ALJDEC decisions subject to certification as final

18A-134-INS · Department of Insurance · 2018-12-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 3, 2018 APPEARANCES: Petitioner Michelle Irene Jaramillo appeared on behalf of herself. Assistant Attorney General Deian Ousounov appeared on behalf of the Arizona Department of Insurance. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. In 1995, Petitioner Michelle Irene Jaramillo pleaded guilty to the felony of “welfare fraud”, a violation of California Welfare and Institutions Code § 10980(c)(2) in the Superior Court of California, County of Ventura. See Exhibits 3 and 4. 2. The conviction was based upon Ms. Jaramillo’s receipt of excess subsidized housing payments. See Exhibit 3. 3. In February of 2002, Ms. Jaramillo pleaded guilty to the felony of “grand theft by embezzlement” in the Superior Court of California, County of Ventura, based upon Ms. Jaramillo’s work as a bookkeeper for a medical doctor. See Exhibits 3 and 5. 3. On August 31, 2018, Ms. Jaramillo filed with the Arizona Department of Insurance (“Department”) an application for an Arizona resident property and casualty producer license (“August 31, 2018 application”). See Exhibit 1. 4. Through the August 31, 2018 application, Ms. Jaramillo disclosed that she had been found guilty of a felony. See id. 5. Ms. Jaramillo submitted with the August 31, 2018 application an order from the State of California granting consent for Ms. Jaramillo to engage in the business of insurance. See Exhibit 2. 6. Ms. Jaramillo provided a statement regarding the facts surrounding the embezzlement felony with the August 31, 2018 application. See id. 7. Ms. Jaramillo did not provide a statement regarding the conviction for welfare fraud with the August 31, 2018 application. See id. 8. On or about September 13, 2018, the Department notified Ms. Jaramillo that her application had been denied based on Ariz. Rev. Stat. sections 20-295(A)(6) and (A)(8). See Exhibit 6. 9. On or about October 12, 2018, Ms. Jaramillo requested a hearing. 10. On October 26, 2018, the Department issued a Notice of Hearing setting the above-captioned matter for hearing on December 3, 2018 at the Office of Administrative Hearings in Phoenix, Arizona. 11. A hearing was held on December 3, 2018. 12. Ms. Jaramillo testified on behalf of herself. The Department presented the testimony of Aqueelah Currie, its Licensing Supervisor. 13. Ms. Jaramillo has been working for an insurance company in Arizona for almost two years, but her employer had not applied for a “1033 waiver” from the State of Arizona. See Hearing Audio 42:34 - 43:47 and 45:00 – 49:22. Ms. Currie testified that the insurance company was required under federal law to obtain a 1033 waiver from the State of Arizona before it hired Ms. Jaramillo, due to her felony convictions for welfare fraud and theft. See id. 14. During Ms. Jaramillo’s work as a bookkeeper for a medical doctor in California, Ms. Jaramillo had access to the office’s finances and was responsible for the office ledger. Ms. Jaramillo fought the charge of embezzlement for almost two years before entering a guilty plea at the advice of her attorney. 15. Prior to filing the August 31, 2018 application, Ms. Jaramillo submitted an insurance license application to the Department in which she answered “No” to the question of whether she had ever been denied a professional license. See Hearing Audio at 45:00 – 46:00 and 49:34 - 49:56. 16. The Department later learned that the State of California had denied Ms. Jaramillo’s application for an insurance license. See Hearing Audio at 59:40 – 50:24. The Department allowed Ms. Jaramillo to withdraw the application and submit a second application. See id. 17. At hearing, Ms. Jaramillo testified to the effect that she knows that she does not look good on paper, but she that she is a good person and has turned her life around. 18. Although Ms. Jaramillo testified at the hearing that she provided a statement regarding the circumstances surrounding her conviction for welfare fraud with the August 31, 2018 application, Ms. Jaramillo did not provide a copy of the statement at the hearing. 19. Ms. Jaramillo testified that she was young and naïve when she was convicted of welfare fraud. Ms. Jaramillo also stated that she did not receive funds directly but the money was given to her landlord. Ms. Jaramillo testified that at the time of the conviction, she believed that the overpayment was the Department’s fault because the Department should have known that she was not eligible for the excess payments. 20. Ms. Jaramillo denied that she embezzled funds. Ms. Jaramillo testified that the doctor for whom she worked would take petty cash and go to the farmer’s market. Ms. Jaramillo stated that it was not a wise business practice and decided to quit after working for the doctor for 10 days. Ms. Jaramillo also testified that she was not the only individual who had access to the funds of the medical office. Ms. Jaramillo denied any wrongdoing with respect to her work at the doctor’s office. 21. Ms. Jaramillo’s testimony is not found to be credible. CONCLUSIONS OF LAW 1. Ms. Jaramillo bears the burden of persuasion. See Ariz. Rev. Stat. § 41-1092.07(G)(1). 2. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014). 4. The preponderance of the evidence shows that Ms. Jaramillo has been convicted of welfare fraud and grant theft by embezzlement. These convictions show that Ms. Jaramillo used fraudulent, coercive or dishonest practices, or demonstrated incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state. Consequently, the Department’s Director has discretion to deny Ms. Jaramillo’s application based on Ariz. Rev. Stat. sections 20-295(A)(6) and (A)(8). 5. Ms. Jaramillo has failed to demonstrate by a preponderance of the evidence that the Department’s decision to deny her application should be overturned. 6. Ms. Jaramillo’s appeal should be dismissed. ORDER IT IS ORDERED that Michelle Irene Jaramillo’s appeal is dismissed. 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 is five days after the date of that certification.

Done this day, December 10, 2018.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Keith A. Schraad, Interim Director Arizona Department of Insurance

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826