The Issue The issue in this case is whether the Department of Education (Respondent) acted properly within its authority to claim lottery winnings of Kevin Frye (Petitioner).
Findings Of Fact At all times material to this case, the Petitioner was a borrower, participating in the federal student loan program. Two of the loans involved funds disbursed in 2002, and the third involved funds disbursed in 2003. Repayment of the three loans was to begin in 2005. The Respondent acted as the guarantee agency for the Petitioner's three loans under the federal student loan program. The program provided that the Respondent was obligated to repay the loan in the event of default by the borrower. Such loans were regarded as in default after passage of a 270-day payment delinquency period. Lenders reported defaulted loans by filing claims with the Respondent. The Respondent paid the claims and initiated a collection process to obtain the funds from the borrowers. The Respondent became aware of the Petitioner's defaulted loans in February 2007, when claims were filed with the Respondent by the Petitioner's lender. The Respondent paid the claims and became the owner and holder of three promissory notes documenting the loans. By letter dated March 24, 2009, the Respondent notified the Lottery that the Petitioner had outstanding student loans in the amount of $5,788.08. The amount included accrued interest as of April 8, 2009. The letter stated that such interest would continue to accrue according to the terms of the notes. The letter requested that any lottery prize proceeds won by the Petitioner be transmitted to the Respondent to be credited towards the debt. On April 9, 2009, the Lottery delivered a check in the amount of $1,000 to the Respondent with a letter identifying the amount as lottery winnings of the Petitioner. By letter dated May 13, 2009, the Respondent advised the Petitioner that the lottery proceeds had been received and would be credited towards his student loan debt. The Petitioner's request for hearing stated that he had entered into and completed a "loan rehabilitation" program and that "there is no reflection in outstanding loan balance that coincides with the lottery winnings." Although the Respondent has a program designed to rehabilitate defaulted student loans, there was no evidence presented at the hearing that the Petitioner has entered into any rehabilitation agreement with the Respondent applicable to the debt obligations relevant to this dispute.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Education enter a final order applying the $1,000 lottery prize winnings of Kevin Frye to the student loan debt referenced herein. DONE AND ENTERED this 25th day of November, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 25th day of November, 2009. COPIES FURNISHED: Robert C. Large, Esquire Department of Education 325 West Gaines Street, Suite 1244 Tallahassee, Florida 32399 Kevin Frye 7429 Oakvista Circle Tampa, Florida 33634 Lynn Abbott, Agency Clerk Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Dr. Eric J. Smith, Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Deborah K. Kearney, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400
Conclusions IT IS THEREFORE ORDERED, that this case is hereby dismissed. DONE AND ORDERED this 2¥_ day of October, 2013, in Tallahassee, Florida. Lo,—tecerrf Pam Stewart Commissioner of Education
The Issue Whether Respondents (private schools participating in certain scholarship programs) engaged in fraud and/or failed to comply with provisions required of private schools participating in such scholarship programs and, if so, whether Petitioner (Commissioner) should suspend or revoke Respondents’ rights to participate in the scholarship programs.
Findings Of Fact Barrington and Barrington II are private schools located in Florida City. They are located in the same facility under the same administration. Both have been eligible to receive McKay and FTC Scholarships for qualified students. Gwendolyn Thomas is the long time administrator of Barrington, which has been in existence for approximately 25 years. Ms. Thomas is also the administrator of Barrington II, which has been in existence for approximately two years. For medical reasons, Ms. Thomas did not participate in the day-to-day operation of either school between October 2010 and November 2013. During her absence, Mack Brown, the assistant principal, was in charge of both schools until he left in June 2013 to start a competing school. Ms. Thomas has been in charge of the day-to-day operation of Barrington and Barrington II since November 2013. McKay Scholarship payments are disbursed on a quarterly basis.2/ Pursuant to sections 1002.39(8)(b) and 1002.421(2)(d), any private school participating in the McKay Scholarship Program is required to affirmatively verify to the Department of Education that each scholarship student is regularly enrolled in the school at least 30 days prior to the issuance of any quarterly scholarship payment. Pursuant to section 1002.39(9)(f), McKay Scholarship checks are made payable to the parent of a scholarship student, which only the parent can sign. Private school personnel cannot sign such a check on behalf of the parent, even with the parent’s permission. Prior to June 9, 2011, Student A was enrolled in Barrington and received a McKay Scholarship. On June 9, 2011, Student A left Barrington and has not been a student at Barrington since June 9, 2011. Between August 26, 2011, and August 23, 2013, nine checks, totaling $12,230.25, were issued to the mother of Student A pursuant to the McKay Scholarship Program. Those checks were issued on the following dates in the following amounts: August 26, 2011 $1,336.75 October 27, 2011 $1,336.75 January 24, 2012 $1,336.75 March 21, 2012 $1,336.75 August 21, 2012 $1,382.50 October 22, 2012 $1,382.50 January 23, 2013 $1,382.50 March 20, 2013 $1,382.50 August 23, 2013 $1,353.25 9. The back of each check contains an endorsement that appears to be the name of Student A’s mother. Student A’s mother did not sign any of these checks. Each check was signed by an employee of Barrington or Barrington II. Each check was deposited into an account owned by Barrington. For each of these payments, Barrington submitted documentation to the Department of Education that Student A was attending Barrington prior to the issuance of the payment, without verifying that Student A was in attendance. As noted above, Student A was not in attendance. On October 4, 2013, the Commissioner filed her Administrative Complaint against Barrington and suspended Barrington’s participation in the McKay and FTC Scholarship Programs. The Commissioner had information that Student