Findings Of Fact Respondent is the administrative agency charged with responsibility for administering and enforcing the provisions of Chapter 626, Florida Statutes. /1 Petitioner is an adult male in his 60's who applied for licensure by Respondent on August 28, 1990. Prior to February 5, 1987, Petitioner was licensed by Respondent as an Ordinary Life and Insurance Agent. The license status included the designations of Health Insurance Agent and General Lines Agent. Respondent filed an Administrative Complaint against Petitioner on or about February 5, 1987 in Case No. 87-L-06RET. Petitioner was charged by the state with criminal violations on or about March 20, 1987. An Information was filed in the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida, in Case No. 87-4964. The Information charged Petitioner with first degree grand theft in violation of Sections 812.014(1)(b) and (2(b), Florida Statutes. The facts alleged in both the Administrative Complaint and the criminal Information were essentially the same. Between August 1, 1985, and February 28, 1986, Petitioner received funds from James DeVita in Petitioner's fiduciary capacity as Mr. DeVita's insurance agent. The funds were delivered to Petitioner as premium payments on commercial liability insurance policies Mr. DeVita wished to purchase. A portion of the funds given to Petitioner were paid over to the insurance company and some of the policies were issued. The remaining portion of the funds were never delivered to the insurance company. The remaining policies were never issued, and the issued policies eventually lapsed. Mr. DeVita was not insured even though Petitioner represented to Mr. DeVita that he was insured. Petitioner entered into a Settlement Stipulation and Consent Order with Respondent on or about June 16, 1987 (the "Consent Order"). Pursuant to the Consent Order, Petitioner surrendered his insurance license and eligibility for licensure. Petitioner entered a plea of nolo contendere in the criminal case on or about December 21, 1987. Adjudication of guilt was withheld, and Petitioner was placed on probation for 10 years. Petitioner was also ordered to pay restitution to Mr. DeVita in the amount of $35,000. Petitioner satisfactorily completed his probation and was released from the terms of the probation prior to the date of the formal hearing in this proceeding. However, Petitioner made no payments of restitution to Mr. DeVita. Petitioner has been financially unable to make restitution payments to Mr. DeVita. Petitioner went through bankruptcy after his criminal prosecution. Without his insurance license, Petitioner was unable to earn the level of income needed to make such payments. Petitioner has supported himself with various jobs that he could find from time to time.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner's application for licensure should be DENIED. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of June 1991. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June 1991.
The Issue The issue for consideration is whether the Respondent's license as an insurance agent should be disciplined because of the misconduct alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issues herein, Respondent, Shirley Ann Cramer, was licensed as a life, health and general lines insurance agent in Florida, and was the sole owner and operator of Consolidated Insurance Associates, Inc., an incorporated general lines life and health insurance agency in Clearwater, Florida. The Department of Insurance was and is the state agency responsible for the licensing and regulation of insurance professionals in this state. In February, 1987, Mercedes Wescott went to the Respondent's agency in Clearwater where she spoke with whom she assumed to be an employee, an individual named Jack. "Jack" is Jack Jarr, Respondent's former husband and a licensed insurance professional who works in a different agency from Respondent, but who was licensed with Respondent's agency at the time in question as well. Ms. Wescott wanted a policy of life insurance, and after talking with Jack, wrote and delivered a check for $167.00, payable to Consolidated Insurance Associates, Inc., as initial down payment therefor. About a week later, she took the required insurance physical but never received the policy she had bought. She called the agency several times about the matter and was repeatedly told the policy was coming. Finally, in June, 1987, she received a letter from American Health and Life Insurance Company, the company with whom, apparently, she was to be insured, advising her that her application for insurance was being cancel led because certain required information was not received. When she called the agency, (Jack), to get her money back, he promised to send it but never did. As a result, she finally called Respondent who, in November, 1987, mailed her a check on the account of Consolidated Insurance Associates, Inc., dated November 24, 1987, in the amount of $117.00, $50.00 less than the initial payment. Ms. Wescott admittedly did not deposit that check immediately. For one thing, it was not for the correct amount, and in addition, she overlooked it. When she finally did deposit it for collection, it was dishonored and returned because of insufficient funds, and she was charged a $12.00 service charge. On January 9, 1988, Ms. Wescott wrote to Respondent outlining what had happened and requested a replacement check in the amount of $179.00, ($167.00 plus $12.00). In this letter, which was mailed to Respondent's home address since the agency had, in the interim, been sold, Ms. Wescott recited the lack of Respondent's response to prior calls and threatened to report the matter to the Insurance Commissioner. Even with this, she received no response from Respondent. Ms. Wescott determined that Respondent was working at a real estate office and when called there, too, failed to return calls. Ms. Wescott ultimately received a check for the entire amount from, she believes, the Department of Insurance. Though she is not sure from whom the check was received, she is certain it was not Respondent or Respondent's agency. When she contacted the new owner of the agency, her request for reimbursement was denied and the new owner suggested she contact the Department. Admittedly, Ms. Wescott dealt only with Mr. Jarr up until the time the cancellation letter was received. Only at that point did she talk with Respondent, and the check, purportedly in reimbursement for the premium paid, which was dishonored, was signed by Respondent. Respondent claims that she was only the subagent for the company with whom Mr. Jarr placed Ms. Wescott but paid Ms. Wescott back herself with a check she claims was good when written. However, since the check in question is dated November 24, and even though held by Ms. Wescott for a while, it had been deposited and dishonored by January 9, 1988 when Ms. Wescott's letter to Respondent was written. This accounts for a total time of 46 days from date of check to date of letter, and with mail times and bank processing times deducted, the time the check was held before deposit cannot be considered unreasonable. Ms. Cramer sold the agency in December, 1987 to an individual who was to assume all the agency liabilities. At the time she sent Ms. Wescott the check for $117.00, she was, she claims, unsure of the amount owed since she no longer had the books in her possession. Considering the probabilities of her testimony and it's corroboration or lack thereof by other evidence of record, it is considered unworthy of belief. On April 4, 1988, Thomas J. Secondo, who was, at the time, having a personal relationship with the Respondent, went to her to get insurance on his two automobiles. He wrote a check that day for $1,641.00 for what he believed was the total premium for the coverage sold and gave it to Respondent personally. He never received a policy of insurance for his money but on June 9, 1988, was notified that his coverage would be cancelled on June 18, 1988 for "underwriting reasons." Somewhat before that time, he also received a book of payment coupons, the reason for which he could not fathom, since it was his understanding he had paid for his policy in full by the check he had given Respondent. Documents introduced into evidence by the parties reflect that on May 18, 1988, Mr. Secondo's policy, purportedly with American United Insurance Company, was to be financed through Express Premium Finance, Inc. in Hollywood, Florida. Mr. Secondo denies having signed the premium finance agreement which bears what is purported to be his signature, and examination of that document clearly reveals that the signature thereon is not his. Just as all this was happening, Respondent contacted Mr. Secondo in writing on June 15, 1988 and requested he come to the office to sign a new application for the requested coverage. Enclosed with that request was a copy of an insurance binder for auto coverage with Bankers Insurance Company, to be effective on June 18, 1988. Again, Mr. Secondo was sent a premium finance notice by Bankers representing a total premium of $1,358.00. This notice, dated August 29, 1988, reflected the first premium of $14.30, due on August 12, 1989, the second in the amount of $193.34, and the remainder, also at $193.34, due on the 28th of each month thereafter. By memo of August 19, 1988, Bankers Insurance Company notified Mr. Secondo that his policy was being cancelled for nonpayment of the initial $14.30 premium. However, by notice of September 1, 1988, the company reinstated the coverage and included a new billing schedule reflecting a slightly higher monthly premium of $197.54. On August 16, 1988, Respondent wrote to Mr. Secondo informing him of a change in policies and noting that the new policy was somewhat less expensive than the former. Notwithstanding this, by letter dated September 25, 1988, she advised him of the need for him to pay an additional $171.31. Mr. Secondo did not understand the reason for this additional charge in light of the fact that the second policy, that issued, was less costly than the first which was never issued. This discrepancy was not successfully explained at hearing nor has it yet been clearly explained. Notwithstanding his confusion, on the advice of a representative from the Department's St. Petersburg office, Mr. Secondo paid