Findings Of Fact Respondent Martha M. Bustillo is a real estate broker licensed in the State of Florida, having been issued license number 0401092. At all times material hereto, she has been the qualifying broker for Respondent Virmar Investments, Inc. Respondent Virmar Investments, Inc., is a real estate brokerage corporation licensed in the State of Florida, having been issued license number 0237551. At no time material hereto has Respondent Olga Venedicto been licensed in the State of Florida as either a real estate broker or as a real estate salesperson. In July of 1992 Thomas F. Sevilla contacted Virmar Investments, looking for a house to buy. Olga Venedicto took his phone call and told him that she would help him. Sevilla went to Venedicto's "office" at Virmar Investment and began working with her. Venedicto gave Sevilla her business card which represented that she is the vice president of Virmar Investments, Inc., and carries the notation "registered real estate brokers." In addition to giving him her card which carried her name, Virmar's name, and the word "brokers" in the plural form rather than the singular form, Venedicto specifically told Sevilla that she was a broker. Venedicto and Bustillo took Sevilla to see a house which he decided to buy. He gave Venedicto his check for $2,000 as a deposit and instructed her and Bustillo to make an offer on that house. Venedicto told him she would put the money in Virmar's escrow account. Instead, the money was deposited in Virmar's operating account. Sevilla did not buy that house, and Venedicto and Bustillo took him to see a second house. Sevilla decided not to make an offer on that house and asked Venedicto to refund his money. It took a month before Sevilla received a check from Venedicto. Although the check was marked "deposit return," the check was not written from Virmar's account but rather was a check from a Mega Group Corp. for only $1,675. When Sevilla attempted to cash that check, it was dishonored three times, with the notation "N. S. F." Finally, the check was honored by the bank. Sevilla had expected to receive his entire $2,000 deposit. Neither Venedicto nor Bustillo had ever told him in advance that they would keep part of his money. Although Respondents' attorney during the final hearing implied that his clients may have kept part of Sevilla's money to pay for a survey and credit report, Sevilla had not agreed in advance to pay for a credit report, and no evidence was offered as to what house Sevilla might have purchased a survey on or for what reason. Further, neither Venedicto nor Bustillo gave him a copy of any survey or credit report nor was he ever shown one or advised that either would be obtained. When Sevilla inquired as to why he was reimbursed the lesser amount, only then did Venedicto tell him that Respondents were keeping part of his money for a credit report. Respondents Bustillo and Virmar authorized and assisted Venedicto in her performance of acts and services requiring licensure as a salesperson relative to the transaction with Sevilla. Rita and Carlos Benitez listed their house for sale with Pedro Realty. Gladys Diaz was the listing agent at Pedro Realty. Respondents Bustillo and Venedicto brought Carlos Martinez and his wife to look at the Benitez house. Gladys Diaz was present at the time. Respondents Bustillo and Venedicto subsequently came to Diaz' office and presented to Diaz and Carlos Benitez an offer on behalf of Mr. and Mrs. Martinez. Respondent Venedicto represented herself to be a realtor and Respondent Bustillo to be Venedicto's partner and broker. Respondent Venedicto discussed the contract and price with Diaz and Benitez while Respondent Bustillo observed Venedicto's presentation. The offer had previously been signed on behalf of Respondent Virmar by Respondent Venedicto who represented to Diaz that the signature on the offer was that of Respondent Venedicto. Mr. Benitez signed the document, and Diaz then took the offer to Mrs. Benitez to obtain her signature. Mrs. Benitez also signed the offer, thereby completing the contract. Thereafter, delays ensued because Mr. and Mrs. Martinez were not in a financial position to be able to purchase the home. Respondent Venedicto contacted Mrs. Benitez and attempted to re-negotiate the contract. During those negotiations which were not successful, Respondent Venedicto represented herself to Mrs. Benitez as being a licensed real estate agent. In response to Mrs. Benitez' inquiries, Respondent Venedicto gave Benitez her business card carrying the names of Venedicto and Virmar and the notation "registered real estate brokers." As to the portion of the transaction involving Mrs. Benitez, all of her contact with the three Respondents in this cause was with Respondent Venedicto. Venedicto gave Benitez advice regarding proceeding with the sale and handled the negotiations. Prior to September 24, 1992, Hector F. Sehweret, an investigator for the Department of Business and Professional Regulation, requested that Respondents Bustillo and Virmar produce certain records for inspection by him. He spoke with Respondent Bustillo on a number of occasions to no avail. He offered to give her time to gather the records if necessary, but she never did. On September 24, 1992, he served Respondent Bustillo with a subpoena for those records. She still failed to produce them. Thereafter, she would not return his phone calls, and when he came to the office of Virmar Investments, Respondent Bustillo would hide from him. Neither Respondent Bustillo nor Respondent Virmar have ever produced the records subpoenaed. Further, no explanation has been given for the failure of Respondents Bustillo and Virmar to produce their records. Although the attorney for Respondents implied during the final hearing that the records may have been destroyed by Hurricane Andrew, there is no evidence to support that implication; rather, the evidence is uncontroverted that the building housing the real estate office of Respondents Virmar and Bustillo was not damaged by Hurricane Andrew. Ileana Hernandez is a realtor and a mortgage broker licensed in the State of Florida. She met Respondents Bustillo and Venedicto during a real estate transaction. In November of 1991 Respondents Bustillo and Venedicto contacted Hernandez regarding obtaining money in exchange for a second mortgage on certain real property. At the time, Respondents did not tell Hernandez the identity of the owner of the property, but Hernandez was given the address of the property and was advised that the market value of the property was approximately $79,000. Hernandez was subsequently advised that Respondent Venedicto (a/k/a Olga Bichara) was the owner of the property. It was agreed that Respondent Venedicto would execute and record the promissory note and mortgage in the amount of $15,500. Hernandez, who knew that Respondent Bustillo was the president of Terra Title, gave her a personal check payable to Terra Title in the amount of $15,000 on November 26, 1991. Respondent Venedicto, who had promised Hernandez that the promissory note and second mortgage would be recorded, never recorded those documents. Further, Respondents never delivered the original copy of the promissory note and mortgage to Hernandez despite her repeated demands. Hernandez later discovered that Respondent Venedicto was not the sole owner of the property which she had attempted to mortgage but jointly owned the property with her son. Accordingly, Respondent Venedicto's signature would not be sufficient to perfect a mortgage on the property. Hernandez also discovered that the mortgage, represented by Bustillo and Venedicto to be a second mortgage, was not. There were already two mortgages on the property. Had Hernandez known the true ownership and the true encumbrances on the property, she would not have loaned Venedicto the $15,000 because that raised the total amount of mortgages on the property to be in excess of the value of the property. Three checks which were subsequently written by Respondent Bustillo from the operating accounts of Respondent Virmar and of Mega Group Corp. were dishonored by the bank with the notation "N. S. F." As a result of those checks, Hernandez obtained default final judgments against Respondent Virmar and against Mega Group Corp., which final judgments are still unsatisfied. Prior to that time, however, Respondents Venedicto and Bustillo approached Hernandez regarding their need to borrow $35,000 to be re-paid in 30 days in conjunction with some real estate development in which Respondents Venedicto and Bustillo were involved. Respondent Venedicto and Respondent Bustillo each individually represented that Hernandez would have her money back in 30 days. Respondent Bustillo told Hernandez that Respondent Venedicto was in business with Bustillo and was selling real estate in Mexico. Bustillo asked Hernandez to make the check payable to Bustillo's company Terra Title. Hernandez went to the offices of Respondent Virmar and handed her personal check made payable to Terra Title to Respondent Venedicto. When the 30 days had passed with no payments to Hernandez, she went to Virmar Investments and made Respondent Venedicto sign a promissory note for $35,000. By the time of the final hearing in this cause, Hernandez had recovered only $15,000 of the $35,000 loan made to Respondent Venedicto and had recovered only the principal amount of the money supposed to have been secured by a second mortgage on real property. Hernandez is still owed $20,000 in principal alone.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered revoking the license of Respondent Martha M. Bustillo, revoking the license of Respondent Virmar Investments, Inc., and requiring Respondent Olga Venedicto to pay an administrative penalty in the amount of $5,000 within 30 days from the entry of the Final Order. DONE and ENTERED this 31st day of January, 1994, at Tallahassee, Florida. LINDA M. RIGOT 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 January, 1994. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 93-3328, 93-3329, and 93-3330 Petitioner's proposed findings of fact numbered 2-18, 20-29, and 31-33 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 1 has been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Petitioner's proposed finding of fact numbered 19 has been rejected as not being supported by the weight of the evidence in this cause. Petitioner's proposed finding of fact numbered 30 has been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 1, 4, 5, 8, 9, 18, 25, 26, 28, 37, 42, 49-52, 55, 57, 62, 63, 69, 71, and 73 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed findings of fact numbered 2, 6, 11-17, 19-22, 30- 36, 43, 46-48, 53, 54, 56, 58, 60, 67 and 68 have been rejected as not constituting findings of fact but rather as constituting argument of counsel, conclusions of law, or recitation of the testimony. Respondents' proposed findings of fact numbered 7, 10, 23, 29, 61, 64, 65, 70, 72, and 75 have been rejected as not being supported by the weight of the evidence in this cause. Respondents' proposed findings of fact numbered 3, 24, 27, 38-41, 44, and 45 have been rejected as being unnecessary to the issues involved herein. Respondents' proposed findings of fact numbered 59, 66, 74, and 76-78 are rejected as being irrelevant to the issues under consideration in this cause. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308A Orlando, Florida 32802-1900 Ofer M. Amir, Esquire Amir & Associates, P.A. 8751 West Broward Boulevard, Suite 500 Plantation, Florida 33324 Darlene F. Keller, Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802-1900 Jack McRay, Acting General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Tallahassee, Florida 32399-0792
The Issue The issue is whether Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b), Florida Statutes.
