06-003657 Alex Niznik vs. Department Of Financial Services Status: Closed Recommended Order on Monday, January 22, 2007.

Summary: Respondent must deny Petitioner`s application for licensure as a public adjuster based on his having pleaded guilty to (and convicted of) a felony involving moral turpitude (conspiracy to commit mail fraud), which he did not disclose on the application.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ALEX NIZNIK , )

)

Petitioner, )

)

vs. ) Case No. 06 - 3657

)

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Respondent. )

)

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing by video teleconference on

November 6, 2006, at sites in Tallahassee and Miami, Florida.

APPEARANCES

For Petitioner: Alex Niznik, pro se

9580 Byron Avenue

Surfside, Florida 33154

For Respondent: R. Terry Butler, Esquire

Department of Financial Services

200 East Gaines Street

Room 612 Larson Building

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue in this case is whether Re spondent should grant

Petitioner's application for licensure as a public adjuster ,

despite his having pleaded guilty to (and been convicted of) a

felony involving moral turpitude (conspiracy to commit mail

fraud), which conviction was not disclosed on Peti tioner's

application.

PRELIMINARY STATEMENT

By letter dated July 27, 2006, Respondent Department of

Financial Services notified Petitioner Alex Niznik that it

intended to deny his application for licensure as a public

adjuster. Respondent's decision was based on Niznik's criminal

record, which he had failed to disclose on his application. Mr.

Niznik timely requested a formal hearing, and on September 22,

2006, Respondent referred the matter to the Division of

Administrative Hearings, where an Adminis trative Law Judge was

assigned to conduct a formal hearing.

The hearing took place on November 6, 2006, as scheduled,

with both parties present. Petitioner testified on his own

behalf, called no other witnesses, and presented no exhibits.

Respondent cal led no witnesses. Respondent's Exhibits 1 - 3 were

received in evidence without objection.

The final hearing transcript was filed on December 4, 2006.

Proposed Recommended Orders were due on December 14, 2006, and

each party filed one. (Mr. Niznik's was late but accepted

nonetheless.) The parties' submissions were considered.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2006 Florida Statutes.

FINDINGS OF FACT

1. On August 29, 2005, Petitioner Alex Niznik ("Niznik")

comple ted an online application for licensure as a Resident Public

Property and Casualty Insurance Adjuster and submitted the form

electronically to Respondent Department of Financial Services

("Department" or "DFS").

2. The application contained 18 "screening questions" that

called for a "yes" or "no" answer. Focusing primarily on matters

bearing on character and fitness, these questions sought to elicit

personal information about the applicant's background. One

question, for example, asked: "Have you held a resident insurance

license in another state during the last three years?" Another

inquired: "Have you ever had an application for a license

declined or denied by this or any other insurance regulatory

body?"

3. The instant dispute arose from the eight h screening

question, which asked:

Have you ever been convicted, found guilty,

or pled guilty or nolo contendere (no

contest) to a felony or crime punishable by

imprisonment of one (1) year or more under

the laws of any municipality, county, state,

territo ry or country, whether or not

adjudication was withheld or a judgment of

conviction was entered?

Niznik answered, "no."

4. At the end of the application, just above his

electronic signature, Niznik checked a box manifesting agreement

with the following declaration:

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 misrepresentation

of any fact required to be disclosed through

this application is a vio lation of the

Florida Insurance and Administrative Codes

and may result in the denial of my

application . . . .

5. Despite having declared that his responses were true,

Niznik's answer to the question of whether he had a criminal

record was false. In f act, contrary to his denial of past

criminal convictions, Niznik had pleaded guilty, about nine

years earlier, to the felony charge of conspiracy to commit mail

fraud, which is an offense against the United States. Following

this guilty plea, the United S tates District Court, Southern

District of New York, on July 25, 1996, had entered a judgment

of conviction against Niznik, sentencing him to three years of

probation and imposing a $50 fine.

6. DFS discovered Niznik's conviction before granting him

a license. Based on Niznik's criminal record and his failure to

disclose its existence, DFS denied Niznik's application. DFS's

decision was communicated to Niznik though a Notice of Denial

dated July 27, 2006. Niznik was informed that he would not be

elig ible to reapply until after 17 years had elapsed, starting

from the date of his conviction. Niznik timely requested an

administrative hearing to determine his substantial interest in

obtaining a license.