the additional sum requested. Ms. Cramer claims that all she asked from Mr. Secondo at the time she sold him the insurance was the down payment on the policy. However, he insisted on giving her more money to impress her with how much money he had. She further claims she put the balance over the down payment in the account of ASAP Insurance, (not further identified). On examination, she claimed this was a unique situation and she never does business this way. Ms. Cramer has been licensed as an insurance agent in Florida for almost 20 years and claims never to have had a problem with the Department before now. There is no evidence of any prior complaints against her or of prior disciplinary action. She had known Mr. Secondo for about 3 months before he came to her for insurance on his vehicles. She admits to having received his check for $1,641.00 for the premium for that coverage. Because of some difficulty with his driver's license, which she discussed with him at the time, she processed the application, sending in only the required 30% down payment so that if the application was rejected, he would not have to wait to get back the full amount of his premium. She claims to have advised him at the time there might be a problem and that the policy, when issued, might carry a higher or lower premium. When she sent the deposit for the auto insurance to the broker with whom she was dealing, he required a premium finance agreement which she filled out and sent in without, she claims, affixing Mr. Secondo's signature thereto. She claims to have no knowledge as to who signed it, but this is unworthy of belief. The automobile insurance was not issued by the first company because of some underwriting problem. Respondent claims she told Mr. Secondo this but by then he had received a payment schedule and was upset about that. Ms. Cramer claims that Mr. Secondo had been fully advised that only a part of the $1,641.00 he had paid originally was to go to payment of premium, but she does not explain where the balance went, other than into the account of ASAP. She also claims to have procured insurance for him from Bankers Insurance Company without financing any part of the premium, but it is clear from the documents introduced that this coverage was financed as well. Her exculpatory comments are confusing and far less than convincing, and are not believed. Respondent asserts she made the premium payments for Mr. Secondo, (presumably from the sums deposited to ASAP), until she got an accounting from the company. She then wrote to Mr. Secondo, (their personal relationship having dissolved by then), and claimed the amount she felt was due her, (the $171.31). She admits that in the interim, while she was awaiting the refund from the first policy deposit, she neglected to make the initial $14.30 premium payment on the second policy, causing it to be cancelled. At that point, she made the payment to have the policy reinstated. The reinstatement notice, however, does not show the policy paid in full, but calls for continuing installments. Ms. Cramer now claims that the $1,641.00 figure she gave Mr. Secondo was tentative and subject to change and that he knew it. She claims the discrepancy involving his policy was a bookkeeping error, and at no time did she intend to take his money and not get him insurance. The evidence, however, shows otherwise.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Insurance Commissioner issue a Final Order in this case suspending Shirley Ann Cramer's license and eligibility for license as an insurance agent of any kind in Florida for one year. RECOMMENDED this 6th day of August, 1990, in Tallahassee, Florida. 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 6th day of August, 1990. COPIES FURNISHED: Robert V. Elias, Esquire Department of Insurance Division of Legal Services 412 Larson Building Tallahassee, Florida 32399-0300 John L. Waller, Esquire 100 2nd Avenue, North Suite 210 St. Petersburg, Florida 33701 Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Don Dowdell General Counsel Office of the Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300
The Issue Whether Petitioner's application for licensure as a customer representative should be granted.
Findings Of Fact Based on the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Petitioner, Marie Ostrowski, submitted an application for licensure as a customer representative. The application was completed and executed by Petitioner on or about February 28, 2003. Chapter 626, Florida Statutes (2003), creates jurisdiction for Respondent, Department of Financial Services, to issue the license and regulate Petitioner in its use. was: One of the questions to be answered in the application Have you ever been charged, convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? Yes/No Petitioner typed or entered "N" in the space next to the question indicating "no" as the answer. Above the signature Petitioner placed on the application is language, which states in pertinent part: I do solemnly swear that all answers to the foregoing questions and statements are true and correct to the best of my knowledge and belief . . . * * * Whoever knowingly makes a false statement in writing with the intent to mislead a public servant in the performance of his/her official duty shall be guilty of a misdemeanor of the second degree. Under penalties of perjury I declare that I have read the foregoing application for license and that the facts stated in it are true. I understand that the misrepresentation of any fact required to be disclosed through this application is a violation of the Florida Insurance and Administrative Codes and may result in the denial of my application and/or the revocation of my insurance license. In reviewing and considering Petitioner's application, the Department conducted a background check of Petitioner. Based on its criminal background check, the Department determined that, contrary to the representations in the application in response to the question concerning Petitioner's criminal history, Petitioner had a criminal history. On July 15, 1992, in State of Florida vs. Marie Pallante [Petitioner], Circuit Court of Pinellas County, Florida, Criminal Division, Case No. CRC91-21372CFANO-C, Petitioner entered a plea of nolo contendere to "Issuing a Worthless Check." At the time of the criminal matter referenced herein, Petitioner's name was Marie Pallante. On July 15, 1992, the Court accepted the plea, and withheld adjudication, and ordered Petitioner to pay court costs of $100.00 within 60 days and to pay restitution in the amount of $100.00 within 60 days to Michael Pallante, who, at that time, was her estranged or former husband. The Clerk of the Circuit Court issued a Satisfaction of Judgment/Fine giving notice that the costs in the amount of $100.00 levied against Petitioner in Case No. CRC91-21372CFANO-C on July 15, 1992, was paid and satisfied in full on September 14, 1992. Petitioner also paid the restitution to her former or estranged husband as required by the Court in Case No. CRC91-21372CFANO-C. The underlying incident which led to the criminal charge being brought against Petitioner and resulted in her entering the nolo contendere plea, occurred on or about November 11, 1991, and involved a check written to a Publix Supermarket. At or near the time of the incident, Petitioner's estranged husband had her name removed from their previously joint checking account without her knowledge. This action was taken by Mr. Pallante soon after Petitioner filed for, and obtained, a restraining order against him. Prior to Petitioner's applying for the application, which is the subject of this proceeding, she mistakenly believed that based on her attorney's representations in the above- referenced 1992 criminal matter, the record in the matter was sealed and/or expunged. At all times relevant to this proceeding, Petitioner was employed by Mercury Insurance Company (Mercury). At the time Petitioner was employed by Mercury, she advised the appropriate personnel of the 1991 incident and the 1992 plea of nolo contendere. However, neither the criminal charge nor Petitioner's subsequent plea of nolo contendere was reflected in the background check done or procured by Mercury. Apparently, Petitioner answered the subject question on the application inappropriately based on her mistaken belief that her criminal record had been sealed and/or expunged. Petitioner's belief also seemed to be supported by the fact that no criminal record appeared in a previous criminal background check conducted by her employer, Mercury. The subject question, quoted in paragraph 3 above, was not ambiguous and contemplated that an applicant answer the question regarding any crime with which the applicant had been "charged, convicted, found guilty, or pled nolo contendere (no contest) . . . whether or not adjudication was withheld." In light of the clarity of the question, it is unreasonable to believe that Petitioner did not understand the question and appreciate that the answer to the question in the application was untruthful. By signing the application according to the instructions for the oath and by her signature, Petitioner acknowledged the consequences of her choice to provide the wrong answer about her criminal history as constituting a violation of the Florida Insurance Code. Prior to and subsequent to the 1992 criminal matter discussed above, Petitioner has not been involved in any other criminal activity or incident.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department of Financial Services enter a final order denying Petitioner's application for a customer representative license. DONE AND ENTERED this 31st day of March, 2004, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 31st day of March, 2004. COPIES FURNISHED: Ladasiah Jackson, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Marie M. Ostrowski 8649 Hawbuck Street Trinity, Florida 34655 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether part of Florida Administrative Code Rule 69V- 560.704, particularly subsections (4)(d) and (5)(a), exceed Respondent’s rulemaking authority; enlarge, modify or contravene the specific provisions of law implemented; or are arbitrary or capricious, and thus, constitute an invalid exercise of delegated legislative authority pursuant to section 120.52(8), Florida Statutes.
