STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NORMAN A. LEVIN, )

)

Petitioner, )

)

vs. ) CASE No. 86-1146

) STATE OF FLORIDA, DEPARTMENT OF ) BANKING AND FINANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a public hearing in the above-styled case on August 15, 1986, in Fort Lauderdale, Florida.

Appearances

For Petitioner: Norman A. Levin, pro se

Max Levin, Esquire 2400 Ocean Boulevard

Fort Lauderdale, Florida 33305

For Respondent: Paul G. Stadler, Jr., Esquire

Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399

Preliminary Statement

At issue in these proceedings is whether the application of Petitioner for registration as a mortgage broker should be approved.

At final hearing the Petitioner testified on his own behalf, and called David H. Warsowe, Amelia P. Murray, Burns Alan Dobbins, III, Charles Burnett, David R. Farbstein, Dewey Reis, and Frances W. Payne, as witnesses.

Petitioner's exhibits 1-9 were received into evidence. Respondent called Dewey Reis as a witness.

The transcript of hearing was filed September 9, 1986, and the parties were granted 10 days from that date within which to file proposed findings of fact.

Respondent elected to file proposed findings of fact and they have been addressed in the appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner, Norman A Levin (Levin), was born March 19, 1935, is a citizen of the United States, and has been a resident of the State of Florida for over 10 years. Levin currently resides at 2400 North Ocean Boulevard, Fort Lauderdale, Florida.

   
   

2. In November 1985, Levin filed an application with Respondent, Department of Banking and Finance (Department), for registration as a mortgage broker. Pertinent to this proceeding, the application provided.

   
   

   5. Have you ever been arrested, charged or indicted for a crime? yes

   (If answer is in the affirmative, attach a complete signed notarized statement of the charges and facts, together with the name and location of the court in which the proceedings were held or are pending.)

   * * *

   I hereby affirm under penalty of perjury that the foregoing statements are true and correct to the best of my knowledge and belief.

   
   

   /s/ Norman A. Levin

   
   

3. As a consequence of his affirmative response to question 5, Levin attached a notarized statement which stated in part:

   
   

   On June 25, 1975, I was convicted in federal court in Boston, Massachusetts. The

   main thrust of my conviction concerned itself with concealment of assets in contemplation of bankruptcy. The docket No. was 73-184C, the register No. was 00092-192, and I was incarcerated in the Federal Prison at Eglin Air Force Base in Florida. I was admitted into prison on June 4, 1976, and was released on parole on June 10, 1977. On June 2, 1978, I was released from parole... 1/

   
   

   No other arrests, charges, or indictments were disclosed.

   
   

4. By letter of January 24, 1986, the Department advised Levin that it was in receipt of a report from the Florida Department of Law Enforcement which reflected that he had been arrested on at least two occasions which had not been disclosed. The department requested that Levin advise it of the circumstances surrounding the arrests, and why he chose not to disclose them on his application.

   
   

5. By letter of January 19, 1986, Levin advised the Department of three arrests he had failed to disclose. The first arrest occurred on March 13, 1979 when he was apprehended leaving a drug store after having forgotten to pay for a

   $7.00 prescription. The ensuing charge of petit theft was dismissed on March 20, 1979, when the manager of the drug store withdrew his complaint. Levin's second arrest occurred on or about December 24, 1979, when he was served with a bench warrant for his failure to appear in court in response to a ticket he had received for improper operation of a motor boat (speeding). Levin's failure to

   appear in court was not due, however, to any inattention on his part, but because he had never received the court's notice of hearing; the notice had been mailed to a wrong address and returned to the clerk's office undelivered.

   Levin's final arrest occurred on or about October 10, 1980, when he was charged with soliciting for prostitution. Levin entered a plea of not guilty, and the State nolle prossed the charge on March 26, 1981.

