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IN THE MATTER OF: NEW ENGLAND JAMES J. D'AMATO (Collectively "Respondents") * * * * * * * * * * * * * * * * * |
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TEMPORARY ORDER TO 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-671d, inclusive, of the 2010 Supplement to the 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(a) of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondents to determine if they have violated, are violating or are 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 provides:
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-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.
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, . . . 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 . . . 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, . . . 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.
II. MATTERS ASSERTED
| 1. |
New England Modifications is a Connecticut limited liability company with an office at 66 Pepper Bush Lane, Newington, Connecticut. |
| 2. |
D’Amato is an individual whose address last known to the Commissioner is 66 Pepper Bush Lane, Newington, Connecticut. |
| 3. |
On September 25, 2009, Five Star Consulting and Services, Inc. (“Five Star Consulting”), a Florida corporation, was administratively dissolved. |
| 4. |
On December 17, 2009, D’Amato, representing himself as a sales representative with Five Star Consulting, met with a couple at their Connecticut residence where they signed a contract to have D’Amato assist them in seeking modification of their mortgage and provided D’Amato with a check made payable to “Cash” because D’Amato represented that he was low on funds and needed working capital.
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| 5. |
On December 28, 2009, New England Modifications registered as a domestic limited liability company with the Connecticut Secretary of the State, and listed D’Amato as a member. |
| 6. | Subsequent to the formation of New England Modifications and the dissolution of Five Star Consulting, D’Amato informed a Connecticut resident who had previously signed a contract with and paid $1,850 to Five Star Consulting that he would take care of the Connecticut resident’s loan modification. |
| 7. |
On February 5, 2010, another Connecticut couple met with D’Amato at their residence in Connecticut and the husband entered into a contract with New England Modifications to assist them in seeking modification of their mortgage. At the request of D’Amato, four post-dated checks were provided to D’Amato, each check in the amount of $787.50. At least one of the checks was subsequently cashed. |
| 8. | At no time relevant hereto were any of the Connecticut residents referred to in paragraphs 4, 6 and 7 provided the promised debt negotiation services. |
| 9. | On August 18, 2010, New England Modifications provided a list of its Connecticut customers to the Division. |
| 10. |
At no time relevant hereto was New England Modifications or D’Amato licensed to engage in or offer to engage in debt negotiation in this state.
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III. STATUTORY BASIS FOR ORDER TO CEASE
AND DESIST AND IMPOSITION OF CIVIL PENALTY
Section 36a-671 of the 2010 Supplement to the General Statutes states, in pertinent part, that:
(a) As used in this section and sections 36a-671a to 36a-671d, inclusive, (1) “debt negotiation” means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor’s obligations with one or more mortgagees or creditors of the debtor . . . .
(b) No person shall engage or offer to engage in debt negotiation in this state without a license issued under this section for each location where debt negotiation will be conducted. . . . A person is engaging in debt negotiation in this state if such person: (1) Has a place of business located within this state; (2) has a place of business located outside of this state and the debtor is a resident of this state who negotiates or agrees to the terms of the services contract in person, by mail, by telephone or via the Internet while physically present in this state; or (3) has its place of business located outside of this state and the contract concerns a debt that is secured by property located within this state.
Section 36a-671a(b) of the 2010 Supplement to the 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-671d, inclusive, . . . the commissioner may take action against such person . . . in accordance with sections 36a-50 and 36a-52.
| 1. |
New England Modifications’ offering to engage in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 7 to 10, inclusive, of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the 2010 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 2010 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 2010 Supplement to the General Statutes and Section 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 New England Modifications in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. The Commissioner intends to impose a civil penalty upon New England Modifications not to exceed Ten Thousand Dollars ($10,000), subject to New England Modifications’ right to a hearing on the allegations set forth above. |
| 2. |
D’Amato’s offering to engage in debt negotiation in this state without obtaining the required license, as more fully described in paragraphs 4, 6, 9 and 10 of the Matters Asserted, constitutes a violation of Section 36a-671(b) of the 2010 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 2010 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 2010 Supplement to the General Statutes and Section 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 D’Amato in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. The Commissioner intends to impose a civil penalty upon D’Amato not to exceed Fifteen Thousand Dollars ($15,000), subject to D’Amato’s right to a hearing on the allegations set forth above.
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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 Respondents to cease and desist from engaging in or offering to engage in debt negotiation in this state without obtaining the required license in violation of Section 36a-671(b) of the 2010 Supplement to the General Statutes and, in that the interests of Connecticut residents are being materially prejudiced by Respondents’ failure to provide the promised debt negotiation services, and that the interests of additional Connecticut residents also may be materially prejudiced.
V. 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
WHEREAS, the Commissioner has reason to believe that Respondents have engaged in acts or conduct which forms the basis to issue an order to cease and desist pursuant to Section 36a-671a(b) of the 2010 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 2010 Supplement to the General Statutes and Section 36a-50(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.
THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that New England Modifications LLC and James J. D’Amato immediately CEASE AND DESIST from engaging in or offering to engage in debt negotiation in this state without obtaining the required license. This Temporary Order shall become effective upon receipt by New England Modifications LLC and James J. D’Amato, 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.
THE COMMISSIONER FURTHER ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that D’Amato submit, not later than ten (10) days after the effective date of this Temporary Order, any and all records of consumer debtors located in Connecticut to whom D’Amato offered to engage or on whose behalf D’Amato engaged in debt negotiation, either in his own name or on behalf of any other person, including in the name of Five Star Consulting or New England Modifications. Such records shall be submitted to Alan J. Cicchetti, Deputy Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, or alan.cicchetti@ct.gov.
FURTHER, notice is hereby given to Respondents that the Commissioner intends issue an order requiring Respondents to CEASE AND DESIST from violating Section 36a-671(b) of the 2010 Supplement to the General Statutes, and impose a CIVIL PENALTY upon Respondents as set forth herein, subject to Respondents’ right to a hearing on the allegations set forth above.
A hearing will be granted to Respondents 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 each Respondent’s receipt of this 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 as set forth in Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes. This 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 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 any 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 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 15, 2010, 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 any Respondent fails to appear at the requested hearing. At such hearing, Respondents 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 New England Modifications does not request a hearing within the time prescribed, the Commissioner will issue an order that New England Modifications cease and desist from violating Section 36a-671(b) of the 2010 Supplement to the General Statutes, and may order a civil penalty in an amount not to exceed Ten Thousand Dollars ($10,000) be imposed upon New England Modifications.
If D’Amato does not request a hearing within the time prescribed, the Commissioner will issue an order that D’Amato cease and desist from violating Section 36a-671(b) of the 2010 Supplement to the General Statutes, and may order a civil penalty in an amount not to exceed Fifteen Thousand Dollars ($15,000) be imposed upon D’Amato.
So ordered at Hartford, Connecticut
this 8th day of September 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 8th day of September 2010, the foregoing 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 was sent by registered mail, return receipt requested, to New England Modifications LLC, Attention: James J. D’Amato, 66 Pepper Bush Lane, Newington, Connecticut 06111, registered mail no. RB028037399US; New England Modifications LLC, Attention: Michael Auger, Agent, 76 Batterson Park Road, Farmington, Connecticut 06032, registered mail no. RB028037408US; and James J. D’Amato, 66 Pepper Bush Lane, Newington, Connecticut 06111, registered mail no. RB028037411US.
________/s/_________
Doniel Kitt
Prosecuting Attorney