Findings Of Fact Respondent is the state agency charged with the regulation and enforcement of chapter 560, Florida Statutes,2/ relating to money services businesses and their authorized vendors. Chapter 560, Part I, governs money services business generally, which includes check cashers. Chapter 560, Part III, governs check cashers. Petitioner is a licensed check casher pursuant to section 560.303. As a licensee, Petitioner is required to comply with Respondent’s duly-adopted administrative rules governing check cashers. Petitioner challenges parts of Florida Administrative Code Rule 69V-560.704, “Records to Be Maintained by Check Cashers,” as an invalid exercise of delegated legislative authority. Respondent cites section 560.105 as the specific authority to adopt the rule. Section 560.105 provides as follows: 560.105 Supervisory powers; rulemaking.— The office shall: Supervise all money services businesses and their authorized vendors. Have access to the books and records of persons the office supervises as necessary to carry out the duties and functions of the office under this chapter. Issue orders and declaratory statements, disseminate information, and otherwise administer and enforce this chapter and all related rules in order to effectuate the purposes, policies, and provisions of this chapter. The commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to administer this chapter. The commission may adopt rules requiring electronic submission of any forms, documents, or fees required by this chapter, which must reasonably accommodate technological or financial hardship and provide procedures for obtaining an exemption due to a technological or financial hardship. Rules adopted to regulate money services businesses, including deferred presentment providers, must be responsive to changes in economic conditions, technology, and industry practices. Respondent cites section 560.310, as the law implemented by the challenged rule. Section 560.310 provides as follows: 560.310 Records of check cashers and foreign currency exchangers.— 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 or submitted: Customer files, as prescribed by rule, on all customers who cash corporate payment instruments that exceed $1,000. A copy of the personal identification that bears a photograph of the customer used as identification and presented by the customer. Acceptable personal identification is limited to a valid driver license; a state identification card issued by any state of the United States or its territories or the District of Columbia, and showing a photograph and signature; a United States Government Resident Alien Identification Card; a passport; or a United States Military identification card. A thumbprint of the customer taken by the licensee when the payment instrument is presented for negotiation or payment. 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. 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. The office shall issue a competitive solicitation as provided in s. 287.057 for a statewide, real time, online check cashing database to combat fraudulent check cashing activity. After completing the competitive solicitation process, but before executing a contract, the office may request funds in its 2014-2015 fiscal year legislative budget request and submit necessary draft conforming legislation, if needed, to implement this act. The office shall ensure that the check cashing database: Provides an interface with the Secretary of State’s database for purposes of verifying corporate registration and articles of incorporation pursuant to this section. Provides an interface with the Department of Financial Services’ database for purposes of determining proof of coverage for workers’ compensation. The commission may adopt rules to administer this section, require that additional information be submitted to the check cashing database, and ensure that the database is used by the licensee in accordance with this section. (emphasis added). Florida Control of Money Laundering in Money Transmitters Act Section 560.310 was created by the 1994 Legislature as part of the omnibus “Money Transmitters Code” (the Code), providing for initial regulation of payment instrument sellers, foreign currency exchangers, check-cashers, and funds transmitters. The Code was enacted following publication of a report of Florida’s Eleventh Statewide Grand Jury titled “Check Cashing Stores: A Call for Regulation.” See Interim Report Number One of the Eleventh Statewide Grand Jury, “Check Cashing Stores: A Call For Regulation,” (Feb. 9, 1994)(“1994 Grand Jury Report” or “1994 Report”). The 1994 Report recognized the important role of check-cashing services for a significant number of people who are economically disadvantaged and cannot, or do not, maintain traditional bank accounts. However, the 1994 Report also documented abuse of unregulated check-cashing services by con artists, money launderers, and other criminals. The report found that the unregulated industry attracted criminals because the industry was under no obligation to keep records of the identity of those for whom they move money. Specifically, the report found that check-cashers did not have to: (1) verify that their business customers were legally registered; (2) verify that the person presenting the payment instrument is authorized to cash the instrument; or (3) keep records of the identity of the person who cashed the payment instrument. Id. The 1994 Report found check-cashing services were “not legally obligated to maintain transaction records of any kind that would be useful to law enforcement in the exercise of their investigatory duties.” Id. The 1994 Report recommended statewide regulation of check-cashing services to include the following relevant requirements: Id. Maintain for a period of five years all records of transmittals, currency exchanges, checks cashed, payment instruments issued, and other related financial records. Obtain identification from customers when cashing checks or money orders. Obtain, and maintain for five years, documentation regarding the identity of the payees of checks and money orders. Part I of the Code applied generally to all money transmitters, which was specifically defined to include check cashers. See ch. 94-354, § 1, Laws of Fla. (1994). The Code created section 560.123 “Florida Control of Money Laundering in Money Transmitters Act” requiring money transmitters to comply with the money laundering, enforcement, and reporting provisions of section 655.50, Florida Statutes. Id. Section 655.50, Florida Statutes (1993),3/ provided in pertinent part, “[e]ach financial institution shall maintain for a minimum of 5 calendar years full and complete records of all financial transactions, including all records required by 31 C.F.R. parts 103.33 and 103.34.” § 655.50(8)(b), Fla. Stat. (1993). Part III of the Code created sections 560.301, et seq., titled the “Check Cashing and Foreign Currency Exchange Act” (the Act). See ch. 94-354, § 3, Laws of Fla. (1994). Section 560.310, titled “Records of check cashers and foreign currency exchangers,” contained no requirements for particular types of records to be kept, but provided for the length of time check cashers must maintain “books, accounts, records and documents,” and provided for the location and destruction of said records. See § 560.310, Fla. Stat. (Supp. 1994). The Act did not directly require personal identification of persons presenting payment instruments for cash, but rather incentivized the presentation of personal identification by correlating the amount of fees charged with presentation of personal identification. Check cashers could charge a higher transaction fee when the customer did not present identification.4/ In 2008, the Attorney General’s Office published a Report of the Eighteenth Statewide Grand Jury titled, “Check Cashers: A Call for Enforcement” (2008 Report). See Second Interim Report of the Eighteenth Statewide Grand Jury, “Check Cashers: A Call for Enforcement” (March 2008). The 2008 Report was highly critical of the Money Transmitter Regulatory Unit (MTRU), the arm of Respondent with regulatory authority over check cashers and other money transmitters. The 2008 Report documented systematic fraud involving the check-cashing industry perpetrated particularly by construction contractors, in the arena of workers’ compensation, and the health care sector, in the arena of Medicaid and Medicaid prescription drug fraud. Id. at 7. According to the 2008 Report, both issues involved the establishment of shell corporations to launder money obtained by fraudulent means. Id. at 9, 11. The 2008 Report described the following elaborate scheme of workers’ compensation fraud: A contractor, who is required to purchase workers’ compensation insurance based on the amount of his or her payroll, hides the payroll by establishing a shell corporation in the name of a nominee owner, often a temporary resident of the United States. The shell company buys a bare minimum workers’ compensation policy, and the contractor makes payments to this shell “subcontractor,” who cashes the checks and returns the money to the contractor to pay his or her employees under the table. Id. at 10-12. Further, according to the 2008 Report, some check cashers actively participated in this scheme by setting up shell companies themselves, securing the certificate of insurance, and seeking out contractors with which to do business. Id. at 13. The 2008 Report documented an investigation by the Division of Insurance Fraud which revealed ten construction companies had funneled one billion dollars through check- cashing businesses in the prior three years. Id. at 13. The 2008 Report documented lack of enforcement by the MTRU, understaffing, and underutilized resources. Id. at 19-24. Further, the Report placed blame on the MTRU for failing to exercise rulemaking authority granted by the 1994 Legislature, especially with respect to collecting information related to corporate customers. Id. at 38. The 2008 Report also found the MTRU needed legislative authority to require check cashers to gather and report information in electronic format, which would make the investigation process more efficient and allow check-cashing businesses to detect structuring of transactions by customers to defraud workers’ compensation and other statutory requirements. Id. at 19. The 2008 Legislature incorporated many of the recommendations from the 2008 Report and significantly overhauled regulation of all money services businesses (formerly, “money transmitters”) including