ALJDEC - Licensing
24F-091-REL · Department of Real Estate · 2024-05-16
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
In the Matter of the Real Estate License of:
WILLIAMS, CALEB, holder of license number SA655104000,
Respondent
No. 24F-091-REL
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 2, 2024
APPEARANCES: Arizona Assistant Attorney General James Rolstead appeared on behalf of the Arizona Department of Real Estate. Respondent Caleb Williams appeared on his own behalf.
ADMINISTRATIVE LAW JUDGE: Adam D. Stone
EXHIBITS ADMITTED INTO EVIDENCE: Arizona Department of Real Estate’s Exhibits 1-16 were admitted into evidence. Respondent’s Exhibits 1-3 were admitted into evidence.
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FINDINGS OF FACT
On or about September 30, 2014, the Department issued Salesperson License No. SA655104000 to Caleb Williams (Respondent). The license was active and expires on September 30, 2024.
From September 30, 2022 to March 31, 2023, Respondent was employed as a salesperson with Blocks Brokerage, LLC (Blocks) under the supervision of Designated Broker Susan Talerico.
On March 31, 2023, Respondent was severed from Blocks and became licensed with Homesmart.
On March 31, 2023, attorney Mark Dillon submitted a complaint to the Department on behalf of Talerico, alleging that Respondent “may have violated one or more the real estate statutes or rules.” In the complaint, Mr. Dillon wrote in pertinent part:
a. Respondent was handling a purchase and sale transaction for a residential property that was listed by Blocks.
b. The sellers John and Celeste Reed contacted Ms. Talerico to complain about Respondent, and upon her meeting with them and reviewing their file, Ms. Talerico discovered that the alleged buyers had neither made the required earnest money deposit nor provided any loan status updates.
c. On March 17, 2023, Respondent provided Blocks with an Unfulfilled Loan Contingency Notice (Notice) that purports to have been electronically signed by the buyers and a man named Jeff Maasch at Homeowners Financial Group.
d. On March 24, 2023, Blocks received a letter from Homeowners stating that the Notice appeared to be a falsified document.
e. Blocks severed Respondent from the brokerage on March 31, 2023.
5. On April 4, 2023, the Department sent a letter to Respondent advising him of the allegations and asking him to submit a narrative response with any supporting documentation.
6. On April 12, 2023, Mr. Dillon sent the Department a second letter stating that in Blocks’ own internal investigation of the matter, they discovered that both the purchase contract and Notice reflect the electronic signatures of the purported buyers [Bryce and Lori McClellan] through DocuSign. Mr. Dillon wrote, “Blocks Brokerage does not use DocuSign (it uses AuthentiSign as part of Transaction Desk).”
7. On April 14, 2023, the Department received Respondent response containing text, email and phone records. Respondent wrote in pertinent part, “[s]o, the document was in fact drafted in my zip forms, but I did not facilitated the signing envelope...”
8. On April 18, 2023, the Department received a third letter from Mr. Dillon along with two real estate purchase contracts involving Jack and Ashley Martin. In his letter, Mr. Dillon wrote the following:
On April 13, 2023, Blocks was contacted by the Martins, who advised they were friends with the Reeds and had hired Respondent to sell their home. “Also like the Reeds, the Martins felt something was ‘off’ in their dealings with Mr. Respondent, and the called asking Blocks Brokerage to look into the matter.”
Blocks reviewed the Martins’ file and found that Respondent presented offers from four potential buyers, but only three of the offers had a paper trail in the Blocks system. The offer with no paper trail came from Four Petals Properties, LLC a real estate investment company managed by Balamurugan Arumugam.
Blocks telephoned Mr. Arumugam directly to inquire about the Martin transaction. “[Arumugam] advised Blocks Brokerage that he was unaware of any offer on the Martins’ property and he declared that he never signed any such offer.”
The Martins provided Blocks with copies of two contracts purporting to show Mr. Arumugam’s signature on behalf of Four Petals, one dated November 8, 2022, and one dated January 11, 2023.
9. On April 21, 2023, the Reeds filed their own complaint against Respondent, alleging that Respondent “created and signed a falsified purchase agreement for our home.”
10. On May 11, 2023, the Department received a fourth letter from Dillon advising of another potential fraudulent purchase offer involving Respondent. On this occasion, Mr. Arumugam was the seller who was presented an offer from Respondent. The offer, dated February 24, 2023, was “ostensibly signed by one James Rich (buyer), represented by salesperson Anthony Sechrist of BRE Services”.
11. On June 28, 2023, the Department issued subpoenas to DocuSign and Authentisign for transaction envelope histories for the Unfulfilled Loan Contingency Notice and the Reed purchase contract.
