The Issue Whether the Petitioner is liable for sales tax, interest, and penalties as alleged by the Department of Revenue (Department).
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the following Findings of Fact are made: The Petitioner is a Florida corporation formed in October 2004. The principal office and mailing address of the Petitioner is 518 North Tampa Street, Suite 300, Tampa, Florida 33602. The directors of the corporation are Brenda Dohring and Robert Hicks (husband and wife), and Joshua Dohring (their son). Brenda Dohring and Robert Hicks are residents of Tampa, Florida, and registered voters in Hillsborough County. Brenda Dohring and Robert Hicks hold Florida driver's licenses. Joshua Dohring is a resident of the United States Virgin Islands, where he operates a charter boat business. On November 8, 2004, the Petitioner purchased, in St. Petersburg, Florida, a 36-foot catamaran sailboat (hull No. QPQ0000D089) for $113,000. On November 15, 2004, the Petitioner purchased, in St. Petersburg, Florida, an inflatable tender with outboard motor and accessories (hull No. XMO18119G405) for $4,865. The catamaran and tender were purchased for the use of Joshua Dohring in his charter boat business in the Virgin Islands. They were to replace his previous boat that was destroyed by Hurricane Ivan. Because Joshua Dohring did not have sufficient financial resources or credit, Brenda Dohring and Robert Hicks decided to make the purchases for him. They created the Petitioner corporation to purchase and own the catamaran and tender because they wanted protection from personal liability that might arise from Joshua Dohring's use of the vessels in the Virgin Islands. At the time of each purchase, Joshua Dohring was provided a Department affidavit form to be completed and filed with the Department to claim exemption from sales tax. Joshua Dohring indicated the name of the Petitioner corporation on the affidavit forms along with the names of the corporation's directors. The Department's affidavit form for sales tax exemption includes several statements that the affiant must attest to, including the following: 4. I represent a corporation which has no officer or director who is a resident of, or makes his or her permanent place of abode in Florida. David Erdman, a licensed yacht broker in Florida who assisted Joshua Dohring in the purchase of the catamaran and tender, believed that the purchases were exempt from Florida sales tax because Joshua Dohring was not a Florida resident and was going to remove the vessels from Florida. Mr. Erdman did not understand that, because the purchaser was not Joshua Dohring, but a Florida corporation, the sales tax exemption did not apply. Mr. Erdman advised Joshua Dohring that the purchases were exempt from Florida sales tax. There is no evidence in the record, and the Department did not allege, that the Petitioner intended to defraud the State. On this record, it is clear that the Petitioner's directors were simply mistaken in their belief that the purchases of the boats were exempt from Florida sales tax, based primarily on the erroneous advice of Mr. Erdman. The Department made a routine investigation after its receipt of the sales tax exemption affidavits signed by Mr. Dohring and determined that the exemption did not apply because the Petitioner is a Florida corporation with directors who are residents of Florida. In January 2005, the Department notified the Petitioner of its billing for the sales tax due on the boat purchases, plus penalty and interest, totaling $8,474.67. An informal conference regarding the billing was requested by the Petitioner, and a conference was held in an attempt to resolve the matter. Subsequently, the Department's Final Assessment was issued on January 23, 2005, indicating tax, penalty, and interest totaling $9,229.26. Because of the circumstances indicating that the Petitioner's failure to pay was due to a mistake and bad advice, the Department proposes to eliminate the penalty.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue an final order: finding that the Petitioner's purchases of the catamaran and inflatable tender are subject to sales tax; and assessing sales tax of six percent on the purchases; and imposing interest on the taxes until paid; and imposing no penalty. DONE AND ENTERED this 22nd day of September, 2005, in Tallahassee, Leon County, Florida. BRAM D. E. CANTER 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 22nd day of September, 2005.
Findings Of Fact Petitioner is a Swiss national, who resides in Jamaica. His business in Jamaica involves water sports and vacation tours, primarily for European tourists. Petitioner attended a boat show in Fort Lauderdale, Florida, in order to locate a suitable boat for entertainment and tour purposes for use by his business in Jamaica. There, he saw The Lady, a vessel being brokered by Anchorline Yacht and Ship Brokerage, Inc., of St. Petersburg, Florida. On February 28, 1980, Petitioner purchased The Lady from Anchorline for $120,000. Prior to that date, a survey was conducted by Wilkinson Company, marine surveyors, and repairs indicated by that survey were completed at South Pasadena Marina, Inc. At the time that Petitioner purchased The Lady from Anchorline, he advised the broker that he was taking the vessel out of the country. Accordingly, the broker required Petitioner to sign an affidavit that Petitioner had read the provisions of Section 212.05, Florida Statutes, and no tax was collected on the sale and purchase of The Lady. As The Lady was journeying from St. Petersburg across the State of Florida to West Palm Beach in order to reach Jamaica, she started taking on water. She was taken to Lantana Boatyard, where another marine survey was conducted. That survey concluded that The Lady was not seaworthy and, therefore, could not be taken to Jamaica at that time. As one of the required repairs, her engines needed to be overhauled by Cummins in Miami. Accordingly, after the repairs to be made at the Lantana Boatyard were completed, The Lady was taken to the Keystone Point Marina in North Miami, Florida, so that the work on her Cummins engines could be undertaken. During this time, Petitioner attempted to register The Lady in Jamaica; however, the Jamaican Government refused to license or register the vessel since she was not in Jamaica but was still physically located within the State of Florida. As a result of discussion between Petitioner and a Mr. Mathews at Anchorline, on September 18, 1980, the Petitioner made application for a Florida boat Certificate of Title at a tag agency. He reported the purchase price as ten dollars and, accordingly, paid forty cents tax on the transaction. Cummins started the repair work necessary on The Lady's engines while she had been docked at the Keystone Point Marina. On occasion, Petitioner has stayed overnight on The Lady for security purposes. He has had a telephone attached to the vessel for his personal use while on board. On January 7, 1981, Respondent Department of Revenue issued a Warrant for Collection of Delinquent Sales and Use Tax against the Petitioner in the total amount of $9,967.37, representing the follows: Tax $4,799.60 Penalty 4,799.60 Interest 350.17 Filing Fee 18.00 $9,967.37 On January 19, 1981, Petitioner made payment to Respondent Department of Revenue in the amount of $5,167.77, which payment was made under protest and which payment represents the amount of tax, interest, and filing fees, but does not include the amount of penalty. Pursuant to its warrant, the Department of Revenue has chained The Lady to the dock at the Keystone Point Marina. Accordingly, the work being performed by Cummins on her engines has not been completed, and no sea trial can be conducted. As stipulated by the parties, since the Petitioner purchased The Lady, she has been under repair and has never left Florida waters.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is therefore, RECOMMENDED THAT: A final order be entered denying Petitioner's claim for a refund, finding the Petitioner liable for a sales tax equal to four percent of the purchase price, together with interest and filing fees, but finding the penalty assessed against Petitioner to be erroneous and therefore invalid. DONE AND ENTERED this 8th day of October 1981 in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October 1981. COPIES FURNISHED: Michael Lechtman, Esquire 801 N.E. 167th Street, Suite 301 North Miami Beach, Florida 33162 John Browdy, III, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301
The Issue Petitioner's liability for tax, interest, and penalty, pursuant to Chapter 212, Florida Statutes, as set forth in Notice of Assessment, dated December 9, 1975. At the hearing, it was stipulated that the sale by Petitioner to one Norady as set forth in Paragraph B of the Petition was no longer in issue, and accordingly this count was withdrawn by Petitioner. The amount of sales by Petitioner to Triumpho Electric as shown in Paragraph C of the Petition was stipulated to be in the amount of $243,724.34 instead of $248,255.26. In view of the above Stipulations, the Hearing Officer requested that a revised assessment be prepared and submitted after the hearing to reflect the amount now sought by Respondent and to indicate thereon the taxes, penalty aid interest attributable to sales to Ivan Alexander, Triumpho Electric, Grand Bahama Development Company, and Agregados de Cal, purchasers from Petitioner. The revised schedule in the total amount of $12,358.37 was submitted on April 30, 1976, received by the Hearing Officer on May 4, 1976, and is marked as Respondent's Exhibit 1. The parties stipulated at the hearing that the method of computation was correct and Petitioner has filed no objections to the counts of the revised assessment. Accordingly, it is deemed to reflect the amount due and owing if imposition of tax is valid.
