Petitioner: DEPARTMENT OF FINANCIAL SERVICES
Respondent: PAMELA A. DOWNER
Judges: R. BRUCE MCKIBBEN
Agency: Department of Financial Services
Locations: Clearwater, Florida
Filed: Jul. 25, 2007
Status: Closed
Settled and/or Dismissed prior to entry of RO/FO on Tuesday, March 4, 2008.
Latest Update: Dec. 24, 2024
FLORIDA
DEPARTMENT OF
FINANCIAL
SERVICES FILED
Chink FNANCIAL OFFICER APR 13 2007
STATE OF FLORIDA
IN THE MATTER OF: eine
OT DUdePe
PAMELA A. DOWNER CASE NO: 87341-07-AG
/
ADMINISTRATIVE COMPLAINT
TO: PAMELA A. DOWNER
8039 Garden Drive, Apt. 110
Seminole, Florida 33777
PAMELA A. DOWNER
Robert Droubie P.A.
2240 Belleair Road
Clearwater, Florida 33764
You, PAMELA A. DOWNER, 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 an insurance agent in this state as a result of which
it is alleged that:
GENERAL ALLEGATIONS
1. You, PAMELA A. DOWNER, are currently licensed in this state as a life and
variable annuity insurance agent and as a life insurance agent.
2. At all times pertinent to the dates and occurrences referenced in this
Administrative Complaint, you, PAMELA A. DOWNER, were licensed in this state as an
insurance agent.
3. A viatical settlement purchase agreement is an investment contract expressly
defined as a security under section 517.021(20)(q), Florida Statutes (2003).
COUNT I |
4. Paragraphs one through three are realleged and incorporated herein by reference.
5. On or about October 15, 2003, you, PAMELA A. DOWNER, visited the home of
S.C. of Clearwater, Florida and solicited her to invest $150,000.00 of her retirement savings in
purchasing three viatical settlement purchase agreements issued by Mutual Benefits Corporation,
Inc., a Florida corporation.
6. You, PAMELA A. DOWNER, represented to S.C. that the viatical settlement
purchase agreements issued by Mutual Benefits Corporation complied with all Florida and
Federal Securities laws and regulations. This representation was false and a material
misstatement of fact. In fact, Mutual Benefits Corporation was not and never has been registered
to sell securities in this state nor was its viatical settlement purchase agreements registered for
sale in this state or exempt from such registration, all in violation of sections 517.051, 517.061,
and 517.07, Florida Statutes. You, PAMELA A. DOWNER, were not registered in this state to
sell securities, in violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER,
were aware or should have been aware of these facts.
7. You, PAMELA A. DOWNER, failed to inform S.C. that you were not licensed to
sell securities, that the viatical settlement purchase agreements being solicited by you were
unregistered, were speculative and involved a very high degree of risk and should not be
purchased by anyone who could not afford the loss of his or her entire investment. S.C. would
not have invested her funds into the viatical settlement purchase agreements if she had been
made aware of these facts.
8. In purchasing the Mutual Benefits viatical settlement purchase agreement, S.C.
relied strictly and solely upon representations that the viatical agreements were guaranteed safe
and secure, represented a good investment, and that she could not lose any portion of her
$150,000 principal. These representations made by you, PAMELA A. DOWNER, were
knowingly false or were made without knowledge as to their truth or accuracy. You, PAMELA
A. DOWNER, were aware of the reliance of S.C. upon your representations concerning her
decision to purchase the viaticals.
9. The Mutual Benefits Corporation viatical program has been determined to be a
fraudulent financial scheme, and its principal organizers have been criminally prosecuted and
convicted under federal law. A receiver has been appointed by the United States Court in and for
the Southern District of Florida to administer Mutual Benefits Corporation and it is presently
uncertain whether S.C. will be able to recover her funds or any portion thereof.
IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are
accountable under the following provisions of the Florida Insurance Code and Rules of the Chief
Financial Officer which constitute grounds for the suspension or revocation of your license(s)
and eligibility for licensure:
(a) 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
permit. [Section 626.611(9), Florida Statutes]
(c)” Sale of an unregistered security that was required to be registered, pursuant to
chapter 517. [Section 626.611(16), Florida Statutes (2003)]
(d) Violation of any provision of this code or of any other law applicable to the
business of insurance in the course of dealing under the license or permit. [Section 626.621(2),
Florida Statutes]
(e) In the conduct of business under the license or permit, 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.
[Section 626.621(6), Florida Statutes]
(f) Knowingly:
a. Filing with any supervisory or other public official,
b. Making, publishing, disseminating, circulating,
c. Delivering to any person,
d. Placing before the public,
e. Causing, directly or indirectly, to be made, published, disseminated, circulated,
delivered to any person, or placed before the public, any false material statement. [Section
626.9541(1)(e)1, Florida Statutes]
(g) A violation of [Chapter 626.991 et. seg.] is an unfair trade practice under ss.
626.9521 and 626.9541, Florida Statutes, and is subject to the penalties provided in the insurance
code. Part X of this chapter applies to a licensee under this act or a transaction subject to this act
as if a viatical settlement contract and a viatical settlement purchase agreement were an
insurance policy. [Section 626.9927(1), Florida Statutes]
(h) (1) It is unlawful for any person:
(b) In the solicitation of a viatical settlement purchase agreement:
1. To employ any device, scheme, or artifice to defraud:
2. To obtain money or property by means of an untrue statement of a material
fact or by any omission to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; or
3. To engage in any transaction, practice or course of business which operates or
would operate as a fraud or deceit upon a person. [Section 626.99275(1)(b),
Florida Statutes]
@ A person may not represent that an investment in a viatical settlement purchase
agreement is “guaranteed,” that the principal is “safe”, or that the investment is free of risk.
[Section 626.99277(6), Florida Statutes (2003)]
COUNT II
10. Paragraphs one through three are realleged and incorporated herein by reference.
11. On or about April 22, 2003, you, PAMELA A. DOWNER, visited the home of
D.H. of Safety Harbor, Florida and solicited him to invest $ 20,000.00 of his personal retirement
savings in purchasing a viatical settlement purchase agreement issued by Mutual Benefits
Corporation, Inc., a Florida corporation.
12. You, PAMELA A. DOWNER, represented to D.H. that the viatical settlement
purchase agreement issued by Mutual Benefits Corporation complied with all Florida and federal
securities laws and regulations. This representation was false and a material misstatement of
fact. In fact, Mutual Benefits Corporation was not and never has been registered to sell securities
in this state nor was its viatical settlement purchase agreements registered for sale in this state or
exempt from such registration, all in violation of sections 517.051, 517.061, and 517.07, Florida
Statutes. You, PAMELA A. DOWNER, were not registered in this state to sell securities, in
violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER, were aware or
should have been aware of these facts.
13. You, PAMELA A. DOWNER, failed to inform D.H. that you were not licensed to
sell securities, that the viatical settlement purchase agreement being solicited by you was
unregistered, was speculative and involved a very high degree of risk. and should not be
purchased by anyone who could not afford the loss of his or her entire investment. D.H. would
not have invested his funds into the viatical settlement purchase agreement if he had been made
aware of these facts.
14. The Mutual Benefits viatical settlement purchase agreements were not an
appropriate investment for individuals of D.H.’s age, financial circumstances and investment
experience. These transactions were neither necessary nor in the purchaser’s best interest. You,
PAMELA A. DOWNER were aware or should have been aware of these facts.
15. In purchasing the Mutual Benefits viatical settlement purchase agreement, D.H.
relied strictly and solely upon representations that the viatical agreement was guaranteed safe
and secure, represented a good investment, and that he could not lose any portion of his $20,000
principal. These representations made by you, PAMELA A. DOWNER, were knowingly false
or were made without knowledge as to their truth or accuracy. You, PAMELA A. DOWNER,
were aware of the reliance of D.H. upon your representations concerning his decision to purchase
the viatical.
