Judges: K. N. AYERS
Agency: Department of Financial Services
Latest Update: Mar. 30, 1987
Summary: Conviction of mail fraud involves moral turpitude and is grounds for revocation of insurance license
86-4321.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF INSURANCE, )
)
Petitioner, )
)
vs. ) CASE NO. 86-4321
)
JOSEPH ANTHONY MIDULLA, )
)
Respondent. )
)
RECOMMENDED ORDER
A hearing in the above-styled case was conducted by K. N. Ayers, Hearing Officer, Division of Administrative Hearings, on February 18, 1987, in Tampa, Florida.
APPEARANCES
For Petitioner: Richard E. Turner, Esquire
Department of Insurance 413E Larson Building Tallahassee, Florida 32301
For Respondent: Dominic J. Baccarella, Esquire
520 North Westshore Boulevard Tampa, Florida 33609
By Administrative Complaint dated October 2, 1986, the Department of Insurance, Petitioner, seeks to revoke, suspend or otherwise discipline the license of Joseph Anthony Midulla, Respondent, as a Health Insurance, Ordinary-- Combination Life, including Health Insurance, and an Ordinary Life, including Health Insurance Agent in the State of Florida. In his Answer to Administrative Complaint dated October 31, 1986, Respondent admitted all factual allegations and requested an administrative hearing to present evidence that his conviction of certain acts in federal court had no connection to Respondent's insurance business and should not lead to revocation of his license.
At the commencement of the hearing, Petitioner presented seven exhibits, Respondent presented one composite exhibit, all of which were admitted into evidence, and Petitioner rested. Respondent then called as witnesses his probation officer, his employer, and testified on his own behalf.
There being no dispute regarding the facts here involved, proposed findings submitted by the parties are accepted.
FINDINGS OF FACT
At all times relevant hereto, Respondent was licensed by Petitioner as a Health Insurance, Ordinary-- Combination Life, including Health Insurance, and an Ordinary Life, including Health Insurance Agent in the State of Florida.
On or about August 25, 1983, a warrant for the arrest of Respondent was issued by the U.S. District Court, Middle District of Florida, Tampa, Florida.
This warrant was based on an indictment charging Respondent, among others, with seven counts of knowingly and intentionally devising and intending to devise a scheme and artifice to defraud and to obtain money by means of false representations from insurance companies, banks, financial institutions, merchants and credit card companies.
Respondent, upon advice of counsel, entered into a plea agreement with the United States Attorney and, pursuant thereto, pleaded guilty to Counts (1) and (7) of the indictment. Pursuant to this plea, Respondent was found guilty of Counts (1) and (7), alleging mail fraud, was sentenced to four years confinement for each count, and incarcerated at the Federal Correction Institute at Eglin Air Force Base, Florida.
Respondent is now 48 years old. He was first licensed as an insurance agent in Florida in 1970 and has been continuously so licensed since that time. From 1973 forward, excluding the time Respondent was imprisoned, he worked for Federal Employee Benefit Association, an insurance agency owned by Joseph Baio specializing in selling health insurance policies to federal employees. During this period, Respondent dealt with hundreds of clients and Baio received no complaints regarding Respondent's work as an insurance agent.
Baio is fully aware of Respondent's conviction and sentence. Nevertheless, he rehired Respondent when he was released from prison and will continue to employ Respondent if Respondent keeps his license.
Upon his release from prison, Respondent was sent to a half-way house for six months and upon release therefrom was placed on probation. Respondent has fully complied with the terms of his probation and expects to be released from probation three months early one year from now because of such compliance.
Respondent contends that his participation in the crimes of which he was convicted was that of an innocent who merely witnessed signatures and was unaware of the fraudulent nature of the documents on which his name appeared as witness. One of those documents was used to submit fraudulent claims to insurance companies for property losses. Respondent's insurance business has been limited to life and health policies.
Numerous letters of character reference were admitted into evidence as Exhibit 8. These letters uniformly commended Respondent as a man of high moral character and as an honest insurance agent.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Respondent is here charged with having been found guilty or having pleaded guilty to a felony which involves moral turpitude in violation of Section 621.611(14), Florida Statutes, and to a felony in violation of Section 626.621(8), Florida Statutes. Additionally, Respondent is charged with having demonstrated lack of fitness or trustworthiness to engage in the business of insurance in violation of Section 626.611(7), Florida Statutes, having engaged in an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance, and engaging in unfair or deceptive
practices or acts while conducting business under his license in violation of Section 626.9561, Florida Statutes. All of these charges stem from the one alleged factual situation, viz. that Respondent pleaded and was found guilty of mail fraud by the U.S. District Court in Tampa, Florida. For this one act, Respondent may be punished only once regardless of the number of statutory violations alleged.
