ALJDEC decisions subject to certification as final

12F-2011.060-ACY · State Board of Accountancy · 2011-11-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 9, 2011 APPEARANCES: The Arizona State Board of Accountancy was represented by Assistant Attorney General Seth T. Hargraves. William G. Abbott appeared personally. 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 State Board of Accountancy (“Board”) is the authority for regulating the practice of Certified Public Accountants in the State of Arizona. 2. William G. Abbott is the holder of Certified Public Accountant Certificate No. 5129-E issued by the Board. This certificate enables Respondent to practice as a Certified Public Accountant in Arizona. 3. In addition to his individual Certified Public Accountant certificate, the Board also issued Respondent Firm Registration No. 5094-S for his solo practice firm, William Gerald Abbott, CPA (“Firm”).

File No. 2011.060 4. On or about November 4, 2010, the Board received a Consumer Complaint against Respondent alleging that he failed to perform agreed upon work after accepting payment from clients, resulting in the clients missing a filing deadline date. The Consumer Complaint was designated File No. 2011.060 and assigned to the Board’s Tax Practice Advisory Committee (“Tax Committee”) for investigation. 5. On or about December 16, 2010, Board staff sent Respondent a letter with a copy of the Consumer Complaint by certified mail to his address of record with the Board. The letter requested, pursuant to A.A.C. R4- 1-455.03(F), that Respondent respond to the Consumer Complaint in writing no later than 30 days from the date of the letter. The letter was returned to the Board by the U.S. Postal Service on January 19, 2011, as unclaimed. 6. By letter dated January 27, 2011, Board staff notified Respondent that the Board would address his failure to respond to the Consumer Complaint at its February 7, 2011 meeting. That letter, sent via regular mail, was not returned to the Board. 7. At its February 7, 2011 meeting, the Board voted to file a Complaint and a Notice of Hearing seeking the revocation of Respondent’s Certified Public Accountant Certificate for his failure to respond to the Consumer Complaint and his failure to comply with previous Board Orders.[1] 8. On February 18, 2011, Board staff, at Respondent’s request, emailed Respondent a copy of the Consumer Complaint. 9. On or about February 18, 2011, the assigned assistant attorney general filed a Motion for Reconsideration with the Board requesting that File No. 2011.060 be remanded to the Tax Committee in lieu of proceeding to an administrative hearing. The requested remand was because it did not appear that Respondent had received a copy of the Consumer Complaint until the email was sent. 10. At its March 21, 2011 meeting, the Board voted to grant the Motion for Reconsideration and remanded the matter back to the Tax Committee. 11. By letter dated March 24, 2011, Board staff advised Respondent that File No. 2011.060 had been remanded to the Tax Committee, which planned to review it at the Tax Committee’s April 25, 2011 meeting. 12. On or about May 4, 2011, after receiving no response from Respondent regarding the Consumer Complaint, Board staff sent Respondent another letter with a copy of the Consumer Complaint by certified mail to his address of record with the Board. The letter requested, pursuant to A.A.C. R4-1-455.03(F), that Respondent respond to the Consumer Complaint in writing no later than 30 days from the date of the letter. On May 13, 2011, the certified letter was received and signed for by Respondent. 13. Despite the request in the Board’s May 4, 2011 letter, and the requirements of A.A.C. R4-1-455.03(F), the Board did not receive a response from Respondent until June 6, 2011. In the response, Respondent indicated that the complainants of the Consumer Complaint had filed an action against him in small claims court, which he resolved by returning the retainer, plus an additional $500.00 for any potential costs incurred by the complainants. The response also indicated that, despite missing filing deadlines, Respondent continued with the engagement even though he was not comfortable with the data provided by the clients. File No. 2004.047 14. On August 10, 2006, following an investigation of a complaint, Respondent entered into a Decision and Order (By Consent) (“August 10th Order”) for File No. 2004.047 with the Board. 15. Pursuant to the terms of the August 10th Order, Respondent was required to obey all laws, cooperate fully with the Board’s staff and counsel in providing relevant documentation of Respondent’s compliance with the terms and conditions of the August 10th Order, including executing any and all release of information forms as may be required by the Board or its designee. Respondent was also required to respond promptly to any request from the Board for documents that the Board requires to demonstrate Respondent’s compliance with the August 10th Order. 16. Additional terms of the August 10th Order provided that any violation by Respondent of the Board’s statutes or rules during the period of probation would be considered noncompliance with the provisions of the August 10th Order. 17. The August 10th Order further provided that Respondent’s failure to comply with any provision of the August 10th Order, including the General Provisions, would be deemed a violation of the August 10th Order for which the Board, in its sole discretion, may direct that the matter proceed to a noncompliance hearing for the revocation of Respondent’s Certified Public Accountant Certificate No. 5129-E. 18. Respondent entered into another Decision and Order (By Consent) with the Board dated April 18, 2008 (“April 18th Order”) for File No. 2004.047 due to Respondent’s noncompliance with the August 10th Order.