Findings Of Fact Respondent was first licensed as a real estate salesperson in Florida in 1997. She has been licensed continuously since that time, although she did not reside or work in Florida for one year in 1998 and 1999. Her license has never been disciplined. Having entered into a contract to purchase, as her personal residence, a townhouse in Palm Beach Gardens for $85,000, Respondent contacted a licensed mortgage broker, Gary Carlson. Respondent and Mr. Carlson had previously worked together, in their respective professions, while employed by a large residential real estate business. Respondent asked Mr. Carlson to find her a mortgage lender, and Mr. Carlson agreed to do so. Mr. Carlson obtained a mortgage loan application from Respondent and submitted it to an institutional mortgage lender that Mr. Carlson represented. At all times in this transaction, Mr. Carlson served as the agent of the mortgage lender, not Respondent. After examining the application and related information on the proposed mortgage loan, the lender directed Mr. Carlson to obtain additional information, including an affidavit to the effect that Respondent had never been known as Lea Taylor Nola and that she had never been married. Respondent disclosed to Mr. Carlson that she had been known as Lea Taylor Nola and she had been married, although she was now divorced. Mr. Carlson assured her that the requirements were unimportant and advised her to sign statements that she did not know Lea Taylor Nola and that she had never been married. Respondent did so. Upon examination of the closing documents, including the unattested statements described in this paragraph, the lender funded the mortgage loan, and Respondent purchased the townhouse. The mortgage loan remains in good standing two years later.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 30th day of June, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 30th day of June, 2004. COPIES FURNISHED: Jauna Watkins, Acting Director Division of Real Estate 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 James P. Harwood Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Suite 802, North Orlando, Florida 32802-1900 Richard L. Robbins Sutherland, Asbill & Brennan, LLP 999 Peachtree Street, Northeast Atlanta, Georgia 30309-3996
The Issue Whether the Respondent violated Section 475.25(1)(a) and (i), Florida Statutes.
Findings Of Fact The admissions by the Respondent, together with the records introduced at the hearing by the Florida Real Estate Commission show that Respondent was a licensed real estate broker holding license no. 0122293. The Respondent admitted his participation in all the transactions referenced in the administrative complaint. The bank records and other evidence introduced at the hearing show that the Respondent's escrow account maintained at Liberty Bank of Cantonment lacked sufficient funds to pay the bills which Respondent admitted were owed Lawyers Title Insurance Co. in the amount of $44.00. The Respondent testified that he had paid these bills only two days before the instant hearing with a check on his personal bank account. From the Respondent's testimony, it is clear that he failed to maintain sufficiently detailed records to permit him to account for monies in his escrow account in the Liberty Bank of Cantonment and in the bank account which he maintained with the First State Bank in Pensacola, Florida. The closing statements relating to the Netzer/Hayes transaction showed that the Respondent received $1,225.00. His records for this transaction showed checks on his escrow account relating to this transaction in the amount of $1,481.60. Respondent testified that the error in this transaction occurred when he erroneously stubbed one check as relating to the Netzer/Hayes transaction, when in actuality it related to a separate transaction. However, under cross examination the Respondent could not identify the transaction to which this check related. The Respondent admitted depositing the money involved in the Netzer/Hayes transaction to his Cantonment Liberty Bank escrow account. He also admitted that he had made no transfer of funds from the Cantonment bank account to his First State Bank account. The Respondent admitted and the evidence indicates that payments were made at closing from the First State Bank account. The Liberty Bank account records show a balance of less thank $731.00 at all times after 9-30-76. Therefore, insufficient funds were maintained by the Respondent in the Liberty Bank escrow account to satisfy the obligations on the account arising from the Nitzer/Hayes transaction. Furthermore, the Respondent's handling of escrow account at the Liberty Bank in Cantonment was as it related to this transaction was improper The admissions of Respondent and the evidence introduced showed that he was the broker involved in the Suttles/ Kamplain transaction. No evidence was introduced that the Respondent failed to advise Suttles that he initially had accepted a $250.00 note in lieu of cash as an earnest money deposit. The evidence is clear that upon receipt of the money, the Respondent deposited this money to his account in the First State Bank of Pensacola. Although this account was not designated an escrow account, it did bear the designation of a management account. It was not established by substantial and competent evidence that a management account was not an escrow account. The Suttles/Kamplain transaction closed without problem; however, there is no explanation of the disbursement of the $250.00 received as an earnest money deposit in the records of this transaction. Regarding the Suttles/Gordon transaction, it was established that the Respondent was the broker who handled this transaction. No substantial and competent evidence was produced that the Respondent failed to disclose to the Gordons that he did not obtain an initial $100.00 deposit on the transaction. The record is clear that the Respondent did receive a check in the amount of $1,500.00 from Mr. Suttles which the Respondent deposited to his account in the First State Bank. The Gordons did testify that the Respondent was authorized to allow the Suttles to occupy the premises prior to closing. After occupying the property, the Suttles were to make rental payments to be credited to the payment of the mortgage. After moving into the house, Mr. Suttles and his wife began to have domestic problems, and he immediately ceased to make all rental payments upon the property. Mr. Suttles did not advise the Respondent that he was not making payments and did not intend to make further payments on the house. Mr. Suttles did avoid all of Respondents efforts to contact him. The Suttles and the Gordons did execute the closing papers but by the time the papers were executed, Mr. Suttles failure to make the rental payments had caused a deficiency in payment of the mortgage. Because the mortgage was in arrears, the transaction could not close. When the Respondent became aware of the Suttles' separation, he began to make arrangements to have them vacate the Gordon house. However, Respondent failed to keep the Gordons fully advised as to the statuts of this transaction. Further, the check given to the Gordons by Respondent was not honored by the First State Bank of Pensacola because of insufficient funds in the Respondent's account to meet this obligation. The Respondent retained and disbursed portions of the $1,500.00 deposited to the account, although the transaction did not close. Money was disbursed to the Gordons and Respondent took out his commission. Whether Respondent was not entitled to disburse the monies under the contract between Respondent and the Gordons cannot be determined upon the evidence presented. However, it is clear that Suttles was a bona fide purchaser, who after he entered into occupancy, determined that he would not complete the transaction; and under the terms of the contract between the Respondent and the Gordons, the Respondent earned his commission when a purchaser was obtained. It is clear that the Respondent did not keep the Gordons properly advised of the situation regarding the sale of their house to the Suttles; and that the Respondent's check to the Gordons on the First State Bank was not honored because the account was impaired. The evidence and testimony taken as a whole at the hearing shows that Respondent did not keep a running balance of the accounts which he maintained at the Liberty Bank of Cantonment or the First State Bank of Pensacola. The evidence further shows that the Respondent failed to withdraw commissions earned in their total amount subsequent to closings on property, did not pay bills which closing statements indicate he was obligated to pay, permitted inter-bank transfers of funds owed him by banking institutions to his escrow or management account, did not take steps to ensure that the First State account was properly and clearly titled as an escrow account, did not properly annotate withdrawals from his escrow accounts, and failed to maintain money in his escrow account until it was disbursed.
Recommendation The record taken as a whole indicates that the violations for which the Respondent is responsible are the result of his culpable negligence as opposed to any dishonest or fraudulent act. However, the Respondent is so devoid of any knowledge of his responsibilities with regard to monies entrusted to him that he may not safely be permitted to function as a real estate broker. Based upon the foregoing-findings of fact and conclusions of law, the Hearing Officer recommends that the Florida Real Estate Commission revoke the license of Respondent as a registered real estate broker. DONE and ORDERED this 9th day of March, 1978, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Robert Pierce, Esquire Florida Real Estate Commission 400 West Robinson Avenue Orlando, Florida 32801 O. E. Adams, Esquire Post Office Box 12217 Pensacola, Florida 32002 ================================================================= AGENCY MEMORANDUM ================================================================= Orlando, Florida November 27, 1978 MEMORANDUM TO: Renata Hendrick, Registration Supervisor FROM: Manuel E. Oliver, Staff Attorney RE: PD 3267 (PD 15776) FREC vs. Ralph D. Villeneuve t/a Don's Realty 122293-1 DOAH Case No. 78-091 Please find enclosed copies of the Final Order filed on April 13, 1978, in the reference case together with the opinion filed on November 2, 1978 by the District Court of Appeal, First District of Florida, affirming the Commission's Order, as well as a copy of the mandate issued by said Court on November 20, 1978. By virtue of the foregoing, the order of the Commission revoking defendant's registration has become firm and effective in all respects. Please make the necessary annotations in the records for all effects. Manuel E. Oliver Staff Attorney MEO/km Enclosures:* * NOTE: Enclosures noted in this memorandum are not available at the division and therefore not a part of this ACCESS document.