Findings Of Fact During the period November 1, 1973 to February 28, 1975, Petitioner made sales of merchandise to the following: Ivan Alexander, Triumpho Electric, Grand Bahama Development Company and Agregados de Cal. the circumstances of each of these transactions are set forth below. Ivan Alexander Construction Co., Ltd. a. Petitioner made sales of electrical equipment in amount of $1,646.50 to Ivan Alexander Construction Co., Ltd. Freeport, Grand Bahamas1 on September 24, 1974. Petitioner delivered e merchandise to Lindsley-RBC, Miami, Florida. Lindsley-RBC was not licensed exporter, but acted in an agency capacity for the purchaser. Subsequent to Petitioner's delivery, Lindsley-RBC consolidated the merchandise with other purchases made by Ivan Alexander, for shipping purposes. After consolidating the merchandise, Lindsley-RBC delivered the merchandise to the shipping vessel, the Tropic Day. It was received by the purchaser in Freeport on October 11, 1974. (Stipulation, Petitioner's Composite Exhibit 7). Triumpho Electric, Inc. Petitioner made sales of electrical construction equipment n the amount of $237,634.57 to Triumpho Electric, Inc., Christiansted, St. Croix, Virgin Islands, during the period under consideration. The procedures used in purchasing, delivering and shipping the merchandise are s follows: Ivan M. Bauknight, an employee of Triumpho, placed the order or the merchandise "on behalf of Triumpho" personally at Petitioner's - place of business, by telephonic communication with a salesman employed by Petitioner, or by contacting its sales representative who took the order in person from Bauknight. In August of 1972, Triumpho had formed Caribbean Supply Company, Inc., a wholly-owned subsidiary, for purposes of purchasing merchandise, consolidating said merchandise in its own warehouse, and shipping. To further effectuate their purposes, warehouse pace was secured at Miami International Airport. Although Bauknight as in charge of Caribbean Supply Company, Inc., he was not an employee of that company. In fact, Caribbean Supply Company, Inc., had no employees during the period in question, excepting casual labor at intervals who were supervised by Mr. Bauknight. Although it was not a "licensed exporter", Caribbean possessed an export sales tax number issued by Respondent. Subsequent to the placing of orders in the above-described manner, Petitioner delivered the merchandise to Caribbean Supply Company, Inc.'s warehouse located at Miami International Airport where the merchandise was consolidated with other purchases. After delivery, and after packaging and consolidating the merchandise in Caribbean Supply Company, Inc.'s warehouse, Bauknight contacted a shipping company and requested that a "piggyback" trailer be provided on which to load the merchandise. The shipping company then placed the trailer upon Caribbean Supply Company, Inc.`s loading lock where Bauknight and laborers would load the merchandise onto the trailer, seal it, and then inform the shipping company which would take it to Dodge Island Seaport, Miami, Florida, and load it upon a ship. During the assessment period in question, all trailers were loaded at Caribbean Supply Company, Inc. Another method of transportation was shipment by air from Miami International Airport. In such cases, the merchandise was delivered by Petitioners to Caribbean's warehouse where it was packaged and taken to commercial airlines for shipment. (Testimony of Bauknight, Petitioner's Composite Exhibits 1-4). Grand Bahama Development Company, Ltd. Petitioner made sales of merchandise in the amount of $21,407.55 to Grand Bahama Development Company, Ltd., during the period in question. Procedures used in purchasing, delivering and shipping were as follow: America Devco, Inc., Miami, Florida, a wholly-owned company of Grand Bahama Development Company, Ltd., was created by the latter to represent its interests in the United States. At all times pertinent to the instant transactions, America Devco, Inc., was not a licensed exporter but was acting as Grand Bahama Development Company, Ltd's agent. It did, however, possess an export sales tax number issued by Respondent. America Devco, Inc., contacted Petitioner's sales representative by telephone and placed orders subsequently issuing a confirming purchase order to Petitioner. In about 60 percent of the transactions, Petitioner delivered the merchandise to America Devco, Inc.'s warehouse. In about 40 percent of the transactions, America Devco, Inc., went to Petitioner's business site, picked up the merchandise and took it to its warehouse. By both methods, the merchandise usually remained at America Devco, Doc's warehouse from one to three days in order to create shipping documents or to take advantage of the hundred pounds air shipping minimum. America Devco, Inc., utilized its trucks to deliver the merchandise to the airline cargo loading platform. All supplies were kept in the original containers supplied by Petitioner and America Devco, Inc., only affixed shipping label. Shipping documents were prepared by the shipping company. In one transaction, Petitioner delivered purchased merchandise to Alco Shipping Company at the dock in Port Laudania, Florida. (Testimony of Gomez, Petitioner's Composite Exhibit 5). Agregados de Cal. Petitioner made sales of merchandise in the amount of 905.90 to Agregados de Cal during the period in question. The merchandise was delivered by Petitioner to Mr. Robert de la-Puirtilla, in employee or representative of Agregados de Cal, at Petitioner's lace of business, at which time he took possession of the merchandise nd delivered it to the airport. (Stipulation, Petitioner's Composite Exhibit 6).
Recommendation That the tax assessment of $12,358.37 against Petitioner under the provisions of Section 212.05, F.S., including interest and penalties be imposed by the Department of Revenue and enforcement thereof be effected in accordance with the provisions of law. DONE and ENTERED this 12th day of July, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Patricia S. Turner Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 George A. Buchmann Penthouse B2 7000 S.W. 62 Avenue South Miami, Florida 33143 Attorney for Petitioner
Findings Of Fact Stipulated Facts The following facts, 1-36, are taken as established by stipulation of the parties in their Prehearing Stipulation filed April 7, 1987. Southland presently holds and held, on the date of issuance of the Notice to Show Cause issued in this case, 704 non-temporary Florida alcoholic beverage license. On or about September 13, 1983, Eugene DeFalco, then a Southland employee, pled guilty to conspiring to bride an official of the New York State Tax Commission in violation of 18 U.S.C. Section 371. On or about September 27, 1983, Southland terminated its employment relationship with DeFalco. In 1977 and 1978, Eugene DeFalco was the manager of all 7-Eleven Stores in Southland's Northeast Division. DeFalco, Eugene Mastropiere, who in 1977 was a practicing attorney in New York City and a New York City Councilman, and John Kelly, a corporate security consultant, agreed that Mastropiere would submit a fictitious legal bill to Southland for $96,500. After receiving Mastropiere's bill, Southland issued a check in that amount payable to Mastropiere. Upon receipt of the check, Mastropiere turned over the proceeds of that check to Kelly and DeFalco. DeFalco and Kelly undertook those actions to facilitate their misappropriation of Southland funds. DeFalco and Kelly did ultimately misappropriate the entire $96,500 for their personal use. DeFalco was aware that Southland would deduct the $96,000 as a business expense and issue Mastropiere an IRS Form 1099, thereby concealing from the Internal Revenue Service and others DeFalco's and Kelly's conversion of the money. On or about June 8, 1984, a jury convicted Southland of conspiring to defraud the Internal Revenue Service. On or about June 11, 1984, the same jury was unable to reach a verdict as to Dole, and the judge declared a mistrial. On August 2, 1984, the judge entered a Judgment and Conviction Order, convicting Southland of conspiring to defraud the Internal Revenue Service in violation of 18 U.S.C. Section 3371, a felony under the laws of the United States. On or about December 28, 1984, Southland paid the $10,000 fine imposed by a federal district court judge in the Eastern District of New York on the basis of that conviction. Southland's August 2, 1984 conviction was upheld by a three-judge panel of the United States Court of Appeals, Second Circuit, on April 23, 1985, United States vs. Southland Corp., 760 F.2d 1366 (1985), which determined that the trial record contained sufficient evidence to support the jury's verdict. On or about February 27, 1985, a jury acquitted S. Richmond Dole of conspiring (1) to bribe an official of the New York Tax Commission and (2) to defraud the Internal Revenue Service in violation of 18 U.S.C. Section 371. On or about February 27, 1985, a jury acquitted Clark J. Matthews, II, then Executive Vice President and Chief Financial Officer of Southland, of conspiring (1) to bribe an official of the New York Tax Commission and (2) to defraud the Internal Revenue Service in violation of 18 U.S.C. Section 371. On or about January 27, 1985, a jury convicted Clark J. Matthews, II, of violating the federal securities laws, 15 U.S.C. Section 78n(a), but on March 27, 1986, a unanimous panel of the United States court of Appeals for the Second Circuit reversed his conviction and ordered the indictment dismissed. At the conclusion of the second trial, United States vs. Dole and Matthews, CR 84-00461 (E.D.N.Y. 1985), the trial judge instructed the jury that it could not, as a matter of law, consider Southland employees John Thompson, Michael Davis, Frank Kitchen, or Eugene Pender as members of any conspiracy. Eugene DeFalco directly contributed to Southland's 1984 conviction in the United States District Court for the Eastern District of New York. For the purposes of this proceeding, the Division takes the position that Clark J. Matthews, II, and S. Richmond Dole are the only present employees of Southland that directly contributed to Southland's conviction in United States vs. Southland, et al., 83-CR-515 (E.D.N.Y.) On or about February 15, 1977, S. Richmond Dole and Eugene DeFalco discussed hiring Eugene Mastropiere as outside counsel on certain New York sales tax cases and at that time, discussed charging Masterpiere's fee to a corporate account in Dallas rather than directly to the Northeast Division. Later that night, on February 15, 1977, Dole, DeFalco, Frank Kitchen and John Thompson met informally and discussed, among other matters, the Northeast Division and its progress. At this meeting, they discussed DeFalco's proposal to have Eugene Masteropiere as outside counsel on the New York sales tax cases. Following this meeting, on February 15, 1977, Dole and Kitchen discussed the proposed retention of Eugene Mastropiere, and Dole told Kitchen not to worry about the sales tax cases--that Eugene DeFalco would handle them. United States of America vs. S. Richmond Dole & Ano., 84 CR 00461 (E.D.N.Y.), tr. at 2493-94. In correspondence from S. Richmond Dole to Eugene DeFalco dated February 23, 1977, Dole stated, "Be sure to send me the bill on the sales tax case so that I can see that it's paid from the corporate office. Hopefully, it will hit one of Clark's legal accrual accounts." In or about May 1977, Eugene DeFalco asked S. Richmond Dole whether Mastropiere's legal fee could be submitted and paid in the form of an airplane lease. United States of America vs. S. Richmond Dole and Ano., 84 CR 00461 (E.D.N.Y.), tr. at 2493-94. Matthews also told DeFalco that Southland would only pay a bill for legal services as a bill for legal services. At some point in time in mid-1977, S. Richmond Dole asked Eugene Pender, Southland's