09-000993 Dr. Eric J. Smith, As Commissioner Of Education vs. Chc Private Schools
 Status: Closed
Recommended Order on Monday, May 4, 2009.


View Dockets  
Summary: Respondent was guilty of fraudulent activity. Recommend revocation of eligibility for a scholarship program.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8DR. ERIC J. SMITH, AS )

14COMMISSIONER OF EDUCATION, )

18)

19Petitioner, )

21)

22vs. ) Case No. 09-0993

27)

28CHC PRIVATE SCHOOLS, )

32)

33Respondent. )

35)

36RECOMMENDED ORDER

38Pursuant to notice, a final hearing was held in this case

49on March 19, 2009, in Titusville, Florida, before Susan B.

59Harrell, a designated Administrative Law Judge of the Division

68of Administrative Hearings.

71APPEARANCES

72For Petitioner: Jason M. Hand, Esquire

78Department of Education

81325 West Gaines Street, Suite 1244

87Tallahassee, Florida 32399-0400

90For Respondent: Lisa L. Hogreve, Esquire

96Lisa L. Hogreve, L.C.

10096 Willard Street, Suite 206

105Cocoa, Florida 32922-7946

108STATEMENT OF THE ISSUES

112The issues in this case are whether Respondent’s

120participation in the John M. McKay Scholarships for Students

129with Disabilities Program (McKay Scholarships) and the Corporate

137Income Tax Credit Scholarship Program (CTC Scholarships) should

145have been suspended, and whether Respondent’s eligibility to

153participate in the programs should be revoked.

160PRELIMINARY STATEMENT

162On December 17, 2008, Petitioner, Dr. Eric J. Smith, as

172Commissioner of Education (Agency), issued an Administrative

179Complaint against Respondent, CHC Private Schools (CHC),

186suspending CHC’s participation in the McKay Scholarships

193and CTC Scholarships programs for failure to comply with

202Subsection 1002.421(2)(g)1., Florida Statutes. 1 CHC came into

210compliance with Subsection 1002.421(2)(g)1., Florida Statutes,

216on or after December 23, 2008.

222On January 23, 2009, the Agency amended the Administrative

231Complaint, withdrawing the violation of Subsection

2371002.421(2)(g)1., Florida Statutes, and immediately suspending

243scholarship payments to CHC and revoking CHC’s eligibility to

252participate in the McKay Scholarships and CTC Scholarships

260programs for alleged fraudulent activity. By letter dated

268January 27, 2009, CHC requested an administrative hearing.

276By letter dated February 19, 2009, the Agency forwarded the

286case to the Division of Administrative Hearings for assignment

295to an Administrative Law Judge. The case was originally

304assigned to Administrative Law Judge Lawrence P. Stevenson, but

313was transferred to Administrative Law Judge Susan B. Harrell to

323conduct the final hearing.

327On March 4, 2009, the Agency filed a Motion for Leave to

339Amend Administrative Complaint. The motion was granted by Order

348dated March 12, 2009.

352At the final hearing, CHC moved for a rehearing on

362Petitioner’s Motion for Leave to Amend Administrative Complaint.

370The Motion for Rehearing was denied. At the final hearing,

380CHC’s Motion to Dismiss Complaint as Amended was heard and

390denied.

391At the final hearing, the Agency called the following

400witnesses: Laura Harrison, Doug Carter, William Scott

407Morissette, Riley Hyle, Rebecca Hendricks, and Joanna Ostrom.

415Petitioner’s Exhibits 1 through 5, 7 through 11, and 13

425through 18 were admitted in evidence.

431At the final hearing, CHC called the following witnesses:

440Doug Carter, William Scott Morissette, Rebecca Hendricks,

447Dorothy Maudra, Jacqueline Maglashan, Jade Quinif, Lara Nichilo,

455Riley Hyle, and Laura Harrison. Respondent’s Exhibits 1

463through 6 and 8 through 16 were admitted in evidence.

473The Transcript was filed on April 3, 2009. The parties

483agreed to file their proposed recommended orders within ten days

493of the filing of the Transcript. The parties timely filed their

504Proposed Recommended Orders, which have been considered in the

513preparation of this Recommended Order.

518FINDINGS OF FACT

5211. CHC is a private school located in Merritt Island,

531Florida. Lara Nichilo is the owner and head administrator of

541CHC. Ms. Nichilo was also the owner and head administrator of

552another private school located in Cocoa, Florida. For the

561purposes of this proceeding, the school located in Cocoa,

570Florida, will be referred to as CHC 2. 2

5792. CHC and CHC 2 had participated in the McKay

589Scholarships and CTC Scholarships programs.

