96-006136 Bt Professional Services, Inc., D/B/A Omar Video vs. Department Of Banking And Finance Status: Closed Recommended Order on Wednesday, December 2, 1998.

Summary: Respondent's denial of Petitioner's application for registration as a check cashier is warranted. Deny application.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BT PROFESSIONAL SERVICES, INC., )

)

Petitioner, )

)

vs. ) Case No. 96-6136

)

DEPARTMENT OF BANKING AND )

FINANCE, DIVISION OF BANKING, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on August 19, 1998, by video teleconference at Miami, Florida,

before Errol H. Powell, a duly designated Administrative Law

Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jonathan K. Thiele, Esquire

6780 Coral Way, Suite 200

Miami, Florida 33155

For Respondent: Robert Alan Fox

Assistant General Counsel

Department of Banking and Finance

The Fletcher Building

101 East Gaines Street, Suite 526

Tallahassee, Florida 32399

STATEMENT OF THE ISSUES

The issue for determination is whether Petitioner is

eligible for registration as a check casher.

PRELIMINARY STATEMENT

By letter dated November 22, 1996, the Department of Banking

and Finance, Division of Banking (Respondent) notified BT

Professional Services, Inc. (Petitioner), among other things, of

its intent to deny Petitioner's application to register as a

check casher pursuant to Chapter 560, Florida Statutes, and the

grounds for the denial. By letter dated December 13, 1996,

Petitioner, through its counsel, requested a formal hearing

regarding Respondent's notice of intent to deny. On December 30,

1996, this matter was referred to the Division of Administrative

Hearings.

At the request of the parties, the hearing in this matter

was continued and this matter was held in abeyance. Having been

held in abeyance for several months, this matter was not resolved

and was scheduled for hearing sua sponte .

On August 13, 1998, a motion hearing was held regarding,

among other things, a motion to amend the denial letter by the

Respondent and a motion to close the hearing and make the

documents related to the hearing confidential. Both motions were

granted. The denial letter was amended to add Subsections

560.114(1)(f) and (2)(c), Florida Statutes, as additional grounds

for denial of the application in that Omar Toledo was found

guilty of violating Title 31 U.S.C. Sections 5313(a) and 5322(a),

Title 18 U.S.C. Section 2, and 31 C.F.R. Section 103.22 (Counts

VIII through X of the Superseding Indictment in the case styled

United States of America v. Omar Lazaro Toledo and Beatriz

Toledo , Case No. 96-599-Cr-UUB(s), Southern District of Florida);

and that the statutory provisions permit Respondent to deny an

application for registration if a person has been found guilty of

a crime involving fraud or dishonest dealing.

At hearing, Petitioner presented the testimony of two

witnesses and entered no exhibits into evidence. Respondent

presented the testimony of one witness and entered twenty-seven

(27) exhibits into evidence. Also, the parties filed a joint

stipulation in which numerous facts were agreed to and did not

require proof at hearing.

A transcript of the proceeding was ordered. Respondent was

permitted to late-file an exhibit. Even though Petitioner was

provided an opportunity to respond to the exhibit, Petitioner did

not respond. Only Respondent filed a post-hearing submission,

and that submission has been considered in the preparation of

this Recommended Order.

FINDINGS OF FACT

1. The Department of Banking and Finance (Respondent) is

the state agency responsible for administering Chapter 560,

Florida Statutes (1995). The said statute is referred to as the

Money Transmitters' Code and in material part governs the

registration of check cashers in the State of Florida.

2. BT Professional Services, Inc. (Petitioner), is a

registered Florida corporation. Petitioner's principal place of

business is 4410 West 16th Avenue, Bay 8, Hialeah, Florida

33012.

3. By application dated April 8, 1996, Petitioner made

application to register as a money transmitter, i.e., check

casher, pursuant to Chapter 560, Florida Statutes. The

application was signed by Omar Toledo, as Petitioner's president.

The application indicated, among other things, that Beatriz

Toledo was Petitioner's vice-president; that she was the person

from whom additional details, regarding the application, could be

obtained; and that her contact address was 4410 West 16th Avenue,

Bay 8, Hialeah, Florida 33012, the same as Petitioner's address.

