13-000801 P* vs. Office Of Financial Regulation Status: Closed Recommended Order on Thursday, July 11, 2013.

Summary: Petitioners failed to disclose criminal charges on an application for a motor vehicle retail installment license. Recommend denial of license application.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

P*, Petitioners ,

vs. Case No. 13 - 0801

OFFICE OF FINANCIAL REGULATION ,

Respondent .

/

RECOMMENDED ORDE R

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

May 14, 2013, via video teleconference in Tampa and Tallahassee,

Florida, before Lynne A. Quimby - Pennock, Administrative Law Judge

of the Division of Administrative Hearings (D OAH ).

APPEARANCE S

For Petitioner: Scott Robert Toner, Esquire

Toner and Ramirez, P.A.

5323 Spring Hill Drive

Spring Hill, Florida 34606

For Respondent: William Michael Oglo, Esquire

Office of Financial Regulation

Fletcher Building, Suite 550

200 East Gaines Street

Tallahassee, Florida 32399 - 0376

STATEMENT OF THE ISSUE

The issue is whether the Petitioners ' applicati on for

licensure as a motor vehicle retail installment seller should be

approved.

PRELIMINARY STATEMENT

On December 12, 2012, the Office of Financial Regulation

(Respondent or OFR) , issued a Denial Letter to P*

, managing member of P*

advising him that P* ' s application for licensure as a

motor vehicle retail installment seller was denied based on

violations of section 520.995, Florida Statutes, (2012). 1/

Specifically, OFR denied the application based on the failure to

disclose six criminal cases 2/ involving P*.

P* , Petitioners, disputed OFR ' s

denial and timely filed a Petition for Administrative Hearing.

OFR referred the matter to D OAH for purposes of hearing.

At heari ng, Petitioners called P*, T. J. Tessner,

Andrew Bishay, and Larry King to testify. Petitioners ' Exhibits

1 through 12 were admitted into evidence. Respondent called

Jason Booth to testify. Respondent ' s Exhibits A, B and D were

received into e vidence without objection. Respondent ' s Exhibit C

was admitted into evidence except for pages 3 through 14, which

were taken under advisement. For the reasons set forth below,

Exhibit C is now admitted in total.

The one - volume Transcript was filed with D OAH on May 21,

2013. Both parties timely submitted their p roposed r ecommended

o rders, and each has been considered in the preparation of this

Recommended Order.

FINDING S OF FACT

1. OFR is the state agency responsible for the

administration and enforce ment of chapter 520, Florida Statutes,

and the rules promulgated thereunder.

2. P* is a Florida Limited Liability Company, with

P* as its owner and managing member.

3. On September 10, 2012, Petitioners filed an initial

application for a motor vehicle retail installment seller

license. OFR issued a deficiency letter to Petitioners on

September 14, 2012, seeking additional information. Petitioners

submitted additional information on September 18 and 19, 2012 ;

however, neither disclos ed the 2000 or 2001 criminal cases.

4. P* responded affirmatively to the following

question on the application:

Has the applicant ever been convicted of or

found guilty of, or pleaded guilty or nolo

contendere to, any crime under the law of any

s tate or of the United States, without regard

to whether a judgment of conviction has been

entered by the court?

5. Based on the affirmative response, P*

completed an additional disclosure reporting page. Therein

P* listed one incide nt, which occurred in 2002,

alleging odometer fraud and false statement in a car title

transfer. After additional investigation, these allegations were

dropped. 3/ P* was not convicted of, found guilty of nor

did he plead guilty or nolo contende re to these allegations ;

thus , this disclosure was not necessary.

6. P* was the subject of other criminal cases but

those cases were not disclosed on the disclosure reporting page.

7. OFR ' s application review process found the following

2000 a nd 2001 criminal cases against P* in the

Thirteenth Judicial Circuit , in and for Hillsborough County,

Florida:

Dealing in Stolen Property; Criminal

Mischief; Arson Second Degree; Grand Theft

Third Degree ; and three counts of Grand Theft

Motor Ve hicle. Adjudication was withheld on

each.

8. On February 7, 2002, following his pleading guilty to

these allegations, the criminal court withheld the adjudication

of guilt and sentenced P* to 60 months probation.

