The Issue Is Respondent, Peter H. Myers, guilty of the allegations contained in the Administrative Complaint issued by Petitioner and, if so, what is the appropriate penalty.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. Respondent Myers is a licensed real estate broker, having been issued license number BK-0646846. Ocean Village Sales & Rentals, Inc. (Ocean Village) is a real estate broker corporation and Respondent is the qualifying broker for said corporation. Background Petitioner and Respondent were involved in earlier disciplinary cases in 1998 and 1999. On or about December 7, 1999, Petitioner and Respondent entered into a Stipulation which resolved DBPR Case Nos. 98-81236 and 99-80423. The Stipulation placed Respondent on probation for a period of one year from the effective date of the Final Order of the Florida Real Estate Commission (FREC), which adopted the stipulation and was issued on or about January 19, 2000. The Stipulation read in pertinent part as follows: Respondent agrees not to hold or maintain any escrow, trust or real estate related escrow or trust funds for the one(1) year probationary period. Respondent is permitted to be a signatory on the operating and payroll accounts for his brokerage firm only. Respondent shall place all escrow, trust or real estate related funds with a title company, attorney, or other proper depository as permitted under Chapter 475, Fla. Stat., and Fla. Admin. Code r. 61J2. Respondent further agrees not to be a signatory on any escrow, trust or real estate related account with the exception of the operating and payroll accounts for his brokerage firm for the one (1) year probationary period. In compliance with the terms of the stipulation, Respondent placed his escrow account with Joseph Roth, a certified public accountant and licensed real estate broker in the State of Florida. In the Stipulation, Respondent admitted to, among other things, failure to prepare the required written monthly escrow statement reconciliations in violation of Rule 61J2-14.012(2) and (3), Florida Administrative Code, and, therefore, in violation of Section 475.25(1)(e), Florida Statutes. Escrow accounts audit Gail Hand is an Investigation Specialist II with the Department of Business and Professional Regulation (the department). She has approximately 16 years of regulatory and investigative experience with the department. When she started working with the department, she conducted from 20 to 30 trust account audits per month. She routinely conducts audits and inspections of the records of real estate brokers. When reviewing escrow accounts, Ms. Hand's review of escrow accounts has two components. First, she reviews the bank statement reconciliations which compares the statement balance to the checkbook balance. Next she reviews a comparison of the bank statement reconciliations with the broker's total trust liability. The broker's total trust liability is the total of all the money that the broker is holding in his trust or escrow account. On or about January 26, 2001, Ms. Hand conducted an office inspection and escrow account audit of Respondent's business, Ocean Village. Respondent and his daughter were present. During this inspection and audit, Ms. Hand requested to inspect financial documents of the company. Respondent and his daughter provided all documents requested and were very cooperative during the course of the audit. Ms. Hand inspected the November and December 2000 bank reconciliation statements from the escrow trust account of Ocean Village and determined that they were properly prepared. However, Ms. Hand determined that the determination of the broker's trust liability was not properly prepared in that she could not identify the broker's total trust liability from a review of the documents provided by Respondent. The calculations in Respondent's financial records included broker's money, bank fees, and negative owner balances. According to Ms. Hand, the reconciled checkbook to bank statement balance should be compared to a balance that does not include broker's money, bank fees or negative owner balances. Because of this, she could not identify the total broker's trust liability. She normally does not have trouble identifying a broker's total trust liability when conducting an audit. During the audit, Respondent could not identify the total broker's trust liability. Respondent deferred to his accountant, Mr. Roth. Ms. Hand did not discuss the financial documents which she reviewed as part of the audit with Mr. Roth because, "Mr. Myers was responsible." License renewal Respondent's renewal fees for his corporate registration and his individual broker's license became due in March 1999. Respondent renewed his corporate registration in March 1999 but failed to renew his individual broker's license. Respondent did not renew his individual broker's license until February 2001. At that time, he paid for the time period in which he was in arrears and for another 24 months in the future, as well as a late fee or penalty. Respondent continued to conduct real estate transactions during the period of time that his individual broker's license was in involuntary inactive status.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, the evidence of record and the demeanor of the witnesses, it is RECOMMENDED: That a final order be entered by the Florida Real Estate Commission finding the Respondent, Peter H. Myers, guilty of violating Sections 475.25(1)(e) and (o), and 475.42(1)(a), Florida Statutes, and imposing a fine of $2,500.00. DONE AND ENTERED this 4th day of September, 2002, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 4th day of September, 2002.
The Issue The issue is whether Mr. Powell should be disciplined for irregularities in the handling of an escrow deposit by a real estate firm for which he was the qualifying broker.
Findings Of Fact The Respondent, Willie Powell, was at all relevant times a licensed real estate broker in the State of Florida, holding license number 0070494. Mr. Powell was the sole qualifying broker of Future Investments & Development II Co., Inc., trading as ERA Thompkins and Saunders Realty Company (hereafter, T & S), 2734 N.W. 183rd Street, Suite 206, Miami, Florida 33056. On or about November 12, 1990, Guillermo Castillo, a licensed real estate broker for Emerald Enterprises, Inc., received a listing agreement from Horace B. Miller to sell residential property (a duplex) owned by Miller located at 2331 N.W. 103rd Street, Miami, Florida. The property was listed with the Multiple Listing Service. On or about February 27 or 28, 1991, Mr. Castillo received a telephone call from Willie J. Thompkins of T & S saying he wanted to show the Miller property to a prospective buyer. On or about February 28, 1991, Mr. Castillo received through the mail slot at his office a written offer from George R. Howell of Dorchester, Massachusetts, to buy the Miller property, with a business card of Jerry Saunders of T & S. On or about March 6, 1991, Guillermo Castillo met with Horace Miller to review the Howell offer. At Miller's request, Castillo made some changes to the contract to reflect that Miller was selling the duplex in "as is" condition. Miller signed the contract and initialed the changes, and Mr. Castillo signed the contract on behalf of Emerald Enterprises, and called Willie J. Thompkins to tell him the contract had been signed. The next day, Mr. Castillo went to the office of T & S and dropped off the contract for the buyer to consider the seller's changes. A day or two later, a representative of T & S telephoned Guillermo Castillo and told Mr. Castillo that the buyer had accepted the seller's changes to the contract; Mr. Castillo then notified Miller. Mr. Castillo later received from T & S the signed contract with Mr. Miller's changes initialed by Mr. Howell. The contract was also signed by Mr. Thompkins of T & S. The contract called for a $1,000 deposit to be held in escrow by T & S (Exhibit 5, Paragraph IIa). Guillermo Castillo contacted T & S to check on the progress of the sale. He learned that J.P. Mortgage was handling the buyer's mortgage loan application. Castillo contacted J.P. Mortgage and was told that the loan was proceeding normally. After the contractual closing date of April 29, 1991, had passed without the closing taking place, Castillo contracted J.P. Mortgage again, but was told that they were no longer processing the loan. Castillo requested that J.P. Mortgage send him a letter to that effect, and he received a letter dated May 2, 1991, stating that J.P. Mortgage was withdrawing as the lender because the buyer failed to return the mortgage loan application. Castillo informed Horace Miller of the situation and Miller instructed Castillo to write to T & S making a claim to the buyer's deposit under the contract of sale. On May 4, 1991, Castillo sent a letter to T & S claiming the deposit for the seller. Paragraph Q of the contract provided for the seller to retain the buyer's deposit as liquidated damages if the buyer failed to perform the contract. On or about May 9, 1991, Guillermo Castillo received from Mr. Thompkins, the manger of T & S, a letter dated May 1, 1991, but postmarked May 6, 1991, ". . . requesting that the . . . file be cancelled" due to ". . . communication problems with . . . Mr. Howell," and citing unsuccessful attempts to contact Howell by telephone and by mail. When Castillo received that letter he contacted T & S to point out the seriousness of