Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Numher- Suhiart: tT 83/15/2085 10:02 8504874987 : LEGAL SERVICES PAGE 83 y : Nv FLORIDA DEPARTMENT OF FINANCIAL SERVICES TOM GALLAGHER GhIEF FINANCIAL OFFICER STATE OF FLORIDA Gooketed by%, IN THE MATTER OF: CASE NO.: 79245-04-AG ‘ (NF -OFol PL ADMINISTRATIVE COMPLAINT TO: MATTHEW DAVID LANZA 162 Country Club Way Kingston, MA 02364-4121 MATTHEW DAVID LANZA You, MATTHEW DAVID LANZA, license ID. #0024690, are hereby notified that the Chief Financial Officer of the State of Florida has caused to be made an investigation of your activities while licensed as an insurance agent in this state, as a result of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, MATTHEW DAVID LANZA, are currently licensed in this state as a Nonres. Gen Lines (Prop. & Cas.) (9-20) Agent. 2. At all times pertinent to the dates and occurrences referred to herein, you, MATTHEW DAVID LANZA, were licensed in this state as an insurance agent. 3. Pursuant to chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. 4, At all times matenal as hereinafter more particularly related, you, MATTHEW DAVID LANZA, as a licensed insurance agent in the exclusive employ of an insurance broker, Arthur J. Gallagher and Company (heremafter "AJG"), owed to your employer fiduciary duties, both contractually and ethically, which were deliberately breached by you by, among other Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Numher: Suhiact- tT 83/15/2885 10:82 8504974987 LEGAL SERVICES PAGE 84 y things, formation of a corporate entity, known as Southem Transportation Associates, Inc. (hereinafter "ST.A") without the knowledge or consent of your employer, for which you were in sole control thereof, and which you falsely and fraudulently utilized to sell and collect premiums from various taxi cab companies for non-existent insurance coverage, and to utilized those premiums for your personal use and benefit and to falsely pay claims of these insureds which arose during times that insurance coverage was not in effect by an authorized insurer, as you had otherwise falsely and fraudulently represented to the insureds. COUNT I 5. The above general allegations are hereby realleged and fully incorporated herein by reference. 6. Prior to 2001, you, MATTHEW DAVID LANZA, as a licensed insurance agent, wete employed by AJG, an insurance broker, to render exclusive services in its behalf. Your duties encompassed the production of insurance business primarily from transportation companies such as taxi cab companies and commercial fleets. In or around April 2001, you, MATTHEW DAVID LANZA, caused formation of STA, a Florida corporation, and thereafter utilized this entity in the sale of insurance to various taxi cab companies. You were the sole officer and stockholder of this company. Without the knowledge or consent of your employer or your insureds thereunder, you falsely and fraudulently caused your employer and various insureds to believe this entity was separate from your ownership and contro] and as a separate entity, it offered a fully insured program devised and sold by you and approved by your employer. During the years 2003 and 2004, you, MATTHEW DAVID LANZA, caused various taxi cab companies to purchase annual insurance coverage through your program offered by STA, and to pay annual premiums therefor when in fact such annual insurance coverage did not exist through an authorized insurer. You caused annual premiums paid for this coverage to be deposited to the STA account which was under your sole control and as claims arose at times when insurance coverage was nonexistent through an authorized insurer you caused payment of same from the STA account in order to cover up your fraudulent activities. Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fay Number Guhiart- qT Q3/15/2885 10:82 8584874987 LEGAL SERVICES PAGE 95 y : : IT IS THEREFORE CHARGED that you, MATTHEW DAVID LANZA, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) All premiums or other funds belonging to insurers or others received by an agent are trust funds and the licensee shall account for and pay the same to the insurer, or other person entitled thereto. [Section 626,561(1), Florida Statutes]; (b) Any agent not being lawfully entitled thereto, either temporarily or permanently diverts or misappropriates such premium funds or any portion thereof cormmits the offense specified. [Section 626.561(3)(c), Florida Statutes]; (c) The license or appointment is willfully used to circumvent any of the requirements or prohibitions of this code. [Section 626.611(4), Florida Statutes]; (d) Willful misrepresentation of any insurance policy or willful deception with regard to any such policy. [Section 626.611(5), Florida Statutes]; (e) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (b Fraudulent or dishonest