These allegations involved fr aud, dishonest dealings or acts

involving moral turpitude. At some point in time, Mr. Elnagger

became a confidential informant. It is unclear whether he did

this as a result of a plea agreement or at the request of law

enforcement . P* believed that these six criminal

charges would " go away " if he assisted law enforcement. Although

no one other than P* testified to his involvement as a

confidential informant, on October 25, 2004, the circuit court

entered a " COURT ORDER TERMINATING [P* ' s] PROBATION. "

P* believed these criminal cases had gone away.

However, there was no court document or other evidence declaring

that the charges had been dropped, dismissed or expunged.

P* ' s understanding regarding t he legal effect of the

termination of probation was erroneous.

9. In March 2012, Petitioner was issued a license by the

Department of Highway Safety and Motor Vehicles, Division of

Motorist Services (HSMV) " TO CONDUCT AND CARRY ON BUSINESS AS AN

INDEPENDE NT DEALER IN MOTOR VEHICLES. " In order to obtain that

license, P* had to complete a HSMV license application

(Respondent ' s Exhibit C, pages 3 through 14).

10. On th e HSMV application, P* responded

negatively and appropriately to the f ollowing inquiry:

Has this applicant, partner, corporate

officer or director:

Been convicted of a felony or equivalent

charge anywhere?

(emphasis added).

11. In follow - up to a HSMV request, P* was asked

to provide court documents on the facts a nd disposition of some

1998 criminal charges. P* contacted the clerk of the

court of Hillsborough County and received a letter that stated:

Please be advised that on this date

[November 15, 2011] a search of Felony &

Misdemeanor records coveri ng the year(s)

01/01/1998 thru 12/31/1998 was conducted on

the following subject:

P* DOB:02/28/1981

This search revealed NO RECORD of any Felony

or Misdemeanor offense on this subject during

this time period . It does not include

criminal Traffic o r Juvenile offenses. This

search is valid for Hillsborough County,

Florida [,] only.

(emphasis added).

12. P* had no difficulty in answering the HSMV

question as it asked specifically about a conviction. OFR ' s

question was different : it asked " regardless of adjudication. "

P* did not provide any information about the criminal

allegations from 2000 or 2001.

13. P* attributes his response to the OFR

question to his thinking those criminal allegations had been

deal t with, yet he provided no evidence, other than his self -

serving responses that they were gone.

14. Mr. Tessner became acquainted with P*

approximately six years ago. Mr. Tessner considers P*

a friend and work associate. Mr. Tessner has provided

P* with signed blank checks for P* ' s use at

auto auctions. However, Mr. Tessner was unaware of

P* ' s past criminal activities .

15. Mr. Bishay first became acquainted with P*

approximately 13 years ago when they met through a mutual friend

and discovered they both knew a lot about cars. Mr. Bishay

considers P* a friend and has worked for him in the

past. Mr. Bishay was aware that P* " got arrested for

something involving automobiles . " The two men lost touch when

Mr. Bishay left for college in early 2002. They became

reacquainted in 2004 or 2005. Mr. Bishay believes P*

did not disclose the criminal activities because " he

[P*] did not know that he was supposed t o disclose

it . . . or there was just some sort of misunderstanding between

him and the question. "

16. Mr. King has known P* approximately five

years in a business relationship. Mr. King buys used cars, fixes

them up, and turns them over to P* to s ell .

17. The testimony by P* ' s colleagues about his

character, while enlightening, does not negate the fact that

P* failed to answer OFR ' s inquiry truthfully. Except

for Mr. Bishay, these witnesses were unaware of P* ' s

past criminal actions.

18. The evidence clearly and convincingly established that

P* pled guilty to the criminal allegations; that

adjudication was withheld as to each allegation; that the

allegations were not sealed or expunged ; and that Petitioner s

(P*, LLC and/or P*) failed to disclose

the information on the OFR license application.

CONCLUSIONS OF LAW

19. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matte r of this

proceeding pursuant to chapter 120 , Fl orid a Stat utes .

20 . OFR, through its Bureau of Registrations, is the state

agency responsible for the administration and regulation of motor

vehicle retail installment seller s under section 520.995.

2 1 . OFR has the burden to prove that the application is

subject to denial, as alleged in the written notice given

Petitioners. See Dep ' t of Banking & Fin. v. Osborne Stern & Co. ,

670 So. 2d 932, 934 (Fla. 1996)( " The general rule is that a party

asserting the aff irmative of an issue has the burden of

presenting evidence as to that issue. " ); M.H. v. Dep ' t of Child.

