ALJDEC decisions subject to certification as final

09F-BD020-BNK · Arizona Department of Financial Institutions · 2008-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 28, 2008. APPEARANCES: The Arizona Department of Financial Institutions was represented by Assistant Attorney General Liane Kido. Richmond Financial, Inc. was represented by its president, Jeffrey S. Bolognese, who appeared telephonically after the hearing had been commenced. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT 1. The Arizona Department of Financial Institutions (“Department”) is the authority for licensing and regulating mortgage brokers in the State of Arizona. 2. On or about August 7, 2007, the Department issued mortgage broker license number MB 0909430 to Richmond Financial, Inc. and its president, Jeffrey Bolognese (“Respondents”). 3. Respondents obtained a bond as a mortgage broker from Contractors Bonding and Insurance Company, Bond No. AL3922, in the amount of $15,000.00. The bond was effective on May 7, 2007. 4. On or about May 1, 2008, the Department received a Cancellation Notice from Contractors Bonding and Insurance Company, which advised that Bond No. AL3922 issued on May 1, 2008 in the amount of $15,000.00 would be cancelled effective June 13, 2008 for nonpayment of the premium. 5. By letter dated May 14, 2008, the Department’s staff advised Respondents that it had received notice of the impending cancellation of its Bond No. AL3922. Respondents were directed to provide the Department with documentation that the bond had been reinstated or Respondents’ mortgage broker license would be revoked. The letter was sent to Respondents at their address of record with the Department. 6. The Department’s May 14, 2008 letter to Respondents was returned as undeliverable by the U.S. Postal Service. 7. On or about September 22, 2008, the Department’s Superintendent of Financial Institutions, Felecia A. Rotellini, issued an Order of Summary Suspension and Notice of Hearing to Revoke Respondents’ mortgage broker license. Respondents were advised of the time, date and location of the evidentiary hearing before the Office of Administrative Hearings, an independent agency. 8. The Superintendent’s Order of Summary Suspension and Notice of Hearing to Revoke were mailed by certified mail to Respondents and Respondents’ statutory agent at their addresses of record with the Department. 9. On or about September 29, 2008, the Department received the Domestic Return Receipt for the mailing of the Order of Summary Suspension and Notice of Hearing from Respondents’ statutory agent. 10. The commencement of the scheduled hearing was delayed 15 minutes to allow for the late arrival of Respondents or an authorized representative. After the delay the Administrative Law Judge commenced the hearing in Respondents’ absence. As a preliminary matter, counsel for the Department announced that Mr. Bolognese had earlier informed her that he just received the Order of Summary Suspension and Notice of Hearing. Counsel gave Mr. Bolognese the telephone number of the Office of Administrative Hearings so that he could attend the hearing telephonically. Shortly after the convening of the hearing, Mr. Bolognese did call the Office of Administrative Hearings and he was permitted to participate in the hearing from that point on. 11. Respondents failed to maintain the required surety bond while maintaining a mortgage broker license. 12. Mr. Bolognese’s testimony that he sent a license cancellation to the Department in March 2008 is found not to be credible. Mr. Fergus credibly testified that the Department never has received a license cancellation from Respondents. Mr. Bolognese’s offer at the hearing to submit a license cancellation to the Department now supports Mr. Fergus’ testimony.

CONCLUSIONS OF LAW 1. Pursuant to A.R.S. Title 6, Chapter 9, the Department’s Superintendent has the authority to regulate all persons engaged in the mortgage broker business and with the enforcement of statutes, rules and regulations relating to mortgage brokers. 2. Pursuant to A.R.S. § 41-1092.07(G)(2), the Department has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. Respondents violated the provisions of A.R.S. § 6-903(G) by failing to maintain the required surety bond while licensed. 4. Pursuant to the provisions of A.R.S. § 6-905(A)(3), the Superintendent may discipline Respondents for violating the provisions of A.R.S. § 6- 903(G).

RECOMMENDED ORDER Mortgage Broker License No. MB 0909430 issued to Respondents shall be revoked on the effective date of the Order issued in 09F-BD020-BNK.

Done this day, November 13, 2008

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Felecia A. Rotellini, Superintendent Arizona Department of Financial Institutions ATTN: Susan Longo 2910 N. 44th Street, Suite 310 Phoenix, AZ 85018

By ___________________________

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