The Issue Whether Petitioner should be granted the exemption from disqualification from employment that he is seeking.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: In the early 1980's, when Petitioner was in his late 20's, he owned a retail business in Miami. Anthony Counts managed the business. Although he held the title of Chief Executive Officer and President, Petitioner was not involved in the day-to-day operations of the business. He delegated that responsibility to Mr. Counts. Petitioner, however, did keep the books and do the accounting for the business. Lester Turner was an acquaintance of Petitioner's. Mr. Turner owned a business located near Petitioner's business. Petitioner participated with Mr. Counts and Mr. Turner in a fraudulent scheme involving the deposit of stolen United States Treasury checks (provided by Mr. Turner) in Petitioner's business account at a local bank. Federal authorities found out about the scheme. Although Petitioner, when questioned regarding the matter, initially denied his involvement in the scheme, he later admitted his wrongdoing and cooperated with federal law enforcement authorities. A federal indictment was thereafter issued against Petitioner, Mr. Counts and Mr. Turner (in United States District Court for the Southern District of Florida Case No. 86-356-CR). Petitioner was named in one of three counts of the indictment. This count read as follows: From an unknown date until or about March 31, 1983, at Miami, Dade County, in the Southern District of Florida, the defendants, ANTHONY COUNTS, LLOYD JOHNSON, and LESTER TURNER, did willfully and knowingly combine, conspire, confederate and agree and have a tacit understanding with each other to commit offenses against the United States, that is to willfully and unlawfully posses United States Treasury checks knowing said checks had been stolen from the United States mails, and to utter as true, forged United States Treasury checks with the intent to defraud the United States, knowing said checks to be forged; in violation of Title 18, United States Code, Sections 495 and 1708. In furtherance of the conspiracy and to effect the objects thereof, one or more of the following overt acts were committed by at least one of the conspirators in the Southern District of Florida: OVERT ACTS On or about November 15, 1982, defendant LESTER TURNER met with defendants ANTHONY S. COUNTS and LLOYD JOHNSON in Miami, Florida at which time TURNER handed JOHNSON five (5) stolen United States Treasury checks. At the meeting described in paragraph 1, supra, TURNER suggested that JOHNSON deposit the checks in JOHNSON'S business account and that COUNTS and JOHNSON keep 50 percent of the proceeds when the checks were cashed. On or about November 15, 1982, COUNTS and JOHNSON went to the Inter-American Bank of Miami, and JOHNSON deposited in his business account the five (5) stolen United States Treasury checks described in paragraph 1, supra. On or about November 21, 1982, defendant ANTHONY COUNTS paid defendant LESTER TURNER six hundred dollars ($600.00) representing 50 percent of the proceeds from the five (5) stolen United States Treasury checks. Between December, 1982 and March 15, 1983, defendant LESTER TURNER gave defendant ANTHONY COUNTS several more stolen United States Treasury checks which defendant LLOYD JOHNSON deposited in JOHNSON's business account at Inter-American Bank of Miami. Sometime in February or March 1983, the exact date unknown, defendant ANTHONY COUNTS received from defendant LESTER TURNER two (2) stolen United States Treasury checks, No. 84,968,071, dated February 25, 1983, payable to J. Jeffrey Stives in the amount of $643.76 and No. 12,818,775, dated February 28, 1983, payable to John R. Perry in the amount of $684.56. On or about March 18, 1983, defendant ANTHONY COUNTS forged the signature of J. Jeffrey Stives to stolen United States Treasury Check No. 84,968,071 described in paragraph 6, supra, and deposited said check in his (COUNTS') business account at the Peoples National Bank of Commerce, Miami, Florida. On or about the same date described in paragraph 7, supra, defendant ANTHONY COUNTS forged the signature of John R. Perry to stolen United States Treasury Check No. 12,818,775 and deposited said check in his (COUNTS') business account at the Peoples National Bank of Commerce, Miami, Florida. Sometime between January 1983, and April 1983, the exact date unknown, defendant LLOYD JOHNSON received stolen United States Treasury Check No. 54,926,144, payable to Annie L. Gilchrist, dated January 31, 1983, in the amount of $160.00 from defendant LESTER TURNER. All in violation of Title 18, United States Code, Section 371. On June 30, 1986, Petitioner entered a plea of guilty to this count of the indictment. The court accepted Petitioner's guilty plea and found Petitioner guilty as charged. This was his first (and it has remained his only) criminal conviction. On August 19, 1986, the court placed Petitioner on probation for a period of two years. As a condition of his probation, he was required to "make restitution in the amount of $2,000.00 to be paid during [the] period of probation as directed by the Probation Department." "Imposition of a sentence of confinement" was withheld. Petitioner was discharged from probation on August 17, 1988. Shortly before his discharge, in July of 1988, Petitioner was arrested for allegedly failing to timely make a restitution payment and thus violating a condition of his probation. Petitioner, however, ultimately made the payment and his probation was neither revoked nor extended. At no time subsequent to his discharge from probation has Petitioner been in trouble with the law. Following his apprehension by federal authorities, Petitioner went back to school and received additional degrees in computer science. (He had previously received a Bachelor of Technology degree from Florida A & M University.) Until 1994, Petitioner worked as a computer programmer/analyst. In 1994, motivated by a desire to "give something back to the community" and to help others not make the same mistake that he made, Petitioner left a higher paying position in the computer field to work for the Metro-Miami Action Plan Trust, a state-funded arm of Miami-Dade County government, teaching Kingian non-violence. In his new position, it was Petitioner's responsibility to teach children in the community how to act appropriately, without violence, in the face of negative influences. On March 5, 1997, Petitioner signed a "Consent to Background Screening" form, which provided as follows: I hereby authorize the Department of Juvenile Justice to check any and all records pertaining to criminal history, driver's license history, and abuse registry and delinquency reports pursuant to Section 39.001, 39.076 and Chapter 435, Florida Statutes. I further authorize any law enforcement agency to release to the Department of Juvenile Justice information regarding convictions under Florida Statutes or statutes of other jurisdictions. I understand that as a criminal justice agency, the Department of Juvenile Justice has access to all criminal records, even those which have been sealed. On April 1, 1997, Petitioner executed an "Affidavit of Good Moral Character" form, which provided, in pertinent part, as follows: As an applicant for employment as a caretaker with Metro-Miami Action Plan Trust1 I affirm that I meet the moral requirements for employment as caretaker, as required by the Florida Statutes and rules, in that: . . . I have not been found guilty regardless of whether adjudication was imposed or withheld, of any of the offenses listed below, or to any similar offense in another jurisdiction, regardless of whether record is sealed or expunged; I have not entered a plea of guilty or nolo contendre (no contest) or had the court enter such a plea, to any of the offenses listed below, or to any similar offense in another jurisdiction regardless of whether the record is sealed or expunged. . . . I understand that I am obligated to notify my employer of any possible disqualifying offenses which may occur while employed in a caretaker's position. The offenses referenced above are the following sections and chapters of the Florida Statutes: . . . . 812 relating to theft, robbery and related crimes, if the offense was a felony. . . . Under the penalty of perjury, I attest that I have read the foregoing carefully and state that my attestation here is true and correct. SIGNATURE OF AFFIANT OR To the best of my knowledge and belief, my record contains one or more of the foregoing disqualifying acts or offenses. (If you have previously been granted an exemption for this disqualifying offense please attach a copy of letter granting exemption. SIGNATURE OF AFFIANT In an apparent effort to conceal his criminal record, Petitioner placed his signature on the first signature line, thereby attesting, untruthfully, that he had never pled guilty to any of the disqualifying offenses enumerated on the form.2 A background screening investigation conducted by the Department, however, revealed that he was not qualified to serve in his "caretaker" position with the Metro-Miami Action Plan Trust. Petitioner thereafter requested from the Department an exemption from such disqualification. Petitioner's request was preliminarily denied by the Department. Because of his disqualification from employment resulting from his 1986 federal felony conviction, Petitioner is no longer employed by the Metro-Miami Action Plan Trust. Based upon Petitioner's history since the criminal conduct that led to his federal indictment and conviction, including, most significantly, his providing to the Department a false "Affidavit of Good Moral Character," it appears that he has not fully rehabilitated himself.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department issue a final order denying the exemption that Petitioner has requested. DONE AND ENTERED this 27th day of Ocotber, 1998, 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 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 27th day of October, 1998.
