business shall account for and pay the same to the insurer, insured, or other person entitled thereto. WHEREFORE, you, DOUGLAS WINFIELD SIMPSON, JR., ate hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent 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 any order in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department 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, 11 ) ) 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, DFS 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. 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) Astatement requesting an administrative hearing identifying those material facts that are in dispute. If there are none, the petition must so indicate. (d) | Astatement of when the respondent received notice of the administrative complaint. 12 ) ») (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 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. 13 No Department attorney will discuss this matter with you until the response has been received by the Department. +4 DATED and SIGNED this_}‘l" | day of August, 2011. ipl Bis « “ ve oF aA < er hedag Greg Thomas, Director Agent and Agency Services ) CERTIFICATE OF SERVICE ‘| HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail to: DOUGLAS WINFIELD SIMPSON, JR., 13826 Clubhouse Circle, Tampa, FL 33618 this 4h | 7q day of August, 2011. 15 DAVID J. BUSCH, ESQUIRE Department of Financial Services Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Tel.: (850) 413-4146 Attorney for the Department Florida Bar No. 140945 ) ) STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: DOUGLAS WINFIELD SIMPSON, JR. CASE NO.: 117723-11-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. J am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1 C] 30] 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. 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): {] 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 {] Attend that same hearing by way of a telephone conference call. 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, DFS 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.: 16

Docket for Case No: 11-004606PL