practices in the conduct of business under the license or appointment, [Section 626.611(9), Florida Statutes]; (g) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [626.611(10), Florida Statutes]; (h) = Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; q@) In the conduct of business under the license or appointment, engaging in deceptive acts or practices prohibited under Part IX of this chapter, or otherwise having shown Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Number: Suhiart- 03/15/2885 18:62 8584974987 LEGAL SERVICES PAGE Ty himself to be a source of injury or loss to the public or detriment to the public interest. [Section 626.621(6), Florida Statutes]; @ No person shall directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not being authorized to transact such business in this state. [Section 626.901(1), Florida Statutes}; (k) Knowingly making an announcement or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive or misleading. [Section 626.9541(1)(b)4., Florida Statutes]; (l) Knowingly collecting any sum as a premium or charge for insurance, which has not been provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this cade. [Section 626.9541(1)(o)1., Florida Statutes]. COUNT II 7. The above general allegations are hereby realleged and fully incorporated herein by reference. 8. In 2003, you, MATTHEW DAVID LANZA, caused annual premium for business automobile insurance to be billed to and paid by Checker Yellow Cab, Inc., with such premium moneys thereafter being deposited to the account of STA, of which company you were in sole control. You then caused STA to issue false and fraudulent confirmation to the said Checker Yellow Cab, Inc. as to the existence of annual insurance effective for the period from May 21, 2003 to May 21, 2004. In fact annual insurance coverage was not in effect for this period of time as confinmed, all of which was known to you and otherwise falsely and fraudulently musrepresented to your insurance customer. Any claims which arose from Checker Yellow Cab, Inc. during the period of nonexistent insurance, were caused by you to be paid by STA acting as an unauthorized insurer and causing the customer to believe it had received valid insurance coverage through STA. At all times you were under an exclusive employment contract with @6 Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Numher: Suhiact tT @3/15/2085 16:82 8584874987 LEGAL SERVICES PAGE 07 y AJG and your activities, as aforesaid, were concealed from and were without knowledge of your employer. IT IS THEREFORE CHARGED that you, MATTHEW DAVID LANZA, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitute grounds for the suspension or revocation of your licenses and appointments: (a) AJJ premiums or other funds belonging to insurers or others received by an agent are trust funds and the licensee shall account for and pay the same to the insurer, or other person entitled thereto. [Section 626.561(1), Florida Statutes]; (b) Any agent not being lawfully entitled thereto, either temporarily or permanently diverts or misappropriates such premium funds or any portion thereof commits the offense specified. [Section 626.561(3)(c), Florida Statutes]; (c) The license or appointment is willfully used to circumvent any of the requirements or prohibitions of this code. {Section 626.61 1(4), Florida Statutes]; (d) Willful misrepresentation of any insurance policy or willful deception with regard to any such policy. [Section 626.611(5), Florida Statutes]; (e) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626,611(7), Florida Statutes]; (f) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.61 1(9), Florida Statutes); (g) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [626.611(10), Florida Statutes]; (h) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: § min 37 sec Sender: 8504874907 Company: Fav Number: Suhiart- tT 03/15/2005 10:82 8504874997 LEGAL SERVICES PAGE a8 y . _ -_ @ In the conduct of business under the license or appointment, engaging in deceptive acts or practices prohibited under Part IX of this chapter, or otherwise having shown himself to be a source of injury or loss to the public or detriment to the public interest. [Section 626.621(6), Florida Statutes]; Gg) No person shall directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not being authorized to transact such business in this state. [Section 626.901(1), Florida Statutes]; (k) Knowingly making an announcement or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive or misleading. [Section 626.9541(1)(b)4., Florida Statutes]; a Knowingly collecting any sum as a premium or charge for insurance, which has not been provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code. [Section 626.9541(1)(0)1., Florida Statutes). COUNT II 9. The above general allegations are hereby realleged and fully incorporated herein by reference. 