STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 99-1186

)

ERNEST ERICK YEGHIAN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly-designated Administrative Law Judge, William J. Kendrick, held a formal hearing in the above-styled case on

May 27, 1999, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Laura McCarthy, Esquire

Department of Business and Professional Regulation

Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

For Respondent: Kenneth Metzger, Esquire

Tilton & Metzger, P.A.

204 South Monroe Street, Suite 200 Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

On April 18, 1997, Petitioner issued a two-count Administrative Complaint whereby it alleged that Respondent violated the provisions of Section 475.25(1)(f), Florida Statutes, "by 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," and Section 475.25(1)(p), Florida Statutes, by "not having informed the Florida Real Estate Commission in writing within thirty (30) days of having pled guilty or having been convicted of a felony." According to the complaint, the predicate for the charges was Respondent's plea of "guilty [in February 1996] to one count of Bank Bribery in violation of 18 U.S.C. § 215(a)(1)."

Respondent filed an election of rights which disputed the factual allegations contained in the Administrative Complaint, and on March 12, 1999, Petitioner referred the matter to the Division of Administrative Hearings for the assignment of an administrative law judge to conduct a formal hearing pursuant to Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes.

At hearing, Petitioner called no witnesses; however, Petitioner's Exhibits 1 through 7 were received into evidence. Respondent testified on his own behalf, and Respondent's Exhibits 1 through 13 were received into evidence.1

The transcript of hearing was filed June 17, 1999, and the parties were initially accorded 10 days from that date to file proposed recommended orders; however, at Petitioner's request, and with Respondent's acquiescence, the time for filing was extended to July 2, 1999. Consequently, the parties waived the requirement that a recommended order be rendered within 30 days after the transcript has been filed. Rule 28-106.216(2), Florida Administrative Code. The parties elected to file such proposals and they have been duly-considered.

FINDINGS OF FACT

The parties

1. Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged, inter alia, with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, including Chapters 455 and 475, Florida Statutes.

2. From January 24, 1994, through the present, Respondent Ernest Eric Yeghian, has been a licensed real estate broker in the State of Florida, having been issued license number BK- 0583985, as well as the broker/officer of Vikon Realty Corp., a broker corporation located at 131 South F Street, Lake Worth, Florida. For the two-year period preceding his licensure as a broker or, stated otherwise, from 1992 to January 24, 1994,

   Respondent was licensed as a real estate salesperson in the State of Florida.

   Respondent's conviction

   
   

3. In early 1996, Respondent pled guilty to one count of bank bribery, a violation of 18 U.S.C. § 215(a)(1), pursuant to a plea agreement reached in the matter of United States of America v. E. Eric Yeghian, United States District Court, District of Rhode Island, Case No. 1:95CR00021-004. Respondent resolved, in part, to enter such plea based on advise of counsel that the banker's coercion, discussed infra, would not constitute a legal defense to the offense charged.

4. On March 20, 1996, judgment of conviction was entered on Respondent's plea and he was sentenced to 10 months' imprisonment and fined $10,000.2 The judgment further provided that upon release from imprisonment, Respondent would be on supervised release for a term of 3 years.

5. Respondent failed to notify the Florida Real Estate Commission of the guilty plea or his conviction within 30 days of having pled guilty or having been convicted.

6. Respondent voluntarily surrendered to the United States Bureau of Prisons (FPC Jesup, Georgia) on April 17, 1996, and was released to a halfway house (located in West Palm Beach, Florida) on or about December 17, 1996, to serve the last 60 days of his sentence. Respondent was released from custody on or about

   February 14, 1997, and will have completed his probation (supervised release) on February 14, 2000.

   The pending complaint

   
   

7. At some point following Respondent's licensure as a real estate broker, the Florida Real Estate Commission (FREC) requested a criminal background check by the Federal Bureau of Investigation (FBI). That investigation was completed on November 30, 1995, and revealed that Respondent had been arrested on March 30, 1995, on the charge of bank bribery. Subsequently, the Department learned of Respondent's plea and conviction, and on December 23, 1996, filed a Uniform Complaint Form which initiated an investigation to resolve whether cause existed to believe that Respondent had violated Section 745.25(1)(p), Florida Statutes, by having failed to notify FREC of his plea of guilty or conviction.

