DOB: Tax Recovery Group - FINE

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IN THE MATTER OF:

TAX RECOVERY GROUP, INC.

    ("Respondent")

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ORDER IMPOSING FINE

DOCKET NO. CF-2006-818-B


WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the Connecticut General Statutes, the Connecticut Business Opportunity Investment Act (“Act”);

WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation into the activities of Respondent, pursuant to Section 36b-71(a) of the Act, to determine if it had violated, was violating or was about to violate provisions of the Act;

WHEREAS, on May 19, 2006, based on the investigation by the Division, the Commissioner, acting pursuant to Sections 36b-72(a) and 36b-72(b) of the Act, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notices are incorporated by reference herein;

WHEREAS, the Order stated that Respondent is to cease and desist from directly or indirectly violating the provisions of the Act and from the further sale or offer to sell business opportunities constituting or which would constitute a violation of the provisions of the Act;

WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Respondent, that a hearing (“Hearing”) would be held on the matters alleged in the Fine Notice on July 20, 2006 at the Department of Banking, and that if Respondent failed to appear at the Hearing, the Commissioner may order that a maximum fine of Ten Thousand Dollars ($10,000) (“Fine”) be imposed upon Respondent;

WHEREAS, on May 22, 2006, the Notice was sent by certified mail, return receipt requested, to Respondent;

WHEREAS, on May 31, 2006, the Notice was returned to the Department of Banking marked “Returned to Sender-Not Deliverable as Addressed, Unable to Forward”;

WHEREAS, on June 1, 2006, the Notice were served on the Commissioner, and on June 2, 2006, Notice of Service on the Banking Commissioner was sent to Respondent in accordance with Section 36b-62(c) of the Act, by registered mail, return receipt requested;

WHEREAS, William Nahas, Jr. was appointed Hearing Officer in this matter;

WHEREAS, in the Notice the Commissioner alleged that Respondent sells supplies and services necessary to enable purchasers to start a business marketing Respondent’s tax review services, tax amendment services and tax audit protection services including: marketing material including brochures, consumer videos, consumer CD/ROMs and consumer lists, customer support, training manuals, and personalized client forms (“TRG Business”);

WHEREAS, in the Notice the Commissioner alleged that Respondent enters into marketing agreements with purchasers, appointing such purchasers as “corporate partners” to market Respondent’s services;

WHEREAS, in the Notice the Commissioner alleged that Respondent represents to prospective purchasers, in written materials, that the “partnership” with Respondent consists of, inter alia, “[a]n easy to follow, complete training package . . . [o]ngoing home office support . . . [p]rofessional sales and marketing materials . . . [a] dedicated marketing company committed to your success”;

WHEREAS, in the Notice the Commissioner alleged that from at least April 2004 to the present, Respondent offered and sold the TRG Business to at least one Connecticut purchaser;

WHEREAS, in the Notice the Commissioner alleged that at the time such offer and sale was made, the TRG Business was not registered as a business opportunity in Connecticut and no registration for the TRG Business as a business opportunity had been made effective by order of the Commissioner under Section 36b-62 of the Act;

WHEREAS, in the Notice the Commissioner alleged that at the time such offer and sale was made, the sale of the TRG Business was not in conjunction with the licensing of a registered trademark or service mark;

WHEREAS, on July 20, 2006, Respondent failed to appear at the Hearing;

WHEREAS, Section 36b-72(a) of the Act provides, in pertinent part, that
“[w]henever it appears to the commissioner that any person or persons are violating or are about to violate any of the provisions of sections 36b-60 to 36b-80, inclusive, or any regulation, rule or order adopted or issued under said sections . . . the Commissioner may in his direction order the person or persons to cease and desist from the violations . . . or from the further sale or offering to sell business opportunities constituting or which would constitute a violation . . .”;

WHEREAS, on June 19, 2006, the Order issued against Respondent became permanent;

WHEREAS, Section 36b-67 of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity:  (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62”.

WHEREAS, Section 36b-72(b)(1) of the Act provides, in pertinent part, that any notice sent to a Respondent “shall include:  (A) [a] reference to the title, [or] chapter . . . alleged to have been violated; (B) a short and plain statement of the matter asserted or charged; (C) the maximum fine that may be imposed for such violation; and (D) the time and place for the hearing”;

WHEREAS, Section 36b-72(b)(2) of the Act provides, in relevant part, that “[i]f such person . . . fail[s] to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding ten thousand dollars per violation be imposed upon such person . . . ”;

WHEREAS, the facts as set forth in paragraphs 7 through 11, inclusive, of the Notice, shall constitute findings of fact, and that the statutory basis for the Order and Fine set forth in paragraphs 12 through 20, inclusive, of the Notice shall constitute conclusions of law;

WHEREAS, the Commissioner finds that the offer and sale of the TRG Business, absent registration and absent the Commissioner having declared the business opportunity effective, constitutes a violation of Section 36b-67(1) of the Act;

WHEREAS, the Commissioner finds that the offer and sale of  the TRG Business, absent registration and absent the Commissioner having declared the business opportunity effective, in violation of Section 36b-67(1) of the Act, constitutes a basis for the imposition of a fine against Respondent under Section 36b-72(b) of the Act;

WHEREAS, the Commissioner finds that the facts require the imposition of a fine against Respondent;

WHEREAS, the Commissioner complied with the provisions of Section 36b-72(b)(1) of the Act;

AND WHEREAS, the Commissioner finds that the Fine is in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act.


ORDER

Having read the record, I HEREBY ORDER, pursuant to Section 36b-72(b)(2) of the Act, that:

1.
A fine of Ten Thousand Dollars ($10,000) is hereby imposed against Tax Recovery Group, Inc., to be remitted to the Department of Banking by cashier’s or certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than 21 days from the date this Order is mailed; and
 
2.
This Order shall become final when mailed.

                                                     
Dated at Hartford, Connecticut
this 27th day of September 2006.               ________/s/_________
                                                            John P. Burke
                                                            Banking Commissioner

This Order was mailed by certified
mail, return receipt requested, to
Respondent on September 28, 2006.

Tax Recovery Group, Inc.           Certified Mail No. 7002 0860 0002 1545 5511
1880 Office Club Point, #2 FLSW
Colorado Springs, Colorado 80920



Tax Recovery Group, Inc.           Certified Mail No. 7002 0860 0002 1545 5528
c/o Eugene Barber Brace
Registered Agent
1880 Office Club Point,
Colorado Springs, Colorado 80920


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