check cashers. The 2008 Legislation made the following changes-of- note to Part I of chapter 560: Prohibited licensees from accepting anything of value from a customer with intent to deceive or defraud. See ch. 08- 177, § 8, Laws of Fla. (2008) Prohibited the delivery to MTRU of any file known by it to be fraudulent or false. See Id. Increased the enforcement authority of MTRU. See ch. 08-177, § 9, Laws of Fla. Authorized immediate suspension of a license for failure to provide required records. See ch. 08-177, § 10, Laws of Fla. Required licensees to retain all required records for a minimum of five years. See ch. 08-177, § 1, Laws of Fla. The 2008 Legislature made the following changes to chapter 560, Part III: Prohibited a check casher from transacting business in any name other than the legal name under which it is licensed; Required disclosure of any fictitious name as part of initial licensing; Required a check casher to endorse all payment instruments received in the check- casher’s legal name under which it is licensed; and Prohibited check cashers from accepting multiple payment instruments from a person who is not the original payee, unless the person is a licensed check casher and the payment instruments are endorsed with the check casher’s legal name. Further, the 2008 Legislation required check cashers to maintain a customer file on all customers who cash “corporate or third-party payment instruments exceeding $1,000.” Ch. 08-177, § 42, Laws of Fla. The 2008 Legislature also added the requirement that, for any payment instrument accepted having a face value of $1,000 or more, the check casher must maintain personal identification from customers, a thumbprint of the customer, and a payment instrument log in an electronic format. See Id. Subsections 560.310(4), (5), and (6), relating to creation and maintenance of a statewide, real-time, online check-cashing database, were created by the 2013 Florida Legislature. See ch. 13-139, § 1, Laws of Fla. Prior to the 2013 amendments, section 560.310 required check cashers to maintain an electronic payment instrument log “as prescribed by rule.” § 560.310(1)(d), Fla. Stat. (2012). The 2013 amendment required check cashers 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 . . . .” Id. The Rule Florida Administrative Code Rule 69V-560.704(5)(a), reads as follows: (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. (b) 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. The 2013 Legislature incorporated into section 560.310, almost verbatim, the information required by the rule to be collected and maintained by check cashers in an electronic log.5/ The only significant difference between the statute and the rule is that the statute additionally requires check cashers to maintain, as part of the electronic log, the “payee’s workers’ compensation insurance policy number or exemption certificate number, if the payee is a business.” § 560.310(2)(d)11., Fla. Stat.6/ Respondent has not amended the rule subsequent to the 2013 amendments to section 560.310 requiring development and maintenance of a statewide, real-time, online check- cashing database. Respondent has not activated a statewide, real-time, online check-cashing database, but anticipates doing so in Fiscal Year 2015-2016. Referrals to Law Enforcement Pursuant to section 560.109(9), Respondent is required to annually report to the legislature the total number of examinations and investigations of its licensees that resulted in a referral to law enforcement, and the disposition of those referrals by agency. Respondent refers to the Florida Department of Law Enforcement (FDLE) results of its licensee investigations which may reveal criminal activity within the purview of the FDLE. For Fiscal Year 2012-2013, Respondent’s Bureau of Enforcement referred 78 examinations to FDLE. Respondent refers to the Division of Insurance Fraud (DIF) results of its licensee examinations which may reveal criminal activity related to workers’ compensation insurance. For Fiscal Year 2012-2013, Respondent referred 33 examinations to DIF. At the time of Respondent’s 2012-2013 annual report to the Legislature, FDLE had not opened any cases based on the 78 examinations referred. During that same time frame, DIF had opened 4 cases based on 33 referrals from Respondent. Threshold Amount for Recordkeeping Petitioner first challenges the rule as exceeding the scope of Respondent’s delegated legislative authority because it requires a log be kept “for payment instruments $1,000.00 or more” while the statute requires a log be kept on payment instruments “that exceed $1,000.” § 560.310(2)(a), Fla. Stat. Section 560.310(2) further reads, as follows: 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. (emphasis added). On the one hand, the statute requires a log be created and maintained on each payment instrument that exceeds $1,000, while on the other hand, acknowledges that payment instruments of lesser amounts, when presented by the same person, are “log worthy” when, together, they reach a threshold of $1,000. Petitioner argues that the 2012 Legislature repealed Respondent’s authority to require a log be kept on payment instrument amounts of $1,000. Section 560.310, Florida Statutes (2011), reads, in pertinent part, as follows: 560.310 Records of check cashers and foreign currency exchangers.— In addition to the record retention requirements specified in s. 560.1105, a licensee engaged in check cashing must maintain the following: Customer files, as prescribed by rule, on all customers who cash corporate or third- party payment instruments exceeding $1,000. For any payment instrument accepted having a face value of $1,000 or more: A copy of the personal identification that bears a photograph of the customer used as identification and presented by the customer. Acceptable personal identification is limited to a valid driver’s license; a state identification card issued by any state of the United States or its territories or the District of Columbia, and showing a photograph and signature; a United States Government Resident Alien Identification Card; a passport; or a United States Military identification card. A thumbprint of the customer taken by the licensee. A payment instrument log that must be maintained electronically as prescribed by rule. For purposes of this paragraph, multiple payment instruments accepted from any one person on any given day which total $1,000 or more must be aggregated and reported on the log. (emphasis added). The statute contained distinct recordkeeping requirements for payment instruments exceeding two different threshold amounts: (1) A customer file on all customers who cash corporate or third-party payment instruments exceeding $1,000, and (2) personal identification information of customers presenting payment instruments of $1,000 or more. The payment instrument log requirement was not associated with any minimum threshold amount. However, the language of subparagraph (c) did require aggregation of multiple payment instruments accepted from any one person on any given day which total $1,000 or more. As such, the log appeared to be required for all payment instruments of $1,000 or more. The 2012 Legislation struck the separate threshold of $1,000 or more which triggered the requirement to keep customer’s personal identification information. See ch. 12- 85, § 7, Laws of Fla. (2012). Further, the 2012 changes collapsed the separate requirements of customer identification information, customer thumbprint, and a payment instrument log into one list of records required to be kept on customers who cash payment instruments exceeding $1,000. See Id. However, the law retained the requirement that multiple payment instruments totaling $1,000 or more accepted from any one person on any given day be aggregated and reported on the log. Electronic Log Requirement Next, Petitioner challenges the rule as an invalid exercise of Respondent’s delegated legislative authority because the governing statute was amended in 2013 to eliminate the requirement for check cashers to keep an electronic log of payment instruments. In 2013, the Legislature created the following new subsections of section 560.310: The office shall issue a competitive solicitation as provided in s. 287.057 for a statewide, real time, online check cashing database to combat fraudulent check cashing activity. After completing the competitive solicitation process, but before executing a contract, the office may request funds in its 2014-2015 fiscal year legislative budget request and submit necessary draft conforming legislation, if needed, to implement this act. The office shall ensure that the check cashing database: Provides an interface with the Secretary of State’s database for purposes of verifying corporate registration and articles of incorporation pursuant to this section. Provides an interface with the Department of Financial Services’ database for purposes of determining proof of coverage for workers’ compensation. The commission may adopt rules to administer this section, require that additional information be submitted to the check cashing database, and ensure that the database is used by the licensee in accordance with this section. Ch. 13-139, § 1, Laws of Fla. With regard to the payment instrument log, the statute was amended as follows:7/ Id. 