FINACT18F-2019.015-ACY.pdf

18F-2019.015-ACY · State Board of Accountancy · 2019-03-28

BEFORE THE ARIZONA STATE BOARD OF ACCOUNTANCY In the Matter of Certified Public OAH Docket No. 18F-2019.015-ACY Accountant Certificate No. 15361-R ASBA File No. 2019.015 Issued to: GERRY KLEIN DECISION AND ORDER Respondent.

On March 25, 2019, this matter came before the Arizona State Board of Accountancy (“Board”) for consideration of Administrative Law Judge (“ALJ”) Kay Abramsohn’s proposed Findings of Fact, Conclusions of Law and Recommended Order (“ALJ’s Decision”). Neither Gerry Klein (“Respondent”) nor an attorney on his behalf

appeared. Assistant Attorney General Scott Donald appeared on behalf of the State. The Board received independent legal advice from Assistant Attorney General Seth Hargraves. The Board, having considered the ALJ’s Decision and the entire record in this

matter, hereby issues the following Findings of Fact, Conclusions of Law and Order (“Decision and Order”). FINDINGS OF FACT

The Findings of Fact as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. CONCLUSIONS OF LAW The Conclusions of Law as set forth in the ALJ’s Decision are adopted in their

entirety and incorporated herein. // // A true and correct copy of the ALJ’s Decision is attached and certain parts of it are incorporated here as set forth above. ORDER Based on the foregoing, the Board ORDERS that Respondent Certified Public Accountant Certificate No. 15361-R be REVOKED. IT IS FURTHER ORDERED that Respondent shall be required to reimburse the Board $12.62 within thirty (30) days of the effective date of this Decision and Order. This amount reflects the costs and attorney’s fees the Board incurred in prosecuting this matter.2 NOTICE OF APPEAL RIGHTS Respondent is hereby notified that they have the right to move for a rehearing or review by filing a motion with the Board’s Executive Director within thirty (30) days after service of this Decision and Order. A.R.S. § 41-1092.09. The motion must set forth legally sufficient reasons for granting a rehearing. A.A.C. R4-1-114(C). Service of this Decision and Order is effective on the date of personal service or five (5) days after the date of mailing. If a motion for rehearing is not filed, the Board’s Decision and Order becomes effective thirty (30) days after it is mailed to Respondent. Respondent is further notified that the filing of a motion for rehearing is required

to preserve any rights of appeal to the Superior Court. DATED this 28th day of March, 2019. ARIZONA STATE BOARD OF ACCOUNTANCY By: ___________________________________ Julie S. Klewer, CPA, Board President The Board voted to modify the ALJ’s Decision to include a requirement that Respondent pay reimbursement of fees and costs the Board incurred, which is consistent with the Board’s practices. Original of the foregoing Decision and Order (and attachment) th filed this 28 day of March, 2019 with: Monica L. Petersen Executive Director Arizona State Board of Accountancy th 100 N. 15 Avenue, Suite 165 Phoenix, AZ 85007 Copy of the foregoing th Decision and Order (and attachment) e-filed this 28 day of March, 2019 with: Greg Hanchett, Director Arizona Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, AZ 85007 Copy of the foregoing Decision and Order (and attachment) mailed via U.S. First Class Mail and Certified Mail #[account number redacted] 7493 this 28th day of March, 2019, to: Gerry Klein th 21479 N. 78 Drive Peoria, AZ 85382 Copy of the foregoing Decision and Order (and attachment) emailed this 28th day of March, 2019 to: Scott Donald Assistant Attorney General 2005 N. Central Avenue Phoenix, Arizona 85004 Seth Hargraves Assistant Attorney General Independent Advisor 2005 N. Central Avenue Phoenix, Arizona 85004 By: ___________________________________ IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of No. 18F-2019.015-ACY

Certified Public Accountant ADMINISTRATIVE LAW JUDGE Certificate No. 15361-R DECISION Issued to: GERRY KLEIN, Respondent.