the matter and to press for forfeiture of the buyer's deposit. On May 9, 1991, Castillo received a telefax from Mr. Thompkins of T & S stating that the Howell deposit check had been returned for insufficient funds and attaching a copy of the returned check. Prior to his receipt of this telefax, Castillo had not taken any independent steps to verify whether T & S had actually received the Howell deposit. He had relied on the contract, which had been executed by a licensed salesman and believed he did not require further verification that the escrow deposit had been made. Neither Mr. Castillo nor Mr. Miller dealt with the Respondent, Mr. Powell, at any time concerning the sale of the Miller property. T & S received George Howell's $1,000 deposit in the form of a check on March 4, 1991, drawn on a Massachusetts bank and deposited it in its account with First Union National Bank which was used as the escrow account, account number 15462242336, on March 5, 1991. The check was charged back to the account twice, on March 11, 1991, and on March 26, 1991. Mr. Powell was a signatory on that escrow account. After Guillermo Castillo received the May 9, 1991, telefax, he notified Horace Miller. Mr. Miller had not taken any steps on his own to verify whether T & S had received the deposit because he had confidence in his broker to let him know right away if there were any problems with the sale. By May 9, 1991, Horace Miller had already incurred expenses preparing the property for closing, and had lost rent by terminating a tenancy in the property. Because the transaction never closed, Mr. Miller sustained financial damage, some of which he might have avoided if he had been notified earlier of the buyer's dishonored escrow deposit check. On or about May 28, 1991, Miller filed a complaint with the Department of Professional Regulation, which Sidney Miller investigated. He found that the person introduced to him during his investigation at T & S as Willie Powell was not actually the Respondent. In March 1991, Mr. Powell had not seen the bank statements for the T & S escrow account for several months, and had not signed the written monthly escrow account reconciliation statement for the month of October 1990 or for any subsequent month. Mr. Powell was serving as the qualifying broker of T & S for a salary of $75 per month and no commissions. He was not active in the management of the firm. He would come to the office of T & S approximately three days per week to check files and sign listing agreements, and he would call in to see if there were any problems, messages or documents to sign. He essentially loaned his brokers' license to those who operated T & S as an accommodation because he had known the Thompkins family for 25 years. Mr. Powell argues in his proposed order that "the adequacy of [Mr. Powell's] monthly reconciliations were impeded by frauds perpetrated upon him by persons at [T & S]" (PRO at page 9, paragraph 5). It is obvious that there were problems at T & S, since a person there misrepresented himself to the Department's investigator as Mr. Powell. The full extent of the misconduct there is unclear. There is no proof in this record that salespersons at T & S had fabricated escrow account statements for Mr. Powell. Had Mr. Powell proven that he performed monthly reconciliations with what turned out to be falsified records of T & S, his argument might be well taken. The record, unfortunately, shows that no reconciliations were done. Had Mr. Powell done them, the problem here should have been uncovered.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be issued finding Willie Powell guilty of violating Section 475.25(1)(b), Florida Statutes, finding him not guilty of violating Section 475.25(1)(d), Florida Statutes, and taking the following disciplinary action against him: Issuance of a reprimand. Imposition of an administrative fine in the amount of $1,000 to be paid within 30 days of the date of the final order adopting the recommended order. Placement of the license of Mr. Powell on probation for a period of one year beginning on the date of the final order and providing that during that period he shall provide satisfactory evidence to the Florida Department of Professional Regulation, Division of Real Estate, Legal Section, Hurston Building, North Tower, Suite N-308, 400 West Robinson Street, Orlando, Florida 32801-1772, of having completion a 30-hour postlicensure education course in real estate brokerage management, in addition to any other education required of him to remain current and active as a real estate broker in the State of Florida, and that he be required to submit to the Commission during that year his monthly trust account reconciliations. Cf. Rule 21V-24.002(3)(i), Florida Administrative Code, on penalties for violation of Rule 21V-14.012(2), Florida Administrative Code. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of July 1992. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this day of July 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-0192 Rulings on Findings proposed by the Commission: Adopted in Findings 1 and 2. Adopted in Finding 2. Adopted in Finding 3. Adopted in Finding 4. Adopted in Finding 5. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 12. Adopted in Finding 13. Adopted in Finding 11. Adopted in Finding 15. Rulings on Findings proposed by Mr. Powell: Adopted in Finding 1 with the exception of the license number. Adopted in Finding 3. Adopted in Finding 2. Adopted in Finding 4. Rejected as unnecessary. Adopted in Finding 5. Adopted in Finding 4. Adopted in Finding 6. Generally adopted in Finding 6. Implicit in Finding 10. Adopted in Finding 6. Adopted in Finding 6. Adopted in Findings 7 and 8. Adopted in Finding 9. Adopted in Finding 10. Rejected as subordinate to Finding 10. Adopted in Finding 13. Rejected as unnecessary, the reconciliation was not one done shortly following the month of March reconciling the account for March 1991. It was done during the investigation conducted by Mr. Miller and took place between approximately June 20 and July 10, 1991. Adopted in Finding 15. Rejected as unnecessary. Adopted in Finding 14. Rejected as unnecessary, or subordinate to Finding 10. Rejected as unnecessary. Rejected as unnecessary. COPIES FURNISHED: Theodore R. Gay, Esquire Department of Professional Regulation Suite N-607 401 Northwest 2nd Avenue Miami, Florida 33128 Harold M. Braxton, Esquire Suite 400, One Datran Center 9100 South Dadeland Boulevard Miami, Florida 33156 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
The Issue The ultimate issue for determination at the formal hearing was whether disciplinary action should be taken against Respondent's real estate broker's license for failing to obey a lawful order of the Florida Real Estate Commission.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida. Respondent is now and was at all times material hereto a licensed real estate broker in the State of Florida. A Final Judgment was entered against Richard B. Abel, P.A., in the case of Mark Freeman v. Richard B. Abel, P.A., Case No 85-5678CA-JRT, on August 17, 1986, in the Circuit Court of the Twentieth Judicial Circuit, Lee County, Florida. The Final Judgment was for an amount of $6,839 representing real estate commissions owed by Richard B. Abel, P.A. to Mark Freeman, plus interest and attorney's fees. A two count Administrative Complaint was filed by the Florida Department of Professional Regulation, Division of Real Estate, against Respondent on June 27, 1988. The Complaint alleged inter alia that Respondent: (a) failed to satisfy a Final Judgment in Circuit Court for the payment of a real estate commission; and (b) failed to maintain trust funds in his real estate brokerage trust account or some other proper depository until disbursement in violation of Section 475.25(1)(d), (k), Florida Statutes. A Final Order was entered by the Florida Real Estate Commission (the "Commission") on December 6, 1988, accepting a Stipulation between Respondent and the Commission in settlement of the Administrative Complaint filed on June 27, 1988 (the "Final Order"). The terms of the Final Order provided that: Richard B. Abel, P.A., was reprimanded for failing to pay the Final Judgment entered against it in Circuit Court and was required to pay the amount due Mark Freeman within 45 days from the entry of the Final Order; Respondent, in his individual capacity, personally guaranteed the amount owed by Richard B. Abel, P.A., to Mark Freeman, and further agreed not to violate any provision of Chapters 455 and 475, Florida Statutes; and Respondent waived his right to contest the validity and enforcement of either the Final Order or Stipulation accepted in the Final Order. Neither Richard B. Abel, P.A., nor Respondent has paid the sums due pursuant to the terms of the Final Order entered by the Commission on December 6, 1988. The evidence submitted by Petitioner was uncontroverted. Respondent admitted that he placed the monies owed by Richard B. Abel, P.A., to Mark Freeman in the escrow account of Richard B. Abel, P.A., and disbursed the funds to himself, the sole owner, operator, director and officer. Respondent stated that he fully intended to pay Mr. Freeman when Respondent was able to do so. Respondent's sole defense was that the original debt was that of a corporation rather than a personal debt of Respondent. Respondent is in violation of the Final Order of the Comission entered on December 6, 1988.