A was not enrolled in Barrington and had probable cause to believe that Barrington Academy had engaged in fraudulent conduct.3/ Afterwards, many of the Barrington students were administratively transferred to Barrington II, and continued to receive scholarship payments. Prior to June 7, 2013, Student B was enrolled in Barrington II and received a McKay Scholarship. On June 7, 2013, Student B was taken into the custody of the DJJ and enrolled in a residential facility in Greenville, Florida. Student B was in the custody of DJJ until March 7, 2014.4/ Between September 25, 2013, and January 23, 2014, three checks, totaling $8,316.75, were issued to the mother of Student B pursuant to the McKay Scholarship Program. Those checks were issued on the following dates in the following amounts: September 25, 2013 $2,772.25 October 23, 2013 $2,772.25 January 23, 2014 $2,772.25 The back of each check contains an endorsement that appears to be the name of Student B’s mother. Student B’s mother did not sign any of these checks. Each check was signed by an employee of Barrington or Barrington II. Each check was deposited into an account owned by Barrington. For each of these payments, Barrington II submitted documentation to the Department of Education that Student B was attending Barrington II prior to the issuance of the payment, without verifying that Student B was in attendance. As noted above, Student B was not in attendance. On February 19, 2014, the Commissioner filed her Amended Administrative Complaint against Barrington and Barrington II and suspended their participation in the McKay and FTC Scholarship Programs. The Commissioner had information that Student B was not enrolled in Barrington II and had probable cause to believe that Barrington II had engaged in fraudulent conduct. Barrington has reimbursed the Department of Education for the McKay Scholarship payments made on behalf of Student A. Barrington II has deposited with its attorney sufficient funds to reimburse the Department of Education for the McKay Scholarship payments made on behalf of Student B. Although Ms. Thomas had returned as administrator when at least two of the McKay Scholarship payments at issue were processed by a school employee, she testified, credibly, that she had not authorized that action and was unaware of the misconduct before the Administrative Complaint and the Amended Administrative Complaint were filed. The persons responsible for the deficiencies discussed above have either voluntarily left their employment or have been fired. Barrington and Barrington II have hired a person to ensure compliance with McKay and FTC Scholarship Programs.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Education revoke the participation of Barrington Academy and Barrington Academy II in the McKay Scholarship Program and the FTC Scholarship Program. It is further RECOMMENDED that both schools be permitted to re- apply to participate in these programs after the Department of Education has been reimbursed for the scholarship payments made on behalf of Student B and after both schools demonstrate that they have personnel and written procedures that will ensure compliance with all applicable rules and statutory provisions. DONE AND ENTERED this 19th day of May, 2014, 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 19th day of May, 2014.
The Issue Whether the State of Florida, through its agencies, collected the money owed it by the Petitioner prior to receipt of a letter from her doctor certifying her disability.
Findings Of Fact On or about June 21, 1990, the Petitioner, Therese L. Hodge, applied for a student loan to pursue educational courses at Career City College in Gainesville, Florida. The loan applied for was a Stafford Loan, a student loan administered by the Department of Education (DOE) through the Office of Student Financial Assistance (OSFA). Under the Stafford Loan program, DOE through OSFA, serves as the guarantee agent performing its responsibilities in accordance with regulations promulgated by the United States Department of Education (USDOE). The essential elements and operation of the loan program are that a participating bank or financial institution agrees to make a loan to a student on the condition that the DOE will issue a written guarantee that it will repay the loan to the lender if the student defaults on the loan. When DOE repays a defaulted loan to the lender, DOE acquires the promissory note and the right to collect from the student. DOE is required by USDOE to pursue collection in order to receive reimbursement from USDOE of the amount paid to the lender. On or about July 7, 1990, OSFA issued its guarantee of a student loan to the Petitioner, and Florida Federal loaned her $1,213.00. While enrolled in her first term at college, the Petitioner suffered a stroke. The Petitioner was observed at the hearing and it was apparent that she had some moderate limitations on her ability to communicate, comprehend, and remember. Petitioner lives on Social Security disability income. Her brother- in-law, who had accompanied her to the hearing, assisted in presentation of Petitioner's case without objection from the Respondents. After the Petitioner defaulted on her student loan, the Petitioner won $5,000 in a Florida lottery game. The Petitioner made demand for payment of the prize money. The Department of Lottery checks winnings of more than $600 to determine if the winner owes any money to the State. In the course of its comparison, the Department of Lottery determined that the Petitioner owed the State money on the defaulted student loan. The Department of Lottery confirmed the indebtedness with the Department of Education, and it was determined that the Petitioner owed $1,231.98 including interest on the defaulted student loan. On January 9, 1993, the Department of Lottery forwarded the $5,000 to the Office of the Comptroller, and notified the Petitioner of her right to request a formal hearing to controvert the Department's collection of the indebtedness. On January 12, 1993, the Petitioner called the Department of Lottery and advised the Department that she was disabled. The Department forwarded to the Petitioner medical forms on January 20, 1993. Subsequently, the Petitioner's physician certified to the state that she was totally and permanently disabled. Documents introduced at hearing show that the Petitioner advised the lending bank on June 17, 1991 that she was disabled due to a stroke and unable to work. The bank sent the Petitioner medical forms in order for her to have her disability certified. The Petitioner did not return the forms due to her financial inability to obtain the required physical. After the Department of Education had repaid the student loan and had turned the matter over to a collection agency, the Petitioner advised the collection agency that she was disabled and the collection agency sent her medical certification forms which she did not have completed due to her financial inability. After she had won the lottery, the Petitioner had the medical certification forms which were forwarded to her by the Department of Education completed by a physician and these were returned to the State after the end of January, 1993 certifying that the Petitioner was totally and permanently disabled.