ALJDEC decisions subject to certification as final

08A-195-INS · Department of Insurance · 2009-08-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 3, 2009 APPEARANCES: Assistant Attorney General Liane Kido for the Arizona Department of Insurance; William L. Kludas did not appear at the hearing. ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT 1. At all times material to this matter, William L. Kludas. (Mr. Kludas) was and currently is the holder of an Arizona accident/health and life producer license, License No. 189705, which expires on January 31, 2012. 2. In September 2008, Arizona Department of Insurance (Department) Investigator Daniel Ray (Investigator Ray) received information that Mr. Kludas had been convicted and was serving time in prison in the State of Washington for securities fraud. 3. On October 17, 2008, Investigator Ray contacted the State of Washington Department of Corrections (DOC) to confirm that Mr. Kludas had been convicted of a felony in the State of Washington and was sentenced to the DOC. 4. The DOC responded to Investigator Ray on November 25, 2008 providing documentation as to Mr. Kludas’s felony conviction and sentencing. 5. The records obtained from the DOC show that on June 15, 2007, in State of Washington v. William L. Kludas, Case No. 06-1-06263-5, in the Superior Court of Washington for King County (Case No. 06-1-06263-5), Mr. Kludas pled guilty to 9 counts of Securities Fraud, in violation of the Revised Code of Washington §§ 21.20.010 and 21.20.400. 6. On March 5, 2008, the Court in Case No. 06-1-06263-5 found Mr. Kludas guilty of 9 felony counts of Securities Fraud and sentenced him to 43 months imprisonment with the DOC. Mr. Kludas is currently in a Washington Sate prison. 7. In Case No. 06-1-06263-5, the Court ordered Mr. Kludas to pay restitution in the amount of $637,800.00, with said amount to be paid installments as approved by the Community Corrections Officer or Department of Judicial Administration Collections Officer. The Court prohibited Mr. Kludas from having any contact with the public in relation to financial planning, prohibited him from selling offering to sell securities, and prohibited him from employment as a financial advisor for the full term of the Court’s jurisdiction. 8. Mr. Kludas did not present any evidence to refute or rebut the evidence presented by the Department. CONCLUSIONS OF LAW 1. This matter is a disciplinary proceeding wherein the Department must prove by a preponderance of the evidence that Respondent violated the State’s Insurance Laws. See A.R.S. § 41-1062.07(G)(3) and A.AC. R2-19-119.

2. A preponderance of the evidence is “evidence of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990). 3. Mr. Kludas has a felony conviction within the meaning of A.R.S. § 20- 295(A)(6). 4. Grounds exist for the Director of the Department to revoke Mr. Kludas’s insurance license pursuant to A.R.S. § 20-295(A). 5. The Department met its burden of proving by a preponderance of the evidence that Mr. Kludas’s felony conviction warrants revocation of his insurance license.

ORDER Based upon the above, on the effective date of the Order entered in this matter, Mr. Kludas’s insurance license, License No. 189705 shall be revoked. Done this day, August 19, 2009.

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

Christina Urias, Director Department of Insurance 2910 North 44th Street, Ste. 210 Phoenix, AZ 85018

By ___________________________

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