8. By letter of December 27, 1996, the Department advised Respondent of the pendency of the complaint and investigation, and proposed to schedule a meeting to discuss the complaint. The letter further provided that "[y]ou may submit a written response to the information contained in the complaint within 20 days after receipt of this letter."

9. Respondent was interviewed by the Department's investigator on December 30, 1996, and by letter of January 3, 1997, he submitted a written response to the complaint, as well as an excerpt from court documents that explained his version of

   events (Respondent's Exhibit 4), and character reference letters that had been submitted to the federal judge (Respondent's Exhibits 6-13). Respondent's response to the complaint included the following explanation regarding his arrest and conviction:

   In 1983, I graduated from high school. I had been accepted by the University of Massachusetts and began my studies there in the fall of that year. It soon became apparent to me that even though I was doing well at school, I had to drop out . . . to assist my family financially. . . .

   
   

   I began to work full time as a laborer in a scrap metal yard in the winter of 1983. As I continued to work as a laborer and save my earnings, I began to learn as much as I could about the real estate business. In 1984, a friend and I pooled our savings and purchased our first property, and [sic] abandoned tenement in Providence's Armory district. I moved in and completely renovated the building from top to bottom myself. I then advertised and sold the home. We reinvested the profit into two similar properties.

   Fortunately, these properties also were sold at a profit. We continued to repeat this process many times over the next 3-4 years, also doing all the work ourselves.

   * * *

   
   

   In early to middle 1987, it became apparent to me that, due to the rapidly rising prices of real estate in Rhode Island, attractively priced existing properties would continue to be more and more scarce. I decided that it would be more cost effective to begin building new properties. However,

   since I was inexperienced at this type of development, I decided to associate with partners who were older and more seasoned. A partnership was formed to build 48 condominiums in North Providence. We agreed that my role would be to supervise the day to day construction and that they would secure the bank financing for the project. The

   construction began in early 1986. Most everything went well and soon we were selling the condominiums at a profit.

   
   

   Around that time, one of my partners introduced me to a college friend of his, an attorney named George Marderosian.

   Mr. Marderosian began to do work for the partnership as well as becoming my personal attorney. Early in 1987, Mr. Marderosian became aware of [a] piece of property, selling at a reasonable price, which was suitable for the same type of condominium development. Because the first project was going well, it seemed a [sic] natural to proceed and do this project as well. . . .

   In early 1987, . . . [my partner and I] decided to put a deposit on the land.

   
   

   I then spent the next 8-10 months verifying the zoning, getting permits for water and sewer service, having engineering and construction plans prepared, etc. This along with the eventual supervision of the construction was my usual role. In the course of this work, I provided all of this development information to Mr. Marderosian, who was preparing the application for the bank loan. The application was made for the loan in the fall of 1987. I learned in late 1987 that the loan was approved and was gratified because I had invested the better part of one year in preparing the

   project. . . .

   
   

   After I was told our loan was approved (and only several days before the closing) Jay Moore, my partner in both the old and new projects, explained to me that he had been approached by our loan officer, Kenneth Annarummo, who was looking for money. I am not entirely sure about the exact circumstances. However, I am sure that this first approach was not to me personally. My best recollection is that Mr. Moore explained to me that Mr. Annarummo told him he wanted

   $20,000 and that he had reluctantly agreed to give it to him. I do recall discussing the matter with our attorney. He told us that he, not being a customer of the bank himself,

   could give money to Mr. Annarummo. He instructed Mr. Moore and me to give him

   $10,000 and he would take care of the rest. With so much at stake and so much already invested, I simply wanted to put the problem behind us. I rationalized that it was just part of doing business. However, while I could not say exactly what law was being broken, I realized paying Mr. Annarummo was wrong.