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of the Comptroller return to the Petitioner the amount $1,231.98. DONE AND ENTERED this 16th day of June, 1993, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1993. APPENDIX TO RECOMMENDED ORDER CASE NO. 93-1218 The Petitioner's sister wrote a letter in the Petitioner's behalf which was read and considered, and is treated as a final argument. The Department of Education filed a proposed order which was read and considered. The following proposed findings were adopted, or rejected for the reason stated: Respondent's (DOE) Proposed Findings: Recommended Order: Paragraph 1-6 Adopted Paragraph 7 Irrelevant Paragraph 8 Adopted Paragraph 9 The Department was on notice of the Petitioner's disability. Total and permanent disability is a medical determination based upon medical certification. The lender was on notice of Petitioner's disability on June 17, 1991. The purpose of the bank sending Petitioner the medical forms was to confirm the medical determination. Paragraph 10-15 Adopted COPIES FURNISHED: Therese L. Hodge and 5855 West Wood Lawn Street Post Office Box 36 Dunnellon, FL 34433 Ocklawaha, FL 32179 Charles S. Ruberg, Esquire Department of Education 325 West Gaines Street Tallahassee, FL 32399-0400 Louisa Warren, Esquire Department of Lottery 250 Marriott Drive Tallahassee, FL 32301 Leslie A. Meek, Esquire Office of the Comptroller The Capitol, Room 1302 Tallahassee, FL 32399-0350 Gerald Lewis, Comptroller Department of Banking and Finance Tha Capitol Tallahassee, FL 32399-0350
The Issue The issues in these consolidated cases are as follows: (1) whether Respondents employed Lorene Walker, who had contact with scholarship students and who did not meet the requisite criteria to pass the Level 2 background screening as required by section 1002.421(1)(m) and (p), Florida Statutes (2019), and if so, what is the appropriate remedy; and (2) whether Respondents engaged in fraud in violation of section 1002.421(3)(d) and, if so, whether Petitioner should revoke Respondents' participation in several Florida Scholarship Programs.1
Findings Of Fact Parties, People, and Programs The Department is the government agency charged with administering numerous state scholarship programs pursuant to section 1002.421, Florida Statutes. The Department operates or has administrative responsibilities for the Gardiner Scholarship Program, the John M. McKay Scholarships for Students with Disabilities Program, the Florida Tax Credit (FTC) Scholarship Program, and the Family Empowerment Scholarship Program. See §§ 1002.385, 1002.39, 1002.394, and 1002.395, Fla. Stat. The Gardiner, McKay, FTC, and Family Empowerment scholarships defray tuition and other qualified educational expenses for eligible students who attend charter, private, or other eligible schools in the state of Florida. The Department also operates or administers the Hope Scholarship Program, which provides tuition assistance to victims of school bullying so that they can enroll in another school. See § 1002.40, Fla. Stat. The scholarship funds are awarded to eligible students to be used at eligible schools. The Commissioner is the agency head of the Department and has the authority to revoke or suspend a school's eligibility to receive scholarship monies on behalf of eligible students. The Independent Education and Parental Choice Office, also referred to as the School Choice Office (Office), is a section of the Department which oversees several school choice options outside Florida's public school system. The Office also oversees the administration of various scholarships programs under chapter 1002. The Office is in regular contact with schools that participate in these scholarship programs. Respondents have been operating as private schools for approximately six years. Since the 2013/2014 school year, they have been found eligible and participated in numerous scholarship programs pursuant to section 1002.421. Respondents operate two campuses: (1) School Code No. 4015 located at 1056 North Pine Hills Road, Orlando, Florida (Pine Hills Campus); and (2) School Code No. 8827 located at 5308 Silver Star Road, Orlando, Florida (Silver Star Campus). The Schools serve 40 to 50 scholarship students and receive approximately $200,000 per year in scholarship funds. Judith Shealey is the owner of the Schools. She carries the title of Executive Director, Principal, Headmistress, and/or Owner. Ms. Shealey has family members who are students and teachers at the Schools. Compliance Requirements As explained by RaShawn Williams, the Office, parents, and eligible schools work closely together to access the scholarship funds. The parents apply for the scholarships through the designated agency and enroll their students directly with an eligible school. The school is responsible for enrolling the student in the scholarship program awarded to that student. Essentially, the student must be deemed eligible to receive scholarship funds, and the school must be eligible to receive those scholarship funds. If a private school is deemed ineligible by the Office for participation in a scholarship program, the students at that school do not lose their eligibility for scholarship funds. Rather, they simply cannot use those funds to enroll in the ineligible school. As private school participants in the Florida Scholarship Programs, the Schools were required to register with the State through the submission of a Private School Annual Survey; and then apply for eligibility through the submission of a yearly Scholarship Compliance Form (Compliance Form). The Compliance Form specifies numerous governing statutory requirements including: (1) submitting background screenings for officers, directors, or other controlling persons; (2) certifying all staff with direct student contact have passed an FDLE Level 2 background screening; and (3) terminating or denying employment to all persons who cannot meet this requirement. The Compliance Form is completed by applicant schools online, and then a signed and notarized hard copy is mailed to the Office. The relevant portions of the