The Issue At issue is whether respondent committed the offenses alleged in the administrative complaint and, if so, what disciplinary action should be taken.
Findings Of Fact Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Phillip Bantu Gilbert, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0460883. Respondent's licensure status On May 13, 1992, respondent applied to the Department for licensure as a real estate broker. As part of that application, respondent was required to make an election with regard to whether, upon successful completion of the examination, he would be actively employed or preferred an inactive broker's license. Specifically, the application provided: EMPLOYMENT INFORMATION You must select one of the following options for your first license which automatically will be mailed as notice of passing the exam- ination, together with your examination score. The receipt of either license will establish your broker's status. You may immediately file a request to change employer, register as a real estate broker (sole proprietorship), or become a broker-member of a corporation or partnership, at no additional charge. [ ] I will continue my present employment as a broker-salesman. (ATTACH COPY of your current salesman's license or Validated Confirmation Slip.) [x] I wish to be issued an inactive broker's license and understand that it may be converted to a broker's or broker-sales- man's license if I file and request same when notified that I have passed the examination. Respondent elected the second option, to be issued an inactive broker's license. Respondent successfully completed the examination, and on December 21, 1992, was issued his broker license. Such licenses do not carry any legend reflecting active or inactive status; however, due to his election, which evidenced no current real estate employment or place of business, respondent's status was inactive. Following licensure, respondent began to actively operate as a broker, under the name Bantu Enterprises, at 150 Northwest 56th Street, Miami Shores, Florida. Bantu Enterprises, of which respondent is president and founder, is a Florida corporation, and has never been registered as a trade name or real estate brokerage company by the Department. Respondent's license continued in a voluntary inactive status until, following the investigation hereinafter discussed, he applied to the Department for active status. That application, filed March 1, 1994, identified the name and business address of the owner/broker as Phillip B. Gilbert, 150 Northwest 56 Street, Miami, Florida. The Morong transaction On or about June 14, 1993, Chester Morong and Lynette Morong, his wife, submitted an offer to purchase certain real property located at 700 Northwest 55 Avenue, Plantation, Florida, to the Department of Veterans Affairs (VA) for $177,250.00. Such offer was submitted through Bantu Enterprises, with Phillip B. Gilbert noted as the principal broker and sales person, and reflected an earnest money deposit of $1,500.00 being held by the broker. On June 30, 1993, respondent was advised by the VA that the Morong offer had been accepted for processing, and respondent was accorded three business days to present the Morongs to an authorized VA lender to process their offer. Respondent apparently complied with such requirement, and on August 4, 1993, the VA advised respondent that the Morongs had been approved to purchase the property and a closing date of August 13, 1993, was established. On August 9, 1993, the VA sent by overnight express to respondent, as the broker of record, the closing package. Under established procedure, respondent was to close the transaction, and then return to the VA, within 10 days of the closing, the closing package, the proceeds due the VA, and a recording receipt for any legal instruments that were recorded. On August 13, 1993, Mr. Morong requested of respondent that the closing be postponed for fourteen days. According to Mr. Morong, a hurricane had destroyed his parents' home in Trinidad the previous weekend, and he had been required to use the closing monies, among others, to provide them assistance. Respondent assured Mr. Morong that the time for closing could be extended; and on some date between August 13 and August 16, 1993, secured the Morongs' signatures to the closing documents in anticipation of closing. Among those documents was a mortgage deed to secure the repayment of the VA financing and a mortgage note in the sum of $175,750.00. On August 16, 1993, the VA contacted respondent's office and advised that there might be a title problem, and that the closing might have to be postponed to see if the problem could be resolved. According to the VA, respondent's office manager informed them that Mr. Gilbert told her to inform the VA that the sale had closed. In fact, the sale had not closed at that time. At or about 2:30 a.m., August 17, 1993, respondent telephoned Mr. Morong and stated he had received a call from the VA and that if he didn't have the closing costs the next day he (respondent) would quit claim the property to another person. On August 17, 1993, Mr. Morong telephoned the VA and learned that there might be a title problem with the property, associated with a bankruptcy. Acting on that advice, Mr. Morong delivered a letter to Mr. Gilbert that same day, which letter stated: Without prejudice I would like to formally withdraw my offer to close on the purchase of the above captioned property. This decision though saddening for us . . . was arrived at due to the attending problems with the property. I would like the urgent return of my $1500 earnest money. I also would like to bid on another property. On August 19, 1993, Mr. Morong was given a check, post-dated for August 21, 1993, on the account of Bantu Enterprises, in the sum of $1,500.00, for return of his escrow deposit. That check was subsequently negotiated and paid. Respondent did not advise the VA of Mr. Morong's withdrawal of the offer to purchase or his return of Mr. Morong's earnest money deposit. Had he done so, the closing on this property would not have occurred and the VA would have offered the property to the next highest bidder (offeror). Under such circumstances, respondent would have lost the six percent commission he anticipated from the transaction. Subsequent to Mr. Morong's withdrawal of his offer to purchase on August 17, 1993, respondent proceeded to close on the property, without the Morongs' consent. In so doing, respondent caused the special warranty deed from the VA to the Morongs, as well as the mortgage previously executed by the Morongs, to be recorded in the public records of Broward County, Florida. Thereafter, on August 26, 1993, respondent caused a quit claim deed, dated August 18, 1993, between Chester Morong and Lynette Morong, his wife, as grantors and Beverly A. Henry, a single woman, as grantee, to be recorded in the public records. That quit claim deed, prepared by respondent's brokerage, is a fraudulent document since the signatures affixed to the quit claim deed purporting to be those of Mr. and Mrs. Morong are forgeries, as the Morongs never executed any such document. On August 23, 1993, the VA received the closing package back from respondent, along with the settlement proceeds. Facially, the documents reflected that the sale had closed on August 13, 1993, and that Chester Morong and Lynette Morong, his wife, were the owners of the property. No reference was made to the transfer to Ms. Henry, and no request was made, at the time, for an assumption of mortgage package. The investigation of respondent's records and escrow accounts Following a complaint from Mr. Morong, after he discovered that the closing had occurred as heretofore discussed, a Department investigator commenced an audit of respondent's business practices. Among the items addressed by the investigator with respondent on his initial visit was a request to audit respondent's account to ascertain when Mr. Morong's $1,500.00 deposit was placed in escrow, and into what escrow account it was placed. To adequately conduct such an audit, the investigator would need respondent's bank deposit slips, monthly bank statements, case files and broker's monthly reconciliations. Respondent advised the investigator that he did not have the documents available at the time. Subsequently, on February 16, 1994, the investigator served a subpoena on respondent to compel production of the documents. That subpoena commanded that respondent produce on February 21, 1994, the following: For the period Jan. 1, 1993 to present, all sale/purchase agreements, contracts, leasing or rental agreements either closed, pending or null and void including monthly bank state- ments and cancelled checks plus monthly reconciliations of all escrow accounts and bank deposit slips. In response to the subpoena, respondent produced some bank statements and cancelled checks on an account for Bantu Enterprises, but no banking information for accounts in his name. As for the documents produced, they were fragmentary and not inclusive of the audit period, no contracts or case files were produced, and no written monthly reconciliations, as required by Rule 61J2-14.012, Florida Administrative Code, were produced. Consequently, a complete picture of respondent's activities was not presented, and the audit could not be completed. As of the date of hearing, respondent had still failed to produce the documentation requested by the subpoena, and the audit could not be completed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be rendered which finds respondent guilty of Counts I and III through VII of the administrative complaint, and which dismisses Count II of the administrative complaint. As a penalty for such violations, respondent's broker's license should be revoked. DONE AND ENTERED this 30th day of May 1996 in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK, 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 30th day of May 1996.