   
   

   In early 1988, I found another property I felt was an excellent value. . . . I spent the first 7-8 months of 1988 doing all the due diligence work on the site. I put down a deposit on the land, spent money on engineering, environmental tests, wetlands studies, etc. By summer 1988 all the research and 3 separate appraisals seemed to indicate the property was an excellent value. In approximately August, 1988 I applied for the loan for this property. About a month later, while I was home during the work week with a broken arm I called to my office to check my messages. There was a message to call Mr. Annarummo at his bank in reference to my loan application. I called

   Mr. Annarummo and he told me that the loan

   committee had approved my loan and that the loan could close within several weeks.

   
   

   About one week later during the early evening I was home, again, with the same broken arm. I was not expecting anyone. There was a knock on my door, It was Mr. Annarummo and his wife. He had never

   been to my home before and he was not invited on that occasion. At first, I did not know why he was there. He stepped inside and told me that he wanted to speak to me about something. He said he had a car loan that he wanted to "get rid of." I genuinely did not know what he was talking about and I asked him what he meant. In response he bluntly stated that he wanted me to pay off his car loan. I did not know what to say. I responded that I would have to get back to him and, with little else said, he and his wife left.

   After he left, I tried to put the approach out of my mind and pretend it never happened. I thought perhaps he wouldn't bother me anymore or be too embarrassed to bring it up ever again. A few days passed and I was back at work and I got a phone call from

   Mr. Annarummo. He started to press me for an answer. Again, I told him I'd have to get back to him. Quite plainly, I did not want to pay him money, but I also did not know what to do. I told him I had a customer in my office and I'd have to get back to him and hung up. By then it was obvious to me that he was not going to drop the issue.

   
   

   I contacted Mr. Marderosian and told him what had happened and I asked him how I should handle it. Mr. Marderosian said to me that it was unfortunate that Mr. Annarummo was doing this to me but if he handled the situation for me that would solve the problem for the time being. We agreed that in future projects I should develop a relationship with another bank so I would not be placed in such a tight position. (At the time,

   Mr. Annuarummo also controlled the day to day funding of the two major projects in which I was involved) I agreed to give him the money. Inherently, I knew then and clearly know now that what Mr. Annarummo was demanding and what George Marderosian helped me to do, was wrong. At those particular moments I felt I had only two choices. to give him the money or to refuse to do so. I did not want to give him the money because he had no right to it. Besides, I knew it was wrong and probably illegal. I did not want to refuse because I felt Mr. Annarummo had the power to ruin or at the very least severely disrupt everything I had been working to build my whole life and most importantly the livelihood and support of my family. I felt stuck in the middle with only two bad choices.

   Eventually, my fear of the potential ramifications of not appeasing Mr. Annarummo in conjunction with Mr. Marderosian offering an apparent way out led me to make the decision I made. It was a wrong decision.

   With the benefit of hindsight, I now see that there was a third choice. I could have brought Mr. Annarummo's approach to the attention of his superiors at the bank and/or the appropriate authorities. This experience is indelibly burned into my consciousness. I am older, wiser and more secure in my judgement. If ever I were to find myself confronted with this type of situation again, my reaction would be completely contrary to what I have done in the past. . . .

   (Respondent's Exhibit 14.) Respondent explained his failure to notify the Florida Real Estate Commission of his plea or conviction within 30 days of having pled guilty or having been convicted, as follows:

   . . . it was my absolute intention to address this issue with the F.R.E.C. upon returning home (which I did just 12/17/96). I clearly am in error in terms of the timetable for notification which I now understand should have been within 30 days of the plea or conviction. I, wrongly, was under the impression that notification was required prior to resuming the use of ones' license.

   I should have known the notification procedure and I am clearly at fault for not doing so in the required time frame.

   (Petitioner's Exhibit 7, at page 3.)

   
   

10. Thereafter, on April 18, 1997, the Department filed the Administrative Complaint at issue in this proceeding which charged that Respondent violated the provisions of Section 475.25(1)(f), Florida Statutes, "by 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" (Count I), and Section 475.25(1)(p), Florida Statutes, by "not having informed the Florida Real Estate Commission in writing within thirty (30) days of having pled guilty or having been convicted of a felony" (Count II).

