DOB: D & K Holdings, Incorporated, et al. - CD-Repay-CP

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IN THE MATTER OF:

D & K HOLDINGS,
INCORPORATED
d/b/a D & K HOLDINGS GROUP
INCORPORATED
d/b/a RELIANT HOME FINANCIAL
GROUP, INCORPORATED
d/b/a THE ARIZE GROUP, INC.
("D & K Holdings")

SKD HOLDINGS, INC.
d/b/a ARIZE HOME FINANCIAL
GROUP, INCORPORATED
("SKD Holdings")

THE ARIZE GROUP,
INCORPORATED
("Arize Group")

    (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-671e, 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 2012 Supplement to the 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 July 24, 2012, the Commissioner, acting pursuant to Section 36a-52(b) of the Connecticut General Statutes, Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Sections 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 July 25, 2012, the Notice was sent by certified mail, return receipt requested, to D & K Holdings (Certified Mail Nos. 70112000000247358734; 70112000000247358758; 70112000000247358765; and 70112000000247358772); to D & K Holdings’ agent (Certified Mail Nos. 70112000000247358741 and 70110470000225730423); to SKD Holdings (Certified Mail Nos. 70112000000247358796 and 70112000000247358802); to Arize Group (Certified Mail Nos. 70112000000247358819 and 70110470000225730416); to Arize Group’s agent (Certified Mail No. 70112000000247358789); and to counsel for the President of D & K Holdings and SKD Holdings (Certified Mail No. 70110470000225730430);
 
WHEREAS, the Notice provided D & K Holdings with an opportunity for hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that D & K Holdings cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, may issue an order of repayment of fees, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon D & K Holdings;
 
WHEREAS, the Notice provided SKD Holdings with an opportunity for hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that SKD Holdings cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon SKD Holdings;
 
WHEREAS, the Notice provided Arize Group with an opportunity for hearing, and stated that if a hearing was not requested within 14 days of its receipt, the Commissioner would issue an order that Arize Group cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes, may issue an order of repayment of fees, and may order a civil penalty in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation be imposed upon Arize Group;
 
WHEREAS, on July 27, 2012, counsel for the President of D & K Holdings and SKD Holdings received the Notice and no request for a hearing has been received by the Commissioner;
 
WHEREAS, on August 1, 2012, the Notice sent to D & K Holdings by Certified Mail No. 70112000000247358765 was returned to the Department marked “Forward Time Exp – Return to Sender”;
 
WHEREAS, on August 3, 2012, the Notice sent to D & K Holdings by Certified Mail No. 70112000000247358734 was returned to the Department marked “Moved Left No Address – Unable to Forward – Return to Sender”;
 
WHEREAS, on August 3, 2012, the Notice sent to D & K Holdings by Certified Mail No. 70112000000247358758 was returned to the Department marked “Not Deliverable as Addressed – Unable to Forward – Return to Sender”;
 
WHEREAS, on August 3, 2012, the Notice sent to D & K Holdings’ agent by Certified Mail No. 7011200000024730423 was returned to the Department marked “Moved Left No Address – Unable to Forward – Return to Sender”;
 
WHEREAS, on August 27, 2012, the Notice sent to D & K Holdings by Certified Mail No. 70112000000247358772 was returned to the Department marked “Return to Sender – Unclaimed – Unable to Forward”;
 
WHEREAS, on August 27, 2012, the Notice sent to D & K Holdings’ agent by Certified Mail No. 70112000000247358741 was returned to the Department marked “Return to Sender – Unclaimed – Unable to Forward”;
 
WHEREAS, on August 3, 2012, the Notice sent to SKD Holdings by Certified Mail No. 70112000000247358802 was returned to the Department marked “Return to Sender – Vacant – Unable to Forward”;
 
WHEREAS, on August 7, 2012, the Notice sent to SKD Holdings by Certified Mail No. 70112000000247358796 was returned to the Department marked “Return to Sender – No Such Street – Unable to Forward”;
 
WHEREAS, on August 3, 2012, the Notice sent to Arize Group by Certified Mail No. 70110470000225730416 was returned to the Department marked “Return to Sender – Not Deliverable as Addressed – Unable to Forward”;
 
WHEREAS, on August 7, 2012, the Notice sent to Arize Group by Certified Mail No. 70112000000247358819 was returned to the Department marked “Return to Sender – Not Deliverable as Addressed – Unable to Forward”;
 
WHEREAS, on August 27, 2012, the Notice sent to Arize Group’s agent by Certified Mail No. 70112000000247358789 was returned to the Department marked “Return to Sender – Unclaimed – Unable to Forward”;
 
WHEREAS, Section 36a-52(a) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing or sending”;
 
WHEREAS, Section 36a-50(a)(1) of the Connecticut General Statutes provides, in pertinent part, that “[t]he notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing or sending”;
 
WHEREAS, Respondents failed to request a hearing within the prescribed time period;
 
WHEREAS, the Commissioner alleged in the Notice, with respect to the activity described therein, that D & K Holdings’ offering to engage in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner also alleged in the Notice, with respect to the activity described therein, that SKD Holdings’ offering to engage in debt negotiation in this state without obtaining the required license constitutes a violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, the Commissioner also alleged in the Notice, with respect to the activity described therein, that Arize Group’s 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, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes.  Such violation forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes and impose a civil penalty pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, also in the Notice, the Commissioner found that the fees charged by D & K Holdings and Arize Group 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 D & K Holdings’ and Arize Group’s receipt of the Notice, D & K Holdings and Arize Group provide repayment of fees to the Connecticut residents and in the amounts identified in Exhibit A to the Notice and provide repayment of all fees received from the Connecticut residents identified in Exhibit B to the Notice, and among other things, provide evidence of such repayments to the Director of the Consumer Credit Division;
 
