“4 ay FLORIDA . DEPARTMENT OF - i ! E fe FINANCIAL SERVICES _. SS 7 OG AUG 22 PN u: 49 DIVISION OF TOM GALLAGHER CHIEF FINANCIAL OFFICER ADMINISTRATIVE STATE OF FLORIDA HEARINGS INTHE MATTER OF: — Bgpketedtts CASE NO.: 82026-05-AG SHAWN ROBERTS ADMINISTRATIVE COMPLAINT TO: SHAWN ROBERTS lv Applied Benefits & Concepts, Inc. !) [0 . “4 ] f q 300 S. Pine Island Road, Suite 237 Plantation, FL 33324-2620 SHAWN ROBERTS 13963 SW 42nd Street Davie, FL 33330-5732 You, SHAWN ROBERTS, are hereby notified that, pursuant to Chapter 626, Florida Statutes, 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, SHAWN ROBERTS, License LD. #A222361 are currently licensed in this state as a Life Including Variable Annuity Agent (2-14), Life Including Variable Annuity & Health Agent (2-15), Life Agent (2-16), Life & Health Agent (2-18), and Health Agent (2-40). 2. At all times pertinent to the dates and occurrences referred to herein, you, SHAWN ROBERTS, were licensed in this state as an insurance agent. 3. Based upon information and belief, at all times pertinent to the dates and occurrences herein, you, SHAWN ROBERTS, were a registered agent for Jefferson Pilot Securities, 4. At all times pertinent to the dates and occurrences herein, you, SHAWN ROBERTS, were the principal for the Florida corporation Applied Benefits & Concepts, located in Plantation, Florida. 5. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. COUNTI 6. The above General Allegations are hereby realleged and fully incorporated herein by reference. 7. You, SHAWN ROBERTS, knew Florida consumer T.B. of Pompano Beach from having sold him a variable annuity product in 1995, 8. You, SHAWN ROBERTS, in or around F ebruary, 2000, met with T.B. in an attempt to induce T.B. to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert his in force Hartford Life and Annuity Insurance Company (“Hartford”) variable annuity for the purpose of creating another annuity contract with another insurer. In doing so, you, SHAWN ROBERTS, made fraudulent misrepresentations, incomplete or fraudulent comparisons, or fraudulent material omissions by failing to disclose to your client the terms and conditions of the annuity transaction. More specifically, you, SHAWN ROBERTS, failed to iS) disclose to your client, T.B., at the time of sale that such a transaction may be subject to surrender charges and/or penalties. 9. As a result, you, SHAWN ROBERTS, did in fact cause the surrender of T.B.’s in force Hartford annuity and the creation of a new contract, American Skandia #00410575 in the amount of $236,555. This transactional episode caused T.B. to suffer approximately $7,755 in " surrender charges or penalties. After execution of the annuity application and upon being notified by Hartford that surrender penalties applied to this transaction, your client sought to cancel this transaction. In an attempt to prevent T.B. from canceling this transaction, you, SHAWN ROBERTS, contacted your client and offered to personally rebate to him at least $2,700 of the surrender charges he incurred if he would keep the annuity in force. This single transactional occurrence would have generated for you, SHAWN ROBERTS, or Jefferson Pilot Securities on your behalf, approximately $11,800 in commissions, IT IS THEREFORE CHARGED that you, SHAWN ROBERTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (b) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; . (c) 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]; (d) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public interest. [Section 626.621(6), Florida Statutes]; (e) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; (f) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes); (g) Violation of the provision against twisting, as defined in s. 626.9542(1)(1). [Section 626.621(5), Florida Statutes]; (h) Is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. [Section 626.9541(1)(a)(6), Florida Statutes); (i) Paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance contract, any unlawful rebate of premiums payable on the contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract. [Section . 626.9541(1)(h)b., Florida Statutes]; G) Knowingly making any misleading representation or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer. [Section 626.9541(1)(), Florida Statutes). COUNT II 10. The above General Allegations are hereby realleged and fully incorporated herein by reference. 