STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF ACCOUNTANTS, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1581

)

PAUL R. ASHE, )

)

Respondent. )

)

RECOMMENDED ORDER

An administrative hearing was held pursuant to notice in Ocala, Florida, on November 8, 1983, before Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented upon an Administrative Complaint filed by Petitioner, Department of Professional Regulation, Board of Accountants, against the Respondent, Paul R. Ashe, containing three counts that allege respectively that the Respondent violated Section 473.323(1)(k), Florida Statutes, by performing any fraudulent act while holding a license to practice accounting; violated Section 473.323(1)(g), Florida Statutes, by being guilty of fraud or deceit . . . or misconduct in the practice of public accounting; and violated Section 473.323(1)(d), Florida Statutes, by having been 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.

APPEARANCES

For Petitioner: Charles F. Tunnicliff, Esquire

Joseph W. Lawrence, II, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Jeffrey J. Fitos, Esquire

One East Silver Springs Boulevard Ocala, Florida 32670

ISSUES

The issue for consideration is whether the Respondent has violated the sections cited in the Administrative Complaint as alleged.

Both parties submitted posthearing findings of fact, which were read and considered. Those findings not incorporated herein are found to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.

FINDINGS OF FACT

1. The Respondent, Paul R. Ashe, is a certified public accountant who was issued a license number 1968 by the Board of Accountants. (See Respondent's admissions.)

   
   

2. The Respondent was found guilty in the United States District Court, Las Vegas, Nevada, of fraud by wire and of the interstate transportation of false and forged securities. The Respondent is currently under a pending sentence of three years in prison on each count, to run concurrently, and a fine of $10,000. (See Respondent's admissions).

   
   

3. The licensure file of the Respondent maintained by the Board of Accountants (Petitioner's Exhibit 2) reveals that the Respondent was licensed as a certified public accountant in the State of Florida on December 3, 1965. The file further reveals that the Respondent's licensure to practice public accounting was placed in an inoperative (inactive) status at the request of the Respondent on or about February 28, 1977. While in an inoperative status, a certified public accountant may not practice and is not issued a license. However, the accountant is not required to keep up his continuing professional education credits or to pay annual license fees. An accountant in an inoperative status may reactive his license upon paying all back annual licensure fees and demonstrating that he has completed all required continuing professional education course hours. On September 26, 1982, the Respondent requested and received conditional reactivation of his license to practice public accounting in the State of Florida, which was made permanent on February 8, 1983.

   
   

4. In this proceeding, the Respondent testified in his own behalf. His testimony was credible and uncontroverted. The Respondent received his certified public accountant certificate on December 3, 1965. He worked for the Internal Revenue Service for three years and subsequently practiced public accounting while working with a life insurance company and attending law school. After obtaining a law degree and admission to the Bar, Respondent practiced tax law and maintained his active license as a certified public accountant. In 1977, because the continuing professional education requirements for both professions were becoming burdensome, the Respondent placed his certified public accountant license in an inoperative status.

   
   

5. Since he was a child, the Respondent has suffered from pathologic compulsive gambling. It was this compulsion which gave rise to his conviction on the federal charges referenced above. The Respondent now has this disorder under control after receiving professional counseling and is a member of Gamblers' Anonymous.

   
   

6. As an attorney practicing tax law and providing investment counseling services, the Respondent maintained large trust accounts during the entire period he was actively gambling. Audits of his personal trust accounts reveal no shortage of any client's account. The Respondent stated, and his testimony was uncontroverted, that he had never violated any client's trust account or any trust relationship.

   
   

7. The charges on which the Respondent was convicted arose out of a series of events which began in 1974 on a gambling trip to Las Vegas, Nevada. At that time, the Respondent became deeply indebted to various casinos in Las Vegas. Some of those casinos relieved the Respondent of his indebtedness upon his promise not to gamble further in their casinos. (Tr. 136, 173.) The Respondent

   paid his gambling debts at other casinos to maintain his right to continue to gamble there.

   
   

8. In 1975, the Respondent returned to Las Vegas with his step-father. At that time, a line of credit was established in the step-father's name, and the Respondent and his step-father gambled on the step-father's line of credit. Respondent's step-father was worried about the Respondent's gambling problems and, at the conclusion of this gambling junket, took several checks from his checkbook, signed them in blank, and gave them to the Respondent with instructions that should the Respondent get into trouble the Respondent should use them. Upon returning home from this gambling junket, the Respondent's step- father died.