& Fam. Servs. , 977 So. 2d 755, 761 (Fla. 2d DCA 2008)( " [I]f the

licensing agency proposes to deny the requested license based on

specific acts of miscon duct, then the agency assumes the burden

of proving the specific acts of misconduct that it claims

demonstrate the applicant ' s lack of fitness to be licensed. " );

and Fla. Dep ' t of HRS v. Career Serv. Comm ' n , 289 So. 2d 412, 414

(Fla. 4th DCA 1974)( " [T]he b urden of proof is ' on the party

asserting the affirmative of an issue before an administrative

tribunal. '" ). To meet its burden, OFR must establish by a

preponderance of the evidence that the applicant ' s culpability

f or the specific act(s) of misconduct i s as alleged in the denial

letter. See M.H. , supra , at 762 - 63

2 2 . Section 520.995, Florida Statutes , provides in

pertinent part:

(3) In addition to the acts specified in

subsection (1), the following shall be

grounds for denial of a license pursuant t o

this chapter, or for revocation, suspension,

or restriction of a license previously

granted:

(a) A material misstatement of fact in an

initial or renewal application for a license;

* * *

(c) Pleading nolo contendere to, or having

been convicted or found guilty of, a crime

involving fraud, dishonest dealing, or any

act of moral turpitude, regardless of whether

adjudication is withheld; or . . .

2 3 . Section 520.995(3)(a) does not require Petitioners to

have knowingly answered the application ques tion incorrectly.

The only requirement is that there is a material misstatement of

fact. OFR proved the material misstatement.

2 4 . Section 520.995(3)(c) clearly states " regardless of

whether adjudication is withheld. " P* entered pleas of

gui lty, and the court withheld adjudication.

2 5 . Florida Administrative Code Rule 69V - 85.111 provides in

pertinent part:

(3)(a) In the presence of aggravating or

mitigating circumstances supported by clear

and convincing evidence the Office of

Financial Reg ulation shall be entitled to

deviate from the above guidelines in imposing

discipline upon a person.

(b) Aggravating or mitigating circumstances

may include, but are not limited to, the

following:

1. The severity of the act.

2. The degree of harm to the consumer or

public.

3. The number of times the acts previously

have been committed by the person.

4. The disciplinary history of the person.

5. The status of the person at the time the act was

committed.

2 6 . P* knew he had pled guilty to the criminal

allegations, yet he did not disclose that information.

2 7 . OFR has met its burden of proving by a preponderance of

the evidence that Petitioners failed to disclose P* ' s

guilty pleas to felony criminal allegations on the application

for licensure as a motor vehicle retail installment seller.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Office of Financial

Regulation issue a final order denying Pet itioners ' application

for the motor vehicle retail installment seller on the grounds

alleged in the letter dated December 12, 2012.

DONE AND ENTERED this 11th day of July , 2013 , in

Tallahassee, Leon County, Florida.

S

LYN NE A. QUIMBY - PENNOCK

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

Divisio n of Administrative Hearings

this 11th day of July , 2013 .

ENDNOTE S

1/ All references to Florida Statutes are to Florida Statutes

(2012), unless otherwise noted.

2/ On February 7, 2002, P* pled guilty to: dealing in

stolen property; crimina l mischief; arson second degree; grand

theft third degree; and three counts of grand theft motor

vehicle. Adjudication was withheld on each count. It appears

there are seven actual charges , however both parties maintained

there were only six.

3/ P* bought a used car that had previously had the

odometer altered. P* was able to provide proof to the

authorities that he did not alter the odometer reading.

COPIES FURNISHED:

William Michael Oglo, Esquire

Office of Financial Regulation

Fletcher Building, Suite 550

200 East Gaines Street

Tallahassee, Florida 32399 - 0376

Scott Robert Toner, Esquire

Toner and Ramirez, P.A.

5323 Spring Hill Drive

Spring Hill, Florida 34606

Drew J. Breakspear, Commissioner

Office of Financial Regulation

T he Fletcher Building

200 East Gaines Street

Tallahassee, Florida 32399 - 03 50

Colin M. Roopnarine, General Counsel

Office of Financial Regulation

The Fletcher Building, Suite 118

200 East Gaines Street

Tallahassee, Florida 32399 - 037 0

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.