FLORIDA DEPARTMENT OF FINANCIAL SERVICES ALEX SINK r i L. E Dd CHIEF FINANCIAL OFFICER STATE OF FLORIDA JAN 29 007 Cond IN THE MATTER OF: Dovkevea oe MARK HENRY GERARD : CASE NO.: 87208-07-A / ADMINISTRATIVE COMPLAINT TO: MARK HENRY GERARD 560 Laurel Grove Lane O “(- O q “Tle PL Orange Park, Florida 32073 MARK HENRY GERARD Humana 76 S. Laura St. Jacksonville, Florida 32202 You, MARK HENRY GERARD, 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 aresult of which it is alleged: GENERAL ALLEGATIONS 1. Pursuant to Chapter 626, Florida Statutes, you, MARK HENRY GERARD, are currently licensed in this state as a Life Including Variable Annuity & Health Agent (2-15). 2. At all times pertinent to the dates and occurrences referred to herein, you, MARK HENRY GERARD, were licensed in this state as an insurance agent, having license number A095594. . 3. At all times pertinent to the dates and occurrences referred to herein, you, MARK HENRY GERARD, were associated with and acted as salesman or agent for a company known as Learn Waterhouse, Inc. (“LWI”) with offices in Texas. 4. You, MARK HENRY GERARD, offered for sale and sold to Florida residents, , various promissory notes (hereafter collectively referred to as “investments”) in LWI. 5. The investments issued, offered for sale, and sold by you, MARK HENRY GERARD, as agent for LWI, are securities as defined in Section 517.012 (18), Florida Statutes. 6. The investments issued, offered for sale and sold by you, MARK HENRY GERARD, as agent for LWI, were not registered with the Office of Financial Regulation (“OFR”), as required pursuant to Section 517.07, Florida Statutes, and were not exempt from such registration requirements, either under the provisions of sections ‘517.051 or 517.061, . Florida Statutes. 7, In each count alleged herein, you, MARK HENRY GERARD, made one or more of the following false verbal representations and advertising statements to the investors that: LWI owned a bank, a gold mine, and investments all over the world; LWI was based in the West Indies and thus avoided payment of United States taxes; an LWI investment would return 10% for ten months or more; taking out a second mortgage or home equity mortgage on investor residences would provide a reasonable means of obtaining additional investment funds; investors could expect to almost double the amount of money they invested in LWI; the investment was safe, secure, guaranteed and risk free. 8. These false statements and mistepresentations were designed to leave all purchasers with the impression that funds invested would be safely held and earn a substantial return. 9. You, MARK HENRY GERARD, sold LWI promissory notes earning you substantial commissions. 10. These individual transactions, more particularly described below, not only resulted in the loss of the invested funds, but also in penalty fees or surrender charges due to you, MARK HENRY GERARD, twisting your insurance clients’ annuity and life insurance contracts and retirement accounts, and in lost interest income payments. 11. Pursuant to Chapter 626, Florida Statutes, the Florida Department of Financial Services has jurisdiction over your insurance licenses and appointments. COUNT I 12. The above General Allegations are hereby realleged and fully incorporated herein by reference. 13. During March 2004 you, MARK HENRY GERARD, were introduced to Ms. Concettina C. Barone by a fellow LWI sales agent named Louis R. Diaz. You then sold Ms. Barone an LWI investment in the amount of $90,000 on March 12, 2004. 14. In conclusion, as to this count you, MARK HENRY GERARD, sold Ms. Barone worthless unregistered securities that resulted in her losing thousands of dollars in invested funds and loss of income from that capital. IT IS THEREFORE CHARGED that you, MARK HENRY GERARD, have violated-or are accountable under one or more of the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Sale of an unregistered security that was required to be registered, pursuant to chapter 517, Florida Statutes. [Section 626.611(16)]; (b) Demonstrated lack of fitness or trustworthiness to engage in the business of Insurance. [Section 626.611(7), Florida Statutes]. COUNT II 15. The above General Allegations are hereby realleged and fully incorporated herein by reference. . 16. During or about April 2004 you, MARK HENRY GERARD, were introduced to Christopher M. Gordon and you, in turn, introduced fellow LWI sales agent John Bruce to Mr. Gordon. You sold two separate LWI investments to Mr. Gordon on April 26, 2004 and the other on June 11, 2004. They totaled $20,000. 17. In conclusion, as to this count, you, MARK HENRY GERARD, sold Mr. Gordon worthless unregistered securities that resulted in his losing thousands of dollars in invested funds and loss of income from that capital. IT IS THEREFORE CHARGED that you, MARK HENRY GERARD, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: . (a) Sale of an unregistered security that was required to be registered, pursuant to chapter 517, Florida Statutes. [Section 626.611(16)]; | (b) Demonsirated lack of fitness or trustworthiness to engage in the business of Insurance, [Section 626.611(7), Florida Statutes]. COUNT III 18. The above General Allegations are hereby realleged and fully incorporated herein by reference. 19. In mid-2004, John Paul Niggeling was introduced to LWI by his sister-in-law and by his nephew, David McDonie, another sales representative for LWI. LWI agent McDonie then placed Mr. Niggeling in touch with you, MARK HENRY GERARD and with fellow LWI sales agent John Wesley Bruce. 