STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM MENKE, )

)

Petitioner, )

)

vs. )

) FLORIDA REAL ESTATE COMMISSION, )

)

Respondent. )

Case No. 05-4469

)

RECOMMENDED ORDER

This cause came on for final hearing on March 10, 2006, in Pensacola, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Daniel Villazon, Esquire

Daniel Villazon, P.A. 1020 Verona Street

Kissimmee, Florida 34741

For Respondent: Daniel R. Biggins, Esquire

Department of Legal Affairs The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUE

The issue is whether Petitioner is qualified to be licensed as a Florida real estate sales associate.

PRELIMINARY STATEMENT

On October 18, 2005, Respondent Florida Real Estate Commission (Respondent) issued a Notice of Intent to Deny the application of Petitioner William Menke (Petitioner) for a real estate sales associate license. The denial was based on Petitioner's criminal record as reflected in his application and his felony conviction.

On October 26, 2005, Petitioner requested a formal hearing to challenge the denial of his application. On December 9, 2005, Respondent referred Petitioner's request to the Division of Administrative Hearings.

On December 23, 2005, the undersigned issued a Notice of Hearing. The notice scheduled the hearing for March 10, 2006.

During the hearing, Petitioner testified on his own behalf and presented the testimony of three additional witnesses.

Petitioner did not offer any exhibits for admission into the record as evidence.

Respondent did not present the testimony of any witnesses.

Respondent offered two exhibits, which were accepted as evidence.

A transcript of the proceeding was filed on March 23, 2006.

Respondent filed its Proposed Recommended Order on March 31, 2006. Petitioner filed his Proposed Recommended Order on April 4, 2006.

All citations hereinafter shall refer to Florida Statutes (2005) unless otherwise specified.

FINDINGS OF FACT

1. Petitioner has a Bachelor of Science degree in accounting from Florida State University. After receiving a Florida license as a Certified Public Accountant (CPA) in 1974, Petitioner worked as a CPA in private practice until 1978. He then returned to school at Trinity University, where he earned a Master of Science degree in Health Care Administration. Petitioner worked for the Hospital Corporation of America (HCA) for approximately 20 years.

2. In the early 1980's, Petitioner's job with HCA involved the management of physician clinics. One of the physicians requested Petitioner to prepare some financial statements and to assist with the preparations of some federal income tax returns for a private client. At that time, Petitioner was living and working in two locations: Atlanta, Georgia, and Dothan, Alabama. Petitioner was not licensed to practice as a CPA in any state except Florida.

3. For approximately two and one-half years, Petitioner helped the private client maintain her books. During this time, Petitioner corresponded with the client, sending her letters with CPA after his name.

4. In 1986, Petitioner decided to discontinue his business relationship with the private client. The private client, who was upset, filed a complaint against Petitioner. In 1987, the private client's complaint resulted in Petitioner’s pleading no contest to the offense of identifying himself as a CPA when he was not a licensed CPA in Georgia.

5. Petitioner subsequently satisfied all sanctions related to the Georgia offense. The Florida Board of Accountancy has not disciplined Petitioner's CPA license. At the time of the hearing, Petitioner's Florida CAP license was inactive.

6. In 1991, Petitioner received a stock bonus from his employer, HCA, when it purchased a private hospital. The bonus consisted of stock certificates in a spin-off company known as Quorum Health Care. The stock was restricted and could not be sold for five years.

7. Petitioner never received a Federal Income Tax Form 1099 related to the stock bonus. Petitioner placed the stock certificates in his safe. He did not include the stock bonus on his personal federal income tax return.

8. In 1994, the Internal Revenue Service audited Petitioner's personal tax returns. During the audit, Petitioner disclosed the stock bonus and immediately filed an amended income tax return, paying all tax and interest due and all penalties.

9. In 1996, Petitioner filed a whistleblower lawsuit against his employer for Medicare fraud. Because the lawsuit was filed in Alabama, the United States Attorney in Birmingham, Alabama, intervened in the case. The lawsuit resulted in the recovery of $180,000,000 from Quorum Health Care. Petitioner was entitled to a whistleblower award in the amount of

   $5,000,000.

   
   

10. In 1999, before Petitioner received his financial reward from the lawsuit, the United States Attorney in Birmingham, Alabama, advised Petitioner that he would be charged with failure to file a correct federal income tax return for the years 1991 and 1992. Petitioner granted the government's request to extend the statute of limitations while the government investigated the tax fraud allegations against him.

11. In 2000, Petitioner pled guilty to income tax fraud and agreed to forego any reward for his participation in the whistleblower lawsuit. Petitioner was sentenced to serve two years in a federal prison, followed by one year of supervised probation. Petitioner also paid a $50,000 fine.

12. Petitioner was incarcerated for 367 days. He was released from federal prison in August 2002. His supervised probation terminated February 2004.