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of failing to obey a lawful order of the Florida Real Estate Commission in violation of Section 475.25(1)(e), Florida Statutes, fined $1,000, and placed on probation for a period not to exceed 5 years. The conditions of probation may include any of those prescribe in Florida Administrative Code Rule 21V-24.001(2)(a) except those prescribing re-examination or being placed on broker-salesman status. In the event Respondent fails to pay in full any fine imposed on Respondent or to complete the terms of any probation imposed on Respondent, it is recommended that Respondent's license be suspended for 8 years. DONE and ENTERED this 4th day of December, 1989, in Tallahassee, Leon County, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-3727 Petitioner has submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Respondent did not submit proposed findings of fact. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection Included in Finding 1 Included in Finding 2 Included in Finding 4 Included in Finding 5 5-6 Included in Finding 6 7-8 Included in Finding 7 9 Included in Finding 9 COPIES FURNISHED: James H. Gillis, Esquire Departmen of Professional Regulation 400 West Robinson Street Orlando, Florida 32801 Mr. Richard B. Abel 2478 Inagua Avenue Miami, Florida 33133
The Issue Should Respondent's license as an insurance agent in the State of Florida be disciplined for the alleged violation of certain provisions of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 626, Florida Statutes. Respondent, at all times material to the dates and occurrences referenced in the Administrative Complaint, was licensed as an insurance agent in the State of Florida. Respondent is also currently licensed in the State of Florida as a life and life and health insurance agent. During the late 1990's, Respondent became a selling agent for an entity known as Alliance Trust, which later merged with Chemical Trust, and is now known as Chemical Trust. Respondent first learned of Chemical Trust through Jim Hicks of West Shore Agency of Michigan. Jim Hicks provided Respondent with selling and marketing materials for the investments, which were marketed as "guaranteed contracts" (Guaranteed Contract marketing materials). Respondent gave the Guaranteed Contract marketing materials to Imogene Skipper, Edward Dandignac, Dorothy Dandignac, Theodore Dostal, Alice Lowe, Robert Marsh, Julia Marsh, Raymond Grossman and Mildred Grossman and had each of them sign a compliance verification form to that effect. The Guaranteed Contract marketing materials contained a six-page U.S. Guarantee Corporation (U.S.G.C.) Balance Sheet, dated July 13, 1999, which listed several financial representations, including U.S.G.C.'s Accounts Receivable, Real Estate, Partnerships, Total Assets, Liabilities, Net Equities, Total Net Liabilities and Net Equity, Certificates of Deposit, and various accounting representations. Respondent did not have a background in financials. However, he made no effort to verify the accuracy of U.S.G.C's financial statements in order to protect his customers' investments. U.S.G.C. did not have the financial wherewithal to guarantee investors' investments. The Guaranteed Contract marketing materials listed several members of its "Staff," including Barry Goldwater, Jr. (Vice President/Director); Kenneth R. Pinckard (Executive Director/Vice President); Stephen M. Hammer (Chief Financial Officer); Kenneth Turner (Vice President/Comptroller); etc. Respondent did not verify that any of these individuals was actually on the staff of U.S.G.C. The Guaranteed Contract marketing materials asserted that U.S.G.C. had provided financial support to various charitable organizations, including Compassion International, St. Mary's Food Bank, World Missions, Salvation Army, Food for the Poor, Tennessee, US, etc. Respondent made no attempt to verify these representations. The Guaranteed Contract marketing materials, in the "Explanation of the Trust" section, falsely states, "This is a Trust and has satellite offices throughout the USA. This Trust has been providing clients steady streams of interest and the return of their principal since its inception." Respondent made no effort to verify which, if any, of these clients existed or if the clients were being provided steady streams of interest and return of their principal. The Guaranteed Contract marketing materials, in the Explanation of the Trust section, falsely states, "Profits are made by the Trust by buying and selling financial instruments and physical properties. The US Government sells Investment Grade Paper Backed by Treasury Notes on a daily basis and the Trust has Buyers purchasing large blocks at discounts. " Respondent did not know what Investment Grade Paper Backed by Treasury Notes was, and made no attempt to determine what this term implied. The Guaranteed Contract marketing materials, in the "Explanation of the Trust" section, falsely states: "The Trust also buys distressed properties with plans already drawn for conversion and then sell at a profit immediately. The Bonding Company approves all investments. This insures the integrity of each investment and its guarantee. There is in excess of SIX Billion Dollars security on the investor's investment." Respondent made no effort to verify these financial representations in order to protect his clients. Respondent made no effort to determine if U.S.G.C. was authorized to transact insurance in the State of Florida. Respondent, after reviewing the Guaranteed Contract marketing materials, considered U.S.G.C. to be a legitimate corporation. However, Respondent made no effort to determine if U.S.G.C. was a legitimate corporation, notwithstanding his testimony to the contrary, which lacks credibility. At all times material hereto, U.S.G.C. was not licensed as an insurance company or a bonding company, and, although a registered corporation in the State of Nevada, it was not a registered corporation in the State of Florida. Respondent received a document from Clifton Wilkinson, Trustee for Alliance Trust dated August 1, 1999, which stated: "News and Information Regarding Misinformation and Opinions of Some State Agencies Concerning the Nature of Alliance Trust and Similar Entities. They are exempt from State Securities Laws." Therefore, sometime around August 1, 1999, Respondent was made aware that some state agencies took the position that the investments (Guaranteed Contracts) being offered by Alliance Trust (n/k/a Chemical Trust) were securities and were not exempt from state securities laws and regulations. Respondent did not seek advice from the agency of the State of Florida charged with the responsibility of regulating securities as to whether the State of Florida considered these investments to be securities and subject to securities regulations. Likewise, Respondent did not seek any legal advice from an independent counsel as to whether these investments were in fact securities and subject to state securities regulations. Respondent made no independent inquiry into whether these investments were in fact securities and subject to securities laws and regulations, but relied solely on information received from Chemical Trust and two other agents for Chemical Trust in coming to the conclusion that these investments were not securities and not subject to securities laws and regulations. Respondent did not personally invest in the Chemical Trust investments. However, he did tell Edward Dandignac and Theodore Dostal that he had personally invested in Chemical Trust investments. Respondent earned a commission from the sale of the Chemical Trust investments. Respondent's commission from the sale of Chemical Trust investments constituted properties involved in Virgil Womack's violation of Title 18, United States Code, Section 1956(h), and were subject to forfeiture pursuant to Title 18, United States Code, Section 982(a)(1). Respondent made a payment of $63,302.29, through his attorney to the Receiver on June 18, 2001. Chemical Trust's investment product (Guaranteed Contract) was an investment contract and thereby a security as defined under Subsection 517.021(19)(q), Florida Statutes. As a security, the Guaranteed Contract was required to be registered in the State of Florida under Section 517.07, Florida Statutes, unless it was exempt from registration under Section 517.051 or 517.061, Florida Statutes. The Guaranteed Contract was neither an exempt security under Section 517.051, Florida Statutes nor an exempt transaction under Section 517.061, Florida Statutes. Therefore, the Guaranteed Contract was required to be registered in the State of Florida. An individual must be licensed in the State of Florida in order to sell or offer securities in the State of Florida. Respondent was neither licensed to sell nor to offer securities in the State of Florida. The monies paid to Chemical Trust for the investments were deposited in the personal bank accounts of Virgil Womack, Clifton Wilkinson, Lewey Cato, and Alvin Tang, the principals of Chemical Trust, and used for their personal benefit and to promote the fraudulent scheme. The Florida Department of Banking and Finance had information concerning previous securities violations by Virgil Womack and Clifton Wilkinson. Womack committed securities violations in Georgia in 1997, and Wilkinson committed securities violations in North Dakota, Iowa, Kansas, and Illinois in June 1999. This information was contained in the National Association of Securities Dealers Regulation Central Registration Depository (NASDAQ CRD) database that was accessible to the public in general, and to the Respondent specifically, through the Florida Department of Banking and Finance through telephonic communication. Imogene Skipper, age 74, of Dover, Florida, is a retired school custodian. Skipper worked as a custodian for 19 years. Skipper met Respondent in 1997 when he came to her home as a representative of Remington Estate Services, Inc., Fort Worth, Texas, to assist her in setting up a revocable living trust. The trust agreement would allow her to plan an orderly distribution of her assets without having to go through probate. In 1999, Respondent persuaded Skipper to liquidate the existing annuities with American Investors and transfer the funds to Chemical Trust. In doing so, Skipper suffered $1,665.49 in surrender charges for policy number 303313 and $1,171.25 for policy number 303467. Respondent told Skipper that Chemical Trust would reimburse her these surrender charges. Skipper purchased these annuities when her children were young. The annuities were funded by a $5.00 deduction from Skipper's weekly paycheck. Skipper was reluctant to transfer her annuity funds to Chemical Trust. However, Respondent kept reminding her that the 10 per cent return on her investment was good. Also, Skipper considered Respondent to be an honest, decent, and well respected man. Skipper invested $17,820.00 in Chemical Trust through Respondent. This figure represented two checks, each written to Chemical Trust by Skipper, in the amount of $8,910.00 each. In return Chemical Trust issued two Guaranteed Contracts in the amount of $10,158.00 each for a total of $20,316.00. The difference in amount of the two contracts ($20,316.00) and the amount of Skipper's checks ($17,820.00) was $2,496.00, which was supposed to reimburse Skipper for the surrender fees on her annuities. However, the surrender fees were $2,836.74, which resulted in Skipper not being reimbursed for surrender fees in the amount of $340.74. Respondent supplied Skipper with documents explaining the Chemical Trust investments. Respondent had Skipper sign a compliance verification stating that Respondent had fully explained and delivered documentation concerning the Guaranteed Contracts. The Cover Page of the Guaranteed Contract marketing material had "Chemical Trust" in bold print. At the bottom of the same page, the language "A Guaranteed Contract" appeared along with Respondent's name, address, and telephone number. The second page was entitled "Explanation of the Trust." The third page was titled "CHEMICAL TRUST" and consisted of information concerning "QUALIFICATIONS," "FINANCIAL STRENGTH," and "BOND PROVIDER." This page contains certain terms such as: (a) "After funds have cleared, you will receive your Contract and Surety Bond"; (b) "With over $725 million in assets to protect clients, Chemical Trust is dedicated to provide you the safety, liquidity, and protection you expect in today's uncertain environment"; (c) "U.S. Guarantee Corporation's financial statement is in excess of 2.4 billion dollars"; and "Please note: Due to confidentially U.S. Guarantee Corporation and Fidelity National will be unable to provide any information to you without the consent of the Trust. ***If you wish to contact either of these it must be coordinated by Chemical Trust." (Emphasis furnished) After her funds cleared, Skipper was provided a "Certificate of Grantor" for each investment. The first page had a bold CHEMICAL TRUST" logo and was identified as a "Certificate