Findings Of Fact The Applicant The Applicant is a Trust (the "Trust") to be formed by settlors Sara Kardonski de Nahmad and Raquel Kardonski de Gilinski. Mark Kardonski is to be designated as the trustee pursuant to the proposed trust agreement. The sole beneficiaries of the trust are Sara Kardonski de Nahmad, Raquel Kardonski de Gilinski, Henry Kardonski and Mark Kardonski. All of the beneficiaries are brothers and sisters. The Trust will acquire 100 percent of the stock of Towerbank Corporation. Towerbank Corporation owns 100 percent of the stock of Key Biscayne Bank and Trust Company, Key Biscayne, Florida. Thirty-three percent (33 percent) of the shares of stock to be acquired by the Trust (33,333 shares) will be transferred to the Trust by an existing trust known as the Walter Kardonski Family Trust. The current trustee of the Walter Kardonski Family Trust is also Mark Kardonski and the beneficiaries are the same as under the Trust; Sara Kardonski de Nahmad, Raquel Kardonski de Gilinski, Henry Kardonski and Mark Kardonski. The terms and provisions of the Trust as they relate to voting control of stock held by the Trust and disposition of the stock of Towerbank Corporation are identical to the terms of the existing trust known as the Walter Kardonski Family Trust. The Trustee Mark Kardonski is a Panamanian citizen who is a resident of the United States. He lives at 3 Grove Isle Drive, Apartment 1005, Miami, Florida. He is 35 years old and not married. Mark Kardonski has a Bachelor's Degree in Business Administration from Boston University and a Master of Arts from the University of Lancaster, Lancaster, England, in International Relations. Mark Kardonski is currently employed in the lending department of the Bank where his daily activities are to visit and contact prospective loan clients, to book quality loans, and to review the performance of the loans. He is also a member of the credit committee and sits in on the meetings of the trust committee of the Bank. Mark Kardonski has banking experience with banks other than the Bank. First, Mark Kardonski worked from 1980 to 1981 at State Street Bank in Boston in their training program and then worked in their international operations department. In 1984, Mark Kardonski joined Towerbank International as a credit analyst and later became a credit officer. In 1986 he joined the executive committee of Towerbank International in Panama. His employment with Towerbank International continued until 1987, at which time he became a director of Towerbank International. He continued as a director until 1992. Mark Kardonski also has other business experience outside of banking. In 1981, he worked with the family-owned wholesale electronics business as a marketing manager and designed the marketing strategy for the company and established a distribution system. For the period from 1987 through 1990, Mark Kardonski was employed by Peikard Miami, Inc. He was responsible for converting a purchasing office for the company in Miami to an export trading company specializing in trade in the Caribbean. He was also responsible for hiring professional management, designing the planning strategy for the company and designing their systems. Mark Kardonski's Reputation Mr. Simoneaux is the Executive Director of the International Banking Operations Association with 94 member banks in Dade and Broward Counties. Mr. Simoneaux worked in banking and finance for 36 years prior to his recent retirement. Mr. Simoneaux testified that during the period when Mark Kardonski has owned a controlling interest in Towerbank Corporation as trustee of the Walter Kardonski Family Trust, the impression in the banking community is that the Bank is conservative and that the Bank has received plaudits for outstanding operations, capital and profits. This is also Mr. Simoneaux's opinion. Mr. Simoneaux described Mark Kardonski as being of good moral character, with "both feet on the ground" in banking, with a great deal of understanding of how the Treasury Department of a bank operates, how the bank's funds must be utilized, and investment rates and income. Mr. Simoneaux believes that Mark Kardonski is qualified by reputation, character, experience and financial responsibility to control and operate a bank in a legal and proper manner. Mr. Chopin testified that Mark Kardonski is generally regarded as a person of high character and integrity with a reputation for being a man of principle. He is a scrupulously careful, conservative business person. Mr. Chopin believes that Mark Kardonski is qualified by reputation, character, experience and financial responsibility to control and operate a bank in a legal and proper manner. Mark Kardonski testified that he has never been convicted or pled guilty or nolo contendere to a violation of Section 655.50, Florida Statutes, relating to Florida Control of Money Laundering in Financial Institutions Act, Chapter 896 relating to offenses relating to financial institutions, or any similar state or federal law. Effect of the Acquisition on the Bank Mark Kardonski testified that the strategy of the current owners of Towerbank Corporation has been to hire professional management to run the Bank consistent with a philosophy of safe and sound banking, with a conservative approach to lending and investing in high quality, high grade investments. The strategy of the Bank includes encouraging management to get involved in community affairs of Key Biscayne and Dade County and to participate in cultural events and activities in Key Biscayne. Mark Kardonski is pleased with the performance of current management in implementing these strategies for the Bank. No changes in the senior management of the Bank, including the chief executive officer are planned at this time. The Applicant plans to continue the current business strategies utilized by the current ownership. The Applicant plans to continue the approach of focusing its attention on strategy at the Board of Directors level and allowing management to run the day-to-day operations of the Bank. DONE AND ENTERED this 24th day of June, 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 24th day of June, 1993. COPIES FURNISHED: Albert T. Gimbel, Esquire Jeffrey D. Jones, Esquire Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Thomas R. Woolsey, Esquire STEEL, HECTOR & DAVIS 200 South Biscayne Boulevard Suite 4000 Miami, Florida 3313 Gerri Raines Dolan, Esquire DELOITTE, HASKINS & SELLS 100 Southeast 2nd Street Suite 2500 Miami, Florida 33131-2335 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves, Esquire General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350
Findings Of Fact The Department rules on the Proposed Findings of Fact and Exceptions, submitted by the parties as follows: APPLICANT'S PROPOSED FINDINGS AND CONCLUSIONS Applicant's Proposed Finding numbers 1 and 2 are accepted to the extent that factual matters are discussed, consistent with the Final Order. Proposed Finding numbers 3-6 are accepted as consistent with the Final Order. PROTESTANT'S (FLORIDA BANKERS ASSOCIATION) PROPOSED FINDINGS ON BEHALF OF PROTESTANTS AND INTERVENORS Proposed Findings 1-32 concern proposed facts relevant to all applications, and Proposed Findings 45-55 concern proposed facts concerning the specific application of DBT Trust Company of Florida. Proposed Finding numbers 1-5, 10-17, 26-30 are accepted to the extent that they are generally consistent with the Hearing Officer's Finding or with the Final Order. Proposed Finding numbers 6-9, 18-25, 31 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 45, 46, 51-55 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact or with this Final Order, or are otherwise irrelevant or immaterial. Proposed Finding numbers 47-48 are accepted to the extent that they are generally consistent with the Hearing Officer's Findings of Fact or with the Final Order. PROTESTANT'S AND INTERVENOR'S EXCEPTIONS Exception numbers 1, 3-7 are rejected and the Hearing Officer's ruling is affirmed. Exception number 2 is rejected. Exception number 8 is misplaced. Many Findings of Fact submitted by the parties were not specifically incorporated into the Findings, but were consistent with the Findings, and have been accepted in this Final Order. Those that have not, are deemed inconsistent with the Hearing Officer's Findings, or are irrelevant or immaterial. Exception number 9 is rejected. All parties had an opportunity to challenge the incipient policy of the Department, pursuant to McDonald vs. Department of Banking and Finance, 346 So.2d 569 (1st DCA Fla. 1977) Exception number 10 was not considered a significant factor, and the Department followed its incipient policy and other trust company order regarding capital adequacy. Exception numbers 11-16 are rejected as inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. Exception numbers 17-26 concern Proposed Findings which have been discussed above, and considered in paragraphs 6-9. SUPPLEMENTAL POST HEARING SUBMISSION OF FIRST NATIONAL BANK IN PALM BEACH AND BESSEMER TRUST COMPANY OF FLORIDA This submission is primarily limited to the issue of transfer accounts. Points 1-3 are rejected to the extent that they are inconsistent with the Hearing Officer's Findings of Fact, and the Final Order. The Hearing Officer made specific findings as the trier of fact, regarding the transfer of accounts, and those Findings have been adopted by the Comptroller. SCHEDULE "A" Thomas C. Oldham, Esquire Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Stephen E. Day Attorney for Respondent Bankers Trust Company of Florida Taylor, Day, Rio & Mercier 701 Fisk Street, Suite 320 Jacksonville, Florida 32204 (904) 356-0700 John A. Jones Bruce Roberson Attorneys for DBT Trust Company of Florida Case No. 79-1228; 79-1234 Holland and Knight 610 North Florida Avenue Tampa, Florida 33601 (813) 223-1621 John Radey Holland and Knight Post Office Drawer 810 Tallahassee, Florida 32302 (904) 224-7000 J. Thomas Cardwell Attorney for Petitioner Florida Bankers Association and Intervenor Atlantic National Bank of Palm Beach County Akerman, Senterfitt and Eidson Post Office Box 231 Orlando, Florida 32802 (305) 843-7860 Bruce Culpepper Attorney for Petitioner Florida Association of Registered Bank Holding Companies, Inc. 350 East College Avenue Tallahassee, Florida 32301 (904) 222-6071 James G. Pressly, Jr. Attorney for Intervenor First National Bank in Palm Beach Attorney for Intervenor Bessemer Trust Company of Florida Gunster, Yoakley, Criser, Stewart and Hirsey, P.A. First National Bank Building Palm Beach, Florida 33480 (305) 655-1980 H. David Faust Attorney for Intervenor Bank of Palm Beach and Trust Company Attorney for Intervenor First Bank and Trust Company of Boca Raton Burns, Middleton, Farrell and Faust 205 Worth Avenue Palm Beach, Florida 33480 (305) 655-5311 Robert I. MacLaren, II Attorney for Intervenor Boca Raton National Bank Osborne and Hankins Post Office Drawer 40 855 South Federal Highway, Suite 200 Boca Raton, Florida 33432 (305) 395-1000 Ralph J. Blank, Jr. Attorney for Intervenor First National Bank and Trust Company of Riviera Beach Blank, Will and Benn Post Office Box 2100 West Palm Beach, Florida 33402 (305) 832-2889 John C. Miller, Jr. Attorney for All Intervenors Post Office Box 46 Mobile, Alabama 36601 (205) 432-1414 Phillip G. Newcomm Bowman Brown Arnold L. Berman Attorneys for Respondent U.S. Trust Company of Florida 1000 Southeast First National Bank Building Miami, Florida 33131 (305) 358-6300