The Issue Whether a civil penalty should be assessed against the Respondent, or whether the license held by Respondent should be suspended or revoked.
Findings Of Fact The Respondent, Carolina Rosenberg, trading as Eastview Apartments, is licensed by the Petitioner, the Division of Hotels and Restaurants, Department of Business Regulation, and is in business at 1530 Washington Avenue in Miami Beach, Florida. A Notice to Show Cause was issued by Petitioner on September 1, 1978, notifying Respondent that certain evidence, which, if true, is good and sufficient cause pursuant to Section 509.261, Florida Statutes, to assess a civil penalty against the Respondent, or to suspend or revoke her License #23- 5830H for failure to return a security deposit of $175.00 to Paul C. Kent and failure to provide a written notice making a claim against said security deposit. Paul C. Kent was a tenant in Eastview Apartments, Unit #518, from September of 1977, through June, 1978. As a condition of renting such unit, Mr. Kent was required to and did pay a security deposit in the amount of $175.00. Mr. Kent was not required to and did not sign a written lease, and at no time during his tenancy was he furnished with a copy of Section 83.49, Florida Statutes. He was not furnished with any specific address for Respondent Rosenberg, the owner, or for a person authorized to receive written notices on her behalf. Mr. Kent said that he gave the manager of Eastview Apartments thirty (30) days' oral notice of his intent to terminate his tenancy. Respondent Rosenberg was notified personally of his intention to terminate his tenancy two (2) weeks before the end of the last month for which he paid rent. No written notice was furnished to Mr. Kent of the Respondent's intention to impose a claim upon his security deposit, and such monies were not returned to him. Respondent Rosenberg testified that the tenant, Mr. Kent, had moved out in the middle of the month, that she felt she had the right to retain the security deposit for the expense of getting the apartment ready to lease again, and that Mr. Kent never came back to ask for the security deposit. Submitted into evidence without objection was a receipt for rental payments dated August 30, 1977, on which it was stated "Received from Paul C. Kent $50.00 for security deposit on 518," and "Balance due $125.00." Said receipt was signed by Kay Kukla, who was the manager of Eastview Apartments at that time. A receipt for $25.00, signed by said manager, was marked "Balance of security paid in full." The Petitioner Division submitted a memorandum of law. This instrument was considered in the writing of this order. To the extent the proposed memorandum has not been adopted in, or is inconsistent with, factual findings in this order it has been specifically rejected as being irrelevant or not having been supported by the evidence.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Respondent, Carolina Rosenberg, be assessed a fine of $200.00. DONE and ORDERED this 21st day of December, 1979, in Tallahassee, Leon County, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Mary Jo. M. Gallay, Esquire Department oil Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Ms. Carolina Rosenberg c/o Eastview Apartments 1530 East Washington Avenue Miami Beach, Florida
Findings Of Fact On January 18, 1982, the First National Bank in Palm Beach submitted a remittance report of unclaimed money items to the Office of the Comptroller. It listed, as item 10, an account which had been maintained by Alberta Stephens in the amount of $663.33. Alberta Stephens filed a claim to that money on March 20, 1989. In the interim the First National Bank had been acquired by Southeast Bank. In processing the claim, the Department requested the bank to provide it with a copy of the signature control card for the account. Southeast Bank could not do so, because under its retention schedule, all banking records were destroyed seven years after the account had been closed by sending the money to the Comptroller with the remittance report of unclaimed money items on January 18, 1982. Ms. Stephens is an elderly black woman. She was unable to produce copies of any deposit receipts or checks demonstrating ownership of the account. At the time the account was opened, depositors were not required to give their social security number to banks, so there is no way to trace the account to Ms. Stephens from documentary evidence. Ms. Stephens did produce the testimony of Preston L. Tillman, a real estate broker in Palm Beach County. Ms. Stephens had purchased income property from Mr. Tillman. He collected the rent on that property on Ms. Stephens behalf. He personally took Ms. Stephens to the First National Bank in Palm Beach County so that she could open an account in which to deposit the rents. He was present at the bank when the account was opened by Ms. Stephens. Ultimately, Ms. Stephens sold the rental property, and Mr. Tillman had no more contact with her. The evidence in this case is rather sparse, due to the passage of time. The evidence does demonstrate that Ms. Stephens had an account at the bank, and that there is no conflicting claim to that deposit. The testimony of Mr. Tillman, that he took Ms. Stephens to the bank so that she could open an account there, is accepted as adequate independent evidence of Ms. Stephens' ownership of the account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the claim of Alberta Stephens to the $663.33 in unclaimed money items be upheld, and that the Comptroller deliver that money to Alberta Stephens. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of March, 1990. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 1990. COPIES FURNISHED: John W. Carroll, Esquire Post Office Box 31794 Palm Beach Gardens, Florida 33420 Eric Mendelsohn, Esquire Department of Banking & Finance 111 Georgia Avenue West Palm Beach, Florida 33401 Honorable Gerald Lewis, Comptroller Department of Banking & Finance The Capitol Tallahassee, Florida 32399-0350 William G. Reeves, General Counsel Department of Banking & Finance The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
The Issue Whether Respondent, Office of Financial Regulation, has made certain agency statements with regard to record-keeping requirements for licensed check cashers, which are agency rules as defined in section 120.52(16), Florida Statutes, but have not been adopted as rules in violation of section 120.54(1)(a), Florida Statutes; and if so, whether costs and attorney’s fees should be awarded.
