DOB: 1st American Debt Solutions - CD-Repay-CP

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IN THE MATTER OF:

1st AMERICAN DEBT SOLUTIONS
LIMITED LIABILITY COMPANY
a/k/a LEGAL SETTLEMENT
SOLUTIONS, LLC
("1st American")

THE PUREWAL LAW GROUP
A PROFESSIONAL CORPORATION
d/b/a LEGAL NETWORK OF
AMERICA (LNOA)
("LNOA")

SETTLEMENT CORPORATION
OF AMERICA
("SCOA")

    (collectively "Respondents")

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ORDER TO CEASE AND DESIST

ORDER OF REPAYMENT OF FEES

AND

ORDER IMPOSING CIVIL PENALTY


I.  PRELIMINARY STATEMENT

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Sections 36a-671 to 36a-671d, inclusive, of the Connecticut General Statutes contained in Part II of Chapter 669 of the Connecticut General Statutes, “Debt Adjusters and Debt Negotiation”;
 
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation of the activities of Respondents, pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, to determine if they had violated, were violating or were about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
 
WHEREAS, on December 13, 2011, the Commissioner, acting pursuant to Sections 36a-671a(b), 36a-671a(c) 36a-52(b), 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, issued a Temporary Order to Cease and Desist, 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 Respondents, which Notice is incorporated herein by reference;
 
WHEREAS, on December 13, 2011, the Notice was sent by registered mail, return receipt requested, to 1st American (Registered Mail No. RB028020654US);
 
WHEREAS, on December 13, 2011, the Notice was sent by registered mail, return receipt requested, to LNOA (Registered Mail No. RB028020668US);
 
WHEREAS, on December 13, 2011, the Notice was sent by registered mail, return receipt requested, to LNOA’s agent (Registered Mail No. RB028020671US);
 
WHEREAS, on December 13, 2011, the Notice was sent by registered mail, return receipt requested, to SCOA (Registered Mail No. RA878574729US);
 
WHEREAS, the Notice provided Respondents with the opportunity for a hearing, and stated that if a hearing was not requested by any Respondent within 14 days of its receipt, the Commissioner would issue an order that such Respondent cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and may order that the maximum civil penalty not to exceed One Hundred Thousand Dollars ($100,000) be imposed upon such Respondent;
 
WHEREAS, on December 16, 2011, LNOA and SCOA received the Notice and on January 3, 2012, LNOA and SCOA requested a hearing, which hearing is currently scheduled for January 30, 2012;
 
WHEREAS, on December 19, 2011, 1st American received the Notice and no request for a hearing has been received by the Commissioner;
 
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that each Respondents’ engaging in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes.  Such violations form the basis to issue an order to cease and desist against each Respondent pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and impose a civil penalty against each Respondent pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, also in the Notice, the Commissioner found that the fees charged by 1st American for debt negotiation services were excessive and ordered, pursuant to Sections 36a-671a(c) and 36a-52(b) of the Connecticut General Statutes that, not later than 10 days from their receipt of the Notice, 1st American repayment of $540.73 to the Connecticut resident identified in Exhibit A of the Notice and provide repayment of all fees received from the Connecticut residents identified in Exhibit B of the Notice by cashier’s check, certified check or money order, and, among other things, provide evidence of such repayment to the Director of the Consumer Credit Division;
 
WHEREAS, no evidence of such repayment was provided to the Director of the Consumer Credit Division by December 29, 2011;
 
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[i]f 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”;
 
WHEREAS, Section 36a-50(a)(2) of the Connecticut General Statutes provides, in pertinent part, that “[i]f 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”;
 
WHEREAS, Section 36a-50(a)(3) of the Connecticut General Statutes provides, in pertinent part, that “[e]ach action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54”;
 
AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”.


II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1.
The Commissioner finds that the matters asserted, as set forth in paragraphs 1, 4, 5, 8, 9, 12 and 15, inclusive, of Section II of the Notice, to the extent applicable to 1st American, shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and that the conclusions, as set forth in paragraph 1 of Section III of the Notice, shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
2.
The Commissioner finds that 1st American has engaged in acts or conduct which, pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against 1st American, and, pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon 1st American.
3.
The Commissioner finds that the payment of fees by the Connecticut residents identified in Exhibits A and B of the Notice to be excessive, upon consideration that the Schedule of Maximum Fees issued by the Commissioner only permits a debt negotiator of unsecured debt to collect total aggregate fees, including the initial fee and service fees, not to exceed ten percent (10%) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved, the debt negotiation services contract was not successfully completed and the Connecticut resident received no benefit from such contract.
4. The Commissioner finds that the Notice was given in compliance with Sections 36a-52(a), 36a-50(a) and 4-177 of the Connecticut General Statutes.


III.  ORDER

Having read the record, I HEREBY ORDER, pursuant to Sections 36a-671a(b), 36a-52(a) 36a-50(a) and 36a-671a(c) of the Connecticut General Statutes, that:

1.
1st American Debt Solutions Limited Liability Company a/k/a Legal Settlement Solutions, LLC CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes;
2.
A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed against 1st American Debt Solutions Limited Liability Company a/k/a Legal Settlement Solutions, LLC, to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than thirty (30) days from the date this Order is mailed;
3.
No later than ten (10) days from the date this order is mailed, 1st American Debt Solutions Limited Liability Company a/k/a Legal Settlement Solutions, LLC shall REPAY FEES in the amount of Five Hundred Forty Dollars and 73/100 ($540.73) by cashier’s check, certified check or money order, to be remitted and made payable to the Connecticut resident identified in Exhibit A attached hereto, and shall REPAY ALL FEES received from the Connecticut residents identified in Exhibit B attached hereto by cashier’s check, certified check or money order, to be remitted and made payable to the Connecticut resident, and shall provide to Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov evidence of such repayment;
4.
This Order shall become effective when mailed.
 

Dated at Hartford, Connecticut
this 23rd day of January 2012.                    ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner



This Order was sent by certified mail,
return receipt requested, to
Respondents on January 24, 2012.


1st American Debt Solutions               Certified Mail No. 70112000000247358062
Limited Liability Company
a/k/a Legal Settlement Solutions, LLC
5000 Atrium Way, Suite 5
Mount Laurel, New Jersey 08054


The Purewal Law Group                     Certified Mail No. 70112000000247358079
A Professional Corporation
d/b/a Legal Network of America (LNOA)
22320 Foothill Boulevard, Suite 400
Hayward, CA 94541

Spiegel & Utrera, P.A.                        Certified Mail No. 70112000000247358086
Agent for Service of Process
for The Purewal Law Group
A Professional Corporation
d/b/a Legal Network of America (LNOA)
4727 Wilshire Boulevard, Suite 601
Los Angeles, CA 90010

Settlement Corporation of America        Certified Mail No. 70112000000247358093
22320 Foothill Boulevard, Suite 400
Hayward, CA 94541

William R. Mitchell, Esq.                       Certified Mail No. 70112000000247358109
31351 Rancho Viejo Road, Suite 202
San Juan Capistrano, CA  92675


Administrative Orders and Settlements