16. The Mutual Benefits Corporation viatical program has been determined to be a
fraudulent financial scheme, and its principal organizers have been criminally prosecuted and
convicted under federal law. A receiver has been appointed by the United States Court in and for
the Southern District of Florida to administer Mutual Benefits Corporation and it is presently
uncertain whether D.H. will be able to recover his funds or any portion thereof.
IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are
accountable under the following provisions of the Florida Insurance Code and Rules of the Chief
Financial Officer which constitute grounds for the suspension or revocation of your license(s)
and eligibility for licensure: Sections 626.611(7); 626.611(9); 626.611(16); 626.621(2);
626.621(6); 626.9541(1)(e)1; 626.9927(1); 626.99275(1)(b) and 626.99277(6), Florida Statutes
as more particularly alleged in Count I above.
COUNT Ill
17. Paragraphs one through three are realleged and incorporated herein by reference. .
18. Onor about April, 2003, you, PAMELA A. DOWNER, visited the home of J.S.
of Clearwater, Florida and solicited him to invest $ 20,000.00 of his personal retirement savings
in purchasing a Viatical settlement purchase agreement issued by Mutual Benefits Corporation,
Inc., a Florida corporation.
19. You, PAMELA A. DOWNER, represented to J.S. that the viatical settlement
purchase agreement issued by Mutual Benefits Corporation complied with all Florida and federal
securities laws and regulations. This representation was false and a material misstatement of
fact. In fact, Mutual Benefits Corporation was not and never has been registered to sell securities
in this state nor was its viatical settlement purchase agreements registered for sale in this state or
exempt from such registration, all in violation of sections 51 7.051, 517.061, and 517.07, Florida
Statutes. You, PAMELA A. DOWNER, were not registered in this state to sell securities, in
violation of Section 517.12, Florida Statutes. You, PAMELA A. DOWNER, were aware or
should have been aware of these facts.
20. You, PAMELA A. DOWNER, failed to inform J.S. that you were not licensed to
sell securities, that the viatical settlement purchase agreement being solicited by you was.
unregistered, was speculative and involved a very high degree of risk and should not be
purchased by anyone who could not afford the loss of his or her entire investment. J.S. would
not have invested his funds into the viatical settlement purchase agreement if he had been made
aware of these facts.
21. The Mutual Benefits viatical settlement purchase agreements were not an
appropriate investment for individuals of J.S.’s age, financial circumstances and investment
experience. These transactions were neither necessary nor in the purchaser’s best interest. You,
PAMELA A. DOWNER were aware or should have been aware of these facts.
22. ‘In purchasing the Mutual Benefits viatical settlement purchase agreement, J.S.
relied strictly and solely upon representations that the viatical agreement was guaranteed safe
and secure, represented a good investment, and that she could not lose any portion of her
$20,000 principal. These representations made by you, PAMELA A. DOWNER, were
knowingly false or were made without knowledge as to their truth or accuracy. You, PAMELA
A. DOWNER, were aware of the reliance of J.S. upon your representations concerning his
decision to purchase the viatical.
23. _ The Mutual Benefits Corporation viatical program has been determined to be a
fraudulent financial scheme, and its principal organizers have been criminally prosecuted and
convicted under federal law. A receiver has been appointed by the United States Court in and for
the Southern District of Florida to administer Mutual Benefits Corporation and it is presently
uncertain whether J.S. will be able to recover his funds or any portion thereof.