10. In 2003, you, MATTHEW DAVID LANZA, caused annual premium for business automobile insurance to be billed to and paid by Cheroqui Corp., with such premium moneys thereafter being deposited to the account of STA, of which company you were in sole control. You then caused STA to issue false and fraudulent confirmation to the said Cheroqui Corp. as to the existence of annual insurance effective for the period from May 21, 2003 to May 21, 2004. In fact annual insurance coverage was not in effect for this period of time as confirmed, all of which was known to you and otherwise falsely and fraudulently misrepresented to your insurance customer. Any claims which arose from Cheroqui Corp. during the period of nonexistent insurance, were caused by you to be paid by STA acting as an unauthorized insurer and causing the customer to believe it had received valid insurance coverage through STA. At Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Number: Suhiant- Ty @3/15/2005 18:62 8504874987 LEGAL SERVICES PAGE @9 a all times you were under an exclusive employment contract with AJG and your activities, as aforesaid, were concealed from and were without knowledge of your employer. (a) All premiums or other funds belonging to insurers or others received by an agent are trust funds and the licensee shall account for and pay the same to the insurer, or other person entitled thereto. [Section 626.561 (1), Florida Statutes]; () Any agent not being lawfully entitled thereto, either temaporarily or permanently diverts or misappropriates such premium funds or any portion thereof commits the offense specified. [Section 626.561(3)(c), Florida Statutes]; (c) The license or appointment is willfully used to circumvent any of the requirements or prohibitions of this code. [Section 626.611(4), Florida Statutes]; (d) Willful misrepresentation of any insurance policy or willful deception with regard to any such policy. (Section 626.611(5), Florida Statutes]; (e) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; 69) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (2g) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in conduct of business under the license or appointment. [626.611(10), Flonda Statutes]; (h) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; Q) In the conduct of business under the license or appomtment, engaging in deceptive acts or practices prohibited under Part IX of this chapter, or otherwise having shown himself to be a source of injury or loss to the public or detriment to the public interest. [Section 626.621(6), Florida Statutes}; Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Numbhar: Guiant- T 63/15/2885 10:02 8504874907 LEGAL SERVICES PAGE y : g) No person shall directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not being authorized to transact such business in this state. [Section 626.901(1), Florida Statutes]; (k) Knowingly making an announcement or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, deceptive or misleading. [Section 626.9541(1)(b)4., Florida Statutes]; (00) Knowingly collecting any sum as a premium or charge for insurance, which has not been provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code. [Section 626.9541(1)(0)1., Florida Statutes). COUNT IV 11. The above genera] allegations are hereby realleged and fully incorporated herein by reference. 12. In 2003, you, MATTHEW DAVID LANZA, caused annual premium for business automobile insurance to be billed to and paid by Zuni Transportation, Inc., with such premium moneys thereafter being deposited to the account of STA, of which company you were in sole control. You then caused STA to issue false and fraudulent confirmation to the said Zuni Transportation, Inc. as to the existence of annual insurance effective for the period from May 21, 2003 to May 21, 2004. In fact annual insurance coverage was not in effect for this period of time as confirmed, all of which was known to you and otherwise falsely and fraudulently misrepresented to your insurance customer. Any claims which arose from Zuni Transportation, Inc., during the period of nonexistent insurance, were caused by you to be paid by STA acting as an unauthorized insurer and causing the customer to believe it had received valid insurance coverage through STA. At all times you were under an exclusive employment contract with AJG and your activities, as aforesaid, were concealed from and were without knowledge of your employer. 