of Grantor." Among the terms were: (a) "SIMPLE INTEREST AT THE FIXED RATE OF 10 PERCENT PER ANNUM"; and (b) THIS PRINCIPAL AMOUNT IS SECURED BY A SURETY BOND ISSUED BY U.S. GUARANTEE CORPORATION." The guarantee of ten percent per annum interest was higher than the amount Skipper was receiving on the annuities that she had liquidated. The second page had the U.S. Guarantee Corporation logo at the top and was titled "Payment Surety Bond" with Chemical Trust as Principal, U.S. Guarantee Corporation, as Surety, and Imogene R. Skipper, as Trustee. Skipper identified the guarantee of ten percent interest and her full trust in Respondent as the factors that influenced her decision to make the Chemical Trust investments. Skipper lost her entire investment with Chemical Trust. Edward Dandignac, age 70, of Inverness, Florida, is a retired Boar's Head provision carrier. Dorothy Dandignac is the spouse of Edward Dandignac. Dorothy Dandignac, age 67, of Inverness, Florida, is a retired housewife. The Dandignacs first had contact with Respondent when he came to their home to set up a revocable living trust in April 1998. Several months after setting up the irrevocable living trust, Edward Dandignac told Respondent that he was having problems with his Oppenheimer funds, Fidelity funds, and other funds. Respondent advised Edward Dandignac that he would probably do better with an investment in some annuity. Subsequently, Respondent sold Edward Dandignac an annuity with Bradford Life and an annuity with United Life. Later, Respondent approached Edward Dandignac concerning Chemical Trust and reviewed the Chemical Trust documents with Edward Dandignac and explained to him that he could make a better return, up to ten percent. Respondent also advised Edward Dandignac that Chemical Trust would cover the surrender charges. Respondent went through the Guaranteed Contract marketing materials with Edward Dandignac. As to the integrity of Chemical Trust and U.S. Guarantee Corporation, Respondent advised Edward Dandignac the companies were "backed" and "protected." Based on Respondent's representations and the Guaranteed Contract marketing materials, Edward Dandignac determined that an investment with Chemical Trust would be secured and guaranteed. Subsequently, Edward Dandignac decided to invest part of his and his wife's life savings in Chemical Trust through Respondent. Edward Dandignac liquidated one of his annuities and had the funds transferred to Chemical Trust. Respondent advised Edward Dandignac that he had personally invested in Chemical Trust. Because Respondent had worked with the Dandignacs in getting them the annuities, which were making better money than their stock, and the fact that Respondent had also invested in Chemical Trust, the Dandignacs trusted Respondent in regard to their investment in Chemical Trust. One of the business cards given to the Dandignacs by Respondent listed "Insurance," "Estate Plans," and "Investments" as the areas in which he was involved. Edward Dandignac identified the Guaranteed Contract marketing material as being similar to the documents given to him by Respondent. This material was the same as the Guaranteed Contract marketing material provided to Skipper by Respondent. The Dandignacs expected a return on their investment with Chemical Trust but instead lost $25,444.89. Theodore Dostal, age 74, of Port Richey, Florida, first had contact with Respondent in October 1997, when Respondent delivered a revocable living trust to him through Senior Estates Services. Shortly thereafter, Respondent and Dostal discussed other investments. Between October 28, 1997, and July 27, 1998, Dostal transferred varying amounts from his revocable living trust to purchase three different annuities from Respondent with Bradford Life. Subsequently, Respondent furnished Dostal the Guaranteed Contract marketing materials identical to those provided to Skipper by Respondent. Based on the Guaranteed Contract marketing materials and Dostal discussions with, and his trust in Respondent, Dostal invested in Chemical Trust. Dostal's investment in Chemical Trust involved the purchase of: a Certificate of Grantor dated September 24, 1999, in the amount of $17,327.00; (2) a Certificate of Grantor dated September 28, 1999, in the amount $92,010.00; (3) a Certificate of Grantor dated October 11, 1999, in the amount of $10,000.00 and; (4) a Certificate of Grantor dated November 10, 1999, in the amount of $37,120.00. Each Certificate of Grantor was issued by Chemical Trust and was backed by a Payment Surety Bond backed by U.S. Guarantee Corporation Other than the terms specific to Dostal, the Certificate of Grantor and the Payment Surety Bond referenced above are the same as those issued to Skipper. Of the monies he invested with Chemical Trust, Dostal lost $56,000.00. Respondent told Dostal that he had personally invested in Chemical Trust Alice Lowe, an elderly lady, is a retired office manager. Lowe currently lives in Orlando, Florida. Lowe purchased an annuity product from Respondent in April 1998. Subsequently, Lowe liquidated her annuity and at the suggestion of Respondent invested $39,914.95 in the Chemical Trust investments, which she lost plus the surrender charges in the amount of $4,350.73 for a total loss of $44,229.85. Lowe could not recall receiving the Guaranteed Contract marketing materials. However, she did recognize her signature on the verification form which confirms that she received the Guaranteed Contract marketing materials. As such, the documents she received would have contained the same terms as the documents received by Skipper. The ten percent interest per annum was a factor in Lowe's decision to invest in Chemical Trust investment along with her confidence in Respondent. Robert Marsh, an elderly man, is a retired mechanic, and is married to Julia Marsh. Currently, the Marshes live in Bradenton, Florida. The Marshes became acquainted with Respondent about May 2, 1998, when Respondent delivered a revocable living trust to them through Remington Estate Services. After this initial contact, the Marshes' interaction with Respondent consisted of Respondent's stopping by a few times, talking to Respondent on the telephone, and discussing investments with Respondent. During all visits with Respondent, both Robert Marsh and Julia Marsh were present. Likewise, the Marshes discussed all financial matters jointly before making a final decision concerning financial matters. The Marshes had an existing annuity that was earning interest at the rate of 2.37 or 3.00 percent, which they were not pleased with. Subsequently, the Marshes transferred some of the money from the existing annuity to purchase an annuity with Respondent. Afterwards, Respondent visited with the Marshes every two to three months. During this time, Respondent discussed Chemical Trust investments with the Marshes and advised them that Chemical Trust was a "good company" that the company "had been around a long time" and "the investments" were a "good deal." The Marshes transferred, through Respondent, their funds from two annuities and an IRA to Chemical Trust. The Marshes invested over $23,000.00 in Chemical Trust investments. Originally the Marshes lost all of their investment. However, they recouped all but $2,300.00 through the efforts of the U.S. Government. The $2,300.00 was surrender charges for early withdrawal of their annuities. Based on Respondent's representations, the Marshes expected to be reimbursed for surrender charges, receive ten percent interest per annum, the principal amount to be secured by a surety bond, and to receive a $700.00 bonus. The Marshes were provided Chemical Trust's Guaranteed Contract marketing materials from Respondent, which was identical (contained the same terms) to the Guaranteed Contract marketing material provided to Skipper. Mildred Grossman, age 79, of Debary, Florida, is a retired secretary. Raymond Grossman, age 80, also of Debary, Florida, is the spouse of Mildred Grossman. Raymond Grossman is retired Methodist minister. The Grossmans became acquainted with Respondent when he came to their home to deliver a revocable living trust as a representative of Remington Estate Services, Inc. After his initial contact with the Grossmans, Respondent visited them every one to three months to check on their needs. Because the Grossmans were seriously considering the possibility that one of them would be going into a nursing home or some type of assisted living facility, Respondent encouraged the Grossmans to purchase annuities. Consequently, the Grossmans cashed in their life insurance policies and their certificates of deposit and purchased annuities from Respondent through American Investors. After they purchased the annuities, the Grossmans were still concerned as to whether they could afford potential retirement home expenses. The Grossmans discussed their concerns with Respondent, and he advised them that they could get a better return on their investment if they switched to Chemical Trust investment. Respondent represented to the Grossmans that their principal investment was protected by a surety payment bond issued by U.S. Guarantee Corporation, that they would receive a guaranteed ten percent interest per annum return for seven years, and that they would be reimbursed for surrender charges incurred when they transferred their funds to Chemical Trust. The Grossmans lost approximately $36,900.00 from their investment with Chemical Trust through Respondent. This amount constituted their life savings, leaving them about $2,000.00 in the bank. Respondent strongly suggested that the Grossmans invest in Chemical Trust. In fact, one of strongest motivating factors for the Grossmans' decision to invest in Chemical Trust was their faith and trust in Respondent. The Guaranteed Contract marketing materials provided to the Grossmans were identical (containing the same terms) to those provided to Skipper. As a result of the lost investments, the Grossmans: (1) were forced to move from a condo to mobile home; (2) cannot provide financial help to their children; and (3) can no longer afford an assisted living home. The Chemical Trust enterprise was a deliberate and largely transparent scheme to swindle Florida residents. Respondent either knew or should have known, had he made good faith attempt to verify the representations contained in the Guaranteed Contract marketing materials and the information furnished to him by other agents, employees, officers or staff of Chemical Trust, that Chemical Trust investments were worthless. Respondent failed to make a due diligence inquiry in this regard. Respondent employed either his past or then current insurance/client relationship with Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac to gain their trust and then abused that trust by his failure to properly research and verify the claims made by Chemical Trust, a fellow insurance agent, others associated with Chemical Trust investments, and those otherwise contained in the Guaranteed Contract marketing materials. Respondent was the source of injury to Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac by inappropriately attempting to act in multiple roles as their insurance agent and as an agent for Chemical Trust. As a result of Respondent's actions, Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac were sold an investment that was nothing more than a scheme to swindle those who invested. The aggregate loss to the Chemical Trust investment scheme by Skipper, the Marshes, the Grossmans, Lowe, the Dandignacs, and Dostal was approximately $200,000. Under the circumstances of this case, the participation of Respondent in the sale of Chemical Trust investments to Skipper, the Dandignacs, Dostal, Lowe, the Marshes, and the Grossmans was "in the conduct of business under the [insurance license]" and "in the course of dealing under the [insurance] license."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and after careful consideration of both aggravating and mitigating factors set forth in Rule 4-231.160(1), Florida Administrative Code, it is RECOMMENDED that the Department enter a final order finding Respondent, Donald Dean Hooley, II, guilty of violating Subsections 626.611(4), (7), (8), (9), and 626.621(2), Florida Statutes, and revoking his license and eligibility for licensure as a life and life health insurance agent in the State of Florida. DONE AND ENTERED this 28th of January, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 2002. COPIES FURNISHED: Charles D. Hinton, Esquire Deane & Hinton, P.A. Post Office Box 7473 St. Petersburg, Florida 33739 Anthony B. Miller, Esquire Department of Insurance Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
The Issue The central issue is whether Bennett committed the violations as alleged and, if so, what discipline is appropriate. More specifically, did he violate Section 475.25(1)(b), (d) and (k), Florida Statutes, by committing fraud, culpable negligence or the like, by failing to account for and deliver trust funds, and by failing to properly maintain trust funds?