5943. Section 1002.39, Florida Statutes, authorizes the McKay

602Scholarships program, which affords a disabled student an

610opportunity to receive a scholarship to defray the cost of

620attending a private school of choice. Section 220.187, Florida

629Statutes, authorizes the CTC Scholarships program, which enables

637taxpayers to make private, voluntary contributions so that

645students who qualify for free or reduced-price school lunches

654under the National School Lunch Act may receive a scholarship to

665defray the cost of attending a private school of choice. The

676Department of Education has the responsibility to annually

684verify the eligibility of a private school to participate in

694these scholarship programs.

6974. Private schools participating in the McKay Scholarships

705and CTC Scholarships programs are required to comply with

714Section 1002.421, Florida Statutes, and must meet applicable

722state and local health, safety, and welfare laws, codes, and

732rules, including laws, codes, and rules relating to firesafety

741and building safety.

7445. If a private school participating in the McKay

753Scholarships and CTC Scholarships programs desires to renew its

762participation in the programs, the school must file a signed,

772notarized Form IEPC SCF-1 affidavit with the Department of

781Education by March 1 of each year for participation in the

792subsequent school year. The Form IEPC SCF-1 affidavit contains

801a list of requirements to which the private school must certify

812that it meets or does not meet. If the school certifies that it

825does not meet a requirement, such certification constitutes an

834outstanding compliance issue, which must be resolved by the

843school prior to May 1 of each year for the school to remain

856eligible to participate in the scholarship programs.

8636. Specifically, the signature page of the Form IEPC SCF-1

873to any requirement in Section 9: School Facility, the provision

883of a reason for answering ‘No’ shall not make the school

894compliant with the reporting requirement and will be considered

903an outstanding compliance issue for resolution as described in

912State Board of Education Rules 6A-6.03315, 6A-6.0960, and 6A-

9216.0970, Florida Administrative Code.”

9257. Florida Administrative Code Rule 6A-6.03315(2) requires

932that every third year a school applies for renewal of

942eligibility for the scholarship programs there must be a review

952of compliance documentation. This means that the school must

961submit documentation to support its eligibility along with the

970affidavit. For the renewal of eligibility for the 2009-2010

979school year, CHC had to submit compliance documentation for

988review.

9898. On November 6, 2008, Ms. Nichilo executed and mailed

999the Form IEPC SCF-1 affidavit for CHC for renewal of CHC’s

1010eligibility to participate in the McKay Scholarships and CTC

1019Scholarships programs for the 2009-2010 school year.

1026Subsection 1 of Section 9 of the Form IEPC SCF-1 affidavit

1037requires the school to answer the following question:

1045Does the school facility possess a current,

1052violation free or satisfactory Fire Code

1058Inspection and compliance report in

1063accordance with Section 1002.421(2)(g)1.,

1067Florida Statutes, State Finance Services

1072Rule 69A-58.004, Florida Administrative

1076Code, and county and/or municipal ordinance?

1082Ms. Nichilo answered “Yes” to the question. CHC submitted a

1092fire inspection certificate for CHC with a date of February 22,

11032008.

11049. At the time Ms. Nichilo executed and submitted the Form

1115IEPC SCF-1 affidavit in November 2008, CHC did not have a

1126current Fire Code Inspection and compliance report. The last

1135fire inspection certificate was dated February 22, 2006, and had

1145expired on February 22, 2007.

115010. Ms. Nichilo executed and submitted a Form IEPC SCF-1

1160affidavit for the 2007-2008 school year, certifying that CHC had

1170a current, violation-free fire inspection report. The

1177certificate affidavit which Ms. Nichilo signed stated:

1184I have read the applicable scholarship

1190program rules and understand that by signing

1197this form I am certifying that the school is

1206currently in compliance and agrees [sic] to

1213remain in compliance with all scholarship

1219program rules and reporting requirements.

1224If at any point, the school is not in

1233compliance with scholarship rules, or if

1239there is a change in the status of any

1248reporting requirement, the school will have

125415 days to notify the Department of

1261Education and will provide all information

1267necessary to document its continued

1272compliance with program rules and

1277requirements.

1278At the time the certification was submitted on January 11, 2007,

1289CHC did have a current, violation-free fire inspection report;

1298however, CHC did not have a current, violation-free fire

1307inspection report that was valid for the entire 2007-2008 school

1317year. CHC did not notify the Department of Education that it

1328was not in compliance with the fire safety inspections during

1338the 2007-2008 school year.

134211. On December 5, 2007, Ms. Nichilo executed and

1351submitted a Form IEPC SCF-1 affidavit for the 2008-2009 school

1361year, certifying that CHC had a current, violation-free fire

1370inspection report. At the time of submission of the affidavit,

1380CHC did not have a current, violation-free fire inspection

1389report, and, from the beginning of the 2008-2009 school year

1399until December 23, 2008, CHC did not maintain a current,

1409violation-free fire inspection report nor did CHC notify the

1418Department of Education as late as December 11, 2008, that CHC

1429was not in compliance with the fire inspection requirement.

