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IN THE MATTER OF: MORTGAGE AND CREDIT (Collectively, "Respondents") * * * * * * * * * * * * * * * * * * * |
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ORDER TO CEASE AND DESIST NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-2010-870-B |
I. PRELIMINARY STATEMENT
| 1. | The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the General Statutes of Connecticut, the Connecticut Business Opportunity Investment Act (“Act”), pursuant to Section 36b-70 of the Act. |
| 2. |
Pursuant to Section 36b-71(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of MACS, its officers, agents, representatives and employees, and Moriarty to determine if any of them have violated, are violating or are about to violate provisions of the Act (“Investigation”). |
| 3. |
As a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act. |
| 4. |
As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-72(a) of the 2010 Supplement to the General Statutes (“2010 Supplement”). |
| 5. |
As a result of the Investigation, the Commissioner has the authority to impose a fine against Respondents pursuant to Section 36b-72(b) of the 2010 Supplement. |
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II. RESPONDENTS | |
| 6. | MACS is, and at all times relevant hereto was, a Arizona limited liability company with its principal place of business at 155 North College Avenue, Suite 220, Fort Collins, Colorado 80524. |
| 7. |
Moriarty is or was the marketing director of MACS and currently is its sole owner and managing member, and is an individual whose address last known to the Commissioner is 2713 Rain Tree Drive, Apt. W-16, Fort Collins, Colorado 80526[.] |
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III. STATEMENT OF FACTS | |
| 8. | Respondents sell products, equipment, supplies or services necessary to enable a purchaser to start a mortgage and credit counseling business (“MACS Opportunity”). |
| 9. | Respondents represent or have represented to prospective purchasers that, inter alia, “you will learn how to assist people with all their mortgage needs, from completing an application to providing basic information about purchasing or refinancing a home”. Further, Respondents represent that “[t]hey will assist you with all your marketing strategies and help you develop a marketing plan that best fits your needs and resources”. Finally, Respondents represent that “with Mortgage and Credit Solutions providing you the support, you can capitalize on providing multiple services to people who seek help saving money on all kinds of purchases”. |
| 10. | From at least June 2008 to the present, Respondents, through their agents, offered to sell and sold the MACS Opportunity to purchasers in Connecticut (“Purchasers”). Respondents offered a guarantee to at least one Purchaser that “[at] the end of 1 year, if . . . [the Purchasers] have not at least earned . . . [the Purchasers’] ‘Set-Up-fee’ . . . [Respondents] will refund . . . [the Purchasers’] set up costs, less any commissions . . . [the Purchasers] have earned, excluding shipping and handling.” |
| 11. | At the time such offers and sales were made to the Purchasers, the MACS Opportunity was not registered as a business opportunity in Connecticut under Section 36b-62 of the 2010 Supplement. |
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IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST AND
ORDER IMPOSING FINE AGAINST RESPONDENTS a. The MACS Opportunity Offered and Sold by Respondents is a Business Opportunity | |
| 12. | Paragraphs 1 through 11, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 13. | The Purchasers are “purchaser-investor[s]” within the meaning of Section 36b-61(6) of the 2010 Supplement, in that each of the Purchasers is a “person who has purchased or is solicited for the purchase of a business opportunity”. |
| 14. | Each of the Respondents is a “seller” within the meaning of Section 36b-61(8) of the 2010 Supplement, in that they are “a person who sells or offers to sell a business opportunity or any agent or person who, directly or indirectly, acts on behalf of such person”. |
| 15. |
The MACS Opportunity constitutes a “business opportunity” as defined in Section 36b-61(2) of the 2010 Supplement, in that it involves “the sale . . . or offer for sale . . . of any product, equipment, supply or service which is sold or offered for sale to the purchaser-investor for the purpose of enabling the purchaser-investor to start a business, and in which the seller represents that: . . . (C) the seller guarantees, either conditionally or unconditionally, that the purchaser-investor will derive income from the business opportunity, or that the seller will refund all or part of the price paid for the business opportunity or repurchase any of the products, equipment, supplies or chattels supplied by the seller, if the purchaser-investor is unsatisfied with the business opportunity; or (D) the seller will provide a sales program or marketing program to the purchaser-investor . . . .” |
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b. Violation of Section 36b-67 of the Act – | |
| 16. | Paragraphs 1 through 15, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 17. | Section 36b-67 of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity: (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62”. |
| 18. |
Respondents offered and sold the MACS Opportunity as more fully described in paragraphs 8 through 11, inclusive. The offer and sale of such a business opportunity absent registration constitutes a violation of Section 36b-67 of the Act, which forms a basis for an order to cease and desist to be issued against Respondents under Section 36b-72(a) of the 2010 Supplement, and for the imposition of a fine against Respondents under Section 36b-72(b) of the 2010 Supplement.
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V. ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO FINE
AND NOTICE OF RIGHT TO HEARING
AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the transactions described herein, Respondents have committed at least one violation of Section 36b-67 of the Act, and that further offers to sell or sales of business opportunities in Connecticut would constitute violations of Section 36b-67 of the Act;
WHEREAS, the Commissioner ORDERS that Respondents, alone or through their officers, agents, employees, representatives, affiliates or successors, CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, offering and selling a business opportunity in this state or from this state unless it has first been registered with the Commissioner and declared effective by the Commissioner in accordance with the provisions of Section 36b-62 of the 2010 Supplement;
WHEREAS, notice is hereby given to Respondents that the Commissioner intends to impose a maximum fine not to exceed One Hundred Thousand Dollars ($100,000) per violation;
AND WHEREAS, pursuant to Section 36b-72 of the 2010 Supplement, Respondent[s] will be afforded an opportunity for a hearing on the allegations set forth above.
THE COMMISSIONER FURTHER ORDERS that a hearing will be granted to each Respondent if a written request for a hearing is received by the Department of Banking, Securities Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing. 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 presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on February 23, 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 General Statutes of Connecticut. At such hearing, each 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.
The Order to Cease and Desist shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at such hearing.
The Commissioner may order that the maximum fine be imposed upon any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
| Dated at Hartford, Connecticut, | ________/s/________ | |
| this 11th day of January 2011. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 13th day of January 2011, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Mortgage and Credit Solutions, LLC, 155 North College Avenue, Suite 220, Fort Collins, Colorado 80524, certified mail no. 7010 1870 0001 3619 4370; and Sean Patrick Moriarty, 2713 Rain Tree Drive, Apt. W-16, Fort Collins, Colorado 80526, certified mail no. 7010 1870 0001 3619 4387.
____/s/___________
Paul A. Bobruff
Prosecuting Attorney