11. In or around May, 2000, you, SHAWN ROBERTS, met with Florida consumer EA. of Boca Raton in an attempt to induce E.A. to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert her in force variable annuity for the purpose of creating another annuity contract with another insurer. In doing so, you, SHAWN ROBERTS, made fraudulent misrepresentations, incomplete or fraudulent comparisons, or fraudulent material omissions by failing to disclose to your client the terms and conditions of the annuity transaction. More specifically, you, SHAWN ROBERTS, exploited your client’s trust in you by fraudulently representing that such transaction would benefit her. 12. Asaresult, you, SHAWN ROBERTS, with no objectively reasonable basis for doing so, did in fact cause the surrender of E.A.’s in force Fidelity annuity and the creation of a new contract, American Skandia #000464254 in the amount of $547,367. This transactional episode generated for you, SHAWN ROBERTS, or Jefferson Pilot Securities on your behalf, a staggering $27,368 in commissions. 13. Furthermore, your client, a sixty-three year old retired schoolteacher with limited investment experience, explained to you that her risk tolerance was limited to little or low tisk, as her investment objectives included using those funds to supplement her retirement and for her childrens’ education. With this in mind, E.A., based upon the trust she placed in you as her insurance agent and believing that you were acting in her best interests, relied on you to allocate her funds appropriately. Despite her low risk tolerance, you, SHAWN ROBERTS, during a volatile time in market performance, placed E.A.’s funds in a number of subaccounts that were inappropriate for her, given her age and stated risk tolerance. 14, Due to your, SHAWN ROBERTS’, failure to consider the investment objectives and the risk tolerance of your client E.A., she suffered additional invesiment losses in excess of $200,000 by way of depreciation of her investment over the course of the following twenty four to thirty six months. These losses occurred as a direct result of your, SHAWN ROBERTS’, failure to consider the age and investment tolerance of your client, and in turn affected E.A.’s ability to supplement her retirement income. IT IS THEREFORE CHARGED that you, SHAWN ROBERTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (b) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; (c) 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 626.61 1(13), Florida Statutes]; (d) _ Violation of the provision against twisting, as defined in s. 626.9542(1)(). [Section 626.621(5), Florida Statutes]; (e) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to be a source of injury or loss to the public interest. [Section 626.621(6), Florida Statutes]; (f) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.61 1(5), Florida Statutes] 3 (g) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (h) Is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. [Section 626.9541(1)(a)(6), Florida Statutes]; (i) | Knowingly making any misleading representation or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer. [Section 626.9541(1)(1), Florida Statutes]. COUNT II 15. The above General Allegations are hereby realleged and fully incorporated herein by reference. 16. In or about June, 1999, you, SHAWN ROBERTS, met with 8.G. and her husband of Deerfield Beach, at their request, for the purpose of discussing their investment portfolio. At that time, S.G. was fifty-seven years of age and was invested primarily in 401k and/or IRA qualified accounts and a fixed annuity. 17. At this initial meeting, you, SHAWN ROBERTS, convinced S.G. and her husband to allow you to in an attempt to induce them to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert their in force investments, including an annuity, for the purpose of creating another annuity contract with another insurer. In doing so, you, SHAWN ROBERTS, made fraudulent misrepresentations, incomplete or fraudulent comparisons, or fraudulent material omissions by failing to disclose to your client the terms and conditions of the annuity transaction. More specifically, you, SHAWN ROBERTS, failed to disclose to your client, S.G., at the time of sale that such a transaction would subject her to surrender charges and/or penalties. Instead, you, SHAWN ROBERTS, insisted to your client that you had a plan to “waive” or “work out” any surrender penalty involved in the transaction to prevent a loss to her. Further, in an attempt to convince your client that your motives for this transaction were strictly in her best interests, you, SHAWN ROBERTS, caused S.G. to believe that commission fees to you as a result of this transaction would not be deducted from her account or in any way paid by her or from her funds. 