The purpose of 18 USCS, Section 1341 was to prevent the post office from being used to carry prohibited schemes into effect. Parr vs. United States, 363 US 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960). Mail fraud, under 18 USCS, Section 1341, requires scheme or artifice to defraud which incorporates common law elements of fraud. Actual rather than constructive fraud, is what is meant for purposes of criminal prosecution under 18 USCS, Section 1341 and fraud need not be successful or completed. United States vs. Bane, 433 F.Supp. 1286 (D.C. Mich. 1977)
Section 626.611, Florida Statutes, provides in pertinent part: The department shall deny, suspend, revoke,
or refuse to renew or continue the license
of any agent . . . and it shall suspend or revoke the eligibility to hold a license or permit of any such person, if it finds that as to the . . . licensee any one or more of the following applicable grounds exist:
(7) Demonstrated lack of fitness or trust- worthiness to engage in the business of insurance.
* * *
(14) Having been found guilty of . . . a felony in this state or any other state which involves moral turpitude, without regard to whether a judgment of conviction has been entered by the court having juris- diction of such cases.
Section 626.621, Florida Statutes, provides grounds for discretionary revocation or suspension of licenses of insurance agents licensed in Florida, one ground being if it finds the licensee has been found guilty of a felony in this state. Additionally, Section 626.9521 provides:
No person shall engage in this state in any trade practice which is defined in this part as, or determined pursuant to Section 626.9561 to be, an unfair method of competition or an unfair or deceptive act or practice involving the business of insurance. Any person who violates any provision of this part shall be subject to the penalties provided in
s. 627.381.
Section 627.381 authorizes the department to assess an administrative fine against a licensee violating any provision of this part.
The only real issue raised by Respondent in this case is whether the offense of which he was found guilty involves moral turpitude. Much has been written on crimes involving moral turpitude and the general consensus is that, in addition to numerous other crimes, all of those crimes involving dishonesty, fraud, embezzlement and the like, are crimes involving moral turpitude. A misdemeanor conviction of embezzlement involves moral turpitude. Cirnigliaro vs. Florida Police Standards and Training Commission, 409 So.2d 80 (Fla. 1st DCA 1982).
Accordingly, Respondent has been found guilty of a felony involving moral turpitude and is subject to the mandatory penalties prescribed for violation of Section 626.611, Florida Statutes, above cited. This mandatory penalty is revocation or suspension of license.
However, this does not preclude the exercise of some leniency by the department when the facts surrounding the conviction and the character evidence presented on behalf of Respondent warrant such leniency.
From the evidence presented, it would appear that Respondent was, at best, a minor participant in the fraudulent scheme and was slated to receive no benefit if the scheme succeeded. He has sold life and health insurance for many years without any complaints from any of his clients and he has faithfully complied with the terms of his parole.
Based upon Respondent's age, his limited participation in the fraudulent scheme of which he was convicted, and his prior record and reputation in the insurance business, it is
RECOMMENDED that Joseph A. Midulla's licenses as an insurance agent in Florida be suspended for three years. It is further
RECOMMENDED that the suspension of the licenses be stayed pending Respondent's completion of a probationary period of five years during which time he shall commit no violation of Chapter 611, Florida Statutes, and that, at the expiration of the probationary period, unless sooner terminated, the suspension of the licenses be set aside and Respondent restored to good standing.
ENTERED this 30th day of March, 1987, in Tallahassee, Florida.