Findings Of Fact Albert Earl Wise, II, (Al,II) (Case No. 86-2161) began work as a securities salesman in Memphis, Tennessee, approximately November 15, 1982. He was a plumber when an old friend recruited him to be come a salesman with G.I.C. Government Securities, Inc., which was registered with the Department of Banking and Finance, Division of Securities (Department), from June 8, 1982, until October 1, 1985. In February, 1983, Al,II, was transferred to Tampa to work in the branch office being opened there by an office manager named Lonnie Kilpatrick. Kilpatrick had been a government trader with the firm in Memphis. In approximately July, 1984, Al,II, became the Tampa branch manager. As the firm's Florida business expanded, Kilpatrick took over sole ownership and named Al,II, general manager over all the offices in Florida. Al,II, also became vice-president, comptroller and member of the board of directors of G.I.C. Government Securities, Inc. As general manager, Al,II, was responsible for the day-to-day operations of the company. A more accurate description of his duties is that of sales manager as he was primarily responsible for promoting sales and motivating the account executives/sales persons. Al,II's, duties did not include registration of securities, as he possessed no training in that area, nor deciding what products G.I.C.. Government Securities would sell. Notwithstanding having been named comptroller and vice- president, Al,II, was not allowed by Kilpatrick, despite request, to audit or examine the company's books and records. Lonnie Kilpatrick decided what securities the entity would offer, as well as who, if anyone, would have access to the corporate records. Dorothy (also known as D'Oresa) Wise Young (Case No. 86-1848) was employed by G.I.C. Government Securities, Inc., as an associated person from September, 1983, through April, 1985, and as Sarasota branch manager from January through April, 1985. She is Al,II,'s daughter. Albert Earl Wise, III, (Al,III) (Case No. 86-1888) was employed by G.I.C. Government Securities, Inc., as an account executive from February, 1983, through April, 1985, became Boca Raton and Orlando branch manager, and was a member of the board of directors of G.I.C. Government Securities, Inc. Al,III, is Al,II,'s son. Glenn Patrick Young (Case No. 86-1847) was employed by G.I.C. Government Securities, Inc., as an associated person from January through April, 1985. He is Dorothy's husband. David Randall Phillips (Case No. 86-1887) was employed by G.I.C. Government Securities, Inc., as an associated person or agent from August, 1984, to May, 1985. He is a long-time, close friend of Al,III. William Fredrick Mann (Case No. 86-2160) was employed by G.I.C. Government Securities, Inc., as an associated person or agent from February to April, 1985. He is Al,III,'s father-in-law. Al,II, was employed as a general manager of G.I.C. Securities Corporation from at least January 27, 1985 to March 5, 1985 and supervised the sale of securities by unregistered agents of G.I.C. Securities Corporation to following investors located outside the State of Florida: Fred E Martin or Matalie L. Martin $85,000 Post Office Box 449 West Upton, Massachusetts 01587 Gregory E Westerman $50,000 2034 Strathmoor Boulevard Louisville, Kentucky 40205 Karen E Prevett $70,000 72 Old Farm Road Mansfield, Massachusetts 02048 Harvey Notis or Marion Notis $50,000 R. D. 3 Box 1248 Great Harrington, Massachusetts 01230 C. T. George $155,000 Living Revocable Trust Trust Dated 01/31/83 20 Palmer Drive Canton, Massachusetts 02021 Geoffrey P. Pollitt $25,000 313 Simon Willard Road Concord, Massachusetts 01742 Walter Kossman or Virginia Kossman $25,000 1594 S. Circle View Seven Hills, Ohio 44131 Robert Anandale Trustee $30,000 Dated 02/28/84 F.B.O. Robert Allandale c/o Central National Bank 6690 McKenzie Road North Olmstead, Ohio 44070 William P. Giblin $25,000 6433 Beverly Drive Parma Heights, Ohio 44129 Walter Kossman or Virginia Kossman $25,000 1594 South Circle View Seven Hills, Ohio 44131 Dorothy L. Bayman or Dale L. Bayman $85,000 150 Belleair Avenue Dayton, Ohio 45420 Dorothy Wise Young was employed by G.I.C. Securities Corporation as an account executive although not registered with Respondent in any capacity at anytime concerning said employment. Young also sold securities on behalf of G.I.C. Securities Corporation to the following investors despite not being properly registered with Respondent: Albin W. Johnson Box 333 Randolph, Massachusetts 02368 $75,000 T. W. Wenzlick or Viola 421 Jeffrey Drive R. Wenzlick $25,000 New Washington, Ohio 44854 Harvey Notis or Marion Notis $50,000 R. D. 3, Box 142C Great Barrington, Massachusetts 01230 Al,III, was employed by G.I.C. Securities Corporation as an account executive from January to April, 1985, and admitted engaging in the sale of one or more securities while employed by said firm. Al,III, also admitted to not being properly registered in the State of Florida with G.I.C. Securities Corporation. G.I.C. Securities Corporation was denied a license by Order of the Department dated April 16, 1984, in part for material false statements in the application and demonstration of the applicant's unworthiness to transact the business of a broker/dealer. G.I.C. Securities Corporation subsequently filed a petition for formal hearing regarding the Department's denial of registration. On August 30, 1984, G.I.C. Securities Corporation entered into a stipulation, consent agreement and final order with the Department. This written agreement provided that the firm would not apply to the Department for registration under Section 517.12(1), Florida Statutes, for a period of twelve months from August 30, 1984, and that it would fully and faithfully comply with all of the provisions of Chapter 517, Florida Statutes, and the rules of the Department. On the basis of these findings of fact, on April 9, 1985, the Department ordered the firm to cease and desist from violating Chapter 517, Florida Statutes, and more specifically from selling unregistered securities and from selling securities without being lawfully registered to do so. Al,II, also sold unregistered Government National mortgage Association GNMA/U.S. Treasury Trust Note securities, to the following individuals in the following amounts: Joseph or Bernice Metcalf 4299-14th Street N.E. St. Petersburg, Fl 33703 $25,000 Bruce or Diane J. Fenton 2435 Post Road Sarasota, Fl 33581 $5,000 Betsy O. Lester 1200 Capri Circle S. Apt. 29 Treasure Island, Fl 33706 $10,000 Ernest L. Miller Post Office Box 458 Lake Hamilton, Fl 33851 $7,000 John and Louise Magill 4260 S.E. 20th Place Apt. Cape Coral, Fl 33904 208 $10,000 Mrs. Lina Anker-Simmons Post Office Box 353 Boca Grande, Fl 33921 $10,000 Charles W. Wood or Babetta 211 W. Emily Tampa, Fl 33603 Edmunds $10,000 Margaret McMenamy 1225 N.W. 16th Street Pembroke Pine, Fl 33026 $20,000 Suzanne J. Lewis 4703 Brookwood Drive Tampa, Fl 33629 $10,000 Raymond or Suzanne Lewis 4703 Brookwood Drive Tampa, Fl 33629 $10,000 Deno or Barbara Kazanis 2310 Southern Lights Lutz, Fl 33549 $5,000 William K. Mall, IV 9500 82nd Avenue N. Seminole, Fl 33543 $20,000 Carl E. or Minnie E. Gustafson $10,000 Post Office Box 451 Matlacha, Fl 33909 John A. or Louis Gress $22,000 Post Office Box 1555 Palm Harbor, Fl 33563 Marguerite Gould or Marguerite Robertson $10,000 16183 Dublin Circle Casa Bella Bldg. A-Apt. 103 Ft. Myers, Fl 33908 Robert J. Evans $7,000 Rt. 2, Box 12-B Moore Haven, Fl 33471 Virginia H. or Robert E Bartlett $10,000 4703 Baycrest Drive Tampa, Fl 33615 Robert S. or Helen M. Gerard $5,000 or Frances C. Rafter JT WROS, 4521 W. Rogers Avenue Tampa, Fl 33611 Jacinto R. or Palmira M. Fernandez $10,000 8436 Nebraska Avenue Tampa, Fl 33604 Paul E. or Elizabeth A. Cleveland $10,000 306 Kllburn Road Holiday, Fl 33590 William F. Price $30,000 custodian for Gary Cotton Dan Cook 9105 Tudor Dr #F102 Tampa, Fl 33615 Ruth T. Penner or Laura B. Wood $5,000 1204 W. Risk-Apt. G Plant City, Fl 33566 Edward G. or Eleanor G. Daniels $20,000 4630 B.E. 20th Place Cape Coral, Fl 33904 Frederick S. Crysler $5,000 1200 Johnston Road Unite B-24 Dade City, Fl 33525 Hazel H. Aspinwall or Frederick F. Smith $30,000 69 Arrowhead Drive St. Augustine, Fl 32086 Jay E or Betty A. Yager $20,000 or Martha Dean Post Office Box 465 Astatula, Fl 32705 Katherine B. Wolf $10,000 1850 Palmcrest Lane Clearwater, Fl 33546 Howard J. or Margaret M. Williams $10,000 8290 Oakhurst Road Seminole, Fl 33542 Roy or Dorothy Schreiner $15,000 4112 Robin Way Valrico, Fl 33594 Alfred or Frances Richter $13,000 7248 Antigua Place Sarasota, Fl 33581 Kaye Reid Wainwright $50,000 10671 William Tell Drive Orlando, Fl 32821 Charles A. Kottmeier $25,000 1200 Druid Road S. #7 Clearwater, Fl 33516 Bernie or Sylvia Albert or $10,000 Sharon Terry Albert 10642 