18. As a result, you, SHAWN ROBERTS, did in fact cause the surrender of §.G.’s in force National Life Annuity and the creation of a new contract, Hartford Life contract number #710648761 in the amount of $102,029. This transactional episode caused S.G. to suffer approximately $1,837 in surrender charges or penalties, but generated for you, SHAWN ROBERTS, or Jefferson Pilot Securities on your behalf, at least $5,356 in commissions. 19, Furthermore, you, SHAWN ROBERTS, insisted to your client that you would “waive” or “work out” any surrender charges that were involved in the above transaction. After the sale, when your client specifically requested that you provide her with the true and accurate figures regarding the commissions involved in the transaction and the surrender charges involved, you, SHAWN ROBERTS, again misrepresented to your client the actual charges. You, SHAWN ROBERTS, provided S.G. with a spreadsheet of her investments. This spreadsheet ’ falsely indicated to your client that you, SHAWN ROBERTS, received zero up front commission on the sale of her Hartford Annuity, when in fact you or Jefferson Pilot on your behalf received at least $5,356 in commissions. Additionally, this spreadsheet falsely represented to your client that the surrender charges she suffered when you effectuated the surrender of her in force National Life annuity were $1,200, when in reality the charges were at least $1,837. ITIS THEREFORE CHARGED that you, SHAWN ROBERTS, have violated or are accountable under the following provisions of the Florida Insurance Code and Rules of the Department of Financial Services which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]; (b) Demonsirated lack of reasonably adequate knowledge and technical competence to engage in the transactions authorized by the license or appointment. [Section 626.611(8), Florida Statutes]; (c) 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]; . (d) In the conduct of business under the license or appointment, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as prohibited under part X of this chapter, or having otherwise shown himself to-be a source of injury or loss to the public interest. [Section 626.621(6), Florida Statutes]; (e) Willful misrepresentation of any insurance policy or annuity contract or willful deception with regard to any such policy or contract, done either in person or by any form of dissemination of information or advertising. [Section 626.611(5), Florida Statutes]; (f) Fraudulent or dishonest practices in the conduct of business under the license or appointment. [Section 626.611(9), Florida Statutes]; (g) Violation of the provision against twisting, as defined in s. 626.9542(1) 1). [Section 626.621(5), Florida Statutes]; (h) Is a misrepresentation for the purpose of inducing, or tending to induce, the lapse, forfeiture, exchange, conversion, or surrender of any insurance policy. [Section 626.9541(1)(a)(6), Florida Statutes]; (i) Knowingly making any misleading representation or incomplete or fraudulent comparisons or fraudulent material omissions of or with respect to any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, 10 terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer. [Section 626.9541(1)(1), Florida Statutes]. WHEREFORE, you, SHAWN ROBERTS, are hereby notified that the Treasurer and Insurance Commissioner intends to enter an Order 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, 626.692, and 626.9521, Florida Statutes, and under the other referenced Sections of the Florida Statutes as set out in this Administrative Complaint. You are further notified that any order entered in this case revoking or suspending any license or eligibility for licensure held by you shall also apply to all other licenses and eligibility held by you under the Florida Insurance Code. 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. ll 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 (c) A reference 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. Ifa 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, Florida, or by telephonic conference call upon your request. However, if you dispute material facts that 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. 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__18t - day of November , 2005. Au La ller CHANDLER, Deputy Chief Financial Officer 13 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE COMPLAINT and ELECTION OF RIGHTS has been furnished to: SHAWN ROBERTS, Applied Benefits & Concepts, Inc., 300 S. Pine Island Road, Suite 237, Plantation, Florida 33324-2620; and to SHAWN ROBERTS, 13963 SW 42nd Street, Davie, FL 33330-5732 by Certified Mail this1S*day of November 2005, Florida Bar Numbe¢ #0738298 Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-033 Phone: (850) 413-4230 Fax: (850) 487-4907 14

Docket for Case No: 06-003149PL