STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF ACCOUNTANCY, )

)

Petitioner, )

)

vs. ) CASE NO. 82-2192

)

PAUL E. FLASHER, II, CPA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Arnold H. Pollock, held a hearing in the above- styled case on January 7, 1983, at 9:30 a.m. in Room 602-605, Park Trammell Building, 1313 Tampa Street, Tampa, Florida.

APPEARANCES

For Petitioner: Joseph W. Lawrence, II, Esquire Chief Attorney

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: B. Anderson Mitcham, Esquire

C. Stephen Allen, Esquire Mitcham, Crooks, Weed & Barbas Ybor City Professional Center 1509 Eighth Avenue

Tampa, Florida 33605 PROCEDURAL BACKGROUND

By Administrative Complaint dated July 12, 1982, the Florida Board of Accountancy, through the Department of Professional Regulation, seeks to suspend, revoke, or take other disciplinary action against the Respondent as licensee and against his license as a certified public accountant. As grounds therefor, the Board alleged fourteen separate counts of larceny during the period July 5, 1977, to October 10, 1978, by the Respondent from the Terrace Village Apartments Partnership; and one count (XV) alleging his conviction on May 30, 1980, of four counts of grand theft, arising out of the above fourteen counts, and sentencing to five years in the Florida Penitentiary on each of the four counts. This alleges violations of Sections 473.323(1)(d), (g), (h) and (k), Florida Statutes (1979), in that these acts constitute fraudulent, wrongful, or unlawful acts while holding a certificate as a certified public accountant; that these acts render him unfit to associate with the fair and honorable members of the profession of public accountancy; that he has been convicted of a crime which directly relates to the practice of public accounting

and has been found guilty of fraud, deceit, and misconduct in the practice of public accounting; and that he has performed fraudulent acts while holding a license to practice accounting. All of the above are also alleged to violate Sections 455.277(1)(a) and (b), Florida Statutes; and Rules 21A-21.02, 21A- 22.01, and 21A-36.01(1), (2), (15), (17), (18), and (20), Florida Administrative Code.

At the hearing, Petitioner called no witnesses and introduced seven exhibits, including the transcript from the criminal trial of the Respondent in the Circuit Court for Hillsborough County. Respondent introduced one exhibit and testified in his own behalf.

FINDINGS OF FACT

1. Respondent, Paul E. Flasher, II, was certified as a certified public accountant by the Florida Board of Accountancy under License No. 4739 in 1975. His license reverted to inactive status on January 1, 1982, for failure to meet continuing professional educational requirements.

   
   

2. On May 31, 1979, Respondent was charged under a direct information for fraud license (seven counts) and grand theft in the second degree (seven counts) in the Circuit Court for the Thirteenth Judicial Circuit of the State of Florida, alleging his improper taking or using various sums of cash from the Terrace Village Apartments Partnership by which he was employed during the period July 5, 1977, through October 10, 1978. On February 15, 1980, the Direct Information was amended in an action which dismissed the first seven counts (grand larceny) and recharged the seven counts of grand theft in the second degree.

   
   

3. Respondent was tried on the remaining seven counts and convicted of four separate counts, which alleged grand theft in the second degree on February 3, 1978; April 10, 1978; June 13, 1978; and October 10, 1978, respectively. He was thereafter sentenced to be imprisoned for the term of five years on each of the four counts of which he was convicted, each count to run concurrently.

   
   

4. The conviction was affirmed on appeal to the District Court of Appeal for the Second District in an opinion filed November 25, 1981. A petition for review to the Supreme Court of Florida was dismissed on January 27, 1982.

   
   

5. The crimes of which the Respondent was convicted arose out of his use of partnership monies for his personal purposes. Mr. Flasher indicated that the partnership monies he utilized by purchasing items for his personal use and then writing a partnership check in payment were in fact owed to him as payment for his managerial services and that he paid by partnership check to take advantage of the partnership quantity discounts. Mr. Flasher also contended that at the times he converted the monies in question, he was acting as a manager/partner in the organization, and not in the capacity as a certified public accountant. The documents to support this managerial relationship were never drafted, nor was the partnership ever legally constituted, however, Therefore, his relationship to the other principals was not as a partner, but as an employee, the primary entree to which was his certified public accountant status for his former client, Mr. Ed Roseman.