Controller, who was responsible for accounting and payroll, to process the Mastropiere legal fee. United States vs. S. Richmond Dole and Clark Matthews, 84 CR 00461 (E.D.N.Y.), tr. at 2493-94. The legal bill for $96,500 submitted to Southland by Mastropiere indicates services rendered from October, 1976 to May, 1977. Southland's normal procedure for payment of outside legal fees requires approval from the General Counsel's Office. On or a about June, 1977, management of The Southland Corporation undertook a Business Ethics Review. Clark J. Matthews, II, then Vice President and General Counsel for Southland, was in charge of that review under the supervision of the Audit Committee of the Southland Board of Directors. When Matthews learned of the size of the Mastropiere legal fee he recalled the airplane lease suggestion and directed Michael Davis, the staff attorney assisting him, to add the Mastropiere fee to the list of items to be investigated in the Business Ethics Review. The handwriting notes that Clark Matthews prepared prior to the meeting at which the Board of Directors was briefed on the Mastropiere matter contain the words "NY-Mastropiere Div. Mg. Thought Payment Outside Usual Controls" and "for $40M to spread among moms tax comm." In 1978, prior to the filing of Southland's 1977 federal income tax return, Matthews and Davis discussed with Stanley Simon, Southland's outside tax counsel, whether the Mastropiere fee was a deductible expense for purposes of Southland's tax return. No written discussion of the Mastropiere legal fee was contained in the final written report prepared at the conclusion of the Business Ethics Review. Gate Petroleum, Inc., Eastern Oil Co. and Cargo Gasoline Co. were convicted in May 1980 of violations of Section 1 of the Sherman Annatitrust Act, 15 U.S.C. Section 1. As a result of these convictions, Gate Petroleum, Inc., paid a civil penalty of $100.00 for each license held (total of $2100.00); Eastern Oil Co. and Cargo Gasoline Co. each paid a civil penalty of $500 per license. The Division and Southland stipulate that Responses Nos. 1 and 2 to Petitioner's First Set of Interrogatories accurately set forth the actions taken by state licensing agencies with respect to Southland's licenses based on Southland's federal conviction in New York. The following additional facts, 37-172, are based upon the record herein. The Sales Tax Cases What has come to be known as the "New York sales tax cases" began in 1972 when New York asserted a sales tax deficiency against one of Southland's franchise 7-Eleven stores. In the next few years, additional deficiency notices were issued. By 1977, New York State contended that Southland owed between $150,000 and $300,000. The New York State Tax Commission asserted that unless Southland gave the state sufficient notice when it terminated a franchise, the Tax Commission could audit that store and hold Southland secondarily liable for any sales tax deficiencies discovered. Southland believed it had a meritorious defense based on a specific exemption provided that there was no transferee liability upon the foreclosure of security interest, and Southland's franchise agreement gave it such an interest in the inventory and assets of the franchises in question. In 1976 and 1977, S. Richmond Dole was Southland's Vice President in charge of franchise stores. He is presently Executive Vice President in charge of 7-Eleven stores. In 1977, Clark J. Matthews, II, was Vice President and General Counsel of Southland. He is today Senior Executive Vice President and Chief Financial Officer. In 1977, John P. Thompson was Chairman of the Board of Southland and its Chief Executive Officer. He today holds the position of Chairman of the Board. In 1977, Frank Kitchen was Regional Manager of the Northeast Region. He is today a Regional Vice President at Southland. The Retention of Mastropiere In 1976, S. Richmond Dole and Eugene DeFalco discussed the New York sales tax cases. In the course of this discussion, DeFalco expressed to Dole his dissatisfaction with the performance of Thomas Dougherty, the outside counsel that Southland had hired to handle the New York sales tax cases. DeFalco stated in substance that he felt that another attorney should be hired since the cases were not moving and additional assessments by New York continued to be made. At the end of 1976 or the beginning of 1977, Dole called Clark J. Matthews, II, and told him that DeFalco was dissatisfied with the progress of the sales tax cases. Dole stated that DeFalco would be giving Matthews a call. DeFalco subsequently called Matthews to discuss the New York sales tax cases. DeFalco stated that he was dissatisfied with Dougherty, Southland's local counsel, because the New York sales tax cases were not moving forward. DeFalco told Matthews that John Kelly, a Southland supplier, had recommended that Eugene Mastropiere be retained to help Southland in the sales tax cases. DeFalco asked Matthews if it would be all right to retain Mastropiere. Matthews told DeFalco that he would check on Masterpiere and get back to him. Matthews reviewed Mastropiere's listing in Martindale Hubbell, and then called Southland's local counsel, Thomas Dougherty, for additional information. Dougherty called Matthews back later and told him that, as far as he could ascertain, Mastropiere was a reputable attorney. Matthews then called DeFalco and told him that he could engage Mastropiere as counsel, but that Matthews wanted Dougherty retained as co- counsel. Matthews also told DeFalco to ascertain what the fee arrangement would be. DeFalco later called Matthews and told him that Mastropiere would require a retainer of $30,000 - $40,000. On or about February 15, 1977, at a Northeast Division sales meeting in Hartford, Connecticut, Dole and DeFalco met in the lobby or coffee shop of the hotel at which the sales meeting was being held. DeFalco told Dole that he wanted to hire Mastropiere as outside counsel on the New York sales tax cases. During the conversation in the hotel lobby, DeFalco again stated that he was not satisfied with Dougherty's handling of the sales tax cases and that the cases were not moving fast enough. DeFalco expressed concern that a negative decision in New York might set a precedent in other states. He stated that he had found a number of stores were undercollecting their taxes and he feared that, because of these stores and the possibility of a bad precedent, Southland faced a potential liability of over one million dollars. DeFalco proposed to Dole the retention of Mastropiere as an attorney in the sales tax cases. He stated that, based on his conversations with Mastropiere and their review of the files, Mastropiere could be helpful to Southland. DeFalco also mentioned to Dole that Mastropiere was a New York City Councilman and a practicing attorney. Dole questioned whether there might be a possible conflict of interest, but DeFalco indicated that there was no conflict since the sales tax cases were disputes with the state and Mastropiere's responsibilities as Councilman involved the city. DeFalco told Dole that there would be an unusual fee arrangement--a one-time payment of $90-100,000, to include appeals. DeFalco never said anything to Dole about a bride or improper payment. DeFalco also proposed charging Mastropiere's fee to a corporate legal accrual account in Dallas rather than directly to the Northeast Division. By charging the fee to a corporate legal accrual account, the expense would not be considered part of the operating expenses of DeFalco's division and thus would not reduce the bonus paid to him and others in the division. Later that night, on February 15, 1977, Dole, DeFalco, Frank Kitchen and John P. Thompson met informally and discussed, among other matters, the Northeast Division and its progress, including the sales tax cases. Such informal gatherings between senior executives from Dallas and field personnel are common at Southland's periodic sales meetings. At that meeting, DeFalco stated that the cases were not moving along and that he had recommended hiring another attorney, by the name of Eugene Mastropiere, who was both a practicing attorney and a City Councilman in New York. DeFalco noted that Mastropiere might be expensive. Thompson replied that all lawyers are expensive, that DeFalco should be sure to get a good one, but that if DeFalco and others thought it was a good idea to hire this man, they should do so. Thompson also told DeFalco to check with Matthews, who ran Southland's Legal Department, about hiring Mastropiere. No mention of a bribe or payoff was made at the meeting. The term "entertainment" may have been used, but if it was used, it did not signify to those present that a bribe was to be paid. Immediately following his meeting, on February 15, 1977, Kitchen expressed concern to Dole about the proposed retention of Mastropiere and asked Dole whether they had just agreed to give $100,000 to a politician, i.e., to Mastropiere. Dole said no and told Kitchen not to worry about the sales tax cases, because DeFalco was fully familiar with these cases, and Kitchen was new to his position and had other priorities to worry about in the region. Following the Hartford meeting, Dole spoke to Matthews about DeFalco's desire to hire Mastropiere. Matthews stated that he had already spoken to DeFalco and that Mastropiere had been retained as co-counsel. Following this meeting, Dole confirmed in a letter to DeFalco that he would attempt to have the bill charged to the corporate legal accrual account. Payment of Mastropiere In or about May 1977, Dole received a phone call from DeFalco, in which DeFalco stated that he had talked with Mastropiere who had suggested that Southland could reduce Mastropiere's bill by 50 percent if it paid him in cash. Dole rejected this proposal. In that conversation or a subsequent conversation, DeFalco asked Dole whether Mastropiere's legal fee could be submitted and paid in the form of an airplane lease. When Dole asked about these unusual payment proposals, DeFalco explained that Mastropiere was having problems with his law partner. Dole told DeFalco that he wanted no part of Mastropiere's partner problems and that DeFalco should send Mastropiere's legal bill to Dole right away. Dole also told DeFalco to tell Matthews about Mastropiere's proposal. DeFalco later called Matthews and told him of the proposal that Mastropiere's fee be paid in the form of an airplane lease. Matthews rejected the suggestion and told DeFalco that Southland would only pay a bill for legal services as a bill for legal services. Because of his concerns about the airplane lease proposal, Matthews arranged to talk to Mr. Dougherty about Mastropiere on a trip to New York in June 1977. When Matthews asked Dougherty in New York about Mastropiere's participation in the sales tax cases, Dougherty indicated that Mastropiere was involved and performing substantive work on the cases. Matthews told Dougherty of the airplane lease proposal. Dougherty acknowledge that the request was peculiar, but added that he had practiced before the Tax Commission for a long time and knew the individual Commissioners to be reputable people. Dougherty assured Matthews that there was nothing improper going on with the Tax Commission. In or about June 1977, DeFalco called Dole to tell him that the bill was in the mail and that he would appreciate it if Dole would expedite the payment for the bill and ensure that it was charged to a corporate account DeFalco also requested that the check be sent to him personally so that he could hand-deliver it to Mastropiere. In the past, other division manager had asked Dole to allow them to deliver a check personally, for various reasons, and Dole saw nothing improper in DeFalco's request. After receiving the bill, Dole took it to Eugene Pender, Southland's Controller, who was responsible for accounting and payroll. Dole told