Watertown Court Orlando, Fl 32809 Arnold or Gloria Barr $10,000 7503 Willow Court Tampa, Fl 33614 Edward Daniels Development Company $35,000 4630 S.E. 20th Place Cape Coral, Fl 33904 John W. DuBrian $30,900 2912 Tiburon Drive New Port Richey, Fl 33553 Arthur and Ruth P. Hiller $10,000 10702 Westbrook Dr Orlando, Fl 32821 Charles A. Kottmeir $40,000 200 Druid Road S. #7 Clearwater, Fl 33516 Kenneth S. Preston $12,000 11839 U.S. Hwy 41 S. Gibsonton, William E. Fl 33534 Morris $11,000 271-B Deming Avenue North Port, Fl 33596 Walter Leena M. Fennander $7,000 1727 Bayshore Boulevard Dunedin, Fl 33528 Thomas B. or Charlene M. Austin $10,000 309 15th Avenue Indian Rocks Beach, Fl 33535 Katherine Wolf $10,000 1850 Palmcrest Lane Clearwater, Fl 33546 Dorothy Wise Young sold unregistered Government National Mortgage Association GNMA/U.S. Treasury Trust Note securities, to the following individuals in the following amounts: George W. Arnold $8,000 618 4th Avenue S. St. Petersburg, Fl 33701 W. R. Bauman or Barbara Nagle $10,000 Post Office Box 16 Yankeetown, Fl 32698 George W. or Marjorie E. Border $10,000 860 N. Lake Avenue Avon Park, Fl 33825 Joan or Jerome Brenan 0005 Granite Lane Orlando, Fl 32821 $10,000 Freida Blockner 14623 Bonaire #607 Delray Beach, Fl 33446 $5,000 John or Elizabeth Grabowski 2308 Castilla Isle Fort Lauderdale, Fl 33301 $10,000 Louis or Mary Hoffman 3512 Spring Valley Drive New Port Richey, Fl 33552 $10,000 Raymond F. Joyce custodian for Salvatore Leone 267 S. Ocean Boulevard #212 C Pompano Beach, Fl 33062 $5,000 John or Caroline Susanec $10,000 215 Stafford Avenue Brooksville, Fl 33512 Stephen Karakay $10,000 Box 3344 Sarasota, Fl 33578 Mrs. Floyd A. Flowers or James A. Monroe $5,000 Route 2, Box 330H Crestview, Fl 32536 Fannie Felicia Caliuzzi $5,000 2742 C. Sherbrook Lane Palm Harbor, Fl 33563 Emma Carolyn Hammond $95,000 130 Devon Drive Clearwater, Fl 33515 A. E. or Joyce LaBeau $12,000 1801 Marine Park Way #106 New Port Richey, Fl 33552 A. E. or Joyce LaBeau $13,000 1801 Marine Park Way #106 New Port Richey, Fl 33552 A. E. or Joyce LaBeau $7,000 1801 Marine Park Way #106 New Port Richey, Fl 33552 Oscar Ritter $5,000 952 N.E. 199th Street #415 N. Miami Beach, Fl 33179 Murial or Sherry Stearns 580 Rio Vista Avenue $9,000 Daytona Beach, Fl 32014 F. William or Frances C. Van 219 87th Street Stone Harbor, N.J. 08247 Ness $6,000 Kaye Reid Wainwright 10671 William Tell Drive Orlando, Fl 32821 $50,000 Adele Althouse 400 Freedom Square U.S.A. Apt. J 619 Seminole, Fl 33542 $5,000 Murial or Sherry Stearns 580 Rio Vista Avenue Daytona Beach, Fl 32014 $10,000 F. William or Frances C. Van 112 S.W. 1st Avenue Seller Apt. Ness $10,000 Delray Beach, Fl 33444 McKinely or Grace Anderson 12408 Oakleaf Avenue Tampa, Fl 33612 $10,000 Mrs. Eileen Coutts 190 S.W. 72nd Terrace Margate, Fl 33068 $18,000 John C. Bertram 1416 Lake Marion Drive Apopka, Fl 32703 $8,000 Luther or Alena D. Ellis Rt. 2, Box 72 Wauchula, Fl 33873 $20,000 F. H. or H. Elizabeth Groezinger $15,000 2308 Crescent Ridge Road Daytona Beach, Fl 32018 Luther or Alena D. Ellis $30,000 Rt. 2, Box 72 Wauchula, Fl 33873 Mrs Isabelia K. Berg $6,000 5421 B Lakefront Blvd. Delray Beach, Fl 33445 Al,III, sold unregistered Government National Mortgage Association GNMA/U.S. Treasury Trust Note securities, to the following individuals in the following amounts: Charles S. Ammerman or Florence F. Ammerman $6,500 710 Lake Hiawassee Orlando, Fl 32811 Eva Wilson $15,000 409 S.E. 2nd Court Deerfield Beach, Fl 33441 Frank or Jean Arnold $18,000 6020 Shakerwood Circle, #G-108 Tamara, Fl 33319 Virginia Cummins or J. H. Cromer $15,000 311 S. Dean Street Westport, Indiana 47283 Morris or Sylvia Erlbaum $10,000 6795 Huntington Lane Bld. #14, Apt. #207 Delray Beach, Fl 33446 Lois G. Crosley $41,000 1626 Silversmith Place Orlando, Fl 32818 Sandy Garrison or Mary M. Boitnott $15,000 3104 Harrison Ave., #C-18 Orlando, Fl 32804 William or Rose Herzog $25,000 Custodian for Ronald Coyne 258-A Hibiscus Drive, M.F.L. Leesburg, Fl 32788 Helen Klein or Shari Weitzner $5,000 3205 Portofina #C-4 Coconut Greek, Fl 33066 Mattye Oliver or Eileen Johnson $3,000 147 W. State Street Kennett Square, PA 19348 Alma Pagliaro or Nancy De Marco $10,000 or Godfrey D. De Marco 9925-B Papaya Tree Trail Boynton Beach, Fl 33436 Gai S. Verner I.T.F. Bill Trilsch $25,000 901 N.W. 31st Avenue Box 13 Pompano Beach, Fl 33069 Harry or Anita Cope $5,000 417 Piedmont I Delray Beach, Fl 33445 Al Rappaport or Ellen Rappaport $15,000 2780 Pine Allen Rd. N. Sunrise, Fl 33329 Godfrey D. De Maro or Nancy De Marco $5,000 9925-B Papaya Tree Trail Boynton Beach, Fl 33436 Morris Erlbaum or Sylvia Erlbaum $10,000 6795 Huntington Lane Delray Beach, Fl 33446 A. Froid or Gertrude Froid $10,000 in trust for Roy Lee Froid 2600 S.W. 18th Terrace Ft. Lauderdale, Fl 33315 Max Pendergrast or Carol Pendergrast $20,000 custodian for Eric & Kurt Pendergrast 1611 S.W. 26th Street Ft. Lauderdale, Fl 33315 Glenn Patrick Young sold unregistered Government National Mortgage Association GNMA/U.S. Treasury Trust Note and GNMA/Mortgage Backed Collateral Note securities, to the following individuals in the following amounts: Wanda G. Baugh $10,500 Trustee for Buford Sitzlar Post Office Box 1523 Bonita Springs, Fl 33923 Wanda Baugh $5,000 Trustee for Buford Sitzlar Post Office Box 1523 Bonita Springs, Fl 33923 Norman R. or Margaret 3442 Gerhardt Street A. Keyes $25,000 Sarasota, Fl 33577 Norman R. or Margaret 3442 Gerhardt Street Sarasota, Fl 33577 A. Keyes $25,000 Howard W. or Hazel M. 3300 26th Avenue East Apt. 17-A Bradenton, Fl 33508 Kerr $10,000 David Randall Phillips sold unregistered Government National Mortgage Association GNMA/U.S. Treasury Trust Note securities, to the following individuals in the following amounts: Frank G. and Mildred W. Reynolds $2,500 JTWROS 400 S. Orlando #305 Maitland, Fl 32751 Vivian W. McCann or Marilyn Culpepper $10,000 JTWROS 2211 Beatrice Drive Orlando, Fl 32810 Stanislaw Szamrej or Stanislawa Szamrej $10,000 or Zdzislaw Szamrej JTWROS 2204 Stanley Street Orlando, Fl 32803 Paul Gheorghiu or Martha Gheorghiu $2,500 JTWROS 6565 Carder Drive Orlando, Fl 32818 Marjorie R. Romano or Michael Romano $40,000 11508 Benbow Court Orlando, Fl 32821 William Fredrick Mann sold unregistered Government National Mortgage Association GNMA/U.S. Treasury Trust Note securities to Mark Fulkerson or Bea Kuykendall, 7900 Montezuma Trail, Orlando, Fl, in the amount of $41,000. On April 9, 1985, the Department issued an Administrative Charges and Complaint against G.I.C. Government Securities, Inc., alleging among other things the sale of unregistered securities. On June 27, 1985, the Department entered into a Stipulation and Consent Order whereby G.I.C., its officers and directors and other persons acting in cooperation or concert with them or at their direction were permanently enjoined in part from selling unregistered securities and from obtaining money or property by means of untrue or misleading statements. Despite their positions with Kilpatrick's firms, the petitioners were not told, and did not know, that G.I.C. Securities Corporation was not registered with the Department. Al,III, and Dorothy Wise Young were registered in the states of Ohio (Al,III, only), Delaware and Massachusetts, and Kilpatrick, who had the benefit of legal counsel, had told them that it was legal for them to sell from their Florida offices to customers in those states. Likewise, Kilpatrick and the company's legal counsel, Tony Todd, told Al,II, Al,III, and Dorothy in late 1984 that the Government National Mortgage Association GNMA/U.S. Treasury Trust Notes and GNMA/Mortgage Backed Collateral Notes issued by Southern Bond Clearing were exempt from registration. Following Kilpatrick's instructions, they had their salesmen, including Glenn Patrick Young, Phillips and Mann, sell the securities. Despite their respective positions with G.I.C. Government Securities, Inc., and despite their representation on their U-4 Form applications to be associated persons with the firm that they were familiar with Florida's securities laws, none of the petitioners knew that those securities were unregistered securities for which there was no exemption. In March, 1985, Al,II, was in Memphis interviewing with the securities broker Turner & Sellhorn, Inc., about possible employment. At the time, although earning income well into six figures, Al,II, was dissatisfied with the way Kilpatrick was keeping him in the dark about some aspects of the companies' operations and finances. While in Memphis, Al,II, called in to his Tampa office and was told that the Department was engaged in some kind of audit. After he returned to the office, on April 4, 1985, he confronted Kilpatrick and demanded to know what the audit was about. Kilpatrick told him for the first time that