    According to the complaint, the disciplinary action sought for such violations was stated to be as follows:

    . . . The penalty for each count or separate offense may range from a reprimand; an administrative fine not to exceed $5,000.00 per violation; probation; suspension of license, registration or permit for a period not to exceed ten (10) years; revocation of the license, registration or permit; and any one or all of the above penalties. 3

11. At hearing, Respondent offered testimony consistent with the explanation he had previously offered the Department, discussed supra. Respondent also observed that, at the time, he was fearful that if he refused the banker's demands, the banker would interrupt the funding that had been obtained for the projects. Respondent further testified that he fully disclosed the circumstances to his attorney and on the attorney's advice delivered the funds (to the attorney) for delivery to the banker. Finally, Respondent averred that he never misrepresented or withheld any material facts regarding the projects during the loan process; had no involvement in structuring the loan transactions; and only agreed to pay the banker (on advice of counsel) to avoid disruption of the previously approved funding. In Respondent's view he was not offering money (a bribe) for something he was not entitled to, but was being extorted by the

    banker to receive that to which he was entitled (the approved funding). Respondent's explanation regarding the circumstances surrounding the events which led to his conviction is credited.

12. Respondent also offered credible proof that he cooperated fully with the government; that he accepted responsibility for his actions; and that he suffered a significant penalty for his misjudgment. The proof further reveals that the events which led to his conviction occurred over

    11 years ago (when Respondent was 22-23 years of age); that in the 7 years Respondent has been licensed in Florida (as a salesperson or broker) no complaints have been filed against him; that among those who know of him, Respondent is considered honorable and trustworthy; and that his involvement in the events leading to his conviction was more likely attributable to naivete than guile. Finally, the proof demonstrates that Respondent continues to provide financial support for his parents and that loss of licensure would impose a severe financial hardship on Respondent and his family.4

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings. Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes (1997).

14. Where, as here, the Department proposes to take punitive action against a licensee, it must establish grounds for

    disciplinary action by clear and convincing evidence. Section 120.57(1)(h), Florida Statutes (1997), and Department of Banking and Finance v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). "The evidence must be of such weight that it produces in the mind of the trier of fact a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established." Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla.

    4th DCA 1983). Moreover, the disciplinary action taken may be based only upon the offenses specifically alleged in the administrative complaint. See Kinney v. Department of State,

    501 So. 2d 129 (Fla. 5th DCA 1987); Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So. 2d 1324 (Fla. 1st DCA 1985); and Hunter v. Department of Professional Regulation, 458 So. 2d 844 (Fla. 2d DCA 1984). Finally, in determining whether Respondent violated the provisions of Section 475.25(1), as alleged in the Administrative Complaint, one "must bear in mind that it is, in effect, a penal statute. . . . This being true, the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it." Lester v. Department of Professional and Occupational Regulations, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

15. Pertinent to this case, Section 475.25(1), Florida Statutes, provides that the Florida Real Estate Commission:

    . . . may deny an application for licensure, registration, or permit, or

    renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $1,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:

    
    

    * * *

    
    

    (f) Has been convicted or found guilty of, or entered a plea of nolo contendere to, regardless of adjudication, a crime in any jurisdiction which directly relates to the activities of a licensed broker or salesperson, or involves moral turpitude or fraudulent or dishonest dealing. 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.

    
    

    * * *

    
    

    (p) Has failed to inform the commission in writing within 30 days after pleading guilty or nolo contendere to, or being convicted or found guilty of, any felony.

    
    

16. The crime for which Respondent was convicted, and which forms the basis for the perceived violation of Subsections 475.25(1)(f) and (p), Florida Statutes, was the offense of bank bribery, as proscribed by 18 USC § 215(a)(1). That statute, as amended in 1986, provides, in pertinent part, that whoever:

    1. corruptly gives, offers, or promises anything of value to any person, with intent to influence or reward an officer, director, employee, agent, or attorney of a financial institution in connection with any business or transaction of such institution. . . .

       is guilty of a felony when, as here, the value of the thing offered exceeds $100. See United States v. Brunson, 882 F.2d 151 (5th Cir. 1989).