   
   

9. On the weekend of July 4, 1976, the Respondent went to Las Vegas on a gambling junket. Prior to arriving there, he had established a line of credit of $54,000. Near the conclusion of his junket, he had lost the $54,000 and, in seeking to win back his losses, used the checks given to him by his step-father. The Respondent issued three checks totaling $55,000 to three different casinos to pay off the gambling debts he had incurred and to reestablish his line of credit. It was the uttering of these checks on his deceased step-father's checking account which gave rise to the federal charges of interstate transport of a forged or false security, and the casinos' subsequent use of the telephone to check the Respondent's credit which gave rise to the federal charges of fraud by wire. The Respondent believed that the account upon which the checks were drawn contained sufficient funds to cover the checks and that the account was active. However, several weeks or months before, the Respondent's mother had closed the account without his knowledge.

   
   

10. In 1977, the Suma Corporation (Hughes' hotels) initiated charges through the U.S. Attorney on one of the checks in the amount of $11,250. When the Respondent made this check good, Suma Corporation withdrew its complaint against him and made him persona non grata at the Hughes' hotels. By this time, the Respondent's family had become quite concerned about his gambling, and he had been divorced from his wife and lost custody of his children. The Respondent sought to conceal his further gambling from his family.

    
    

11. In November 1977, the Respondent was overcome by the urge to gamble. Having settled a substantial case, he opened a bank account under the assumed name of Paul Allen and went to Las Vegas. The Respondent used this assumed name because he did not want his family to find out he was gambling in Las Vegas. While at the MGM Hotel, his real identify was discovered, and he was compelled to pay the MGM Hotel all the monies which he owed it. This event initiated a reinvestigation of the previous 1976 check-passing incident, which resulted in his indictment in 1979-1980 and his subsequent conviction.

    
    

12. Lawrence Dale Scheaffer was a client of Respondent from 1976 until the present. The Respondent provided Scheaffer with information and professional advice concerning Scheaffer's retirement plan, both as an attorney and later as a certified public accountant. Scheaffer and others testified concerning the Respondent's reputation in the community, where the Respondent is reputed to be honest and of good character.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Board of Accountants has jurisdiction to discipline its licensees pursuant to Section 473.323, Florida Statutes. This Recommended Order is entered pursuant to the authority of Section 120.57(1), Florida Statutes.

14. Counts I, II and III of the Administrative Complaint allege that the Respondent has violated the following statutory provisions of Section 473.323(1), Florida Statutes:

    
    

    (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;

    * * *

    (g) Upon proof that the licensee is guilty of fraud or deceit, or of negligence, incompetency, or misconduct in the practice of public accounting;

    * * *

    (k) Performance of any fraudulent act while holding a license to practice public accounting; . . . . [Emphasis supplied.]

    
    

15. The terms "practice of," "practice of public accounting," or "public accounting" are statutorily defined in Section 473.302(4), Florida Statutes, as follows:

    
    

    1. Offering to perform or performing for the public one or more types of services involving the use of accounting skills, or one or more types of management advisory or consulting services, by a certified public accountant, or firm of certified public accountants, of this state, including the performance of such services in the employ of another person; or

    2. Offering to perform or performing for the public one or more types of services involving the use of accounting skills, or one or more types of management advisory or consulting services, by any other person holding himself or itself out as a certified public accountant or a firm of certified public accountants, including the performance of such services by a certified public accountant in the employ of a person so holding himself or itself out.

       
       

16. The Petitioner concedes in its proposed recommended order that the fraudulent acts which formed the basis for Respondent's conviction in federal court were based upon the Respondent's personal gambling and were not related to his practice of public accounting. The facts do not support a finding that Respondent violated the provisions of Sections 473.323(1)(d) or (g), Florida Statutes, relating to the practice of public accounting, as alleged in Counts II and III of the Administrative Complaint.

    
    

17. Based upon the concession of the Petitioner that the Respondent's acts were not related to the practice of accounting, only the latter part of Section 473.323(1)(d), Florida Statutes, relating to his ability to practice public accounting, is arguable applicable to the Respondent, as alleged in Count III.