Compliance Form are found in "Section 4," and involve background checks: * Has each Owner, Operator, and Chief Administrative Officer undergone a Level 2 background screening through the Florida Department of Law Enforcement and submitted the results to the Florida Department of Education in accordance with section 1002.421(1)(m), Florida Statutes? (Reports must be filed with the private school and made available for public inspection). * * * * Have all employees and contracted personnel with direct student contact submitted their fingerprints to the Florida Department of Law Enforcement for state and national background screening in accordance with section 1002.421(1)(m), Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school deny employment to or terminate an employee or contracted personnel with direct student contact if he or she fails to meet the background screening standards under section 435.04, Florida Statutes? * In accordance with section 1002.421(1)(m), Florida Statutes, does the school disqualify instructional personnel and school administrators from employment in any position that allows direct contact with students if the personnel or administrators are ineligible under section 435.40, Florida Statutes? A "No" answer on any of the above questions would, if unresolved, result in a private school's ineligibility for scholarship funds. The evidence establishes that the Schools answered "Yes" for sections 4A, 4C, 4D, and 4E on the notarized Compliance Forms that were submitted on December 18, 2018, and December 11, 2019. In addition to certifying the information above on the Compliance Forms every year, an eligible school must submit to the Office screening documentation for directors, principals, board members, administrators, and officers as part of the renewal of participation in the scholarship programs. Screening documentation related to other employees must be maintained by the schools and is usually only reviewed by the Office during an audit or a site visit of the school. There is no dispute that the Schools never listed Lorene Walker as an administrator for the Schools. There is no dispute the Schools never submitted any background screening information for Ms. Walker until specifically requested by the Office in November 2019. Employment of Lorene Walker Lorene Walker was hired by the Schools in 2013.3 She had children and/or grandchildren who attend the Schools. The Schools claim Ms. Walker was hired from an entity known as "Career Source." Although Ms. Walker believed that she had been cleared to work at the Schools, there is no employment file or documentation that she had undergone the Level 2 background screening required by law before being employed at the Schools. Originally, Ms. Walker worked as a "floater." As a floater, Ms. Walker cooked, cleaned, and did whatever the school needed at the time. It is unclear whether she had direct contact with students in this position. 3 Ms. Walker testified she began working there in 2015, but later stated she started in 2013. Ms. Shealey indicated by 2014, Ms. Walker had transitioned into the current position. Regardless, in 2014, Ms. Walker transitioned into a more active role at the Schools. Although the Schools claim in response to the Complaints that she was simply an administrative assistant to Ms. Shealey, the evidence establishes that Ms. Walker was the Administrator for the Schools during the time relevant to the Complaints. She reminded teachers to send out grades, attended meetings, oversaw the lunch program, and prepared school-related and financial documentation. Ms. Walker was also responsible for the Schools' students' enrollment into the scholarship programs. As Administrator, Ms. Walker also had authority, either explicit or implicit, from the Schools' owner, Ms. Shealey, to represent the Schools when dealing with the Office. She worked directly with Ms. Williams on compliance issues, including fire safety, health inspections, and completion of the Annual Survey and Compliance Form for the Schools. Ms. Walker also responded to requests for information from Ms. Williams and others in the Department. It was clear Ms. Walker was integral to the operation of the Schools. Ms. Shealey and Ms. Walker were the only two individuals with access to the Schools' email accounts that were used to correspond with the Department. The emails from one of the email addresses usually contained Ms. Shealey's signature block indicating either the title of "Principal" or "Headmistress." Ms. Walker's signature line identified her title as "Administrator." Before being hired by the Schools, Ms. Walker had been arrested for numerous offenses between 1978 and 2001 in Florida. Although most of these offenses were dismissed, dropped, and/or abandoned, she pled nolo contendere to and was found guilty of a 1994 charge for unlawful purchase of a controlled substance, a second-degree felony in violation of section 893.13, Florida Statutes (1993). The 1994 charge is a disqualifying offense which rendered Ms. Walker ineligible to be a school employee.4 There was no evidence that Ms. Walker had obtained an exemption for this qualification. As noted above, the Schools never disclosed Ms. Walker's importance in their operations in their Compliance Forms. Prior to November 2019, the Schools had never provided any screening documentation for Ms. Walker to the Office as part of the yearly compliance process. Investigation and Complaints On or around October 14, 2019, the Department received a complaint from another state agency concerning possible abuse by an employee of the School at the Pine Hills campus. Although the abuse investigation was handled outside of the Office, the Office opened an inquiry into the Schools' compliance with background check requirements and other issues. Whitney Blake conducted the investigation on behalf of the Office. The first step in this inquiry was a letter from Ms. Blake's supervisor, dated October 25, 2019, requesting (among other things) a list of all employees (including both teachers and other personnel) and results of current FDLE Level 2 background screenings for all employees. 