17. The conduct prohibited by 18 USC § 215(a)(1) is limited to acts that are done "corruptly." The term "corruptly" is ordinarily understood as referring to "'act[s] done voluntarily and intentionally and with the bad purpose of accomplishing either an unlawful end or result, or a lawful end or result by some unlawful method or means. The motive to act corruptly is ordinarily a hope or expectation of either financial gain or benefit to oneself or some profit or benefit to another.'" United States v. Brunson, supra, at page 154 n.2. See also United States v. McElroy, 910 F.2d 1016 (2nd Cir. 1990).

18. Here, it should not be subject to serious debate that, by failing to inform the commission in writing within 30 days after pleading guilty to or having been convicted of a felony, Respondent violated the provisions of Subsection 475.25(1)(p), Florida Statutes, as alleged in Count II of the Administrative Complaint. The more problematic issue to resolve is whether the nature of the offense provides a basis for disciplinary action under the provisions of Subsection 475.25(1)(f), Florida Statutes, as alleged in Count I of the Administrative Complaint.

19. Subsection 475.25(1)(f), Florida Statutes, provides three bases under which the Department is authorized to take disciplinary action against a real estate licensee for conviction

    of a crime, to wit: (1) when the crime is directly related to the activities of a licensed broker or salesperson; (2) when the crime involves moral turpitude; or (3) when the crime involves fraudulent or dishonest dealing. Nelson v. Department of Business and Professional Regulation, 707 So. 2d 378 (Fla. 5th DCA 1998)(The statute provides three bases under which the Department is authorized to take disciplinary action against a real estate licensee for conviction of a crime), and Milliken v. Department of Business and Professional Regulation, 709 So. 2d

    595 (Fla. 5th DCA 1998)(Not every crime provides a basis for disciplinary action under the statute). However, the statute does not further explain the nature of the crimes that would warrant discipline. Consequently, it is necessary to resolve what the Legislature intended by the language it chose.

20. The first basis established by the statute authorizes the Department to take disciplinary action when a licensee has been convicted of a crime "which directly relates to the activities of a licensed real estate broker or salesperson." By so describing the crime, it is unlikely the Legislature intended to limit the grounds to those crimes which relate to the licensee's technical ability or to those which arise out of misconduct in which the licensee's only interest is as a broker or salesperson. Rather, it is most likely the Legislature intended to include convictions for crimes which reflect a lack of honesty and integrity. See Section 475.17(1)(c), Florida

    Statutes (An applicant for a real estate license in Florida must be, inter alia, "honest, truthful, [and] trustworthy."), and Pearl v. Florida Board of Real Estate, 394 So. 2d 189, 192

    (Fla. 3d DCA 1981)("The intent underlying chapter 475 is to insure the protection of the public from unscrupulous and dishonest real estate brokers.") See also Rush v. Department of Professional Regulation, 448 So. 2d 26 (Fla. 1st DCA 1984), and Greenwald v. Department of Professional Regulation, 501 So. 2d 740 (Fla. 3rd DCA 1987), review denied 511 So. 2d 998 (Fla.

    1987), cert. denied 108 S.Ct. 502, 484 U.S. 986, 98 L.Ed.2d 501

    
    

    (1987).

    
    

21. The second basis identified by the statute authorizes the Department to take disciplinary action when a licensee has been convicted of a crime that "involves moral turpitude." According to Black's Law Dictionary, "moral turpitude" is

    The act of baseness, vileness, or the depravity in private and social duties which man owes to his fellow man, or to society in general, contrary to accepted and customary rule of right and duty between man and

    man. . . . Act or behavior that gravely violates moral sentiment or accepted moral standards of community and is a morally culpable quality held to be present in some criminal offenses as distinguished from others. . . . The quality of a crime involving grave infringement of the moral sentiment of the community as distinguished from statutory mala prohibita. . . .