143812. On November 19, 2008, Assistant Fire Marshall Doug

1447Carter of Brevard County Fire Rescue (BCFR) received a complaint

1457concerning CHC and CHC 2 from an anonymous caller. It is the

1469policy of BCFR to follow up on all complaints. On November 20,

14812008, Lead Fire Inspector William Morissette, following up on

1490the anonymous complaint, went to CHC for the purpose of

1500performing a fire inspection.

150413. On November 20, 2008, Mr. Morissette performed a fire

1514inspection on CHC and noted some violations. During the

1523inspection on November 20, 2008, Mr. Morissette noticed that the

1533fire inspection certificate that was posted at CHC was partially

1543obscured, and he could not see the school’s address.

155214. On November 20, 2008, Mr. Morissette performed a fire

1562inspection of CHC 2 and noted some violations. He observed the

1573posted fire certificate at CHC 2 during his inspection. The

1583fire certificate had an account number 23832 and was dated

1593February 22, 2008. The font used in the printing of the

1604certificate did not appear to be the same type as used by BCFR.

1617While at CHC 2, Mr. Morrissette called Assistant Fire Marshall

1627Carter and learned that account number 23832 was for CHC and not

1639CHC 2 and that no fire certificate had been issued to CHC 2 on

1653February 22, 2008. The last fire certificate that had been

1663issued to CHC 2 was on December 15, 2005, and had expired on

1676December 16, 2006.

167915. On November 6, 2008, CHC sent a copy of the fire

1691inspection certificate dated February 22, 2008, to the

1699Department of Education as part of the documentation supplied to

1709verify CHC’s eligibility for renewal. The fire inspection

1717certificate was a forgery. Ms. Nichilo testified that she did

1727not send the forged certificate to the Department of Education

1737and that some disgruntled former employee who had access to

1747CHC’s files must have sent the certificate to the Department of

1758Education or must have put the forged certificate in the

1768envelope containing the renewal information that was sent to the

1778Department of Education. Ms. Nichilo’s testimony is not

1786credible. The certificate came in the same envelope as the

1796other material which CHC submitted in November 2008.

1804Ms. Nichilo signed and mailed the renewal information on

1813November 6, 2008. Her testimony that the envelope must have

1823been in the mail room a couple of days before it was mailed,

1836thereby allowing the disgruntled employee an opportunity to slip

1845the forged certificate in the envelope, is not credible.

185416. After the renewal package was sent to the Department

1864of Education, Ms. Nichilo asked her secretary to contact BCFR to

1875schedule a fire inspection. Ms. Nichilo knew that she needed a

1886fire inspection because she knew that she did not have a current

1898fire inspection certificate when she sent the renewal submittal

1907to the Department of Education. Based on the clear and

1917convincing evidence presented, it can only be concluded that

1926Ms. Nichilo knew the fire inspection certificates, which she

1935included with the renewal submittals, were forgeries.

194217. On or about December 5, 2008, Mr. Carter contacted the

1953Department of Education and informed the Department of Education

1962that he had concerns about CHC’s and CHC 2’s fire inspection

1973certificates. Mr. Carter sent a memorandum dated December 9,

19822008, to Riley Hyle with the Department of Education, explaining

1992BCFR’s observations and concerns relating to the fire inspection

2001certificates. After learning from Mr. Carter that CHC’s and

2010CHC 2’s fire inspection certificates were in question, Mr. Hyle

2020checked the Department of Education’s renewal files on CHC and

2030CHC 2. Mr. Hyle found forged fire inspection certificates in

2040both files.

204218. When CHC’s and CHC 2’s submittals arrived on

2051November 10, 2008, in the same envelope, Mr. Hyle reviewed the

2062submittals and verified that both submittals contained fire

2070inspection certificates. He received no further documentation

2077from CHC or CHC 2 from November 10, 2008, and the time he talked

2091to Mr. Carter on December 5, 2008.

209819. On December 8, 2008, Mr. Morrissette returned to CHC 2

2109to do a follow-up inspection. CHC 2 had not corrected all its

2121violations. Mr. Morrissette was advised by the principal at

2130CHC 2 that CHC also had not corrected all of its violations.

2142One of the violations CHC had was a broken lockbox. On

2153December 7, 2008, CHC had called BCFR and requested an

2163application for a lockbox. Thus, on December 8, 2008, CHC would

2174still have not corrected its lockbox violation.

218120. On December 11, 2008, Ms. Nichilo signed a revised

2191version of the Form IEPC SCF-1 affidavit 3 for CHC for the 2009-

22042010 school year. The question posed in the affidavit submitted

2214in November 2008 concerning whether the facility had a current,

2224violation-free fire code inspection remained the same in the

2233revised affidavit. Again, CHC stated that it did have a

2243current, violation-free Fire Code Inspection and compliance

2250report. The revised affidavit also contained the same language

2259as the November 2008 affidavit that answering a question in the

2270negative in Section 9 would result in an out-of-compliance

2279issue. Both the November affidavit and the revised affidavit

2288contained the following language:

2292I have read the applicable scholarship

2298program rules and understand that by signing

2305the form I am certifying that the school is

2314currently in compliance and agrees [sic] to

2321remain in compliance with all scholarship

2327program rules and reporting requirements.