Findings Of Fact Petitioner, Capital City Check Cashing (Capital City) is a licensed check casher, pursuant to chapter 560, Part III, Florida Statutes. Respondent, Office of Financial Regulation (the Office), is the state agency charged with administering and enforcing chapter 560, Florida Statutes, related to licensing of Money Services Business, at term that includes check-cashing businesses. License Disciplinary Case On or about October 23, 2012, the Office conducted an examination of Respondent’s business records for the period January 1, 2010, through October 23, 2012. The examination ultimately culminated in an Amended Administrative Complaint (Complaint) filed by the Office against Petitioner, a matter which is pending before the undersigned in Case No. 13-4484. The Complaint charges, among other alleged violations, that Petitioner failed to (1) keep a daily payment instrument log including all the information required by section 560.3110(2)(d) and Florida Administrative Code Rule 69V- 560.704(5)(a); (2) maintain copies of payment instruments cashed as required by section 560.310(1) and rule 69V-560.704(2)(a); and (3) maintain records of conductor’s thumbprints on payment instruments as required by section 560.310(2)(c) and rule 69V-560.704(4)(a). The Complaint against Petitioner prompted Petitioner to file the instant unadopted rule challenge.1/ Examination Process The Office examines licensees’ records to ensure compliance with the record-keeping requirements of section 560.310. The general process for an examination is a site visit from an examiner, a report from the examiner of his or her findings to the Chief of the Bureau of Enforcement, and a recommendation from the Bureau Chief to the Director of the Division of Enforcement whether to file a complaint against a licensee, and if so, recommended sanctions. Examination Module2/ William Morin is the examiner who conducted the examination of Petitioner’s records in the underlying license disciplinary case. Mr. Morin utilized an “examination module” to track compliance with various statutory and rule requirements during the examination. The examination module is a chart divided into four columns. The columns are labeled, from left to right, “Area of Review,” “Results of Review,” “Findings,” and “Report Reference.” The first column is pre-filled with the particular record-keeping statutory and rule requirements, along with directions to the examiner, such as “[t]he examiner should access the FinCEN registration list to determine if the licensee has registered with FinCEN as a money services business (MSB).” The second column allows the examiner to note the results of his or her review of the particular requirement found in the first column. For example, in his review of Petitioner’s records, Mr. Morin noted in column 2 “[n]o branch offices” in response to the requirement noted in column 1, that he “verify all branch locations have been properly and timely reported to the Office.” The examination module also allows the examiner to input detailed notes regarding the results of the review. In the case at hand, Mr. Morin made notes regarding the records reviewed for each of approximately 10 of Petitioner’s named customers. The notes reflect observations such as “[d]id not provide consumer with full amount of cash;” “[n]o customer file;” and “[n]o thumbprint from consumer.” The examination module is a work plan used by an examiner to document the findings of each examination. The examination module is used consistently by the Office’s examiners. The examination module is an internal agency document used to assist in conduct of examinations of licensee’s records. The examination module does not, in and of itself, create rights, require compliance, or otherwise have the direct and consistent effect of law. Sanction Computation Worksheet Andrew Grosmaire is the Office’s Chief of the Bureau of Enforcement. Mr. Grosmaire reviews examiners’ reports of examination. When Mr. Grosmaire receives an examination report, he utilizes a sanction computation worksheet to calculate a recommended sanction amount based on violations noted in the examination report. The sanction computation worksheet is a spreadsheet developed for him by Jay Newton, a financial administrator with the Office. Mr. Grosmaire uses the sanction computation worksheet with every examination report that is referred to him. Florida Administrative Code Rule 69V-560.1000 establishes the disciplinary guidelines applicable to each ground for disciplinary action that may be imposed against a licensee for violating chapter 560. The rule establishes both administrative fines associated with violations of particular statutory sections, as well as levels of suspension or revocation, if applicable to the corresponding violation. Administrative fines and levels of suspension are classified as A, B, and C. Generally, the guidelines increase the severity of the recommended administrative fine and level of suspension for repeat violations of the same requirements. The rule establishes a range of administrative fines, as well as a range of days of suspension, that corresponds with A, B, and C penalties. For example, an A-level administrative fine ranges between $1,000 and $3,500. An A-level suspension ranges between 3 to 10 days. The rule authorizes the Office to consider a list of enumerated circumstances when determining an appropriate penalty within the range of penalties prescribed for each violation, as well as when determining whether to impose a penalty outside of the established range. These circumstances are generally referred to as “mitigating and aggravating factors.” Mr. Grosmaire uses the sanction computation worksheet to calculate an overall recommended penalty against a licensee based on the particular violations noted in the examiner’s report, the range of sanctions for those particular violations as established in rule 69V-560.1000, and any mitigating or aggravating factors. For each finding noted in the examiner’s report, Mr. Grosmaire inputs the corresponding statute or rule, the level of sanction from the corresponding rule, a description of the violation, the minimum and maximum fine established by the rule, the minimum and maximum suspension established by the rule, and whether or not revocation is authorized by the rule for the specific violation. The chart also contains fields for Mr. Grosmaire to input the sample size utilized by the examiner, the number of violations of a particular requirement within the particular sample, and the percentage of the sample containing the same violation. Finally, Mr. Grosmaire inputs a recommended fine and recommended sanction in their respective columns. The spreadsheet automatically calculates the total recommended fine and recommended days of suspension for all the violations. This sum can be compared with the total of the minimum and maximum fine and days of suspension for each violation based on the range established by rule. Mr. Grosmaire exercises discretion in determining the recommended sanctions against a licensee based upon the range of penalties provided in the rule and any mitigating or aggravating circumstances. After completing the sanction computation worksheet, Mr. Grosmaire makes a written recommendation of appropriate penalties against the licensee to the Division Director and the Office’s legal counsel. Payment Instrument Log Section 560.310, Florida Statutes (2012), provides in pertinent part: A licensee engaged in check cashing must maintain for the period specified in s. 560.1105 a copy of each payment instrument cashed. If the payment instrument exceeds $1,000, the following additional information must be maintained: * * * d) The office shall, at a minimum, require licensees to submit the following information to the check cashing database or electronic log, before entering into each check cashing transaction for each payment instrument being cashed, in such format as required by rule: Transaction date. Payor name as displayed on the payment instrument. Payee name as displayed on the payment instrument. Conductor name, if different from the payee name. Amount of the payment instrument. Amount of currency provided. Type of payment instrument, which may include personal, payroll, government, corporate, third-party, or another type of instrument. Amount of the fee charged for cashing of the payment instrument. Branch or location where the payment instrument was accepted. The type of identification and identification number presented by the payee or conductor. Payee’s