The Department of Banking News Bulletin
Bulletin # 2749
Week Ending October 28, 2016
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 Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten days from the date of this bulletin.
CONSUMER CREDIT DIVISION ACTIVITY
On October 17, 2016, the Commissioner entered into a Consent Order with Siwell, Inc. d/b/a Capital Mortgage Services of Texas
(NMLS # 149169) (“Capital Mortgage Services”), Lubbock, Texas. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, on March 22, 2016, the Commissioner issued a Notice of Intent Not to Renew Mortgage Lender License and Notice of Right to Hearing. The Commissioner alleged that Capital Mortgage Services failed to have a designated qualified individual (“QI”) at its main office with the experience required by Section 36a-488 of the Connecticut General Statutes. As a result of further investigation, the Commissioner additionally alleged in the Consent Order that, as it pertained to the qualifications of its designated QI, Capital Mortgage Services violated Sections 36a-498e(10) and 36a-53a of the Connecticut General Statutes. As part of the Consent Order, Capital Mortgage Services paid $10,000 as a civil penalty.
Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
On October 20, 2016, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (collectively “Notice”) in the Matter of: Evans Law Associates, P.C. a/k/a Evans Law Associates, PLLC a/k/a Evans Law Associates, ELLC
(“Evans Law”) and Jason J. Evans
(collectively, “Respondents”), Williamsville, New York. The Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges that Respondents acted within this state as consumer collection agencies without consumer collection agency licenses, in violation of Section 36a-801(a) of the 2016 Supplement to the General Statutes, and that Evans Law violated Consent Orders it entered into with the Commissioner. Respondents were afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
Order to Cease and Desist and Order Imposing Civil Penalty
On October 24, 2016, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the matter of: American Billing & Collections, Inc.
(“Respondent”), Newington, Connecticut. The basis of the Order was that, among other violations, Respondent acted as a consumer collection agency in this state without obtaining the required license, in violation of Section 36a-801(a) of the 2016 Supplement to the General Statutes. Respondent was ordered to cease and desist from violating Section 36a-801(a) of the 2016 Supplement to the General Statutes, as well as other consumer collection agency statutes, and to pay a civil penalty in the amount of $100,000. In addition, an Order of Restitution issued against Respondent on July 14, 2016, remains in effect and became permanent against Respondent on August 6, 2016.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
David Lerner Associates, Inc. (CRD No. 5397) Fined $5,000,
Directed to Cease and Desist from Regulatory Violations
On October 26, 2016, the Banking Commissioner entered a Consent Order (No. CO-16-8184-S) with respect to David Lerner Associates, Inc.,
a Connecticut-registered broker-dealer with a branch office at 1221 Post Road, Westport, Connecticut 06880. The Consent Order alleged that the firm violated Section 36b-31-6f(b) of the Regulations under the Connecticut Uniform Securities Act by failing to follow and enforce its system for supervising agent activities regarding the processing of client IRA distributions. The Consent Order grew out of the conduct of ex-agent Michael Thomas Lombardo (CRD No. 4091665) who was barred by FINRA (Case No. 2014040513601) following allegations that Lombardo misappropriated funds from a David Lerner Associates, Inc. customer by forging the customer’s signature on an IRA distribution request form; taking delivery of the IRA disbursement check; forging the customer's signature on the disbursement check; and converting the funds to Lombardo's own use. On September 11, 2014, Lombardo pled guilty in the United States District Court for the District of Connecticut to one count of violating 18 U.S.C. Section 1343 (Wire Fraud) (United States v. Lombardo, Case No. 3:14-cr-00189-AVC).
The Consent Order acknowledged that David Lerner Associates, Inc., had immediately terminated Lombardo when the firm was alerted of Lombardo's misconduct, and that the firm had voluntarily offered each client affected by Lombardo's conduct a full refund of amounts misappropriated plus interest.
The Consent Order fined the firm $5,000 and directed it to cease and desist from regulatory violations.
Dated: Tuesday, November 1, 2016
Jorge L. Perez