2332If at any point, the school is not in

2341compliance with the scholarship rules, or if

2348there is a change in the status of any

2357reporting requirement, the school shall have

236315 days to notify the Department of

2370Education and will provide all information

2376necessary to document its continued

2381compliance with program rules and

2386requirements.

238721. The revised affidavit was submitted to the Department

2396of Education, which received the affidavit on December 16, 2008.

2406At the time CHC submitted the affidavit, it did not have a

2418current, violation-free Fire Code Inspection and compliance

2425report. On December 23, 2008, the BCFR re-inspected CHC and

2435found that the violations had been corrected. After its

2444inspection on December 23, 2008, BCFR issued a fire inspection

2454certificate backdated to November 20, 2008, which was the date

2464of the original inspection.

246822. On December 17, 2008, the Agency issued an

2477Administrative Complaint, suspending CHC’s eligibility for the

2484McKay Scholarships and CTC Scholarships programs for failure to

2493have a current fire inspection report. By letter dated

2502December 23, 2008, and received by the Department of Education

2512on December 29, 2008, CHC advised that the school had been re-

2524inspected and now had a current fire code inspection

2533certificate.

253423. On January 2, 2009, CHC sent a 12-page facsimile

2544transmission to the Department of Education. One of the pages

2554of the transmission was a copy of a facsimile transmission

2564coversheet dated December 31, 2008, with the BCFR letterhead

2573concerning inspection reports. The comments section of the

2581coversheet read “Please read letter.” The second page of the

2591transmission was an unsigned to-whom-it-may-concern letter dated

2598December 30, 2008. At the top of the letter, printed in large,

2610bold type was the following: “Brevard County Fire Rescue.” The

2620letter stated:

2622To whom it may concern,

2627In reviewing and trying to figure out what

2635happen with the 2007 inspection reports this

2642is the conclusion we have come to.

2649If you review the two reports on both CHC-1

2658and CHC-2 the visiting inspection times over

2665lap each other making it seem like a 2007

2674inspection was done when in reality it was

2682not.

2683CHC-1 inspection has a date on it

2690February 22, 2006 to February 2007.

2696CHC-2 inspection shows January 12, 2006

2702(re-inspection) January 2007.

2705I believe that this was just an over site on

2715both our parts due to the fact that the fire

2725department does come in regularly every year

2732even without an appointment.

2736Lara Nichilo did notify us to come in ASAP

2745when the reports could not be found. But as

2754of November 20, 2008 all her inspections

2761were done and her follow up correction

2768reports have been completed putting her in

2775good standing with the fire and inspections

2782department. CHC-1 and CHC-2 (inspection

2787reports provided to you with this letter)

2794For more information you may contact us at

2802321-455-6383

2803Thank you for your time,

280824. The telephone number given in the letter was the

2818telephone number for CHC. The original letter submitted at the

2828final hearing by CHC was written on stationary bearing the CHC

2839watermark. The letter received by the Department of Education

2848had no visible watermark.

285225. The facsimile transmission coversheet that accompanied

2859the letter was a coversheet which BCFR had sent to CHC on

2871December 31, 2008. The statements in the comments section that

2881BCFR sent had been deleted and replaced with “Please read

2891letter.” The following are the comments which BCFR had written:

2901There are no reports or certificates for

2908690 Range Road for 2006 or 2007.

2915There are no inspection reports or

2921certificates for 55 McLeod for 2007.

2927Certificates will be issued upon receipt of

2934payment.

293526. Laura Harrison, the director of the McKay Scholarships

2944and CTC Scholarships programs at the Department of Education,

2953transmitted a copy of the letter to BCFR and asked if the letter

2966had originated from BCFR. Mr. Carter advised Ms. Harrison that

2976the letter did not come from BCFR.

298327. Ms. Nichilo wrote the letter. A person reading the

2993letter would be led to believe that the letter came from BCFR.

3005The letter was accompanied by a facsimile transmission

3013coversheet bearing the BCFR letterhead and the coversheet

3021comments said “Please read letter.” The letter refers to

3030Ms. Nichilo in the third person and uses first person plural

3041pronouns to refer to BCFR. The letter purports to bear the

3052letterhead of BCFR. It must be concluded that Ms. Nichilo

3062intended the Department of Education to rely on the letter as a

3074letter transmitted by BCFR to Ms. Nichilo to explain the

3084situation. If Ms. Nichilo had intended the Department of

3093Education to treat the letter as a letter written by her, she

3105would have written the letter using CHC letterhead, signed the

3115letter, not referred to herself in the third person, not

3125referred to BCFR in the first person, and not used a

3136transmission coversheet from BCFR in which the comments section

3145had been altered.