Findings Of Fact First Bank of Hollywood Beach is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. First Bank's main office is located in Broward County, and it has three authorized branch offices in Broward County. (Hearing Officer's Exhibit 1) American Bank of Hollywood is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. (Hearing Officer's Exhibit 1) It conducts business in its main office in Broward County, has a branch office in Broward County, and has applied for a second branch office in Broward County. Gerald A. Lewis is the Comptroller of the State of Florida and, as such, is the head of the Department of Banking and Finance. On August 1, 1980, the Department received request from the First Bank of Hollywood Beach for approval of an amendment to its charter changing its name to First American Bank of Broward County. On August 22, 1980, the department received an objection to the requested name change from American Bank of Hollywood. (Hearing Officer's Exhibit 1) Both banks have engaged in the banking business in Broward County, Florida, for more than eight years using their current corporate names. (Hearing Officer's Exhibit 1) Some of the principals of First Bank of Hollywood Beach, either as directors, officers, or shareholders, are and have been directors, officers, or shareholders of the First American Bank of Palm Beach County, which bank conducts a business through a main office and ten branch offices in Palm Beach County, Florida. Said principals desire to change the name of First Bank of Hollywood Beach to reflect its affiliation with the First American Bank of Palm Beach County. Additionally, substantially the same group of individuals has pending with the Department an application to organize a new bank to be named First American Bank of Broward County, which bank will also conduct its business through its main office in Broward County, Florida. If the de novo charter is approved, the new bank would also function as part of the "group" comprised of the First American Bank of Palm Beach County and the First Bank of Hollywood Beach. (Hearing Officer's Exhibit 1) As of the date of hearing in this cause, banks with the word "American" in their names were located in thirteen different counties within the State of Florida. At that time, within Broward County, the following commercial banks and savings and loan associations used the word "American" in their titles: American Bank of Hollywood + 1 branch (+ 1 branch applied for) Transamerica Bank of Florida + 1 branch Pan American Bank of Broward + 3 branches Great American Bank of Davie Great American Bank of Broward County Gulfstream American Bank & Trust Company + 5 branches AmeriFirst Federal Savings & Loan Associa- tion + 5 branches American Savings & Loon Association + 14 branches The proposed First American Bank of Broward County, together with First Bank's group if its requested name change is approved, would produce five additional locations of banks with "American" in their titles in Broward County. The sole basis for American Bank's objection to First Bank's requested name change is confusion based upon name similarity. No confusion exists between the First American Bank of Palm Beach County and the Pan American Bank of Palm Beach County or between the First American Bank of Palm Beach County and any bank in Broward County with "American" in its name, although the First American Bank of Palm Beach County has a branch within one mile of the Palm Beach/Broward County line. David Starke, an economist who specializes in consulting work with financial institutions, was not tendered as an expert witness and, accordingly, was not accepted as one. However, the surveys of banks with similar names in the State of Florida prepared by him reveal that all banks using the word "American" in their names also use either a first-word adjective and/or a geographic designation to distinguish one from the other. According to those surveys, both the banks and the savings and loam associations in Broward County with "American" in their titles use these two methods of distinguishing themselves. Both methods of distinction would be utilized by the requested one change in this cause. Other than uncorroborated hearsay evidence, American Bank introduced four items of correspondence which David L. Cory personally obtained from mail erroneously received by American Bank on one Saturday. All of the items of correspondence originated from persons outside of Broward County, with two of them originating from outside of the State of Florida. None of the items was addressed to the American Bank of Hollywood; however, three of the four items specifically carried American Bank's mailing address. The 1980 Hollywood (Broward County, Florida) telephone directory contains a listing for a First American Bank of Broward County, a bank formerly known as Executive Bank of Fort Lauderdale and now known as Great American Bank of Broward County. 10 . In March, 1979 the American Bank of Hollywood reserved with the Secretary of State's office the corporate name of American Bank of Broward. Other than reserving the name, American Bank has taken no steps toward using that name. The Department takes no position on the requested name change herein and recommends neither approval nor disapproval.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is, therefore, RECOMMENDED: That a final order be entered approving the request of First Bank of Hollywood Beach to change its name to First American Bank of Broward County. RECOMMENDED this 13th day of May, 1981, in Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 1981. COPIES FURNISHED: Leonard L. Levenstein, Esquire 1500 South Dixie Highway Coral Gables, Florida 33146 Walter W. Wood, Esquire Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32301 Robert B. Butler, Esquire Ellis, Spencer, Butler & Kisslan 1909 Tyler Street Post Office Box 6 Hollywood, Florida 33022 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301 =================================================================
Findings Of Fact On December 30, 1993, the Department received an application to organize a proposed new trust company to be located in Miami, Dade County, Florida, and to be called Columbus Trust Company (Columbus). Four individuals to be associated with Columbus are foreign nationals: Arturo Vinueza and Mario Yepes are proposed board of directors members; and Catalina Landes and Pedro Ycaza are major stockholders of Columbus. All other directors and stockholders of Columbus are citizens of the United States. They are: Charles C. Hardwick, III, Michael Hollihan, and Timothy S. Reed. All of the individuals listed in paragraphs 2 and 3 attended the public hearing. Mr. Vinueza is the proposed chief executive officer for Columbus. He is a graduate of the University of Miami and has more than thirteen years of banking and trust experience. Mr. Vinueza has served as manager or managing director of Citibank, N.A., Quito, Ecuador; Banco Popular International, Nassau; The Jersey Private Bank and Trust, Nassau; and Banco Popular del Ecuador, Miami Agency. Charles C. Hardwick, III, a proposed director, is a graduate of the University of Colorado, College of Law. He has more than twelve years of experience in international finance. Timothy S. Reed, a proposed director, is a graduate of Dartmouth College, and is a career banker, having retired from Citibank, N.A., New York, after more than thirty years of continuous service. He has served as general manager of Banco Popular del Ecuador, Miami Agency, for the past three years. Michael Hollihan, a proposed director who will serve as chief investment officer, has a degree in economics from the University of Wisconsin. He has completed graduate course work in economics at the University of South Carolina, and has been engaged in the business of international trade, finance and investments for more than twenty years. Mr. Hollihan was previously employed by Banco Central del Ecuador. For the past four years he has served as President of JPBT Advisors, Inc. in Miami. Mario Yepes, a proposed director, also has a degree in economics and was a teacher at the university of Colombia. He worked for a number of years for Bank of America, both in Miami and in Venezuela. Catalina Echevaria Landes, a major stockholder, is a business woman and interior designer. She has her own business located in Miami. Pedro Ycaza, a major stockholder, has a degree in business from a university in Ecuador. He worked for various banks in Ecuador for a number of years before joining Banco Popular in 1986. The Applicants seek to organize Columbus to provide trust services and investment management services to individuals having business or personal interests in the Miami area, and to JPBT Advisors, Inc. JPBT Advisors, Inc. advises certain mutual funds specializing in international investments. The Applicants propose to expand such services gradually to include private banking and investment management services to international investors residing or doing business in Miami and Dade County, Florida. The existing business of JPBT Advisors, Inc., which has annual revenues of approximately $3 million, will contribute to the income of Columbus during its initial period of operations as the bank develops its personal trust and investment management business. The proposed board of directors consists of individuals having many years of banking and business experience in the areas of international finance and asset management. Both Mr. Vinueza, the proposed chief executive officer, and Mr. Reed, a proposed outside director, have had direct experience as officers of financial institutions within the past three years and are presently employed in such capacities. The initial capital for Columbus will be $2 million. The initial capitalization of Columbus is adequate in relation to is proposed business activities. The corporate name of Columbus is reserved with the Department of State. Columbus will have suitable quarters in the Barnett Bank building located at 701 Brickell Avenue, Miami. Columbus' application was prepared by Richard Hunt, a financial consultant, who has been engaged in the business of providing such consulting services to organizing financial institutions for more than 25 years. The economic study and demographic analysis of the market for fiduciary services in Dade County, prepared by Mr. Hunt, concluded that the organization of Columbus will serve the convenience and advantage of its expected clients. The local conditions in Miami are favorable to Columbus' business plan. DONE AND ENTERED this 7th day of March, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. 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 7th day of March, 1995. APPENDIX TO REPORT OF PUBLIC HEARING, CASE NO. 94-6306 All proposed findings of fact were submitted by stipulation of the Department and Columbus. COPIES FURNISHED: Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Harry Hooper, General Counsel Department of Banking and Finance The Capitol-Room 1302 Tallahassee, Florida 32399-0350 Rod Jones Shutts and Bowen 20 North Orange Avenue, Suite 1000 Orlando, Florida 32801 Albert T. Gimbel Chief Banking Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Jeffrey D. Jones Assistant General Counsel Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE DIVISION OF BANKING IN RE: Application for Authority to Organize a State Chartered Trust Administrative Proceeding Company to be located at Number: 3328-B-11/94 701 Brickell Avenue, Miami, DOAH Case Number: 94-6306 Dade County, Florida (Columbus Trust Company) / FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER Having considered the facts and information contained in the application for authority to organize and operate Columbus Trust Company (Applicant), 1 have determined that the Applicant has met all six (6) statutory criteria set forth in Section 658.21, Florida Statutes, or can meet those criteria by complying with specific conditions. Accordingly, the application is approved, subject to the conditions specified herein.