Determinations of Ultimate Fact

7. Because conspi racy to commit mail fraud is a felony

that involves moral turpitude, and because it is undisputed that

Niznik pleaded guilty to —— and was convicted of —— this federal

crime, the Department is required by statute to deny Niznik's

application for licensure.

8 . Pursuant to its rules, the Department must impose a

waiting period on Niznik, which he is required to serve before

becoming eligible to reapply. The usual waiting period for the

type of crime of which Niznik was convicted is 15 years. An

additional tw o years must be added to this, in consequence of

Niznik's failure to disclose the conviction.

9. Although Niznik failed to present persuasive evidence

on any specific mitigating factors that might have given grounds

to shorten the prescribed waiting peri od, he did persuade the

undersigned that, more likely than not, he has been

rehabilitated. Rehabilitation is a general mitigating factor

that warrants a modest reduction of the waiting period.

CONCLUSIONS OF LAW

10. The Division of Administrative Hear ings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569, and 120.57(1), Florida Statutes.

11. Section 626.611, Florida Statutes, provides as

follows:

The department shall deny an application

. . . of any applica nt . . . if it finds

that as to the applicant, . . . any one or

more of the following applicable grounds

exist:

(14) Having . . . pleaded guilty . . . to a

felony . . . under the law of the United

States of America . . . which involves moral

turpitude, w ithout regard to whether a

judgment of conviction has been entered by

the court having jurisdiction of such cases.

(Emphasis added.)

12. Niznik pleaded guilty to the federal crime of

conspiracy to commit mail fraud, which comprises the following

element s:

If two or more persons conspire either to

commit any offense against the United

States, or to defraud the United States, or

any agency thereof in any manner or for any

purpose, and one or more of such persons do

any act to effect the object of the

consp iracy, each shall be fined under this

title or imprisoned not more than five

years, or both.

18 U.S.C. § 371.

13. The object (mail fraud) of the criminal conspiracy in

which Niznik took part is a federal crime having the following

elements:

Whoever, hav ing devised or intending to

devise any scheme or artifice to defraud, or

for obtaining money or property by means of

false or fraudulent pretenses,

representations, or promises, or to sell,

dispose of, loan, exchange, alter, give

away, distribute, supply, or furnish or

procure for unlawful use any counterfeit or

spurious coin, obligation, security, or

other article, or anything represented to be

or intimated or held out to be such

counterfeit or spurious article, for the

purpose of executing such scheme or artifice

or attempting so to do, places in any post

office or authorized depository for mail

matter, any matter or thing whatever to be

sent or delivered by the Postal Service, or

deposits or causes to be deposited any

matter or thing whatever to be sent o r

delivered by any private or commercial

interstate carrier, or takes or receives

therefrom, any such matter or thing, or

knowingly causes to be delivered by mail or

such carrier according to the direction

thereon, or at the place at which it is

directed t o be delivered by the person to

whom it is addressed, any such matter or

thing, shall be fined under this title or

imprisoned not more than 20 years, or both.

If the violation affects a financial

institution, such person shall be fined not

more than $1,00 0,000 or imprisoned not more

than 30 years, or both.

18 U.S.C. § 1341.

14. Conspiracy to commit mail fraud is a Class D felony

under federal law, because the maximum term of imprisonment

authorized therefor is "less than ten years but five or more

years [.]" 18 U.S.C. § 3559(a)(4).

15. By rule, the Department has enumerated the felonies ——

dubbed "Class A Crimes" —— which, it has found, always involve

moral turpitude. Among these crimes are "postal fraud" and

"conspiracy." Fla. Admin. Code R. 69B - 21 1.042(21)(nn), (vv).

See also Fla. Admin. Code R. 69B - 211.042(7)(f)(For purposes of

classifying felonies, "conspiracy to commit a crime . . . is

classified the same as the crime itself.").

16. When the unambiguous law is applied to the undisputed

facts of this case, the conclusion is inescapable that Niznik

has pleaded guilty to (and been convicted of) a felony involving

moral turpitude. Therefore, in accordance with Section

626.611(14), Florida Statutes, the Department has no choice but

to deny Niznik' s license.

