DOB: Allied Financial Services, LLC, Ayeshah Malik, Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Broker License, Issue Order to Cease and Desist and Impose Civil Penalty

* * * * * * * * * * * * * * * * * * *

IN THE MATTER OF:

ALLIED FINANCIAL SERVICES, LLC
("Allied")

AYESHAH MALIK
("Malik")

    (collectively "Respondents")

 
 
 
 
 
 
* * * * * * * * * * * * * * * * * * *
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*

TEMPORARY ORDER TO
CEASE AND DESIST

ORDER OF SUMMARY SUSPENSION

NOTICE OF INTENT TO REVOKE
MORTGAGE BROKER LICENSE

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO IMPOSE
CIVIL PENALTY

AND

NOTICE OF RIGHT TO HEARING

I. LEGAL AUTHORITY AND JURISDICTION

The Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators” (“Act”).
 
Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner.
 
Section 36a-17 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  The commissioner, in the commissioner’s discretion, may make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner. . . .
 
(c)  For the purpose of any investigation, [or] examination . . . the commissioner may . . . require written statements and require the production of any records which the commissioner deems relevant or material.  The commissioner may require that certified copies of any such records be provided to the commissioner at the commissioner’s office.

(d)  Any person who is the subject of any such investigation, [or] examination . . . shall make its records available to the commissioner in readable form; . . . provide copies or computer printouts of records when so requested; furnish unrestricted access to all areas of its principal place of business or wherever records may be located; and otherwise cooperate with the commissioner. . . .

(f)  As used in this section, “records” includes, but is not limited to, books, papers, correspondence, memoranda, agreements, diaries, logs, notes, ledgers, journals, visual, audio, magnetic or electronic recordings, computer printouts and software, and any other documents.

Section 36a-51 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending a notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the licensee on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . involved; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that the licensee may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If the commissioner finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in the notice, the commissioner may order summary suspension of a license in accordance with subsection (c) of section 4-182 and require the licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section, pending proceedings for . . . revocation . . . .

(b)  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless the licensee fails to appear at the hearing.  After the hearing, the commissioner shall . . . revoke . . . the license for any reason set forth in the applicable licensing provisions of the general statutes if the commissioner finds sufficient grounds exist for such . . . revocation . . . .  If the licensee does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall . . . revoke . . . the license.  No such license shall be suspended or revoked except in accordance with the provisions of chapter 54.

Section 36a-52 of the Connecticut General Statutes provides, in pertinent part, that:

(a)  Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending.  Any such notice shall include:  (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing.  After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice.  If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person.  No such order shall be issued except in accordance with the provisions of chapter 54.

(b)  If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation and to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section.  Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice.

Section 36a-50(a) of the Connecticut General Statutes provides, in pertinent part, that:

(1)  Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt.  The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending.  Any such notice shall include:  (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes . . . alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice.

(2)  If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing.  After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.  If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding one hundred thousand dollars per violation be imposed upon such person.

(3)  Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54.

Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part, that:

If the agency finds that public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered pending proceedings for revocation or other action.  These proceedings shall be promptly instituted and determined.


II.  MATTERS ASSERTED

1.
Allied is a Connecticut limited liability company with its main office at 83 East Avenue, Suite 206, Norwalk, Connecticut.
2.
Allied currently holds a mortgage broker license in Connecticut (No. 11022) under the Act.
3.
Malik is a member of Allied whose address last known to the Commissioner is 34 Woodbrook Drive, Stamford, Connecticut.
4.
On February 25, 2009, examiners from the Division attempted to conduct an examination of Allied.  During such examination, Allied, through Malik, failed to provide copies of certain loan files that the examiners required to be produced and failed to otherwise furnish the examiners with unrestricted access to its records.
5.
During the examination as described in paragraph 4, the examiners asked Malik whether she had originated any mortgage loans during the last two years, to which she replied that she had not originated any such loans or taken any mortgage loan applications since 2006.
6.
During the examination as described in paragraphs 4 and 5, the examiners reviewed a mortgage loan file that contained a mortgage loan application signed by Malik on January 10, 2008.
 