The Issue Should Respondent's license as an insurance agent in the State of Florida be disciplined for the alleged violation of certain provisions of Chapter 626, Florida Statutes, as set forth in the Administrative Complaint and, if so, what penalty should be imposed?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida vested with the statutory authority to administer the disciplinary provisions of Chapter 626, Florida Statutes. Respondent, at all times material to the dates and occurrences referenced in the Administrative Complaint, was licensed as an insurance agent in the State of Florida. Respondent is also currently licensed in the State of Florida as a life and life and health insurance agent. During the late 1990's, Respondent became a selling agent for an entity known as Alliance Trust, which later merged with Chemical Trust, and is now known as Chemical Trust. Respondent first learned of Chemical Trust through Jim Hicks of West Shore Agency of Michigan. Jim Hicks provided Respondent with selling and marketing materials for the investments, which were marketed as "guaranteed contracts" (Guaranteed Contract marketing materials). Respondent gave the Guaranteed Contract marketing materials to Imogene Skipper, Edward Dandignac, Dorothy Dandignac, Theodore Dostal, Alice Lowe, Robert Marsh, Julia Marsh, Raymond Grossman and Mildred Grossman and had each of them sign a compliance verification form to that effect. The Guaranteed Contract marketing materials contained a six-page U.S. Guarantee Corporation (U.S.G.C.) Balance Sheet, dated July 13, 1999, which listed several financial representations, including U.S.G.C.'s Accounts Receivable, Real Estate, Partnerships, Total Assets, Liabilities, Net Equities, Total Net Liabilities and Net Equity, Certificates of Deposit, and various accounting representations. Respondent did not have a background in financials. However, he made no effort to verify the accuracy of U.S.G.C's financial statements in order to protect his customers' investments. U.S.G.C. did not have the financial wherewithal to guarantee investors' investments. The Guaranteed Contract marketing materials listed several members of its "Staff," including Barry Goldwater, Jr. (Vice President/Director); Kenneth R. Pinckard (Executive Director/Vice President); Stephen M. Hammer (Chief Financial Officer); Kenneth Turner (Vice President/Comptroller); etc. Respondent did not verify that any of these individuals was actually on the staff of U.S.G.C. The Guaranteed Contract marketing materials asserted that U.S.G.C. had provided financial support to various charitable organizations, including Compassion International, St. Mary's Food Bank, World Missions, Salvation Army, Food for the Poor, Tennessee, US, etc. Respondent made no attempt to verify these representations. The Guaranteed Contract marketing materials, in the "Explanation of the Trust" section, falsely states, "This is a Trust and has satellite offices throughout the USA. This Trust has been providing clients steady streams of interest and the return of their principal since its inception." Respondent made no effort to verify which, if any, of these clients existed or if the clients were being provided steady streams of interest and return of their principal. The Guaranteed Contract marketing materials, in the Explanation of the Trust section, falsely states, "Profits are made by the Trust by buying and selling financial instruments and physical properties. The US Government sells Investment Grade Paper Backed by Treasury Notes on a daily basis and the Trust has Buyers purchasing large blocks at discounts. " Respondent did not know what Investment Grade Paper Backed by Treasury Notes was, and made no attempt to determine what this term implied. The Guaranteed Contract marketing materials, in the "Explanation of the Trust" section, falsely states: "The Trust also buys distressed properties with plans already drawn for conversion and then sell at a profit immediately. The Bonding Company approves all investments. This insures the integrity of each investment and its guarantee. There is in excess of SIX Billion Dollars security on the investor's investment." Respondent made no effort to verify these financial representations in order to protect his clients. Respondent made no effort to determine if U.S.G.C. was authorized to transact insurance in the State of Florida. Respondent, after reviewing the Guaranteed Contract marketing materials, considered U.S.G.C. to be a legitimate corporation. However, Respondent made no effort to determine if U.S.G.C. was a legitimate corporation, notwithstanding his testimony to the contrary, which lacks credibility. At all times material hereto, U.S.G.C. was not licensed as an insurance company or a bonding company, and, although a registered corporation in the State of Nevada, it was not a registered corporation in the State of Florida. Respondent received a document from Clifton Wilkinson, Trustee for Alliance Trust dated August 1, 1999, which stated: "News and Information Regarding Misinformation and Opinions of Some State Agencies Concerning the Nature of Alliance Trust and Similar Entities. They are exempt from State Securities Laws." Therefore, sometime around August 1, 1999, Respondent was made aware that some state agencies took the position that the investments (Guaranteed Contracts) being offered by Alliance Trust (n/k/a Chemical Trust) were securities and were not exempt from state securities laws and regulations. Respondent did not seek advice from the agency of the State of Florida charged with the responsibility of regulating securities as to whether the State of Florida considered these investments to be securities and subject to securities regulations. Likewise, Respondent did not seek any legal advice from an independent counsel as to whether these investments were in fact securities and subject to state securities regulations. Respondent made no independent inquiry into whether these investments were in fact securities and subject to securities laws and regulations, but relied solely on information received from Chemical Trust and two other agents for Chemical Trust in coming to the conclusion that these investments were not securities and not subject to securities laws and regulations. Respondent did not personally invest in the Chemical Trust investments. However, he did tell Edward Dandignac and Theodore Dostal that he had personally invested in Chemical Trust investments. Respondent earned a commission from the sale of the Chemical Trust investments. Respondent's commission from the sale of Chemical Trust investments constituted properties involved in Virgil Womack's violation of Title 18, United States Code, Section 1956(h), and were subject to forfeiture pursuant to Title 18, United States Code, Section 982(a)(1). Respondent made a payment of $63,302.29, through his attorney to the Receiver on June 18, 2001. Chemical Trust's investment product (Guaranteed Contract) was an investment contract and thereby a security as defined under Subsection 517.021(19)(q), Florida Statutes. As a security, the Guaranteed Contract was required to be registered in the State of Florida under Section 517.07, Florida Statutes, unless it was exempt from registration under Section 517.051 or 517.061, Florida Statutes. The Guaranteed Contract was neither an exempt security under Section 517.051, Florida Statutes nor an exempt transaction under Section 517.061, Florida Statutes. Therefore, the Guaranteed Contract was required to be registered in the State of Florida. An individual must be licensed in the State of Florida in order to sell or offer securities in the State of Florida. Respondent was neither licensed to sell nor to offer securities in the State of Florida. The monies paid to Chemical Trust for the investments were deposited in the personal bank accounts of Virgil Womack, Clifton Wilkinson, Lewey Cato, and Alvin Tang, the principals of Chemical Trust, and used for their personal benefit and to promote the fraudulent scheme. The Florida Department of Banking and Finance had information concerning previous securities violations by Virgil Womack and Clifton Wilkinson. Womack committed securities violations in Georgia in 1997, and Wilkinson committed securities violations in North Dakota, Iowa, Kansas, and Illinois in June 1999. This information was contained in the National Association of Securities Dealers Regulation Central Registration Depository (NASDAQ CRD) database that was accessible to the public in general, and to the Respondent specifically, through the Florida Department of Banking and Finance through telephonic communication. Imogene Skipper, age 74, of Dover, Florida, is a retired school custodian. Skipper worked as a custodian for 19 years. Skipper met Respondent in 1997 when he came to her home as a representative of Remington Estate Services, Inc., Fort Worth, Texas, to assist her in setting up a revocable living trust. The trust agreement would allow her to plan an orderly distribution of her assets without having to go through probate. In 1999, Respondent persuaded Skipper to liquidate the existing annuities with American Investors and transfer the funds to Chemical Trust. In doing so, Skipper suffered $1,665.49 in surrender charges for policy number 303313 and $1,171.25 for policy number 303467. Respondent told Skipper that Chemical Trust would reimburse her these surrender charges. Skipper purchased these annuities when her children were young. The annuities were funded by a $5.00 deduction from Skipper's weekly paycheck. Skipper was reluctant to transfer her annuity funds to Chemical Trust. However, Respondent kept reminding her that the 10 per cent return on her investment was good. Also, Skipper considered Respondent to be an honest, decent, and well respected man. Skipper invested $17,820.00 in Chemical Trust through Respondent. This figure represented two checks, each written to Chemical Trust by Skipper, in the amount of $8,910.00 each. In return Chemical Trust issued two Guaranteed Contracts in the amount of $10,158.00 each for a total of $20,316.00. The difference in amount of the two contracts ($20,316.00) and the amount of Skipper's checks ($17,820.00) was $2,496.00, which was supposed to reimburse Skipper for the surrender fees on her annuities. However, the surrender fees were $2,836.74, which resulted in Skipper not being reimbursed for surrender fees in the amount of $340.74. Respondent supplied Skipper with documents explaining the Chemical Trust investments. Respondent had Skipper sign a compliance verification stating that Respondent had fully explained and delivered documentation concerning the Guaranteed Contracts. The Cover Page of the Guaranteed Contract marketing material had "Chemical Trust" in bold print. At the bottom of the same page, the language "A Guaranteed Contract" appeared along with Respondent's name, address, and telephone number. The second page was entitled "Explanation of the Trust." The third page was titled "CHEMICAL TRUST" and consisted of information concerning "QUALIFICATIONS," "FINANCIAL STRENGTH," and "BOND PROVIDER." This page contains certain terms such as: (a) "After funds have cleared, you will receive your Contract and Surety Bond"; (b) "With over $725 million in assets to protect clients, Chemical Trust is