IT IS THEREFORE CHARGED that you, PAMELA A. DOWNER, have violated or are
accountable under the following provisions of the Florida Insurance Code and Rules of the Chief
Financial Officer which constitute grounds for the suspension or revocation of your license(s) _
and eligibility for licensure: Sections 626.61 1(7); 626.611(9); 626.611(16); 626.621(2);
626.621(6); 626.9541(1)(e)1; 626.9927(1); 626.99275(1)(b) and 626.99277(6), Florida Statutes
as more particularly alleged in Count I above.
WHEREFORE, you, PAMELA A. DOWNER, are hereby notified that the Chief
Financial Officer intends to enter an Order revoking or suspending your licenses and eligibility
for licensure or to impose such penalties as may be proper under the provisions of Sections
626.611, 626.621, 626.681, 626.691, 626.692 and 626.9521 Florida Statutes, under the
procedures and rules set forth in this Administrative Complaint.
NOTICE OF RIGHTS
You have the right to request a proceeding to contest this action by the Department of
Financial Services ("Department") pursuant to Sections 120.569 and 120.57, Florida Statutes,
and Rule 28-106, 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 acting as 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 SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU.
If you request a proceeding, you must provide information that complies with the
requirements of Rule 28-106.2015, 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, address, and telephone number, and facsimile number (if any) of the
respondent (for the purpose of requesting a hearing in this matter, you are the "respondent").
(b) The name, address, telephone number, facsimile number of the attorney or
qualified representative of the respondent (if any) upon whom service of pleadings and other
papers shall be made.
(c) A statement requesting an administrative hearing identifying those material facts
that are in dispute. If there are none, the petition must so indicate.
(d) A statement of when the respondent received notice of the administrative
complaint.
(e) A statement including the file number to the administrative complaint.
Ifa 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, Florida, or by telephonic conference cail upon your request.
10
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.
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.
DATED and SIGNED this _| 3" day of Ae <4 , 2007.
‘N CHANDLER
Deputy Chief Financial Officer
11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing ADMINISTRATIVE
COMPLAINT and ELECTION OF PROCEEDING has been furnished by Certified Mail to:
PAMELA A. DOWNER, 8039 Garden Drive, Apt. 110, Seminole, Florida 33777 and c/o Robert
Droubie P.A., 2240 Belleair Road, Clearwater, Florida 33764 on this ioe day
of cv\ 2007.
AMES A. BOSSART, ESQUI
Division of Legal Services
612 Larson Building
Tallahassee, Florida 32399-0333
(850) 413-4124
12
Docket for Case No: 07-003438PL
Issue Date |
Proceedings |
Mar. 04, 2008 |
Order Closing File. CASE CLOSED.
|
Mar. 03, 2008 |
Motion to Relinquish Jurisdiction filed.
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Jan. 08, 2008 |
Order Granting Continuance and Placing Case in Abeyance (parties to advise status by March 3, 2008).
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Jan. 07, 2008 |
Agreed Motion for Continuance filed.
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Jan. 04, 2008 |
Notice of Transfer.
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Oct. 05, 2007 |
Order Granting Continuance and Re-scheduling Hearing (hearing set for January 15 and 16, 2008; 9:00 a.m.; Clearwater, FL).
|
Oct. 04, 2007 |
Amended Agreed Motion for Continuance filed.
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Oct. 04, 2007 |
Notice of Transfer.
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Oct. 04, 2007 |
Agreed Motion for Continuance filed.
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Aug. 06, 2007 |
Order of Pre-hearing Instructions.
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Aug. 06, 2007 |
Notice of Hearing (hearing set for October 17 and 18, 2007; 9:00 a.m.; Clearwater, FL).
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Aug. 01, 2007 |
Response to Initial Order filed.
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Jul. 26, 2007 |
Notice of Transfer.
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Jul. 25, 2007 |
Election of Proceeding filed.
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Jul. 25, 2007 |
Request for Formal Proceeding filed.
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Jul. 25, 2007 |
Administrative Complaint filed.
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Jul. 25, 2007 |
Agency referral filed.
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Jul. 25, 2007 |
Initial Order.
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