STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 93-1854

)

STANTON S. BANK, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a duly designated Hearing Officer of the Division of Administrative Hearings, on June 21, 1993, by telephone conference call in Tallahassee, Florida.

APPEARANCES

For Petitioner: Theodore R. Gay, Esquire

Department of Professional Regulation

401 Northwest 2nd Avenue, Suite N 621 Miami, Florida 33128

For Respondent: J. David Bogenschutz, Esquire

Jefferson Bank Building, Suite 500 600 Southeast Third Avenue

Fort Lauderdale, Florida 33301 STATEMENT OF THE ISSUES

The issue for determination at final hearing was whether Respondent committed the offenses set forth in Petitioner's administrative complaint, and if so, what disciplinary action should be taken against Respondent's real estate license.

PRELIMINARY STATEMENT

On January 21, 1993, the Florida Department of Professional Regulation, Division of Real Estate (Petitioner), filed an administrative complaint, with supporting documents, against Stanton S. Bank (Respondent). Petitioner alleged in the administrative complaint that Respondent had violated Subsection 475.25(1)(f), Florida Statutes, by being guilty of having been convicted or found guilty, regardless of adjudication, of a crime which directly relates to the activities of a licensed real estate salesperson or involves moral turpitude or fraudulent or dishonest dealing. Because of the alleged violation, Petitioner seeks to discipline Respondent's real estate broker's license.

On March 26, 1993, Respondent executed an election of rights requesting a formal hearing. The matter was referred to the Division of Administrative Hearings for assignment of a Hearing Officer on April 15, 1993.

Based upon Respondent's election of rights which indicated an admission of the facts alleged in the administrative complaint but a denial of violating the aforementioned statute, Petitioner filed a motion to relinquish jurisdiction.

By Order dated June 4, 1993, the motion was denied and a formal hearing was scheduled on June 21, 1993, to be conducted by telephone conference call, for the presentation of testimony and evidence on the sole issue of mitigation.

At the formal hearing, Respondent again admitted the facts alleged in the administrative complaint. Petitioner, relying upon Respondent's admission of the facts, called no witnesses and entered no exhibits into evidence.

Respondent testified on his own behalf and entered two exhibits into evidence.

No transcript of the formal proceeding was ordered. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the conclusion of the hearing. Both Petitioner and Respondent timely submitted proposed findings of fact and conclusions of law. The appendix to this recommended order addresses the parties' proposals.

FINDINGS OF FACT

1. The Department of Professional Regulation, Division of Real Estate (Petitioner) is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints filed pursuant to Chapters 455 and 475, Florida Statutes, and rules promulgated pursuant thereto.

   
   

2. At all times material hereto, Stanton S. Bank (Respondent) was a Florida licensed real estate broker, having been issued license number 0003707, with an address of Bank Enterprises, Inc., 1959 NE 148th Street, North Miami, Florida 33131. Respondent was initially licensed in or around the mid-1970s.

   
   

3. On or about April 17, 1992, the United States Attorney for the Southern District of Florida charged Respondent by Information with a felony, which was filed in the U.S. District Court, Southern District of Florida, Case No. 92- 0233-CR-KEOE, for filing a false 1985 Form 1040 U.S. Individual Income Tax Return in violation of Title 26, United States Code, Section 7206(1).

   Respondent falsely represented his distributive share of income from a corporation called Aqua Shield, Corp.

   
   

4. On or about June 29, 1992, Respondent entered into a plea agreement with the U.S. Attorney's Office on the charge, agreeing, inter alia, to plead guilty to the Information. No promises regarding sentencing were made to Respondent in the agreement.

   
   

5. On or about September 16, 1992, Respondent pled guilty to the criminal offense and was sentenced as follows: suspended sentence and three years probation with special conditions, among them, performing 100 hours of community service and paying the cost of prosecution, not to exceed $2,000.

   
   

6. Approximately 28 days later, on or about October 14, 1992, Respondent informed Petitioner of his conviction of the felony.

7. In 1978, Respondent and Robert "Bud" Smith (Smith) formed a business called Aqua Shield Corp. which was engaged in the business of painting and waterproofing. Smith was the President, owning 51 percent of the stock, and Respondent was the Treasurer, owning 49 percent. Respondent's main responsibility was developing the business, whereas Smith controlled the payroll and handled most of the financial matters.

   
   

8. By 1978, Respondent was no longer actively involved in real estate but kept his license active.

   
   

9. Subsequently, in 1979 Respondent was licensed by the State of Florida as a general contractor. His contractor's license was not needed for the work performed by the business. Also, very little of the business was construction related.

   
   

10. Aqua Shield employed a certified public accountant, Glenn Lapides (Lapides), whose services Smith had used in his prior business. Smith and Lapides developed a scheme whereby the salaries of Smith, Respondent and employees of the business would periodically be paid in cash, instead of by check. Smith would selectively choose certain checks that the business received for services rendered and take them to Lapides who, in turn, would give Smith cash, after deducting nine percent for himself (Lapides). Smith would then pay himself, Respondent and the employees' wages in cash. On some occasions, after Smith selected the checks, Respondent would take the checks to Lapides and exchange them for cash.