20. Through the combined sales efforts of sales agents McDonie, Bruce, and you , MARK HENRY GERARD, Mr. Niggeling was persuaded to make two separate investments in LWI, the first contract signed on June 1, 2004 for $25,000 and the second signed in September, 2004 for $83,000. Together they totaled $108,000, and from them you MARK HENRY GERARD earned a commission of at least $1,250.00. 21. In conclusion, as to this count, you, MARK HENRY GERARD, were instrumental in selling Mr. Niggeling worthless unregistered securities that resulted in his losing thousands of dollars in invested funds and loss of income from that capital. IT IS THEREFORE CHARGED that you, MARK HENRY GERARD, have violated or are accountable under one or more of the following provisions of the Florida Insurance Code and Rules of the Department which constitutes grounds for the suspension or revocation of your licenses and eligibility as an insurance agent: (a) Sale of an unregistered security that was required to be registered, pursuant to chapter 517, Florida Statutes. [Section 626.611(16)];. (b) Demonstrated lack of fitness or trustworthiness to engage in the business of insurance. [Section 626.611(7), Florida Statutes]. WHEREFORE, you, MARK HENRY GERARD, are hereby notified that the Chief Financial Officer intends to enter an order suspending or revoking your license(s) and eligibility for licensure as an insurance agent or to impose such lesser penalties as may be provided under the provisions of Chapter 626, Florida Statutes, and under the other referenced sections of the Florida Statutes as set out in this Administrative Complaint. Additionally, you are notified that the Department intends to seek aggravation of the applicable statutes for the purposes of calculating the total penalty assessed ‘against you, MARK HENRY GERARD, in consideration of the age and capacity of the victims. 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 Pursuant to Sections 120.569 and 120.57, Florida Statutes and Rule Chapter 28-107, Florida Administrative Code (F.A.C.), you have the right to request a proceeding to contest this action by the Department. You may elect a proceeding by completing the attached Election of Rights form or filing a Petition. Your Petition or Election of a proceeding must be in writing and must be filed with the General Counsel acting as the Agency Clerk, Department of Financial Services. If served by U.S. Mail the Petition or Election should be addressed to the Florida Department of Financial Services at 612 Larson Building, Tallahassee, Florida 32399-0333. If Express Mail or hand delivery is utilized, the Petition or Election should be delivered to 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. The Petition or Election must be received by, and filed in the Department within twenty-one (21) days of the date of your receipt of this notice. YOUR FAILURE TO RESPOND TO THIS ADMINISTRATIVE COMPLAINT WITHIN TWENTY-ONE (21) DAYS 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. : Ifa proceeding is requested and there is no dispute of fact the provisions of Section 120.57(2), Florida Statutes would apply. In this regard you may submit oral or written evidence in Opposition to the action taken by this agency or a written statement challenging the grounds upon which the agency 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. If you dispute material facts that are the basis for this agency’s action you may request a proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. If you request this type of proceeding, the request must comply with all of the requirements of Rule Chapter 28-106, FAC. and contain: a) A statement identifying with particularity the allegations of the Department that you dispute and the nature of the dispute; b) An explanation of what relief you are seeking and believe you are entitled to; c) Any other information which you contend is material. 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. If you request a hearing, you have the right to be represented by counsel, or other qualified representative, to take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf, You are hereby notified that mediation under Section 120.573, Florida Statutes, is not available. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. Ail prior correspondence in this matter shall be considered freeform agency action, and no such correspondence shall operate as a valid request for an administrative proceeding. Any request for 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. Lh, IN CHANDLER. Deputy Chief Financial Officer , Wen STATE OF FLORIDA a7 Fep Ep DEPARTMENT OF FINANCIAL SERVICES €3 DIVISION OF LEGAL SERVICES Y 4:9 Oba Slo 0 § IN THE MATTER OF: Heap RATT Gg CASE NO.: 87208-07-AG MARK HENRY GERARD / ELECTION OF PROCEEDING T have 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 J 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. wv I 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 ofa 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.: CERTIFICATE OF SERVICE THEREBY CERTIFY that a true and correct copy of this ADMINISTRATIVE COMPLAINT has been furnished to: MARK HENRY GERARD, Laurel Grove Lane, Orange Park, Florida 32073 ; MARK HENRY GERARD, Humana,76 S. Laura St., Jacksonville, Florida 32202 by U.S. Certified Mail this gre day of __-Jountior ry, 2007. David J, Busch Florida Department of Financial Services Division of Legal Services 645 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 (850) 413-4146 10

Docket for Case No: 07-000976PL