Findings Of Fact Respondent, Fred M. Bennett was, at all times relevant, licensed as a real estate broker in the State of Florida, having been issued license number 0161968 in accordance with Chapter 475, Florida Statutes. Harold E. McNally is a self-employed businessman from Chillicothe, Ohio. He met Fred Bennett in 1976 or 1977 when he bought some property in Orlando. Thereafter, the relationship continued with McNally buying and selling property as an investment, and Bennett acting as agent or purchaser. Four of McNally's properties in Orlando, Florida were held as rentals: 3939 Spoonbill Avenue 4525 Salvia Drive 7806 Toledo Street 1308 Forester Avenue Bennett collected the rents and sent them to McNally, after deducting his management fee. There was no written management agreement, but rather McNally leased the properties back to Bennett. Later, those leases expired and since the market was not good for sales, Bennett and McNally continued their relationships with Bennett sending the rents and deducting his fees. The rents were $450.00 and $485.00 per month and his fee was $93.00 per month in 1986. The rents remained the same in 1987, but the management fee was raised to $103.00 per month. Beginning in May 1986, the rents were not sent to McNally on a regular basis. McNally attempted to contact Bennett but was unsuccessful. By July 1987, Bennett owed McNally $11,169.00 for back rents and a $400.00 deposit on one of the houses. After McNally retained counsel and sent a letter informing Bennett that he was terminating the management arrangement, Bennett eventually returned the keys and (with the exception of one which he had applied to rent) transferred the tenants' deposits to McNally's new agent. Bennett attempted to account for the back rents with promissory notes. McNally never acknowledged the notes and filed them. The $11,169.00 was never paid. James D. Stayton is another real estate investor who dealt with Bennett. He had two properties which Bennett handled for him. Between September 20, 1984, when he acquired the property, and October 1986, when he removed the property from Bennett's control, Stayton was owed $7,447.44 in back rents. Again, Bennett signed a promissory note in this amount, but never paid on the note. Bennett admits that he owes the funds but denies fraud or dishonesty and claims that his failure to pay the rents was the result of a business deal that went bad. Bennett Does not claim that the rents were not collected. One tenant, Patricia Sulter established that she lived in the 4525 Salvia Drive unit and paid her deposit and rents regularly to Bennett during the months when Bennett failed to forward the funds as agreed, to Harold E. McNally.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered finding Fred M. Bennett guilty of violations of Section 475.25(1)(b) and (d), Florida Statutes, imposing a $4,000.00 fine and suspending his license for four years. DONE and ENTERED this 31st day of March, 1989, in Tallahassee, Leon County, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4903 The following constitute specific rulings on each of the findings of fact proposed by the Petitioner: Adopted in paragraph :1. Adopted in paragraph #3. Rejected as unsupported by the evidence. & 5. Adopted in paragraph #5. Adopted in paragraph 6, except for the finding that the funds were converted to Bennett's own use, which finding was not proven. Adopted in paragraph #6. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation - Legal Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Fred M. Bennett Post Office Box 3102 Orlando, Florida 32802 Darlene Keller, Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32802
Findings Of Fact The Department rules on the Proposed Findings of Facts and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Findings numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 27, 28, and 29 are accepted to the extent that they are not inconsistent with the Findings of Fact rendered by the Hearing Officer. Applicant's Proposed Finding number 22 is accepted to the extent that factual matters are discussed. However, to the extent that it suggests that "public convenience and advantage" will be promoted by establishment of the trust company, the Department rejects this conclusionary statement as inconsistent with the Department's conclusion as to this criterion based on the reasons as discussed in paragraph three (3) contained in the Conclusions of Law of the Final Order. Applicant's Proposed Finding number 25 concerning the telephone survey has been dealt with in the Hearing Officer's Finding number 13, as adopted by the Department. Applicant's Proposed Finding number 26 concerns several counter- arguments addressing contentions proposed by the Protestants. As to (1) "Concentration", (2) "Dual Banking", and (3) "Siphoning of Capital". To the extent that no significant findings of fact, if any, were premised on these contentions, there is no necessity to respond. A portion of the Hearing Officer's Finding of Fact number 10, was excepted to, concerning the "concentration" argument, and will be treated below in paragraph 9. Number 4 concerning injury to existing institutions has been dealt with in the Final Order in paragraph 4 of the Conclusions of Law, as to the "reasonable promise". The Applicant's Conclusions of Law numbers 1, 4, 5, 6, 7 are accepted. Numbers 2, 3, and 8 are rejected as contrary to the Conclusions of the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS Protestant's Proposed Findings numbers 1, 2, 3, 4, 5, 13, 18, 19, 20, 21, 23, 29, 30, 34, and 35 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings or with the Final Order. Protestant's Proposed Findings numbers 6, 7, 8, 9, 10, 12, 14, 15, 16, 17, 22, 24, 25, 26, 27, 28, 31, 32, 33, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, and 47 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings or with this Final Order, or are otherwise irrelevant or immaterial. APPLICANT'S EXCEPTIONS The Applicant's Exceptions numbers 1, 2, 3, 4, 5, 6, and 10 concern Proposed Findings that were not specifically referenced in the Hearing Officer's Report. However, they are generally consistent with the Hearing Officer's Findings and have been accepted by the Department to the extent that they are consistent with the Final Order. Exception 7, concerning Proposed Finding number 18, has been discussed above in paragraph 1. Exception 8, concerning Proposed Finding number 22, has been discussed above in paragraph 2. Exception number 9, concerning objection to portions of Finding of Fact number 10, is rejected. The first sentence of the Finding may speak in terms of "national trust business", but is viewed in terms of trust business throughout the nation. In no wise does it imply that there is a national market for personal trust business. The language should be viewed in the context of the overall finding. Exception number 10 is duly noted and reflected in the Final Order. Exception number 11 has been addressed in the Final Order in paragraph 4 of the Conclusions of Law as to "resonable promise." CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original of the foregoing was filed with the Clerk of the Department of Banking and Finance and that a true and correct copy of the foregoing was sent by Certified U.S. Mail, Return Receipt Requested, to: Thomas J. Cardwell, Esquire, Post Office Box 231, Orlando, Florida 32802; Robert A. White, Esquire, Aubrey Kendall, Esquire, and Paul Brenner, Esquire of the firm Mershon, Sawyer, Johnston, Dunwoody and Cole, 1600 Southeast First National Bank Building, Miami, Florida 33131; Howard A. Setlin, Esquire, 1111 Lincoln Road Mall, Suite 600, Miami Beach, Florida 33139; Bruce Culpepper, Esquire, 350 East College Avenue, Tallahassee, Florida 32301; Robert Asti, Esquire, 2400 First Federal Building, Miami, Florida 33131; Richard R. Paige, Esquire, Alfred I. DuPont Building, Miami, Florida 33131; Charles Cane, Esquire, 801 Hallandale Beach Boulevard, Hallandale, Florida 33009; and G. Kenneth Kemper, Esquire, 9999 N.E. 2nd Avenue, Suite 200, Miami Shores, Florida 33138, on this 24 day of January, 1980. FRANKLYN J. WOLLETT Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301 (904) 488-9886
The Issue Whether Respondents assisted their client in receiving unclaimed property to which the client was not entitled, and, if so, what discipline should be imposed against Respondents’ locator registration with the Florida Department of Financial Services. Whether Respondents received and refused to return unclaimed property to which they were not entitled, and ,if so, what discipline should be imposed against Respondents’ locator registration with the Florida Department of Financial Services.