314828. In a conversation on December 30, 2008, Ms. Nichilo

3158advised Mr. Hyle that she was sending him a letter that would

3170explain everything and would resolve the situation concerning

3178the fire inspections. Ms. Nichilo testified that she told

3187Mr. Hyle that she was writing the letter. Mr. Hyle did not

3199recall whether Ms. Nichilo said that she was writing a letter.

3210Jade Quinif, who was Ms. Nichilo’s administrative assistant on

3219December 30, 2008, listened to the conversation between Mr. Hyle

3229and Ms. Nichilo on speakerphone. She recalls Ms. Nichilo asking

3239Mr. Hyle if he would like her to write a letter regarding

3251Ms. Nichilo’s conversations with BCFR. Mr. Hyle said that would

3261be fine.

326329. Ms. Nichilo typed a letter and asked Ms. Quinif to

3274send it to the Department of Education. Ms. Quinif sent a

3285letter to the Department of Education dated December 30, 2008.

3295Based on the evidence presented, the letter that Ms. Quinif sent

3306was a letter dated December 30, 2008, written on CHC letterhead

3317and signed by Ms. Nichilo. 4 It was not the letter dated

3329December 30, 2008, which appeared to be from BCFR (purported

3339BCFR letter).

334130. The only evidence of receipt of the purported BCFR

3351letter by the Department of Education is in a 12-page facsimile

3362transmittal, which was transmitted twice on January 2, 2009.

3371Ms. Quinif credibly testified that she did not send a 12-page

3382transmission and that she did not send the doctored transmission

3392coversheet from BCFR. She also credibly testified that the

3401letter that she sent was a few days after Christmas and was not

3414more than a week after Christmas. Ms. Nichilo testified that

3424Ms. Quinif did sent the transmittal coversheet from the BCFR on

3435December 30, 2008; however, Ms. Nichilo’s testimony is not

3444credible given that the transmittal coversheet from BCFR was

3453dated December 31, 2008, and showed a transmission date of

3463December 31, 2008, to CHC. The clear and convincing evidence is

3474that Ms. Nichilo wrote and sent the purported letter from BCFR

3485and the doctored transmittal coversheet from BCFR in an attempt

3495to make it appear that BCFR was taking some of the blame for CHC

3509not having maintained current fire inspection certificates.

3516BCFR does not automatically do an annual inspection of schools.

3526If a school desires to have a fire inspection, the school must

3538notify BCFR and arrange for a fire inspection. The failure to

3549have current, violation-free fire inspection reports rests with

3557CHC and not with BCFR. The bogus letter was an effort by CHC to

3571seek mitigation for its failure to adhere to the requirements

3581for eligibility for the scholarships programs.

358731. After learning that the letter transmitted on

3595January 2, 2009, was not from BCFR, the Agency issued an Amended

3607Administrative Complaint on January 23, 2009, which superseded

3615the December 17, 2008, Administrative Complaint. The Amended

3623Administrative Complaint deleted the allegations concerning the

3630failure to have a current, violation-free fire inspection report

3639and added allegations involving fraud and failure to maintain

3648current, violation-free fire inspection reports.

3653CONCLUSIONS OF LAW

365632. The Division of Administrative Hearings has

3663jurisdiction over the parties to and the subject matter of this

3674proceeding. §§ 120.569 and 120.57, Fla. Stat.

368133. Subsection 1002.39(7), Florida Statutes, provides that

3688the “Commissioner of Education shall deny, suspend, or revoke a

3698private school’s program, if it is determined that the private

3708school has failed to comply with the provisions of this section”

3719regarding the McKay Scholarships program. The Commissioner of

3727Education may immediately suspend payments of scholarship funds,

3735if is determined there is probable cause to believe there is

3746“[a]n imminent threat to the health, safety, or welfare of the

3757students” or there is “[f]raudulent activity on the part of the

3768private school.” The Commissioner of Education has the same

3777authority as it relates to private schools eligible for CTC

3787Scholarships funds pursuant to Subsection 220.187(10), Florida

3794Statutes.

379534. The Second Amended Administrative Complaint

3801immediately suspends and seeks to revoke CHC’s eligibility for

3810failure to have a current, violation-free Fire Code Inspection

3819and compliance report for the entire 2007-2008 school year and

3829from the start of the 2008-2009 school year through December 23,

38402008; for falsifying the Form IEPC SCF-1 affidavits for the

38502007-2008, 2008-2009, and 2009-2010 school years; for submitting

3858a forged fire inspection certificate for CHC on November 10,

38682008, as supporting compliance documentation; for submitting a

3876forged fire inspection certificate for CHC 2 on November 10,

38862008, as supporting compliance documentation; and for submitting

3894a letter to the Department of Education purporting to be from

3905BCFR when the letter was not from BCFR.

