ALJDEC

97A-H1925-REL · Department of Real Estate · 1998-02-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 1998

APPEARANCES: -Assistant Attorney General Michael Denious represented the Department of Real Estate (the “Department”). -No person appeared on behalf of the Respondent.

ADMINISTRATIVE LAW JUDGE: Casey J. Newcomb _____________________________________________________________________

On February 2, 1998, at 9:00 A.M., a hearing was held to determine if the Respondent’s real estate salesperson’s license should be suspended, revoked, or its renewal be denied. The Department was represented by Assistant Attorney General Michael Denious. The Respondent failed to appear. The record was kept open until approximately 9:30 A.M. to allow for the appearance of the Respondent or the receipt of any information which would constitute good cause for the Respondent’s absence or delay. No such information was received from or on the behalf of the Respondent. Based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision are made.

FINDINGS OF FACT

1. On or about November 25, 1992, the Department issued a real estate salesperson’s license (the “License”) to the Respondent. This License will expire on November 30, 1998.

2. On or about January 3, 1997, Maria Perez contacted the Respondent to purchase a property located in Yuma, Arizona. Ms. Perez gave the Respondent a Bank One cashier's check in the amount of $6,250.00 to be deposited with the Yuma Title & Trust Company as a down payment.

3. Contrary to Ms. Perez' instructions, the Respondent did not deposit the check with the Yuma Title & Trust Company. Instead, the Respondent altered the check and tendered it to First Nationwide Mortgage Company as a mortgage payment on his own residence. The check subsequently cleared.

4. On or about March 14, 1997, Ms. Perez received two letters from the Yuma Title & Trust Company indicating that her down payment had never been received. Ms. Perez contacted the Respondent who told her that the check was deposited with the Yuma Title & Trust Company.

5. On or about March 19, 1997, the Respondent admitted to Ms. Perez that he had used the check to pay his own mortgage payment.

6. On or about March 25, 1997, the Respondent was arrested by the Yuma Police Department for Forgery and Fraudulent Scheme.

7. On or about June 10, 1997, the Respondent was indicted in the Yuma County Superior Court (the “Court”). See State of Arizona v. Frank Velez (No. SC97C00573). The Respondent was charged with Count One, Theft, a class 3 felony; and Count Two, Forgery, a class 4 felony.

8. On or about August 21, 1997, the Respondent entered into a Plea Agreement in which he plead guilty to Count Two, Forgery, a class 4 felony. Count One was dismissed and the Respondent was also required to pay $6,250.00 in restitution. There is no evidence showing that the Respondent has ever paid the $6,250.00 restitution.

9. On September 18, 1997, the Court entered a judgment and sentencing order finding the Respondent guilty of forgery. The Court suspended imposition of the sentence and placed the Respondent on supervised probation for 36 months. Furthermore, as a condition of the probation, the Court ordered that the Respondent be incarcerated in the Yuma County Adult Detention Facility for 60 days.

10. The Respondent failed to notify the Commissioner of his conviction within 10 days as is required by A.A.C. R4-28-301(C)(1).

11. On December 10, 1997, a Notice of Hearing and Complaint was filed against the Respondent. The Notice of Hearing and Complaint was sent by certified mail to the Respondent's last known address at 1634 S. 31st Dr., Yuma, Arizona. The Respondent failed to file an Answer.

12. The Notice of Hearing and Complaint correctly states the date, time and location for the hearing scheduled on February 2, 1998 at the Office of Administrative Hearings. The Respondent has failed to appear and present any evidence on his own behalf.

CONCLUSIONS OF LAW

1. The Department has jurisdiction over the Respondent and the subject matter of this case pursuant to A.R.S. §32-2108, et seq.

2. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent has breached his fiduciary duty to act in his client's best interest in violation of A.A.C. R4-28-1101(A).

3. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent failed to notify the Commissioner of his conviction within 10 days as is required by A.A.C. R4-28-301(C)(1).

4. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent engaged in substantial misrepresentations within the meaning of A.R.S. §32-2153(A)(1) and (B)(3).

5. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent violated the provisions of Title 32, Chapter 20 of the Arizona Revised Statutes and the Commissioner's Rules within the meaning of A.R.S. §32-2153(A)(3).

6. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent commingled his client's money with his own or converted that money to his own within the meaning of A.R.S. §32-2153(A)(16).

7. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent demonstrated negligence in performing acts for which his license is required within the meaning of A.R.S. §32-2153(A)(22).

8. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent was convicted of Forgery, a class felony, within the meaning of A.R.S. §32-2153(B)(2).

9. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent was found guilty of conduct which constitutes fraud or dishonest dealings within the meaning of A.R.S. §32- 2153(B)(5).

10. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent has not shown that he is a person of honesty, truthfulness and good character within the meaning of A.R.S. §32-2153(B)(7).

11. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent has violated state laws, regulations and rules involving forgery within the meaning of A.R.S. §32- 2153(B)(10).

12. Based upon the foregoing, the undersigned Administrative Law Judge finds that the Respondent's real estate salesperson's license should be revoked pursuant to provisions of A.R.S. §32-2153(A) and (B).

13. Based upon the foregoing, the undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent has violated provisions of Title 32, Chapter 20 of the Arizona Revised Statutes and the Commissioner's Rules and therefore, the Respondent may be assessed a civil penalty (not to exceed $1,000.00 per violation) pursuant to A.R.S. §32-2160.01(A).

14. The undersigned Administrative Law Judge finds that the Respondent’s criminal behavior strikes at the very heart of the professional relationship of trust and confidence between a real estate salesperson and his client. Therefore, a civil penalty should be assessed against the Respondent in the amount of $1000.00. This amount does not imply that only one violation occurred.

RECOMMENDED DECISION

In view of the foregoing, the undersigned Administrative Law Judge recommends that the Respondent’s real estate salesperson’s license be revoked and that the Respondent be assessed a $1,000.00 civil penalty. The civil penalty shall be paid by money order or certified check to the Department and is due before the effective date of this Order.

Done this day, February 5, 1998.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1998, to:

Mr. Jerry Holt, Commissioner Department of Real Estate 2910 North 44th Street, Ste. 100 ATTN: Bonnie Hollon Phoenix, AZ 85018

By ___________________________ -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826