   
   

6. Levin further responded to the Department's letter of January 24, 1986, by providing it with copies of a motion filed on his behalf to seal the court records concerning the soliciting for prostitution charge, an affidavit he executed to support the motion and the court order sealing the records. Levin's affidavit, executed March 26, 1981, provided in part:

   
   

   Prior to and subsequent to Defendant's arrest of October 10, 1980, Defendant has never been arrested or convicted of a violation of municipal ordinance, a violation

   of the State of Florida or of any other state. (Emphasis added)

   
   

7. In response to the Department's request that he advise the Department why he chose not to disclose the prior arrests on this application, Levin asserted that:

   
   

   In my mind I felt that since these matters had been legally processed, dismissed, expunged, etc., that brought an end to them. Since I had not been found guilty by any jury or judge, I felt that the legal process had been satisfied. While it is true that I was arrested on these three occasions, I truly believed that since I was never guilty of any of the foregoing arrests, there was no need to elaborate upon them. Certainly I elaborated in some detail on the one incident for which I was convicted and incarcerated.

   My intention was not to hide something from you--I merely believed that it was dropped and over with after having been adjudicated. Since all of these matters had gone through the legal process, I truly believed that they were not even on record.

   
   

   I am very sorry for the misunderstanding here. Again, I did not try to hide something from you on purpose. I am guilty here only of ignorance of understanding.

   
   

8. Levin's assertion of misunderstanding is inherently improbable. He is certainly no novice to the legal process, and is cognizant of the difference between arrest and conviction. These arrests were not, however, material to the Department's disposition of his application. Further, Levin did fully apprise the Department of the arrests before it took any action; albeit after the Department's discovery of his nondisclosure.

   
   

9. By order of February 28, 1986, the Department proposed to deny Levin's application, and Levin filed a timely request for formal hearing. In resisting

   Levin's application for licensure, the Department offered no evidence that Levin had committed any of the previously undisclosed offenses for which he had been arrested, nor did it offer any evidence that such arrests, or the facts incident to such arrests, were material to its disposition of his application. Rather, the Department resisted Levin's licensure because of his federal conviction; his failure to disclose the 1979 arrests on the application he affirmed under penalty of perjury; his affidavit, supporting the motion to expunge, which falsely attested that he had never been arrested for "a violation of municipal ordinance, a violation of the State of Florida or of any other state"; and, his failure on seeking expungement, to apprise the criminal court of his prior federal conviction.

   
   

10. Levin's 1975 federal conviction was predicated on a finding that he had conspired to fraudulently transfer or conceal property in contemplation of bankruptcy or with intent to defeat the bankruptcy laws in violation of 18

    U.S.C. Sec. 152 and 371, knowingly making false statements in connection with applications for loans from federally insured banks in violation of 18 U.S.C. Sec. 1014, and transporting or causing to be transported in interstate commerce property which had been stolen, converted, or taken by fraud in violation of 18

    U.S.C. Sec. 2314. Such felony convictions clearly involve fraudulent or dishonest dealings and directly relate to the business of being a mortgage broker.

    
    

11. To Levin's credit he has served his sentence, successfully completed his parole, and been restored of his civil rights. The seriousness of the crimes for which Levin was convicted cannot, however, be gainsaid. To justify his registration as a mortgage broker would, under the circumstances, require proof of his rehabilitation.

    
    

12. Since his release from prison almost 10 years ago, Levin has suffered no conviction, and his arrests have been limited to those disclosed to the Department. During the intervening years Levin has been licensed as a real estate salesman by the Florida Real Estate Commission; a license that requires of an applicant the attributes of honesty, trustworthiness, good character, and a good reputation for fair dealing. See: Section 475.17 Florida Statutes. Levine has, through the conduct of his business, demonstrated that he possesses these attributes, and that he is worthy of the trust of his peers. 2/ But for his failure to disclose his arrests on his application and his failure to disclose his arrests on his affidavit of March 26, 1981, there is no evidence that Levin's conduct subsequent to his federal conviction was anything short of exemplary. 3/

    
    

13. While nondisclosure and misstatement cast an unfavorable pall over Levin's application, their significance must be examined in light of their materiality, as well as Levin's subsequent disclosure. Significantly, the arrests in question were not material to either the Department or the criminal court. 4/ Considering the lack of materiality of these isolated transactions, combined with Levin's subsequent disclosure, the proof establishes, on balance, that Levin currently possesses the requisite honesty and integrity for registration as a mortgage broker.