4. Omar Toledo and Beatriz Toledo are husband and wife.

5. Respondent received the application on April 12, 1996,

together with a biographical report of Omar Toledo, as one of

Petitioner’s directors. Upon review, Respondent determined that

the application was incomplete.

6. In addition to errors and omissions, the biographical

report for Beatriz Toledo, as one of Petitioner's directors, was

not submitted with the application.

7. By letter dated May 7, 1996, and addressed to

Mrs. Toledo, Respondent requested additional information and the

correction of errors and omissions. Among other things, the

letter requested Mrs. Toledo's biographical report.

8. Moreover, the letter dated May 7, 1996, notified

Petitioner, among other things, that it had sixty (60) days to

provide the requested information; and that failure to comply

with the letter may be grounds for denial of the application.

9. On May 30, 1996, Respondent received Petitioner’s

response, through Mrs. Toledo, to the letter dated May 7, 1996.

Petitioner complied with almost all of the letter’s requests.

However, instead of submitting a biographical report for

Mrs. Toledo, Petitioner submitted a biographical form for

Mr. Toledo.

10. The biographical form is an addendum to the

application. Respondent provides the form to an applicant.

11. By letter dated June 6, 1996, and addressed to

Mrs. Toledo, Respondent, among other things, acknowledged receipt

of the submitted information and again requested Mrs. Toledo to

complete and submit the biographical report on her. Further,

Respondent advised Petitioner that it had until July 8, 1996, to

provide the requested information. Moreover, Respondent again

notified Petitioner that failure to comply with the request may

be grounds for denial of the application.

12. On June 24, 1996, Respondent received Petitioner’s

response to the letter dated June 6, 1996. Responding to the

letter dated June 6, 1996, Petitioner submitted a biographical

form on Mrs. Toledo. However, the biographical form was

incomplete in that questions 6A, C, and D of the biographical

form were not answered.

13. By letter dated July 11, 1996, and addressed to

Mrs. Toledo, Respondent, among other things, acknowledged receipt

of Mrs. Toledo's biographical form, 1/ but again notified her

that the biographical form was incomplete in that questions 6A,

C, and D were not answered. The letter also notified Petitioner

that it had until July 22, 1996, to provide the requested

information and that failure to comply with the request may be

grounds for denial of the application.

14. Respondent did not receive a reply to the letter dated

July 11, 1996. The letter was not returned by the U.S. Postal

Service. An inference is drawn that Petitioner received the

letter. Petitioner did not provide Respondent with a completed

biographical form or report on Mrs. Toledo.

15. Respondent performed a background investigation upon

Omar Toledo and Beatriz Toledo. The investigation revealed that

both Mr. and Mrs. Toledo were under indictment for numerous

criminal offenses involving money laundering.

16. By letter dated November 22, 1996, Respondent notified

Petitioner of its intent to deny Petitioner's application to

register as a check casher. Respondent cited several grounds for

the denial.

17. As a ground for the denial, Respondent cited that both

Mr. and Mrs. Toledo were subjects of pending criminal

prosecution. Mr. and Mrs. Toledo were charged in a superceding

indictment and were being prosecuted regarding money laundering

in the case styled United States of America v. Omar Lazaro Toledo

and Beatriz Toledo , Case No. 96-599-Cr-UUB(s), U.S. Southern

District of Florida.

18. At the time of the formal hearing in the case sub

judice , criminal charges remained pending against Mrs. Toledo. 2/

19. Prior to the formal hearing in the case sub judice ,

Respondent was granted leave to amend the denial letter to

include, as a ground for denial, Mr. Toledo being convicted of

some of the criminal charges in the federal money laundering

case. Mr. Toledo had been found guilty of three of the counts of

criminal conduct. The three counts (Counts VIII, IX, and X)

involved the knowing and willful failure to file a report

required by federal law regarding currency transactions. He did

not appeal his convictions. 3/

20. As an additional ground for the denial, Respondent

cited that Petitioner failed to correct the omission of a

completed biographical report for Mrs. Toledo. An incomplete

biographical form for Mrs. Toledo was submitted to Respondent in

that Mrs. Toledo failed to respond to questions 6A, C, and D.

