DOB: Strategic Debt Solutions LLC - ASUS-Temp CD-NOI Rev-CD

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IN THE MATTER OF:

STRATEGIC DEBT SOLUTIONS LLC


   ("Respondent")






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NOTICE OF AUTOMATIC SUSPENSION

TEMPORARY ORDER TO
CEASE AND DESIST

NOTICE OF INTENT TO REVOKE
DEBT NEGOTIATION LICENSE

NOTICE OF INTENT TO ISSUE
ORDER TO CEASE AND DESIST

AND

NOTICE OF RIGHT TO HEARING

I. LEGAL AUTHORITY AND JURISDICTION

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”;

Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-89, 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 within the jurisdiction of the Commissioner.
 
Section 36a-17(a) of the Connecticut General Statutes, as amended, provides, in pertinent part, that:

The commissioner, in the commissioner’s discretion, may, subject to the provisions of section 36a-21 . . . and the Freedom of Information Act, as defined in section 1-200, (1) 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-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.

Subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes provide, 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. . . .

(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-671d of the Connecticut General Statutes, as amended by Public Acts 14-7 and 14-22, provides, in pertinent part, that:

(a)(1)  No debt negotiation license, and no renewal thereof, shall be granted unless the applicant has filed the surety bond required by this section, which bond shall be written by a surety authorized to write such bonds in this state.

(2)  No application for a debt negotiation license for a main office, and no renewal of such a license, shall be granted unless the applicant has filed a single surety bond with the commissioner in an aggregate amount of fifty thousand dollars, or such other amount required by subdivision (4) of this subsection. . . .

(3)  Each debt negotiation licensee shall file a single surety bond that complies with the requirements of this section in connection with the main office license with the commissioner in an aggregate amount of fifty thousand dollars. . . .

(b)  The form of any surety bond submitted pursuant to subsection (a) of this section shall be approved by the Attorney General. . . .

(c)  The surety shall have the right to cancel any bond written or issued under subsection (a) of this section at any time by a written notice to the debt negotiation licensee stating the date cancellation shall take effect.  Such notice shall be sent by certified mail to the licensee at least thirty days prior to the date of cancellation.  No such bond shall be cancelled unless the surety notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation.  After receipt of such notification from the surety, the commissioner shall give written notice to the debt negotiation licensee of the date such bond cancellation shall take effect.  The commissioner shall automatically suspend the licenses of the debt negotiation licensee on such date . . . unless prior to such date the debt negotiation licensee submits a letter of reinstatement of the bond from the surety or a new bond, surrenders all licenses . . . .  After a license has been automatically suspended, the commissioner shall give the debt negotiation licensee notice of the automatic suspension pending proceedings for revocation . . . and an opportunity for a hearing on such actions in accordance with section 36a-51 and shall require the debt negotiation licensee to take or refrain from taking such action as, in the opinion of the commissioner, will effectuate the purposes of this section.

Section 4-182(c) of the 2014 Supplement to the General Statutes provides, in pertinent part, that:

No revocation, suspension, annulment or withdrawal of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action and the specific provisions of the general statutes or of regulations adopted by the agency that authorize such intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license.


II.  MATTERS ASSERTED

1.
Respondent is a Florida limited liability company with an office at 8461 Lake Worth Road, Suite 450, Lake Worth, Florida (“Lake Worth Office”).
2.
On August 20, 2013, Respondent filed an application for renewal of its debt negotiation license in Connecticut for the Lake Worth Office for the October 1, 2013 through September 30, 2015 renewal period.  Such license was renewed on October 1, 2013.
3.
On August 5, 2014, the Commissioner received notice from Washington International Insurance Company that bond number S 9152570 issued on behalf of Respondent with respect to its debt negotiation license for the Lake Worth Office would be cancelled, effective on September 3, 2014.
4.
On August 5, 2014, pursuant to Section 4-182(c) of the 2014 Supplement to the General Statutes, the Division sent a letter to Respondent giving Respondent an opportunity to show compliance with all lawful requirements for retention of its debt negotiation license in Connecticut.
5.
To date, Respondent has failed to file with the Commissioner a letter of reinstatement of the bond or a new bond and has not surrendered its license.
6.
The Commissioner automatically suspended Respondent’s debt negotiation license in Connecticut for the Lake Worth Office effective on September 3, 2014.
 