III.  STATUTORY BASIS FOR REVOCATION OF MORTGAGE BROKER LICENSE,
ORDER TO CEASE AND DESIST AND IMPOSITION OF CIVIL PENALTY

Section 36a-53a of the Connecticut General Statutes provides that:

No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under this title, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.

Section 36a-493(a) of the Connecticut General Statutes provides, in pertinent part, that:

Each . . . mortgage broker licensee shall maintain adequate records of each loan transaction at the office named in the license, or, if requested by the commissioner, shall make such records available at such office or send such records to the commissioner by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than five business days after requested by the commissioner to do so.

Section 36a-494 of the Connecticut General Statutes provides, in pertinent part, that:

(a)(1)  The commissioner may . . . revoke . . . any . . . mortgage broker license or take any other action, in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498a, inclusive, or if the commissioner finds that the licensee or any proprietor, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has . . . (B) committed any fraud, misappropriated funds or misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36-493, or part III of chapter 669 . . . to anyone entitled to such information; [or] (C) violated any of the provisions of this title . . . .

(b)  Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36a-485 to 36a-498a, inclusive, . . . or any licensee has . . . misrepresented, concealed, suppressed, intentionally omitted or otherwise intentionally failed to disclose any of the material particulars of any mortgage loan transaction, including disclosures required by subdivision (6) of subsection (a) of section 36a-493, or part III of chapter 669 or regulations adopted pursuant thereto, to anyone entitled to such information, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.

1.
Allied’s conduct, as more fully described in paragraph 4 of the Matters Asserted, constitutes a violation of Sections 36a-17(d) and 36a-493(a) of the Connecticut General Statutes.  Such conduct constitutes sufficient grounds for the Commissioner to revoke Allied’s license to act as a mortgage broker in Connecticut pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(B), 36a-494(a)(1)(C) and 36a-51 of the Connecticut General Statutes, and forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Allied in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Allied not to exceed Thirty Thousand Dollars ($30,000), subject to Allied’s right to a hearing on the allegations set forth above.
2.
Malik’s conduct, as more fully described in paragraph 4 of the Matters Asserted, constitutes a violation of Section 36a-17(d) of the Connecticut General Statutes.  Such conduct forms the basis to issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Malik in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Malik not to exceed Thirty Thousand Dollars ($30,000), subject to Malik’s right to a hearing on the allegations set forth above.
3.
Malik’s statement that she had not originated any mortgage loans or taken any mortgage loan applications since 2006, as more fully described in paragraph 5 of the Matters Asserted, when, in fact, she had taken such an application, as more fully described in paragraph 6 of the Matters Asserted, constitutes a violation of Section 36a-53a of the Connecticut General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-50(a) of the Connecticut General Statutes.  Section 36a-50(a) of the Connecticut General Statutes authorizes the Commissioner to impose a civil penalty upon Malik in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Malik not to exceed Thirty Thousand Dollars ($30,000), subject to Malik’s right to a hearing on the allegation set fourth above.
 

IV.  FINDINGS AND STATUTORY BASIS FOR TEMPORARY ORDER
TO CEASE AND DESIST AND ORDER OF SUMMARY SUSPENSION

The Commissioner finds that public safety and welfare imperatively require emergency action to summarily suspend Allied’s license to act as a mortgage broker in Connecticut under Section 4-182(c) of the Connecticut General Statutes and finds that public welfare requires immediate action to issue a temporary order requiring Allied and Malik to cease and desist from violating the law under Section 36a-52(b) of the Connecticut General Statutes, in that Allied’s and Malik’s failure to produce copies of records and failure to produce unrestricted access to the Commissioner of all areas at Allied’s principal place of business or wherever records may be located, and Malik’s making of false statements to the examiners impedes the Commissioner’s ability to carry out his duties to examine Allied’s activities in order to determine whether the business is being operated soundly and efficiently, in the public interest and consistent with the purposes of the Act, and therefore adversely effects the public.
 