dedicated to provide you the safety, liquidity, and protection you expect in today's uncertain environment"; (c) "U.S. Guarantee Corporation's financial statement is in excess of 2.4 billion dollars"; and "Please note: Due to confidentially U.S. Guarantee Corporation and Fidelity National will be unable to provide any information to you without the consent of the Trust. ***If you wish to contact either of these it must be coordinated by Chemical Trust." (Emphasis furnished) After her funds cleared, Skipper was provided a "Certificate of Grantor" for each investment. The first page had a bold CHEMICAL TRUST" logo and was identified as a "Certificate of Grantor." Among the terms were: (a) "SIMPLE INTEREST AT THE FIXED RATE OF 10 PERCENT PER ANNUM"; and (b) THIS PRINCIPAL AMOUNT IS SECURED BY A SURETY BOND ISSUED BY U.S. GUARANTEE CORPORATION." The guarantee of ten percent per annum interest was higher than the amount Skipper was receiving on the annuities that she had liquidated. The second page had the U.S. Guarantee Corporation logo at the top and was titled "Payment Surety Bond" with Chemical Trust as Principal, U.S. Guarantee Corporation, as Surety, and Imogene R. Skipper, as Trustee. Skipper identified the guarantee of ten percent interest and her full trust in Respondent as the factors that influenced her decision to make the Chemical Trust investments. Skipper lost her entire investment with Chemical Trust. Edward Dandignac, age 70, of Inverness, Florida, is a retired Boar's Head provision carrier. Dorothy Dandignac is the spouse of Edward Dandignac. Dorothy Dandignac, age 67, of Inverness, Florida, is a retired housewife. The Dandignacs first had contact with Respondent when he came to their home to set up a revocable living trust in April 1998. Several months after setting up the irrevocable living trust, Edward Dandignac told Respondent that he was having problems with his Oppenheimer funds, Fidelity funds, and other funds. Respondent advised Edward Dandignac that he would probably do better with an investment in some annuity. Subsequently, Respondent sold Edward Dandignac an annuity with Bradford Life and an annuity with United Life. Later, Respondent approached Edward Dandignac concerning Chemical Trust and reviewed the Chemical Trust documents with Edward Dandignac and explained to him that he could make a better return, up to ten percent. Respondent also advised Edward Dandignac that Chemical Trust would cover the surrender charges. Respondent went through the Guaranteed Contract marketing materials with Edward Dandignac. As to the integrity of Chemical Trust and U.S. Guarantee Corporation, Respondent advised Edward Dandignac the companies were "backed" and "protected." Based on Respondent's representations and the Guaranteed Contract marketing materials, Edward Dandignac determined that an investment with Chemical Trust would be secured and guaranteed. Subsequently, Edward Dandignac decided to invest part of his and his wife's life savings in Chemical Trust through Respondent. Edward Dandignac liquidated one of his annuities and had the funds transferred to Chemical Trust. Respondent advised Edward Dandignac that he had personally invested in Chemical Trust. Because Respondent had worked with the Dandignacs in getting them the annuities, which were making better money than their stock, and the fact that Respondent had also invested in Chemical Trust, the Dandignacs trusted Respondent in regard to their investment in Chemical Trust. One of the business cards given to the Dandignacs by Respondent listed "Insurance," "Estate Plans," and "Investments" as the areas in which he was involved. Edward Dandignac identified the Guaranteed Contract marketing material as being similar to the documents given to him by Respondent. This material was the same as the Guaranteed Contract marketing material provided to Skipper by Respondent. The Dandignacs expected a return on their investment with Chemical Trust but instead lost $25,444.89. Theodore Dostal, age 74, of Port Richey, Florida, first had contact with Respondent in October 1997, when Respondent delivered a revocable living trust to him through Senior Estates Services. Shortly thereafter, Respondent and Dostal discussed other investments. Between October 28, 1997, and July 27, 1998, Dostal transferred varying amounts from his revocable living trust to purchase three different annuities from Respondent with Bradford Life. Subsequently, Respondent furnished Dostal the Guaranteed Contract marketing materials identical to those provided to Skipper by Respondent. Based on the Guaranteed Contract marketing materials and Dostal discussions with, and his trust in Respondent, Dostal invested in Chemical Trust. Dostal's investment in Chemical Trust involved the purchase of: a Certificate of Grantor dated September 24, 1999, in the amount of $17,327.00; (2) a Certificate of Grantor dated September 28, 1999, in the amount $92,010.00; (3) a Certificate of Grantor dated October 11, 1999, in the amount of $10,000.00 and; (4) a Certificate of Grantor dated November 10, 1999, in the amount of $37,120.00. Each Certificate of Grantor was issued by Chemical Trust and was backed by a Payment Surety Bond backed by U.S. Guarantee Corporation Other than the terms specific to Dostal, the Certificate of Grantor and the Payment Surety Bond referenced above are the same as those issued to Skipper. Of the monies he invested with Chemical Trust, Dostal lost $56,000.00. Respondent told Dostal that he had personally invested in Chemical Trust Alice Lowe, an elderly lady, is a retired office manager. Lowe currently lives in Orlando, Florida. Lowe purchased an annuity product from Respondent in April 1998. Subsequently, Lowe liquidated her annuity and at the suggestion of Respondent invested $39,914.95 in the Chemical Trust investments, which she lost plus the surrender charges in the amount of $4,350.73 for a total loss of $44,229.85. Lowe could not recall receiving the Guaranteed Contract marketing materials. However, she did recognize her signature on the verification form which confirms that she received the Guaranteed Contract marketing materials. As such, the documents she received would have contained the same terms as the documents received by Skipper. The ten percent interest per annum was a factor in Lowe's decision to invest in Chemical Trust investment along with her confidence in Respondent. Robert Marsh, an elderly man, is a retired mechanic, and is married to Julia Marsh. Currently, the Marshes live in Bradenton, Florida. The Marshes became acquainted with Respondent about May 2, 1998, when Respondent delivered a revocable living trust to them through Remington Estate Services. After this initial contact, the Marshes' interaction with Respondent consisted of Respondent's stopping by a few times, talking to Respondent on the telephone, and discussing investments with Respondent. During all visits with Respondent, both Robert Marsh and Julia Marsh were present. Likewise, the Marshes discussed all financial matters jointly before making a final decision concerning financial matters. The Marshes had an existing annuity that was earning interest at the rate of 2.37 or 3.00 percent, which they were not pleased with. Subsequently, the Marshes transferred some of the money from the existing annuity to purchase an annuity with Respondent. Afterwards, Respondent visited with the Marshes every two to three months. During this time, Respondent discussed Chemical Trust investments with the Marshes and advised them that Chemical Trust was a "good company" that the company "had been around a long time" and "the investments" were a "good deal." The Marshes transferred, through Respondent, their funds from two annuities and an IRA to Chemical Trust. The Marshes invested over $23,000.00 in Chemical Trust investments. Originally the Marshes lost all of their investment. However, they recouped all but $2,300.00 through the efforts of the U.S. Government. The $2,300.00 was surrender charges for early withdrawal of their annuities. Based on Respondent's representations, the Marshes expected to be reimbursed for surrender charges, receive ten percent interest per annum, the principal amount to be secured by a surety bond, and to receive a $700.00 bonus. The Marshes were provided Chemical Trust's Guaranteed Contract marketing materials from Respondent, which was identical (contained the same terms) to the Guaranteed Contract marketing material provided to Skipper. Mildred Grossman, age 79, of Debary, Florida, is a retired secretary. Raymond Grossman, age 80, also of Debary, Florida, is the spouse of Mildred Grossman. Raymond Grossman is retired Methodist minister. The Grossmans became acquainted with Respondent when he came to their home to deliver a revocable living trust as a representative of Remington Estate Services, Inc. After his initial contact with the Grossmans, Respondent visited them every one to three months to check on their needs. Because the Grossmans were seriously considering the possibility that one of them would be going into a nursing home or some type of assisted living facility, Respondent encouraged the Grossmans to purchase annuities. Consequently, the Grossmans cashed in their life insurance policies and their certificates of deposit and purchased annuities from Respondent through American Investors. After they purchased the annuities, the Grossmans were still concerned as to whether they could afford potential retirement home expenses. The Grossmans discussed their concerns with Respondent, and he advised them that they could get a better return on their investment if they switched to Chemical Trust investment. Respondent represented to the Grossmans that their principal investment was protected by a surety payment bond issued by U.S. Guarantee Corporation, that they would receive a guaranteed ten percent interest per annum return for seven years, and that they would be reimbursed for surrender charges incurred when they transferred their funds to Chemical Trust. The Grossmans lost approximately $36,900.00 from their investment with Chemical Trust through Respondent. This amount constituted their life savings, leaving them about $2,000.00 in the bank. Respondent strongly suggested that the Grossmans invest in Chemical Trust. In fact, one of strongest motivating factors for the Grossmans' decision to invest in Chemical Trust was their faith and trust in Respondent. The Guaranteed Contract marketing materials provided to the Grossmans were identical (containing the same terms) to those provided to Skipper. As a result of the lost investments, the Grossmans: (1) were forced to move from a condo to mobile home; (2) cannot provide financial help to their children; and (3) can no longer afford an assisted living home. The Chemical Trust enterprise was a deliberate and largely transparent scheme to swindle Florida residents. Respondent either knew or should have known, had he made good faith attempt to verify the representations contained in the Guaranteed Contract marketing materials and the information furnished to him by other agents, employees, officers or staff of Chemical Trust, that Chemical Trust investments were worthless. Respondent failed to make a due diligence inquiry in this regard. Respondent employed either his past or then current insurance/client relationship with Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac to gain their trust and then abused that trust by his failure to properly research and verify the claims made by Chemical Trust, a fellow insurance agent, others associated with Chemical Trust investments, and those otherwise contained in the Guaranteed Contract marketing materials. Respondent was the source of injury to Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac by inappropriately attempting to act in multiple roles as their insurance agent and as an agent for Chemical Trust. As a result of Respondent's actions, Imogene Skipper, Robert and Julia Marsh, Raymond and Mildred Grossman, Alice Lowe, and Edward and Dorothy Dandignac were sold an investment that was nothing more than a scheme to swindle those who invested. The aggregate loss to the Chemical Trust investment scheme by Skipper, the Marshes, the Grossmans, Lowe, the Dandignacs, and Dostal was approximately $200,000. Under the circumstances of this case, the participation of Respondent in the sale of Chemical Trust investments to Skipper, the Dandignacs, Dostal, Lowe, the Marshes, and the Grossmans was "in the conduct of business under the [insurance license]" and "in the course of dealing under the [insurance] license."