Mrs. Toledo failed to respond to the said questions even after

being requested to do so more than once by Respondent.

21. Also, as a ground for the denial, Respondent cited that

Petitioner knowingly failed to comply with the advertising

prohibition for a non-registered check casher, pursuant to

Chapter 560, Florida Statutes. On or about April 4, 1996,

Petitioner, through Mrs. Toledo, was notified by one of

Respondent's representatives, an inspector, that registration

with Respondent was required for Petitioner to advertise check

cashing services. Even after the notification, Petitioner

continued to advertise check cashing services by way of a sign,

promotional display, on the outside of Petitioner's facility

indicating check cashing services. The advertising of check

cashing services on the outside of Petitioner’s facility

continued beyond the date of the denial letter through February

1997.

22. Moreover, after receiving the denial letter dated of

November 22, 1996, Petitioner advertised check cashing services

from March 1997, through July 7, 1997, by way of a sign,

promotional display, on the inside of Petitioner's facility

indicating check cashing services.

23. Further, as a ground for the denial, Respondent cited

that Petitioner had made a material misrepresentation regarding

Mr. Toledo's prior arrests. Petitioner submitted a biographical

report on Mr. Toledo, which, among other things, requested

information regarding Mr. Toledo’s arrests, charges and/or

convictions of a criminal offense, to which Mr. Toledo responded.

Also, Petitioner submitted a biographical form on Mr. Toledo,

which, among other things, requested information regarding his

prior arrests in question 6A, to which Mr. Toledo did not

respond. But, Mr. Toledo, as Petitioner’s president, did respond

to a question on the application, question 6 of Section 1, as to

his "criminal convictions, pleas of nolo contendere, and cases of

adjudication withheld." 4/ Furthermore, pursuant to a request

from Respondent, Mr. Toledo provided to Respondent related

documents pertaining to the criminal court cases by way of a

docket printout from the Criminal Justice Information System. 5/

However, at no time did Mr. Toledo disclose that on May 18, 1995,

he was arrested and charged with criminal assault. 6/

24. At no time did Petitioner seek to amend its application

dated April 8, 1996.

25. On June 1, 1996, Mr. Toledo resigned as Petitioner's

president and assigned all of his stock to Mrs. Toledo who became

the president and who had all of the stock. At no time after the

resignation and assignment did Petitioner seek to amend its

application of April 8, 1996.

26. On or about July 14, 1997, Petitioner made Respondent

aware of Mr. Toledo's resignation and assignment through

Petitioner’s response to interrogatories.

CONCLUSIONS OF LAW

27. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and the

parties thereto pursuant to Section 120.569 and Subsection

120.57(1), Florida Statutes.

28. Petitioner, as the applicant, has the ultimate burden

of proof to establish by a preponderance of the evidence that it

is entitled to the registration as a check casher. Florida

Department of Transportation v. J.W.C. Company, Inc. , 396 So. 2d

778, 788 (Fla. 1st DCA 1981); Subsection 120.57(1)(j), Florida

Statutes.

29. Chapter 560, Florida Statutes, provides the statutory

provisions for the "Money Transmitters' Code."

30. Section 560.303, Florida Statutes, provides in

pertinent part:

(1) No person shall engage in, or any manner

advertise engagement in, the business of

cashing payment instruments or the exchanging

of foreign currency without first registering

under the provisions of this part.

31. Section 560.306, Florida Statutes, provides in

pertinent part:

(2) The department [Florida Department of

Banking and Finance] may deny an initial

application for registration if the applicant

or money transmitter-affiliated party of the

applicant is the subject of a pending

criminal prosecution or governmental

enforcement action, in any jurisdiction,

until the conclusion of such criminal

prosecution or enforcement action.

32. Section 560.103, Florida Statutes, provides in

pertinent part:

(3) "Check casher" means a person who, for

compensation, sells currency in exchange for

payment instruments received, except

travelers checks and foreign-drawn payment

instruments.