4 Section 435.04, Florida Statutes, provides the following in relevant part: (2) The security background investigations under this section must ensure that no persons subject to the provisions of this section have been arrested for and are awaiting final disposition of, have been found guilty of, regardless of adjudication, or entered a plea of nolo contendere or guilty to, or have been adjudicated delinquent and the record has not been sealed or expunged for, any offense prohibited under any of the following provisions of state law or similar law of another jurisdiction: * * * (ss) Chapter 893, relating to drug abuse prevention and control, only if the offense was a felony or if any other person involved in the offense was a minor. On November 4, 2020, Ms. Walker sent the Department a list of all the Schools' staff, including herself as "Administrator," along with the results of her background screening, revealing her previous disqualifying offense. On November 15, 2019, Ms. Blake attempted to contact Ms. Shealey by phone because she was concerned that Ms. Walker, who was the disqualified employee, was the person sending the information from the School. When she called the Schools and requested to speak with the owner (Ms. Shealey), the person who answered purportedly claiming to be the Schools' owner did not have a distinguishable accent. Ms. Shealey was known to have a strong accent, whereas Ms. Walker did not. Regardless, on this call, Ms. Blake instructed the person on the other end of the phone line that the Schools would need to terminate Ms. Walker immediately because of her disqualifying offense. On that same day, Ms. Blake then sent a follow-up email to the Schools (at both email addresses utilized by the Schools) indicating there were outstanding items that had not been provided as requested in the October 25 letter. She also specifically requested proof Ms. Walker was no longer at the Schools. Specifically, the Department stated: Upon review of the Level 2 background screenings, it was determined Lorene Walker has disqualifying offenses pursuant to section 435.04, F.S. An employee or contracted personnel with direct student contact means any employee or contracted personnel who has unsupervised access to a scholarship student for whom the private school is responsible. To certify compliance with this requirement, please submit a signed statement indicating Lorene Walker's employment at your school has been terminated or that individual's role with your school no longer puts he/she in proximity to scholarship students. Your attention to this in the next five days will preempt any further action on our part. (emphasis added). That same date, November 15, 2019, the Schools emailed one of the items requested by Ms. Blake, an abuse poster, to the Office. Although Ms. Walker testified she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. On November 18, 2019, the Schools sent another item previously requested by Ms. Blake, the teaching qualifications for a teacher, to the Office. Again, although Ms. Walker claimed she did not send the email, it had her signature block and was from one of the Schools' two email accounts to which she had access. The undersigned finds Ms. Walker sent this email to Ms. Blake. Ms. Blake did not receive any proof that the Schools had removed Ms. Walker from her position within five days as requested in the November 15 email to the Schools. As a result, on November 22, 2019, Ms. Blake emailed the Schools reiterating the requirements of section 1002.421, and repeating her request for a signed statement that Ms. Walker had been terminated or had no contact with scholarship students. Ms. Blake also added: "Failure to turn in the requested documentation could impact your school's ongoing participation in the Scholarship Program." During this time, Ms. Blake spoke to Ms. Shealey numerous times on the phone regarding the outstanding requests related to another teacher and the signed documentation that Ms. Walker had been removed from her position. Ms. Shealey indicated it would be difficult to remove Ms. Walker due to Ms. Walker's oversight of the school and her familiarity with the scholarship student information. After Ms. Blake did not receive the requested proof of Ms. Walker's removal from the Schools and two other items related to a teacher, the Office issued a Notice of Noncompliance on December 5, 2019. On December 19, 2019, Ms. Shealey sent to Ms. Blake one of the outstanding items related to the teacher by email. There was no mention of Ms. Walker and no signed proof that Ms. Walker had been removed from her position. The next day, Ms. Blake wrote an email to Ms. Shealey indicating that she did not have authority to exempt Ms. Walker from the background screening requirements. She again asked for the outstanding information related to the other teacher and a signed statement indicating Ms. Walker had been removed and no longer had proximity to scholarship students. On December 23, 2019, Ms. Shealey emailed Ms. Blake that the teacher for which there was an outstanding request had resigned and no longer worked for one of the Schools. Ms. Blake responded with yet another request for the signed statement indicating Ms. Walker had been terminated or was no longer in proximity to scholarship students. In response, Ms. Shealey sent an email to Ms. Blake with an attached letter. The letter titled "Termination of your employment" and dated December 9, 2019, indicates that Ms. Shealey terminated Ms. Walker during a meeting held on December 9, 2019. The letter is unsigned. Ms. Shealey indicated in the text of the email that it was the hardest letter she had to write. Being concerned that they had not received a signed statement, Ms. Blake and Ms. Williams requested that a site visit be conducted at the Pine Hills Campus. A visit was scheduled for February 5, 2020, and the Schools were provided notice of the site visit by certified mail, email, and telephone. Additionally, the Schools were provided a checklist of the documents that should be provided to the inspector during the site visit. On February 5, 2020, Scott Earley from the Office conducted the site visit at the Pine Hills Campus. When he arrived, Ms. Shealey was not there and none of the documentation previously requested had been prepared for review. Mr. Earley testified that once Ms. Shealey arrived, she did not know where all the requested documents were, nor could she produce all of them. For example, when asked about a necessary health form, Ms. Shealey indicated that Ms. Walker would know where the document was, but she could not locate it. Mr. Earley did not recall Ms. Shealey stating during the inspection that Ms. Walker was working from home, but she gave Mr. Earley the impression that Ms. Walker's background screening issue had been resolved. Regardless, the Site Visit Staff/Consultant Worksheet filled out for the February 5 site visit does not disclose Ms. Walker as a member of staff or contracted personnel with the Pine Hills Campus. Although Ms. Walker was not at the Pine Hills Campus during the site visit, Mr. Earley believed based on his observations and conversations with Ms. Shealey that Ms. Walker was still employed by the Schools as a director or principal. Almost