   
   

6. On February 4, 1982, Respondent offered to make restitution in the amount of $1,469.74.

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

   
   

8. Sections 473.323(1)(a), (d), (g), (h), and (k), Florida Statutes (1979), permit disciplinary action upon:

   
   

   1. Violation of any provision of Section 473.317, Section 455.227(1), or any other provision of this act.

      * * *

      (d) Being convicted or found guilty, regardless of adjudication, of a crime in any jurisdiction which directly relates to the practice of public accounting or the ability to practice public accounting.

      * * *

      1. Proof that the licensee is guilty of fraud or deceit, or of negligence, incompetency, or misconduct, in the practice of public accounting.

      2. Violation of any rule adopted pursuant to his act or Chapter 455.

      * * *

      (k) Performance of any fraudulent act while holding a license to practice public accounting.

      
      

9. Sections 455.227(1)(a) and (b) [consistently, but erroneously, referred to as Sections 455.277(1)(a) and (b)] provide that boards shall have the power to revoke, suspend, or deny the renewal of the license, or to reprimand, censure, or otherwise discipline a licensee when it finds that (a) the licensee has made misleading, deceptive, untrue, or fraudulent representations in the practice of his profession; or (b) the licensee has intentionally violated any rule adopted by the board or the Department. Subparagraph (c) of that same section, though not alleged in the Administrative Complaint, allows the same disciplinary action when the licensee has been convicted of a felony which relates to the practice of his profession. Sections 473.251(1)(c) and (g), Florida Statutes, permit revocation or suspension of the license of a CPA or public accountant when it appears the individual has been guilty of any fraudulent, wrongful, or unlawful act while holding the certificate; has committed any act which renders him unfit to associate with the fair and honorable members of the public accounting profession; or was guilty of violating the provisions of Chapter 473 or of any rule of the Board of Accountancy.

   
   

10. Florida Administrative Code Rule 21A-21.02 prohibits a certified public accountant from knowingly misrepresenting facts. Rule 21A-22.01 requires a CPA to comply with defined professional standards, and Rules 21A-36.01(1), (2), (15), (17), (18), and (20) are basically restatements of the sentiments and provisions of Section 473.323(1), Florida Statutes.

    
    

11. All of the authorities cited above were designed to protect the public by encouraging, and in fact requiring, the highest possible standards of professional competence and personal integrity in those individuals who hold

    themselves out as certified public accountants. That these regulations and requirements are necessary and in the public good is without question. Their validity is the same.

    
    

12. In the instant case, Respondent's conviction of four separate counts of grand theft in the second degree, indicating serious individual departures from the high standards required of persons possessing the license of the certified public accountant, fully meets the criteria for disciplinary action set forth in the authorities cited. His claim that he was owed money for managerial services rendered is not impressive, nor does it justify his self- help efforts to satisfy the debt owed him. Other legitimate avenues were open to him. Neither is his argument that his services for the Terrace Village Apartment Partnership were management, and not accounting, persuasive. There was no partnership agreement ever written or entered into. He was brought into the operation as a CPA by one of his prior clients who wanted him to look at the partnership as a possible tax shelter. Thereafter, his involvement in an accounting mode grew, ultimately culminating in this being in the position he occupied at the time of the incidents in question.

    
    

13. In summary, the evidence presented at the hearing shows that Mr. Flasher violated the cited statutes in that he was found guilty of at least four separate crimes which directly relate to the practice of public accounting or to the ability to practice public accounting, that he was guilty of fraud in the practice of public accounting, and that he performed several fraudulent acts while holding a license to practice public accounting.

    
    

14. The Petitioner has submitted a proposed recommended order which includes proposed findings of facts and conclusions of law. The proposed findings and conclusions have been adopted only to the extent that they are expressly set out in the Findings of Fact and Conclusions of Law which follow. They have been otherwise rejected as not supported by the evidence, contrary to the better weight of the evidence, irrelevant to the issues, or legally erroneous.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

1. That Respondent be found guilty of repeated violations of the statutes cited in the Administrative Complaint.

   
   

2. That Respondent's license to practice as a certified public accountant be revoked.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 1st day of February, 1983.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 1st day of February, 1983.

Docket for Case No: 82-002192

Orders for Case No: 82-002192