Findings Of Fact On November 26, 2014, United States Magistrate Judge Thomas B. McCoun, III, Middle District of Florida, in response to a Motion to Stay filed in a related case by Mortellaro & Sinadinos, PLLC, entered an Order denying the motion. Magistrate McCoun’s Order provides an excellent overview of the facts underlying the instant dispute. The “background facts” set forth below are, in part, taken from Magistrate McCoun’s Order. Background Facts During all times relevant hereto, the Department was responsible for examining and approving all claims for unclaimed property under chapter 717, Florida Laws (2013). Section 717.1400, Florida Statutes, provides that State of Florida licensed private investigators, certified public accountants, and attorneys must register with the Department if they desire to file claims on behalf of claimants seeking unclaimed property from the Department. Upon successfully completing the registration process, a claimant’s representative is assigned a locator identification number. During times relevant hereto, Michelangelo Mortellaro and Gina M. Sinadinos were members in good standing of The Florida Bar. Mr. Mortellaro and Ms. Sinadinos are shareholders in the law firm of Mortellaro & Sinadinos, PLLC. Attorneys Mortellaro and Sinadinos registered with the Department as representatives authorized to assist claimants and were jointly issued locator identification number 103423042. In the instant dispute, Respondents were retained by the Estate of Darlene Swaim to file with the Department a claim for unclaimed property. Diann Capwell and Darlene Swaim had a joint checking account at Wachovia Bank, N.A. (Wachovia). Ms. Capwell, who received social security benefits, passed away on April 23, 1989. From April 1989 through March 2010, the Social Security Administration (SSA) deposited approximately $247,619.00 in benefits for Ms. Capwell into the joint checking account that she held with Ms. Swaim. On March 17, 2004, Ms. Swaim passed away. According to the Department, on April 30, 2010, Wachovia reported to the Department that it held $182,248.61 in unclaimed property in the account titled in the names of Ms. Capwell and Ms. Swaim. Wachovia remitted the funds to the Department, which, in turn, held the $182,248.61 in an unclaimed property account. On November 2, 2012, a Petition for Administration of the Estate of Ms. Swaim was filed in the probate division of the Circuit Court for Broward County, Florida. Mack A. Swaim served as the personal representative of the estate. On February 14, 2013, Attorneys Mortellaro and Sinadinos, pursuant to their registered locator status, filed a claim with the Department on behalf of the Estate of Darlene Swaim for the $182,284.61 (Swaim claim). Upon approval of the claim, Attorneys Mortellaro and Sinadinos would receive 50 percent of the funds as its locator fee. On July 24, 2013, the Department approved the Swaim claim and issued a paper warrant payable to the Estate of Darlene Swaim, c/o Mack A. Swaim, in the amount of $91,142.31 (purported estate funds). The paper warrant for the purported estate funds was delivered to the Mortellaro & Sinadinos law firm. On July 26, 2013, the Department disbursed, via electronic funds transfer, the remaining $91,142.30 to the Mortellaro & Sinadinos law firm as payment of its locator fee. The Social Security Administration On August 1, 2013, SSA notified the Department that the purported estate funds should not have been deposited into the Wachovia joint checking account following Ms. Capwell’s death. SSA did not file a formal claim with the Department until August 14, 2013. The Purported Estate Funds On August 2, 2013, the following email exchange occurred between the Department and Respondents. From the Department (8/2/13 at 2:26 p.m.): I received notification from the Soc. Sec. Admin. that there was a $200,000+ overpayment into the account that was reported to this office. As such, the Soc. Sec. Admin. is entitled to these funds, not the estate or your office. I am currently in the process of cancelling the warrant that was issued to the PR and I advise you to return your fee to this office within 15 days. From Respondent (8/2/13 at 3:20 p.m.): Please be advised that the checks, including the estate check, have been negotiated. With that said, we have not disbursed any of the funds; nor will we, until this matter is resolved. Please be further advised that since the estate is still open, the probate court has exclusive jurisdiction over the estate assets. This position is clearly in line with the unclaimed property statute 717.1242, F.S., - Restatement of jurisdiction of the circuit court sitting in probate and the department. Since this law firm has a fiduciary responsibility to the Personal Representative and the beneficiaries of the estate, it will not release estate funds without the probate court entering an order directing same. On or about August 2, 2013, the paper treasury warrant representing payment to the estate was initially deposited into a checking account opened for the Estate of Darlene Swaim at SunTrust Bank. SunTrust is the same bank where Respondents maintain multiple accounts, including the firm’s IOTA trust account. At the time of presentation of the paper warrant to the bank, SunTrust provisionally made the funds available to the estate for withdrawal. Respondents, after being contacted by the Department on August 2, 2013, regarding SSA’s claim, immediately transferred the estate funds into the firms’ IOTA trust account for safekeeping. The Department, after receiving Respondents’ email reply of August 2, 2013, immediately contacted SunTrust and informed the bank that the paper warrant presented to the bank for payment to the Estate of Darlene Swaim was void. SunTrust reversed the provisional credit to the estate checking account which resulted in the estate account being overdrawn by approximately $91,000. Because SunTrust had only issued a provisional credit for the deposit of the estate funds, this meant that SunTrust needed to reconcile the estate checking account. Accordingly, SunTrust, soon after Respondents transferred the estate funds into their trust account, debited Respondents’ trust account in the amount of $91,142.31. The evidence shows that the estate funds were provisionally made available to both the Estate of Darlene Swaim and Respondents. The evidence also conclusively establishes that monies from the State treasury were never released by the Department to SunTrust, the Estate of Darlene Swaim, or Respondents. On or about August 27, 2013, Respondents filed with the probate division of the Circuit Court for Broward County, Florida, an Emergency Motion to Return Estate Funds. Respondents’ emergency motion argued, in part, that the Department lost jurisdiction of the monies at issue once it approved the estate’s claim, and that the circuit court, sitting in probate, possessed exclusive jurisdiction to resolve any dispute regarding the estate funds. On September 6, 2013, the circuit court held a hearing on Respondents’ emergency motion. The Department did not attend the hearing, and claims that it never received notice of the same. Respondents assert that the Department received proper notice of the hearing on the emergency motion but, for whatever reason, elected not to attend. Nevertheless, the circuit court, after hearing argument from Respondents on the emergency motion, verbally granted the motion and directed Respondents to provide the court with a written order outlining the court’s ruling. By correspondence dated September 9, 2013, the Department advised Respondents that they should “immediately return the $91,142.31 (locator fee) to which the firm is not entitled [and] [i]f [they] fail to return these funds within ten days, the Bureau will pursue appropriate remedies for conversion of the funds.”1/ The letter makes no mention of the emergency motion that was then pending before the circuit court. Furthermore, the September 9, 2013, letter to Respondents does not contain a Notice of Rights statement or any other language which provided Respondents with a clear point of entry to challenge the Department’s contention that Respondents possessed funds (i.e., the locator fee) to which they were not entitled. On September 23, 2013, the Department responded in writing to the emergency motion and argued to the circuit court that the Department has exclusive jurisdiction to determine the merits of claims for unclaimed property held in the State treasury. The circuit court was not persuaded by the Department’s assertions, and on October 30, 2013, entered a written Order granting Respondents’ motion and directed therein that the Department return the $91,142.31 to the Estate of Darlene Swaim on or before November 19, 2013. The Department neither appealed nor complied with the Order of the circuit court, but instead, on November 15, 2013, issued a Notice of Intent to Approve Claim (Notice of Intent) in favor of the SSA in the amount of $182,284.61. A Notice of Rights statement, for the first time, was included with the Notice of Intent. Despite the fact that Respondents were now provided with a point of entry to challenge the Department’s actions, they elected not to challenge the intended action, in part, because they had an Order from the circuit court directing the Department to return the purported estate funds. On January 9, 2014, the Department entered a Final Order Approving Claim (Final Order) in favor of the SSA in the amount of $182,284.61. In addition to the Final Order, the Department also issued a separate Notice of Intent to Offset and Notice of Rights, wherein the Department advised that it was seeking to collect the $91,142.30 locator fee that Respondents still possessed with respect to the Estate of Darlene Swaim from other claims where Respondents were owed locator fees. On February 7, 2014, Respondents appealed the Final Order approving SSA’s claim to the First District Court of Appeal, State of Florida (DCA). Among other things, Respondents requested the DCA “to reverse the final order, and order the Department to return the funds it ha[d] taken from the estate in accordance with its July 24, 201[3], approval of the estate’s claim as well as the probate court’s order directing the return of the [estate] funds.” On March 14, 2014, while Respondents’ appeal to the DCA was pending, the Federal Bureau of Investigation (FBI) seized the $91,142.30 locator fee from Respondents’ bank account. On August 19, 2014, Respondents filed a Verified Claim with the United States District Court seeking return of the seized locator fee. The Department was not a party to the seizure action, and the Estate of Darlene Swaim elected not to participate in the same. After some additional legal wrangling, and recognizing that recovery of its locator fee was contingent upon