Jan 26 2006 10:19 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE &3 - FLORIDA DEPARTMENT OF FINANCIAL SERVICES e TOMGALLAGHER . FILED CHIEF FINANCIAL OFFICER STATE OF FLORIDA JAN 23 2008 . IN THE MATTER OF: Bookoted OR flit tame CASE NO.: 83838-06-AG JAMES MICHAEL VIOLA ADMINISTRATIVE COMPLAINT TO: JAMES MICHAEL VIOLA 14100 Southwest 72nd Avenue Miami, FL 33157 JAMES MICHAEL VIOLA 1465 Northwest North River Drive Miami, FL 33125 You, JAMES MICHAEL VIOLA, license .D. #4274176, 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 648, Florida Statutes, you, JAMES MICHAEL VIOLA, are currently licensed in this state as a Managing General Agent (0-60), and Limited Surety (Bail Bond) Agent (2-34). 2. At all times pertinent to the dates and occurrences referred to herein, you, JAMES MICHAEL VIOLA, were licensed in this state as a Managing General Agent and Limited Surety Agent. Jan 26 2006 10:19 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE 3. Pursuant to Chapter 626, Florida Statutes, the FLORIDA DEPARTMENT OF FINANCIAL SERVICES has jurisdiction over your license and appointments. 4, On March 29, 1994, one Nelson Tomayo, was tried and found guilty of a felony in the Circuit Court of the Eleventh Judicial Circuit, in and for Dade County, Florida, Case No. 92-28388. Thereafter, and at all times material as hereinafter related, you, JAMES MICHAEL VIOLA, employed the services of Nelson Tomayo in your bail bond business. COUNT I 5. The above general allegations are hereby realleged and fully incorporated herein. by reference. 6. During the period of August 1, 1996 through December, 1997, Nelson Tomayo was employed by you in your regular business in your bail bond business premises located at 2200 NW 11th Street, Miami, Florida. During such employment, he conducted bail bond inquiries and instructed other agents to execute bail bond duties. Indeed, during that time you instructed the said Nelson Tomayo to explain and teach other employees conceming attomey referrals for bail bonds. IT IS THEREFORE CHARGED that you, JAMES MICHAEL VIOLA, 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) An owner, operator, or primary agent, may not employ, contract with, or use the services of any person in a bail bond agency who has been charged with, found guilty of, or pled nolo contendre to a felony or a crime punishable by imprisonment of 1 year or more under the law of any jurisdiction, without regard to whether judgment was entered or withheld by the court. [Section 648.387(4), Florida Statutes]: (b) Any person who knowingly permits a person who has been convicted of or who has pleaded guilty or no contest to a crime to engage in the bail bond business commits a felony of the first degree. [Section 648.44(8)(b), Florida Statutes]. Ad Jan 26 2006 10:20 81/26/2886 18:19 s5848 74987 LEGAL SERVICES PAGE COUNT II 7. The above general allegations are hereby realleged and fully incorporated herein by reference, 8. During the period May, 2003 through April 2004, you, JAMES MICHAEL VIOLA, employed one Nelson Tomayo, a convicted felon, to conduct bail bond business at your business location at 1421 NW River Drive, Miami, Florida. During this period the said Nelson Tomayo acted as a supervisor, trainer and recruiter for your bail bond business. TT IS THEREFORE CHARGED that you, JAMES MICHAEL VIOLA, 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 licetises and appointments: (a) An owner, operator, or primary agent, may not employ, contract with, or use the services of any person in a bail bond agency who has been charged with, found guilty of, or pled nolo contendre to a felony or a crime punishable by imprisonment of 1 year or more under the law of any jurisdiction, without regard to whether judgment was entered or withheld by the court. [Section 648.387(4), Florida Statutes]; (b) Any person‘who knowingly permits a person who has been convicted of or who has pleaded guilty or no contest to a crime to engage in the bail bond business commits a felony of the first degree. [Section 648,44(8)(b), Florida Statutes]. COUNT II 9. The above general allegations are hereby realleged and fully incorporated herein by reference. 10. In or around March, 2001, in conjunction with bond agent Richard L. Ashenoff, you, JAMES MICHAEL VIOLA, effected an appearance bond in the sum of $250,000.00 on behalf of Simon D. Chocron, Case No. 2001-2997-CFA, in the Circuit Court, Fourth Judicial Circuit, in and for Duval County, Florida. Such bond was written through Seneco Insurance Company. On or about March 5, 2001, the sum of $250,000.00 was provided by Sadia Chocron a5 Jan 26 2006 10:20 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE &6 as collateral security for such bond, which you then deposited to an account in the Washington Mutual Bank for which you were the sole signatory. Such action was without the knowledge or approval of Seneco Insurance Company. li. Onor about March 5, 2001, you, JAMES MICHAEL VIOLA, executed an agreement with Richard L. Ashenoff, providing that upon discharge of the bond written in behalf of Simon Chocron, the collateral sum of $250,000.00, plus interest, would be returned to the indemnator, Sadia Chocron. 