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 A payment instrument being cashed, in such format as required log that must be maintained electronically as prescribed by rule: The law also made the following conforming changes to existing text of section 560.310: (2) If the payment instrument exceeds $1,000, the following additional information must be maintained or submitted: * * * For purposes of this subsection paragraph, multiple payment instruments accepted from any one person on any given day which total $1,000 or more must be aggregated and reported in on the check cashing database or on the log. Id. The statute authorizes Respondent to make a 2014- 2015 legislative budget request prior to executing the contract for a vendor to run the database. See § 560.310(4), Fla. Stat. Thus, the statute specifically anticipates lag time between enactment of the legislation requiring the statewide database and the rollout of the database. Contrary to Petitioner’s assertion, the statute does not eliminate licensed check cashers’ responsibility to maintain records in an electronic log. The statute recognizes the licensee’s duty to both maintain information on an electronic log and submit that information to the statewide real time database. Corporate Customer Next, Petitioner challenges Respondent’s authority to require check cashers to maintain records of corporate customers in addition to natural persons. The section of the rule at issue is 69V-560.704(4), which reads, in pertinent part, as follows: (4) In addition to the records required in subsections (1) and (2), for payment instruments exceeding $1,000.00, the check casher shall: * * * (d) Create and maintain a customer file for each entity listed as the payee on corporate payment instruments and third party payment instruments accepted by the licensee. Each customer file must include, at a minimum, the following information[.] (emphasis added). Florida Administrative Code Rule 69V-560.704 further defines the following relevant terms: For purposes of this rule the term: ‘Corporate payment instrument’, as referenced in Section 560.310(1), F.S., means a payment instrument on which the payee named on the face of the payment instrument is not a natural person. ‘Conductor’ means a natural person who presents a payment instrument to a check casher for the purpose of receiving currency. ‘Customer file’ in regard to a ‘corporate payment instrument’ means the corporate entity shown as payee. In regard to ‘third-party payment instruments’, the term ‘customer file’ means the individual negotiating the payment instrument. Petitioner complains that Respondent is without authority to construe the term “customer” as the payee on a corporate payment instrument rather than a natural person appearing before the licensee presenting a check to be cashed. Petitioner argues that section 560.310 defines customer as the person presenting a check for payment, while the rule impermissibly requires the licensee to maintain customer files of corporate entities. Section 560.310 does not define the term “customer.” The sections of the statute which predate the 2013 Legislation used the term customer as if it applied only to a natural person. For example, the statute required the check casher to maintain “[a] copy of the personal identification that bears the photograph of the customer used as identification and presented by the customer.” § 560.310(2)(b), Fla. Stat. (2012). Further, the statute required the licensee to maintain “[a] thumbprint of the customer taken by the licensee when the payment instrument is presented for negotiation or payment.” § 560.301(2)(c), Fla. Stat. (2012). However, the 2013 amendments to chapter 560, specifying the items to be documented in the check casher’s electronic log of payment instruments, employ the terms “payor name” and “payee name” as displayed on the payment instrument, and “conductor” if different from the name on the payment instrument. The list of items required by statute to be logged include “[t]he type of identification and identification number presented by the payee or conductor,” and “[p]ayee’s workers’ compensation insurance policy number or exemption certification number, if the payee is a business.” § 560.310(2)(d)10. and 11., Fla. Stat. (2013). Additionally, the legislation requires Respondent to ensure that the anticipated statewide check-cashing database will interface with the Secretary of State’s database for verifying corporate registration and articles of incorporation, as well as with the Department of Financial Services’ database for determining proof of coverage for workers’ compensation. If the payee’s corporate information is not maintained by check cashers, it cannot be reported to the statewide check-cashing database for verification. Furthermore, the statute prohibits a licensee from accepting or cashing a corporate payment instrument from a person who is not an authorized officer of the corporate payee named on the instrument. See s. 560.309(4), Fla. Stat. Without obtaining records of the corporate payee, the check casher would be unable to comply with this requirement. Corporate Documents Next, Petitioner complains that some of the information required by rule to be kept on corporate customers is beyond the Respondent’s statutory authority. Specifically, Petitioner objects to the obligation to maintain the following information on corporate customers, as required by rule 69V- 560.704(4)(d): Documentation from the Secretary of State verifying registration as a corporation or fictitious entity showing the listed officers and FEID registration number. If a sole proprietor uses a fictitious name or is a natural person, then the customer file shall include the social security number of the business owner and documentation of the fictitious name filing with the Secretary of State. Articles of Incorporation or other such documentation which establishes a legal entity in whatever form authorized by law. For purposes of this rule a sole proprietor operating under a fictitious name registered with the Secretary of State shall not have to present such documentation. Documentation of the occupational license from the county where the entity is located. A copy of the search results screen page from Compliance Proof of Coverage Query Page webpage from the Florida Department of Financial Services – Division of Workers’ Compensation website (http://www.fldfs.com/WCAPPS/Compliance _POC/wPages/query.asp). Documentation of individuals authorized to negotiate payment instruments on the corporation or fictitious entity’s behalf including corporate resolutions or powers of attorney. Payment instruments for insurance claims where there are multiple payees shall be exempt from this provision provided that the maker of the check is an insurance company and the licensee has obtained and retained documentation as to the identity of the natural person listed as the payee on such payment instrument. Section 560.310(2) provides for the following customer information to be kept on file: Customer files, as prescribed by rule, on all customers who cash corporate payment instruments that exceed $1,000. (emphasis added). Respondent clearly has statutory direction in determining which types of documentation should be kept in corporate customer files. As noted previously, licensed check cashers are required by statute to enter into their electronic log each corporate payees’ workers’ compensation insurance policy number or exemption certificate number before entering into each check-cashing transaction. See § 560.310(2)(d)11, Fla. Stat. Likewise, licensees are required to verify that the conductor presenting a corporate check is an authorized officer of the corporate payee. See § 560.309(4), Fla. Stat. Petitioner seems to suggest that Respondent cannot require any document to be kept on corporate payees unless that document is specifically mentioned in the authorizing statute. That suggestion is contrary to controlling law, as discussed more fully below.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: On or about October 25, 1988, a Felony Complaint was filed in Municipal Court, Mt. San Jacinto Judicial District, Riverside County, California (Case No. 884467) charging that Petitioner had committed a violation of Section 278.5, Subdivision (b) of the Penal Code, a felony, in that on or about September 1, 1988, in the County of Riverside, State of California, she, being a person having physical custody of a child pursuant to an order, judgment, and decree of court which granted to another person [her former husband] rights of physical custody and visitation, did willfully and unlawfully, with the intent to deprive such person of such rights to custody and visitation, detain, conceal, take, and entice away such child, to wit, JAMES H. RODEN [her son, who, according to court documents, was born on April 22, 1989]. An Amended Felony Complaint charging Petitioner with the same felony offense was filed on or about April 8, 1991. Subsequently, there were plea negotiations which resulted in Petitioner entering a guilty plea to a reduced, misdemeanor charge, which the court accepted. In June or July of 1993, Petitioner submitted to the Department an application for licensure as a general lines insurance agent. Among the questions on the application form that Petitioner filled out were the following: Have you ever been charged with or convicted of or pleaded guilty or no contest to a crime involving moral turpitude (yes or no), or a felony (yes or no), or a crime punishable by imprisonment of one (1) year or more under the law of any state, territory or county, whether or not a judgment or con- viction has been entered? (yes or no) If yes, give date(s): What was the crime? Where and when were you charged? Did you plead guilty or nolo contendre? Were you convicted? Was adjudication withheld? Please provide a brief description of the nature of the offense charged If there has been more than one such felony charge, provide an explanation as to each charge on an attachment. Certified copies of the Information or Indictment and Final Adjudication for each charge is required. On this portion of the form, Petitioner wrote "no" in each of the first three blank spaces and made no further entries, notwithstanding that several years prior thereto, in Mt. San Jacinto Judicial District Municipal Court Case No. 884467, she had indeed been charged with (albeit not found guilty or convicted of) a felony punishable by imprisonment of one year or more. Petitioner, however, did not intend to misrepresent or conceal any information or to otherwise deceive the Department concerning her past. She mistakenly believed that, in this portion of the form, the Department was inquiring only about criminal offenses involving "moral turpitude." After looking up the term "moral turpitude" in the dictionary, she determined that the crime with which she was charged in Mt. San Jacinto Judicial District Municipal Court Case No. 884467 was not one involving "moral turpitude" inasmuch as her actions in abducting her son were intended to protect the child and were not in any way "wicked." After receiving Petitioner's application, the Department conducted a records check which revealed the felony charge that had been filed against Petitioner in Mt. San Jacinto Judicial District Municipal Court Case No. 884467. The Department thereupon advised Petitioner of its discovery and asked her to supply it with certain documnents that were filed in the case. Petitioner complied with the Department's request.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order announcing its intention to continue to process Petitioner's application for licensure as a general lines insurance agent rather than denying the application on the ground stated in the Department's January 26, 1994, denial letter. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 14th day of September, 1994. 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, 1994. COPIES FURNISHED: Lisa Beth Weiner 572 Northeast 31st Street Pompano Beach, Florida 33064 James A. Bossart, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Honorable Tom Gallagher State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Bill O'Neill General Counsel Department of Insurance The Capitol, PL-11 Tallahassee, Florida 32399-0300