violations had been committed by selling unregistered securities and selling for G.I.C. Securities Corporation, which had not been registered. Although Al,II, and Al,III, technically were members of the board of directors of G.I.C. Government Securities, Inc., there were no meetings of the board during their tenure, and Kilpatrick did not fully disclose the details of the firm's operations and finances to them. The Wises also were not made privy to the operations of related firms, such as Southern Bond Clearing. Dissatisfied with the position in which Kilpatrick had placed him and Al,III, Al,II, decided to resign despite Kilpatrick's offer of concessions and an expenses-paid trip to Europe as enticement to Al,II, stay on with the company. Al,II, resigned the next day, effective April 15, 1985. Al,III, resigned as a director on April 17, 1985. When Al,II, resigned, the other petitioners--family and friends whom Al,II, had brought to the company--began discussing plans to leave. On April 9, 1985, Gerald Lewis, as Comptroller, entered the cease and desist orders enjoining G.I.C. Securities Corporation from selling any securities while still unregistered and enjoining both G.I.C. Government Securities, Inc., and G.I.C. Securities Corporation from sales of unregistered securities. But the orders did not otherwise enjoin G.I.C. Government Securities, Inc., from conducting business. When Dorothy Wise Young inquired of a Department employee, the violations were characterized as "technical." The petitioners then decided that, to be able to have uninterrupted income, the others would stay at the company until Al,II, secured employment at Turner & Sellhorn and could hire the others on at Turner & Sellhorn. But on April 30, 1985, Kilpatrick required all employees to sign a new employment contract which provided, among other things, for 90 days notice before an employee could terminate employment. At that point, the petitioners still at the company (i.e., all but Al,II) refused to sign the new contract and resigned from employment. Up to the departure of the petitioners from Kilpatrick's companies, none of them had any reason to think that securities they sold would not be delivered in due course of time to the customers who purchased them. Securities always had been delivered properly during the term of their employment with the companies. The petitioners, like the Department's employees, were not privy to the companies' finances and had no reason to believe the companies would not, or would not be able to, deliver securities that had been purchased. It is not a customary practice in the industry for securities salesmen associated with a broker/dealer to remain responsible for insuring delivery of securities after termination of employment with the broker/dealer. To the contrary, it is customary for the salesman to rely on the broker/dealer to follow through on delivery of securities. On or about July 22, 1985, the petitioners' U-4 Form applications to be associated persons with Turner & Sellhorn, Inc., were granted, and they began employment at Turner & Sellhorn. They mailed notices to their former customers to advise the customers of their new place of employment. Later in the summer of 1985, some of the petitioners were told by former customers both that G.I.C. Government Securities, Inc., had begun selling short-term zero coupon repurchase agreements and that some former customers had not yet received possession of securities purchased from some of the petitioners on or before April 30, 1985, an extraordinary delay. After discussing these developments with Mr. Turner, the petitioners concluded that Kilpatrick's companies might be having financial difficulties and that the former customers might be at risk. The petitioners began to try to contact all of their former customers to caution them about the "zero repos" and to be sure they had received possession of their securities. This was not easy since many of the petitioners' former customers already had left for summer residences up north, some without leaving a forwarding address or telephone number. Glenn Patrick Young sent letters to the U.S. Postal Service and paid its service fee to obtain a good address or telephone number at which to contact six of his former customers If former customers the petitioners were able to contact had not yet received their securities, petitioners advised them to contact G.I.C. Government Securities, Inc., immediately and demand satisfaction--either possession of their securities or return of their investment. They further advised the customers that, if the company did not satisfy them within a week to ten days, they should contact the Department. Thanks to petitioners' efforts, several of their former customers recovered either their security or investment. For example, Al,III, was able to contact former customer Bryant on August 20, 1985, on Bryant's return to Florida and was told that Bryant still had not received the GNMA certificate he had bought on March 26, 1985. Following Al,III,'s advice, Bryant got his certificate on September 6, 1985. Glenn Patrick Young was contacted by former customer Bough about a "zero repo." He advised her not to invest and to contact the Department. Young also called former customers Neukom and Horowitz and, by his advice, helped Neukom get her $23,000 investment returned around September 25, 1985, and helped Horowitz get his $66,000 GNMA certificate on September 6, 1985, after a six month delay. David Randall Phillips helped former customers, including Mrs. Moffat, who called Phillips at his home for help in August, 1985, because she still had not received the security she had purchased in April, 1985. Phillips advised Moffat to write a letter to the Department, and she got her security within five days. Unfortunately, not all of petitioners' former customers had gotten satisfaction--either the security they had purchased or the return of their investment--by the time G.I.C. Government Securities, Inc., went bankrupt on or about October 1, 1985. Some, including Lillian Nelson and Raymond Dennis (customers of Phillips), did not listen to petitioners' advice and counsel. One couple, the Bakers of Ft. Myers, were contacted by Glenn Patrick Young but misinformed him that they had received possession of their security when in fact they had not. Others could not be contacted because petitioners were unable to get a good address or telephone number for them during the summer and early autumn, 1985. Dr. Stanley Pollock of 332 Fifth Avenue, Suite 213, McKeesport, Pennsylvania, purchased three GNMA certificates in the amount of $195,131 from Dorothy Wise Young near the end of her employment at G.I.C. Government Securities. Young tried to telephone Pollock but had a bad telephone connection. She tried to leave a message for Pollock to call her if he had not yet received his securities and, when Pollock did not call her, she assumed that he had received them. In fact, Pollock never got the message because of the bad connection. As a result, Dr. Pollock did not receive or obtain registered ownership of the securities which he had purchased. He currently has a claim pending in the United States Bankruptcy Court for the Middle District of Florida for the purchase price of the certificates. At the direction of Richard Johnson of Tampa, Richard J. Hansen, IRA Plans Administrator, Retirement Accounts, Inc., Post Office Box 3017, Winter Park, Florida, purchased two GNMA certificates from Al,III, on behalf of Johnson in the amount of $18,470.37. Mr. Johnson did not receive the certificates. He moved to Wisconsin June through October, 1985, and gave Al,III, no forwarding address or telephone number (although Al,III, could have made contact with Mr. Johnson through Mr. Hansen.) James and Katheryn Putnal of Route 1, Box 14, Myakka City, Florida, purchased an $85,000 GNMA certificate from Glenn Patrick Young on April 12, 1985. In addition, M. Reed and Edna M. Veazey of 2141 Third Street East, Bradenton, Florida purchased a $50,000 Federal Home Loan Mortgage Corporation (FHLMC) certificate from him on February 11, 1985. Both couples moved from Florida (the Putnals from May 8 through August, 1985, and the Veazeys until October, 1985), and neither gave Young a forwarding address or telephone number. Young unsuccessfully tried to locate them through the U.S. Postal Service and then gave up. Before they left to go up north, the Putnals did receive Young's announcement that he had left G.I.C. and was starting employment with Turner & Sellhorn. But when they returned they called G.I.C., not Young, to inquire about delivery of their certificate and were told it was coming, give it time. The Veazeys also contacted G.I.C., not Young, after Young switched to Turner & Sellhorn and, in fact, bought two more GNMA certificates