DOB: Squire Industries, Inc. - SumSusp-NOI Rev-CD-CP

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

IN THE MATTER OF:

SQUIRE INDUSTRIES, INC.

    ("Respondent")



 



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

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

ORDER OF SUMMARY SUSPENSION

NOTICE OF INTENT TO REVOKE
CHECK CASHING SERVICE
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 IV of Chapter 668, Sections 36a-580 to 36a-589, inclusive, of the Connecticut General Statutes, “Check Cashing Services” and Sections 36a-585-1, 36a-588-1, 36a-588-3 and 36a-588-4 of the Regulations of Connecticut State Agencies (“Regulations”).
 
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 Respondent to determine if it has violated, is violating or is about to violate the provisions of the Connecticut General Statutes or Regulations within the jurisdiction of the Commissioner. 
 
Section 36a-17(a) of the Connecticut General Statutes provides that:
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.
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, [or] regulations . . . 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 . . . revoked except in accordance with the provisions of chapter 54.
Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that:
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, or any regulation, . . . 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, [or] regulations . . . 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.
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, or any regulation, . . . 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, [or] regulation, . . . 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, [or] regulation, . . . 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 the 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.
Respondent is a Connecticut corporation with its main office at 1154 Dixwell Avenue, Hamden, Connecticut.
2.
At all times relevant hereto, Respondent has been licensed to operate a general facility to engage in the business of cashing checks, drafts or money orders.
3.
At all times relevant hereto, Claude A. Narracci (“Narracci”) has been the President and sole shareholder of Respondent.
4.
On August 31, 2009, Respondent filed a Renewal of Check Cashing Service License application for the October 1, 2009 to September 30, 2011 renewal period (“Renewal Application”).  The Renewal Application asks if any officer or shareholder owning ten percent or more of outstanding stock of the applicant has pending charges for a felony.  The Renewal Application indicated a “no” response to this question and was signed by Narracci.  Respondent’s license was renewed on October 1, 2009.
5. On December 23, 2009, an Indictment was filed in Westchester County Court against Anthony Delmaro (“Delmaro”) and Narracci (“Indictment”).  The Indictment charges Narracci with the crime of grand larceny in the second degree, a felony in New York, and alleges that Narracci acted in concert with others to steal property with a value in excess of $50,000.  In particular, underlying statements supporting the Indictment allege that during March 2006, Narracci repeatedly cashed, for Delmaro, checks that bounced at Respondent’s Connecticut location and that Narracci subsequently deposited proceeds of approximately $470,000 in Respondent’s account from another individual’s mortgage proceeds in connection with such bounced checks.
6.
As of March 16, 2011, Respondent had not informed the Commissioner of the Indictment.
7.
On March 16, 2011, the Division sent a letter by facsimile and certified mail to Respondent, pursuant to Section 4-182(c) of the Connecticut General Statutes, giving Respondent an opportunity to show compliance with all lawful requirements for the retention of its check cashing service license (“Compliance Letter”).  Respondent received the Compliance Letter on March 17, 2011.
8. By letter dated March 21, 2011, Narracci, on behalf of Respondent, responded to the Compliance Letter, advising the Commissioner that he was charged with grand larceny in the second degree in New York and that Respondent had not been charged with a crime.  The Commissioner was not persuaded by such response.
9.
On March 28, 2011, Narracci pled guilty to grand larceny in the second degree in New York.
 
 
III.  STATUTORY BASIS FOR REVOCATION OF CHECK CASHING
SERVICE LICENSE, ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
 