    
    

11. Respondent knew that the scheme was illegal.

    
    

12. In December 1988, a U.S. Internal Revenue Service (IRS) agent, investigating Lapides, visited Aqua-Shield Corp. The IRS agent had no knowledge of the scheme. Immediately after the agent's visit, Respondent informed Smith that the illegal activity had to stop.

    
    

13. Shortly thereafter, Respondent began to cooperate with the IRS and convinced Smith to do the same, with both fully cooperating throughout the investigation. For almost four years Respondent provided documents and testimony to the IRS. Smith cooperated until his death from cancer.

    
    

14. Respondent resigned from Aqua-Shield Corp. in 1990.

    
    

15. During the IRS investigation, Respondent filed amended tax returns and paid the IRS in interest and penalties approximately $40,000 to $45,000. Even though Respondent was charged in the Information for filing a false 1985 federal tax return, his 1986 and 1987 returns were also false.

    
    

16. Presently, Respondent actively uses his general contractor's license. He operates a highrise waterproofing business, restoring homes and buildings damaged by Hurricane Andrew. The business is licensed to operate through his contractor's license which is the sole license for the business. Respondent employs approximately 42 people on a full-time basis.

    
    

17. As his probation has not expired or been terminated on his criminal conviction, he and his business are being monitored by the federal government.

    
    

18. Even though Respondent also continues to maintain an active real estate broker's license and an office at the location listed on his license, he does not engage in the real estate business and has no sales persons.

19. The prosecuting Assistant United States Attorney in the federal criminal action supports and recommends leniency toward Respondent regarding the discipline of his license due to the considerable cooperation of Respondent with the criminal investigation.

    
    

20. No prior disciplinary action has been taken against either Respondent's real estate broker's license or construction license.

    
    

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

22. License revocation proceedings are penal in nature. The burden of proof is on the Petitioner to establish the truthfulness of the allegations of the administrative complaint by clear and convincing evidence. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977), and Ferris v. Turlington, 510 So.2d 292 (Fla. 1987). Due to Respondent admitting the facts alleged in the administrative complaint, Petitioner has met its burden. Furthermore, Respondent admits that the crime for which he was convicted involves moral turpitude or fraudulent or dishonest dealing. Hence, Respondent has violated Subsection 475.25(1)(f), Florida Statutes, by being convicted or found guilty of a crime which involves moral turpitude or fraudulent or dishonest dealing.

    
    

23. Turning to discipline, Subsection 475.25(1), Florida Statutes, provides in pertinent part that for a violation of Subsection 475.25(1)(f), Florida Statutes, the Real Estate Commission may place a licensee on probation; may suspend a license not to exceed 10 years; may revoke a license; may impose an administrative fine not to exceed $1,000; may issue a reprimand, and any or all of the foregoing. Also, Petitioner's Disciplinary Guidelines found at Chapter 21V-24, Florida Administrative Code, 1/ provides that, except as otherwise provided, the minimum penalty which may be imposed for each violation is a reprimand, or a fine up to $1,000 per count, or both and that the recommended penalty imposed for a violation of Subsection 475.25(1)(f), Florida Statutes, is up to seven years suspension or revocation. Further, the Disciplinary Guidelines also provide for the consideration of mitigating or aggravating circumstances in the imposition of discipline.

    
    

24. Respondent contends that mitigating circumstances exist. He points to: (1) no prior disciplinary action has been taken against his real estate license since its initial issuance in the mid-1970s; (2) he cooperated fully with the federal government, providing documents and testimony; (3) his paying of all back taxes, penalties and interest, which amounted to $40,000 to $45,000, to the U.S. Internal Revenue Service (IRS) prior to entering into the plea agreement; (4) he possesses a Florida construction license, issued in 1979, used to license his present business since 1990, which employs approximately 42 people; and (5) the federal prosecutor recommending leniency toward the disciplining, if any, of his license. Petitioner counters that the amount paid to the IRS indicates the severity of Respondent's crime and that any disciplinary action against Respondent's real estate license would not have any effect upon Respondent's construction license to injure Respondent's current business.

In terms of mitigation, what is found to be persuasive is Respondent's lack of prior disciplinary action in the more than 13 years of licensure, his full cooperation with the federal government over a period of almost four years before criminal charges were filed against him, and the recommendation of leniency by the federal prosecutor. Also, Respondent was not the initiator or originator of the illegal activity although he was a willing participant for whatever the reason, his crime, albeit a dishonest dealing or fraudulent or involving moral turpitude, was not related to the practice of real estate; and he has been active in the construction business since 1990 without any financial problems or disciplinary action taken against his license.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order:

1. Suspending Respondent's real estate broker license for one year, with the suspension being stayed provided Respondent completes a two-year probation under terms and conditions that Petitioner deems appropriate.