from G.I.C. after Young had left (although they still had not received the security they had purchased from Young on or about February 19, 1985.) Both the Putnals and the Veazeys have had to make claims in the United States Bankruptcy Court for the Middle District of Florida for the purchase price of the certificates. While employed by G.I.C. Government Securities, William Fredrick Mann sold GNMA certificates to the following individuals in the following amounts: Louis M. Totka or Marguerite A. Totka 117 Pine Circle Drive $25,000 Lake Mary, Fl 32746 Mignon Weinstein or Philip Weinstein 2910 Plaza Terrace Drive Orlando, Fl 32803 $40,000 Philip Weinstein or Mignon Weinstein 2910 Plaza Terrace Drive Orlando, Fl 32803 $55,000 Although Mann was able to contact these former customers in late July or in August, 1985, and advise and counsel them how to get satisfaction (i.e., either possession of the securities they had purchased or return of their investments, for some reason the Totkas and the Weinsteins did not get satisfaction before the G.I.C. bankruptcy. Despite their association with Kilpatrick's G.I.C. companies, the petitioners have been able to maintain a good reputation for competence, honesty and trustworthiness in their business dealings. Testimony of this kind came from Mr. Turner and Mr. Sellhorn of Turner & Sellhorn, Inc., and several of petitioners' former customers--four customers of Al,II; one of Dorothy; four of Al,III; three of Glenn Patrick Young; and three of Phillips. More than being responsible for the violations in which they have participated, petitioners have been fellow victims of Kilpatrick's violations. The most serious of the violations--failure to account for and deliver securities-- occurred after the petitioners left G.I.C. and through no doing of their own.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that a final order be entered in these cases granting the applications of all of the petitioners for registration as associated persons with Certified Capital Corporation. RECOMMENDED this 29th day of April, 1987 in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 29th day of April, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NOS. 86-1847, 86-1848, 86-1887, 86-1888, 86-2160 and 86-2161 To comply with Section 120.59(2), Florida Statutes (1985), the following rulings are made on proposed findings of fact. Respondent's proposed findings of fact were organized and filed separately by petitioner. Petitioners' proposed findings of fact were not timely filed and do not require explicit rulings (although they have been considered, as reflected in the Findings Of Fact.) Respondent's Proposed Findings Of Fact As To Glenn Patrick Young (Case No. 86-1847). 1.-5. Accepted and incorporated, along with additional findings. Respondent's Proposed Findings Of Fact As To Dorothy Wise Young (Case No. 86-1848). 1.-8. Accepted and incorporated, along with additional findings. 9. Rejected as contrary to facts found that Dr. Pollock had no contact with Young; in part, subordinate; otherwise, accepted and incorporated, along with additional findings. Respondent's Proposed Findings Of Fact As To David Randall Phillips (Case No. 86-1887). 1.-5. Accepted and incorporated, along with additional findings. 6. Subordinate to facts found. Respondent's Proposed Findings Of Fact As To Albert Earl Wise, III (Case No. 86-1888). 1.-8. Accepted and incorporated, along with additional findings. Respondent's Proposed Findings Of Fact As To William Fredrick Mann (Case No. 86-2160). 1.-6. Accepted and incorporated, along with additional findings. Respondent's Proposed Findings Of Fact As To Albert Earl Wise (Case No. 86-2161). 1.-7. Accepted and incorporated, along with additional findings. COPIES FURNISHED: Michael J. Echevarria, Esquire ECHEVARRIA & BENCHIMOL, P.A. Suite 3016, First Florida Tower 111 East Madison Street Tampa, Fl 33602 Charles E. Scarlett, Esquire Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Fl 32399-0305 Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Fl 32399-0305 Charles Stutts General Counsel Plaza Level The Capitol Tallahassee, Fl 32399-0305 =================================================================
Findings Of Fact Respondent was licensed as a real estate salesman in November 1979, and renewed her license as required until some time prior to October 12, 1987. A certified copy of Respondent's license record was admitted into evidence as Exhibit 1. The computer printout dated 10/12/87 shows Respondent's license as delinquent (voluntary inactive). It shows she is licensed as a salesman with license effective 11/19/84. On the same line showing 'delinquent' but several spaces therefrom is "renewal period: 2 FEE $.00". On the same line with "license effective" is "RECOVERY FEE PD $.00." Below these lines is Respondent's name below which appears "INVALID." Below which is a "%FRIEDEL BETTE L." and below this is "HOME ADDRESS," presumably that of Respondent. A review of the other documents in Exhibit 1 shows: Notification of License Change dated 2/28/83. A Request for License or Change of Status, undated, with date stamp "received June 15, 1984, Florida Real Estate Commission". This document does not indicate action by the Real Estate Commission on this request. A copy of a marriage certificate. Notification of License Change dated 6/26/84. No action indicated by the Florida Real Estate Commission. A Request for License or Change of Status dated 7/12/84 apparently notifying the Commission of a change in brokers. This document is stamped "Validated and Effective September 4, 1984." An unreadable photocopy of a computer printout similar to that in Finding No. 2 above dated 11/30/84 showing license effective 09/04/84. Below that is hand printed "Cancellation of Certificate as listed below effective date 11/19/84. Reason MIC (or M/C). Batch 2717." Request for License or Change of Status dated 4/23/86. No action on request is shown by the Commission. An undated Request for License or Change of Status received 12/30/86 by Florida Real Estate Commission. No other evidence (other than hearsay) was presented regarding Respondent's license. No copy of any license issued to Respondent is contained in Exhibit 1, and the only document showing Respondent is unlicensed is that computer printout discussed in Finding No. 2 above. In 1985, Respondent and her husband entered into a contract to purchase realty from Mr. and Mrs. Scalo. OMB Form No. 2502-0059, a Veterans' Administration Request for Verification of Employment Form, forwarded to Coldwell Banker Real State office, was signed by the Assistant Manager 11/29/85 certifying that Respondent was employed by Coldwell Banker (Exhibit 6). In the VA Financial Statement (Exhibit 7) submitted by Respondent and her husband, she shows under "employment record" that she worked as a real estate salesman for Coldwell Banker from 3/85 to 11/15/85, the date on Exhibit 7. In purchasing the residence from Scalo, Respondent represented that she was employed as a real estate salesman by Coldwell Banker. In this purchase, Respondent assumed the first mortgage from Scalo, as well as executing a second and third mortgage held by Scalo. To protect himself from Respondent and her husband failing to pay the first mortgage, Scalo provided in the contract that Respondent and her husband would verify payment of the first mortgage when they made the monthly payment on the mortgages held by Scalo. Respondent failed to provide such assurance the first month after the transaction cleared and was reminded of the requirement by Scalo. Thereafter for the next four months, Respondent notified Scalo that the first mortgage payments had been made. This was false and known by Respondent to be false. The fraud on Scalo was discovered when he was notified by the bank holding the first mortgage that the Jones were delinquent in the mortgage payments from February through July, and that payment in excess of $5900.00 was needed to stop the bank from initiating foreclosure proceedings. One of the checks payable to the bank holding the mortgage signed by Respondent (Exhibit 4) was dishonored by the payor for insufficient funds and was not made good by Respondent. Michael Good, Chief Operations Officer at Coldwell Banker, testified without contradiction that Respondent worked as a sales associate at Coldwell Banker from May 24, 1985 until April 23, 1986. On October 2, 1985, Ronald Pike submitted an offer to purchase property in Brandon, and Respondent signed the offer as broker. She also signed the earnest money release agreement dated February 26, 1986, as broker. On another transaction involving Pike, a $5,000.00 earnest money deposit was given by Pike to Respondent. The transaction failed to close, and Respondent did not return the deposit after demand was made by Pike.