K. N. AYERS 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 30th day of March, 1987.
COPIES FURNISHED:
Richard E. Turner, Esquire Department of Insurance Room 413-5, Larson Building Tallahassee, Florida 32301
Dominic J. Baccarella, Esquire
500 North Westshore Boulevard Suite 500
Tampa, Florida 33609
Honorable William Gunter State Treasurer and
Insurance Commissioner The Capitol, Plaza Level
Tallahassee, Florida 32399-0300
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF INSURANCE AND TREASURER
IN THE MATTER OF
Case No. 86-L-673RET
JOSEPH ANTHONY MIDULLA Case No. 86-4321
/
FINAL ORDER
THIS CAUSE came before the Insurance Commissioner of the State of Florida for consideration and final agency action. On October 2, 1986, the Petitioner, DEPARTMENT OF INSURANCE, filed an Administrative Complaint seeking revocation of all license and eligibility for licensure held by the Respondent, JOSEPH ANTHONY MIDULLA, under the Florida Insurance Code. Petitioner alleged that JOSEPH ANTHONY MIDULLA had demonstrated a lack of fitness or trustworthiness to engage in the business of insurance had pled guilty to a felony involving moral turpitude and engaged in an unfair or deceptive act or practice involving the business of insurance. Respondent timely filed a request for a hearing pursuant to Section 120.57(1) Florida Statutes. On February 18, 1987, and administrative hearing was held in Tampa, Florida, before the Honorable K.M. Ayers, Hearing Officer with the Division of Administrative Hearings. After consideration of the evidence and argument presented at the hearing, and after consideration of the Proposed Recommended Orders submitted by the parties, the Hearing Officer issued his Recommended Order on March 30, 1987. This Recommended Order is attached hereto as Exhibit "A". Neither party filed exceptions to the Recommended Order.
Upon consideration of the foregoing and the record being otherwise fully advised in the premises, it is
ORDERED:
The Hearing Officer's Findings of Fact are adopted in full as this agency's Findings of Fact.
The Hearing Officer's Conclusions of Law are adopted in full as this agency's Conclusions of Law.
The Hearing Officer's recommendation that the licenses and eligibility for licensure of the Respondent be suspended for three years subject to the successful completion of a five (5) year probationary period is rejected as being beyond the statutory power of the Department to impose. Section 626.691 (1), Florida Statutes, states in pertinent part " ...the Department may, in its discretion, except when ... such suspension, revocation, or refusal is mandatory ... place the offending licensee or permittee on probation for a period not to exceed two (2) years, as specified by the Department in its order." Since this is an instance where the suspension or revocation is mandatory per Section 626.611, Florida Statutes, the imposition of probation is not permissible. Further, the Department of Insurance is without authority to stay the imposition of any available penalty.
It is noted that the conduct charged in the indictment involved schemes to defraud insurers by both arson and the filing of falsified theft claims. By his plea of guilty, Mr. Midulla admitted to "knowing" violations of 18 U.S.C. 1341. Both mailings were directed to insurers. Under the rationale of Natelson vs.
Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984), the duty of the Department of Insurance to protect the public interest is clear and compelling. The Respondent's knowing and willful participation in these schemes to defraud obviously render him unfit and untrustworthy to engage in the business of insurance. Accordingly, all licenses held by and eligibility for licensure of the Respondent JOSEPH ANTHONY MIDULLA are hereby REVOKED.
Any party to these proceedings adversely affected by this Order is entitled to seek review of this Order Pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Fla.R.App.P. Review proceedings must be instituted by filing a petition notice of appeal with the General Counsel, acting as the agency clerk, at 413-B Larson Building, Tallahassee, Florida, 32399-0300 and a copy of the same with the appropriate district court of appeal within thirty (30) days of rendition of this Order.
DONE and ORDERED, this 9th day of June, 1987.
BILL GUNTER
Insurance Commissioner and State Treasurer
ANN WAINWRIGHT
Assistant Insurance Commissioner and State Treasurer
Copies Furnished To:
JOSEPH ANTHONY MIDULLA
634 Apt. A Tallwood Circle Brandon, Florida 33584
JOSEPH ANTHONY MIDULLA
705 Orange Blossom Lane Seffner, Florida 33584
DOMINIC J. BACCARELLA, Esquire
500 North Westshore Boulevard Suite 500
Tampa, Florida 33609
K. N. AYERS, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
RICHARD E. TURNER, Esquire
Department of Insurance 413-B Larson Building
Tallahassee, Florida 32399-0300
ROBERT V. ELIAS, Esquire
Department of Insurance 413-B Larson Building
Tallahassee, Florida 32399-0300
Docket for Case No: 86-004321
Orders for Case No: 86-004321
| Issue Date |
Document |
Summary |
|
Jun. 09, 1987 |
Agency Final Order
|
|
|
Mar. 30, 1987 |
Recommended Order
|
Conviction of mail fraud involves moral turpitude and is grounds for revocation of insurance license
|