   
   

2. Imposing an administrative fine of $1,000.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of December 1993.

ERROL H. POWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of December 1993.

ENDNOTE

1/ Changed to Chapter 61J2-24, Florida Administrative Code.

APPENDIX

The following rulings are made on the parties proposed findings of fact: Petitioner's Proposed Findings of Fact.

All (numbered 1-17) have been adopted in substance, insofar as material. Respondent's Proposed Findings of Fact.

1. Proposed findings of fact numbered 1-3, 5-6, 7-10 and 12 have been adopted in substance, insofar as material.

2. Proposed finding of fact numbered 4 adopted in substance, insofar as material; except for the last sentence which is rejected as constituting argument, or conclusions of law.

3. Proposed finding of fact numbered 11: First sentence, regarding the characterization of the recommendations, is rejected as constituting argument, or conclusions of law. Remainder is adopted in substance, insofar as material.

4 Proposed finding of fact numbered 13 is rejected as constituting recitation of testimony, argument, or conclusions of law.

COPIES FURNISHED:

Theodore R. Gay, Esquire

Department of Professional Regulation Suite N621

401 N.W. 2nd Avenue Miami, Florida 33128

1. David Bogenschutz, Esquire Jefferson Bank Building, Suite 500 600 Southeast Third Avenue

   Fort Lauderdale, Florida 33301

   
   

   Darlene F. Keller Division Director Division of Real Estate

   Department of Professional Regulation Post Office Box 1900

   Orlando, Florida 32802-1900

   
   

   Jack McRay General Counsel

   Department of Business

   and Professional Regulation Suite 60

   1940 North Monroe Street Tallahassee, Florida 32399-0792

   NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

   
   

   All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

   
   

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

   AGENCY FINAL ORDER

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

   
   

   STATE OF FLORIDA

   DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION

   
   

   FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE

   
   

   Petitioner

   
   

   vs. CASE NO. 92-84692

   DOAH NO. 93-1854

   STANTON S. BANK

   
   

   Respondent

   /

   
   

   FINAL ORDER

   
   

   On February 15, 1994, the Florida Real Estate Commission heard this case to issue a Final Order.

   
   

   Hearing Officer Errol H. Powell of the Division of Administrative Hearings presided over a formal hearing on June 21, 1993. On December 28, 1993, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact, Conclusions of Law, and Recommendation except as noted below. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.

   
   

   The Florida Real Estate Commission therefore ORDERS that the license of Stanton S. Bank be suspended for a period of one (1) year.

   
   

   At the conclusion of the period of suspension, the Respondent is directed to contact the Records Section of the Division of Real Estate at Post Office Box 1900, Orlando, Florida 32802, or (407) 423-6060, to secure the proper forms for rein- statement of the suspended license.

   However, this license suspension shall be stayed, provided the Respondent completes a 2-year probation, subject to the following terms and conditions:

   
   

   1. The licensee shall notify the Division of Real Estate of any changes in address or employment.

      
      

   2. The licensee shall not violate any provisions of Chapter 475, Florida Statutes, or Rules adopted by the Commission.

      
      

   3. The licensee shall not be convicted or found guilty of a crime in any jurisdiction.

      
      

   4. The licensee shall enroll in and satisfactorily complete a 60-hour, post-licensure education course for brokers within two (2) years of the filing date of this Order. These course hours are in addition to any other education required to maintain a valid and current license. Thirty of the 60 hours shall include a broker management course.

Although the Hearing Officer included an administrative fine as a penalty, the Commission decided to delete this as part of the Final Order.

This Order shall be effective 30 days from date of filing with the Clerk of the Department of Business and Professional Regulation. However, any party affected by this Order has the right to seek judicial review, pursuant to s.12O.68, Florida Statutes, and to Rule 9.110, Florida Rules of Appellate Procedure.

Within 30 days of the filing date of this Order, review proceedings may be instituted by filing a Notice of Appeal with the Clerk of the Department of Business and Professional Regulation at 400 West Robinson Street, Suite 309, Orlando, Florida 32801. At the same time, a copy of the Notice of Appeal, with applicable filing fees, must be filed with the appropriate District Court of Appeal.

DONE AND ORDERED this 15th day of February 1994 in Orlando, Florida.

Darlene F. Keller, Director Division of Real Estate CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Certified Mail to J. David Bogenschutz, Esquire., Jefferson Bank Bldg. Suite 500, 600 Southeast 3rd Avenue, Ft. Lauderdale, Florida 33301; and by Hand Delivery to Frederick Wilsen Esquire, for Theodore Gay, Esquire, DBPR, Post Office Box 1900, Orlando, Florida 32801, this 4th day of March,1994.

Brandon L. Moore Deputy Agency Clerk

Docket for Case No: 93-001854

Orders for Case No: 93-001854