STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL )

ESTATE COMMISSION; )

)

Petitioner, )

)

vs. ) CASE NO. 87-2106

)

CHARLES SIMON, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter was heard in Miami, Florida on June 4, 1987 by William R. Dorsey, Jr., the Hearing Officer assigned by the Division of Administrative Hearings. A transcript of the proceedings was filed on July 20, 1987, and a proposed recommended order was filed by the Division of Real Estate. Rulings on proposed findings of fact are made in the appendix to this recommended order.

For Petitioner: James H. Gillis, Esquire, Orlando, Florida For Respondent: Charles Simon, pro se, Miami, Florida

ISSUES

The issue presented is whether Charles Simon violated subsections 475.25(1)(b) and (f), Florida Statutes (1985) by pleading guilty to crimes involving moral turpitude or fraudulent and dishonest dealing, i.e. grand theft and trafficking in stolen property by reissuing and refunding airline tickets without making payment for them.

FINDINGS OF FACT

1. Charles Simon was at the times material to this proceeding licensed as a real estate broker in the State of Florida holding license number 0123689. The last license was issued to him as a broker at 90 Beacon Boulevard, Miami, Florida 33135.

   
   

2. On about October 15, 1986, Mr. Simon pled guilty to six counts of an indictment alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO Act), grand theft and trafficking in stolen property for issuing and refunding of airline tickets without making payment for them. Adjudication of guilt was withheld and Mr. Simon was placed on community control for a period of twenty-four months to be followed by a period of probation of eight years, and he was ordered to pay $50,000 in restitution and court costs. By letter dated October 9, 1986, Respondent informed the Commission of having pleaded guilty to a felony.

3. By letter dated January 6, 1987, Mr. Simon wrote again to the Commission, stated that he had received no reply to his letter of October 9, 1986 and enclosed a carbon copy of the October 9, 1986 letter. The Commission never received his first (October 9, 1986) letter, although it did receive a copy of it when attached to the January 6, 1987 letter.

   
   

4. The Department relies solely upon the records of the conviction to make its case. It did not dispute Mr. Simon's explanation of the events underlying his guilty plea. Mr. Simon's version of the events is accepted, in part because his testimony was not contested by the Department, and in part because the explanation is plausible. In May of 1983, Mr. Simon's wife owned a travel agency in Dade County. His real estate office was located in the same suite of offices. While clerical employees of the travel agency would sometimes perform work for the real estate office they were wholly separate businesses. Mr. Simon was not an officer or employee of the travel agency and received no money from it.

   
   

5. In May, 1983 Mr. Simon's wife put the agency up for sale.

   
   

6. Travel agencies are approved by the Air Traffic Corporation (ATC) to write airline tickets on generic ticket stock if they meet certain requirements. ATC affiliation is important to a travel agency because it makes accounting to airlines for tickets sold much simpler. ATC serves as a clearinghouse; at the end of the week a travel agency sends one check to ATC for all tickets written during the week. ATC separates the billings according to airline, and writes one check to each airline for all tickets sold by the agents belonging to ATC.

   
   

7. Blank ticket stock is valuable and purchasers must qualify through ATC to buy a travel agency that is an ATC member. Otherwise an untrustworthy new owner could write tickets out, collect money and never pay the ATC who in turn would not be able to pay the airlines.

   
   

8. Mrs. Simon was familiar with people who expressed an interest in purchasing her agency, but they asked her not to tell ATC of the sale. When notified of the impending sale ATC would investigate the qualifications of the proposed new owners, and their previous employer or present employer would be contacted by ATC. The potential buyers were currently working at another travel agency. They wanted to buy Mrs. Simon's agency and move their clients to their new agency (Mrs. Simon's agency). They did not want to tip off their present employer of their intentions by having ATC contact the present employer. Mrs. Simon agreed to withhold notification to ATC to facilitate the sale of the travel agency.

   
   

9. After the ownership of the travel agency was transferred and most of the purchase price had been paid, Mrs. Simon was informed that the new owners had ticket stock from other travel agencies at the agency she had sold. Although this is not a violation of any statute, it violates ATC rules and alerted Mrs. Simon that something was wrong. She realized that the reason the purchasers did not want to notify the ATC of the transfer was that they were engaging in a "bust out" of the agency, i.e., issuing valid airline tickets without receiving payment for them. The tickets would then be returned to the airlines for cash refunds (although they had never been paid for) or resold to others at less than their face value. Ultimately, ATC revoked the agency's

   authority to issue tickets, but by then the owners had defrauded the airlines of many thousands of dollars. Mrs. Simon panicked and Mr. Simon agreed to try to handle the situation. Instead of reporting the matter to the police Mr. Simon tried to cover it up so that Mrs. Simon would not be implicated in wrongdoing.