* * *

(10) "Money transmitter" means any person

located in or doing business in this state

who acts as a payment instrument seller,

foreign currency exchanger, check casher, or

funds transmitter.

(11) "Money transmitter-affiliated party"

means any director, officer, responsible

person, employee . . . or a person who . . .

is found to control a money transmitter

pursuant to s. 560.127 . . . .

33. There is no disagreement that Petitioner is applying

for initial registration as a money transmitter, a check casher,

as defined by Subsections 560.103(3) and (10), Florida Statutes.

34. Mrs. Toledo is a money transmitter-affiliated party, as

defined by Subsection 560.103(11), Florida Statutes. She is the

subject of a pending criminal prosecution by the federal

government in a money laundering case. At this time, the denial

of Petitioner’s application for registration as a check casher is

warranted.

35. In the criminal prosecution of Mr. Toledo by the

federal government in the money laundering case, Mr. Toledo was

convicted of several counts of knowingly and willfully failing to

comply with reporting requirements for currency transactions.

The evasion of the federal reporting requirements for currency

transactions is a crime involving fraud or dishonest dealing.

The convictions of Mr. Toledo warrant the denial of Petitioner’s

application for registration as a check casher.

36. Section 560.114, Florida Statutes, provides in

pertinent part:

(1) The following actions by a money

transmitter or money transmitter-affiliated

party are violations of the code [Money

Transmitters' Code] and constitute grounds

for the . . . denial of a registration

application . . .:

(a) Knowing failure to comply with any

provision of the code, any rule or order

adopted pursuant thereto . . . .

* * *

(2) In addition to the acts specified in

subsection (1), the following acts are

grounds for denial of registration . . .:

(a) A material misstatement of fact in an

initial or renewal application for

registration.

* * *

(d) Having been convicted of or found guilty

of, or having pled guilty or nolo contendere

to, a crime involving fraud or dishonest

dealing.

37. Petitioner failed to disclose on the application,

Mr. Toledo's biographical report, and his biographical form that

Mr. Toledo had been arrested for criminal assault. Petitioner

made a material misstatement of fact on its application, which

warrants the denial of Petitioner’s application for registration

as a check casher.

38. Petitioner knowingly advertised check cashing services

without being registered by placing signs for check cashing

services within and outside of its facility. Registration with

Respondent for check cashing services is required before

advertising can take place. Subsection 560.303(1), Florida

Statutes. The undersigned is persuaded by Respondent that

"knowing" or "knowingly" requires that the person committing the

act need only have knowledge of the facts; knowledge of the law

itself is not required nor is it an element of the offense. See

United States v. International Minerals and Chemical Corporation ,

402 U.S. 558, 91 S.Ct. 1697, 29 L.Ed.2d 178 (1971); Boyce Motor

Lines v. United States , 342 U.S. 337, 72 S.Ct. 329, 96 L.Ed. 367

(1952); United States v. Illinois Central Railroad Company , 303

U.S. 239, 58 S.Ct. 533, 82 L.Ed. 773 (1938). Moreover, even

after Petitioner was notified by Respondent that registration was

required, Petitioner continued to advertise check cashing

services. Petitioner knowingly failed to comply with the

advertising prohibition, which warrants the denial of

Petitioner’s application for registration as a check casher.

39. Petitioner failed to provide Respondent with a complete

biographical form or report for Mrs. Toledo. Respondent notified

Petitioner more than once of the omissions from Mrs. Toledo’s

biographical form, but Petitioner failed to provide the omitted

information. Section 120.60, Florida Statutes (1996), provides

in pertinent part:

(1) Upon receipt of an application for a

license, an agency shall examine the

application and, within 30 days after such

receipt, notify the applicant of any apparent

errors or omissions and request any

additional information the agency is

permitted by law to require. An agency shall

not deny a license for failure to correct an

error or omission or to supply additional

information unless the agency timely notified

the applicant within this 30-day period. An

application shall be considered complete upon

receipt of all requested information and

correction of any error or omission for which

the applicant was timely notified or when the

time for such notification has expired. . . .