12. On November 6, 2001, Sadia Chocron assigned to Richard L. Ashenoff the bail bond collateral of $250,000.00 which had been furnished by him. 13. Inor around August, 2004, the bond written by you through Seneco Insurance Company was discharged and collateral was ordered to be retumed. The said Richard L. Ashenoff, as assignee of the collateral, has made numerous demands upon you for the return of the collateral sum of $250,000.00, plus accrued interest, which you have failed and refused to do, IT IS THEREFORE CHARGED that you, JAMES MICHAEL VIOLA, 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, return premiums, or other funds belonging to insurers or others received by a person licensed pursuant to this chapter in transactions under her or his license are trust funds received by the licensee in a fiduciary capacity, and the licensee must account for and pay the same to the insurer, insured, or other person entitled to such funds. Any licensee who unlawfully diverts or appropriates such funds or any portion thereof to her or his own use commits larceny by embezzlement, punishable as provided by law, [Section 648.295(1)(3), Florida Statutes]; (b) Collateral security or other indemnity accepted by a bail bond agent, except a promissory note or an indemnity agreement, shall be returned upon final termination of liability on the bond. Collateral security may not be used by the bail bond agent for personal benefit or Jan 26 2006 10:20 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE gain and must be returned in the same condition as received. [Section 648.442(1), Florida Statutes, (c) | When the obligation of the surety on the bond or bonds has been released in writing by the court, the collateral shall be returned to the rightful owner named in the collateral receipt unless another disposition is provided for by legal assignment of the right to receive the collateral to another person, [Section 648.442(4), Florida Statutes]: (d) Demonstrated lack of fitness or trustworthiness to engage in the bail bond business. [Section 648.45(2)(e), Florida Statutes]; (e) Withholding of moneys belonging to a surety, a principal, or others and received in the conduct of business under a license. [Section 648.45(2)(h), Florida Statutes]; (f) Failure to return collateral. [Section 648.45(2)(n), Florida Statutes]; (g) Violation of any law relating to the business of bail bond insurance or violation of any provision of the insurance code. [Section 648.45(3)(c), Florida Statutes]; (h) “Failure or refusal, upon demand, to pay over to any insurer the bail bond agent represents or has represented any money coming into his or her hands which money belongs to the insurer. [Section 648.45(3)(d), Florida Statutes]; qi) Being found to be a source of injury or loss to the public or detrimental to the public interest or being found by the department to be no longer carrying on the bail bond business in good faith. [Section 648,45(3)(e), Florida Statutes]; Q) If a discharge is provided to the surety or the surety's agent pursuant to chapter 903, the collateral shall be retumed to the indemnitor within 21 days after the discharge is provided, [Section 648.571(1), Florida Statutes]; (k) In addition to the criminal penalties and any other penalties provided in this chapter, the department shall impose against any person violating this section an administrative fine of five times the dollar amount of the collateral. [Section 648.571(4), Florida Statutes]. WHEREFORE, you, JAMES MICHAEL VIOLA, are hereby notified that the Chief Financial Officer intends to enter an Order suspending or revoking your licenses and ay Jan 26 2006 10:21 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE 8 appointments as an insurance agent or to impose such penalties as may be provided under the provisions of Sections 648.45, 648.46, 648.49, 648.50, 648.51, 648.52, 648.53, and 648.58, 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 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 Jan 26 2006 10:21 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE &9 (c) A teference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. Ifa hearing of any type is requested, you have the tight 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 subrnit 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, Florida, 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. 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, Jan 26 2006 10:21 81/26/2886 16:19 8584874987 LEGAL SERVICES PAGE 16 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. (24, day of Januasey, 2006. 4 KAREN CHANDLER Deputy Chief Financial Officer Jan 26 2006 10:21 81/26/2686 16:19 8584874987 LEGAL SERVICES PAGE 11 CERTIFICATE OF SERVICE THEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF PROCEEDING has been furnished to: JAMES MICHAEL VIOLA, 14100 Southwest 72nd Avenue, Miami, FL 33157; JAMES MICHAEL VIOLA, 1465 Northwest North River Drive, Miami, FL 33125 by Certified Mail this / & day of January, 2006. Dean'Andrews Division of Legal Services 200 East Gaines St. 612 Larson Building Tallahassee, Florida 32399-033 (850) 413-4242 Florida Bar Number 0001959 Jan 26 2006 10:21 81/26/2086 16:19 8584874987 LEGAL SERVICES PAGE 12 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES DIVISION OF LEGAL SERVICES IN THE MATTER OF: CASE NO.; 83838-06-AG JAMES MICHAEL VIOLA / ELECTION OF PROCEEDING Thave received and have read the Notice of the ADMINISTRATIVE COMPLAINT filed against me, including the Notice of Rights contained therein, and I understand my options. I am requesting disposition of this matter as indicated below. (Choose one) 1 [] I do not dispute any of the Department’s factual allegations and | do not desire a hearing. I understand that by waiving my right to a hearing, the Department may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including revoking my licenses and appointments as may be appropriate. 2. 1 do not dispute any of the Department's factual allegations and I hereby elect a proceeding to be conducted in accordance with Section 120.57(2), Florida Statutes, In this regard, I desire to (Choose one): {} Submit a written statement and documentary evidence in lieu of a hearing; or [] Personally attend a hearing conducted by a department hearing officer in Tallahassee; or [] Attend that same hearing by way of a telephone conference call. 3. —] I do dispute one or more of the Department's factual allegations. I hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 5:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. The address for filing is: General Counsel as acting agency clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. Signature Print Name Date: Address: Phone No.: 10

Docket for Case No: 06-000326PL