18. On this issue, the Petitioner introduced the testimony of Mr. Marlyn Felsing. Paragraph 6 of Petitioner's proposed findings based on Felsing's testimony, which was based upon his reading of the indictment and verdict against the Respondent, is rejected to the extent that his opinions relate to the ultimate facts and are beyond the province of the witness. Based upon the testimony of the Respondent and various character witnesses, Respondent's conviction was not related to and has not affected his ability to practice accounting. Petitioner has failed to prove that the Respondent is guilty of violating Section 473.323(1)(d), Florida Statutes, as alleged in Count III.

    
    

19. The last issue, raised by the allegations of Count I, is that Respondent violated Section 473.323(l)(k), Florida Statutes, which provides for the discipline of one found guilty of performing "any fraudulent act while holding a license to practice accounting." Clearly, the Respondent's conviction establishes that he committed a fraudulent act. However, when the Respondent committed said act, his license was in an inoperative (now inactive) status. Therefore, the issue is whether the Respondent was "holding a license" for the purposes of disciplining the Respondent under Section 473.323(1)(k), supra.

    
    

20. Petitioner avoids an in-depth consideration of this issue, merely reciting that the Respondent held a license at all relevant periods, albeit inactive from 1977 to 1982. However, this issue deserves careful and close examination. First, this is not a jurisdictional question. Clearly, the Petitioner has jurisdiction to consider offenses committed by the Respondent while he was in inactive status. [See Boedy v. Department of Professional Regulation, 428 So.2d 758 (Fla. 1st DCA 1983).]

    
    

21. The narrow issue is whether a person in inactive status "holds a license." Factually, a person in inactive status does not hold a license. However, as stated above, the issue is not jurisdictional, but whether the Legislature intended for Subsection (k), supra, to apply only to persons who were in active status. This intent must be sought through an examination of Chapter 473, Florida Statutes, as a whole. Certain common threads run through the statute which impact upon the interpretation given Subsection (k), supra.

    
    

22. In searching for the meaning of the language, "while holding a license," two aspects of the various provisions of Section 473.323, Florida Statutes, will be examined. The proscribed conduct will be looked at and related to the scope of the statute's applicability in terms of the people who are subject to its provisions. In that regard, clearly only licensees of the Board are subject to the disciplinary provisions of Chapter 473, Florida Statutes. Therefore, statutory language specifically addressing the scope of the provision's applicability must be presumed to have significance.

    
    

23. Within Section 473.323(1), Florida Statutes, there are three different provisions which proscribe fraud specifically or generally, and each has different language regarding the scope of the statute. Subsection (d) proscribes conviction of crimes to include crimes related to fraud. Subsection

    (d) does not contain any language referencing or defining scope. It clearly was intended to apply to all licensees, active or inactive, who committed a crime of fraud. Subsection (g) references licensees, again the most inclusive reference, in proscribing fraudulent or deceitful acts. Of particular note is that both Subsections (d) and (g) require a relationship between the offense and the practice of accounting. This link between offensive conduct and the professional responsibilities of an accountant commences with Section 473.306(4), Florida Statutes, before licensure. Section 473.306(4)(b) provides

    that the Board may refuse to certify an applicant only if "there is a substantial relationship between the lack of good moral character and the professional responsibilities of a Certified Public Accountant."

    
    

24. Turning to the subsection at issue, Subsection (k), supra, provides that it shall be applicable to those who commit proscribed acts "while holding a license." This language is a departure from the chapter's previous references to scope, which are either stated in terms of licensure or are unstated.

    
    

25. If the nature of the proscribed conduct is examined, the reason for the change of scope becomes apparent. Subsection (k) proscribes all fraudulent conduct. However, Subsection (k) does not contain the language contained in Subsection (d) or (g), which requires that the offensive conduct be related to the professional practice of accounting. Yet, as noted above, this link between wrongdoing and professional responsibilities is otherwise present throughout the chapter. This link is provided by limiting scope to active licensure. Any act of fraud while actively licensed bears sufficient connection to the profession to be related to the practice.

    
    

26. Of those people who are subject to the jurisdiction of the Board, only those who are active hold licenses. Those who are inactive do not hold licenses. Had the Legislature desired to have the provisions of Subsection (k) apply to all licensees, it could have stated the scope as "while licensed" or "by a licensee," as it did in Subsection (g), or it could have simply deleted any reference, as it did in Subsection (d). Construing "while holding an active license" to refer to active licensees gives the language at issue its plain and common meaning, harmonizes the provisions of Section 473.323(1), Florida Statutes, and is consistent with the other provisions of the statute. If construed otherwise, the Board could revoke the license which it reissued Respondent when, under the facts presented, it could not deny him a license under Section 473.306(4)(b), Florida Statutes.