V.  TEMPORARY ORDER TO CEASE AND DESIST,
ORDER OF SUMMARY SUSPENSION, NOTICE OF INTENT
TO REVOKE MORTGAGE BROKER LICENSE, NOTICE OF INTENT
TO ISSUE ORDER TO CEASE AND DESIST, NOTICE OF INTENT
TO IMPOSE CIVIL PENALTY AND NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that Allied has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Allied’s license to act as a mortgage broker in Connecticut pursuant to Sections 36a-494(a)(1), 36a-494(a)(1)(B), 36a-494(a)(1)(C) and 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist against Allied pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty upon Allied pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner has reason to believe that Malik has engaged in acts or conduct which forms a basis to issue an order to cease and desist against Malik pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty upon Malik pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has made the findings required under Sections 4-182(c) and 36a-52(b) of the Connecticut General Statutes.
 
THE COMMISSIONER THEREFORE ORDERS, pursuant to the authority granted in Section 36a-52(b) of the Connecticut General Statutes, that Allied Financial Services, LLC immediately CEASE AND DESIST from further violations of Sections 36a-17(d) and 36a-493(a) of the Connecticut General Statutes, and that Ayeshah Malik immediately CEASE AND DESIST from further violations of Sections 36a-17(d) and 36a-53a of the Connecticut General Statutes.  This Temporary Order shall become effective upon receipt by Allied Financial Services, LLC and Ayeshah Malik and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this Temporary Order.
 
THE COMMISSIONER FURTHER ORDERS, pursuant to the authority granted in Sections 36a-51 and 4-182(c) of the Connecticut General Statutes, that the license of Allied Financial Services, LLC to act as a mortgage broker in Connecticut be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to Allied that the Commissioner intends to REVOKE Allied’s license to act as a mortgage broker in Connecticut, issue an order requiring Allied to CEASE AND DESIST from violating Sections 36a-17(d) and 36a-493(a) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Allied as set forth herein, subject to Allied’s right to a hearing on the allegations set forth above.
 
FURTHER, notice is hereby given to Malik that the Commissioner intends to issue an order requiring Malik to CEASE AND DESIST from violating Sections 36a-17(d) and 36a-53a of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Malik as set forth herein, subject to Malik’s right to a hearing on the allegations set forth above.
 
A hearing will be granted to Respondents if a written request for a hearing is received by the Department of Banking, Consumer Credit Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing as set forth in Sections 36a-51, 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing or sending.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on July 7, 2009, at 9:30 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
 
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes, unless Respondents fail to appear at the requested hearing.  At such hearing, Respondents will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
 
If Allied does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Allied’s license to act as a mortgage broker in Connecticut and issue an order that Allied cease and desist from violating Sections 36a-17(d) and 36a-493(a) of the Connecticut General Statutes, and may order a civil penalty not to exceed Thirty Thousand Dollars ($30,000) be imposed upon Allied.
 
If Malik does not request a hearing within the time prescribed, the Commissioner will issue an order that Malik cease and desist from violating Sections 36a-17(d) and 36a-53a of the Connecticut General Statutes, and may order a civil penalty not to exceed Sixty Thousand Dollars ($60,000) be imposed upon Malik.



So ordered at Hartford, Connecticut
this 9th day of April 2009.                            ________/s/_________
                                                               Howard F. Pitkin
                                                               Banking Commissioner



CERTIFICATION

I hereby certify that on this 9th day of April 2009, the foregoing Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing was sent by registered mail, return receipt requested to Allied Financial Services, LLC, c/o Zeba Mohib, Agent 83 East Avenue, Suite 206, Norwalk, Connecticut 06851, registered mail no. RB027869020US; and Ayeshah Malik, 34 Woodbrook Drive, Stamford, Connecticut 06907, registered mail no. RB028036190US.

                                                             
                                                              ________/s/_________
                                                              Doniel Kitt
                                                              Prosecuting Attorney


Administrative Orders and Settlements