Section 36a-581 of the Connecticut General Statutes provides, in pertinent part, that:
(e)  Upon the filing of the required application and the applicable license and location fees, the commissioner shall investigate the facts and may issue a license if the commissioner finds that . . . (3) if the applicant is a corporation, each officer, director, authorized agent and each shareholder owning ten per cent or more of the outstanding stock of such corporation is in all respects properly qualified and of good character . . . .  The commissioner may deny an application if the commissioner finds that the applicant or any member, officer, director or authorized agent or shareholder owning ten per cent or more of the outstanding stock of the applicant has been convicted, during the ten-year period prior to the date of application, of any misdemeanor involving any aspect of the check cashing services business, or any felony.  Any denial of an application by the commissioner shall, when applicable, be subject to the provisions of section 46a-80.
(f)  An applicant or licensee shall promptly notify the commissioner, in writing, of any change in the information provided in its initial or renewal application for licensure or most recent renewal of such license.
Section 36a-587 of the Connecticut General Statutes provides, in pertinent part, that:
(a)  The commissioner may . . . revoke . . . any license issued pursuant to section 36a-581 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 a license under sections 36a-580 to 36a-589, inclusive, or if the commissioner finds that the licensee or any owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has done any of the following:  . . . (3) violated any provision of sections 36a-580 to 36a-589, inclusive, or any regulation promulgated under said sections; or (4) demonstrated incompetency or untrustworthiness to act as a licensed check cashing service.
(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-580 to 36a-589, inclusive, or any regulation adopted pursuant to said sections, or any licensee or any owner, director, officer, member, partner, shareholder, trustee, employee or agent of such licensee has committed any fraud, engaged in dishonest activities or made any misrepresentation, the commissioner may take action against such person or licensee in accordance with sections 36a-50 and 36a-52.
1.
Respondent’s failure to promptly notify the Commissioner of the pending felony charge against Narracci, as more fully described in paragraphs 3 through 6, inclusive, of the Matters Asserted, constitutes a violation of Section 36a-581(f) of the Connecticut General Statutes, and constitutes sufficient grounds for the Commissioner to revoke Respondent’s check cashing service license pursuant to Section 36a-587(a)(3) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.  Such violation also forms a basis for the Commissioner to issue an order to cease and desist pursuant to Sections 36a-587(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a-587(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 Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a civil penalty upon Respondent not to exceed Fifteen Thousand Dollars ($15,000), subject to Respondent’s right to a hearing on the allegations set forth above.
2.
As a result of the conduct of Narracci, an officer and shareholder of Respondent, as more fully described in paragraphs 3, 5, 8 and 9 of the Matters Asserted, the Commissioner is unable to find that such officer and shareholder is in all respects properly qualified and of good character.  Such failure constitutes grounds for the Commissioner to deny an application for a check cashing service license pursuant to Section 36a-581(e)(3) of the Connecticut General Statutes, which constitutes sufficient grounds for the Commissioner to revoke Respondent’s check cashing service license pursuant to Section 36a-587(a) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes. 
3.
The conduct of Narracci, an officer and shareholder of Respondent, as more fully described in paragraphs 3, 5, 8 and 9 of the Matters Asserted, demonstrates incompetency or untrustworthiness to act as a licensed check cashing service by a licensee’s officer or shareholder, and such conduct forms a basis for the Commissioner to revoke Respondent’s check cashing service license pursuant to Section 36a-587(a)(4) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.
 

IV.  FINDINGS AND STATUTORY BASIS FOR
ORDER OF SUMMARY SUSPENSION
 
The Commissioner finds that the public safety and welfare imperatively require emergency action to summarily suspend Respondent’s check cashing service license in Connecticut pursuant to Section 4-182(c) of the Connecticut General Statutes in that an Indictment was issued against an officer and shareholder of Respondent, the underlying basis for such Indictment involves check cashing activity at Respondent’s Connecticut location, Respondent failed to inform the Commissioner of the Indictment, the officer and shareholder pled guilty to the felony charge in the Indictment on March 28, 2011, a felony conviction of an officer or shareholder is a basis for denial of a check cashing service license by the Commissioner, and the continued operation of Respondent as a check cashing service licensee may adversely affect Connecticut residents.
 

V.  ORDER OF SUMMARY SUSPENSION, NOTICE OF INTENT TO REVOKE
CHECK CASHING SERVICE 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 Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke Respondent’s check cashing service license pursuant to Section 36a-587(a) and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes, issue an order to cease and desist pursuant to Sections 36a-587(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Sections 36a-587(b) and 36a-50(a) of the Connecticut General Statutes;
 
AND WHEREAS, the Commissioner has made the findings under Section 4-182(c) of the Connecticut General Statutes.
 
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 4-182(c) of the Connecticut General Statutes, that the license of Squire Industries, Inc. to operate a general facility to engage in the business of cashing checks, drafts or money orders in Connecticut, be and is hereby SUMMARILY SUSPENDED pending proceedings for revocation.
 
FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE its check cashing service license, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-581(f) of the Connecticut General Statutes, and impose a CIVIL PENALTY upon Respondent as set forth herein, subject to its right to a hearing on the allegations set forth above.
 
A hearing will be granted to Respondent 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 its receipt of this Order of Summary Suspension, Notice of Intent to Revoke Check Cashing Service 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 subsections (a) and (b) of Section 36a-51 and Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes.  This Order of Summary Suspension, Notice of Intent to Revoke Check Cashing Service 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 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 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, 2011, at 10 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 Respondent fails to appear at the requested hearing.  At such hearing, Respondent 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 Respondent does not request a hearing within the time prescribed, the Commissioner will issue an order revoking Respondent’s check cashing service license in Connecticut, issue an order to cease and desist and may order a civil penalty in an amount not to exceed Fifteen Thousand Dollars ($15,000) be imposed upon Respondent.
 
 
So ordered at Hartford, Connecticut
this 27th day of May 2011.                ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner
 
 
 
CERTIFICATION
 
I hereby certify that on this 27th day of May 2011, the foregoing Order of Summary Suspension, Notice of Intent to Revoke Check Cashing Service 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 Squire Industries, Inc., Attention:  Cora Spinelli, Vice President/Secretary, 1154 Dixwell Avenue, Hamden, Connecticut 06514-4732, registered mail no. RB028020138US.
 
 
                                                   ________/s/_________
                                                   Stacey L. Serrano
                                                   Prosecuting Attorney
 

Administrative Orders and Settlements