two weeks later on February 20, 2020, Petitioner filed the Complaints against the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. Even after the Complaints had been served on the Schools, however, it was unclear what Ms. Walker's involvement was with the Schools. There may have been some confusion because Ms. Walker had been seen after her purported termination on campus. Ms. Walker claimed she was on campus only to pick up her children and grandchildren. Testimony from two of the Schools' teachers indicated that they noticed Ms. Walker was no longer at the Schools, but knew she was taking care of the Schools' paperwork from her home. Neither teacher could establish a date certain for when Ms. Walker stopped working on campus and/or when she began working at home. Prior to the filing of the Complaints in these proceedings, there was no evidence that the Schools ever reported to the Office that Ms. Walker had been working from home. Nothing in the Petition filed on March 4, 2020, indicates Ms. Walker was still employed at the Schools. It was not until March 11, 2020, in response to the Complaints that the Schools submitted for the first time a signed copy of a termination letter dated December 9, 2020. As part of the March 11 submission, Ms. Shealey sent a signed statement indicating she had not terminated Ms. Walker, but rather "had her work from home." This was the first time Ms. Shealey indicated to the Office that Ms. Walker was still working for the Schools. In the Motion filed April 10, 2020, the Schools indicated they were unaware of the specifics of the Level 2 background screening requirement, and that, once aware, "we took action immediately and terminated the employee in question." There was no indication in the body of the Motion the Schools continued to employ Ms. Walker to work at her home. Attached to the Motion, however, was the same letter submitted on March 11 indicating Ms. Walker was working from home. In the Amended Petition filed on May 15, 2020, the Schools state Ms. Walker was terminated: "I terminated Ms. Lorene Walker due to the Department's information in order to come into compliance with the Florida Department of Education." "I rectified this deficiency by terminating Ms. Walker." "Ms. Lorene Walker was terminated on December 9, 2019, as advised by Whitney Blake." Although the Amended Petition does not explicitly state Ms. Walker continued to work for the Schools at home, it does leave room for this interpretation: "As of December 9, 2019, Ms. Lorene Walker no longer works in the Lion of Judah facility." It is unclear on what date Ms. Walker stopped working from home for the Schools. What is clear is that at the time of the final hearing she was no longer working at the Schools in any location or in any capacity. ULTIMATE FACTUAL DETERMINATIONS The greater weight of the evidence establishes Ms. Walker, in her role as Administrator, should have been disclosed to the Office as an "operator" or "a person with equivalent decision making authority." The Schools were required to send her background screening documentation to the Office as required by the Compliance Form and section 1002.421(1)(p), and they did not. The Schools employed a person with a disqualifying offense in violation of sections 1002.421(1)(m) and 435.04(2)(ss). Specifically, the Schools employed Ms. Walker from 2014 (if not earlier) through December 2019 (if not later) in a position in which she was in the vicinity of scholarship students, knowing that she had been found guilty of a felony and without obtaining or providing documentation related to a Level 2 background clearance. The Schools continued to allow Ms. Walker to remain in a position that placed her in the vicinity of scholarship students after receiving notification of her ineligibility for almost a month (if not more). The greater weight of the evidence establishes the Schools engaged in fraudulent activity, to wit: (1) Ms. Shealey falsely represented to the Office that the Schools complied with Section 4 of the Compliance Form for 2018 and 2019; (2) the Schools falsely obscured Ms. Walker's role at the School and her criminal background; and (3) the Schools failed to honestly disclose Ms. Walker's employment status when they claimed to terminate her on December 9, 2020, but failed to inform the Office that they had retained (or rehired) her to work at home. The Schools made these statements of material fact either knowing they were false or in reckless disregard of the truth or falsity of the representations, which were false.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner enter a final order (1) upholding the suspension; and (2) revoking the eligibility of Lion of Judah Academy (4015) and Lion Of Judah Academy (8827) to participate in the following Florida Scholarship Programs: John M. McKay Scholarships for Students with Disabilities Program, Florida Tax Credit Scholarship Program, Gardiner Scholarship Program, Hope Scholarship Program, and/or Family Empowerment Scholarship Program. DONE AND ENTERED this 3rd day of November, 2020, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 November, 2020. COPIES FURNISHED: Jason Douglas Borntreger, Esquire Department of Education Suite 1544 325 West Gaines Street Tallahassee, Florida 32310 (eServed) Judith Shealey Lion of Judah Academy 1056 North Pine Hills Road Orlando, Florida 32808 Shawn R. H. Smith, Esquire Law Office of Shawn R. H. Smith, P.A. Post Office Box 547752 Orlando, Florida 32854 (eServed) Chris Emerson, Agency Clerk Department of Education Turlington Building, Suite 1520 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Matthew Mears, General Counsel Department of Education Turlington Building, Suite 1244 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed) Richard Corcoran Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 (eServed)