HEARING: February 27, 2019 APPEARANCES: The Arizona State Board of Accountancy (“the Board”) was represented by Scott Donald, Esq., Assistant Attorney General. Gerry Klein (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Kay Abramsohn _________________________________________________________________

FINDINGS OF FACT 1. On January 17, 2019, the Board issued a Complaint and Notice of Hearing setting this matter for an evidentiary hearing at 1:00 p.m. on February 27, 2019, before the Office of Administrative Hearings (“OAH”), an independent state agency. 2. The Complaint and Notice of Hearing provided that the issue to be decided was “whether good cause exists to revoke, suspend or take any other disciplinary action against [Certified Public Accountant (“CPA”)] Certificate No. 15361-R issued to [Respondent].” By law, any answer to the Complaint and Notice of Hearing was required to be filed within 20 days after service. 3. The Board sent the Complaint and Notice of Hearing via United States certified mail to Respondent at the address of record with the Board. 4. On February 6, 2019, Respondent did file a statement to the OAH, but it does not appear to be copied to the Board. The statement indicates as follows: I am sending this Answer to the Complaint to waive a hearing on the Complaint and not contest the allegations. I declare that I was not granted an inactive status and therefore let my CPA license lapse. I did not complete the needed CPE registration and pay the annual fee. I do not wish to retain an active certificate/license for I am no longer in the accounting profession. A CPA license is not required

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 for what I am currently doing and I cannot not (sic) afford to keep up the required CPE. Please accept my apologies in not responding sooner. Please let me know if I need to do anything else to deactivate my license. Thanks.

5. At the time of the scheduled hearing, Respondent did not appear. The start of the duly noticed hearing was delayed to allow Respondent additional travel time to arrive; however, he did not appear and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to be considered. 6. The Board presented the testimony of Christopher Rasmussen, Assistant Director of Regulation and Compliance. Mr. Rasmussen was familiar with this matter because he had reviewed the file in this matter. 7. On April 23, 2018, the Board received Respondent’s renewal registration form for the 2018-2010 renewal period. Respondent requested that his CPA license be placed in inactive status. 8. The Board voted to deny the request for inactive status, and subsequently notified Respondent of a 60-day period within which to complete all registration requirements (payment of the fee and submittal of requisite CPE units). 9. Although the Board did not receive the completed registration, the Board voted to offer a Consent Order for a one year license suspension on the failure to comply with registration requirements. Respondent failed to reply to the offer. 10. Thereafter, the Board determined to proceed to administrative hearing to discipline Respondent’s certification with revocation for the failure to respond to the Board. 11. At hearing, the Board requested that Respondent’s certification be revoked and that the Tribunal award costs and fees regarding this disciplinary matter. 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. The Board has the authority to discipline Respondent pursuant to A.R.S. § 32-741. Specifically, under A.R.S. § 32-741(A)(9), the Board may discipline a registrant for a violation of any decision, order, or rule promulgated by the Board.

2. The Board bears the burden of proof to establish cause to discipline

Respondent by a preponderance of the evidence.1 “A preponderance of the evidence

is such proof as convinces the trier of fact that the contention is more probably true

than not.”2

3. A.A.C. R4-1-455.03(D) provides that a registrant shall file a written response

to a communication from the Board within 30 days of the date of the mailing of that

communication.

4. A.R.S. § 32-730(C) provides that the accountant shall submit to the Board, at

the time of registration, proof that they have completed the CPE requirements. This

section further provides that the Board may grant a full or partial exemption from CPE

or “an extension of time to complete the [CPE] requirements for registrants on a

demonstration of good cause.”

5. The Board established that Respondent failed to file a timely written

response as required by A.A.C. R4-1-455.03 (D) and that Respondent was not in compliance with CPE requirements, as he failed to complete the registration, which was a violation of A.A.C. R4-1-453(C), in violation of A.R.S. § 32-741(A)(9). 6. A.R.S. § 32-741(A) authorizes the Board to revoke or suspend Respondent’s certificate. The Board demonstrated that Respondent’s failures to complete the registration and to respond to the Board were violations of applicable law. Therefore, the Administrative Law Judge recommends the Board revoke Respondent’s CPA certificate.

RECOMMENDED ORDER

See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). 2 MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). Based on the foregoing, it is recommended that, on the effective date of the Board’s final order, Respondent’s Certified Public Accountant Certificate No. 15361-R be revoked.

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 days from the date of that certification.

Done this day, March 19, 2019

/s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to:

Monica L. Petersen, Executive Director Arizona State Board of Accountancy