Pender that he had a bill from the attorney working on the sales tax cases in New York. Dole stated that Pender might recall this attorney because the attorney had suggested that his bill be paid in cash or in some form of an airplane lease. Dole indicated that he wanted the bill paid and charged against the corporate legal accrual account. Pender noted that it was a Division expense and should be charged to the Division, but Dole stated that he had promised DeFalco that the bill would be charged to the corporate legal accrual account and that if Pender had any questions he should check with the Legal Department. Dole also told Pender to send the check directly to DeFalco so that DeFalco could hand-deliver it to the attorney. In 1977, it was not unusual for Pender to be asked to expedite the payment of a bill. Although Southland's normal procedure for payment of outside legal fees requires approval from the General Counsel's office, it was not unusual for the Controller to process a legal or other bill based on the oral authorization of a senior executive such as Dole. Dole did not suggest anything improper to Pender. Pender would not have processed the Mastropiere fee if he had felt that the bill was improper. Upon receipt of the check, Mastropiere turned over the proceeds of that check to Kelly and DeFalco. DeFalco and Kelly ultimately misappropriated the entire $96,500 for their personal use. Business Ethics Review Investigation In or about June 1977, Southland's management undertook a Business Ethics Review (BER). Clark J. Matthews, II, then Vice President and General Counsel, was in charge of that review under the supervision of the Audit Committee of the Board of Directors. Michael Davis, then a staff attorney at the Legal Department, handled most of the day-to-day work on the BER. In conducting the investigation, Matthews, Davis and the Audit Committee relied on the advice of an outside attorney, John Fedders. Fedders helped draft the BER questionnaire, consulted with Matthews and Davis concerning responses and follow-up strategy, helped prepare the presentation of these findings to the Audit Committee (a committee comprised of outside directors) and assisted in the drafting of the final written BER report. In or about July 1977, Southland distributed BER questionnaires to over 300 employees to elicit information on possibly questionable payments. Independent of the BER, in August 1977, Matthews learned that the size of the Mastropiere fee was $96,500 rather than the $30-$40,000 that he expected. The size of the fee and the earlier airplane lease suggestion led Matthews to direct Michael Davis to add the mastropiere fee to a list of items to be investigated in the Business Ethics Review. When the BER questionnaires were returned in August or September 1977, Davis prepared a summary of the positive responses, i.e., those responses that reported information which might require further investigation. In his response to the BER questionnaire, Pender denied any direct knowledge of improprieties, but raised questions about a legal fee in the Northeast Division. Pender cannot recall today what led him to mention the legal fee on his questionnaire, but he is certain that he was not suggesting that the fee might include a payoff or bribe. Davis interviewed Pender about his BER questionnaire response but Pender could provide no information beyond what was contained in his questionnaire. On September 22, 1977, Davis Fedders, and Matthews met to review the summary and to determine how to proceed with the BER investigation. At the September 22, 1977 meeting, Davis, Fedders and Matthews discussed the Mastropiere fee and the Pender questionnaire response, and prepared a list of people to be interviewed, which included DeFalco and Kitchen. On or about September 27, 1977, Matthews and Davis reported to the Audit Committee on the status of the BER investigation, including the investigation of the Mastropiere fee. As part of their investigation, on October 17 or 18, 1977, Matthews and Davis interviewed Eugene DeFalco about the Mastropiere fee. This interview took place in DeFalco's room at a Dallas hotel, where he was staying while in Dallas for a meeting. Matthews and Davis drove to the hotel in separate cars and met DeFalco at the hotel. In the interview, DeFalco provided some background information concerning the retention of Mastropiere, including the involvement of John Kelly in DeFalco's negotiations with Mastropiere over his fee. However, DeFalco did not tell Matthews and Davis that he and Kelly had begun to embezzle the funds, and he never suggested that any part of the fee was intended as a pay-off or bribe. DeFalco did not try to prevent Matthews or Davis from interviewing Matropiere. After the interview, Matthews and Davis walked to their cars together. DeFalco remained in his room and did not speak separately with Matthews. DeFalco did not advise Matthews in a parking lot conversation or on the way to the car of any alleged bribe conspiracy or that any improper payment had been made. The next day, Davis interviewed Frank Kitchen. Kitchen told Davis that he surmised that a payoff had been discussed at the Hartford meeting with Thompson, DeFalco and Dole. When pressed by Davis for more information, Kitchen listed four factors that led him to this conclusion: (a) the name Mastropiere was Italian; (b) the cases involved a New York state agency; (c) the attorney was said to be "expensive", and (d) entertainment was mentioned. Kitchen could provide no more specific information and cannot recall the details of that conversation today. Davis thereupon recommended that Kitchen amend his BER questionnaire, which Kitchen eventually did. Based on the results of this interview, Davis Fedders and Matthews decided that Thompson and Dole--the other two persons present at the Hartford meeting--should be interviewed. Matthews subsequently interviewed Dole and Thompson; both denied that any payoff or bribe had been discussed at Hartford. In December 1977, Matthews and Davis again reported to the Audit Committee the status of the Mastropiere investigation, including that there had been a suggestion that the Mastropiere fee be paid as an airplane lease, that the actual fee was substantially greater than Matthews had anticipated, that Kelly had been involved in the alternative payment suggestions, that Kitchen had indicated in an amendment to his questionnaire responses that he felt that at a meeting in Hartford a payoff had been discussed, and that Thompson, Dole and DeFalco all had denied any such conversation. During December, 1977, and January, 1978, Matthews consulted with the Audit Committee and with Fedders and one of his law partners, Bud Vioth, as to how to proceed with the investigation of the Mastropiere fee. It was agreed that Matthews should interview Mastropiere. Matthews' meeting with Mastropiere was arranged for late afternoon, January 9, 1978, in New York. Because of a snowstorm, Mastropiere never showed up for the meeting. Matthews and Mastropiere later talked by telephone. During their telephone conversation, Mastropiere demonstrated knowledge of the cases and was conversant with the theory of Southland's defense. Matthews questioned Mastropiere about his legal fee. Matthews asked if Mastropiere received the entire fee, to which Mastropiere responded yes. Matthews asked if any of the money had been paid or was intended to be paid to anybody else, to which Mastropiere responded no. Matthews followed the interview protocol that Fedders had recommended. On or about January 12, 1978, the Audit Committee held another meeting at which Matthews shared the details of the Mastropiere conversation with Fedders and his law partner, Vieth, and with the Audit Committee. At this meeting, the Audit Committee also interviewed Dole about the Mastropiere fee. After the Mastropiere and Dole interviews, the Audit Committee, Fedders, Vieth, and Matthews and Davis reviewed the evidence and concluded that they had no proof that there had been a bride or any improper use of the money. In making this determination, they took into consideration that New York was continuing to file sales tax cases and that there had been no unusual activity in the course of that litigation or its pace. Because there was no evidence of any impropriety and because of the possibility of libel, it was agreed that the matter would not be discussed in the final written BER report. It was also agreed that a detailed oral report on the matter would be made to the Board of Directors. On or about January 25, 1978, Matthews made an oral report to the Southland Board of Directors on the finding of the BER, including the investigation of the Masteropiere fee. At the conclusion of the BER investigation, Southland's Board of Directors adopted a "Code of Business Conduct," which it now requires all employes to follow. The Legal Department's investigation of the Mastropiere fee was a good faith effort to determine whether there was any impropriety connected with the retention and payment of Mastropiere. Matthews and Davis completely and accurately disclosed to outside counsel, the Audit Committee and the Board of Directors the steps taken to investigate the Mastropiere fee and the results of that investigation. In fact, according to one Audit Committee member, Matthews was the motivating force behind the Mastropiere investigation and brought it to the Audit Committee's attention on a number of occasions. DeFalco engaged in a conspiracy with Kelly and Mastropiere to misappropriate $96,500 from Southland. DeFalco was aware that Southland would deduct the $96,500 as a business expense on its federal corporate income tax return and issue Mastropiere an IRS Form 1099, thereby concealing from the Internal Revenue Service and others DeFalco's and Kelly's intended use of that money. Neither Dole nor Matthews knew of any facts that would require them to prevent the deduction of the Mastropiere fee on Southland's 1977 income tax. Neither Matthews nor Dole had an any involvement in the preparation of filing of Southland's 1977 federal income tax return or in the deduction of the paid to Eugene Mastropiere. In December 1977 and January 1978, Matthews discussed with Stanley C. Simon, Southland's outside tax counsel, a number of issues arising out of the BER investigation, including the Mastropiere fee. Simon stated that Southland should deduct the fee unless it had proof of a bribe or of any other improper use of the money. Based on this advise, Matthews and Davis determined that no action need be taken with respect to the deduction of the Mastropiere fee. Inasmuch as DeFalco embezzled the entire sum, the Mastropiere fee deduction by Southland was in any event properly deductible as a theft loss. The IRS has never challenged Southland's deduction of the Mastropiere fee. In connection with an IRS audit of Southland's 1974 and 1975 tax returns, Southland volunteered to the IRS that it had conducted a Business Ethics Review and it made available to the IRS all of the questionnaires requested. Davis' secretary was told by Davis to make the BER questionnaires available to the IRS and personally saw the IRS take the boxes of questionnaires to their work area, but the IRS agent does not recall seeing the Kitchen questionnaire. He concedes that he does not recall seeing other questionnaires that his records indicate that he did in fact review. DeFalco's Credibility Eugene DeFalco was the only witness in either the Southland trial or the Dole and Matthews trial who testified that there was a conspiracy to bribe a New York State tax official or to defraud the Internal Revenue Service, or that Matthews and Dole were knowledgeable of or participated in any conspiracy. Even DeFalco's confederate, John Kelly, who testified with immunity, while admitting participating in DeFalco's scheme to defraud Southland, denied that he was a party to or aware of