workers’ compensation insurance policy number or exemption certificate number, if the payee is a business. Such additional information as required by rule. For purposes of this subsection, multiple payment instruments accepted from any one person on any given day which total $1,000 or more must be aggregated and reported in the check cashing database or on the log. Florida Administrative Code Rule 69V-560.704 provides, in pertinent part: (5)(a) In addition to the records required in subsections (1) and (2) for payment instruments $1,000.00 or more, the check casher shall create and maintain an electronic log of payment instruments accepted which includes, at a minimum, the following information: Transaction date; Payor name; Payee name; Conductor name, if other than the payee; Amount of payment instrument; Amount of currency provided; Type of payment instrument; Personal check; Payroll check; Government check; Corporate check; Third party check; or Other payment instrument; Fee charged for the cashing of the payment instrument; Branch/Location where instrument was accepted; Identification type presented by conductor; and Identification number presented by conductor. Electronic logs shall be maintained in an electronic format that is readily retrievable and capable of being exported to most widely available software applications including Microsoft EXCEL. Petitioner alleges that the Office requires check cashers to keep the daily payment instrument log in a spreadsheet format, a statement Petitioner argues is an unadopted rule. In his exam notes, Mr. Morin wrote “Licensee maintains an electronic log; however, it lacks the information and data fields required by rule.” Petitioner was not charged with failing to maintain an electronic log in a spreadsheet format. Gregory Oaks is the Office’s Director of the Division of Consumer Finance, and oversees the Bureau of Enforcement, as well as the Bureau of Registration. Mr. Oaks testified that if a licensee kept an electronic log in some format other than a spreadsheet, the Office would look at whether the information was “readily retrievable and capable of being exported into some software application, including or similar to Excel” in determining compliance.3/ Andrew Grosmaire is the Office’s Chief of the Bureau of Enforcement. Mr. Grosmaire testified that software other than a spreadsheet program might comply with the statute and rule if it was searchable, allowed for sampling, and aggregation of multiple checks cashed for less than $1,000 by the same person on the same day. Mr. Grosmaire conceded that a .pdf copy of documents would likely not meet the requirement of rule 69V-560.704 that the information be “easily retrievable and capable of being used in the format the same way that an application such as Microsoft Excel would do.”4/ Mr. Grosmaire testified consistently that the determinative factor is that the data on the electronic log be “retrievable and capable of being exported.”5/ Petitioner did not demonstrate by a preponderance of the evidence that the Office maintains a statement that check cashers must maintain the electronic log in a spreadsheet format. Copies of Checks Section 560.301(1) provides, “[a] licensee engaged in check cashing must maintain for the period specified in s. 560.1105 a copy of each payment instrument cashed.” Section 560.301(3) provides, “[a] licensee under this part may engage the services of a third party that is not a depository institution for the maintenance and storage of records required by this section if all the requirements of this section are met.” Florida Administrative Code Rule 69V-560.704(2) provides as follows: Every check casher shall maintain legible records of all payment instruments cashed. The records shall include the following information with respect to each payment instrument accepted by the registrant: A copy of all payment instruments accepted and endorsed by the licensee to include the face and reverse (front and back) of the payment instrument. Copies shall be made after each payment instrument has been endorsed with the legal name of the licensee. Endorsements on all payment instruments accepted by the check casher shall be made at the time of acceptance. Petitioner was cited by the Office as follows: “Respondent’s records from July 2012 failed to show copies of the back of all accepted payment instruments.”6/ In the examination module for examination of Petitioner’s records, Mr. Morin noted as follows: Licensee claims that the copies of the back of the checks are on their bank statements. The licensee cannot rely on their financial institution to keep these records for them. Reviewed bank statements and saw no copies of backs of customer checks. (emphasis added). Petitioner alleges the Office prohibits check cashers from designating a bank as a third-party record keeper of the documents required to be kept by section 560.301(1) and rule 69V-560.704(2), i.e., copies of the checks cashed. Petitioner claims that this policy constitutes a rule, pursuant to section 120.52(16), but has not been adopted as a rule in violation of section 120.54(1)(a). The Office maintains that it has no such policy. Rather, the statute prohibits check cashers from designating a bank as a third-party record keeper. Neither chapter 560 nor rule 69V-560.704 defines “depository institution.” Section 494.001 defines “depository institution” to have the same meaning as in section(3)(c) of the Federal Deposit Insurance Act, and to include any credit union. See § 494.001(9), Fla. Stat. Chapter 494 provides for regulation of loan originators, mortgage brokers, and lenders. Section(3)(c) of the Federal Deposit Insurance Act defines “depository institution” to include any bank or savings association. See 12 U.S.C. § 1813(c) (1989). Further, section 560.104 provides, in pertinent part, as follows: 560.104 Exemptions.—The following entities are exempt from the provisions of this chapter: Banks, credit card banks, credit unions, trust companies, associations, offices of an international banking corporation, Edge Act or agreement corporations, or other financial depository institutions organized under the laws of any state or the United States. § 560.104(1), Fla. Stat. Chapter 560, Part I, provides for general regulation of money services business, a term which specifically includes check cashing businesses. See § 560.104(22), Fla. Stat. The Office’s practice of prohibiting check cashers from designating banks as third-party record keepers of copies of the checks cashed, is a simple reiteration of the statutory prohibition. Thumbprints Section 560.310(2) provides, in pertinent part, as follows: If the payment instrument exceeds $1,000, the following additional information must be maintained or submitted: * * * A thumbprint of the customer taken by the licensee when the payment instrument is presented for negotiation or payment. Florida Administrative Code Rule 69V-560.704(4), provides, in pertinent part: In addition to the records required in subsections (1) and (2), for payment instruments exceeding $1,000.00, the check casher shall: Affix an original thumbprint of the conductor to the original of each payment instrument accepted which is taken at the time of acceptance[.] Petitioner was cited for violating section 560.310(2)(c) and rule 69V-560.704(4) by failing “to maintain records of conductors’ thumbprints from approximately twenty-two (22) accepted payment instruments exceeding $1,000.” Off. of Fin. Reg. v. Capital City Check Cashing, Case No. 13-4484, Amd. Admin. Comp. at 7 (Dec. 4, 2013). In the examination module for examination of Petitioner’s records, Mr. Morin noted as follows: “Thumbprint is not affixed to the payment instrument. It is affixed to the check cashing agreement.” It is Petitioner’s practice to obtain the customer’s thumbprint on a check-cashing agreement at the time a check is presented. Petitioner then staples a copy of the check-cashing agreement to a copy of the check cashed, which is kept for his records. Mr. Grosmaire testified it is his understanding that the rule requires the original thumbprint be placed on the original check. Strict Compliance Finally, Petitioner argues that the Office requires strict compliance with the regulations applicable to check cashers, a requirement which is in and of itself a rule.7/ The Office does not distinguish between “strict compliance” and “substantial compliance” in determining whether a licensee has complied with the applicable statutory and administrative record-keeping requirements.