17. An applicant whose criminal record precludes licensure

must serve a waiting period before reapplying, the term of which

is prescribed by rule as follows:

(8) Required Waiting Periods for a Single

Felony Crime. The Department finds it

nec essary for an applicant whose law

enforcement record includes a single felony

crime to wait the time period specified

below (subject to the mitigating factors set

forth elsewhere in this rule) before

licensure. All waiting periods run from the

trigger dat e.

(a) Class A Crime. The applicant will not

be granted licensure until 15 years have

passed since the trigger date.

(b) Class B Crime. The applicant will not

be granted licensure until 7 years have

passed since the trigger date.

(c) Class C Crime. T he applicant will not

be granted licensure until 5 years have

passed since the trigger date.

(d) The Department shall not impose any

waiting period pursuant to this rule where

the only crime in an applicant's law

enforcement record is a single felony crim e

that results from the applicant’s passing of

a worthless check, or obtaining property in

return for a worthless check, and the amount

of the check or checks involved in the

single felony crime is $500 or less.

However, this subparagraph shall not apply

where a felony crime resulting from the

applicant's passing of a worthless check, or

obtaining property in return for a worthless

check is not the only crime in an

applicant's law enforcement record.

Fla. Admin. Code. R 69B - 211.042(8)(emphasis added).

18 . The term "trigger date" is defined in Florida

Administrative Code Rule 69B - 211.041(11) as meaning:

the date on which an applicant was found

guilty, or pled guilty, or pled nolo

contendere to a crime; or, where that date

is not ascertainable, the date of the

charges or indictment.

19. The applicable trigger date in this instance is

July 25, 1996. Thus, under the usual, 15 - year waiting period

imposed on an applicant whose criminal record consists of a

single, Class A Crime, Niznik would be ineligible to reapply

until July 25, 2011.

20. Niznik, however, has a problem in addition to his

felony conviction, namely his failure to disclose that

conviction on his application for licensure. Florida

Administrative Code Rule 69B - 211.042(4) provides as follo ws:

(4) Effect of Failure to Fully Disclose Law

Enforcement Record on Application.

(a) The Department finds that all matters

that are part of an applicant's law

enforcement record are material elements of

the application, and finds that the omission

of a ny part of the law enforcement record

required to be disclosed on the application

is a material misrepresentation or material

misstatement in and of itself . The

applicant shall have violated Section

626.611(2) or 626.621(1), Florida Statutes,

if the appli cant fails to provide the

Department with the documentation required

by this rule.

(b)1. If an applicant fails to fully and

properly disclose the existence of law

enforcement records, as required by the

application, the application will be denied

and a wa iting period will be imposed before

the applicant may reapply for any license.

2. If the Department discovers the

applicant's failure to disclose only after a

license has been granted, the Department

will suspend or revoke each license

currently held by t he applicant.

3. The waiting period shall begin on the

later of:

a. The date that the Department issues a

letter or notice of denial of the

application, or

b. The date that a previously imposed

waiting period expires.

4. Waiting periods shall be calcul ated as

follows:

a. Class A or B crime omitted, where the

trigger date was more than 10 years before

time of application, add 1 year. If the

trigger date was 10 years prior, or less

than 10 years prior, to the time of

application, add 2 years.

b. Class C crime omitted, add 1 year.

c. Omission of any arrest, pending criminal

charges, pre - trial intervention, or other

part of the law enforcement record required

to be disclosed on the application, add 1

year.

(c) An applicant whose application is

denied un der this subsection shall resubmit

another application and applicable fee as

set forth in Section 624.501, Florida

Statutes, on the application form respective

to the type and class of license sought.

(d) After the waiting period has elapsed,

the Departme nt shall consider the

application if it is resubmitted in good

form with applicable fees, and licensure

shall be granted if the licensee then meets

all the requirements and criteria for

licensure as set out in the then applicable

rules and statutes.

(e) F ormal Record to be Made. The

Department finds that submission of an

application that is inaccurate as to law

enforcement history is a matter of such

weight that a formal record of the

application shall be made and preserved by

Department order for referen ce and

consideration should the applicant

subsequently become licensed and violate any

portion of the insurance code. To this end,

applicants are required to execute a

settlement acknowledging the inaccuracy as a

prerequisite to becoming licensed after al l

waiting periods have elapsed and the

applicant is otherwise eligible for

licensure.