a conspiracy to bribe an official of the New York Tax Commission. The record of these proceedings shows that DeFalco has lied repeatedly to serve his own interests. DeFalco admitted in the Southland and Dole and Matthews trials that he was both a liar and a thief. DeFalco admitted that he lied to the FBI in 1980 by telling them that he had a B.S. in marketing from the University of San Diego and that he had attended one semester of law school--when he had not. DeFalco admitted at trial that he stole Southland's money, and that he lied to the FBI in July 1980 on how he spent the money, falsely stating that a substantial part of the fee ($18,000 - $20,000) went for business expenses. DeFalco admitted lying on various occasions to federal government officials. DeFalco told the FBI that no portion of the Mastropiere fee money went to his then future wife, Kathy Burton. Later he admitted at trial that this was not true. DeFalco repeatedly lied to Southland about his use of the money. Prior to pleading guilty, DeFalco denied that there was any conspiracy to bribe and denied that he had embezzled any of Southland's funds. Upon pleading guilty, DeFalco changed his story. On a loan application to the Union Trust Company in April 1979, DeFalco listed as assets certain WD-40 stock wit the value of $150,000. DeFalco admitted at trial that this was a lie, that his largest holding was $6,000 - $8,000. On the same application, DeFalco claimed to have an interest of over $100,000 in a trust called Falcon Investment Trust, even though he admitted at trial that he had no present interest in the trust. On a loan application to the Southern Ocean State Bank in June 1979, DeFalco claimed to have an interest in the Falcon Investment Trust of $1.5 million, even though he had no present interest in the trust. He also claimed to have $81,000 worth of WD-40 stock, which he admitted at trial was a lie. DeFalco perjured himself even after pleading guilty in September 1983. In November 1983, two months after pleading guilty to a felony and while awaiting sentencing, DeFalco lied on a California residential loan application. He listed a company called "Coast-to-Coast" as his employer for the preceding three years at an annual income of $140,000, even though Coast-to-Coast was not yet generating any income. On the same application, DeFalco listed as assets 1,371 shares of Southland stock at a value of $54,840, even though DeFalco had sold these shares in September 1983. DeFalco admitted that he lied throughout his career at Southland, including falsely claiming on his personnel form in 1969-70 that he had a B.S. in marketing. DeFalco admitted that he lied to get ahead in the corporation. DeFalco even admitted lying under oath at the Southland trial. He claimed in that trial that the false statements on the California residential loan application were mistakes made by the person who typed the application. When confronted with an earlier handwritten version containing the same statements, he admitted that the statements were his. DeFalco's lies are so numerous and pervasive as to render all of this testimony unbelievable. His testimony is rejected as lacking in credibility and as self-serving. DeFalco's Direct Contribution to Southland's Conviction In 1983, DeFalco was indicted and charged with one felony count of conspiracy to bribe an official of the New York State Tax Commission in violation of 18 U.S.C. Section 371 and three felony counts relating to his misappropriation of Southland's funds. On or about September 13, 1983, Eugene DeFalco who was then on administrative leave from Southland, pleaded guilty to the conspiracy charge. In return for pleading guilty, the government agreed to dismiss the three counts of fraud pending against him relating to his misappropriation of $96,500 from Southland. As a result, DeFalco's potential prison sentence was reduced from 20 years to 5 years. Up until the time he pleaded guilty, DeFalco denied the existence of any conspiracy to bribe. Up until the time he pleaded guilty, DeFalco denied that he had embezzled any of Southland's money. After pleading guilty, DeFalco testified at both Southland's trial and the trial of Dole and Matthews that one objective of his agreement with Kelly and Mastropiere was bribery, and that ultimately he and Kelly embezzled from Southland all of the $96,500 fee. Eugene DeFalco directly contributed to Southland's 1984 conviction in the United States District Court for the Eastern District of New York. At Southland's trial, the jury was instructed that a "corporation is liable for the acts of its agents within the scope of his employment as long as the agent acted in substantial part and [sic] with the specific intent of benefiting the corporation." The jury was also instructed that if DeFalco had that intent "[i]t does not matter that [he] . . . may have also had another purpose in mind which may have involved personal gain for himself. Mitigation Southland's conviction in 1984 is the first and only felony conviction against Southland in the 53 years the company has been in business. The DABT offered no evidence to suggest that Southland's conviction for conspiring to defraud the IRS was anything more than an isolated incident or that it cast doubt on Southland's qualifications to hold beer and wine licenses in Florida. Southland holds beer and wine licenses in 39 states. No other state has revoked Southland's alcoholic beverage licenses based on this conviction, and approximately 29 of the 39 states in which Southland holds licenses took no action whatsoever. The record in this proceeding establishes that Southland has been a good corporate citizen both nationally and in the State of Florida. In the past 11 years, Southland has raised millions of dollars for the Muscular Dystrophy Association, contributing up to a million dollars each year in advertising alone for the Association's fund raising campaign. Southland was the March of Dimes first corporate sponsor and remains its leading sponsor today. Southland strongly encourages its employees to participate in the March of Dimes "Walk America" and has developed a manual for its employees on how they can best promote the March of Dimes effort. Southland was a major corporate sponsor of the Olympic Games in Los Angeles in 1984 and of the United States Olympic Committee. Southland funded the construction of the $3,000,000 7-Eleven Velodrome in Los Angeles for the Olympic Cycling events and also built a similar Velodrome for the Olympic committee at the Olympic Training Center in Colorado Springs, Colorado. Prior to the Olympics, Southland created and funded the Olympia Awards, awards given by a panel of past Olympic competitors to young athletes. This program continues today. Beginning in August 1974, Southland co-sponsored the Save a Living Thing project with the National Wildlife Federation. The project was designed to generate funds for the purchase of nesting grounds for the American Bald Eagle. As a result of the Save a Living Thing project, Southland raised two hundred thousand dollars for the National Wildlife Association, and, with that, purchased 1,123 acres of eagle nesting grounds. Southland and the National Wildlife Federation transferred the deed to the property to the Department of the Interior, which now maintains the refuge as part of the National Parks System. Southland is active in efforts to reduce crime and has hired an ex- convict to conduct seminars and clinics on how best to deter robberies. Southland has signed an agreement with two minority organizations, Operations PUSH and LULAC, committing Southland to seek a greater representation of minorities in its corporate and franchise operations. Southland sponsors at a local level in Florida many of the organizations it helps nationally. In addition, it sponsors organizations and events indigenous to Florida. Southland has developed and underwirtten child abuse prevention programs in New York, Texas, and Florida. The Florida program, called "Child Abuse, It's A Crying Shame," was launched in January 1986 by Governor Graham. As part of this program, all Florid 7-Eleven stores made available, at no charge the public, Child Abuse Awareness and Prevention bumper stickers supporting the 1-800-FLA-LOVE telephone number--a hotline number for those who need help or who want information concerning child abuse. Southland also paid for the creation of similar placards for buses. Since 1984, Southland has sponsored Florida's Sunshine State Games, encouraging people from across the state to compete in the amateur Olympic-type events. In 1981, Southland established the Come of Age Program and became the first retailer in the country to initiate an in-house employee training program to prevent the sale of alcoholic beverages to minors. This program continues today. Southland has received numerous letters from public officials and law enforcement officers in Florida and elsewhere praising the Come of Age Program and its efforts to prevent the sale of alcoholic beverages to minors. In addition, Southland sponsors various community programs designed to combat drug and alcohol abuse among minors. In 1985, Southland developed an educational packet on drug and alcoholic abuse, which it has now sent to 40,000 junior high schools across the country. Southland also sponsors a program called Operation Prom/Graduation, designed to encourage alcoholic-free events for minors, and has developed and sent to communities across the country a manual on how to sponsor such events." DABT'S Policy DABT has never previously revoked or suspended a corporation's license when the corporation was convicted of a felony. Mr. Barry Schoenfield is the Bureau Chief of Licensing and Records for the DABT. Based on his nearly 20 years with the DABT and his review of final agency documents, he could identify only four DABT actions against corporate license holders based on the felony convictions of the corporations themselves--all of which stem from a common indictment. The DABT settled with the corporations and, for three of the corporations, imposed fines of $1,000, to $7,500. The fourth company agreed to divest itself of its license. Ms. Louisa Hargrett is a staff attorney who has been with the DABT for the past 3 1/2 years and has dealt with literally hundreds of cases. Ms. Hargrett presented the representatives cases that he had discovered in a search of her files. None of these cases involved corporations who themselves have been convicted of a felony. The DABT admits that it has no procedure for determining whether corporations that hold alcoholic beverage licenses have been convicted of a felony within the last fifteen years. DABT does not even require corporations applying for a license to list prior criminal convictions. Actions by Other States Against Southland Other states have imposed penalties against Southland for its 1984 conviction. California accepted an offer of compromise in the amount of $157,680 in lieu of a 30-day suspension. There was also a probationary period of one year. Colorado agreed to a ten-day suspension, with the suspension held in abeyance for a one-year probationary period. This penalty applied to both alcoholic beverage and lottery licenses. Connecticut agreed to an offer of compromise in the amount of $250 per license, for a total of $6,750. Hawaii accepted payment of a penalty of $500 per business for a total of $15,500. Illinois was paid a penalty of $27,000 for restitution. Iowa agreed to a accept a 30-day suspension with 27 days remitted and cancelled. Southland also paid a penalty of $12,500 in Iowa. In Michigan, Southland paid a penalty of $22,600. In New York, Southland paid a penalty of $46,000 plus an additional fine of $10,000 for the conviction of Matthews which subsequently was reversed. Oregon agreed to impose a penalty of $455 per license, for a total of $8,190, and a suspension of 3 days per license.