13. In January 2006, Petitioner's civil rights were restored.

14. In an effort to prove rehabilitation, Petitioner presented evidence to show his involvement and/or active participation with the following: (a) his church; (b) children's sports programs; (c) Habitat for Humanity; (d) neighborhood hurricane recovery; (e) and other activities beneficial to his friends and family.

15. The following three witnesses testified on Petitioner's behalf at the hearing: (a) Mike Papantonio, an attorney and Petitioner's brother-in-law; (b) Randal Spencer, a Florida licensed real estate broker who, along with his partners, sold a commercial building to Petitioner's wife; and

    (c) Carl Collins, Petitioner's neighbor since 2000. Each witness testified that Petitioner is honest, trustworthy, and of good character.

16. At the time of the hearing, Petitioner was owner/manager of CommStructure, a company that manufactures and installs cellular towers. Petitioner oversees all financial aspects of the company.

17. Petitioner's wife owns a real estate brokerage company, Spencer Realty. If Petitioner becomes licensed as a real estate sales associate, he would assist his wife in her business.

18. A real estate sales associate, like a CPA, is responsible for important financial transactions where accuracy

    is important. Therefore, a real estate sales associate must be trustworthy regarding financial matters.

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

20. Petitioner has the burden of proving that he is entitled to hold a license as a real estate sales associate. See Antel v. Dept. of Professional Regulation, Florida Real

    Estate Commission, 522 So. 2d 1056 (Fla. 5th DCA 1988); Dept. of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).

21. The qualifications for licensure as a real estate sales associate are set forth in Section 475.17, Florida Statutes, which states as follows in pertinent part:

    (1)(a) An applicant for licensure who is a natural person must be at least 18 years of age; hold a high school diploma or its equivalent; be honest, truthful, trustworthy, and of good character; and have a good reputation for fair dealing. An applicant for an active broker's license or a sales associate's license must be competent and qualified to make real estate transactions and conduct negotiations therefor with safety to investors and to those with whom the applicant may undertake a relationship of trust and confidence . . . [I]f the applicant has been guilty of conduct or practices in this state or

    elsewhere which would have been grounds for revoking or suspending her or his license under this chapter had the applicant then been registered, the applicant shall be deemed not to be qualified unless, because of lapse of time and subsequent good conduct and reputation, or other reason deemed sufficient, it appears to the commission that the interest of the public and investors will not likely be endangered by the granting of registration.

    
    

22. Respondent has authority to deny an application or discipline an existing license pursuant to Section 475.25, Florida Statutes, which states as follows in relevant part:

    1. The 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:

       
       

       * * *

       
       

       (b) Has been found guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state . . .

       
       

       * * *

       
       

       (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 sales associate, or involves moral turpitude or fraudulent or dishonest dealing . . . .

       
       

23. The Florida Supreme Court has defined moral turpitude as follows:

    Moral turpitude involves the idea of inherent baseness or depravity in the private social relations or duties owed by man to man or by man to society. Holloway v. Holloway, 126 Ga. 459, 55 S.E. 191, 7

    L.R.A. (N.S.) 272, 115 Am. St. Rep. 102, 7 Ann. Cas. 1164. 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 judgement when wrong was not contemplated. Pullman Palace-Car Company v. Central Transport Co. 65 Feb. 158.

    
    

    See State ex rel. Tullidge v. Hollingsworth, 108 Fla. 607, 146 So. 660, 661 (Fla. 1933).

24. Tax fraud is a crime that involves moral turpitude and fraudulent or dishonest dealing because it deprives the public of legitimate tax revenues. See Carp v. Florida Real Estate Commission, 211 So. 2d 240 (Fla. 3rd DCA 1968)(bookmaking is a crime involving moral turpitude because it deprives the public of legitimate tax revenues).

25. In 1987, Petitioner pled no contest to misrepresenting himself as a CPA in Georgia. Petitioner pled guilty to tax fraud in 2000. He was released from prison in August 2002 and released from supervised probation in February 2004. The

evidence of Petitioner's subsequent good conduct is not sufficient to demonstrate rehabilitation in light of Petitioner's criminal history and the shortness of time since Petitioner's release from prison and supervised probation.

RECOMMENDATION

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

RECOMMENDED that:

Respondent enter a final order denying Petitioner a license as a real estate sales associate.

DONE AND ENTERED this 20th day of April, 2006, in Tallahassee, Leon County, Florida.

S

SUZANNE F. HOOD

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 20th day of April, 2006.

COPIES FURNISHED:

Daniel R. Biggins, Esquire Department of Legal Affairs The Capitol, Plaza Level 01

Tallahassee, Florida 32399-1050

Daniel Villazon, Esquire Daniel Villazon, P.A.

1020 Verona Street

Kissimmee, Florida 34741

Nancy B. Hogan, Chairman Real Estate Commission Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N Orlando, Florida 32801

Josefina Tamayo, General Counsel Department of Business and

Professional Regulation Northwood Centre

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: 05-004469

Orders for Case No: 05-004469