    Black's Law Dictionary, 910 (5th Ed. 1979). The Supreme Court of Florida has defined "moral turpitude" as follows:

    Moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owned by man to man or by man to society. . . . It has also been defined as anything done contrary to justice, honesty, principle, or good morals, though it often involves the question of intent as when unintentionally committed through error of judgment when wrong was not contemplated.5

    State ex rel. Tullidge v. Hollingsworth, 146 So. 660, 661 (1933). It is the nature of the conduct, not its characterization as a crime, which raises the specter of moral turpitude. See Pearl v. Florida Board of Real Estate, supra.

22. The third and final basis identified by the statute authorizes the Department to take disciplinary action when a licensee has been convicted of a crime that involves "fraudulent or dishonest dealing." According to Black's Law Dictionary, a "[f]raudulent or dishonest act" is

[o]ne which involves bad faith, a breach of trust, a want of integrity, or moral turpitude.

Black's Law Dictionary, 596 (5th Ed. 1979). "Fraud" is

. . . [a] generic term embracing all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth, and includes all surprise, trick, cunning, dissembling, and any unfair way by which another is cheated. . . . 'Bad faith' and 'fraud' are synonymous, and also synonyms of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc.

Black's Law Dictionary, 594 (5th Ed. 1979). "Dishonesty" is a

[d]isposition to lie, cheat or defraud; untrustworthiness; lack of integrity.

Black's Law Dictionary, 421 (5th Ed. 1979).

1. Examining the nature of the crimes identified by the Legislature that will support disciplinary action against a licensee reveals a common thread or element. That element is the Legislature's manifest intent that the public be protected from unscrupulous and dishonest real estate brokers and salespersons. Consequently, it has identified, as worthy of discipline or exclusion from the profession, those licensees convicted of crimes which reflect the antithesis of qualities, such as honesty, integrity, and good moral character, expected of a person in a position of trust, such as a real estate broker or salesperson. Under the statute, the lack of such qualities has been typified as a conviction of a crime "which directly relates to the activities of a licensed broker or salesperson, or involves moral turpitude or fraudulent or dishonest dealing."

2. Here, given the manifest Legislative intent, it must be concluded that Respondent's conviction of a violation of 18 USC

   § 215(a)(1), albeit commonly referred to as bank bribery, is not a conviction for which the Department is authorized to take disciplinary action under the provisions of Section 475.25(1)(f), Florida Statutes. In so concluding, it is observed that Respondent did not misrepresent or withhold any material facts regarding the projects during the loan process and only

   acquiesced to the banker's demands (on the advice of counsel) to avoid the disruption of previously approved funding. While such conduct may be prohibited by 18 USC § 215(a)(1), as mala prohibita, it is hardly conduct that is imbued with moral turpitude or a lack of honesty or integrity. Consequently, it must be concluded that the Department has failed to demonstrate that the Respondent violated the provisions of Section 475.25(1)(f), Florida Statutes, as alleged in Count I of the Administrative Complaint.

3. Having reached the foregoing conclusions, it remains to resolve the appropriate penalty for Respondent's offense. Here, the Department by way of its Proposed Recommended Order, represents that the 1996 version of Rule 61J2-24.001(3)(q), Florida Administrative Code, established a recommended penalty of "up to a 5 year suspension or revocation" for a violation of Section 475.25(1)(p), Florida Statutes. As heretofore noted (in Endnote 1), the provisions of the 1996 version of the Rule are not of record; however, the mitigation of record would require (in any event) a deviation from such guideline.

4. Pursuant to Rule 61J2-24.001(4), Florida Administrative Code, the Department has established a predicate to support a deviation from its usual penalty guidelines. Pertinent to this case, the rule provides as follows:

   (4)(a) When either the Petitioner or Respondent is able to demonstrate aggravating or mitigating circumstances to the Commission in a s. 120.57(2), Florida Statutes, hearing

   or to a Division of Administrative Hearings hearing officer in a s. 120.57(1), Florida Statutes, hearing by clear and convincing evidence, the Commission or hearing officer shall be entitled to deviate from the above guidelines in imposing or recommending discipline, respectively, upon a

   licensee. . . .

