DOB: Diversified Investment Services - SA

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IN THE MATTER OF:

DIVERSIFIED INVESTMENT
SERVICES, INC.

  ("Diversified Investment Services")

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SETTLEMENT AGREEMENT        

WHEREAS, 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”;
 
WHEREAS, Diversified Investment Services is a Connecticut corporation that was licensed as a mortgage broker under Part I of Chapter 668, Sections 36a-485 et seq. of the Connecticut General Statutes;
 
WHEREAS, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Diversified Investment Services to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes;
 
WHEREAS, on December 21, 2009, the Commissioner acting pursuant to Sections 36a-494(a)(1) and 36a-494(a)(1)(C) of the Connecticut General Statutes, as amended by Public Act 09-209, Sections 36a-489(a)(2)(A) and 36a-489(a)(1)(C) of the Connecticut General Statutes, as amended by Public Acts 09-207, 09-208 and 09-209, Section 8(c) of Public Act 09-209, subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, Section 36a-494(b) of the Connecticut General Statutes, as amended by Public Act 09-209, and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a Notice of Intent to Refuse to Renew 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 (collectively “Notice”) against Diversified Investment Services, which Notice is incorporated herein by reference;
 
WHEREAS, the Notice alleged that Diversified Investment Services failed to pay the application fees required by the then applicable Section 36a-491(a)(1) of the Connecticut General Statutes in connection with its mortgage broker license renewal application for the January 1 to December 31, 2009, licensing period, which constitutes a failure to meet the minimum standards for renewal set forth in Section 36a-489(a)(2)(A)(iii) of the Connecticut General Statutes, as amended.  Such failure to meet minimum standards constitutes sufficient grounds for the Commissioner to refuse to renew the license of Diversified Investment Services to act as a mortgage broker in Connecticut from 4133 Whitney Avenue, 1-A, Hamden, Connecticut (“Hamden Office”) pursuant to Section 36a-494(a)(1) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes;
 
WHEREAS the Notice alleged that Diversified Investment Services failed to establish and maintain tangible net worth in the required statutory amount, which constitutes (1) a violation of Section 36a-488(a)(2) of the Connecticut General Statutes, as amended by Public Act 09-209; and (2) a failure to meet the minimum standards for renewal of a license under Sections 36a-489(a)(1)(A) and 36a-488(a)(1)(A)(ii) of the Connecticut General Statutes, as amended.  Such violation and failure to meet the minimum standards constitutes sufficient grounds for the Commissioner to refuse to renew the license of Diversified Investment Services to act as a mortgage broker in Connecticut from the Hamden Office pursuant to Sections 36a-494(a)(1) and 36a-494(a)(1)(C) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.  The violation of Section 36a-488(a)(2) of the Connecticut General Statutes, as amended, also forms a basis to issue an order to cease and desist pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes;
 
WHEREAS the Notice alleged that Diversified Investment Services failed to pay personal property taxes resulting in the issuance of an outstanding tax lien, which demonstrates that the financial responsibility of Diversified Investment Services will not “command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498c, inclusive, . . . sections 36a-534a and 36a-534b . . . and sections 9 and 19 to 21, inclusive, of . . . [public act 09-209] . . . .” and constitutes an additional ground for the Commissioner to refuse to renew the license of Diversified Investment Services to act as a mortgage broker in Connecticut from the Hamden Office pursuant to Sections 36a-494(a)(1), 36a-489(a)(2)(A) and 36a-489(a)(1)(C) of the Connecticut General Statutes, as amended, Section 8(c) of Public Act 09-209 and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes;
 
WHEREAS the Notice alleged that Diversified Investment Services refused to permit the Division’s examiner entry into the office of Diversified Investment Services or otherwise respond to the examiner’s attempts to contact Diversified Investment Services for such purpose, which constitutes a violation of Section 36a-17(d) of the Connecticut General Statutes.  Such conduct constitutes sufficient grounds for the Commissioner to refuse to renew the license of Diversified Investment Services to act as a mortgage broker in Connecticut from the Hamden Office pursuant to Section 36a-494(a)(1)(C) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, and forms a basis to issue an order to cease and desist pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty pursuant to Section 36a-494(b) of the Connecticut General Statutes, as amended, and Section 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS the Notice alleged that Diversified Investment Services refused to permit the Division’s examiner entry into the office of Diversified Investment Services or otherwise respond to the examiner’s attempts to contact Diversified Investment Services for such purposes, that Diversified Investment Services refused to claim certified mail sent to Diversified Investment Services by the Division, and that Diversified Investment Services failed to respond to certified mail sent from the Division and received by Diversified Investment Services, which conduct collectively demonstrates that Diversified Investment Services does not possesses the “character and general fitness . . . such as to command the confidence of the community and to warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-485 to 36a-498c, inclusive, . . . sections 36a-534a and 36a-534b . . . and sections 9 and 19 to 21, inclusive, of . . . [public act 09-209] . . .”, and constitutes an additional ground for the Commissioner to refuse to renew the license of Diversified Investment Services to act as a mortgage broker in Connecticut from the Hamden Office pursuant to Sections 36a-494(a)(1), 36a-489(a)(2)(A) and 36a-489(a)(1)(C) of the Connecticut General Statutes, as amended, and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes;
 