    
    

    Conclusions of Law

    
    

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

15. The ultimate burden of persuasion of whether Levin's application for registration as a mortgage broker should be approved rested with Levin. See: Rule 28-6.08(3), F.A.C., and Florida Department of Transportation v. J.W.C. Co. 396 So.2d 778 (Fla. 1st D.C.A. 1981).

    
    

16. Pertinent to these proceedings, Section 494.037(2) Florida Statutes provides:

    
    

    ... it shall be grounds for denial of licensure if the applicant has committed any violation as set forth in s. 494.055(1)....

    
    

17. The Department contends that Levin has violated the following provisions of Section 494.055(1), Florida Statutes:

    
    

    1. Being convicted or found guilty, regardless of adjudication, of a crime in any jurisdiction which involves fraud, dishonest dealing, or any other act of moral turpitude;

       * * *

       (c) A material misstatement of fact on an initial or renewal application;

       * * *

       (q) Failure to comply with or violation of any other provision of this chapter.

       
       

18. With respect to its claim regarding section 494.055(1)(q), the Department relies on the provisions of Section 494.093, Florida Statutes, which provide:

    
    

    Prohibited practices.--It is unlawful, and a violation of the provisions of this chapter, for any person:

    * * *

    (4) In any matter within the jurisdiction of the department, to knowingly and wilfully falsify, conceal, or cover up, by any trick, scheme, or device, a material fact, or make any false or fraudulent statement or representation, or make or use any false writing or document, knowing the same to

    contain any false or fraudulent statement or entry.

    
    

19. The Department's reliance upon the provisions of sections 494.055(1)(c) and (q), as authorizing the denial of Levin's application because of his failure to disclose his March 13, 1979 and December 24, 1979 arrests on his application 5/ and his failure to disclose those arrests on his affidavit of March 26, 1981, is unwarranted. Levin's arrests were not shown to be material to the Department's consideration or disposition of his application and, consequently, there was no showing that Levin's nondisclosure constituted a material misstatement of fact. Levin's failure to disclose his prior arrests on his affidavit of March 26, 1981, was not material to that court's decision of whether to grant the motion to expunge. See: Section 943.058, Florida Statutes. Consequently, these isolated transactions do not militate against a finding that Levin possesses the requisite honesty and integrity for registration as a mortgage broker.

20. While Levin's 1975 federal conviction was for a crime involving fraud, dishonest dealing and moral turpitude within the purview of section 494.055(1)(a), the proof evidences Levin's rehabilitation and his present worthiness of the trust and confidence of his peers. Accordingly, on balance, Levin has demonstrated his qualification for registration as a mortgage broker.

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Norman A. Levin for registration as a

mortgage broker be approved.

DONE and ORDERED this 22nd day of October, 1986, at Tallahassee, Florida.

WILLIAM J. KENDRICK, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of October, 1986.

ENDNOTES

1/ Levin has received a Certificate of Restoration of Civil Rights from the Office of Executive Clemency, Tallahassee, Florida, dated October 30, 1978, evidencing that he has been restored to all civil rights in this State, except the specific authority to possess or own a firearm.

2/ Both Levin, with one exception, and the Department sought to establish Levin's reputation for honesty and integrity through evidence of specific acts. Such evidence is traditionally inadmissible to establish an individual's character. See: Ehrhart, Florida Evidence, 2d. Ed., Section 405.3. To the extent such evidence was admitted without objection, it demonstrated that Levin was possessed of a reputation characterized by honesty and integrity.