391335. The Agency argues that the burden to establish the

3923allegations in the Second Amended Administrative Complaint is a

3932preponderance of the evidence. CHC argues that the burden of

3942proof is clear and convincing evidence. The burden is a

3952preponderance of the evidence. See Winn v. Muskateers Academy ,

3961Case No. 06-5074 (DOAH April 2, 2007), adopted in Department of

3972Education Final Order dated May 4, 2007. However, in the

3982instant case, the Agency has established the allegations by

3991clear and convincing evidence with the exception which is noted

4001below.

400236. Subsection 1002.421(2)(g), Florida Statutes, provides:

4008(2) A private school participating in a

4015scholarship program must be a Florida

4021private school as defined in s. 1002.01(2),

4028must be registered in accordance with s.

40351002.42, and must:

4038* * *

4041(g) Meet applicable state and local health,

4048safety, and welfare laws, codes, and rules,

4055including:

40561. Firesafety.

40582. Building safety.

4061These statutory provisions apply to both the McKay Scholarships

4070and CTC Scholarships programs. See §§ 1002.39(8) and

4078220.187(8), Fla. Stat.

408137. Florida Administrative Code Rule 6A-6.03315

4087incorporates by reference the Form IEPC SCF-1 affidavit, which

4096requires each private school participating in the scholarship

4104programs to certify it has a current, violation-free fire

4113inspection report. Further, the Form IEPC SCF-1 affidavit

4121provides that the school must agree to maintain its compliance

4131with all requirements for the program. Further, if the school

4141becomes non-complaint, the school is to notify the Department

4150within 15 days.

415338. The Agency has established by clear and convincing

4162evidence that CHC did not have current, violation-free fire

4171inspection reports or certificates for the entire 2007-2008

4179school year. CHC did not advise the Department of Education

4189within 15 days of the expiration of its fire inspection

4199certificate on February 22, 2007, that it was not in compliance

4210with the fire inspection requirement.

421539. The Agency has established by clear and convincing

4224evidence that at the time CHC submitted its renewal for the

42352008-2009 school year that it did not have a current, violation-

4246free fire inspection report as it certified and that CHC was not

4258in compliance with having a current, violation-free fire

4266inspection report from the beginning of the 2008-2009 school

4275year until December 23, 2008.

428040. The Agency has established by clear and convincing

4289evidence that CHC did not have a current, violation-free fire

4299inspection report when it certified that it did in the

4309submittals received by the Department of Education on

4317November 10, 2008, and December 16, 2008.

432441. The Agency has alleged that CHC committed fraud when

4334it submitted a forged fire certificate for CHC in its

4344November 2008 renewal submittal to the Department of Education

4353and when it submitted to the Department of Education on

4363January 2, 2009, a letter and facsimile transmission coversheet

4372purporting to be from BCFR.

437742. The essential elements of a claim of fraud are: (1) a

4389false statement concerning a material fact, (2) made with

4398knowledge that the representation is false and with the

4407intention of inducing another’s reliance thereon, and

4414(3) consequent injury to the other party acting in reliance on

4425the false representation. See Cohen v. Kravit Estate Buyers,

4434Inc. , 843 So. 2d 989, 991 (Fla. 4th DCA 2003).

444443. “[F]raudulent intent usually must be proved by

4452circumstantial evidence and such circumstances may, by their

4460number and joint consideration, be sufficient to constitute

4468proof.” Nally v. Olsson , 134 So. 2d 265, 267 (Fla. 2d DCA

4480distinct acts, each of which may be a badge of fraud and when

4493taken together as a whole, constitute fraud.’” Department of

4502Revenue v. Rudd , 545 So. 2d 369, 372 (Fla. 1st DCA 1989),

4514quoting Allen v. Tatham , 56 So. 2d 337, 339 (Fla. 1952).

4525Further, “[s]cienter, or guilty knowledge, [which] is an element

4534of intentional misconduct [such as fraud], . . . can be

4545established by showing actual knowledge, or that the defendant

4554was reckless or careless as to the truth of the matter

4565asserted.” Ocean Bank of Miami v. INV-UNI Inv. Corp. , 599 So.

45762d 694, 697 (Fla. 3d DCA 1992).

458344. The Agency has established by clear and convincing

4592evidence that CHC submitted forged fire inspection certificates

4600with its November 2008 renewal submittal. The forged fire

4609inspection certificates were submitted with the renewal package.

4617Ms. Nichilo was responsible for submitting the renewal package,

4626including the fire inspection certificate for CHC. Her claim

4635that some disgruntled employee slipped the forgeries into the

4644submittal package is incredulous. She knew that she did not

4654have current, violation-free fire inspection reports as

4661evidenced by her attempt to get her assistant to schedule an

4672inspection with BCFR shortly after the renewal package was

4681submitted. CHC is guilty of fraud. It submitted a forged fire

4692inspection certificate with the intent that the Department of

4701Education would rely upon the certificate to renew CHC’s

4710eligibility for the scholarships programs. Had not BCFR alerted

4719the Department of Education to the bogus certificate, the

4728Department of Education would have relied on the forged

4737certificate to approve CHC’s eligibility for the 2009-2010

4745school year, and the Department of Education would not have

4755known that CHC had not been in compliance with the fire

4766inspection requirement for some time.