19. Pursuant to the terms of the April 18th Order, the terms, conditions, and requirements of the August 10th Order remained in full force and effect. 20. The April 18th Order also required Respondent to obey all laws, and cooperate with the Board’s staff and counsel in providing relevant documentation of Respondent’s compliance with the terms and conditions of the April 18th Order, including executing any and all release of information forms as may be required by the Board or its designee. Respondent was also required to respond promptly to any request from the Board for documents that the Board requires to demonstrate Respondent’s compliance with the August 10th Order and the April 18th Order. 21. By letter dated July 22, 2011, Board staff sent Respondent a compliance affidavit regarding File No. 2004.047 by certified mail. The cover letter requested, pursuant to A.A.C. R4-1-455.03(F), that Respondent complete and return the affidavit to the Board within 30 days to document his compliance with the August 10th Order and the April 18th Order. On July 26, 2011, the certified mailing was received and signed for by Respondent. 22. Respondent did not respond to the July 22, 2011 request until September 12, 2011. File No. 2008.086 23. On August 25, 2009, following a Board investigation of another complaint, Respondent entered into a Decision and Order (“By Consent”) (“August 25th Order”) for File No. 2008.086 with the Board. 24. The August 25th Order also required Respondent to obey all laws, and cooperate with the Board’s staff and counsel in providing relevant documentation of Respondent’s compliance with the terms and conditions of the August 25th Order, including executing any and all release of information forms as may be required by the Board or its designee. Respondent was also required to respond promptly to any request from the Board for documents that the Board requires to demonstrate Respondent’s compliance with the August 25th Order. 25. The August 25th Order further provided that the failure of Respondent to comply with any provision of the August 25th Order, including the General Provisions, would be deemed a violation of the August 25th Order for which the Board, in its sole discretion, may direct that the matter proceed to a noncompliance hearing for revocation of Respondent’s Certified Public Accountant Certificate No. 5129-E. 26. By letter dated July 22, 2011, Respondent was sent a compliance affidavit regarding File No. 2008.086 by certified mail to his address of record. The cover letter requested that Respondent complete and return the affidavit to the Board within 30 days, pursuant to A.A.C. R4-1-455.03(F). On July 26, 2011, the certified mailing was received and signed for by Respondent. 27. Respondent did not respond to the Board until September 12, 2011. Respondent’s ADHD Defense 28. At hearing, Respondent raised for the first time the defense that his diagnosis of ADHD is the cause of his conduct described in the above Findings of Fact. However, the evidence presented at hearing does not establish that Respondent’s medical condition is the cause of such conduct or that it excuses such conduct. CONCLUSIONS OF LAW 1. The Board has jurisdiction over Respondent and Firm, and the subject matters in this case. 2. Pursuant to A.R.S. § 41-1092.07(G) (2) and A.A.C. R2-19-119(B), the Board has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 3. Pursuant to A.A.C. R4-1-102(A), Respondent is deemed to have knowledge of the Board’s rules. 4. Respondent’s failure to timely respond to the Board’s request for a response to the Consumer Complaint in File No. 2011.060, as described in the above Findings of Fact, constitutes violations of A.R.S. §§ 32- 741(A) (15) and 32-741(A) (9), specifically A.A.C. R4-1-455.03(F). 