ALJDEC

02A-2001136-ACY · State Board of Accountancy · 2002-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 28, 2002. APPEARANCES: The Arizona State Board of Accountancy was represented by Assistant Attorney General Dawn Walton Lee. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to A.R.S. § 32-701 et seq., the Arizona State Board of Accountancy (“Board”) is authorized to regulate and control the profession of Certified Public Accounting in the State of Arizona. 2. The Respondent was issued Certificate No. 9915-E by the Board on June 10, 1996. This certificate enables the Respondent to hold himself out and to practice as a certified public accountant in the State of Arizona. 3. On or about May 25, 2001, the Respondent appeared before Superior Court Judge Louis Araneta for sentencing in CR 1997-011943, State of Arizona v. Douglas James Will (B). 4. At sentencing, the Respondent entered a plea of guilty to the following crimes:

OFFENSE: COUNT 1: FACILITATION OF A FRAUDULENT SCHEME OR ARTIFICE, a class 6 Undesignated felony, nondangerous and nonrepetative offense in violation of A.R.S. §§ 13-2310, 13- 1006, 13-701, 13-702, 13-801, 13-802, 13-804, 13-301, 13-302, 13- 303, 13-304, 13-305 and 13-306 committed between April 1, 1992 and January 17, 1997.

OFFENSE: COUNT 2: FACILITATION OF A FRAUDULENT SCHEME OR ARTIFICE, a class 6 Undesignated felony, nondangerous and nonrepetative offense in violation of A.R.S. §§ 13-2310, 13- 1006, 13-701, 13-702, 13-801, 13-802, 13-804, 13-301, 13-302, 13- 303, 13-304, 13-305 and 13-306 committed between April 1, 1992 and January 17, 1997.

OFFENSE: COUNT 26: FACILITATION OF A FRAUDULENT SCHEME OR ARTIFICE, a class 6 Undesignated felony, nondangerous and nonrepetative offense in violation of A.R.S. §§ 13-2310, 13- 1006, 13-701, 13-702, 13-801, 13-802, 13-804, 13-301, 13-302, 13- 303, 13-304, 13-305 and 13-306 committed between April 1, 1992 and January 17, 1997.

5. After finding the Respondent guilty of the above-described crimes, the Superior imposed the following punishment on the Respondent:

a) Ordered suspending imposition of sentence and placing Respondent on probation as to Counts 1, 2 and 26 for a period of three years commencing May 25, 2001 under the supervision of the Adult Probation Department. b) Ordered that the Respondent complete 200 hours of community service at the rate of 20 hours each month beginning July 1, 2001. c) Ordered the Respondent to pay a monthly probation fee. d) Ordered that Respondent pay specified amounts of restitution to 117 victims of his crimes for their economic losses in the total amount of $102,302.00 through the Clerk of the Superior Court. Respondent is to make regular monthly payments in the amount of $700.00 commencing on July 1, 2001 until paid in full. e) Ordered that Respondent provide the Board with notice of his convictions in this case. f) Ordered various other fees and specified terms of probation.

6. On or about June 27, 2001, the Board received a copy of the minute entry from the Superior Court of Maricopa County, Arizona pertaining to the sentencing of the Respondent. 7. On or about October 4, 2001, the Board issued an Order of Summary Suspension which suspended Certified Public Account Certificate No. 9915- E issue to Respondent pending the outcome of formal proceedings pursuant to A.R.S. § 32-741(B). 8. On or about November 6, 2001, the Board issued a Complaint and Notice of Public Hearing against the Respondent, which advised Respondent, among other things, that a hearing on the complaint would be conducted by the Office of Administrative Hearings on January 28, 2002 at 2:00 p.m. 9. On Friday, January 25, 2002 Respondent filed a belated motion to continue the scheduled hearing. No reason for the request was given by Respondent. 10. On Monday, January 28, 2002, counsel for the Board filed a written response in opposition to the continuance request. 11. On Monday, January 28, 2002, the undersigned Administrative Law Judge denied Respondent’s belated continuance request for lack of good cause. 12. It is determined that the evidence presented to the Board supported its summary suspension of Respondent’s certification to protect the public. 13. Respondent should be precluded from practicing and holding himself out as a certified public accountant in the State of Arizona while on criminal probation. The Board’s desire to impose a disciplinary penalty in the form of suspension of Respondent’s certification concurrent with the term of his criminal probation will serve to protect the public from any certified public accounting by Respondent.

CONCLUSIONS OF LAW

1. The Board has personal and subject matter jurisdiction over Respondent pursuant to A.R.S. § 32-701 et seq. and A.A.C. R4-1-101 et seq. 2. Proper notice of hearing was given to the Respondent. His belated motion to continue filed Friday, January 25, 2002[1] did not stay the scheduled hearing. Respondent had the responsibility to be present and ready to proceed at the scheduled hearing unless and until a continuance was granted. Respondent could have renewed his request for the late continuance by presenting oral argument at the hearing in an attempt to establish good cause for granting it. 3. The Board’s Rules, set forth in A.A.C. R4-1-455-455.04, incorporate the Standards and Principles of Professional Conduct with which all registrants must comply. 4. The evidence of record supports the Board’s summary suspension of Respondent’s certificate pending formal hearing to protect the public welfare as required by A.R.S. §§ 41-1092.11(B) and 32-741(B). 5. Respondent’s conduct described in the above-described Findings of Fact constitute a violation of A.R.S. § 32-741(A)(1) (conviction of a felony under the laws of any state or of the United States if civil rights have not been restored pursuant to title 13, chapter 9[2] or other applicable recognized judicial or gubernatorial order). 6. Respondent’s conduct described in the above-described Findings of Fact constitute a violation of A.R.S. § 32-741(A)(2) (conviction of any crime that has a reasonable relationship to the practice of accounting as a certified public accountant or as a public accountant, including crimes involving accounting or tax violations, dishonesty, fraud, misrepresentation, embezzlement, theft, forgery, perjury or breach of fiduciary duty, regardless of whether civil rights have been restored). 7. Respondent’s conduct described in the above-described Findings of Fact constitute a violation of A.R.S. § 32-741(A)(4) (dishonesty, fraud or gross or continuing negligence in the practice of accountancy). 8. Respondent’s conduct described in the above-described Findings of Fact constitute a violation of A.R.S. § 32-741(A)(6) (violation of any of the provisions of this chapter, of title 44, chapter 12, article 13[3] or of any fraud provisions of the federal securities laws).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Certified Public Accountant Certificate No. 9915-E be suspended for a period of time concurrent with the term of his criminal probation in CR 1997-012943, subject to the following conditions:

a) Respondent shall timely comply with the terms and conditions of his criminal probation. Any violation of his criminal probation may constitute grounds for additional disciplinary action against him by the Board. b) Respondent shall furnish the Superior Court’s Adult Probation Department with a copy of the effective Order in this disciplinary action. c) Respondent shall timely renew his certification with the Board during the period his certificate is suspended. d) Respondent shall notify the Board of the date that his criminal probation expires. Respondent’s certification shall remain suspended until the Board expressly reinstates it. Done this day, February 5, 2002

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002, to:

State Board of Accountancy Lee Prins, Executive Director ATTN: Wendy Johnson 3877 North 7th Street, Suite 106 Phoenix, AZ 85014

By ___________________________

----------------------- [1] Pursuant to A.A.C. R2-19-106(C) Respondent was required to file his motion to continue with the Office of Administrative Hearings. He filed it with the Board instead on the evening of January 24, 2002. The Board then faxed it over to the OAH for filing. [2] Section 13-901 et seq. [3] Section 44-1991 et seq.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826