Findings Of Fact At all times material hereto, Respondent is and has been a physician licensed to practice medicine under the laws of the State of Florida, having been issued license number ME 0034162. Between the dates of approximately December 1982 and July 1953, Respondent was associated with Felix Garcia-Loredo in the practice of medicine under the name of Hialeah Family Practice at 777 East 25th Street, Hialeah, Florida 33013, pursuant to a verbal agreement. At the time that they entered into that verbal agreement, Garcia-Loredo was not licensed as a physician or as a physician's assistant, and Respondent knew that Garcia-Loredo had no license. What Garcia-Loredo did have, however, was that which Respondent lacked: the money and community contacts which Respondent needed in order to start a medical practice which might have been otherwise out of reach for Respondent, who was new to the Miami area where he knew almost no one and where he earned a living by working as a physician at two clinics. In furtherance of their agreement, Garcia-Loredo borrowed $10,000 from a bank in order to open the office and hired a secretary. Since Respondent had the only medical license between the two of them, he signed the lease for the office space in a complex of medical offices next to Hialeah Hospital. Name signs were placed outside the door of the Hialeah Family Practice: one sign bore Respondent's name, and the other read "Dr. Felix Garcia-Loredo." Although the office was open thereafter for six days a week, the only person working on a regular schedule was the secretary. Xiormma Perez was the secretary at Hialeah Family Practice during substantially all the time that the office was open. She believed she worked for Felix Garcia-Loredo, since he was the one who hired her and since she did not meet Respondent until approximately a month after she had begun working for Felix Garcia-Loredo. She also believed that Garcia-Loredo was a medical doctor, since he introduced himself to her as such when she interviewed with him for employment. Additionally, the many people who came to the office to see Garcia- Loredo referred to him as Dr. Garcia-Loredo. If anyone telephoned the office requesting an appointment to see a doctor, Perez gave that person an appointment to see Respondent at 5:00 p.m. or later, since Respondent was employed full-time at two clinics and that was the earliest time when he could be at the office to see a patient. According to Perez, Respondent saw only a "handful of patients" during the entire time that the office was open. Felix Garcia-Loredo, however, had numerous friends and relatives appear at the office to see him. Garcia-Loredo would take those persons into an interior office, and Perez had no knowledge as to what occurred behind the closed door. When Perez prepared insurance claim forms, she left them with Garcia-Lore do for review and did not give the insurance claim forms to Respondent, although the forms were to be signed by the physician who had rendered the medical services for which reimbursement was being sought. In fact, Garcia-Loredo signed numerous insurance claim forms on behalf of Hialeah Family Practice, and Respondent signed none. The parties have stipulated that the following acts constitute medical service in the practice of medicine: performing examinations, ordering or performing laboratory tests, ordering or performing x-rays, ordering or performing treatment, and prescribing or dispensing medication. Between January 1983 and March 1983, Garcia-Lore do performed the following medical services to patient Leslie Andrews at the office of Hialeah Family Practice at 777 East 25th Street, Hialeah, Florida: Garcia-Loredo gave Andrews a complete physical examination; he ordered for Andrews laboratory tests and x-rays; he evaluated those laboratory tests and x-rays and diagnosed Andrews' symptoms based thereon; he placed Andrews on a special diet and wrote Andrews a prescription for medication. He thereafter filed a health insurance claim form for payment of medical services rendered by him to Andrews in the amount of $1,739, and he signed that form where the form requires the signature of physician or supplier. Not only was Respondent not present during any of the treatment rendered to Andrews, Respondent and Andrews have never met. All of the patient records were kept in files in the reception area in the office of Hialeah Family Practice. Copies of the insurance claim forms were also kept in that location. Although these records were available to Respondent at all times, the only time that Respondent ever examined a file or any business record was when Garcia-Loredo needed him to admit a patient into the hospital, something which Garcia-Loredo could not do. Other than examining a patient's file for the purpose of admitting that patient into the hospital and performing whatever follow-up was required during that patient's hospitalization, Respondent never reviewed or even asked questions about any financial aspects of the medical office. During the entire time that the office was open, Respondent never received a salary or any draw from that office and did not know if the secretary or Garcia-Loredo were paid a salary or received any money in compensation for their services. Respondent had no knowledge of any insurance claim forms that were filed or of any insurance payments received. Respondent had no knowledge as to any charges made to any patient for services rendered or whether anyone had paid any of the charges. Respondent was not even aware of whether the business had any books and records.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained in Count One of the Amended Administrative Complaint, dismissing Count Two of the Amended Administrative Complaint with prejudice, and assessing against Respondent an administrative fine in the amount of $1,000 to be paid by a date certain. DONE and RECOMMENDED this 4th day of May 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 4th day of May 1984. COPIES FURNISHED: Spiro T. Kypreos, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Manuel E. Oliver, Esquire 275 SW 13th Street Miami, Florida 33130 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Dorothy Faircloth, Executive Director Board of Medical Examiners 130 North Monroe Street Tallahassee, Florida 32301 =================================================================
The Issue Whether the Petitioner's application for licensure as a resident customer representative insurance agent should be approved.
Findings Of Fact The Petitioner is an applicant seeking to be licensed as a resident customer representative insurance agent. The Respondent is the state agency charged with the responsibility of reviewing and issuing licenses governed by Chapter 626, Florida Statutes. On or about May 29, 2003, the Petitioner filed an internet application that required responses to questions regarding the Petitioner's fitness to be licensed. Among the screening questions listed on the application was the following inquiry: Have you ever been charged, convicted, found guilty, or pled guilty or nolo contendere (no contest) to a crime under the laws of any municipality, county, state, territory or country, whether or not adjudication was withheld or a judgment of conviction was entered? The options to the question noted above required the Petitioner to choose "Y" for affirmative or "N" for a negative response. The Petitioner selected "N." Thus, the Petitioner represented to the Respondent that she had not ever been charged, convicted, found guilty, or pled guilty to a crime. In fact, the Petitioner was charged with a crime and did enter a plea to a crime. On May 25, 1984, the Petitioner filed a Plea Agreement wherein she agreed to plead guilty to the offense of unlawful use of a communication facility. Judge Orrick in the United States District Court, Northern District of California, then accepted the plea and found the Petitioner guilty of a violation of 21 U.S.C. Section 843(b). The Petitioner was placed on probation for a period of three years. With regard to the instant case, the Petitioner admitted she failed to disclose the conviction. The Petitioner maintained her grandchildren distracted her when she was completing the form and checked the wrong response by mistake. The Petitioner did not review the error and advise the Department of the erroneous entry. Additionally, the Petitioner claimed that she did not realize the screening question related to activities in all jurisdictions and thought it meant only criminal conduct in the State of Florida. Again, the Petitioner did not seek any clarification as to the question's meaning prior to submitting an incorrect answer. Moreover, it is determined that the question is unambiguously stated to include jurisdictions beyond the State of Florida. The Petitioner believes that because she was able to successfully achieve citizenship after the criminal incident noted above she should similarly be favorably considered for the instant license. There is no evidence that supports a conclusion that the naturalization and immigration regulations for citizenship comport with the Florida laws regulating the licensure of insurance agents. Moreover, the Petitioner acknowledged that she disclosed the criminal history on her application for citizenship. The omission of pertinent facts regarding her criminal history was therefore not an issue in whether or not she should achieve citizen status.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a Final Order denying the Petitioner's application for licensure. DONE AND ENTERED this 27th day of April 2004, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. Parrish 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 27th day of April 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Ladasiah Jackson, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Nora Delgadillo 11432 Southwest 75th Terrace Miami, Florida 33173
The Issue The issue is whether the Amended Order of Penalty Assessment issued to Respondent, Dave's Tractor, LLC, on August 27, 2018, is correct.