    
    

27. Therefore, the language "while holding a license" is deemed to limit the scope of Section 473.323(l)(k), Florida Statutes, to active licensees. The facts show that the Respondent was not actively licensed at the time he committed the acts in question. The Respondent did not violate Section 473.323(l)(k), Florida Statutes, as alleged in Count I of the Administrative Complaint.

RECOMMENDATION

Having found that the Respondent did not violate the statutes as alleged in Counts I, II or III of the Administrative Complaint, the Hearing Officer recommends that the charges against the Respondent be dismissed.

DONE AND RECOMMENDED this 22nd day of February 1984 in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February 1984.

COPIES FURNISHED:

Charles F. Tunnicliff, Esquire Joseph W. Lawrence, II, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Jeffrey J. Fitos, Esquire

One East Silver Springs Boulevard Ocala, Florida 32670

Frederick Roche, Secretary

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Martha Willis, Executive Director Board of Accountancy

4001 NW 43rd Street, Suite 16

Gainesville, Florida 32306

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF PROFESSIONAL REGULATION

DEPARTMENT OF PROFESSIONAL REGULATION, BOARD OF ACCOUNTANCY

Petitioner,

vs. CASE NO. 30091

DOAH NO. 83-1581

PAUL R. ASHE,

Respondent.

/

FINAL ORDER

THIS CAUSE came on to be heard by the Florida Board of Accountancy of the Department of professional Regulation at a regularly scheduled meeting held on March 30, 1984, in Tampa, Florida.

Appearance for Petitioner: Joseph W. Lawrence, II

Chief Attorney

Department of Professional Regulation

130 North Monroe Street Tallahassee Florida 32301

Appearance for Respondent: No appearance

After reviewing the complete record, the Florida Board of Accountancy(Board) hereby adopts the Findings of Fact of the Hearing Officer as set forth in the Recommended Order dated February 22, 1984.

The Board rejects the Conclusions of Law and Recommendation of the Hearing Officer for the following reasons:

1. The Hearing Officer's determination that Respondent's conviction did not affect his "ability to practice public accountancy as set forth in 473.323(1)(d), F.S. , is erroneous in that any dishonest criminal act on the part of an individual licensed or seeking licensure to practice public accountancy in the State of Florida' clearly affects its ability to practice public accountancy in Florida clearly affects its ability to practice public accountancy. The legislative intent in regulating the practice of public accountancy specifically is to "protect the public from dishonest practitioners" (473.301, F.S.) and thus the rationale of Rush v. Department of Professional Regulation, Board of Podiatry, 1st DCA Case No. AT-257, opinion rendered March 22, 1984 is applicable. The Hearing Officer's finding to the contrary is thus in error.

2. It is further found that under the provisions of 473.323(1)(k), F.S. that the Hearing Officer's rationale for determining that Respondent did not "hold a license" is erroneous in that an individual who holds an inactive license and who commits a fraudulent act is clearly "holding a license" as that term is contemplated in Ch. 473. See 473.322(1)(f), F.S., Rule 21A-20.01, F.A.C., each of which contemplates that an inactive licensee in fact "holds a license". Further, as noted above the legislative intent in regulating the practice of public accountancy is to protect the public from dishonest practitioners and the provisions of 473.323(1)(k), F.S. are thus on its face intended to apply to any fraudulent act (such as set forth in the instant cause) which would bear directly or indirectly upon the honesty of a practitioner. To accept the Hearing Officer's recommendation would be to allow an inactive licensee to commit a fraud in some business endeavor and then be permitted to activate and potentially commit such dishonest acts in the practice of public accountancy.

To the extent set forth above the exceptions filed by Petitioner are hereby adopted by the Board and the recommendation of dismissal of the Hearing Officer is hereby REVOKED.

WHEREFORE, it is hereby

ORDERED AND ADJUDGED that Respondent be and the same is hereby found to be in violation of 473.323(1)(d) and (1)(k), F.S. and his certificate and license to practice public accountancy in the State of Florida is REVOKED.

DONE AND ORDERED this 16th day of April, 1984, by the Florida Board of Accountancy.

RAMON A. RODRIGUEZ, Chairman

Florida Board of Accountancy

Copies furnished to:

Joseph W. Lawrence, Esquire Jeffrey Fitos, Esquire

Docket for Case No: 83-001581

Orders for Case No: 83-001581