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and after careful consideration of both aggravating and mitigating factors set forth in Rule 4-231.160(1), Florida Administrative Code, it is RECOMMENDED that the Department enter a final order finding Respondent, Donald Dean Hooley, II, guilty of violating Subsections 626.611(4), (7), (8), (9), and 626.621(2), Florida Statutes, and revoking his license and eligibility for licensure as a life and life health insurance agent in the State of Florida. DONE AND ENTERED this 28th of January, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 2002. COPIES FURNISHED: Charles D. Hinton, Esquire Deane & Hinton, P.A. Post Office Box 7473 St. Petersburg, Florida 33739 Anthony B. Miller, Esquire Department of Insurance Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer/Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Insurance The Capitol, Lower Level 26 Tallahassee, Florida 32399-0307
The Issue The issue for consideration in this case is whether the Respondent's licenses as a real estate broker should be disciplined because of the matters set forth in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the allegations of misconduct in the Administrative Complaint, the Petitioner, Division of Real Estate, was the state agency charged with the responsibility for the licensing and regulation of the real estate profession in this state. The Respondent, Richard L. Bohner, was licensed as a real estate broker in Florida operating, with his wife, Kirsten, Bohner Real Estate, located at 205 E. Osceola Street in Stuart, Florida. On October 1, 1989, Mr. Bohner as owner/lessor, entered into separate rental agreements with Trudy Dohm and Thelma Reynolds, with Bohner Real Estate identified as agent, for the lease for 12 months each of apartments number 105 and 204, respectively, at 1674 S.E. St. Lucie Blvd. in Stuart, Florida, for a monthly rental of $350.00 each. Each lease provided for the placement of a security deposit and last month's rental in advance; those sums, according to the terms of the lease, to be held by the agent, Bohner Real Estate, in a non- interest bearing escrow account at the Florida National Bank in Stuart. In actuality, the sums above-mentioned were, in each case, deposited into an account at the First National Bank and Trust Company in Stuart. This account, number 8000030400, was held in the name of Richard L. Bohner or Kirsten L. Bohner, Trust account. This account was an interest bearing account and, over the time in question, also received several large deposits of funds by or on behalf of the Respondent, Richard L. Bohner which were his personal funds and not funds received as a part of or in conjunction with his activities as a real estate broker or those of Bohner Real Estate. For the most part, the funds placed in that account were Bohner's personal funds and security deposits and last month's rent on apartments in the building owned as a personal investment by Mr. and Mrs. Bohner. On February 20, 1990, Sharon Thayer, an investigator for the Department, in the normal course of business, went to the Respondent's real estate office, unannounced as was her prerogative, and asked to speak with Mr. Bohner. He was not present at the time and she asked Mrs. Bohner, who was present, to produce the Respondent's books for the brokerage's escrow account, which she did. In the course of their conversation, Mrs. Bohner identified herself as being in partnership with the Respondent and admitted to assisting him in the maintenance of the escrow account. When Ms. Thayer asked for the backup documents for the escrow account, these were produced. Ms. Bohner also provided Ms. Thayer with copies of the bank account she maintained. On inquiry, Mrs. Bohner said the deposits thereon were, in the main, representative of rental and security deposits from tenants on leases which Bohner Real Estate managed. Ms. Thayer asked about the large deposits made on May 3, June 7, and July 7, 1989. These were for $104,542.50, $50,000.00, and $4.600.00 respectively. In response, Mrs. Bohner indicated these were personal monies which came from personal sources and funds which had been put in that account because that's where they would get the most interest. They were not escrow funds related to the real estate brokerage. Ms. Thayer made an appointment to return to the brokerage office on February 23, 1990 to speak with Respondent. When she did so, Mr. Bohner accounted for the trust liability of $6,885.00 which existed on that date. This sum was verified with the bank by phone. The trust account had an overage of somewhat more than $881.00 which Respondent explained as accrued interest not removed from the account. Mr. Bohner admitted at hearing that he earned interest on the security and rental deposits he held in that account and used that earned interest to offset the low rentals he charged his tenants. He asserted, and there was no evidence to rebut this assertion, that the only security and rental deposits placed in that account were from tenants in the apartment building he and his wife owned personally. Neither he nor Bohner Real Estate managed or served as rental agent for any rental properties owned by others. It is so found. Ms. Thayer pointed out, and it is accepted as fact, that a broker is required to reconcile his trust account on a monthly basis and file a monthly reconciliation form which accounts for overages and shortages. Respondent admits he had not completed or filed these reconciliations because neither he nor Bohner Real Estate has a trust or escrow account into which client funds are deposited. He manages no property from which rents would be collected other than his own, and when he takes a deposit on a sale or transfer, a separate trust account is opened for that particular transaction with any interest earned going to the buyer. Petitioner showed, through the testimony of Ms. Casale, the bank records custodian, that the largest deposit in issue, that one in excess of $100,000.00, was the result of the maturity of a certificate of deposit that was transferred to the account in question. Respondent did not endorse the check for deposit or sign any deposit document. He submitted a letter from the bank chairman to support his thesis that he was not a party to the transfer, but the letter, admitted over objection by counsel for Petitioner, indicates the deposit was made by the bank's investment counselor who handled the transaction consistent with telephone instructions given her by the Respondent. This is a collateral matter, however. When Ms. Thayer completed her audit, she prepared and filed a report on which she indicated, inter alia, that the office met inspection standards and that the property management escrow/trust account was satisfactory. She noted an overage of $889.31 in the account and that it was an interest bearing account although the leases state it would be non-interest bearing. No deadline was given for the correction of this item. Mrs. Bohner admits that when she gave the apartment security escrow account to Ms. Thayer at her request and described it as a trust account, she was not thinking. In fact, and it is so found, neither Respondent nor Bohner Real Estate have a trust account for the business and have not had one for several years. She reiterates Mr. Bohner's assertion that the only money usually kept in the account referenced by Ms. Casale and referred to by Ms. Thayer, is money received as security deposits and last month's rental from tenants in their own building. In the absence of any evidence to the contrary, it is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered in this case dismissing all allegations of misconduct by Respondents as outlined in the Administrative Complaint filed herein. RECOMMENDED in Tallahassee, Florida this 1st day of April, 1992. ARNOLD H. POLLOCK 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 1st day of April, 1992. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 3. Accepted and incorporated herein. Accepted. - 7. Accepted and incorporated herein. Accepted and incorporated herein. First sentence accepted and incorporated herein,. Balance is not Finding of Fact but lore legal conclusion. Accepted and incorporated herein. Accepted and incorporated herein. FOR THE RESPONDENTS: None submitted. COPIES FURNISHED: Theodore Gay, Esquire Department of Professional Regulation 401 NW Second Avenue, Suite N-607 Miami, Florida 33128 Richard L. Bohner Bohner Teal Estate 205 East Osceola Street Stuart, Florida 34994 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 - 1900
The Issue Whether the Certificate of Registration of the Respondent as a real estate broker should be suspended or revoked For alleged violation of Sections 475.25(1)(a), 475.25(1)(c), 475.25(1)(i), and 475.25(3), Florida Statutes, as alleged in the Administrative Complaint filed February 11, 1976. A final hearing was scheduled to be held on June 29, 1976, but pursuant to Motion of Respondent was continued until July 6, 1976 and, pursuant to a further Motion of Respondent For continuance, the hearing was continued until November 15, 16, 1976. A prehearing Motion of Respondent to strike Counts I, II, III, V, VII, VIII, IX & X of the Administrative Complaint was denied at the commencement of the hearing. At the hearing, Petitioner moved to amend Count X of its Complaint to correct a typographical error as to the statutory provision alleged to have been violated. The Motion was granted and the said Count was amended to reflect an alleged violation of Section 475.25(3), F.S. rather than Section 475.25(1), F.S. Pursuant to further Motion of Petitioner, a typographical error appearing in Count VII of the Administrative Complaint relating to the address of the property in question shown in paragraph 1 thereof was corrected to read "1558". Pursuant to further Motion of petitioner, Count Seven was also amended to include an alleged violation of Section 475.25(1)(i), F.S. No objections to any of the above amendments were made by Respondent.