a successful recovery of the unclaimed monies by the estate (with the claim of the estate having been abandoned by Mr. Swaim), Respondents, on January 20, 2015, withdrew their Verified Claim with respect to the seized locator funds. Respondents “Received” the Locator Fee As noted above, Respondents, in their August 2, 2013, email to the Department, advised that “we have not disbursed any of the funds; nor will we, until this matter is resolved.” Respondents’ representation to the Department that none of the funds would be disbursed reasonably implies that all funds, including the locator fee, would be deposited in Respondents’ trust account. Rule 5-1.1(f), of The Florida Bar Rules Regulating Trust Accounts, provides as follows: Disputed Ownership of Trust Funds. When in the course of representation a lawyer is in possession of property in which 2 or more persons (1 of whom may be the lawyer) claim interests, the property shall be treated by the lawyer as trust property, but the portion belonging to the lawyer or law firm shall be withdrawn within a reasonable time after it becomes due unless the right of the lawyer or law firm to receive it is disputed, in which event the portion in dispute shall be kept separate by the lawyer until the dispute is resolved. The lawyer shall promptly distribute all portions of the property as to which the interests are not in dispute. Rule 5-1.1(f) makes clear that when a lawyer is in possession of disputed property and the lawyer claims an interest in the same, the property shall be treated as trust property and, therefore, kept separate until such time as the dispute is resolved. If Respondents had maintained the locator fee in the firms’ trust account during the pendency of the dispute, Respondents would be in a better position to assert that the firm never actually received the locator fee because of the special character of property held in trust. In her Verified Claim filed with respect to the seized locator fee, Respondent Sinadinos attests to the following: On July 26, 2014, the Department issued a warrant in favor of [Respondents] in the amount of $91,142.30, effectuated by electronic funds transfer, to a bank account of Claimant at SunTrust Bank. Shortly thereafter, [Respondents] transferred the $91,142.31 into [Respondents’] savings account at SunTrust Bank. Subsequently, for accounting purposes, [Respondents] opened a money market account at SunTrust Bank, account number xxx0890, wherein it deposited the $91,142.31 warrant in favor of [Respondents] issued by the Department in connection with claim no. C5047499. The $91,142.30 was seized pursuant to a seizure warrant . . . from SunTrust account number xxx0890. While the Verified Claim references two different amounts, it is clear that the locator fees are the same monies that were seized by the FBI from Respondents’ money market account.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a final order finding that Michelangelo Mortellaro and Gina M. Sinadinos violated sections 717.1322(1)(a) and 717.1341(1)(a), Florida Statutes. It is further recommended that the Department suspend locator license number 103423042 for a period of one month.6/ DONE AND ENTERED this 21st day of November, 2016, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of November, 2016.
Findings Of Fact The Respondent was, at the time of the hearing and at all times material to this proceeding, registered with the Real Estate Commission as a real estate broker. During the period of the transactions involved in this proceeding the Respondent was operating and registered as an active broker and President of Fortiner Realty Company, which was a corporate real estate broker registered with the Commission. In Count One of the Complaint, the Respondent is charged with failing to maintain a security deposit in his trust account in connection with a real estate transaction involving Phillip E. Andrews and Betsy K. Andrews, as sellers, and Joseph T. Lyons and Marion C. Lyons, as purchasers. In Count Two of the Complaint the Respondent is charged with converting the deposit in the Andrews-Lyons transaction to his own use. During March, 1976, Claude I. Allen was employed at the Respondent's real estate office as a salesman. Allen negotiated a transaction between the Andrewses and the Lyonses. On March 17, 1976, the Lyonses made an offer to purchase the Andrews property and submitted a $1,000.00 deposit to Allen. On March 18, 1976 the $1,000.00 was deposited in the Respondent's trust account at the Palmer Bank of Ft. Myers. On March 22, 1976 the Andrewses accepted the offer and the Lyonses provided an additional $2,000.00 deposit to Allen. On that same date the $2,000.00 was deposited in the Respondent's trust account. The transaction closed on May 11, 1976. It was a smooth transaction. On May 110, 1976 $3,000.00 was withdrawn from the Respondent's trust account as a part of the transaction. During the entire time from March 17 through May 11, 1976, the monies deposited by the Lyonses remained on deposit in the Respondent's trust account. There is no evidence to support a finding either that the Respondent failed to maintain the $4,000.00 in the trust account, or that he converted any part of the deposit for his own use. In Count Three of the Complaint the Respondent is charged with failing to maintain a deposit in his trust account in connection with real estate transactions between Mac-Nel Ltd. and M & N Ltd. as sellers, and Stanley G. Courtney, as purchaser. In Count Four the Respondent is charged with converting all or part of the security deposit to his own use. The Respondent was one of several partners in Mac-Nel Ltd. and M & N Ltd. On august 28, 1976, Stanley G. Courtney entered into separate contracts to purchase all of the property owned by the two partnerships. Through six separate checks Courtney made a deposit of $13,500.00 to the Respondent to be placed in the Respondent's trust account. The evidence is unclear as to when or in what manner the deposit was placed in the trust account, or whether all of it was in fact placed in the trust account. The bank records reflect that $17,600.00 was placed in the Respondent's trust account on August 30, 1976, and it is possible that the Courtney checks formed a part of that deposit. During August and September, 1976, the Respondent's financial condition became grave. He had apparently defaulter on several notes to the Palmer Bank in which he had his trust account. The bank sued on the notes, and put a hold on the Respondent's accounts. In order to allow the Courtney transactions to close, the Respondent was able to withdraw allow a portion of the deposits made by Courtney form his trust account. He transferred his interest in the property to a Mr. Blankenship, so that Mr. Blankenship could close the transaction unfettered by the Respondent's financial plight. After he withdrew the money from his trust account, and forwarded it to Blankenship, the Respondent took no further part in the Courtney transaction either as a party to the transaction or as a broker. The closing of the transaction was delayed due in part to the Respondent's bankruptcy, however, it did close on October 29, 1976. Courtney was credited with the full amount that he had deposited with the Respondent. It is clear that the Respondent did not maintain all of the monies deposited by Courtney in the trust account. His reason for failing to do that was to permit the transaction to close even though the Respondent had gone bankrupt. The evidence would not support a finding that the Respondent converted any portion of the Courtney deposit to his own use. In Count Five of the Complaint the Respondent is charged with failing to maintain a deposit in his trust account in connection with a transaction involving Charles and Margaret Lathrop as sellers, and William and Jeannette Whitacre as purchasers. In Count Six the Respondent is charged with converting all or part of the deposit in that transaction to his own use. On or about June 29, 1976, the Whitacres entered into a contract to purchase property from the Lathrops. The transaction was negotiated by Mary E. Bishop, a saleswoman who was employed by the Respondent in his real estate company. The Whitacres delivered a $6,500.00 check to Mrs. Bishop as a deposit on the transaction. The bank records received into evidence do not clearly reveal when or in what manner the Whitacre's deposit was placed in the Respondent's trust account. The bank statements do show a $7,000.00 deposit made into the Respondent's trust account at the Palmer Bank of Ft. Myers on July 1, 1976, and it is possible that the Whitacre's check was a part of that deposit. Bank records from other trust accounts maintained by the Respondent such as that at the Cape Coral Bank do not reveal any deposit that could have been the Whitacre's check. The Lathrop/Whitacre transaction closed successfully on August 18, 1976, and the Whitacres were credited with the $6,500.00 that they had submitted to the Respondent's firm. It is apparent from the bank records that $6,500.00 was not on deposit at all times in the Respondent's trust account between July 1 and August 18, 1976. During most of that period the Respondent's balance in his trust account was less than $6,500.00. No evidence was offered from which it could be concluded that the Respondent made any specific use of the money deposited by the Whitacres. It is apparent, however, that the money was not used as intended, i.e., it was not maintained in the Respondent's trust account. In Count Seven of the Complaint the Respondent is charged with fraud, misrepresentation, and dishonest dealing in connection with his handling of the business of a partnership known as 27 Oaks Ltd. The Respondent was the general partner in 27 Oaks Ltd. He was responsible for carrying on the business of the partnership for the benefit of eight limited partners. The partnership owned property which it was seeking to develop and sell in small parcels. On November 19, 1975, a mortgage payment in the amount of $21,300.00 was due from the partnership. In accordance with the partnership agreement, the Respondent solicited funds from the limited partners so that the mortgage payment could be made by letter dated October 15, 1975. The evidence does not reveal whether the Respondent received sufficient contributions from the limited partners to pay the mortgage payment. The evidence reveals only that he received $9,997.00 from the limited partners in response to his solicitation. The Respondent did not make the mortgage payment when it was due, but instead received a ninety-day extension. The new date was February 19. The principal payment on the mortgage was not made on that date, but instead, the Respondent made payments on the interest due. Ultimately the payment was made in a manner satisfactory to