5. Respondent’s violations for failing to timely respond to the Board’s request for a response to the Consumer Complaint in File No. 2011.060 and his noncompliance with the August 10th Order, the April 18th Order, and the August 25th Order constitutes unprofessional conduct by Respondent in violation of A.R.S. § 32-741(A) (7). 6. Respondent’s failure to timely respond to the Board’s request to complete and return a compliance affidavit for File No. 2004.047, as described in the above Findings of Fact, constitutes violations by Respondent of A.R.S. §§ 32-741(A) (15) and A.R.S. § 32-741(A) (9), specifically A.A.C. R4-1-455.03(F). 7. Respondent’s violations for failure to timely respond to the Board’s request to complete and return a compliance affidavit for File No. 2004.047, as described in the above Findings of Fact, constitutes Respondent’s noncompliance with the August 10th Order in violation of A.R.S. § 32-741(A) (9). 8. Respondent’s failure to timely respond to the Board’s request to complete a compliance affidavit in File No. 2008.086, as described in the above Findings of Fact, constitutes violations of A.R.S. §§ 32- 741(A) (15) and 32-741(A) (9), specifically A.A.C. R4-1-455.03(F). 9. Respondent’s failure to timely respond to the Board’s request to complete and return a compliance affidavit for File No. 2008.086, as described in the above Findings of Fact, constitutes noncompliance with the August 10th Order, the April 18th Order, and the August 25th Order in violation of A.R.S. § 32-741(A) (9). 10. Respondent’s conduct described in the above Findings of Fact constitute discredited acts in violation of the professional standards set forth in A.A.C. R4-1-455.03(A) (1) and (3). 11. The conduct and circumstances described in the above Findings of Fact and the resulting violations of professional standards, statutes, and rules described in the above Conclusions of Law are grounds for the imposition of discipline against Respondent’s Certified Public Accountant Certificate No. 5129-E pursuant to A.R.S. § 32-741 and as defined in A.R.S. § 32-701(6). 12. The disciplinary options against Respondent’s Certified Public Accountant Certificate No. 5129-E, pursuant to A.R.S. § 32-741, would also be grounds for disciplinary action against Firm Registration No. 5094-S, pursuant to A.R.S. §§ 32-731, 32-731, 32-742(A) and (B), and A.A.C. R4-1-455.03(D) (2), as any subsequent discipline against Respondent’s Certified Public Account Certificate No. 5129-E, as a result of these proceedings, would affect the eligibility of the Firm’s registration. 13. The evidence of record established that Respondent cannot be regulated by the Board. Therefore, the revocation of Respondent’s Certified Public Accountant Certificate No. 5129-E is warranted pursuant to A.R.S. § 32-741. Such revocation will not deprive Respondent of the ability to practice accountancy; he just may not do so as a Certified Public Accountant. RECOMMENDED ORDER Respondent’s Certified Public Accountant Certificate No. 5129-E and Firm’s Certified Public Accounting Firm Registration No. 5094-S shall be revoked on the effective date of the Order entered in File No. 2011.060, File No. 2008.086, and File No. 2004.047. In addition to the above-provided discipline imposed upon Respondent, Respondent shall reimburse the Board for the costs of investigation and of proceeding to hearing in this matter within 30 days of the effective date of the Order entered in this matter pursuant to A.R.S. § 32-701(6) (f). In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five (5) days from the date of that certification.

Done this day, November 29, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy ----------------------- [1] File Numbers 2004.047 and 2008.086.

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