Findings Of Fact Respondent is a registered real estate broker, Certificate No. Q056337. During the year in which the alleged statutory violations occurred, i.e., 1974, she was also registered under the trade name "Watson Real Estate". Also, effective November 4, 1974, she was additionally registered in the name of Connie B. Martin. Her place of business was listed at 17031 North Dixie Highway, North Miami Beach, Florida. (Petitioner's Exhibits 1, 2) On April 16, 1974, Respondent, in the name of "Connie Martin and/or Nominees" entered into an Agreement of Sale and Deposit Receipt with Richard Infante and Susan Infante, his wife, whereby Respondent agreed to purchase real estate located at 1558 N.W. 102nd Street, Miami, Florida, For the price of $24,607.50. The contract provided For a $1,000.00 security deposit by the purchaser in the Form of a check payable to "Watson Real Estate Trust Account" and the Agreement recited an acknowledgement of receipt of these escrow funds by Constance B. Mastellone For Watson Real Estate. The Agreement further provided that closing of the transaction would be on June 23, 1974 and that, in the event of failure or refusal of the purchaser to comply with the obligations thereunder, without fault on the sellers' part, all monies paid under the contract could be retained by the sellers as liquidated damages. Respondent did not place the $1,000.00 deposit in the Watson Real Estate Trust Account that was maintained in the City National Bank of Miami Beach, Miami Beach, Florida. Instead, she wrote a letter to the Infantes on the same day that the contract was executed advising them that the money was in an interest-bearing account at Chase Federal Savings, North Miami Beach, Florida. The letter stated that she preferred to handle the matter in that manner because there was a possibility she would not be able to obtain financing and close the purchase. Although Respondent testified that Mr. Infante called and told her that he had received the letter and had expressed no objection to this disposition of the funds, no written instrument or addendum to the contract in this respect was ever executed by the parties. (Petitioner's Exhibit 14; Respondent's Exhibit 16). The transaction with the Infantes did not close on the scheduled date because Respondent was unable to obtain mortgage financing. On July 1, 1974, Respondent, in the name of "Connie B. Martin, broker" as seller, entered into a deposit receipt agreement with Carrie Clark, as purchaser to sell the Infante property For the sum of $25,000.00. The deposit receipt reflected that the sum of $1,450.00 was acknowledged to be held in escrow by Watson Real Estate as a deposit on the property. There was no showing in this Agreement that Respondent did not hold title to the property at the time. The contract was contingent upon the delivery by the seller of an FHA appraisal of not less than $25,000.00. The Agreement reflected that "Watson Real Estate, Connie B. Martin, Broker" had received the aForesaid deposit. Under the same date of July 1, 1974, another deposit receipt was executed by Carrie Clark as buyer, whereby "Watson Real Estate Trust Account, Connie B. Martin", acknowledged receipt of $1,450.00 from Carrie Mae Clark on the same property as a deposit to be held in escrow by Watson Real Estate. This document showed the purchase price to be $24,607.50. It did not reflect the name of the proposed seller of the property. At the time she executed these documents, Clark did not know who owned the property in question. Respondent viewed Clark as her "Nominee, as referred to in the original contract with the Infantes, and had contracted with Clark on the assumption that she could deliver clear title to her when she had received the same from the Infantes. Respondent considered this transaction to be what she termed a "double closing". Her original contract with the Infantes provided that she would receive as "Watson Real Estate, Connie B. Martin, Broker", 40 percent of the real estate commission on the sale with 60 percent to be paid to the listing broker, Edwin C. Bagby. (Testimony of Respondent, Clark, Petitioner's Exhibit 8; Respondent's Exhibit 6). During the next several months after June, 1974, Respondent advised Infante and his attorney Benjamin Agronow, that she was endeavoring to sell the house to Clark. Infante was desirous of selling the property and did not press to close the transaction. He hereby tacitly agreed to an extension of the time For closing. However, when the Clark deposit receipt was submitted to Agronow in early November, 1974, he advised Infante that the changed method of financing therein would result in higher costs to him. By this time Infante wanted no further dealings with the Respondent and declined to consider the offer by Clark. Thereafter, on November 12, 1974, Agronow advised the Respondent that she had breached the contract of April 16, 1974 For, failure to close the transaction, and demanded delivery of the $1,000.00 deposit under the terms of the contract. It provided that upon default of the purchaser all monies paid thereunder could be retained by the seller as liquidated damages and the contract terminated. Respondent did not pay over the deposit funds to Infante. (Testimony of Respondent, Agronow, Infante (Deposition), Respondent's Exhibit 6, Petitioner's Exhibit 14). On May 25, 1974, Respondent, in the name of "Connie B. Martin and/or Nominees" as purchaser, entered into an Agreement Of Sale And Deposit Receipt with Ruth E. Higgins, as seller, to purchase property located at 1065 N.W. 127th Street, Miami, Florida, For the sum of $31,000.00. The contract provided For the payment of $1,000.00 in the Form of a check to "Watson Real Estate trust account", escrow agent, as a security deposit, and receipt was acknowledged of this amount on the same date by Constance B. Mastellone For Watson Real Estate Trust Account. The contract further provided that it was a "back-up" contract and would not become effective until the date that Higgins was notified that a previous contract with one Hyde was known to be void. Respondent was advised several months later that the Hyde transaction had failed. Neither the listing broker, Associates Real Estate, nor Higgins saw the $1,000.00 at the time the aForesaid agreement of May 25 was entered into by the parties. A letter of Respondent to Higgins on the same date as the contract was executed stated that Respondent held the deposit of $1,000.00 in her account with Chase Federal Savings, North Miami Beach, Florida, in an interest-bearing account. It further stated that Respondent did not want to lose the interest during the time spent waiting For a mortgage commitment. Respondent testified that Higgins called her on the phone and told her she had received the letter and accepted the provisions thereof. Respondent encountered difficulties in obtaining financing For the purchase due to a tight money market and there was also a title problem to be resolved. In any event, the deal did not go through and Respondent obtained a release of the deposit receipt to herself which was executed by Higgins on December 19, 1974. Respondent admitted at the hearing that at no time was the $1,000.00 deposit ever placed in the Watson Real Estate trust account. (Testimony of Respondent, Higgins, Shaeffer; Petitioner's Exhibit 15; Respondent's Exhibits 8, 10, 11, 12, 13). On December 10, 1974, Respondent's daughter, Pamela A. Mastellone entered into an Agreement Of Sale And Deposit Receipt as purchaser of the Higgins property For the sum of $34,000.00. This agreement provided For a security deposit in the sum of $3,000.00 in the Form of a check payable to Ruth E. Higgins. The check was issued by Connnie Mastellone" on December 10, 1974 and was drawn on the City National Bank of Miami Beach. The contract further provided that if it did not close by December 24, 1974, the contract would be null and void and the parties relieved of all obligations. The agreement provided For an even split of a 7.5 percent commission between Associates Realty and Watson Realty. Respondent testified that at the time she gave the check to Higgins, she asked her to hold it until a firm commitment from a mortgage company had been received. Higgins, on the other hand, testified that Respondent had asked her to hold it For two weeks. Respondent was unable to get mortgage financing For her daughter and the contract expired by its terms on December 24, 1974. On December 27, 1974, Higgins deposited the check For payment and it was returned For insufficient funds. (Testimony of Respondent, Shaeffer; Petitioner's Exhibits 16, 17, 18; Respondent's Exhibit 14). On June 18, 1974, Respondent in the name of "Connie B. Martin" as purchaser entered into an Agreement Of Sale And Deposit Receipt with Rose Gilbert, represented by Jean Fielding, Attorney in fact, to purchase real estate located at 16150 N.E. 12th Avenue, North Miami Beach, Florida, For the price of $26,000.00. The Agreement provided that upon signing of the contract, the purchaser would place $2,00.00 in escrow with Watson Real Estate Trust Account and receipt was acknowledged of this sum by Constance B. Mastellone For Watson Real Estate. The contract provided For a 50-50 commission split between Watson Real Estate and Pete Lipinsky, listing broker. At the time the contract was executed, Lipinsky told Respondent that if she did not place the money in escrow, he would "nail her hide to the wall". Respondent testified that she instructed her daughter, Pamela Mastellone, to go to the Chase National Bank and withdraw $2,100.00 and send the same to the Watson Realty Trust Account at City National Bank of Miami Beach. She further testified that it was not until she was investigated by petitioner that she learned her daughter had neglected to follow her instructions in this regard. The contract did not close on the agreed date and thereafter, on September 20, 1974, Respondent, in the name of "Constance B. Mastellone, Broker" entered into another Agreement Of Sale And Deposit Receipt with Gilbert on the same property For a price of $29,000.00. Although this Agreement provided For a security deposit of $2,600.00 to be placed in the Watson Real Estate Account, the parties understood that these were the same funds deposited under the Former contract. This deal closed on October 14, 1974. (Testimony of Respondent, Fielding, Lipinsky; Petitioner's Exhibits 6, 7; Respondent's Exhibits 1, 2). On May 28, 1974, Peter A. Mastellone and Respondent, in the name of "Constance B. Mastellone, Broker, and/or Nominees" was purchaser entered into an Agreement Of Sale And Deposit Receipt with Roy M. Hall and Kitty H. Hall, his wife, to purchase property located at 1517 N.W. 101st Street, Miami, Florida, For the price of $17,000.00. The contract provided For a $1,000.00 check payable to Watson Real Estate Trust Account as escrow agent as a security deposit, and receipt of the said deposit was acknowledged by Constance B. Mastellone on behalf of Watson Real Estate. The contract further specified that the property was being purchased For the purpose of resale