3/ The Department's assertion that Levin should not be licensed because of his failure, on seeking expungement, to apprise the criminal court of his prior federal conviction is unpersuasive. The affidavit does not attest that Levin had not been convicted of a federal offense. Further, the affidavit was executed upon the advice of an attorney who was fully cognizant of Levin's federal conviction, and who advised Levin it need not be disclosed. While his expungement may be subject to reversal, Levin was not shown to have knowingly breached a duty to disclose.

4/ See: Section 943.058, Florida Statutes. Motions to seal court records are concerned with prior convictions, not arrest.

5/ Levin's failure to disclose his October 10, 1980, arrest is not pertinent to this case. Under the provisions of Section 943.058(6)(b), Florida Statutes, such nondisclosure was authorized.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1146

The Department's proposed findings of fact are addressed as follows:

1. Conclusion of law.

2. Addressed in paragraph 1.

3. Addressed in paragraph 2.

4. Addressed in paragraph 1.

5. Addressed in paragraphs 2 and 3.

6. Addressed in paragraph 4.

7. Addressed in paragraphs 5 and 6.

8. Addressed in paragraph 7.

9. Addressed in paragraph 9.

10. Addressed in paragraphs 12-13.

11. Addressed in paragraph 8.

12. Addressed in paragraph 9.

13. Addressed in paragraphs 12-13.

    
    

    COPIES FURNISHED:

    
    

    Norman A. Levin, pro se Max Levin, Esquire

    2400 Ocean Boulevard

    Fort Lauderdale, Florida 33305

    
    

    Paul C. Stadler, Jr., Esquire Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399

    
    

    Honorable Gerald Lewis Comptroller, State of Florida The Capitol

    Tallahassee, Florida 32301

    
    

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

    AGENCY FINAL ORDER

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

    
    

    STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE

    DIVISION OF SECURITIES

    
    

    IN RE: NORMAN A. LEVIN, File No. 617-F-2/86 DOAH Case No. 86-1146

    Applicant.

    /

    FINAL ORDER GRANTING THE APPLICATION FOR REGISTRATION AS

    A MORTGAGE BROKER AND NOTICE OF RIGHTS

    
    

    The State of Florida Department of Banking and Finance, Division of Finance, being authorized and directed to administer the provisions of the Mortgage Brokerage Act, Chapter 494, Florida Statutes, hereby enters this Final Order Granting the Application for Registration as a Mortgage Broker and Notice of Rights in favor of NORMAN A. LEVIN (hereinafter Applicant), and, as grounds therefore states:

    
    

    FINDINGS OF FACTS

    
    

    1. Under the provisions of Chapter 494, Florida Statutes, the Department is charged with the responsibility and duty of administering and enforcing the provisions of said chapter, which includes the duty of granting or denying an application for a mortgage broker license, as set forth in Section 494.037, Florida Statutes.

       
       

    2. Applicant is a resident of the State of Florida and has a present address at 2400 North Ocean Boulevard, Fort Lauderdale, Florida 33305.

       
       

    3. On November 26, 1985, Applicant submitted a partially completed Application for Registration as a Mortgage Broker (hereinafter Application), under the provisions of Chapter 494, Florida Statutes.

       
       

    4. From the Application, Applicant was born March 19, 1935. He is a citizen of the United States and is a resident of the State of Florida. The files of the Department indicate that Applicant is not now and never has been granted a license as a mortgage broker by the Department.

       
       

    5. On February 28, 1986, the Department entered a Final Order Denying the Application for Registration as a Mortgage Broker and Notice of Rights against Applicant (hereinafter Denial Order). Applicant timely requested a hearing and William J. Kendrick, Hearing Officer, was assigned to preside over these proceedings. An administrative hearing was held on August 18, 1986, and on October 22, 1986, said Hearing Officer entered a Recommended Order recommending that Applicant's Application be approved.

       
       

    6. The Department has reviewed the Hearing Officer's Findings of Fact and adopts and incorporates them by reference with two minor exceptions which are discussed in the Conclusions of Law section herein.