Findings Of Fact The Respondent, Robert Watson, Jr., is a real estate broker-salesman, having been issued license Number 0093690. He resides and has his business in Jacksonville, Florida. On or about September 1, 1978, the Respondent negotiated and drafted a contract for sale of a certain piece of residential real estate, the purchaser for which was one Mr. Lacy Cole. The Respondent was Mr. Cole's broker in that transaction. The Respondent informed Mr. Cole that he would have to pay a two- hundred-dollar deposit as prospective buyer pursuant to the deposit receipt, sales contract agreement drafted by the Respondent. Mr. Cole did not pay the entire two-hundred-dollar deposit, but he did pay the Respondent sixty-five dollars. The closing was held October 20, 1978, at which time Mr. Cole's attorney directed the Respondent to pay Mr. Cole a two-hundred-dollar refund as the contract for sale provided that financing would be through the Veterans Administration and that in such a Veterans Administration sponsored transaction the buyer is precluded from paying closing costs. Mr. Cole cashed the two- hundred-dollar check in good faith and later was informed that the Respondent had stopped payment on it, which resulted in Mr. Cole having to make the check good. The Respondent has failed to recompense Lacy Cole for the sixty-five- dollar deposit he had already paid pursuant to the contract for sale drafted by the Respondent. Mr. Watson has also never repaid the two hundred dollars which Mr. Cole had to expend in order to provide payment on the two-hundred-dollar check on which the Respondent had stopped payment. In response to the Petitioner's demonstration that the Respondent had obligated Mr. Cole for a two-hundred-dollar "binder or closing costs" which he was not obligated to pay under Veterans Administration policy, the Respondent stated that he wrote the contract with the two-hundred-dollar binder with the understanding that Cole would pay a portion of it at the first of each month until it was paid and that he only received a total of sixty-five dollars from Cole. The seller agreed to sell the property to Mr. Cole anyway. The Respondent maintained that he merely told Mr. Cole at the closing that he would write him a two-hundred-dollar check and deliver it to him at closing with the understanding that Cole would deliver it back to him immediately afterward to keep from confusing the attorney." The Respondent, however, failed to refute the showing by the Petitioner that the Respondent attempted to obligate that purchaser to pay two hundred dollars in "closing costs" which he was not legally obligated to pay and for which the seller of the property was responsible in the first place. The Respondent adduced no evidence contrary to that of Petitioner which established that, after being informed by the attorney that Mr. Cole was not responsible for any deposit or closing costs, the Respondent still retained the sixty-five dollars paid him as earnest money by Mr. Cole and, further, that after stopping payment on Cole's refund check, causing Mr. Cole to incur two hundred dollars additional expense for which he was not obligated, the Respondent failed to recompense Cole. There is thus no question that the Respondent misrepresented to his client, Mr. Cole, the obligations and expenses Mr. Cole would have to incur in order to purchase the property and thus, in effect, wrongfully obtained two hundred sixty-five dollars from Mr. Cole. On or about September 16, 1978, Mrs. Joanne Wesley deposited a ten- dollar check with the Respondent as a partial deposit for a down payment on a home. On or about September 20, 1978, she deposited an additional one-hundred- dollar check with the Respondent as further deposit on the same contract for sale and purchase which the Respondent had at that time not yet drafted. The Respondent never made an appropriate deposit of the above referenced checks in his escrow account, but, instead, cashed them for his personal use. On or about October 25, 1978, the contract for sale and purchase was finally drafted by the Respondent. On approximately December 4, 1978, Mrs. Wesley deposited with the Respondent an additional check for eight hundred fifty dollars as the final installment of her deposit money with regard to the proposed purchase of the home. On December 29, 1978, Mrs. Wesley learned that she had failed to qualify for FHA financing with regard to the above-referenced contract and, after looking at another home which was not to her liking offered to her by the Respondent as a "replacement dwelling," finally requested the refund of her total deposit of nine hundred sixty dollars. The Respondent then requested Mrs. Wesley to wait until January 2, 1979, for that refund and on January 2, 1979, tendered to her four hundred dollars cash as partial reimbursement. On January 3, 1979, the Respondent tendered to her an additional three hundred dollars cash and drew and delivered to her his escrow check, post-dated to January 10, 1979, in the amount of two hundred fifty dollars. That escrow account check was returned for insufficient funds. On February 1, 1979, Mrs. Wesley's attorney made demand on the Respondent for payment of the two hundred fifty dollars outstanding, represented by the invalid check. On approximately February 3, 1979, the Respondent ultimately paid the two hundred fifty dollars due Mrs. Wesley. Thus, at that point the Respondent had refunded nine hundred fifty dollars of the nine hundred sixty dollars in deposit money due Mrs. Wesley. The entire refund had become due on December 29, 1978, when it was learned that she could not qualify for FHA financing with regard to the proposed purchase, which qualification for financing was a condition precedent to performance of the contract. In his defense the Respondent stated that he attempted to arrange the purchase of another dwelling for Mrs. Wesley upon learning that she could not qualify for financing on the subject property and that he retained her deposit money in his escrow account for that reason and ultimately repaid it to her, although after over a month's delay. The Respondent contended that he had opened the subject account as a business account when he was doing appraisal work and had not considered it to be an escrow account and "did not know when they switched it over to escrow." The Respondent did acknowledge that he had used this escrow account as his business account and commingled personal and business operating funds in it and made withdrawals from time to time for business and personal reasons. With further regard to the Cole transaction, the Respondent contended that he felt it was customary for a veteran to pay two hundred dollars closing costs and even when he learned the veteran was not obligated to pay closing costs in such a transaction, that he still felt it was "customary as earnest money" even though the seller obviously was obligated to pay closing costs. The Respondent also testified that as of the time of the hearing and for an indeterminant period of tinge before the hearing, he had terminated active practice of real estate brokerage and was mostly performing appraisal work. There is thus no question that the Respondent informed Mr. Cole that he was obligated to pay two hundred dollars "earnest money" or "closing costs" and that his actions forced Mr. Cole to incur the two-hundred-sixty-five dollar expense described above, even after the Respondent was informed by the closing attorney that the purchaser was not obligated for those expenses. There is no question with regard to the Wesley transaction that he delayed an inordinate amount of time in refunding her deposit money after the condition of financial qualification for the purchase did not occur, and, further, that he commingled these purchaser deposit funds in his escrow account with personal and business funds and used a portion of them for personal purposes.
Recommendation Having considered the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED that the license of Robert Watson, Jr., as a real estate broker in the State of Florida be REVOKED. DONE AND ENTERED this 1st day of February, 1982, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February 1982. COPIES FURNISHED: Barry S. Sinoff, Esquire 2400 Independent Square One Independent Drive Jacksonville, Florida 32202 Robert Watson, Jr. 9527 Abedare Avenue Jacksonville, Florida 32208 Frederick B. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Samuel Shorstein, Secretary Department of professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C. B. Stafford, Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
The Issue The issue for determination is whether Petitioner is eligible for registration as a check casher.