Rule 3C-560.122, Florida Administrative Code, effective

August 18, 1996, through September 23, 1997, provides in

pertinent part:

(2) Request for Additional Information. Any

request for additional information will be

made by the Department within thirty (30)

days after receipt of the application by the

Department. The additional information must

be received by the Department within forty-

five (45) days from the date of the request.

Failure to respond to the request within

forty-five (45) days from the date of request

shall be construed by the Department as

grounds for denial for failure to complete

the application, and the application shall be

denied pursuant to s. 120.60(2) [sic], F.S.

Petitioner’s failure to provide Respondent with a complete

biographical form warrants a denial of Petitioner’s application

for registration as a check casher.

40. At no time did Petitioner amend or seek to amend its

application for registration as a check casher. Mr. Toledo’s

resignation as Petitioner’s president did not amend Petitioner’s

application. Rule 3C-560.122(3), Florida Administrative Code,

effective August 18, 1996, through September 23, 1997, provides

in pertinent part:

(a) An applicant may amend the application

as to those factors generally within the

control or selection of the applicant once,

as a matter of course, at any time within

thirty (30) days from the Department’s

receipt for filing. Otherwise, the

application may be amended only with prior

written permission from the Department. . . .

Rule 3C-560.102, Florida Administrative Code, effective September

24, 1997, provides in pertinent part:

(7)(a) Amendment of Application. A request

to amend an application must be in writing

. . .

(b) Provided the department has not already

docketed a Notice of Intent to Deny the

Application, an applicant may amend the

application after receiving written

permission from the department . . . .

Petitioner did not amend its application within 30 days after

Respondent’s receipt of the application. Furthermore, subsequent

to the 30-days, at no time did Petitioner make a written request

to Respondent to amend its application.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Banking and Finance enter

a final order denying BT Professional Services, Inc.’s

application for registration as a check casher.

DONE AND ENTERED this _____ day of December, 1998, in

Tallahassee, Leon County, Florida.

___________________________________

ERROL H. POWELL

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

Filed with the Clerk of the

Division of Administrative Hearings

this _____ day of December, 1998.

ENDNOTES

1/ Respondent indicated in its letter dated July 11, 1996, that

it received the biographical form that was requested by

Respondent in its letter of June 6, 1996. An inference is drawn

that instead of a biographical report, as indicated in the letter

dated June 6, 1996, Respondent requested a biographical form to

be completed by Mrs. Toledo.

2/ Mrs. Toledo was found not guilty of several of the criminal

counts, but some counts remained pending.

3/ Mr. Toledo did appeal the federal judge's denial of his

motion to bar retrial on double jeopardy grounds and denial of

his objections to retrial. Mr. Toledo was successful on the

appeals.

4/ Section 1 of the application provides in pertinent part:

Section 1 - Applicant's History of

Operations.

* * *

6. If applicant is a corporation,

partnership or association, indicate any

material litigation, criminal convictions,

pleas of nolo contendere, and cases of

adjudication withheld for each individual

having a controlling ownership interest in

applicant and each responsible person who

will be in charge of applicant's registered

activities in this state.

5/ There is no evidence as to whether a printout was requested

regarding information on all of Mr. Toledo's arrests or only on

specific arrests. Such evidence would affect the omission of the

disclosure of the arrest as a ground for denial of Petitioner's

application.

6/ The assault was a misdemeanor, and the case was dismissed.

COPIES FURNISHED:

Jonathan K. Thiele, Esquire

6780 Coral Way, Suite 200

Miami, Florida 33155

Robert Alan Fox

Assistant General Counsel

Department of Banking and Finance

The Fletcher Building, Suite 526

101 East Gaines Street

Tallahassee, Florida 32399

Honorable Robert F. Milligan

Comptroller, State of Florida

The Capital, Plaza Level

Tallahassee, Florida 32399-0350

Harry Hooper, General Counsel

Department of Banking and Finance

Fletcher Building, Suite 526

101 East Gaines Street

Tallahassee, Florida 32399-0350

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.