12. DocuSign provided records showing that all correspondence between Respondent and Maasch in executing the Notice were performed using the same Internet Protocal (IP) Address.
On or about December 27, 2023, the Department issued a Notice of Hearing and Complaint to Respondent setting this matter for hearing detailing the alleged violations of Department statutes. The Department asserted that Respondent’s conduct constituted violations of A.R.S. § 32-2153(A)(1) and (25) as well as A.R.S. § 32-2153(B)(5).
After several continuances, hearing was held on May 2, 2024.
The Department offered the testimony of Susan Talerico and Steven Hooper.
Mr. Hooper was a Senior Investigator with the Department and personally investigated this matter.
Mr. Hooper testified as to the above timeline of events.
Further, Mr. Hooper testified that he reviewed of the purchase documents related to the Reed, Martin and Arumugam files show that the individual DocuSign signatures for the McClellans on both the purchase contract and the Buyer’s Inspection Notice and Seller’s Response beat the same identifying number 40AD5669736348C. This same identifying number also appears under the individual DocuSign signature for Mr. Arumugam on the Martin contracts dated November 8, 2022 and January 11, 2023, and under the individual DocuSign signature for Mr. Rich on the Arumugam contract dated February 24, 2023. Mr. Hooper conclude that for these separate transactions to all have the same identifying number was impossible.
In addition, Mr. Hooper testified that he was able to speak with Lori McClelland who informed him that they never met Respondent, nor signed a contract to purchase a home. Mr. Hooper testified further, that he questioned Ms. McClelland as to the phone number and e-mail address which Respondent purported to be belonging to the McClelland’s, and her response was that it was not their information.
Ms. Talerico testified that she became aware of the issue when the Reed’s contacted her with questions relating to the sale of their home. Ms. Talerico testified that she attempted to contact the buyer at the number Respondent provided, but heard a “generic” voicemail greeting. Ms. Talerico then investigated as to whether or not escrow was ever opened and whether or not the buyer made an earnest deposit.
Ms. Talerico testified that because of this, she requested that Respondent complete the Notice, to inform the sellers that the buyer could not proceed with the transaction. Ms. Talerico testified that later she would come to find out that this form was falsified.
Respondent testified that he had met the McLelland’s at an open house at the Reed’s, and that they were not made up and they made a legitimate offer to purchase the house.
However, Respondent testified that he falsified and completed the Notice based upon the text messages he received from Ms. Talerico. Respondent testified that he felt pressured and “extorted” by Ms. Talerico to complete the Notice. Respondent however admitted that this was a great lapse in judgment.
As to the other allegations, Respondent testified that the reason the DocuSign ID’s were the same was because he had everyone sign on his iPad which was connected to his e-mail address.
Finally, Mr. Williams testified that his license should not be revoked as he had great reviews and completed hundreds of sales in his nine and half years prior to this without incident.
CONCLUSIONS OF LAW
The Commissioner has jurisdiction over Respondent and the subject matter in this case.
Pursuant to A.R.S. § 41-1092.07(G)(2) and A.A.C. R2-19-119(B), the Department has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119(A).
A.R.S. § 32-2153(A) provides in relevant part:
A. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant, within five years immediately preceding, in performing or attempting to perform any acts authorized by the license or by this chapter, has:
1. Pursued a course of misrepresentation or made false promises, either directly or through others, whether acting in the role of a licensee or a principal in a transaction.
. . .
25. Signed the name of another person on any document or form without the express written consent of the person.
A.R.S. § 32-2153(B)(5) provides in relevant part:
B. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under this chapter if it appears that the holder or applicant has:
...
5. Been guilty of any conduct, whether of the same or a different character than specified in this section, that constitutes fraud or dishonest dealings.
Based upon the weight of the credible evidence in this matter, the tribunal finds that the Department established it has grounds to revoke Respondent’s license pursuant to A.R.S. § 32-2153(A)(1) and (25) as well as A.R.S. § 32-2153(B)(5). Respondent admitted he falsified the Unfulfilled Loan Contingency Notice, and that alone demonstrated that he was involved in fraud, and signing the names of the buyers and the loan officer. Further, the credible evidence demonstrated that the McClelland’s were fictitious buyers, and therefore, Respondent misrepresented their status to the sellers.
RECOMMENDED ORDER
IT IS ORDERED revoking Caleb Williams’ License No. SA655104000.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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 forty (40) days from the date of that certification.
Done this day, May 16, 2024.
/s/ Adam D. Stone
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Susan Nicolson, Commissioner
Arizona Department of Real Estate
Caleb Williams
[email redacted]
James Rolstead
[email redacted]
Lynette Evans
[email redacted]
By: OAH Staff