WHEREAS, on December 22, 2009, Diversified Investment Services received the Notice, and on December 30, 2009, requested a hearing;
 
WHEREAS, after various continuances, the hearing commenced on June 9, 2010, but was continued until June 24, 2010;
 
WHEREAS, Diversified Investment Services represents to the Commissioner that:

1. As of December 31, 2009, Diversified Investment Services ceased all business subject to licensure under Part I of Chapter 668 of the Connecticut General Statutes;
2. Diversified Investment Services is not otherwise presently engaged, directly or indirectly, in any business presently regulated by the Commissioner through the Division under applicable provisions of Chapters 668 and 669 of the Connecticut General Statutes;
3. Diversified Investment Services was working and continues to work with the relevant tax authorities to resolve issues and/or disputes pertaining to amounts due as outstanding personal property taxes;
4. Diversified Investment Services did not intentionally refuse to permit examiner access, did not refuse receipt of mail from the Division, and did not otherwise intentionally fail to respond to the Division’s mailings and other inquiries;

WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by agreed settlement, unless precluded by law;
 
WHEREAS, Diversified Investment Services agrees to voluntarily enter into this Settlement Agreement without admitting or denying any allegations contained in the Notice and set forth herein, and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations described above;
 
WHEREAS, Diversified Investment Services, through its execution of this Settlement Agreement, voluntarily agrees to waive any rights to a hearing upon the allegations contained in the Notice and this Settlement Agreement, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Settlement Agreement;
 
AND WHEREAS, upon the entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Diversified Investment Services based upon the allegations contained in the Notice and set forth herein.
 
NOW THEREFORE, the Commissioner and Diversified Investment Services enter into this Settlement Agreement as follows:

1. Effective on the date this Settlement Agreement is executed by the Commissioner, Diversified Investment Services is BARRED for a period of eighteen (18) months from January 1, 2010, from applying for a license to act as a mortgage lender, mortgage correspondent lender or mortgage broker within the meaning of Part I of Chapter 668, Sections 36a-485 to 36a-498f, inclusive, and Sections 36a-534a and 36a-534b of the Connecticut General Statutes.
2. No later than the date this Settlement Agreement is executed by Diversified Investment Services, Diversified Investment Services shall remit through the Nationwide Mortgage Licensing System the outstanding payment of Five Hundred Fifty Dollars ($550) for licensing and processing fees that were not paid for the January 1 to December 31, 2009, licensing period, and shall provide proof of such payment to the Commissioner in such form as the Commissioner may require.
3. No later than sixty (60) days from the date this Settlement Agreement is executed by the Commissioner, Diversified Investment Services shall remit to the Department of Banking, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Five Thousand Dollars ($5,000) as a civil penalty.
4. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Diversified Investment Services based upon the allegations contained herein; provided that entry of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Diversified Investment Services if any representations made by Diversified Investment Services in this Settlement Agreement are subsequently discovered to be untrue or if Diversified Investment Services is not fully complying with any term or condition stated herein.
5. Notwithstanding paragraph 4 herein, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Diversified Investment Services to enforce this Settlement Agreement if the Commissioner determines that Diversified Investment Services is not fully complying with any term or condition stated herein.  For purposes of this paragraph, a violation of this Settlement Agreement shall be deemed to be a violation of the order of the Commissioner.
6. Nothing in the entry of this Settlement Agreement shall adversely affect the ability of Diversified Investment Services to apply for or obtain a license under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes at any time subsequent to the period of the bar set forth in paragraph 1 herein, provided all other terms and conditions of the Settlement Agreement have been satisfied.

IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to be executed by each of them or their duly authorized representatives on the dates hereinafter subscribed.


Dated at Hartford, Connecticut
this 22nd day of June 2010.                ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Donald A. Moses, state on behalf of Diversified Investment Services, Inc., that I have read the foregoing Settlement Agreement; that I know and fully understand its contents; that I am authorized to execute this Settlement Agreement on behalf of Diversified Investment Services, Inc.; and that Diversified Investment Services, Inc., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.                           

                                            
                                             By:  ________/s/_________
                                                   Name:  Donald A. Moses
                                                   Title:  President
                                                   Diversified Investment Services, Inc.

State of:  Connecticut

County of:  New Haven

On this the 18th day of June 2010, before me, Debra E. O’Loughlin, the undersigned officer, personally appeared Donald A. Moses, who acknowledged himself to be the President of Diversified Investment Services, Inc., a corporation, and that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President.

In witness whereof I hereunto set my hand.


                                                       ________/s/_________
                                                       Notary Public
                                                       Date Commission Expires:  2/28/15


Administrative Orders and Settlements