Findings Of Fact Respondent is a limited liability company engaged in the construction business with offices at 434 Skinner Boulevard, Suite 105, Dunedin, Florida. It uses tractors and a grading process to prepare land prior to building construction for commercial clients. Its managing member is David Richardson. The Department is the state agency responsible for enforcing the requirement of the Workers' Compensation Law that employers secure the payment of workers' compensation coverage for their employees and corporate officers. § 440.107, Fla. Stat. To enforce this requirement, the Department conducts random inspections of job sites and investigates complaints concerning potential violations of workers' compensation rules. On May 25, 2018, Christina Brigantty, a Department investigator, conducted a routine inspection of a job site at 3691 Tampa Road, Oldsmar, Florida. She observed two men working in a ditch, one man mixing cement, the other man driving a tractor. Investigator Brigantty observed four individuals at the job site, including the two working in the ditch: Dylan Richardson; Ismael Demillon; Javier Mastica; and Jorge Duran. She was informed by the individuals that they worked for Richardson Trailers, LLC. Investigator Brigantty called Mr. Ramsey, corporate officer for Respondent, who confirmed that Respondent hired Richardson Trailers, LLC, as a subcontractor. She later confirmed through discussions with Dylan Richardson and the Coverage and Compliance Automated System that Richardson Trailers, LLC, had no workers' compensation insurance on its employees. The parties have stipulated that at the time of the inspection, Respondent had not secured workers' compensation for any of the four individuals observed on the job site. Investigator Brigantty received approval from her supervisor to issue Respondent a Stop-Work Order and Request for Business Records for Penalty Calculation (BRR). These papers were served on Respondent on June 30, 2018. The BRR requested numerous types of business records for the period May 26, 2016, through May 25, 2018, including business tax receipts (occupational licenses), trade licenses or certifications, and competency cards held by Respondent or any of its principals; payroll documents (time sheets, time cards, attendance records, earnings records, check stubs, and payroll summaries for both individual employees and aggregate payrolls, and federal income tax documents reflecting the amount of remuneration paid or payable to each employee, including cash); and account documents including all business check journals and statements, which would include cleared checks for all open and/or closed business accounts established by the employer. Respondent failed to provide any business records in response to the BRR to determine Respondent's payroll for the audit review period. Therefore, the Department proceeded to compute a penalty based on imputed payroll in accordance with section 440.107(7)(e), Florida Statutes. This formula produced a penalty assessment of $165,654.10. On August 27, 2018, the Department served Respondent with an Amended Order of Penalty Assessment totaling $165,654.10. Pursuant to Florida Administrative Code Rule 69L-6.028(4), the Department also gave Respondent 20 business days in which to provide business records that would confirm Respondent's actual payroll during the two-year review period. This meant the records were due by September 25, 2018. A final hearing was scheduled initially for January 24, 2019. By agreement of the parties, on January 4, 2019, the case was rescheduled to March 15, 2019. One ground for granting a continuance was that the parties were "waiting on outstanding discovery that is being located and is necessary for an amicable resolution," presumably referring to items listed in the BRR. The final hearing was conducted on March 15, 2019, or almost seven months after the Amended Order of Penalty Assessment was issued. A week before the final hearing, Respondent began providing business records to the Department, including bank statements and checks on March 8, 2019, and a general ledger on March 13, 2019. Given the time constraints, they were not reviewed by the auditor until the day before the final hearing. The auditor conceded at hearing that these records would result in a "significantly lower" penalty, and they were sufficient to recalculate the penalty. Even so, at this late date, the Department refuses to recalculate the assessment. Respondent's principal, Mr. Richardson, testified that he has "no way to pay" the penalty, it will force him out of business, and he will be required to terminate his employees. Mr. Richardson also testified that he requested the records from the bank on "numerous occasions," but the bank refused to provide them directly to the Department or referred him to other branch offices. However, bank records are not the only way an employer can demonstrate the amount of payroll. This also can be established by business taxes or other records described in the BRR. Mr. Richardson denied knowing that business taxes are an option if bank records are unavailable.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services, Division of Workers' Compensation, enter a final order finding that Respondent violated the workers' compensation laws by failing to secure and maintain required workers' compensation insurance for its employees, and imposing a penalty of $165,654.10. DONE AND ENTERED this 3rd day of May, 2019, in Tallahassee, Leon County, Florida. S D. R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 2019. COPIES FURNISHED: Steven R. Hart, Qualified Representative Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-4229 (eServed) Kyle Christopher, Esquire Department of Financial Services Hartman Building 2012 Capital Circle Southeast Tallahassee, Florida 32399 (eServed) Julie Jones, CP, FRP, Agency Clerk Division of Legal Services Department of Financial Services 200 East Gaines Street Tallahassee, Florida 32399-0390 (eServed) Adrian Shawn Middleton, Esquire Middleton & Middleton, P.A. 1469 Market Street Tallahassee, Florida 32312-1726 (eServed)
The Issue Whether the Florida Department of Financial Services (the Department) has grounds to deny the application for an "All- Lines Public Adjuster's" license filed by Jeffrey Carl Pellet (Mr. Pellet) as alleged in the Department's Notice of Amended Denial and Notice of Permanent Bar dated January 19, 2012. Specifically, two grounds for denial were at issue. First, whether Mr. Pellet's action in litigating a subpoena served on him in 2008 by the Department constitutes grounds to deny his application. Second, whether Mr. Pellet's criminal history disqualifies him from licensure.