477145. The Agency has established by clear and convincing

4780evidence that CHC is guilty of fraudulent activity when it

4790submitted the purported letter from BCFR along with the altered

4800BCFR transmission coversheet. The letter was written to appear

4809that it came from BCFR and was written to place some of the

4822blame for CHC’s failure to maintain current, violation-free fire

4831inspection report status on BCFR. The BCFR transmission

4839coversheet was altered so that it appeared that the purported

4849BCFR letter was sent from BCFR to CHC. The letter was written

4861by the owner of CHC and not BCFR. It was intended that the

4874Department of Education would rely on the letter in mitigation

4884of the violations committed by CHC relating to the failure of

4895CHC to have current fire inspection reports.

490246. The Agency has alleged that CHC is guilty of

4912fraudulent activity as it relates to the submittal of a forged

4923fire inspection certificate on behalf of CHC 2. The Agency has

4934failed to establish that it was CHC and not CHC 2 who was

4947responsible for submitting the forged certificate on behalf of

4956CHC 2. No evidence was presented to establish that Ms. Nichilo

4967was not acting in her capacity as the owner of CHC 2 when the

4981forged certificate was submitted with the renewal package.

498947. The evidence establishes that the Agency had grounds

4998to immediately suspend CHC’s eligibility for the McKay

5006Scholarships and CTC Scholarships programs. The evidence

5013establishes that the actions of CHC were so egregious as to

5024warrant revocation of CHC’s eligibility for the McKay

5032Scholarships and CTC Scholarships programs.

5037RECOMMENDATION

5038Based on the foregoing Findings of Fact and Conclusions of

5048Law, it is RECOMMENDED that a final order be entered sustaining

5059the suspension of CHC’s eligibility for the McKay Scholarships

5068and CTC Scholarships programs and revoking CHC’s eligibility for

5077the McKay Scholarships and CTC Scholarships programs.

5084DONE AND ENTERED this 4th day of May, 2009, in Tallahassee,

5095Leon County, Florida.

5098S

5099SUSAN B. HARRELL

5102Administrative Law Judge

5105Division of Administrative Hearings

5109The DeSoto Building

51121230 Apalachee Parkway

5115Tallahassee, Florida 32399-3060

5118(850) 488-9675

5120Fax Filing (850) 921-6847

5124www.doah.state.fl.us

5125Filed with the Clerk of the

5131Division of Administrative Hearings

5135this 4th day of May, 2009.

5141ENDNOTES

51421/ Unless otherwise indicated, all references to the Florida

5151Statutes are to the 2008 version.

51572/ An Administrative Complaint and Amended Administrative

5164Complaint had also been filed against CHC 2. CHC 2 had

5175requested an administrative hearing regarding the Administrative

5182Complaint and Amended Administrative Complaint, but later

5189dismissed its request for a hearing. CHC 2 has been sold.

52003/ The Department of Education had revised its Form IEPC SCF-1

5211affidavits for use in renewals for the 2009-2010 school year.

5221At the time CHC submitted the affidavit in November, CHC had not

5233been given the revised form.

52384/ Respondent’s Exhibit 10.

5242COPIES FURNISHED :

5245Jason M. Hand, Esquire

5249Department of Education

5252325 West Gaines Street, Suite 1244

5258Tallahassee, Florida 32399-0400

5261Lisa L. Hogreve, Esquire

5265Lisa L. Hogreve, L.C.