Findings Of Fact On March 19, 1985 petitioner, Michael Scott Symons, became employed as a financial manager with the brokerage firm of Easter Guthmann & Kramer Securities, Inc. (EGK) at 7200 West Camino Real Street, Suite 200, Boca Raton, Florida. In connection with his employment Symons filed an application for registration as an associated person of EGK with respondent, Department of Banking & Finance, Division of Securities (Division). The application was received by the Division on or about March 19, 1985 and was deemed to be complete on April 18, 1985. On that portion of the application entitled "Personal History" Symons gave 5700 Grillet Place, S.W., Fort Myers, Florida 33907 as his home address. He identified EGK's address as being 7200 West Camino Real, Suite 200, Boca Raton, Florida 33433. Although Symons signed the application he stated that EGK had actually submitted the application on his behalf since it was a common practice for brokerage firms to do administrative work on behalf of their employees. This is consistent with an agency rule (3E-600.02(3), F.A.C.) which requires that a securities dealer file and countersign the application for registration on behalf of an associated person. On March 24, 1985, or shortly after he began employment with EGK, Symons moved into an apartment at 6091 Boca Colony Drive, Boca Raton, Florida 33427. Approximately one month later, he began renting Post Office Box 3299 in Boca Raton. Symons did not inform the Division of these changes in address, or otherwise amend his application. On or about July 12, 1985 a Division bureau chief spoke by telephone with the chief financial officer of EGK and asked if EGK would voluntarily withdraw Symons' application. Later that same day, an EGK vice-president telephoned the bureau chief and advised him the firm would not withdraw the application. On July 16, 1985, the Division prepared and dated an Order Denying Application for Registration as an Associated Person. The next day a Division attorney sent a copy by certified mail to Symons' at 5700 Grillett Place, S.W., Fort Myers, Florida. Because Symons' wife had previously provided the post office with a change of address form the envelope containing the order was forwarded from Fort Myers to Post Office Box 3229 in Boca Raton. Certified mail notices were thereafter placed in the box on July 24 and July 31. However, the mail was never claimed. On August 8, 1985 the envelope was returned to the Division. It was received in Tallahassee on August 12, 1985. There is no evidence that Symons was aware the order had been mailed or that he deliberately failed to claim the letter. The agency attorney similarly assumed that Symons had not received a copy. Accordingly, it is found that at this point in time Symon had no knowledge that the July 16 order-was entered, and had been mailed to him in Fort Myers and Boca Raton. On August 19, 1985 the Division attorney again sent a copy of the July 16 order by certified mail to 7200 West Camino Real, Suite 200, Boca Raton. This was the address of EGK. According to the attorney, it was her intention to mail the order to Symons, and not his employer. The order contained the following pertinent language on page 5: Respondent is advised that Respondent may request a hearing to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. A request for such hearing must comply with the provisions of Rule 28-5.201, Florida Administrative Code, and must be filed within twenty-one (21) days after receipt of this order. Otherwise, Respondent will be deemed to have waived all rights to such hearing. The certified mail receipt for the envelope containing the order was apparently signed for by Charlie Shields, an EGK employee. 1/ It eventually reached the desk of EGK's chief financial officer, James Weber, in an unopened envelope on August 23, 1985. Weber opened the envelope and read the enclosed order. He noticed on page five of the order that there was a twenty-one day time frame in which an appeal of the agency denial could be made. Believing that the twenty-one day time frame began on July 16, Weber erroneously concluded that the time to request a hearing had already expired. This was probably because he had never before seen a denial order, and was not familiar with the procedures under Chapter 120, F.S. Weber then showed the order to Edward Guthmann, a principal and vice- president of EGK. Guthmann telephoned an out- of-state attorney seeking advice on how to proceed, and sent a copy of the order to the attorney on August 23. The attorney did not take any action, and returned the order to Guthmann on an undisclosed dated between late August and the middle of September. On September 17 Weber "came to the realization" that under any interpretation of the order the time frame in which to request a hearing had run. He then contacted petitioner's present counsel on September 17 to discuss obtaining legal representation for Symons. Symons has continued using that counsel since that time. A petition for hearing was eventually filed with respondent on October 1, 1985. This petition was denied by agency order entered on October 16, 1985 on the ground Symons had "constructive receipt and notice of the Denial Order at the time of its delivery by U.S. Certified Mail to Respondent's personal address on July 24 1985, and furthermore, deems Respondent to have received actual notice. . . on August 25, 1985, when the Denial Order was claimed and signed for at EGK's address as listed on the application." Neither Weber or Guthmann informed Symons prior to September 15 that they had received the Division order, or that the document even existed. They also did not advise him that they had contacted an out-of-state attorney in August in an effort to obtain advice. In this regard, petitioner had not authorized them to take any action with respect to the denial order, or to seek the advice of an attorney. Symons was unaware of the existence of the denial order prior to September 20, 1985 when he was shown a copy of the order by his employer. Had he been aware of the order prior to September 15, he would have filed a request for a hearing. Even though he did not specifically voice an objection to his employer opening his mail, Symons did not expressly authorize his employer to accept the order or any other notices from respondent. Indeed, Symons considered certified mail to be "a personal thing," and something that "an employer has (no) right to open."
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that petitioner timely requested an administrative hearing to contest respondent's denial of his application for registration as an associated person. DONE and ORDERED this 4th day of December, 1986 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1986.
Findings Of Fact In June 1986, Petitioner purchased a 55 Ft. Ocean Yacht Super Sport from South Jersey Yacht Sales for $577,055 and took delivery in New Jersey. Although Petitioner is not a dealer, a dealer's license was used to purchase this vessel and Petitioner paid no sales tax to New Jersey on this sale. The boat was named "SEABURY", entered Florida waters in November 1986 and remained for 105 days, proceeded to Bahama Islands February 22, 1987 and returned to Florida April 7, 1987, and remained in Florida for 31 additional days before returning north. From bridge logs maintained by bridge tenders over the Intracoastal Waterway and docking receipts at Bahia Mar and other berthing spaces it was concluded the vessel was used in Florida. Respondent established a prima facie case that the M/V SEABURY entered Florida waters within 6 months of its purchase in New Jersey and was used in this state. No evidence to rebut this prima facie case was presented by Petitioner.
The Issue The issue in this case concerns whether the Petitioner should issue a cease and desist order and/or impose sanctions against the Respondent on the basis of allegations that the Respondent, by failing to have its books, accounts, and documents available for examination and by refusing to permit an inspection of its books and records in an investigation and examination, has violated Sections 520.995(1)(a), (f), and (g), Florida Statutes.
