01-002598PL Department Of Business And Professional Regulation, Board Of Accountancy vs. Robert Jarkow Status: Closed Recommended Order on Tuesday, December 4, 2001.

Summary: Delay in prosecuting case did not prejudice Respondent and does not support laches. If anything, Respondent benefited from lack of witnesses.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

BOARD OF ACCOUNTANCY, )

)

Petitioner, )

)

vs. ) Case Nos. 01 - 2597PL

) 01 - 2598PL

ROBERT JARKOW, )

)

Respondent. )

____________________________ _____)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in

this case by video teleconference on September 11, 2001,

with the parties appearing from Miami, Florida, before J.

D. Parrish, a designated Administrative Law Judge of the

Divisio n of Administrative Hearings.

APPEARANCES

For Petitioner: Charles F. Tunnicliff, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahass ee, Florida 32399 - 2202

For Respondent: Victor K. Rones, Esquire

Law Offices of Rones & Navarro

16105 Northeast 18th Avenue

North Miami Beach, Florida 33162

STATEMENT OF THE ISSUE

Whether the Resp ondent committed the violations

alleged in the A dministrative C omplaint dated February 5,

1999, and, if so, what penalty should be imposed. The

Respondent maintains that the instant action is barred by

laches and violates Section 455.225, Florida Statutes .

PRELIMINARY STATEMENT

On February 5, 1999, the Petitioner, Department of

Business and Professional Regulation (Department) on

behalf of the Board of Accountancy filed an

Administrative Complaint against the Respondent, Robert

Jarkow. The complaint alle ged that the Respondent had

violated Florida law in connection with accounting work

performed for Sound Advice, Inc. Respondent disputed the

allegations of fact in that matter and requested a formal

hearing. When the case was referred to the Division of

Administrative Hearings for formal proceedings it was

assigned DOAH Case No. 01 - 2597PL.

A second case, DOAH Case No. 01 - 2598PL, was also

referred to the Division of Administrative Hearings

regarding this Respondent. The Administrative Complaint

in DOAH Ca se No. 01 - 2598PL was also filed by the

Department on February 5, 1999. The two counts of this

case alleged violations stemming from accounting work

performed for an individual named Kasman who operated a

company known as "Traditions Workshop, Inc."

The two cases were consolidated for hearing by order

entered July 16, 2001. Thereafter the matter was

scheduled for final hearing.

At the hearing, the Petitioner announced its

intention to dismiss the allegations found in DOAH Case

No. 01 - 2597PL. According ly, that case is hereby closed.

All findings therefore relate to the allegations

found in DOAH Case No. 01 - 2598PL. The evidence has been

considered only as to issues set forth in that case.

The Petitioner presented testimony from Thomas

Reilly, a certifie d public accountant who was accepted as

an expert in accounting and auditing; and Marlyn Felsing,

also an expert in accounting. The Petitioner's E xhibits

numbered 1 and 2 were admitted into evidence.

The Respondent testified in his own behalf.

Responden t's E xhibits numbered 1 and 2 were admitted into

evidence.

Official recognition has been taken of the

provisions of Chapter 61H1, Florida Administrative Code,

as well as the Codification of Statement on Standards for

Accounting and Review Services (SARS) as referenced by

the parties.

The transcript of the proceedings was filed on

October 18, 2001. T hereafter, the Petitioner requested

additional time to file a Proposed Recommended Order.

Such motion was granted by order entered October 24,

2001. Petitio ner's second motion for an extension of

time to file a proposed order is hereby granted.

The parties filed proposed orders that have been

fully considered in the preparation of this Recommended

Order. The Petitioner's proposed order was filed with

the D ivision of Administrative Hearings on November 9,

2001.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the

responsibility of regulating the practice of certified

public accountants licensed within the state.

2. At all times material to t he allegations of this

case, the Respondent, Robert Jarkow, has been licensed in

Florida as a certified public accountant, license number

AC0010963.

3. On or about December 1996, the Respondent orally

agreed to provide accounting services for an individua l

named Kasman who was doing business as Traditions

Workshop, Inc. (Traditions).

aditions manufactured uniforms and listed the

federal government among its clients. Revenues to the

company from the sale of uniforms were presumably posted

in accordan ce with written contracts.

5. Although the Respondent participated in the

monthly completion of financial records for the company,

the exact description of his responsibilities for the

company and the individual are not known.

6. It is undisputed tha t Ms. Kasman asked the

Respondent to provide a financial statement for the

company as part of an effort to secure a line of credit

from a bank in New York. It is also undisputed that Ms.

Kasman refused to pay for the statement. According to

the Responden t, based upon that refusal, he declined to

prepare the instrument.

7. Nevertheless, a document entitled "Financial

Statements" was generated with a notation "MANAGEMENT USE

ONLY - NOT FOR DISTRIBUTION." The Respondent maintains

that the document was not prepared as a financial report

and that if generated using his data disk it was done

without any intention on his part for the product being

used to secure a line of credit.

8. The document did not comply with provisions of

accounting practice.

9. The Re spondent admitted that when his

relationship with the party deteriorated, and payment for

services was not rendered, he did not release information

to a succeeding accountant.

10. Ms. Kasman needed the information, depreciation

schedules, in order to ac curately complete tax records

for Traditions.

11. The Respondent attempted to locate Ms. Kasman

and her bookkeeper for hearing but was unable to do so.

12. Ms. Kasman filed a complaint with the

Petitioner against the Respondent that was not

investigate d until several months after it was filed.