the mortgagee by early June, 1976. The Real Estate Commission has charged that the Respondent received funds sufficient to make the mortgage payment in November, 1975, but that he applied the money to some other purpose. This contention is not supported by the evidence. The evidence does not reveal that the Respondent received sufficient money to make the mortgage payment. The bank records reveal that there was sufficient money in the 27 Oaks Ltd account to make the mortgage payment in November, and that the Respondent withdrew most of that money. The evidence does not establish that the Respondent improperly withdrew the money, or that the Respondent improperly withdrew the money, or that he put it to any but a valid partnership purpose. The Commission has also contended that the Respondent failed to maintain the monies he received from the limited partners in a trust account. Nothing in the partnership agreement requires that such monies be kept in a trust account, and the Respondent's failure to do so could not, therefore, constitute fraud or misrepresentation. Even if the contract were construed arguably to require that funds be placed in a trust account, certainly there are equally valid arguments that is does not. In Count Eight of the Complaint the Respondent is charged with fraud, misrepresentation, and dishonest dealing in connection with his handling of the affairs of a Florida limited partnership know as Randag Properties Ltd. During 1976 the Respondent was the sole general partner of Randag Properties Ltd. The partnership owned property which it was seeking to develop into apartments. The Respondent was responsible for carrying on the partnership business. The property consisted of more than 40 acres on a river and a navigable canal. Part of the property was a small appendage which contributed little to the development potential of the property. In order to raise money to prepare the property for development, the Respondent sold the appendage to an ajoining property owner. That transaction closed on or about May 28, 1976. The Respondent had contributed more than $30,000 of his own money to the partnership in order to prepare the property for development. These expenditures included attorneys fees that he had incurred; a boundary survey, a high tide location survey, and a topographical survey; fees to the Florida Secretary of State's office; real estate taxes; land clearing expenses; and various miscellaneous expenditures. The Respondent had also made an advance to one of the limited partners. The Respondent applied most of the proceeds from the sale of the appendage to compensate himself for the expenditures that he had incurred. The Respondent had a disagreement with one of the limited partners, Mr. Swartz, as to whether the proceeds of the sale should be applied to compensate the limited partners for their initial investment or the Respondent for his expenditures. The Respondent's applying the proceeds to compensate himself does not appear to be contrary to the partnership agreement and it does appear that he had validly incurred expenses on behalf of the partnership to which he was entitled to be compensated. The Respondent ultimately resigned as the general partner on October 12, 1976, in order to save the partnership from the consequences of his bankruptcy, and was replaced by Swartz. Early in October, 1976, the Respondent issued a promissory note to the partnership, but there was no showing that this promissory note was the consequence of any fraud, but rather that it was for the purpose of placing the partnership in a favorable position in relation to the Respondent's bankruptcy. The Respondent ended up losing money through his participation in the partnership while the limited partners ended by making a substantial profit. All of the limited partners were advised of the sale of the appendage either prior to the sale or shortly after. There is no requirement in the partnership agreement that they be advised in advance of the sale, or that they assent to it. The Respondent is charged in Count Nine of the Complaint with fraud, misrepresentation, and dishonest dealing in connection with a business transaction that he had with William K. Gamble and Dorothy V. Gamble. The allegations in essence are that the Respondent received loans from the Gambles, and that he pledged certain property as security for the loans. He was required under the terms of the promissory notes and the collateral assignment that accompanied them to provide other adequate security in the event that he sold any of the property that served as collateral for the loans. It is alleged that the Respondent sold the property, did not advise the Gambles, and did not substitute any other property as security for the promissory notes. The only testimony offered to establish that the property that served as collateral was sold was the testimony of Mrs. Dorothy V. Gamble. Mrs. Gamble had no direct knowledge that the property was in fact sold. It is apparent from the evidence that the Respondent has defaulted on the promissory notes. In Count Ten of the Complaint it is alleged that the Respondent failed to maintain a deposit in his trust account in connection with a real estate transaction involving Herbert J. Haase and Katherine M. Haase, as trustees, the sellers, and Loyal H. Tingley as purchaser. In Count Eleven it is alleged that the Respondent converted all or part of the deposit to his own use. On or about August 6, 1976, Tingley entered into a contract to purchase property from the Haases. Herbert Haase was a real estate salesman employed in the Respondent's real estate firm, and he held title to the subject property in trust. The Respondent was the actual owner. Tom Carpenter, another salesman employed in the Respondent's firm, was the sales man in the transaction. Tingley delivered a $5,000 check to Carpenter as a deposit on the transaction. Another real estate broker, a Mr. Himmelrick, had negotiated mortgage modifications in connection with the sale. He and the mortgage bank insisted that the deposit be placed in Himmelrick's trust account. Accordingly, the Respondent deposited the $5,000 check from Tingley into his trust account, and delivered a $5,000 check from his trust account to Himmelrick. Carpenter advised Tingley that Himmelrick and the bank insisted upon having the $5,000 deposited in Himmelrick's trust account prior to the time that the check was forwarded from the Respondent's trust account to Himmelrick. Tingley consented to that arrangement. While it is true that the Respondent did not keep the $5,000 deposit in his trust account, his failure to do so was with the consent of the purchaser, and resulted only in the deposit being placed in the trust account of a participating realtor. The evidence would not sustain a finding that the Respondent converted any part of the deposit to his own use. In Count Twelve of the Complaint it is alleged that the Respondent issued over 22 checks drawn on his trust account wherein said checks were not honored for payment for the reason of insufficient funds; that the Respondent placed funds in his trust account that did not come from valid trust account sources; and that the Respondent caused his account to have a negative closing balance on May 13, 1876. The evidence would not sustain any finding that the Respondent issued checks which were not honored for payment. It is apparent from the bank records that several checks issued by the Respondent drawn on his trust account were not covered by the balance in the trust account. Bank records indicated a "OC" next to such withdrawals on the ledger sheets. The bank witnesses testified, however, that frequently such entries are honored by the bank and are not returned due to the insufficient funds. The evidence would not sustain a finding that the Respondent placed money in his trust account that came from sources there were not proper for placing in a trust account. Nothing in the bank records offered into evidence demonstrates which deposits may not have been valid trust account deposits. The deposit slips merely show the payor of the checks. The bank records do reveal that the Respondent's trust account balance in the Palmer Bank of Ft. Myers on May 13, 1976 was a negative balance of $732.60. On September 29, 1978, the Florida Real Estate Commission entered its final order finding the Respondent guilty of a of a violation of the Real Estate License Law. The Respondent's registration as a real estate broker was suspended for a period of ninety days. The Real Estate Commission Case Number was Progress Docket Number 3130. All of the events involved in the instant proceeding occurred prior to the time that the final order was entered in Case Number 3130 and indeed prior to the time that the Complaint was issued in Case Number 3130. The Respondent has enjoyed a very good reputation in his community for fair dealing, truthfulness and competence. None of the acts which the Respondent committed that led to the instant proceedings show that the Respondent has engaged in a course of conduct or in practices which demonstrate that he is so incompetent, negligent, dishonest and untruthful that the money, property, transactions and rights of others may not safely be entrusted to him. The Administrative Complaint in Case Number 3130 before the Florida Real Estate Commission was issued on January 14, 1977. In included twenty-seven counts. All of the allegations related to the Respondent's dealings with various real estate salesman, and his alleged failure to share real estate commissions with the salesmen. In connection with the transactions involved, it was asserted in several counts that the Respondent failed to place deposits properly in his trust account. None of the charges in the first administrative complaint are grounded upon the facts alleged in the instant Administrative Complaint. The facts involved in the instant proceeding did, however, all occur at about the same time as the facts alleged in the first complaint, and all occurred prior to the date that the Administrative Complaint was filed in Case Number 3130. New facts came to the attention of the Commission due in part to comments made to one of the present real estate commissioners by a Ft. Myers resident. With diligent inquiry it is possible that the Commission could have discovered the facts which have resulted in the instant proceeding and included them as additional counts in the complaint in Case Number 3130. It has not, however, been shown that the Commission had reason to believe that it should make such diligent search and inquiry. B
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioner's 1978 cost report be modified consistent with the foregoing adjustments. DONE and ENTERED this 10th day of November, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1982.
