DOB: News Bulletin 2017 - October 18, 2002

The Department of Banking News Bulletin 

Bulletin # 2017
Week Ending October 18, 2002

This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to John P. Burke, Commissioner of Banking, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail to john.burke@ct.gov. Written comments will be considered only if they are received within ten days from the date of this bulletin.


BRANCH ACTIVITY
State Bank Activity

Section 36a-145 of the Connecticut General Statutes requires that each application for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided. Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days. Questions concerning branch activity should be directed to the Bank Examination Division, (860) 240-8180.
Note: dates are listed in month/day/year format.

Date Bank Location Activity
10/16/02 Dime Savings Bank of Norwich
Norwich
131 & 135 Franklin Street
Westerly, RI 02891
approved

PREDATORY LENDING CONFERENCE

The Department of Banking and the Department of Consumer Protection are jointly sponsoring a conference on predatory lending on Tuesday, November 19, 2002 from 8:30 to 2:15 at the Radisson Hotel and Conference Center in Cromwell, Connecticut.

The conference is intended to educate mortgage lending professionals and those in related industries about state and federal laws and regulations to prevent predatory lending. Additional presentations will cover lender concerns and perspectives, credit issues, state examination priorities and educational programs.

For complete program and registration information, please visit the department's web site or call the department at (860) 240-8170.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Stamford Firm Fined $30,000 in Connection With Fraudulent Note Sales

On October 15, 2002, the Commissioner issued an Order Imposing Fine against Georges Trading Corp., also known as G's Trading Corp., G's Capital Investments, G's Investment Club and B & S Investment Club. The corporation maintains its principal place of business at 800 Summer Street, Suite 207, Stamford, Connecticut. Georges Trading Corp. had been the subject of an August 2, 2002 Order to Cease and Desist and Notice of Intent to Fine. The Order to Cease and Desist, being uncontested, became permanent on September 19, 2002. The Order to Cease and Desist and Notice of Intent to Fine had alleged that from at least February 2000 forward, the respondent sold $906,650 of its promissory notes to at least 63 Connecticut investors; that the notes were not registered under Section 36b-16 of the Connecticut Uniform Securities Act; and that the respondent violated Section 36b-6(b) of the Act by employing unregistered agents in selling the notes. In addition, the Order to Cease and Desist and Notice of Intent to Fine had claimed that the respondent violated the antifraud provisions of the Act by a) mailing inaccurate account statements to Connecticut investors; b) presenting subsequently dishonored checks to Connecticut investors as refunds; and c) falsely representing that the note proceeds would be invested in the stock market, that the investments were safe, secure and insured; that investors would receive up to 70% in interest per month; that the respondent had 3,000 members in over 5 countries; that respondent had over $2,500,000 in total assets; and that the respondent would pay taxes on the investment returns of certain Connecticut investors. The Order to Cease and Desist and Notice of Intent to Fine had also alleged that no investor monies were invested as promised by the respondent, and that, while the respondent had returned approximately $78,939 to investors, the remaining $827,711 had been used to pay the personal expenses of the respondent's president and vice president as well as payroll and office expenses.

In fining the respondent $30,000, the Commissioner found that the respondent committed one violation of the antifraud provisions of the Act; one violation of Section 36b-6(b) of the Act; and one violation of Section 36b-16 of the Act. The respondent did not contest the imposition of the fine.