(Emphasis added.)

21. Pursuant to the plain language of the preceding Rule,

two additional years must be added to the usual waiting period

applicable to Niznik's crime , postponing until July 25, 2013,

the earliest date on which Niznik may reapply for licensure as a

public adjuster. 1

22. The undersigned has not overlooked Niznik's defense,

which is that a secretary who was unfamiliar with his background

filled out the electronic application, resulting in the

unintentional nondisclosure of Niznik's criminal conviction.

Even if true, however, this explanation for the omission does

not change the undisputed fact that Niznik has a felony

conviction for a crime involving mo ral turpitude. This fact

alone compels the denial of Niznik's application, as a matter of

law, whether the nondisclosure was innocent or not.

23. At best, then, Niznik's defense might avoid the

addition of two extra years to the usual 15 - year waiting pe riod,

as required under Rule 69B - 211.042(4) for failing fully and

properly to disclose the existence of a criminal conviction.

Yet, while the undersigned is not without sympathy for Niznik,

he cannot conclude that Niznik is blameless in connection with

th e nondisclosure at issue. First, if the secretary were

unfamiliar with Niznik's background, then it was his

responsibility to inform her of all facts necessary to

accurately and truthfully complete the application. Indeed,

given the nature of the screeni ng questions, which focus on the

applicant's background, Niznik would have had to tell the

secretary the relevant facts, or else she could not have

answered any of the questions, except by guessing . Niznik 's

failure (by his own admission) to fully and pro perly disclose

the criminal conviction to his secretary is the same, in these

circumstances, as having failed to fully disclose the fact on

his application.

24. Second, Niznik was required to (and did) declare,

under penalties of perjury, that he had (a) read his application

and (b) confirmed that the facts stated therein were true.

Because, according to his own testimony, someone else (who was

unfamiliar with Niznik's background) had completed the

application, Niznik needed to be especially careful in c hecking

the form for accuracy, as the circumstances were such that a

mistake could easily have been made. If Niznik carelessly

overlooked the misrepresentation about his criminal record, as

he implicitly claims, then he is culpable of willful

indifference in the matter, at the very least, which amounts to

an improper failure to disclose the existence of a conviction.

25. Notwithstanding Niznik's defense, therefore, the

undersigned has concluded that he is fully responsible for the

nondisclosure and subje ct to the imposition of a longer - than -

usual waiting period as a result.

26. Finally, Niznik did not present persuasive evidence in

support of any of the specific mitigating factors set forth in

Florida Administrative Code Rule 69B - 211.042(10). Niznik

te stified generally, however, that he has not been in trouble

with the law in the decade since the conviction in question, and

he stressed that he is anxious to resume working to support his

wife and children , with whom he evidently has a stable life .

The u ndersigned accepts this testimony as evidence of

rehabilitation and recommends that one year be deducted from the

waiting period.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department enter a f inal order

(a) denying Niznik's application for licensure as a Resident

Public Property and Casualty Insurance Adjuster and (b) imposing

a waiting period of 16 years, from the date of his criminal

conviction, which must be serve d before Niznik may reapply.

DONE AND ENTERED this 22nd day of January , 2007, in

Tallahassee, Leon County, Florida.

S

___________________________________

JOHN G. VAN LANINGHAM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tall ahassee, 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 22nd day of January , 2007.

ENDNOTE

1 / Actually, the plain language of Rule 69B - 211.042(4)(b)3.

provides that, where the applicant has failed to disclose his

criminal record, as here, the waiting period commences, not on

the date of conviction, but on the date that DFS denies the

application (or on the date of a p reviously imposed waiting

period, if later). If that provision were applied to Niznik, he

would be ineligible to reapply until July 27, 2023, making the

waiting period tantamount to a permanent ban. The Department,

however, has not suggested that the wai ting period be held to

start on July 27, 2006, but instead has maintained consistently

that the commencement date should be July 25, 1996. The

undersigned urges that DFS adhere to its previous position when

rendering the final order.

COPIES FURNISHED :

R. Terry Butler, E squire

Department of Financial Services

200 East Gaines Street

Room 612 Larson Building

Tallahassee, Florida 32399

Alex Niznik

9580 Byron Avenue

Surfside, Florida 33154

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capi tol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Daniel Sumner , General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have 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.