   (b) Aggravating or mitigating circumstances may include, but are not limited to, the following:

   1. The severity of the offense.

   2. The degree of harm to the consumer or public.

   3. The number of counts in the Administrative Complaint.

   4. The number of times the offenses previously have been committed by the licensee.

   5. The disciplinary history of the licensee.

   6. The status of the licensee at the time the offense was committed.

   7. The degree of financial hardship incurred by a licensee as a result of the imposition of a fine or suspension of the license. . . .

5. Here, the offense found (a violation of Section 475.25(1)(p), Florida Statutes) was minor; there was no harm to the public; there was only one count of the Administrative Complaint established; the licensee had no previous disciplinary history; and the imposition of a fine or suspension would adversely impact Respondent financially. Also of note, is Respondent's candor and evident good character.

6. Given the nature of the offense, and the mitigating factors present, the appropriate penalty in this case is the issuance of a written reprimand for Respondent's violation of Section 475.25(1)(p), Florida Statutes.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a final order be entered which finds the Respondent not guilty of the offense charged in Count I of the Administrative Complaint.

It is further RECOMMENDED that the final order find Respondent guilty of the offense charged in Count II of the Administrative Complaint, and that for such offense Respondent receive a written reprimand.

DONE AND ENTERED this 9th day of July, 1999, in Tallahassee, Leon County, Florida.

WILLIAM J. KENDRICK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1999.

ENDNOTES

1/ At the parties' request, official recognition was take of Chapters 455 and 475, Florida Statutes, as well as 18 U.S.C. §

215. Petitioner also requested that official recognition be taken of Rule 61J-2, Florida Administrative Code, as it existed in April 1997, and agreed to file a copy of such exhibit as a late-filed exhibit. (Transcript, pages 10 and 11.) Petitioner failed to

file a copy of the rule and, consequently, its request for official recognition is denied.

2/ Respondent was also ordered to pay restitution of

$2,213,654.71; however, that portion of the judgment was vacated on appeal.

3/ The Department also sought an award of costs as provided for by Section 455.227(3), Florida Statutes; however, it offered no proof at hearing, regarding what costs, if any, it incurred.

Consequently, there is no record basis on which to make a recommendation concerning any cost award.

4/ Respondent is engaged in the business of purchasing foreclosed homes, renovating them, and reselling them to low-income families and does not currently broker real estate for others. Loss of licensure would impair his access to the Multiple Listing Service, and therefore his livelihood, since such service is the source he relies on to locate properties to purchase and renovate.

5/ While the term "moral turpitude" has been so defined, the courts "have noted the difficulty of delineating in a general way which crimes are, or are not, ones involving 'moral turpitude.'" Milliken v. Department of Business and Professional Regulation, supra. As observed in Nelson v. Department of Business and Professional Regulation, supra, at page 379, Judge Sharp concurring specially:

The federal district court in Corporation of Haverford College v. Reeher, 329 F.Supp. 1196 (E.D.Pa.1971) invalidated a statute which authorized the denial of student aid to anyone convicted of a 'misdemeanor involving moral turpitude.' . . . The court noted that:

[I]f we go to the dictionaries, the last resort of the baffled judge, we learn little except that the expression is redundant, for turpitude alone means moral wickedness or depravity and moral turpitude seems to mean little more than morally immoral.

329 F.Supp. at 1205

The federal court further observed that a large number of cases upholding such language in other contexts reach capricious results.

It agreed with the dissenting judges in Jordan v. DeGeorge, 341 U.S. 223, 71 S.Ct.

703, 95 L.ED. 886 (1951):

It (the debate over the morality of some

crimes) shows on what treacherous grounds we tread when we undertake to translate ethical concepts into legal ones, case by case. We usually end up by condemning all that we personally disapprove and for no better reason than we disapprove it. (Emphasis in original.)