and provided For a closing within 30 days. The contract provided that there would be no real estate commission paid on the transaction. Also, on May 28, 1974, Respondent directed letters to the Halls advising them that the $1,000.00 security deposit was in her account at Chase Federal Savings, North Miami Beach, an interest- bearing account, and that she did not want to place it in an escrow account where it would earn no interest. Respondent testified that the Halls orally agreed the deposit money could stay in the savings account of Respondent. This contract did not close, but on August 9, 1974, Respondent executed an FHA deposit receipt as seller whereby she agreed to sell the property to Nicholas Torek and Mary McDonnell Torek For the sum of $23,000.00. The document acknowledged the receipt of a $500.00 security deposit, which was in the Form of a check issued to Watson Real Estate by M.L. McDonnell on August 11, 1974, to be placed in the Watson Real Estate Account. Respondent was unaware at the time that McDonnell and Torek were not married. Torek had authorized McDonell to use his name on the instrument because they were planning to be married. Respondent sent them to a mortgage company to qualify For a mortgage. Several days later, she learned that they were not married and Torek came back and signed a new contract, which was also dated August 9, with the Halls at the same purchase price as his contract with Respondent. The latest agreement provided For a security deposit of $1,250.00 to be held in escrow by Watson Real Estate Trust Account and also provided For a real estate commission to Watson Real Estate of $3,750.00 to be paid by the Halls. An addendum to this contract was executed by Torek and Respondent, dated August 9, 1974, whereby Torek agreed that the $1,250.00 escrow should not be deposited in the trust account, but be given to Peter A. Mastellone For the purpose of making repairs on the property. It further provided that he would hold $850.00 toward closing costs and "prepayables". The document reflects the receipt of $2,100.00 by Peter A. Mastellone. Respondent testified that since $2,100.00 was all that was necessary to close the transaction, her husband returned $500.00 cash to Torek to reimburse McDonnell For her original deposit on the other contract. The Halls were not a party to the addendum to the contract and Torek was not aware that the Halls were the owners of the property until after the transaction was closed on October 4, 1974. Torek testified that he had not signed the second August 9 contract which had been executed by the Halls. However, Torek had agreed to close in his own name when he learned that McDonnell could not qualify For FHA financing. Torek was not concerned about the name in which the transaction was consummated but later, after disputes with McDonnell, quitclaimed his interest to her. Although McDonnell was present at the closing on October 4, the deed to the property was issued in the name of Torek only. McDonnell testified that Respondent had told her to sign the original contract In the name of Torek and in that way the deed would come out in her married name. McDonnell was surprised when the deed was issued only in the name of Torek. McDonnell was aware that the Halls owned the property and that Respondent was attempting to sell it in order to get out from under her own contract with the Halls. McDonnell was not aware that Torek had signed the subsequent agreement in his name only. (Testimony of Respondent, Torek, McDonnell, Petitioner's Exhibits 10, 11, 12, 13; Respondent's Exhibits 5 & 20).
Recommendation That the registration of Constance B. Mastellone as a real estate broker be suspended For a period of six months For violation of subsections 475.25(1)(a), 475.25(1)(c), and 475.25 (1)(i), Florida Statutes. DONE and ENTERED this 3rd day of January, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Manuel E. Oliver, Esquire Staff Attorney Florida Real Estate Commission 2699 Lee Road Winter Park, Florida James, A. Baccus, Esquire Attorney For Respondent Triangle Building 595 N.W. 91st Street Miami, Florida 33150 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION ANATOL ARIAN, Petitioner, PROGRESS DOCKET NO. 2788 vs. DADE COUNTY DOAH NO. 76-472 CONSTANCE B. MASTELLONE, Respondent. /
The Issue Whether Petitioner is qualified for licensure as a real estate salesperson.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: Petitioner is fifty-two years of age. He became licensed as a real estate salesperson in the State of Florida in 1981, after returning to the state (where he was born and raised) from New Jersey. The following year he obtained a license that allowed him to operate as a real estate broker in Florida. In or about 1984, Petitioner formed Landmark Realty, Inc. (Landmark), which operated in Broward County, Florida, as a Century 21 franchise. On or about June 29, 1989, in DPR Case Nos. 0163964 and 0164128, the Department of Professional Regulation, Division of Real Estate, issued an Administrative Complaint against Petitioner and Landmark containing the following allegations: Petitioner 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 is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0344112 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker c/o Landmark Realty, Inc., 1860 N. Pine Island Road, Plantation, Florida 33322. Respondent Landmark Realty, Inc., is now and was at all times material hereto a corporation licensed as a real estate broker in the State of Florida having been issued license number 0239155 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 1860 N. Pine Island Road, Plantation, Florida 33322. COUNT I The Department of Professional Regulation conducted a routine office inspection/escrow account audit of Respondents' escrow accounts between June 15, 1989 and June 16, 1989. Respondents' escrow account number 55322000377 is held at First Union National Bank of Florida. Respondents' escrow account number 55322000377 had a balance of $1,368.36 on June 16, 1989. The pending sales files revealed that the escrow monies balance should have been $65,250 on June 16, 1989. The escrow account had a shortage of $63,881.64. . . . Respondent Caprio claims he transferred $80,700 from Respondents' escrow account number 55322000377 to the Keys & Keys trust account number 0304301543 on the advice of counsel. . . . Kathy Clements, Operations Officer for County National Bank of South Florida furnished a written letter that the Keys & Keys trust account number 0304301543, had a current balance of $101,901.43 on June 20, 1989. . . . The Respondents failed to furnish any validated documents detailing the dates and amounts of deposits into the aforementioned Keys & Keys trust account from the aforementioned Respondents' escrow account. The Respondents' escrow account number 55322000377 is a commercial money market investment account with the interest going to Landmark Realty, Inc., without the consent or prior knowledge of all parties. . . . The Respondents failed to timely notify the Florida Real Estate Commission of conflicting demands on the earnest money deposit on the contract, dated July 17, 1988, between David B. Perry, as seller, and Earle A. and Yvonne M. Levy, as buyers. The buyers entrusted an earnest money deposit of $1,000 with the Respondents on or about July 17, 1988, and an additional earnest money deposit of $20,000 was entrusted to the Respondents on or about August 22, 1988. The Respondents received a demand letter f[rom] the buyers on December 13, 1988 and a demand letter from the seller's attorney on February 21, 1989. . . . On or about April 19, 1989, the Respondents received or should have received a total earnest money deposit of $4,000 from Perry Silver, as buyer, and Charles Hennessey, as seller. The audit revealed no proof that the additional deposit of $2,000 as required by the contract dated April 19, 1989 was received by the Respondents. . . . The Respondents failed to timely notify the Florida Real Estate Commission of conflicting demands on the earnest money deposit on the contract, dated May 31, 1989, between C. McCanes and J. Steele, as sellers, and Jacqueline W. Mayers, as buyer. The buyer entrusted an earnest money deposit of $1,000 with the Respondents on or about May 31, 1989. The additional deposit of $4,000 as called for in the contract was never received by the Respondents. On June 1, 1989, the buyers made a demand on the earnest money deposit and on June 6, 1989 the seller made a demand for the earnest money deposit. . . . The Respondents, on or about May 16, 1989, did unlawfully disburse check number 0963 from the Respondents' escrow account number 55322000377 to the Respondents' operating account to cover office expenses. The Administrative Complaint further alleged that, "[b]ased upon the foregoing," Petitioner and Landmark were guilty of "fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction in violation of Subsection 475.25(1)(b), Florida Statutes"; "having failed to account and deliver a deposit in violation of Subsection 475.25(1)(d), Florida Statutes"; "having failed to maintain trust funds in [their] real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of Subsection 475.25(1)(k), Florida Statutes"; and "having failed to notify the Florida Real Estate Commission upon receiving conflicting demands or having a good faith doubt as to who is entitled to an earnest money deposit according to Rule 21V-10.032, Florida Administrative Code and therefore in violation of Subsection 475.25(1)(e), Florida Statutes." Petitioner had never before had a complaint filed against him. On December 21, 1989, the Florida Real Estate Commission issued a Final Order in DPR Case Nos. 0163964 and 0164128 finding Petitioner guilty of the violations alleged in the Administrative Complaint and revoking his license, notwithstanding his unblemished disciplinary record. The Final Order read, in pertinent part, as follows: On December 5, 1989, the Florida Real Estate Commission heard this case to issue a Final Order. On or about June 29, 1989, an Administrative Complaint was filed against Respondents. The Respondents admitted the allegations of fact. . . . The Respondents were properly served with the Notice of Hearing, appeared and presented matters in mitigation. Based upon the allegations of fact and upon the information provided to the Commission at its meeting of December 5, 1989, the Commission finds the Respondents guilty of violating s.475.25(1)(b), 475.25(1)(d), 475.25(1)(e), and 475(1)(k), Florida Statutes, and Rule 21V-10.032, Florida Administrative Code, as charged in the Administrative Complaint. Therefore, the Commission ORDERS that the license of Respondent Philip Caprio be revoked. The Commission further ORDERS that Respondent Landmark Realty Inc. be reprimanded and that said Respondent pay an administrative fine of $1000.00 within 30 days of the date of this Order. Petitioner did not appeal the Final Order. Following the issuance of the Final Order, reimbursement was made to the victims of the violations of which Petitioner and Landmark had been found