   Precisely what Mr. Simon did in his attempt to keep his wife from being implicated in the purchasers' scheme was not explained at the hearing.

   
   

10. Those individuals involved in the "bust out" were ultimately arrested and convicted. Mr. Simon was also charged because of his involvement with the sale after Mrs. Simon discovered the purchasers' scheme. Under the sentencing guidelines the charges made against him would have called for a sentence of six years in jail. The state attorney's office agreed to two years of community control, eight years probation and $50,000 restitution to the airlines, if Mr. Simon would plead guilty to the charges rather than require a trial; the state attorney also agreed that no charges would be filed against Mr. Simon's wife in return for his guilty plea. The state attorney's office further agreed to a withholding of adjudication of guilt so that Mr. Simon's real estate license would not be affected.

    
    

11. Based on 1) the cost of going through a trial to defend himself and potentially another legal proceeding for the defense of his wife (which would exceed $50,000) and, 2) his erroneous belief that a guilty plea with a withholding of adjudication would not affect his real estate license, Mr. Simon agreed to the state attorney's offer as being in his best interest even though he believed that he had done nothing illegal. Since that time Mr. Simon's community control has been terminated and he has been placed on regular probation, which merely requires a once a month report to a probation officer which can be done by mail. It has also been agreed that Mr. Simon may return to England to live. The lightness of the sentence and the reduction of the period of community control corroborates Mr. Simon's argument that the state attorney's office knew that he had not been involved in the fraudulent plan to "bust out" his wife's travel agency, although he was not entirely forthcoming when the purchaser's plan was discovered.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over this proceeding. Section 120.57(1), Florida Statutes (1985).

    
    

13. The Florida Real Estate Commission is authorized by subsection 475.25(1)(b), Florida Statutes (1985) to discipline a real estate license if the licensee is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction.

    
    

14. The Commission may also discipline a licensee under subsection 475.25(1)(f), Florida Statutes if the licensee has been convicted or found guilty, regardless of adjudication, of a crime which involves moral turpitude or fraudulent or dishonest dealing. According to that statute

    
    

    [the] record of a conviction certified or authenticated in such form as to be admissible in evidence under the laws of the state shall be admissible as prima facie evidence of such guilt.

    
    

15. The Division of Real Estate has proven that Mr. Simon has been convicted of crimes involving fraudulent and dishonest dealing, in violation of section 475.25(1)(f), Florida Statutes (1985). His plea of guilty is a sufficient predicate to bring him within that subsection, regardless of the withholding of adjudication of guilt.

16. That conviction also demonstrates that he is guilty of fraud, misrepresentation, or dishonest dealing by trick in violation of section 475.25(1)(b), Florida Statutes (1985). Mr. Simon's testimony has been accepted, as far as it went, but he did not explain what it was he did after his wife came to him in a panic about the fraudulent action of the purchasers which she had unwittingly assisted by failing to report the sale to ATC in a timely manner. The record is silent about his efforts to extricate his wife from her predicament which caused the state attorney to file charges against him. Although the lightness of the sentence does indicate that whatever he did was minor, it is impossible to evaluate what is not in the record. Mr. Simon has failed to demonstrate why he should not suffer a substantial penalty as the result of his plea of guilty to what are, on the face of the indictment, serious crimes.

    
    

17. Given the state of the record, the least penalty that is appropriate is revocation of Mr. Simon's license as a real estate broker.

RECOMMENDATION

It is RECOMMENDED that a final order be entered finding Mr. Simon guilty of violation of subsection 475.25(1)(b), Florida Statutes as charged in Count I of the administrative complaint and guilty of violation of subsection 475.25(1)(f), Florida Statutes as charged in Count II of the administrative complaint and that the real estate broker's license held by Mr. Simon be revoked.

DONE and ORDERED this 21st day of September, 1987, in Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

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 21st day of September, 1987.

APPENDIX

The following are my rulings on the proposed findings of fact submitted by the parties pursuant to Section 120.59(2), Florida Statutes (1985).

Rulings on Proposals of the Petitioner's:

1. Rejected as unnecessary.

2. Covered in Finding of Fact 1.

3. Covered in Finding of Fact 1.

4. Covered in Finding of Fact 2.

5. Covered in Finding of Fact 2.

6. Covered in Finding of Fact 3.

COPIES FURNISHED:

Charles Simon

90 Beacon Boulevard Miami, Florida 33135

Mr. Charles Simon 10435 S.W. 76th Street Miami, Florida 33173

James H. Gillis, Esquire Department of Professional

Regulation

Florida Real Estate Commission

P. O. Box 1900

Orlando, Florida 32802

Harold Huff, Executive Director Department of Professional

Regulation

Florida Real Estate Commission

P. O. Box 1900

Orlando, Florida 32802

Tom Gallagher, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Joseph A. Sole, General Counsel Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 87-002106

Orders for Case No: 87-002106