Findings Of Fact Petitioner, Allied Marine Group, Inc., d/b/a Stuart Hatteras, Ltd. (Allied), is the largest dealer in new and used yachts in Florida. Its Dealer Registration Number is 16-03-232. It has 175 employees and sells yachts that range in price from $100,000 to $9,000,000. In 1993 Allied sold in excess of 300 yachts and realized gross sales of $60,000,000. The yacht sales business is very competitive. Allied's sales and marketing departments target the well-to-do who can afford expensive yachts and enjoy fishing and pleasure cruising. The target group subscribes to yachting magazines, visits boat shows, attends cruising activities, and participates in fishing tournaments. To reach these individuals in these activities, Allied spent $585,000 advertising in magazines including publishing its own magazine, "Makin Wake," $166,000 participating in boat shows, and $155,000 participating in fishing tournaments and other promotions for the fiscal year ending October 31, 1993. Allied's Vice President of Sales and Operations, Tom Sanders, and salesman Chris Cunningham actively market the sale of Allied's yachts by participating in fishing tournaments and boat shows because that is where the buyers are. Fishing tournaments and boat shows are "selling events" to Allied. Neither Mr. Sanders nor Mr. Cunningham was of the opinion that Allied could remain competitive in the yacht sales business by simply displaying vessels at showrooms and waiting for customers to come. Most yacht sales are made to customers who have purchased yachts in the past. The selling of a yacht is a process that involves many contacts with a customer before the customer actually makes a purchase. Customers rarely buy million dollar vessels on the spot. Purchasers of fishing yachts like to purchase from dealers who are knowledgeable about fishing. Participation in fishing tournaments and outfitting inventory boats for fishing is a way of showing a vessel's capabilities to potential purchasers and Allied's knowledge of fishing vessels. Allied often enters fishing tournaments to demonstrate the capabilities and amenities of its yachts to prospective purchasers for the ultimate purpose of selling the yacht entered and increasing overall sales. It outfits the vessel with elaborate decor and fishing equipment to attract customers. The salespersons participate in the fishing portion of the tournament in order to get access to the tournament functions where they can meet prospective purchasers at the captains' meetings, at the fish weigh-ins and other gatherings before and after each day's fishing, and at the awards ceremony at the end of the tournament. In addition to promoting the sale of the vessel entered, Allied and other dealers enter and sponsor fishing tournaments to give their salespersons opportunities to meet with potential purchasers and to keep the name of their products, company and salespersons in the public eye. Salespersons sell yachts by networking, that is, developing and maintaining one-on-one contacts with prospective purchasers. Salespersons make and maintain contacts by referrals from other customers, by hosting parties and by frequenting boat shows, fishing tournaments and other events that boat enthusiasts attend. There are different sizes and types of fishing tournaments, and a dealer's participation may vary depending on the tournament. Allied sometimes participates in fishing tournaments by providing a crew to actually fish. When a dealer enters a vessel in a fishing tournament, the fishing element is secondary to the opportunity the tournament presents for the dealer's salespeople to make contact with potential purchasers. The main reason Allied enters its yachts in fishing tournaments is to sell the yachts entered in the tournaments and to promote Allied as a dealer in vessels made for fishing. Yacht owners that see new models at fishing tournaments often trade up to that model or newer or larger vessels. Allied promotes its yachts and its business at fishing tournaments in the same manner as it does at boat shows: by displaying its products and by sending its salespersons to mingle with the attendees, to pass out business cards, and to provide information about its products and services. Allied always stocks yachts participating in fishing tournaments with literature concerning the particular vessel and the dealership including brochures about its yachts, specification sheets for the particular yacht, and business cards of the salespersons. Allied does not have any yachts, in inventory or otherwise, that are designated as demonstrators. Vessels that are outfitted and decorated to participate in particular boat shows or fishing tournaments are always for sale to customers during or after the event. In October, 1992 Tiara Yachts delivered a 43 foot sport fishing vessel to Allied for resale. The yacht is described as a 4300 Tiara Convertible and was delivered to Allied's Fort Lauderdale marina. Between October, 1992 and May 27, 1993, Allied displayed the vessel (the Tiara) at its marina showrooms in Fort Lauderdale, Stuart, and West Palm Beach. The Tiara was held by Allied as part of inventory for resale to customers and was so reflected on Allied's accounting books and records. The Tiara was floor plan financed, meaning the manufacturer loaned Allied 95 percent of the cost of purchasing the vessel and maintained a security interest in the vessel until its resale to a customer. The manufacturer made periodic and unannounced checks of Allied's inventory to verify that the vessel was actually in Allied's possession at one of its facilities and held for resale. On May 14 and 15, 1993, the Arthur Smith, Kingfish, Wahoo and Dolphin Fishing Tournament (the Tournament) was held in Palm Beach County. It is a large tournament which draws about 600 participants. Allied paid the $300 Tournament entry fee, hired a crew, provided the Tiara, and paid for all supplies. These expenses were charged to Allied's "Tournament and Promotion" account on its general ledger. Allied listed the Tiara on the Tournament entry form as the vessel to be used in the Tournament. The participants listed were Edward Sweigart, Chris Cunningham, Monty Braune, Jim Neill, Bob Wimmer, and Kimberly Kern. Allied's address in West Palm Beach was listed as the address for each participant; however, Allied's name was not referenced on the entry form. Allied did not obtain advertising in any medium prior to, during, or after the Tournament to announce the vessel's participation in the Tournament. Allied was not a Tournament sponsor and did not donate any prizes to the Tournament. No banners, flags, or pennants with Allied's name were displayed either on land or on the Tiara during the Tournament. The transom of the Tiara was marked with the vessel's make-and-model number, which read, "4300 Tiara Convertible." All rods and reels used on the vessel during the Tournament were the personal property of Allied's salesman Chris Cunningham. At no time was there a known prospective buyer present, either on land or upon the vessel, during or after the vessel's participation in the Tournament. Participation in the Tournament included fishing from the vessel by various participants. The participants on May 14 included Allied employees: Chris Cunningham, salesman; Monty Braune, yard worker; Edward Sweigart, boat washer; as well as non-employees; Ed Steffes; and Sweigart's girlfriend, Kimberly Kern. The participants on May 15 included Allied employees, Sweigart, Braune, and David McGee, service manager; as well as non-employees