The Respondent obtained a civil judgment against

Traditions for unpaid accounting fees.

13. The Administrative Complaint filed in this case

was submitted over a year after the consumer complaint.

14. Neither party presented testimony from the

complainant, her bookkeeper, or her succeeding

accountant.

CONCLUSIONS OF LAW

15. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter

of these proceedings. Section 120.57, Florida Statutes.

16. The Petitioner bears the burden of proof in

this case to establish by clear and convincing evidence

the violations alleged to have been committed by this

Respondent. While the Petitioner has established that

the documents evidence violations of the SARS and rules

of the administrative code, there is insufficient

evidence to attribute the violations to the Respondent.

Since the Respondent's relationship to the complainant

and Traditions was based on an oral agreement, it cannot

be c oncluded that the Respondent erroneously completed

work for that entity. The work submitted did contain

incomplete and erroneous accounting information as

alleged by the Petitioner but such errors cannot wholly

be attributed to the Respondent. The violat ions

demonstrated on the "financial statement" cannot be

attributed to the Respondent since he maintains he was

not retained to create a financial statement. The

contradictory testimony does not meet the burden of proof

as to Count I of the Administrative Complaint.

17. As to Count II, the Respondent has admitted

that he failed or refused to provide the depreciation

schedules to the succeeding accountant.

18. Rule 61H1 - 23.002, Florida Administrative Code,

provides in part:

(1) A licensee shall furnis h to a

client or former client within a

reasonable time after request of the

document the following if they are in

the licensee's possession or control

at the time of the request: Any

accounting or other records belonging

to the client which the licensee m ay

have had occasion to remove from

client's premises, or to receive for

the client's account, including

records prepared as part of the

service to the client which would be

needed to reconcile to the financial

statements or tax return prepared and

issued by the certified public

accountant. If the tax return or

financial statement has not been

issued, the certified public

accountant must only return records

received from the client, but this

shall not preclude the licensee from

making copies of such docume nts when

same form the basis of work done by

the licensee.

2) This rule shall not preclude a

licensee from making reasonable

charges for costs incurred. A

licensee shall not withhold those

items contemplated

above under any circumstances

following a de mand for same from the

client.

19. Based upon the foregoing, the Petitioner has

established a violation of Count II.

20. Having considered the violation, and the

aggravating circumstances presented, the Respondent's

request for dismissal for laches mu st be addressed.

21. Section 455.225, Florida Statutes, provides, in

part:

(2) The department shall allocate

sufficient and adequately trained

staff to expeditiously and thoroughly

determine legal sufficiency and

investigate all legally sufficient

comp laints. When its investigation is

complete and legally sufficient, the

department shall prepare and submit to

the probable cause panel of the

appropriate regulatory board the

investigative report of the

department. The report shall contain

the investigati ve findings and the

recommendations of the department

concerning the existence of probable

cause.

22. The Respondent maintains that the Petitioner

did not "expeditiously" complete the investigation of

this case and that, as a result, the Respondent ha s been

prejudiced by the inability to secure witnesses. Under

the circumstances of this case, it is inconceivable how

the inability to secure witnesses has prejudiced the

Respondent. As to the violations outlined in Count I of

the complaint, the lack of witnesses benefited the

Respondent. Because the Petitioner did not secure the

testimony of the complainant, her bookkeeper, or her

succeeding accountant, the Respondent was given the

benefit of the doubt as to the violations and

deficiencies in the work p roduct. As to Count II, the

Respondent admitted the violation. Additional witnesses

would not have reduced the violation. The Respondent did

not release records because he had not been paid.

Nothing in the rule grants that unilateral protection.

Thus it is concluded that Respondent's admission was

sufficient to establish the Count II violation.

23. Finally, it is concluded that any delay in the

prosecution of this case must be considered "harmless

error" under the terms of Carter v. Department of

Pr ofessional Regulation, Board of Optometry , 633 So. 2d 3

(Fla. 1994). The claims in this case were not so stale

that due process considerations preclude the advancement

of the Petitioner's cause. In this case the delay did

not prejudice the Respondent, ac cordingly, no harm has

been demonstrated. The Respondent's claim of laches is

denied.

RECOMMENDATION

Based on the foregoing Findings of Fact and

Conclusions of Law, it is RECOMMENDED that the Department

of Business and Professional Regulation enter a fina l

order finding the Respondent violated Rule 61H1 - 23.002,

Florida Administrative Code, as set forth in Count II of

the Administrative Code; imposing an administrative fine

in the amount of $1000; and placing the Respondent on

probation for one year subject to terms as may be

specified by the Board of Accountancy.

DONE AND ENTERED this 4th day of December, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

J. D. PARRISH

Administrative Law Judge

Division of Administrative

Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 30 60

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Ad ministrative

Hearings

this 4th day of December, 2001.

COPIES FURNISHED:

Charles F. Tunnicliff, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399 - 2202

V ictor K. Rones, Esquire

Law Offices of Rones & Navarro

16105 Northeast 18th Avenue

North Miami Beach, Florida 33162

Martha Willis, Division Director

Division of Certified Public Accounting

Department of Business and

Professional Regulation

240 Northwes t 76 Drive, Suite A

Gainesville, Florida 32607

Hardy L. Roberts, III, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties ha ve the right to submit written exceptions

within 15 days from the date of this Recommended Order.

Any exceptions to this Recommended Order should be filed

with the agency that will issue the Final Order in this

case.