Bridgeport Man Fined $30,000 in Connection With Fraudulent Note Sales

On October 15, 2002, the Commissioner issued an Order Imposing Fine against Gerald Georges, president of Georges Trading Corp. Gerald Georges' last known address is 1431 Iranistan Avenue, 1st Floor, Bridgeport, Connecticut. Gerald Georges had also been the subject of an August 2, 2002 Order to Cease and Desist and Notice of Intent to Fine. The Order to Cease and Desist and Notice of Intent to Fine had alleged that, from at least February 2000 forward, the respondent effected at least 68 transactions in securities consisting of notes issued by Georges Trading Corp. to at least 45 Connecticut investors, and, in so doing, transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act. In addition, the Order to Cease and Desist and Notice of Intent to Fine had alleged that the notes were not registered under Section 36b-16 of the Connecticut Uniform Securities Act, and that Gerald Georges violated the antifraud provisions of the Act by a) failing to honor a personal guarantee he had made to a Connecticut investor that the investor's funds would be returned; b) presenting subsequently dishonored checks to Connecticut investors as refunds; c) mailing an inaccurate statement of account to a Connecticut investor; and d) falsely representing that the note proceeds would be invested in the stock market, that the investments were safe, secure and insured; that investors would receive up to 70% in interest per month; and that Georges Trading Corp. would generate income to cover the cost of taxes on the investments over and above the promised monthly returns when no such taxes were paid. The Order to Cease and Desist and Notice of Intent to Fine had further alleged that, while Georges Trading Corp. had returned a fraction of investment monies to Connecticut investors, Connecticut investors never realized the promised returns, and that the bulk of investor money was spent on Gerald Georges' personal expenses, the personal expenses of Georges Trading Corp.'s vice president and on payroll and office costs.

In fining Gerald Georges $30,000, the Commissioner found that Gerald Georges committed one violation of the antifraud provisions of the Connecticut Uniform Securities Act; one violation of Section 36b-6(a) of the Act; and one violation of Section 36b-16 of the Act. Gerald Georges did not contest the imposition of the fine.

Stamford Man Permanently Barred From Securities-Related
Activity in Connecticut;
Order to Cease and Desist Made Permanent

On October 1, 2002, the Commissioner entered a Consent Order with respect to Gregory Katsaros of 29 Hanover Street, Stamford, Connecticut. Respondent Katsaros had been the subject of a May 22, 2002 Order to Cease and Desist and Notice of Intent to Fine alleging that, from at least November 2000 forward, the respondent represented International Market Consultants, LLC, a broker-dealer, in effecting at least five transactions in securities involving contracts on foreign currencies ("FOREX investments") and that, in so doing, the respondent acted as an unregistered broker-dealer agent in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act. The Order to Cease and Desist and Notice of Intent to Fine had also claimed that the FOREX investments were not registered as required by Section 36b-16 of the Act, and that the respondent violated statutory antifraud provisions by misrepresenting to one or more customers that he would purchase FOREX investments on their behalf through InterTrade Forex of Kissimmee, Florida when, in actuality, International Market Consultants LLC, used investor monies to pay office expenses, personal expenses of respondent Katsaros' manager and agents and fees to an international global events planner.

The respondent agreed to the entry of the Consent Order in lieu of an administrative hearing on the Order to Cease and Desist and Notice of Intent to Fine, and demonstrated to the Commissioner that he was financially incapable of paying the maximum fine of $30,000 sought by the Notice of Intent to Fine. The Consent Order rendered the May 22, 2002 Order to Cease and Desist permanent as of October 1, 2002, and permanently barred respondent Katsaros from transacting business in Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent.

CONSUMER CREDIT DIVISION ACTIVITY
License Revocation

On October 11, 2002 the Commissioner issued a Findings of Fact, Conclusions of Law and Order, revoking the first and secondary mortgage licenses of Impac Mortgage Corporation, LLC. The entity is located at 756 Park Avenue, Bloomfield, Connecticut. The agency's action was based on the fact that the entity filed an application for a secondary mortgage license and submitted a check from a closed account to the Department. Such failure to pay the required license fee at the time of renewal and the concomitant late fee is in violation of Section 36a-514(a)(1) of the Connecticut General Statutes and illustrates that the Respondent's qualifications and character are not such as to warrant belief that its business will be operated soundly and efficiently, in the public interest.

Dated: Tuesday, October 22, 2002

John P. Burke
Commissioner