       
       

       CONCLUSIONS OF LAW

       
       

    7. The Department has reviewed the Hearing Officer's Conclusions of Law and adopts and incorporates them by reference. The Department, however, takes exception to the following: First, the Hearing Officer states in footnote 2 of the Recommended Order:

       
       

       Both Levin, with one exception, and the Department sought to establish Levin's reputa- tion for honesty and integrity through evidence of specific acts. Such evidence is traditionally inadmissible to establish an individual's char- acter. See: Ehrhardt, Florida Evidence, 2d. Ed.,

       Section 405.3. To the extent such evidence was admitted without objection, it demonstrated that Levin was possessed of a reputation characterized by honesty and integrity.

       
       

       The Department respectfully submits that while specific act evidence is generally inadmissible, "[w]hen the character of a person is `an essential element' in a lawsuit, Section 90.405(2), provides that proof of character may be by using specific instances of the party's conduct." 1 C. Ehrhardt, Florida Evidence Section 405.3, at 153 (2d ed. 1984). As the Denial Order in paragraph

       11 concluded that Applicant did not have the requisite honesty, truthfulness, and integrity to act as a mortgage broker, his character was an essential element in these proceedings and, accordingly, Applicant properly presented specific act evidence at the administrative hearing.

       
       

    8. The Hearing Officer in footnote 4 of the Recommended Order also concluded that Section 943.058, Florida Statutes, "[m]otions to seal court records are concerned with prior convictions, not arrest." The Department respectfully takes issue with this conclusion and notes that Canter v. State,

448 So.2d 64 (Fla. 3d DCA 1984), involved the sealing of court records involving charges for bad checks in which the state entered a nolle prosequi. See also Section 943.058(6)(a), Florida Statutes. However, as noted above, the Department does not take issue with the fundamental correctness of the factual and legal findings of the Hearing Officer and, accordingly, Applicant shall be issued a license to act as a mortgage broker pursuant to Chapter 494, Florida Statutes.

FINAL ORDER

IT IS THEREFORE determined and ordered that:

1. The Department's Final Order Denying the Application for Registration as a Mortgage Broker and Notice of Rights entered against Applicant on February 28, 1986, is vacated and superseded by this Final Order.

   
   

2. The Recommended Order entered on October 22, 1986, is adopted and incorporated by reference as if set forth at length except for footnote 4 therein in its entirety and footnote 2 in so far as it states that specific act evidence was inadmissible at the administrative hearing held in this cause.

   
   

3. The Department hereby approves that the application of Applicant, Norman A. Levin, to obtain a license pursuant to Chapter 494, Florida Statutes.

DONE and ORDERED in Tallahassee, Florida this 19th day of November, 1986.

GERALD LEWIS, Comptroller of the State of Florida and Head of the Department of Banking and Finance

COPIES FURNISHED:

William J. Kendrick, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

Randall A. Holland Assistant Director Division of Finance Office of the Comptroller

The Fuller Warren Building, 2nd Floor

202 Blount Street Tallahassee, Florida 32301

Paul C. Stadler, Jr. Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Norman A. Levin

2400 North Ocean Blvd.

Fort Lauderdale, Florida 33305

NOTICE OF RIGHTS

Applicant is advised that within thirty days of the date of this Final Order he may seek judicial review of the same by filing a Notice of Appeal with the Clerk of the Department, Office of the Comptroller, Department of Banking and Finance, The Capitol, Suite 1302, Tallahassee, Florida 32301, (904) 488-9896 and by filing a second copy of such Notice of Appeal together with the appropriate filing fee with the Clerk of the District Court of Appeal, First District, Martin Luther King, Jr., Boulevard at Pensacola and West Jefferson Street, Tallahassee, Florida 32301 or with the District Court of Appeal, Fourth District, 1525 Palm Beach Lakes Blvd., P. O. Box A, West Palm Beach, Florida 33402.

Docket for Case No: 86-001146

Orders for Case No: 86-001146