10 Received Event (Event Succeeded) Date: 3/18/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Number: Suhiart- Q3/15/2005 18:82 9584874987 LEGAL SERVICES PAGE Ty (a) All premiums or other funds belonging to insurers or others received by an agent are trust funds and the licensee shall account for and pay the same to the insurer, or other person entitled thereto. [Section 626.561(1), Florida Statutes]; (o) Any agent not being lawfully entitled thereto, either temporarily or permanently diverts or misappropriates such premium funds or any portion thereof commits the offense specified. [Section 626.561(3)(c), Florida Statutes]; (c) The license or appointment is willfully used to circumvent any of the requirements or prohibitions of this code. (Section 626.611(4), Florida Statutes]; (d) Willful misrepresentation of any insurance policy or willful deception with regard. to any such policy. [Section 626.611(5), Florida Statutes]; (e) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (f) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (g) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers or insureds or beneficiaries or to others and received in, conduct of business under the license or appointment. [626.611(10), Florida Statutes]; (h) Willful failure to comply with, or willful violation of, any proper order or rule of the department or willful violation of any provision of this code. [Section 626.611(13), Florida Statutes]; da) In the conduct of business under the license or appointment, engaging in deceptive acts or practices prohibited under Part [X of this chapter, or otherwise having shown himself to be a source of injury or loss to the public or detriment to the public interest. [Section 626.621(6), Florida Statutes]; (6) No person shail directly or indirectly act as agent for, or otherwise represent or aid on behalf of another, any insurer not being authorized to transact such business in this state. [Section 626.901(1), Florida Statutes]; Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fay Numher- Subiart- 83/15/2085 14:02 8584874987 LEGAL SERVICES PAGE Ty Ne (k) Knowingly making an announcement or statement containing any assertion, Tepresentation, or statement with respect to the business of insurance, which is untrue, deceptive or misleading. [Section 626.9541(1)(b)4., Florida Statutes]; (6) Knowingly collecting any sum as a premium or charge for insurance, which has not been provided, or is not in due course to be provided, subject to acceptance of the risk by the insurer, by an insurance policy issued by an insurer as permitted by this code. [Section 626.9541(1)(o)1., Florida Statutes]. WHEREFORE, you, MATTHEW DAVID LANZA, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and appointments as an insurance agent or to impose such penalties as may be provided under the -provisions of Sections 626.611, 626.621, 626.681, 626.691, and 626.9521, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to Sections 120.569 and 120,57, Florida Statutes, and Rule 28-107, Florida Administrative Code, The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel as acting Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Your written response must be received by the Department no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE 10 Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Fav Nomhar- Suhiact- tT 83/15/2085 18:02 8504874987 LEGAL. SERVICES PAGE 13 y . a MATTERS ALLEGED HEREIN AND AN ORDER OF REVOCATION WILL BE ENTERED AGAINST YOU. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-107.004, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name and address of the party making the request, for purpose of service; (b) A statement that the party is requesting a hearing involving disputed issues of material fact, or a hearing not involving disputed issues of material fact; and (c) A reference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of Section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Flonda, or by telephonic conference call upon your request. However, if you dispute material facts which are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before a State administrative law judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. 11 13 Received Event (Event Succeeded) Date: 3/15/2005 Time: 9:04 AM Pages: 16 Duration: 5 min 37 sec Sender: 8504874907 Company: Siuhiart- w Mumbhar: ly 03/15/2885 16:02 8584874987 LEGAL SERVICES PAGE 14 y : __ oa Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department of Financial Services. DATED and SIGNED this 3rd day of December, 2004. IN CHANDLER Deputy Chief Financial Officer 12 14 Received Event (Event Succeeded) Date: 3/16/2005 Pages: 16 Sender: 8504874907 Fav Mumbar- T 43/15/2005 16:82 8504874987 y x Time: 9:04 AM Duration: 5 min 37 sec Company: Suhiact LEGAL SERVICES CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: RICHARD SANTURRI, ESQ., Mang Law Firm, P.A., Post Office Box 11127, Tallahassee, Florida 32303- 3127 by Certified Mail this 280 day of SY c ee , 2004. ~ byl oY Dean drews Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 (850) 413-4242 Florida Bar Number 0001959 13 1s PAGE

Docket for Case No: 05-000961PL