Findings Of Fact Sometime during the month of February of 1991, Ms. Jennifer Chirolis, a Financial Investigator from the Department of Banking and Finance, visited the offices of the Barat Company. She spoke with Mr. Roque Barat and determined that the Barat Company was conducting retail installment sales without being licensed to do so under Chapter 520, Florida Statutes. Mr. Chirolis advised Mr. Roque Barat that he needed a license and asked him to cease operations until he obtained the necessary license. The Barat Company thereafter obtained the necessary license and was still licensed as of the time of the formal hearing. Thereafter, the Department received a complaint about the Barat Company from a customer. The customer's complaint was to the effect that the Barat Company had made misrepresentations concerning the fee paid by the customer. The Department initiated an "investigation" of the customer's complaint and also decided to conduct an "examination" of the Barat Company. On April 22, 1992, a Department Examiner, Mr. Lee Winters, went to the office of the Barat Company to conduct the "examination" and "investigation". The Barat Company is operated out of a small office with two employees and a few filing cabinets. When Mr. Winters arrived, employees of the Barat Company were conducting business with two customers. Mr. Winters identified himself to the employees and informed them that he had been assigned to conduct an "examination" and "investigation" of the Barat Company. A Barat Company employee, Mr. Fred Vivar, said that he could not produce the company's records without express authorization from Mr. Roque Barat, that Mr. Roque Barat was out of the country, that he could not get in touch with Mr. Roque Barat at that moment, but that when he did get in touch with him, he would advise Mr. Roque Barat of Mr. Winter's desire to examine the company's books and records. Following a number of telephone calls over a period of several days, on May 1, 1992, Mr. Vivar advised Mr. Winters that he had received authorization from Mr. Roque Barat for the Department to inspect the books and records of the Barat Company. An appointment was made for the Department to inspect the books and records on May 6, 1992, beginning at 10:00 a.m. On May 5, 1992, a letter from an attorney representing the Barat Company was hand delivered to Mr. Winters. The letter included the following paragraph: It is my understanding that you have requested the opportunity to view the records of the above-referenced company, said inspection to take place on May 6, 1992. Please be advised that if this "inspection" is purportedly being done by your agency's authority, pursuant to F.S. 520.996, that no records will be produced absent compliance by your department with F.S. 520.994 including, but not limited to, the Barat Company exercising its right to challenge said subpoena. The Department concluded from the letter of May 5, 1992, that the Barat Company not only refused to produce records without a subpoena, but that, even if served with a subpoena, the Barat Company would resist compliance with the subpoena unless and until ordered to comply by a court. For that reason the Department did not pursue the issuance of a subpoena. Mr. Winters has been involved in over one hundred "examinations" under Chapter 520, Florida Statutes. In the course of those "examinations" there have been only two licensees that did not produce their records. Those two licensees were the Barat Company and another company known as Phase One Credit. Mr. Roque Barat is an officer and director of both Phase One Credit and the Barat Company. The license of Phase One Credit was revoked for its failure to produce its books and records. The refusal to produce the books and records of the Barat Company was occasioned by an effort on the part of Mr. Roque Barat to avoid payment of "examination" fees authorized by Section 520.996, Florida Statutes. In the summer of 1992, the Barat Company filed for bankruptcy, closed down its business operations, and is currently winding up the business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance issue a Final Order in this case to the following effect: Dismissing the charge that the Barat Company has violated Section 520.995(1)(a), Florida Statutes; Concluding that the Barat Company has violated Sections 520.995(1)(f) and (g), Florida Statutes, as charged in the Administrative Complaint; Imposing a penalty consisting of: (a) an administra-tive fine in the amount of one thousand dollars, and (b) revocation of the Barat Company's license; and Ordering the Barat Company to cease and desist from any further violations of Chapter 520, Florida Statutes. DONE AND ENTERED this 23rd day of February, 1993, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 23rd day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5620 The following are my specific rulings on the proposed findings of fact submitted by the parties. Proposed findings submitted by Petitioner: Paragraph 1: Rejected as constituting a conclusion of law, rather than a proposed finding of fact. Paragraphs 2, 3 and 4: Accepted in substance. Paragraph 5: Accepted in substance, with the exception of the last five words. The last five words are rejected as irrelevant to the issues in this case and as, in any event, not supported by clear and convincing evidence. Paragraph 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 8: First sentence accepted. Second sentence rejected as inaccurate description of letter. (The relevant text of the letter is included in the findings of fact.) Last sentence rejected as subordinate and unnecessary evidentiary details. Paragraph 9: Rejected as irrelevant to the issues in this case. Paragraph 10: First two sentences rejected as irrelevant to the issues in this case. Last two sentences accepted in substance. Paragraph 11: Accepted in substance. Paragraph 12: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 13: Accepted. Proposed findings submitted by Respondent: As noted in the Preliminary Statement portion of this Recommended Order, the Respondent's proposed recommended order was filed late. The Respondent's proposed recommended order also fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, in that it fails to contain citations to the portions of the record that support its proposed findings of fact. A party's statutory right to a specific ruling on each proposed finding submitted by the party is limited to those circumstances when the proposed findings are submitted within the established deadlines and in conformity with applicable rules. See Section 120.59(2), Florida Statutes, and Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), in which the court held, inter alia, that a party is not entitled to more than a reasonable period of time within which to submit its proposals. Because the Respondent submitted its proposals late and because those proposals fail to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, the Respondent is not statutorily entitled to a specific ruling on each of its proposed findings and no such specific findings have been made. (As noted in the Preliminary Statement, the Respondent's proposed recommended order has been read and considered.) COPIES FURNISHED: Ron Brenner, Esquire Office of the Comptroller 401 Northwest 2nd Avenue Suite 708-N Miami, Florida 33128 Louis J. Terminello, Esquire 950 South Miami Avenue Miami, Florida 33130 Michael H. Tarkoff, Esquire 2601 South Bayshore Drive Suite 1400 Coconut Grove, Florida 33133 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Copies furnished continued: William G. Reeves, General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32399-0350
Findings Of Fact At present Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant is the holder of license no. 16-1320-SRX, series 4-COP held with the State of Florida, Division of Beverage. Prior to September 1, 1974, Armand Cerami owned 50 shares of stock in Tony's Fish Market, Inc., which represented a 50 percent interest in that corporation. In addition, Armand Cerami held 50 shares of stock in Tony's Fish Market of Ft. Lauderdale, Inc., representing a 50 percent interest in that corporation and was the holder of 50 shares of Tony's Sweet Enterprises, Inc., which represented a 50 percent interest in that corporation. During the time period of September 1, 1974, Armand Cerami had been charged with violation of the Internal Revenue Laws of the United States, under a federal indictment no. 74-407-CR-JE, in the United States District Court for the Southern District of Florida. This charge was placed against Cerami for Internal Revenue Law Violations which allegedly took place on tax returns on the tax year ,1968. In contemplation of a plea of guilty which Cerami intended to enter in the above cited case, he entered into a contract for purchase and sale of the corporate securities in the aforementioned corporations. Petitioner's Exhibit 2, admitted into evidence is a copy of the contract for purchase and sale of corporate securities, which was entered into between Armand Cerami and Pamela Ann Cerami, his wife, on September 1, 1974. The terms of the contract were that Pamela Ann Cerami would pay Armand Cerami $20,000 cash and would give to Armand Cerami a promissory note payable in the amount of $200,000, in ten equal installments of principal and interest at 6-1/2 percent payable on the anniversary date of the contract. On September 20, 1974, the Board of Directors of the three subject corporations accepted the resignation of Armand Cerami as the Secretary-Treasurer of those corporations, and elected Pamela Cerami as Secretary-Treasurer in Armand Cerami's stead. Those Board of Directors were Tony Sweet, Frank Sweet and Armand Cerami. Armand Cerami returned to federal court on October 18, 1974, and entered a plea of guilty to counts one and five of the aforementioned, indictment, for which he was sentenced to three year on each count to run concurrently, but was given a split sentence of 6 months time in confinement, thereafter to be placed on a probationary period for 2-1/2 years. A copy of the judgement and commitment is Petitioner's Exhibit number 1, admitted into evidence. They are felony offenses. Subsequent to his release from prison, Armand Cerami served as a co- manager and host of the licensed premises, Tony's Fish Market, located at 1900 N. Bay Causeway, North Bay Village, Florida, license no. 23-1624-SRX, series 4- COP and in the same capacity at Tony's Fish Market of Ft. Lauderdale, located at 1819 S.E. 17th Street, Ft. Lauderdale, Florida, license no. 16-1320-SRX, series 4-COP. He remained in this capacity until September 30, 1976, when a change in 562.13(3)(a), F.S. prohibited convicted felons from being managers of the licensed premises, licensed by the State of Florida, Division of Beverage. The change in the law took effect on October 1, 1976. At that point two separate individuals were hired as managers of the subject licensed premises. Armand Cerami remained in the position as host of those licensed premises, up to and including the date of the hearing. Although this title and this position was held by Armand Cerami, on December 16, 1976, while