WHEREAS, no evidence of such repayments was provided to the Director of the Consumer Credit Division;
 
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 through 19, inclusive, of Section II of the Notice, 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 paragraphs 1 through 3, inclusive, 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 Respondents have engaged in acts or conduct which, pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-52(a) of the Connecticut General Statutes, forms the basis to issue an order to cease and desist against each Respondent, and, pursuant to Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Section 36a-50(a) of the Connecticut General Statutes, forms the basis to impose a civil penalty upon each Respondent.
3.
The Commissioner finds that the payment of fees by the Connecticut residents identified in Exhibits A and B to the Notice to be excessive, upon consideration of the Schedule of Maximum Fees issued by the Commissioner, the debt negotiation services contract was not successfully completed and the Connecticut residents received no benefit from such contract, which forms the basis to order repayment of such fees pursuant to Section 36a-671a(c) of the Connecticut General Statutes.
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 Section 36a-671a(b) of the 2012 Supplement to the General Statutes and Sections 36a-52(a), 36a-50(a) and 36a-671a(c) of the Connecticut General Statutes, that:

1.
D & K Holdings, Incorporated d/b/a D & K Holdings Group Incorporated d/b/a Reliant Home Financial Group, Incorporated d/b/a The Arize Group, Inc., CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes;
2.
A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed against D & K Holdings, Incorporated d/b/a D & K Holdings Group Incorporated d/b/a Reliant Home Financial Group, Incorporated d/b/a The Arize Group, Inc., 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.
SKD Holdings, Inc. d/b/a Arize Home Financial Group, Incorporated, CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes;
4.
A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed against SKD Holdings, Inc. d/b/a Arize Home Financial Group, Incorporated, 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;
5. The Arize Group, Incorporated, CEASE AND DESIST from violating Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes;
6. A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed against The Arize Group, Incorporated 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; and
7. D & K Holdings, Incorporated d/b/a D & K Holdings Group Incorporated d/b/a Reliant Home Financial Group, Incorporated d/b/a The Arize Group, Inc. and The Arize Group, Incorporated REPAY FEES to the Connecticut residents and in the amounts identified in Exhibit A attached hereto and REPAY FEES received from the Connecticut residents identified in Exhibit B attached hereto by cashier’s check, certified check or money order, no later than ten (10) days from the date this Order is mailed, and shall provide Carmine Costa, Director, Consumer Credit Division, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or carmine.costa@ct.gov, evidence of such repayments;
8.
This Order shall become effective when mailed.
 
 
 

Dated at Hartford, Connecticut
this 28th day of September 2012.               ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner



This Order was sent by certified mail,
return receipt requested, to each of the
Respondents on October 1, 2012.


D & K Holdings, Incorporated                Certified Mail No. 70110470000225730898
d/b/a D & K Holdings Group Incorporated
d/b/a Reliant Home Financial Group, Incorporated
d/b/a The Arize Group, Inc., at
12101 Woodcrest Executive Drive, Suite 160
St. Louis, Missouri 63141,

D & K Holdings, Incorporated                Certified Mail No. 70110470000225730904
d/b/a D & K Holdings Group Incorporated
d/b/a Reliant Home Financial Group, Incorporated
d/b/a The Arize Group, Inc.
7113 135th Street, Suite 361
Overland Park, Kansas 66223

D & K Holdings, Incorporated                Certified Mail No. 70110470000225730911
d/b/a D & K Holdings Group Incorporated
d/b/a Reliant Home Financial Group, Incorporated
d/b/a The Arize Group, Inc.
15941 W 65th Street, Suite 394
Shawnee, Kansas 66217-9342; and

D & K Holdings, Incorporated                Certified Mail No. 70110470000225730928
d/b/a D & K Holdings Group Incorporated
d/b/a Reliant Home Financial Group, Incorporated
d/b/a The Arize Group, Inc.
157 Forest Brook Lane
Creve Coeur, Missouri 63146

Tyler Korn, Agent                               Certified Mail No. 70110470000225730935
D & K Holdings, Incorporated
d/b/a D & K Holdings Group Incorporated
d/b/a Reliant Home Financial Group, Incorporated
d/b/a The Arize Group, Inc.
157 Forest Brook Lane
Creve Coeur, Missouri 63146

Tyler Korn, Registered Agent for              Certified Mail No. 70112000000247319773
D & K Holdings Group Incorporated
d/b/a D & K Holdings, Incorporated
12101 Woodcrest Executive Drive, Suite 160
St. Louis, Missouri 63141

SKD Holdings, Inc.                                Certified Mail No. 70112000000247319780
d/b/a Arize Home Financial Group, Incorporated
at 1000 Executive Parkway, Suite 227
St. Louis, Missouri 63141; and

SKD Holdings, Inc.                                Certified Mail No. 70112000000247319797
d/b/a Arize Home Financial Group, Incorporated
3965 W. 83rd Street, Suite 164
Prairie Village, Kansas 66208

The Arize Group, Incorporated, at           Certified Mail No. 70112000000247319803
15941 W. 65th Street, Suite 394
Shawnee, Kansas 66217; and

The Arize Group, Incorporated                Certified Mail No. 70112000000247319810
7300 W. 110th Street, Suite 700
Overland Park, Kansas 66210

Sara H. Cordry, Registered Agent for       Certified Mail No. 70112000000247319827
The Arize Group, Incorporated
9849 Cedar Street
Overland Park, Kansas 66207

James Leightner, Esq.                           Certified Mil No. 70112000000247319834
Diekman & Leightner
230 South Bemiston, Suite 600
Clayton, Missouri 63105


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