Findings Of Fact The Department of Banking and Finance (Respondent) is the state agency responsible for administering Chapter 560, Florida Statutes (1995). The said statute is referred to as the Money Transmitters' Code and in material part governs the registration of check cashers in the State of Florida. BT Professional Services, Inc. (Petitioner), is a registered Florida corporation. Petitioner's principal place of business is 4410 West 16th Avenue, Bay 8, Hialeah, Florida 33012. By application dated April 8, 1996, Petitioner made application to register as a money transmitter, i.e., check casher, pursuant to Chapter 560, Florida Statutes. The application was signed by Omar Toledo, as Petitioner's president. The application indicated, among other things, that Beatriz Toledo was Petitioner's vice-president; that she was the person from whom additional details, regarding the application, could be obtained; and that her contact address was 4410 West 16th Avenue, Bay 8, Hialeah, Florida 33012, the same as Petitioner's address. Omar Toledo and Beatriz Toledo are husband and wife. Respondent received the application on April 12, 1996, together with a biographical report of Omar Toledo, as one of Petitioner’s directors. Upon review, Respondent determined that the application was incomplete. In addition to errors and omissions, the biographical report for Beatriz Toledo, as one of Petitioner's directors, was not submitted with the application. By letter dated May 7, 1996, and addressed to Mrs. Toledo, Respondent requested additional information and the correction of errors and omissions. Among other things, the letter requested Mrs. Toledo's biographical report. Moreover, the letter dated May 7, 1996, notified Petitioner, among other things, that it had sixty (60) days to provide the requested information; and that failure to comply with the letter may be grounds for denial of the application. On May 30, 1996, Respondent received Petitioner’s response, through Mrs. Toledo, to the letter dated May 7, 1996. Petitioner complied with almost all of the letter’s requests. However, instead of submitting a biographical report for Mrs. Toledo, Petitioner submitted a biographical form for Mr. Toledo. The biographical form is an addendum to the application. Respondent provides the form to an applicant. By letter dated June 6, 1996, and addressed to Mrs. Toledo, Respondent, among other things, acknowledged receipt of the submitted information and again requested Mrs. Toledo to complete and submit the biographical report on her. Further, Respondent advised Petitioner that it had until July 8, 1996, to provide the requested information. Moreover, Respondent again notified Petitioner that failure to comply with the request may be grounds for denial of the application. On June 24, 1996, Respondent received Petitioner’s response to the letter dated June 6, 1996. Responding to the letter dated June 6, 1996, Petitioner submitted a biographical form on Mrs. Toledo. However, the biographical form was incomplete in that questions 6A, C, and D of the biographical form were not answered. By letter dated July 11, 1996, and addressed to Mrs. Toledo, Respondent, among other things, acknowledged receipt of Mrs. Toledo's biographical form, 1/ but again notified her that the biographical form was incomplete in that questions 6A, C, and D were not answered. The letter also notified Petitioner that it had until July 22, 1996, to provide the requested information and that failure to comply with the request may be grounds for denial of the application. Respondent did not receive a reply to the letter dated July 11, 1996. The letter was not returned by the U.S. Postal Service. An inference is drawn that Petitioner received the letter. Petitioner did not provide Respondent with a completed biographical form or report on Mrs. Toledo. Respondent performed a background investigation upon Omar Toledo and Beatriz Toledo. The investigation revealed that both Mr. and Mrs. Toledo were under indictment for numerous criminal offenses involving money laundering. By letter dated November 22, 1996, Respondent notified Petitioner of its intent to deny Petitioner's application to register as a check casher. Respondent cited several grounds for the denial. As a ground for the denial, Respondent cited that both Mr. and Mrs. Toledo were subjects of pending criminal prosecution. Mr. and Mrs. Toledo were charged in a superceding indictment and were being prosecuted regarding money laundering in the case styled United States of America v. Omar Lazaro Toledo and Beatriz Toledo, Case No. 96-599-Cr-UUB(s), U.S. Southern District of Florida. At the time of the formal hearing in the case sub judice, criminal charges remained pending against Mrs. Toledo. 2/ Prior to the formal hearing in the case sub judice, Respondent was granted leave to amend the denial letter to include, as a ground for denial, Mr. Toledo being convicted of some of the criminal charges in the federal money laundering case. Mr. Toledo had been found guilty of three of the counts of criminal conduct. The three counts (Counts VIII, IX, and X) involved the knowing and willful failure to file a report required by federal law regarding currency transactions. He did not appeal his convictions. 3/ As an additional ground for the denial, Respondent cited that Petitioner failed to correct the omission of a completed biographical report for Mrs. Toledo. An incomplete biographical form for Mrs. Toledo was submitted to Respondent in that Mrs. Toledo failed to respond to questions 6A, C, and D. Mrs. Toledo failed to respond to the said questions even after being requested to do so more than once by Respondent. Also, as a ground for the denial, Respondent cited that Petitioner knowingly failed to comply with the advertising prohibition for a non-registered check casher, pursuant to Chapter 560, Florida Statutes. On or about April 4, 1996, Petitioner, through Mrs. Toledo, was notified by one of Respondent's representatives, an inspector, that registration with Respondent was required for Petitioner to advertise check cashing services. Even after the notification, Petitioner continued to advertise check cashing services by way of a sign, promotional display, on the outside of Petitioner's facility indicating check cashing services. The advertising of check cashing services on the outside of Petitioner’s facility continued beyond the date of the denial letter through February 1997. Moreover, after receiving the denial letter dated of November 22, 1996, Petitioner advertised check cashing services from March 1997, through July 7, 1997, by way of a sign, promotional display, on the inside of Petitioner's facility indicating check cashing services. Further, as a ground for the denial, Respondent cited that Petitioner had made a material misrepresentation regarding Mr. Toledo's prior arrests. Petitioner submitted a biographical report on Mr. Toledo, which, among other things, requested information regarding Mr. Toledo’s arrests, charges and/or convictions of a criminal offense, to which Mr. Toledo responded. Also, Petitioner submitted a biographical form on Mr. Toledo, which, among other things, requested information regarding his prior arrests in question 6A, to which Mr. Toledo did not respond. But, Mr. Toledo, as Petitioner’s president, did respond to a question on the application, question 6 of Section 1, as to his "criminal convictions, pleas of nolo contendere, and cases of adjudication withheld." 4/ Furthermore, pursuant to a request from Respondent, Mr. Toledo provided to Respondent related documents pertaining to the criminal court cases by way of a docket printout from the Criminal Justice Information System. 5/ However, at no time did Mr. Toledo disclose that on May 18, 1995, he was arrested and charged with criminal assault. 6/ At no time did Petitioner seek to amend its application dated April 8, 1996. On June 1, 1996, Mr. Toledo resigned as Petitioner's president and assigned all of his stock to Mrs. Toledo who became the president and who had all of the stock. At no time after the resignation and assignment did Petitioner seek to amend its application of April 8, 1996. On or about July 14, 1997, Petitioner made Respondent aware of Mr. Toledo's resignation and assignment through Petitioner’s response to interrogatories.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance enter a final order denying BT Professional Services, Inc.’s application for registration as a check casher. DONE AND ENTERED this day of December, 1998, in Tallahassee, Leon County, Florida. ERROL H. POWELL Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this day of December, 1998.