526996 Willard Street, Suite 206

5274Cocoa, Florida 32922-7946

5277Lynn Abbott, Agency Clerk

5281Department of Education

5284Turlington Building, Suite 1514

5288325 West Gaines Street

5292Tallahassee, Florida 32399-0400

5295Deborah K. Kearney, General Counsel

5300Department of Education

5303Turlington Building, Suite 1244

5307325 West Gaines Street

5311Tallahassee, Florida 32399-0400

5314Dr. Eric J. Smith

5318Commissioner of Education

5321Department of Education

5324Turlington Building, Suite 1514

5328325 West Gaines Street

5332Tallahassee, Florida, 32399-0400

5335NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

5341All parties have the right to submit written exceptions within

535115 days from the date of this Recommended Order. Any exceptions

5362to this Recommended Order should be filed with the agency that

5373will issue the Final Order in this case.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 06/25/2013
Proceedings: (Agency) Final Order filed.
PDF:
Date: 06/05/2009
Proceedings: Agency Final Order
PDF:
Date: 05/04/2009
Proceedings: Recommended Order
PDF:
Date: 05/04/2009
Proceedings: Recommended Order cover letter identifying the hearing record referred to the Agency.
PDF:
Date: 05/04/2009
Proceedings: Recommended Order (hearing held March 19, 2009). CASE CLOSED.
PDF:
Date: 04/13/2009
Proceedings: Petitioner`s Proposed Recommended Order filed.
Date: 04/03/2009
Proceedings: Transcript of Hearing (Volumes I&II) filed.
PDF:
Date: 04/01/2009
Proceedings: Respondent`s Request for Production of Documents filed.
PDF:
Date: 04/01/2009
Proceedings: Respondent`s Complaince with Initial Order filed.
PDF:
Date: 04/01/2009
Proceedings: Petition for Entry of Initial Scheduling Order filed.
PDF:
Date: 04/01/2009
Proceedings: Notice of Serving Serving Respondent`s First Set of Interogatories filed.
PDF:
Date: 04/01/2009
Proceedings: Notice of Serving Responden`s Answers to Petitioner`s First Interlocking Discovery filed.
PDF:
Date: 04/01/2009
Proceedings: Motion to Dismiss Complaint as Amended filed.
PDF:
Date: 04/01/2009
Proceedings: Motion for Rehearing filed.
PDF:
Date: 04/01/2009
Proceedings: Response to Amended Administrative Complaint and Request for Hearing filed.
PDF:
Date: 03/30/2009
Proceedings: (Respondent`s Proposed) Recommended Order filed.
PDF:
Date: 03/30/2009
Proceedings: Respondent`s Memorandum of Law in Support of its Recommended Order filed.
PDF:
Date: 03/19/2009
Proceedings: Motion for Rehearing filed.
PDF:
Date: 03/19/2009
Proceedings: Motion to Dismiss Complaint as Amended filed.
Date: 03/19/2009
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 03/18/2009
Proceedings: Letter to L. Nichilo from E. Smith regarding second amended order filed.
PDF:
Date: 03/18/2009
Proceedings: Respondent`s Unilateral Pre-hearing Statement filed.
PDF:
Date: 03/18/2009
Proceedings: Petitioner`s Unilateral Pre-hearing Statement filed.
PDF:
Date: 03/13/2009
Proceedings: Notice of Transfer.
PDF:
Date: 03/12/2009
Proceedings: Order (Motion for Leave to Amend Administrative Complaint is granted).
PDF:
Date: 03/10/2009
Proceedings: Petitioner`s Response to Respondent`s Request for Admissions filed.
PDF:
Date: 03/10/2009
Proceedings: Petitioner`s Response to Respondent`s Interrogatories filed.
PDF:
Date: 03/09/2009
Proceedings: Amended Notice of Deposition (of K. Wilinski) filed.
PDF:
Date: 03/04/2009
Proceedings: Order of Pre-hearing Instructions.
PDF:
Date: 03/04/2009
Proceedings: Notice of Hearing (hearing set for March 19, 2009; 9:00 a.m.; Titusville, FL).
PDF:
Date: 03/04/2009
Proceedings: Notice of Telephonic Deposition filed.
PDF:
Date: 03/04/2009
Proceedings: Notice of Deposition filed.
PDF:
Date: 03/04/2009
Proceedings: Notice of Depositions Duces Tecum filed.
PDF:
Date: 03/04/2009
Proceedings: Motion for Leave to Amend Administrative Complaint filed.
PDF:
Date: 03/04/2009
Proceedings: Response to Production of Documents Request filed.
PDF:
Date: 03/03/2009
Proceedings: Response to Petition for Entry of Initial Scheduling Order filed.
PDF:
Date: 03/02/2009
Proceedings: Petition for Entry of Final Scheduling Order filed.
PDF:
Date: 02/26/2009
Proceedings: First Interlocking Request for Admissions, Interrogatories, and Request to Produce filed.
PDF:
Date: 02/26/2009
Proceedings: Response to Initial Order filed.
PDF:
Date: 02/20/2009
Proceedings: Initial Order.
PDF:
Date: 02/19/2009
Proceedings: Responent`s Request for Production of Documents filed.
PDF:
Date: 02/19/2009
Proceedings: Response to Amended Administrative Complaint and Request for Hearing filed.
PDF:
Date: 02/19/2009
Proceedings: Request for Hearing filed.
PDF:
Date: 02/19/2009
Proceedings: Administrative Complaint filed.
PDF:
Date: 02/19/2009
Proceedings: Letter to L. Nichilo from Dr. E. Smith regarding Immediate Suspension of Scholarship Payments and Scholarship Program Participation filed.
PDF:
Date: 02/19/2009
Proceedings: Agency referral

Case Information

Judge:
SUSAN BELYEU KIRKLAND
Date Filed:
02/19/2009
Date Assignment:
03/13/2009
Last Docket Entry:
06/25/2013
Location:
Trenton, Florida
District:
Northern
Agency:
ADOPTED IN TOTO
 

Counsels

Related DOAH Cases(s) (2):

Related Florida Statute(s) (6):

Related Florida Rule(s) (2):