For example, the court in Pearl v. Florida Board of Real Estate, supra, at page 191, noted the following diverse holdings:

. . . in Florida, mere possession of lottery tickets does not constitute moral turpitude and is not an offense for which the Real Estate Board may suspend a license, Everett v. Mann, [113 So. 2d 758 (Fla. 2d DCA 1959)], but the sale by a physician of bogus diplomas and licenses does constitute moral turpitude. State ex rel. Munch v. Davis, 143 Fla. 236, 196 So. 491 (Fla. 1940).

Bookmaking has been held to be a crime involving moral turpitude since the public is deprived of legitimate tax revenues by such conduct. Carp v. Florida Real Estate Commission, 211 So. 2d 240 (Fla 3d DCA 1968).

In other jurisdictions, crimes which have been held to involve moral turpitude include: extortion, In re Disbarment of Coffey, 123 Cal. 522, 56 P. 448 (1899); embezzlement,

In re Shumate, 382 S.W.2d 405 (Ky. 1964); use of the mail to obtain property under false pretenses, In re Comyns, 132 Wash. 391, 232

P. 269 (1925); possession of counterfeit money with intent to cheat and defraud persons to whom it is uttered, State Medical Board v. Rogers, 190 Ark. 266, 79 S.W.2d 83 (1935); indecent exposure, Brun v. Lazzell, 172 Md. 314, 191 A. 240 (1937); auto theft, Hulgan v. Thornton, 205 Ga. 753, 55 S.E.2d

115 (1949); possession and transportation of intoxicating liquor under the Prohibition Act, Rudolph v. United States ex rel. Rock,

6 F.2d 487 (D.C.Cir.), cert. denied, 269 U.S. 559, 46 S.Ct. 20, 70 L.Ed. 411 (1925). (Rudolph arose under prohibition. It is unlikely that mere possession of illegally distilled spirits would now be considered moral turpitude. Jenkins v. Beary, 241

So. 2d 866 (Fla. 1st DCA 1970 (dicta)).

In reviewing cases from other jurisdictions

concerning drug offenses, we find that moral turpitude has been established by the sale of opium, In re McNeese, 346 Mo. 425, 142 S.W.2d

33 (1940); by a physician's failure to keep a record of narcotics dispensed to a known addict, Brainard v. Board of Medical Examiners of California, 68 Cal. App.2d 591,

157 P.2d 7 (1945); by the sale of morphine, Texas v. Speer, 109 S.W.2d 1150 (Tex.Civ.App. 1937); and by the sale of drugs for non- medical use, DuVall v. Board of Medical Examiners of Arizona, 49 Ariz. 329, 66 P.2d 1026 (1937). None of these authorities involves . . . [as here, conviction for mere possession of controlled substances]. (Emphasis in original.)

In resolving that a real estate salesman's conviction for mere possession of controlled substances did not evidence moral turpitude under the statute, the court concluded with the following observation:

The intent underlying the enactment of chapter 475 is to insure the protection of the public from unscrupulous and dishonest real estate brokers. Its purpose is to guard against fraudulent real estate practices, State ex rel. Davis v. Rose, 97 Fla. 710, 122 So. 225 (1929); Reid v. Florida Real Estate Commission, 188 So. 2d 846 (Fla. 2d DCA 1966). In Reid, the court, evaluating the theft of a three-dollar steak, found no moral turpitude, stating that penal sanctions should be imposed 'only upon clear and convincing proof of substantial causes justifying the forfeiture.' Reid v. Florida Real Estate Commission, supra at 851. The penalty of suspension should be sparingly and cautiously used and directed at the dishonest and unscrupulous. Pauline v. Borer, 274

So. 2d 1 (Fla. 1973). . . . (Emphasis in

original.)

COPIES FURNISHED:

Laura McCarthy, Esquire Department of Business and

Professional Regulation Division of Real Estate Post Office Box 1900

Orlando, Florida 32802-1900

Kenneth Metzger, Esquire Tilton & Metzger, P.A.

204 South Monroe Street, Suite 200 Tallahassee, Florida 32301

Herbert S. Fecker, Director Division of Real Estate Department of Business and

Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900

William Woodyard, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 99-001186

Orders for Case No: 99-001186