Findings Of Fact Respondent met Sibley Dennis Carpenter, Jr. (Carpenter) in 1974 or 1975, in connection with a land sale that is not otherwise relevant to this matter. In the summer of 1975, Carpenter asked respondent for assistance in obtaining financing for another, separate land transaction. On that occasion, Carpenter furnished respondent an unaudited, personal financial statement, prepared by an accounting firm, which put the net worth of Carpenter and his wife at slightly less than a half million dollars. On November 19, 1975, respondent became affiliated with Dennis Carpenter Realty, Inc., as a real estate salesman. Because he had other irons in the fire, he only appeared at the office of Dennis Carpenter Realty, Inc., once every month or two. Not until the spring of the following year, after he had been licensed as a real estate broker, did respondent have access to the company's books. In November of 1975, respondent met one Charles W. Van Cura, a hog farmer from Minnesota who expressed an interest in buying land in Florida, and referred Mr. Van Cura to Carpenter. Carpenter, possibly in the company of respondent, showed Mr. Van Cura certain real property belonging to Harvey H. Westphal and Margaret Westphal. Mr. Van Cura made an offer of one hundred fifteen thousand dollars ($115,000.00) for the property and deposited seven thousand five hundred dollars ($7,500.00) with Carpenter towards the purchase price, as evidenced by a binder receipt and deposit, dated December 31, 1975, and signed by Carpenter. Respondent's exhibit No. 1. Carpenter presented the offer to the Westphals, who refused Mr. Van Cura's offer but made a counteroffer of one hundred thirty-five thousand dollars ($135,000.00), by crossing out Mr. Van Cura's figures, substituting their own and signing their names. Both the offer and the counteroffer were "subject to receiving Federal Land Bank Loan of 70 percent of purchase price . . ." Van Cura told Carpenter he was unwilling to accept the Westphals' counteroffer. Carpenter persuaded respondent to buy the property himself, and, on January 6, 1976, Carpenter, respondent and Van Cura met in respondent's office. After some discussion, respondent drew two checks aggregating seventy- five hundred dollars ($7,500.00) to Van Cura's order. Petitioner's composite exhibit No. 6. Van Cura executed a receipt, respondent's exhibit No. 2, reciting that he had received seventy-five hundred dollars ($7,500.00) from respondent. At the time of this transaction, Carpenter could not have refunded Van Cura's deposit from the escrow account of Dennis Carpenter Realty, Inc., because there were insufficient funds in the account. Unbeknownst to respondent, Carpenter had never deposited Van Cura's money in the escrow account. On January 30, 1976, Carpenter drew up a written offer on behalf of respondent to purchase the Westphal property for one hundred thirty-five thousand dollars ($135,000.00). Petitioner's exhibit No. 1. The binder receipt and deposit recited that respondent "and or assigns" had deposited seventy-five hundred dollars ($7,500.00) with Carpenter in earnest money. Although the Westphals accepted this offer, the transaction never closed, for reasons which were not developed in the evidence. The Westphals never made demand for the seventy-five hundred dollar ($7,500.00) deposit, and respondent never got the money back from Carpenter. Respondent has since decided to "treat it . . . as a loan, or write it off." (R119) At no time did respondent relate to the Westphals the history of the earnest money deposit. In May of 1976, respondent was licensed as a real estate broker, and became secretary-treasurer of Dennis Carpenter Realty, Inc. Respondent and Carpenter agreed between themselves that the corporation should open an escrow account on which each could draw individually. This is reflected by a corporate resolution, dated May 4, 1976. Respondent's exhibit No. 7. Such an account was opened. When the first bank statement revealed to respondent that Carpenter had drawn improper checks against the escrow account, however, a second corporate resolution was drafted, dated July 23, 1976, respondent's exhibit No. 9, which authorized respondent, but not Carpenter, to draw against the escrow account.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the administrative complaint be dismissed. DONE and ENTERED this 15th day of September, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Bruce I. Kamelhair, Esquire 2699 Lee Road Winter Park, Florida 32789 Mr. W. O. Birchfield, Esquire 3000 Independent Square Jacksonville, Florida 32201
Findings Of Fact Kenneth M. Olson, Jr., is a registered real estate broker with the FREC and Active Firm Member of Olson and Associates Real Estate, Inc., a corporate broker registered with the FREC. A copy of the Administrative Complaint was forwarded to the last address of Defendants registered with the FREC by certified mail numbers 4747 and 4748 and the notice of hearing was forwarded to the same address by certified mail numbers 4613 and 4614. Accordingly the Hearing Officer had jurisdiction over the Defendants and the offenses. By contract dated September 17, 1975 (Exhibit 6) Joseph J. Pillucere contracted to purchase real property from Paul L. Nave. The contract provided, inter alia, for a $500 earnest money deposit, $9500 down payment at closing with purchaser to assume existing first mortgage of approximately $28,000; and the seller taking back a purchase money second mortgage in the amount of $17,000. Thereafter, at the time scheduled for closing, the purchaser failed to produce the additional down payment required, execute the second mortgage and assume the existing first mortgage. After receiving conflicting demands from buyer and seller for the return of the earnest money deposit Defendant requested an advisory opinion from the FREC in accordance with Section 475.25(1)(c) FS. On May 13, 1976 an advisory opinion (Exhibit 5) was given by FREC to the Defendant, with copies to both parties to the contract, advising Defendant that the earnest money deposit should-be disbursed to the seller. The deposit has been disbursed to neither party to the contract.