guilty. The loss of Petitioner's real estate license has adversely affected his ability to make a living and support his family. Petitioner is married to Teresa Caprio. He and Teresa have a twenty-five year old disabled daughter, who requires assistance in performing the normal activities of daily living. Before the revocation of Petitioner's license, the Caprios' daughter lived at home with them. Teresa was able to stay at home and care full-time for her daughter. After Petitioner's license was revoked, however, she no longer was able to do so, inasmuch as she needed to work outside the home to supplement the family income. The Caprios therefore had to place their daughter in a group home. Although Petitioner has not been able to earn nearly as much as he did when he had his real estate license, he has been gainfully employed since the revocation of his license. From 1989 to 1995, he worked for Potamkin Toyota (Potamkin), an automobile dealership. He started as a salesman at Potamkin. After approximately six months at the dealership, he was promoted to customer relations manager/weekend sales manager. He left the employ of Potamkin in 1995, following a change in management at the dealership. Petitioner is now, and has been since July of 1995, employed by Central Florida Investments, Inc., d/b/a Westgate Miami Beach (Westgate), a seller of timeshare plans. He currently is a salaried employee occupying the position of finance manager, a position to which he was promoted after his first six months with the company. He will be unable to advance further in the company if he does not obtain a Florida real estate license. In his position as finance manager, Petitioner takes deposits made by purchasers and prospective purchasers2 and delivers them to Westgate's contract office, which is approximately 20 feet from his office. Using hidden security cameras, Westgate management closely monitors the workplace activities of Petitioner and his coworkers. Petitioner has performed his job duties in a manner that has impressed Westgate management. He has proven to be a competent, reliable, responsible, honest, and trustworthy employee.3 Petitioner is involved in community activities. He and his wife volunteer their time to operate the Rainbow Foundation, a non-profit organization that they formed two years ago to promote the growth of residential facilities for the developmentally disabled in the South Florida area. It appears that since the revocation of his real estate license, Petitioner has rehabilitated himself and that therefore it is not likely that his relicensure would endanger the public.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission issue a final order finding that Petitioner is qualified to practice as a real estate salesperson. DONE AND ENTERED this 26th day of September, 1997, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1997.
Findings Of Fact Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the law of the State of Florida, in particular, Section 20.30, Florida Statutes, and Chapters 120, 455, and 475, Florida Statutes, and the rules promulgated pursuant thereto. The Respondent Gustavo Mejido is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0059653 in accordance with Chapter 475, Florida Statutes. The last license issued said Respondent as a broker was for the address of the offices of G.M. Realty, Inc. Respondent, G.M. Realty, 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 0208962 in accordance with Chapter 475, Florida Statutes. The last license issued was at the address of 715 S.W. 73rd Avenue, Miami, Florida. Respondent Gustavo Mejido was at all times pertinent hereto the qualifying broker for Respondent G.M. Realty, Inc. On August 30, 1990, Hector Sehwerert, an investigator employed by Petitioner, conducted an office inspection and audit of the office account and of the escrow/trust account maintained by Respondents. The audit reflected that there was a shortage in the escrow/trust account in the amount of $1,006.68. Respondents' sales escrow/trust liability was $88,220.00 while the balance of the escrow/trust account was $87,213.32. Respondents were unable to immediately explain the cause of the shortage, but on the same day the shortage was detected, Respondent Mejido caused the shortage in the escrow/trust account to be corrected. He caused the sum of $1,006.68 to be transferred from Respondent G.M. Realty's operating account to its escrow/trust account. The undisputed testimony at the formal hearing was that the discrepancy was caused by a clerical mistake. Respondents failed to reconcile its escrow/trust account for the month of July 1990, and for subsequent months as required by the rules of the Florida Real Estate Commission. While Respondents had utilized its own system of reconciling its books for 14 years without having any other difficulty, this system was defective because the reconciliation did not include a determination of the total amount of escrow liability. Respondents have agreed to use the reconciliation method recommended by the Petitioner in the future. The licenses of Respondents have not been previously disciplined.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which finds that Respondents have violated the provisions of Section 475.25(1)(e) and (k), Florida Statutes, and which issues a letter of reprimand to said Respondents for such violations. RECOMMENDED in Tallahassee, Leon County, Florida, this 16th day of May, 1991. CLAUDE B. ARRINGTON 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 16th day of May, 1991. COPIES FURNISHED: Steven W. Johnson, Esquire Florida Department of Professional Regulation Real Estate - Legal Section Hurston Building - North Tower Suite N-308 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Armando E. Lacasa, Esquire 3191 Coral Way Third Floor Miami, Florida 33145 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792 APPENDIX TO THE RECOMMENDED ORDER, CASE NO. 91-0376 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1-6a. are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 6b. are rejected as being unnecessary to the conclusions reached or as being subordinate to the findings made. The proposed findings of fact in the first sentence of paragraph 7 are rejected as being contrary to the finding that the month audited was July 1990, not August 1990. The remaining proposed findings are rejected as being the recitation of testimony or as being subordinate to the findings made. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. 1. The proposed findings of fact submitted by Respondents are adopted in material part by the Recommended Order.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint? If so, what disciplinary action should be taken against her?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Department is a state government licensing and regulatory agency. Respondent is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida holding license number 0005609. She is 72 years of age. The money she earns as a real estate broker helps to supplement her retirement income. In the almost 40 years that she has been broker, the only complaint that has been made against her in connection with the practice of her profession is the complaint that is the subject of the instant case. Peter Rettig is a longtime acquaintance of Respondent's. He too is a Florida real estate broker. Rettig is the operating and qualifying broker for La Costa Real Estate, Inc. In September of 1993, as a favor to Rettig, Respondent agreed to act, without compensation, as Rettig's escrow agent. Thereafter, Rettig deposited trust funds received from his buyer/clients in the "Mary A. Belotto Escrow Account" (account number 3431110272) that Respondent had established at Barnett Bank. On various occasions from September of 1993, to July of 1994, Respondent, unthinkingly, appropriated a portion of these funds for her own personal use, but acted swiftly to replace the appropriated funds with her own personal funds. As a result, no one was actually harmed by her actions. During this period of time, Respondent was suffering from severe emotional distress and a resulting inability to think clearly due to the death of her husband and the subsequent death of a close friend who had provided her with needed assistance and support following her husband's death. On January 18, 1995, Edward Gruskin, an investigator with the Department, conducted an office inspection/audit of La Costa Real Estate, Inc. and the "Mary A. Belotto Escrow Account." The inspection/audit revealed that Respondent had engaged in the conduct previously described in Finding of Fact 11 of this Recommended Order and that, in addition, she had failed to prepare and sign monthly reconciliation statements for her escrow account. Respondent now realizes that she erred in engaging in such conduct and in failing to prepare and sign these reports. She has apologized for making these errors and has promised, with apparent sincerity, not to repeat them in the future.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby RECOMMENDED that the Commission enter a final order finding Respondent guilty of the violations alleged in the Administrative Complaint and fining her $250.00, issuing her a reprimand, and placing her on probation for a period of three years for having committed these violations. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 14th day of September, 1995. STUART M. LERNER 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 14th day of September, 1995. APPENDIX TO RECOMMENDED ORDER The following are the Hearing Officer's specific rulings on the findings of fact proposed by the parties in their proposed recommended orders: The Department's Proposed Findings 1-2. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. 3. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 4-5. Accepted and incorporated in substance, except for 5c. and 5d., which have not been incorporated in this Recommended Order because they would add only unnecessary detail to the factual findings made by the Hearing Officer. Respondent's Proposed Findings First unnumbered paragraph: To the extent that this proposed finding states that Respondent is 72 years of age and has been a real estate broker in the State of Florida for almost 40 years, it has been accepted and incorporated in substance. Second unnumbered paragraph: Accepted and incorporated in substance. Third unnumbered paragraph: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer. Fourth and fifth unnumbered paragraphs: Accepted and incorporated in substance. Sixth unnumbered paragraph: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. Seventh unnumbered paragraph- First sentence: Accepted and incorporated in substance; Second sentence: Rejected as a finding of fact because it is more in the nature of argument than a finding of fact. COPIES FURNISHED: Daniel Villazon, Esquire Senior Attorney Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Mary A. Belotto 1571 Southeast 23rd Avenue Pompano Beach, Florida 33062 Henry M. Solares, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