conducting a routine visit, beverage officer, William Valentine was told by Frank Sweet, a Director in the subject corporations, that Frank Sweet was in charge of the kitchen of the Tony's Fish Market of Ft. Lauderdale and that Armand Cerami was the real manager, ran the restaurant and was responsible for hiring and firing of employees. Pamela Ann Cerami was not shown to have any active interest in the management of the licensed premises. Pamela Ann Cerami as the Secretary-Treasurer in the three corporations which she purchased shares in, does not draw a salary from the operation of the two restaurants. Her background and financial involvement in the licensed premises, can be traced to certain trusts in her name and a certain gift from her husband, Armand Cerami. The joint composite exhibit number 1, admitted into evidence in the hearing, shows that Pamela Ann Cerami, at one time Pamela Crumly, was a beneficiary of the estates of Gail Crumly and Mildred Crumly, her grandparents. Certain distributions of money were made to Pamela Ann Cerami from those estates. On April 3, 1970, she received $6,093.94; on July 3, 1970, she received $121.88; on October 5, 1970, she received $182.82; and on December 31, 1970, she received $925.65,, which represented a partial distribution of her 1/2 interest in the Gail Crumly estate. As of April 1, 1970, she had been given $5,292.59 as a portion of the 1/3 distribution of her share in the estate of Mildred Crumly. The total value of her share in that estate being $16,157.02, and the conditions of her rights to the estate being set forth in the will of Mildred Crumly which is found in the joint composite exhibit number 1. Pamela Ann Cerami had worked as an airline stewardess prior to her marriage to Armand Cerami and had certain funds from her employment in that capacity. Other funds of the marriage include a certificate of deposit in the Bank of Nova Scotia in Nassau, Bahamas in the amount of $18,000., at 8-1/4 percent interest, as deposited May 20, 1970 with a maturity of November 20, 1970. This certificate of deposit was in the name of Armand D. Cerami and/or Pamela Crumly now Pamela Ann Cerami. The interest received on that certificate of deposit was redeposited along with the principal and a second certificate of deposit was purchased on May 23, 1974 in the amount of $23,480.74, to become mature on November 25, 1974. This certificate was withdrawn on October 18, 1974 and the receipt of 10-1/4 percent interest was paid. The amount of interest thereby being $975.89. Copies of the above mentioned certificates of deposit may be found as part of the joint composite exhibit number 1 admitted into evidence. Continuing an examination of the financial circumstances of Pamela Cerami and Armand Cerami, there is found a warranty deed from Willard H. Keland to Pamela Ann Cerami for certain real estate in Dade County, Florida, for which Pamela Ann Cerami paid Willard H. Keland the amount of $158,000. This deed is found as Petitioner's exhibit number 4 admitted into evidence and was recorded on January 11, 1974. On that same date a closing was held on the property. Petitioner's Exhibit number 5, admitted into evidence is a copy of the closing statement. Conditions of the closing was a cash deposit in the amount of $15,800 and $69,251.64 to close. A first mortgage in the amount of $67,500 and interest of $1,028.75 was given to the Miami Beach First National Bank. The $158,000 paid for this estate corresponds to a gift which was given by Armand Cerami to Pamela Ann Cerami in the amount of $158,000 as shown in the gift tax return, a copy of which is Petitioner's exhibit number 6, admitted into evidence. The effective date of the gift is established in the gift tax return as February, 1974. The federal income tax return filed by Armand Cerami for the year 1974, shows the sale of the stock of the three corporations. That income tax return would further show the $20,000 installment sale payment, a portion of which was treated as income to Armand Cerami. Finally, that return shows $13,000 of interest which was treated as income to Armand Cerami. On October 1, 1975, Pamela Anne Cerami gave a first mortgage on the property that she had paid $158,000 for this mortgage being given to Bob Erra, as trustee. A copy of the mortgage deed is found as Petitioner's Exhibit number 9, admitted into evidence. The amount of the mortgage was $40,000 and the proceeds of the mortgage amount were distributed as $7,000 to Pamela Cerami and $33,000 to Armand Cerami. These distributions were placed as time certificates of deposit with the Pan American Bank of West Dade, copies of which are found as Petitioner's composite exhibit number 8. The amount of interest returnable on the time certificate of deposit held by Armand Cerami is shown in his 1975 federal income tax return. Tony's Fish Market of Ft. Lauderdale, Inc. t/a Tony's Fish Market Restaurant made application with the State of Florida, Division of Beverage, to change Armand Cerami as Secretary-Treasurer of Tony's Fish Market of Ft. Lauderdale, Inc. and substitute Pamela Cerami as Secretary-Treasurer of that corporation and to transfer the stock ownership in the licensee corporation from Armand Cerami to Pamela Cerami. This change of officer and transfer of stock ownership involves the license no. 16-1320-SRX, series 4-COP. This application was denied by letter of April 9, 1975, from the Director of the Division of Beverage. In fact, Armand Cerami had been convicted of a felony, and is interested in an indirect way in the licensed premises.
Recommendation It is recommended that the applications to change the officer and transfer the stock ownership in license no. 16-1320-SRX, series 4-COP, set forth in this hearing be denied DONE AND ENTERED this 24th day of February, 1977, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: William Hatch, Esquire Division of Beverage The Johns Building Tallahassee, Florida 32304 Tobias Simon, Esquire 1492 S. Miami Avenue Suite 208 Miami, Florida 33130 Sy Chadroff, Esquire Suite 2806 120 Biscayne Boulevard North Miami, Florida 33132
Findings Of Fact High-Tech Yacht & Ship, Inc. (Petitioner) is a Florida corporation engaged in the business of retail sales of marine vessels. Also, Petitioner is a registered retail dealer in the State of Florida. The President of Petitioner is its only corporate officer. On or about September 2, 1993, Petitioner, in the capacity of a broker, sold a motor yacht at retail to Regency Group, Inc. (purchaser), through its representative, for $78,000. The motor yacht is described as a 1988, 41' Amerosport Chris Craft, hull Number CCHEU075E788, and called the "Motivator". At the closing of the sale, on or about September 2, 1993, the purchaser refused to pay the sales tax on the purchase, which was $4,680. However, the purchaser agreed to pay the sales tax after being informed by Petitioner that, without the payment of the sales tax, there could be no closing. The purchaser's representative submitted, at closing, a personal check in the amount of $4,680 for the sales tax. All of the necessary documents were completed for ownership and registration to be transferred to the purchaser. Subsequently, Petitioner received notice from its bank that the check for the sales tax had been dishonored by the purchaser's bank. The purchaser's representative had stopped payment on the check. In October 1993, Petitioner submitted its sales and use tax return for the month of September 1993 to Respondent in which the sale of the yacht was reported. Respondent automatically reviews sales and use tax returns. Respondent's review of Petitioner's return revealed a shortage of sales tax collected in the amount of $4,680.. In January 1994, Respondent issued a notice of tax action for assessment of additional tax in the amount of $4,710, plus interest and penalty, to Petitioner. The $4,710 included the loss of Petitioner's collection allowance of $30, which loss resulted from Petitioner's failure to timely remit all taxes due. Having received the notice of tax action, by letter dated January 20, 1994, Petitioner generally informed Respondent of the circumstances regarding the sales tax shortage, including the dishonored check. Petitioner pointed out, among other things, that Respondent had the authority and the means to collect the tax, while it (Petitioner) had limited means, and suggested, among other things, that Respondent cancel the purchaser's Florida registration of the yacht. On or about January 31, 1994, approximately three months after the check for sales tax was dishonored, Petitioner issued a notice of dishonored check to the purchaser, in which Petitioner requested payment of the sales tax. The notice provided, among other things, that Petitioner could seek criminal prosecution and civil action if the monies were not paid to Petitioner. Having not received the $4,680, Petitioner contacted the local law enforcement agency. After investigation, the law enforcement agency informed Petitioner that a civil action would have to be instituted because the purchaser, through its representative, had indicated that it was not satisfied with the yacht. Although Petitioner engaged the services of an attorney for civil action, no civil action was commenced. Additionally, Petitioner did not engage the services of a collection agency for assistance in collecting the sales tax. Subsequent to its notice of tax action, on or about March 12, 1994, Respondent issued a notice of assessment to Petitioner. The notice of assessment provided, among other things, that Petitioner was being assessed taxes in the amount of $4,710, plus penalty and interest in the amount of $2,342.61, totalling $7,052.61. Petitioner protested the assessment. On February 8, 1995, Respondent issued its notice of reconsideration in which Respondent determined, among other things, that the assessment was appropriate and affirmed the assessment of $7,052.61, plus interest and penalty. The interest accrues at the rate of $1.55 per day. Petitioner has not remitted any of the assessed tax, including interest and penalty, to Respondent. Petitioner has not identified on its federal tax return the noncollection of the sales tax from the purchaser as a bad debt. Sales tax is part of the total sale price for an item. Respondent considers the sales tax as collectable by a seller in the same manner as any other debt owed by a purchaser to a seller. A retail dealer, who is also a seller, is considered to be an agent for the State in the collection of sales tax. The burden of collecting the sales tax is placed upon the retail dealer by Respondent. Some of Respondent's employees have been sympathetic to Petitioner's tax assessment matter. However, none of the employees indicated to or advised Petitioner that Respondent was or is in error.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Revenue enter a final order affirming the assessment of sales tax against High-Tech Yacht & Ship, Inc. in the amount of $7,052.61, plus interest and penalty. DONE AND ENTERED this 7th day of August 1996, in Tallahassee, Leon County, Florida. ERROL H. POWELL, 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 7th day of August 1996.