Steffes, Michael McGee and Bobby Wimmer. The attire of the May 14 participants was, in part, as follows: Sweigart wore a polo shirt bearing the "Tiara" logo; Cunningham and Kern wore "Palm Beach Hatteras" t-shirts; Steffes and Braune wore t-shirts without logos. The attire of the May 15 participants was in part, as follows: Sweigart wore a polo shirt bearing the "Tiara" logo; Braune wore a "Stuart Hatteras" shirt; David McGee, Michael McGee and Steffes wore shirts with no logo and Wimmer wore a "Hatteras of Palm Beach" t-shirt. At the Tournament, the weigh-in location for the larger boats (including the Tiara) was at a park where there were no facilities to dock the Tiara for display either before or after the day's fishing. Tournament participants weighing their fish at the park were required to pull up to the dock, off-load their catches and depart so that other participants could come to weigh their fish. Mr. Cunningham got off the Tiara at the weigh-in location and remained there to mingle with prospective purchasers while the captain and crew returned the Tiara to Soveral Marina where it was available for boarding by prospective purchasers. Soveral Marina was located approximately ten minutes or five miles away from the weigh-in location. Allied would have preferred to dock the Tiara at the Tournament location for easier access by prospective purchasers. Because this was not possible, displaying the Tiara at nearby Soveral Marina was a good alternative for making the yacht available to potential customers. Mr. Cunningham knew that some of his customers would be attending the Tournament and might be interested in the Tiara. He attended the Tournament's captains' meetings, weigh-ins and other gatherings and the awards ceremony at the end of the Tournament. During the Tournament gatherings Mr. Cunningham handed out business cards and brochures describing the Tiara. For catching the largest dolphin, Edward Sweigart was awarded a prize which consisted of cash, a boat, an outboard motor, and a boat trailer. The following participants were on stage during the May 16 awards presentation after Mr. Sweigart caught the biggest dolphin of the tournament: Mr. Sweigart, wearing a "Tiara" logo shirt; Mr. Cunningham, wearing a "Palm Beach Hatteras" shirt; and Ms. Kern, wearing a "Palm Beach Hatteras" shirt. Immediately after the Tournament, Mr. Sweigart took the prize boat and a dispute arose between Allied and Mr. Sweigart over who was entitled to the prize which culminated in a lawsuit by Allied against Mr. Sweigart. A newspaper article was published criticizing Allied for trying to recover the prize from Mr. Sweigart. The negative publicity surrounding Allied's participation in the Tournament caused Allied to downplay its participation in the event. As a result of the newspaper article, Steve C. Brown, Senior Tax Specialist with the Department of Revenue's (Department) Boat Enforcement Unit, conducted an investigation into Allied's entry and participation in the Tournament. Twelve days after the Tournament, on May 27, 1993, the vessel was sold to Mr. Arthur Levitan for the sum of $506,727.80. Mr. Levitan was not at the Tournament nor did he know the vessel had been in the Tournament. Six percent sales tax of $26,727.30 along with a luxury tax of $34,504.50 was collected from Mr. Levitan. The sales tax was paid to the Department of Revenue. As a result of Mr. Brown's investigation, the Department issued a Notice of Final Assessment for Tax, Penalty, and Interest Due on a Boat, dated January 18, 1994, for use tax in the amount of $27,000, plus a late filing penalty of $13,500 and interest as of January 18, 1994 of $1,801.50, which totaled $42,301.50. Allied protested the Assessment in a Petition for Reconsideration, dated February 7, 1994, in which it alleged: that the vessel was operated on behalf of Allied as part of its promotional activities and to expose the vessel to potential buyers. Allied further alleged that no use tax was due because the vessel was at all times part of Allied's inventory for sale to customers; that such use is consistent with the vessel being offered for resale and being maintained in inventory and that entry of the vessel into the tournament was at all times solely for the purpose of promoting the sale of this vessel, Tiara Yachts, and Allied. It was also alleged that there are no rules or statutes that support the Department's assessment of use tax for vessels for resale. The Department rejected the facts and arguments in the Petition and upheld the Assessment in a Notice of Reconsideration, dated July 7, 1994, in which it concluded that the vessel was: removed from inventory and used in an activity inconsistent with it being offered for resale; that such "use" of the vessel fell within the statutory language of Section 212.02(20), Florida Statutes; that the use of a vessel held in inventory for resale and used in the manner set forth in the facts of this case constitute a taxable use, as there is no rule or statute that allows a dealer an exemption for such use. The Department's Special Programs Unit is charged with collection and enforcement of sales and use tax, especially with respect to boats. The Special Programs Unit was created by L. Lamar Gay in 1983 and was headed by Mr. Gay from its creation through June, 1989. Mr. Gay developed the policy for the unit and was responsible for hiring Steve Brown in November of 1980. From the inception of the Special Programs Unit through Mr. Gay's tenure as an assistant bureau chief and head of that unit, the Department's interpretation of the term "use" for use tax purposes was that it did not include participation of an inventory vessel in a fishing tournament. According to Brown, it is presently the policy of the Department that the promotion of vessels at boat shows by dealers is not a taxable use. The Department has not issued use tax assessments to dealers participating in boat shows.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered assesing Allied Marine Group, Inc., for payment of use tax in the amount of $27,000 plus interest incurred as a result of the participation of one of its inventoried vessels in the Arthur Smith, Kingfish, Dolphin and Wahoo Fishing Tournament of May 14-15, 1993. DONE AND ENTERED this 19th day of November, 1996, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1996. COPIES FURNISHED: Albert J. Wollermann, Esquire Mark T. Aliff, Esquire Office of the Attorney General The Capitol - Tax Section Tallahassee, Florida 32399-1050 Craig D. Olmstead, Esquire Jane W. McMillan, Esquire Kelley, Drye and Warren 201 South Biscayne Boulevard, Suite 2400 Miami, Florida 33131 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