III.  STATUTORY BASIS FOR REVOCATION OF DEBT
NEGOTIATION LICENSE AND ORDER TO CEASE AND DESIST
 

Section 36a-671a(a) of the Connecticut General Statutes, as amended by Public Act 14-7, provides, in pertinent part, that:

The commissioner may . . . revoke . . . any [debt negotiation] license . . ., in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny application for a license under sections 36a-671 to 36a-671e, 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 . . . (3) violated any of the provisions of sections 36a-671 to 36a-671e, inclusive . . . .

Section 36a-671a(b) 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 the provisions of sections 36a-671 to 36a-671e, inclusive, . . . the commissioner may take action against such person . . . in accordance with . . . [section] . . . 36a-52. . . .

Respondent’s failure to maintain a surety bond that runs the entire period of its debt negotiation license, as more fully described in paragraphs 1 through 5, inclusive, of the Matters Asserted, would constitute sufficient grounds for the Commissioner to deny an application for such license pursuant to Section 36a-671d of the Connecticut General Statutes, as amended, and constitutes a violation of Section 36a-671d of the Connecticut General Statutes, as amended, both of which constitute sufficient grounds for the Commissioner to revoke Respondent’s debt negotiation license in Connecticut for the Lake Worth Office pursuant to Sections 36a-671a(a) and 36a-671a(a)(3) 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 against Respondent pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes.


IV.  FINDING AND STATUTORY BASIS FOR
TEMPORARY ORDER TO CEASE AND DESIST

The Commissioner finds that public welfare requires immediate action to issue a temporary order requiring Respondent to cease and desist from violating Section 36a-671d of the Connecticut General Statutes, as amended, pursuant to Section 36a-52(b) of the Connecticut General Statutes, in that due to Respondent’s failure to maintain its surety bond, any debtor who may be damaged by Respondent’s failure to faithfully perform any written agreement or commitment with or for the benefit of debtors will not be able to proceed on such surety bond to recover damages.


V.  NOTICE OF AUTOMATIC SUSPENSION, TEMPORARY ORDER TO CEASE
AND DESIST, NOTICE OF INTENT TO REVOKE DEBT NEGOTIATION LICENSE,
NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST
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 its debt negotiation license in Connecticut for the Lake Worth Office pursuant to Sections 36a-671a(a) and 36a-671a(a)(3) 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 against Respondent pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes;

AND WHEREAS, the Commissioner has made the finding required under Section 36a-52(b) of the Connecticut General Statutes.

NOW THEREFORE, pursuant to Section 36a-671d(c) of the Connecticut General Statutes, as amended, the Commissioner gives NOTICE that on September 3, 2014, the debt negotiation license of Strategic Debt Solutions LLC in Connecticut for 8461 Lake Worth Road, Suite 450, Lake Worth, Florida, was AUTOMATICALLY SUSPENDED pending proceedings for revocation.
 
THE COMMISSIONER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that Strategic Debt Solutions LLC immediately CEASE AND DESIST from violating Section 36a-671d of the Connecticut General Statutes, as amended.  This Temporary Order to Cease and Desist shall become effective upon receipt by Strategic Debt Solutions LLC 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 to Cease and Desist.

FURTHER, notice is hereby given to Respondent that the Commissioner intends to REVOKE Respondent’s debt negotiation license in Connecticut for the Lake Worth Office, and issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-671d of the Connecticut General Statutes, as amended, subject to its right to a hearing on the allegation 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 Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Negotiation License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing as set forth in subsections (a) and (b) of Section 36a-51 and Section 36a-52(a) of the Connecticut General Statutes.  This Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Negotiation License, Notice of Intent to Issue Order to Cease and Desist 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 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 hearing 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 December 4, 2014, 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 debt negotiation license in Connecticut for 8461 Lake Worth Road, Suite 450, Lake Worth, Florida, and issue an order that Respondent cease and desist from violating Section 36a-671d of the Connecticut General Statutes, as amended.

So ordered at Hartford, Connecticut
this 6th day of October 2014.                     ________/s/_________
                                                               Howard F. Pitkin
                                                               Banking Commissioner



CERTIFICATION

I hereby certify that on this 7th day of October 2014, the foregoing Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Debt Negotiation License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Strategic Debt Solutions LLC, Attention:  Dave Green, 8461 Lake Worth Road, Suite 450, Lake Worth, Florida 33467, certified mail no. 70120470000147897043.

                                                              ________/s/_________
                                                              Doniel Kitt
                                                              Prosecuting Attorney


Administrative Orders and Settlements