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint for Imposition of Sanctions and Notice of Rights ("Administrative Complaint") dated June 10, 2010, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The OFR is the state agency responsible for licensing and regulating money services businesses in Florida. See §§ 560.105(1) and 560.141(2), Fla. Stat. At the times material to this proceeding, Isaiah Check Cashing Store was a Florida corporation, with its principal place of business located at 5905 Northeast Second Avenue, Miami, Florida. At the times material to this proceeding, Isaiah Check Cashing Store was licensed to engage in the business of cashing payment instruments, pursuant to Chapter 560, Part III, Florida Statutes. The OFR conducted an examination of Isaiah Check Cashing Store beginning on May 26, 2009, and concluding on May 29, 2009. At the Isaiah Check Cashing Store office, the OFR examiner found a hard copy of a Western Union manual that contained anti-money laundering policies and procedures related to money transmissions and money orders. Upon review, the examiner determined that the Western Union Manual did not include anti-money laundering policies and procedures related to Isaiah Check Cashing Store's check cashing activities. Isaiah Check Cashing Store also had available to its employees a manual containing anti-money laundering policies and procedures specifically relating to check cashing activities. Additionally, the Internal Revenue Service conducted a Bank Secrecy Act examination of Isaiah Check Cashing Store's anti- money laundering compliance program for the period extending from March 1, 2009, through August 31, 2009, and notified Isaiah Check Cashing Store in a letter dated January 26, 2010, that "[b]ased on the scope and depth of our examination and the evaluation and testing of the implementation of your Anti-Money Laundering (AML) compliance program, no violations were identified during the examination period."2 The letter specifically referenced the financial service of "check casher" as one of the activities subject to its examination. As part of his examination, the OFR examiner requested on May 28, 2009, that Isaiah Check Cashing Store produce copies of original thumbprints on all payment instruments of $1,000.00 or more that it cashed between January 13, 2009, and May 26, 2009. Out of a total of 163 payment instruments of $1,000.00 or more that were cashed by Isaiah Check Cashing Store during the specified time period, only 107 of the payment instruments produced to the examiner included an original thumbprint. With respect to the 56 payment instruments of $1,000.00 or more that did not contain thumbprints, Frantz Chery, on behalf of his wife Colette Cesar, attested on May 28, 2009, that he had diligently searched all the records maintained by Isaiah Check Cashing Store but was unable to locate copies of the 56 payment instruments that included an original thumbprint. Isaiah Check Cashing Store did, however, subsequently locate and produce copies of five of the 56 payment instruments that did contain original thumbprints, but it failed to produce copies of the 51 remaining payment instruments.3 The OFR examiner reviewed all of the records made available to him by Isaiah Check Cashing Store during the examination and was unable to find copies of any payment instruments that exhibited the endorsement of Isaiah Check Cashing Store. Even though Isaiah Check Cashing Store had a stamp with which to endorse checks that were accepted for payment, Mr. Chery, on behalf of his wife Colette Cesar, attested on May 28, 2009, that he had diligently searched all the records maintained by Isaiah Check Cashing Store but was unable to locate copies of these documents. Isaiah Check Cashing Store maintained an electronic payment instrument log for checks of $1,000.00 or more that it cashed between January 13, 2009, and May 28, 2009, but, at the time of the OFR examination in May 2009, the log failed to include fields for the name of the conductor, if the check was made payable to a corporation,4 and for the amount of currency provided to the person cashing the check. Isaiah Check Cashing Store relied on a software company to provide the format for the electronic log it maintained. When the software was updated, the company failed to include fields for the conductor and for the amount of currency paid. In the presence of the OFR examiner, Mr. Chery telephoned the software company, which subsequently added the required fields to the electronic log format used by Isaiah Check Cashing Store. Summary A. Violation of Title 31, Section §103.125, Code of Federal Regulations and Sections 560.114(1)(y) and 560.1235(2), Florida Statutes. The evidence presented by the OFR is not sufficient to establish that Isaiah Check Cashing Store failed to maintain, review, and update an anti-money laundering compliance program in accordance with Title 31, Section 103.125, Code of Federal Regulations. The OFR examiner testified that he did not find a manual governing Isaiah Check Cashing Store's check cashing activities during his examination, but this is not sufficient to establish that Isaiah Check Cashing Store did not have anti- money laundering policies and procedures in place at the time of the examination. Indeed, Isaiah Check Cashing Store presented evidence establishing that, after an examination, the Internal Revenue Service had found that Isaiah Check Cashing Store's anti-money laundering policies and procedures were in compliance with the requirements of federal law during the period extending from March 1, 2009, through August 31, 2009. The policies and procedures that the Internal Revenue Service had approved included those relating to Isaiah Check Cashing Store's check cashing activities. On rebuttal, the OFR examiner testified that the Bank Secrecy Act examination of Isaiah Check Cashing Store conducted by the Internal Revenue Service was "totally different" from the examination conducted by the OFR and that the finding by the Internal Revenue Service that Isaiah Check Cashing Store's anti- money laundering compliance program satisfied federal law was not determinative of whether Isaiah Check Cashing Store violated provisions of Florida law.5 The examiner identified several items required by Florida law that were not required under federal law, such as filing suspicious activity reports; due diligence activities that must be performed by cashiers when cashing checks of $1,000.00 or more for corporations or third party customers; affixing thumbprints to checks of $1,000.00 or more; endorsing checks by the money service business at the time they are accepted; and keeping an electronic log of checks of $1,000.00 or more.6 Significantly, the violation alleged in the OFR's Administrative Complaint was that Isaiah Check Cashing Store failed "to maintain, review, and update an anti-money laundering program in accordance with 31 C.F.R. s. 103.125." This violation did not reference the requirements of Florida law enumerated by the OFR examiner, and the examiner did not offer a persuasive explanation of the alleged difference between the requirements of the Florida and federal laws governing anti- money laundering compliance programs related to check cashing activities. In addition, the testimony that the Internal Revenue Service's examination and the OFR's examination were different begs the question of whether a finding by the Internal Revenue Service that the Isaiah Check Cashing Store's anti-money laundering compliance program satisfied federal requirements is persuasive evidence that the anti-money laundering compliance program satisfied the requirements of Florida law. The testimony of the OFR examiner was, therefore, not persuasive and did not support the OFR's contention that Isaiah Check Cashing Store did not have in place anti-money laundering policies, procedures, and internal controls with respect to its check cashing activities. Violations of Sections 560.310(1)(b)2. and (c) and 560.1105, Florida Statutes, and of Florida Administrative Code Rule 69V- 560.704(2)(a), (4)(a), and (5)(a). The evidence presented by the OFR is sufficient to support findings that, between January 13, 2009, and May 26, 2009, Isaiah Check Cashing Store failed to maintain copies with thumb prints for some of the payment instruments of $1,000.00 or more that it accepted and cashed; that, between January 13, 2009, and May 26, 2009, Isaiah Check Cashing Store failed to keep copies of payment instruments of $1,000.00 or more that it accepted and cashed that carried the endorsement of Isaiah Check Cashing Store; and that, between January 13, 2009, and May 28, 2009, Isaiah Check Cashing Store did not maintain an electronic log that included the name of the conductor or the amount of currency paid on payment instruments of $1,000.00 or more.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order finding that Isaiah Check Cashing Store, Inc., violated Sections 560.1105 and 560.310(1)(b)2. and (c), Florida Statutes, and Florida Administrative Code Rule 69V- 560.704(2)(a), (4)(a), and (5)(a); directing Isaiah Check Cashing Store, Inc., to cease and desist this unlawful activity; and imposing an administrative fine in the amount of $3,000.00. DONE AND ENTERED this 23rd day of November, 2010, in Tallahassee, Leon County, Florida. S PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of November, 2010.