Findings Of Fact The Department is the state agency that regulates the practice of insurance in the State of Florida. On April 20, 2011, Mr. Pellet filed with the Department an application for an "All-Lines Independent Adjuster's" license. CRIMINAL HISTORY On October 13, 1987, Mr. Pellet entered a plea of nolo contendere to three counts of insurance fraud and three counts of grand theft. Adjudication of guilt was withheld. He was ordered to serve six months of community control to be followed by 2.5 years of probation. Mr. Pellet's term of probation was terminated May 24, 1989.3/ CHANGE IN THE LAW Before it was invalidated in April 2010, Florida Administrative Code Rule 69B-211.042(8)(a) contained a 15-year waiting period before a person with Mr. Pellet's criminal history would become eligible for the type license at issue in this proceeding.4/ Section 6 of chapter 2011-174, Laws of Florida, created subsection 626.207(3), Florida Statutes. That provision became effective on July 1, 2011, and provides as follows: (3) An applicant who commits a felony of the first degree; a capital felony; a felony involving money laundering, fraud, or embezzlement; or a felony directly related to the financial services business is permanently barred from applying for a license under this part. This bar applies to convictions, guilty pleas, or nolo contendere pleas, regardless of adjudication, by any applicant, officer, director, majority owner, partner, manager, or other person who manages or controls any applicant. Section 626.207(1) defines the term "financial services business" to include any financial activity regulated by the Department of Financial Services, Office of Insurance Regulation, or Office of Financial Regulation. The foregoing provision is applicable to the type of application submitted by Mr. Pellet. The foregoing provision is applicable to Mr. Pellet's application because his application was pending when the provision became law. Section 18 of chapter 2011-174, Laws of Florida, provides as follows: The amendments to s. 626.207, Florida Statutes, made by this act do not apply retroactively and apply only to applicants whose applications are pending or submitted on or after the date that the amendments to s. 626.207, Florida Statutes, made by this act become law. This section shall take effect upon this act becoming a law. PRIOR LICENSE In compliance with the then existing 15-year waiting period, Mr. Pellet waited until December 18, 2003, to file with the Department an application for licensure as an "Independent Adjuster." That application disclosed Mr. Pellet's criminal history. On July 9, 2004, the Department granted Mr. Pellet's application and issued an "Independent Adjuster" license to him.5/ He held that license until he converted it to a "Public Adjuster Apprentice" license in August 2009. Mr. Pellet's "Public Adjuster Apprentice" license expired February 11, 2011.6/ Mr. Pellet held no license from the Department as of the date of the formal hearing. SUBPOENA Prior to February 12, 2008, the Department received complaints that Mr. Pellet was performing services beyond the scope of his licensure. At that time, Mr. Pellet was an owner and operator of a business known as Professional Insurance Estimating & Appraisals. On February 12, 2008, the Department served an investigative subpoena on Mr. Pellet by leaving the subpoena with an employee of Mr. Pellet at Mr. Pellet's office. The subpoena was directed to Mr. Pellet and to an associate of Mr. Pellet who is not involved in this proceeding. The subpoena cited the following authority for the subpoena: sections 624.307, 624.310, 624.317, 624.318, 624.321, 626.561, 626.601, 626.748, and 626.9561. The subpoena demanded that Mr. Pellet produce to the Department: the complete claim files for seven named consumers "including the contracts entered with each of these consumers, communications with these consumers and or their insurers, the request for appraisal for each of these consumers, the companies settlement checks, the consumer check made payable to Pellet or Professional Insurance Estimating & Appraisals, and the bank account name and number for Professional Estimating & Appraisals' bank account." Mr. Pellet did not comply with the subpoena. Instead, Mr. Pellet filed "Motion for a Protective Order and to Quash Subpoena" (Motion to Quash) in Broward circuit court. The Motion to Quash was heard by a magistrate who denied the Motion to Quash as it related "to non-testimonial production of files, records, documents, etc." The magistrate's report ordered Mr. Pellet and his associate to comply with the subpoena within 30 days unless they filed an objection and requested a hearing before the circuit judge within the 30-day period. On February 18, 2009, the circuit judge denied the Motion to Quash and also denied the exceptions to the magistrate's report that had been filed on behalf of Mr. Pellet. The circuit judge ratified and "approved in all respects" of the magistrate's report. On March 10, 2009, Mr. Pellet, through counsel, offered to produce two of the seven consumer files demanded by the subpoena and asserted that the other five consumer files had been shredded before the subpoena was issued. No offer was made as to the banking information demanded by the subpoena. The Department rejected that offer. Mr. Pellet appealed the order denying the Motion to Quash to the Fourth District Court of Appeal. On May 19, 2010, the court affirmed the order denying the Motion to Quash. Mr. Pellet filed a motion for re-hearing, which was denied by the court on June 16, 2010. During the course of the formal hearing before the undersigned Mr. Pellet repeated the offer to produce two of the seven consumer files demanded by the subpoena and asserted that the other five consumer files had been shredded before the subpoena was issued. No offer was made as to the banking information demanded by the subpoena. The Department rejected that offer. Mr. Pellet's action in litigating the subpoena impeded the Department's investigation into his alleged wrongdoing. Mr. Pellet has paid the fee and passed a pre-licensure examination, which are pre-requisites for the license he seeks.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Financial Services enter a final order denying Mr. Pellet's application for license as an "All-Lines Public Lines Adjuster." DONE AND ENTERED this 11th day of July, 2012, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of July, 2012.
The Issue The issue in this case is whether the Stop-Work Order issued by Petitioner for Respondent's failure to comply with a business records request served in connection with Petitioner's workers' compensation coverage audit of Respondent was issued in conformance with section 440.107(7)(a), Florida Statutes (2014).1/
Findings Of Fact Petitioner, Department of Financial Services, Division of Workers' Compensation, is the state agency responsible for enforcing the requirement that employers in the State of Florida secure the payment of workers' compensation insurance covering their employees, pursuant to chapter 440, Florida Statutes. Respondent, D. Tech Networking Services, LLC, is a registered Florida limited liability company engaged in the technology service business. At the time of Petitioner's audit giving rise to this proceeding, Respondent's principal address was 2933 Southwest Lakemont Place, Palm City, Florida 34990. Respondent actively conducted business between July 29, 2014, and October 28, 2014, the audit period pertinent to this proceeding. As the result of an injury referral filed with Petitioner by an employee of Respondent, on October 28, 2014, Petitioner's Compliance Inspector Michael Cicio attempted to visit Respondent's business site. The principal business address identified in the Division of Corporations Sunbiz records for Respondent was a residential mailing address, so Cicio was unable to conduct a site visit at that address. Thereafter, Cicio attempted to conduct a site visit at an alternate address, which was identified in Sunbiz records as the location of Respondent's business operation. However, he was unable to locate the business at that address, so again was unable to conduct a site visit. To determine whether Respondent had obtained workers' compensation coverage for its employees as required by law, Cicio checked the State of Florida Coverage and Compliance Automated System and the National Council on Compensation Insurance computer databases, which contain information regarding workers' compensation insurance policies that have been obtained by employers. These databases showed no record of any workers' compensation policies covering Respondent's employees having been issued. Thereafter, Petitioner served a Request for Production of Business Records ("RPBR") on Respondent. Respondent received the RPBR on October 30, 2014. The RPBR ordered Respondent to produce, within ten business days, the following business records: payroll documents; bank account documents; business disbursements; contracts for work performed by the business; documents evidencing workers' compensation coverage secured by the business; professional employer organization records, including certificates of workers' compensation coverage for leased employees; independent contractor records; documentation of any exemptions from the workers' compensation coverage requirement obtained by the business; documents regarding subcontractors employed by the business; and documentation of subcontractors' workers' compensation coverage. Florida Administrative Code Rule 69L-6.0152/ requires these specific types of business records to be maintained by Respondent and to be produced to Petitioner upon request. Respondent did not produce the requested business records in response to the RPBR within ten business days. Accordingly, on December 1, 2014, Petitioner issued a Stop-Work Order, directing Respondent to cease all business operations for all worksites in the state on the basis that Respondent failed to produce required business records, in violation of section 440.107(7)(a). By its terms, the Stop-Work Order remains in effect until Petitioner either: (1) issues an order releasing the Stop- Work Order upon finding that the employer has come into compliance with the workers' compensation coverage law and paid applicable penalties, or (2) issues an agreed order of conditional release subject to certain specified conditions. Neither of these actions can occur unless and until the employer provides records showing current compliance with the workers' compensation requirements of chapter 440. On December 13, 2014, Respondent requested an administrative hearing challenging the issuance of the Stop-Work Order. Also on that date, Respondent produced some business records in response to the RPBR. Respondent also sent correspondence to Petitioner asserting that all persons who worked for Respondent were independent contractors who were responsible for obtaining their own workers' compensation insurance coverage, so that the Stop-Work Order was issued in error. The records produced did not adequately respond to the RPBR. Specifically, Respondent failed to produce records3/ sufficient to substantiate its claim that its workers were independent contractors for whom Respondent was not required to provide workers' compensation coverage. Indeed, the payroll records produced indicated that the workers were, in fact, employed by Respondent rather than being independent contractors. Respondent also produced a copy of a liability insurance policy covering the business itself, but did not produce any workers' compensation policies showing that any workers were covered. Respondent produced additional documents that similarly were unhelpful in enabling Petitioner to determine whether Respondent's workers were independent contractors or whether they were employees for whom Respondent was responsible for securing workers' compensation coverage. In sum, the records Respondent produced in response to the RPBR were insufficient to enable Petitioner to determine whether Respondent was in compliance with the workers' compensation coverage requirements of chapter 440. Respondent did not submit any additional records rectifying this deficiency. Accordingly, Petitioner did not lift the Stop-Work Order, which remains in effect.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner, Department of Financial Services, Division of Workers' Compensation, issue a final order adopting the Stop-Work Order as its final agency action. DONE AND ENTERED this 15th day of January, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 2016.