Findings Of Fact The parties Petitioner, Department of Professional Regulation, Division of Real Estate (Department), is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.30, Florida Statutes, Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. Respondent, Linda B. Schumacher, is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0171642 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, c/o Linda B. Schumacher, Inc., 155 Worth Avenue, Palm Beach, Florida 33480. Respondent, Linda B. Schumacher, Inc., is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0237256 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 155 Worth Avenue, Palm Beach, Florida 33480. At all times material hereto, respondent Linda B. Schumacher was licensed and operating as a qualifying broker and officer for Respondent Linda B. Schumacher, Inc. The Brokerage While respondent, Linda B. Schumacher (Schumacher) was a qualifying broker and officer of respondent, Linda B. Schumacher, Inc. (the "Brokerage"), at all times material hereto, the proof also demonstrates that one Marion Jones (Jones), a licensed real estate broker in the State of Florida, was also an officer of the Brokerage and duly licensed to manage its affairs during times pertinent to this proceeding. Regarding Jones' involvement in the Brokerage, the proof demonstrates that in 1988, Schumacher had accepted a proposal of marriage from one Peter Widner, and contemplated moving to Wyoming, the state of Mr. Widner's residence, and selling the Brokerage. Consequently, in or about October 1988, with the mutual expectation that acceptable terms could be negotiated with Jones for the purchase of the Brokerage, Schumacher employed Jones to operate and manage the Brokerage. Incident to such employment, Jones acquired signature authority for the escrow and operating accounts of the Brokerage, and operated the Brokerage on a daily basis from November 1988 until March 13, 1989. From November 1988 to mid-January 1989, Schumacher resided in Wyoming with her finance and from mid-January 1989, to March 13, 1989, following the breach of her engagement, she resided in Miami, Florida. During such periods, Schumacher occasionally visited the Brokerage, but the day-to-day responsibility for its operation was reposed in Jones. On March 13, 1989, Schumacher terminated discussions with Jones concerning the proposed sale of the Brokerage, and also terminated Jones' employment as manager of the Brokerage. The predicate for such action was Schumacher's belief that Jones was diverting staff and customers of the Brokerage to her own business, and the consequent belief that Jones no longer intended to purchase the Brokerage. At the time of Jones' termination, she claimed that Schumacher owed her approximately $4,000.00 for management fees, as well as $4,000.00 for the deposit she paid Schumacher toward the purchase of the Brokerage. Schumacher disputed such sums in light of the matters set forth in paragraph 8, supra. Schumacher, concerned with the possibility that Jones might attempt to access the escrow account of the Brokerage to satisfy her claims against Schumacher, closed the escrow account of the Brokerage at Florida National Bank on March 13, 1989, and contemporaneously opened a new escrow account at that institution, over which she alone had signature authority. All funds that existed in the old escrow account were deposited into the new account. 1/ When Schumacher changed escrow accounts, a number of checks were outstanding on the old account. To address such problem, Schumacher promptly drew replacement checks on the new account, and promptly forwarded such checks to most of the affected persons. Here, there is no persuasive proof that any such person was seriously inconvenienced by the change in escrow accounts or failed to receive the monies due them. 2/ While all outstanding checks were replaced with reasonable promptness, the Department points to the return of three checks drawn on the old account as evidencing some impropriety. In this regard, the proof demonstrates that on March 3, 1989, Jones drew three checks on the old escrow account, two payable to Michael Gretschel (Gretschel) in the sum of $102.50 and $57.84, and one payable to Janet Lebedeker (Lebedeker) in the sum of $341.71. 3/ Lebedeker deposited her check on March 13, 1989, when she knew that escrow account had been closed, and Gretschel deposited his checks on March 15, 1989. These checks were returned by the bank because of the closure of that account. Such checks were, however, replaced with reasonable promptness and, under the circumstances of this case, no impropriety is found in Schumacher's change of escrow accounts, and the consequent return by the bank of these checks. The Department's attempt to audit the Brokerage accounts On Friday, March 24, 1989, the Department's investigator, Sharon Thayer (Thayer) contacted Schumacher to schedule an audit of the Brokerage's escrow accounts. At that time, Schumacher agreed to make her books and records available during regular business hours on Monday, March 27, 1989. Later, on March 24, 1989, Schumacher, apparently uneasy least the escrow records not be in order following Jones' departure, contacted her attorney, G. Michael Keenan (Keenan). Keenan telephoned Thayer and told her that she had no authority to inspect the subject records. In response, Thayer directed Keenan to the legal authority for such inspection, and Keenan thereupon accused her of practicing law without a license, threatened to report her to the Bar Association, told her that she had no authority to review such records on Monday, and that she could see such records "when we're ready to let you see them." 4/ Notwithstanding the advice given the previous Friday by Schumacher's attorney that the records would not be produced, Thayer, along with another investigator, presented herself at the Brokerage at approximately 9:00 a.m. and again at 2:30 p.m., March 27, 1989, to conduct the audit. On each occasion the office was locked, and the person in attendance denied admission. On April 5, 1989, the Department, having been denied access to the records of the Brokerage, issued a Subpoena Duces Tecum to Florida National Bank to obtain copies of any trust account records that it might possess. Such subpoena was served by Thayer on April 10, 1989. 5/ By letter of May 8, 1989, Florida National Bank's counsel notified Thayer that it was customary to advise a customer of a request to produce bank records, and that unless she could provide the bank with legal authority to the contrary, the records could not be produced absent such notification. Apparently not receiving any authority to the contrary, Florida National Bank advised Schumacher of the pending subpoena and by letter of May 12, 1989, her counsel advised Thayer that: By means of this letter, please be advised that Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. hereby object to the service of the Subpoena Duces Tecum on Florida National Bank and to the request that monthly bank statements for September, 1988 through March, 1989 on any and all trust accounts and escrow accounts in the name of Linda B. Schumacher, Inc. and/or Linda B. Schumacher Real Estate, Inc. be produced. Further, the undersigned on behalf of Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. have advised Florida National Bank of their objection and directed Florida National Bank not to produce any said documents to the Department of Professional Regulation. As in the past, Linda B. Schumacher, Inc. and Linda B. Schumacher Real Estate, Inc. remain ready, willing and able to permit the Department of Professional Regulation to review their monthly bank statements for September, 1988 through March, 1989 for any and all trust accounts and escrow accounts upon being provided reasonable notice as to the time and date the Department wishes to make the inspection. In the event you wish to make the necessary arrangements to schedule an inspection, please do not hesitate to contact the undersigned immediately inasmuch as my clients remain willing to cooperate with the Department of Professional Regulation. While her counsel's letter of May 12, 1989, references Schumacher's past willingness to make her records available on "reasonable notice," the proof in this case is to the contrary. Rather, the proof supports the conclusion that Schumacher wanted to delay any audit until she could have the records reviewed to insure that they were in order following Jones' departure. 6/ As to her then willingness to produce the records, the proof supports the conclusion that she was then amenable to producing her records; however, the Department delayed contacting her until after May 31, 1989, when Schumacher withdrew her objection to the subpoena served on First National Bank. The audit The First National Bank records were delivered to Thayer on June 2, 1989. Between June 6 and 20, 1989, Thayer audited, with Schumacher's cooperation, the books and records at the Brokerage. The audit of such escrow accounts identified three transactions which the Department contends were improper: a deposit of $2,000.00 made by Val Gabaldon on November 17, 1988, which the Department asserts was not timely returned; a security deposit of $1,500.00 made by Mr. and Mrs. Marvin Silverman on December 2, 1988, which the Department asserts was not timely returned; and, a withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash. Regarding the Val Gabaldon (Gabaldon) deposit, the proof demonstrates that on November 17, 1988, Gabaldon placed in escrow with the Brokerage a $2,000.00 deposit toward the purchase of a unit at the Palm Beach Hotel. On January 17, 1989, and again on January 25, 1989, Lebedeker, an associate employed by the Brokerage, executed "escrow request forms" seeking the return of the deposit to Gabaldon ostensibly because the contact had been cancelled since financing had not been secured. However, such forms also reflect that on February 2, 1989, Jones, who was then managing the Brokerage, instructed that the deposit not be returned to Gabaldon. At hearing, the Gabaldon purchase agreement was not offered in evidence, Gabaldon did not testify, and no explanation was offered as to why Jones felt it necessary not to disperse the deposit as requested by Lebedeker. Accordingly, there was no competent proof as to the terms of the purchase agreement, when or how it was cancelled, and when the deposit became due to be returned to Gabaldon. The proof does, however, demonstrate that on March 15, 1989, two days after Schumacher regained control of the Brokerage and changed the escrow accounts, that she issued a check to Gabaldon for the return of his deposit, but because the Brokerage had the wrong address for Gabaldon he did not receive his deposit until April 25, 1989. Here, there was no complaint by Gabaldon that his deposit was not returned in accordance with the terms of his purchase agreement, and no impropriety shown regarding Schumacher's handling of this deposit. Regarding the deposit of Mr. and Mrs. Marvin Silverman (Silverman), the proof demonstrates that on or about December 2, 1988, they placed in escrow with the Brokerage a $1,500.00 security deposit under a "memorandum to enter into a lease" of property from Martin and Linda Perlmutter (Perlmutter). That memorandum agreement provided: 7. THIS MEMORANDUM SHALL NOT HAVE THE EFFECT OF A LEASE. THE PARTIES' RIGHTS HEREUNDER ARE CONTINGENT ON (A) FINALIZATION AND EXECUTION OF THE LEASE AGREEMENT WHICH IS CONTEMPLATED BY THIS MEMORANDUM, AND (B) IF APPLICABLE, APPROVAL BY THE CONDOMINIUM BOARD (ASSOCIATION). At hearing, the Department failed to offer the lease agreement ultimately executed by the parties, and consequently the terms of that agreement are not of record. The proof does, however, demonstrate that on March 27, 1989, Perlmutter wrote a letter to Schumacher advising her that the Silvermans had fulfilled their lease agreement, and requesting that their security deposit of $1,500.00 be released to them in full. On May 11, 1989, Schumacher returned the Silvermans' deposit. At hearing, no proof was offered as to when the Perlmutter letter was received by the Brokerage (it was apparently mailed from Nashville, Tennessee), or the reason for the delay, if any, in refunding the deposit. As importantly, neither the Perlmutters nor the Silvermans offered any testimony in these proceedings, and the lease agreement was not offered in evidence. Consequently, there is no competent proof that the deposit was not returned in accordance with the terms of the parties' agreement. Regarding the withdrawal of $50.00 by Schumacher on May 5, 1989, from the escrow account for petty cash, the proof demonstrates that such transaction was inadvertent on her part, in that it should have been withdrawn from her operating account, and that upon such transaction being pointed out to her during the audit of June 6, 1989, by Thayer that Schumacher promptly replaced such funds. Previous disciplinary proceedings Here, there was no suggestion or proof that Schumacher or the Brokerage had previously been the subject of any prior disciplinary proceeding.
Recommendation Based on the foregoing findings fact and conclusions of law, it is RECOMMENDED that a final order be entered finding respondents guilty of having violated the provisions of Section 475.25(1)(e), Florida Statutes, for having failed to produce their records as required by Rule 21V-14.12, Florida Administrative Code, that respondents be reprimanded for such failure, and that all other charges be dismissed. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of September 1991. WILLIAM J. KENDRICK 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 9th day of September 1991.
