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* * * * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF: CENTURY UNION SERVICES, LLC ROBES BARBOZA (Collectively, "Respondents") * * * * * * * * * * * * * * * * * * * * * * * * * |
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FINDINGS OF FACT, |
FINDINGS OF FACT
| 1. | On October 24, 2016, the Commissioner issued a Temporary Order to Cease and Desist, Order of Summary Suspension, Notice of Intent to Revoke Money Transmission License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Respondents (collectively “Notice”). The Notice is incorporated by reference herein. (Tr. at 4-5; H.O. Ex. 1.)* |
| 2. | The Notice was issued pursuant to Connecticut General Statutes §§ 36a-50, 36a-51, 36a-52 and 36a-595 to 36a-612, inclusive. (Tr. at 4-5; H.O. Ex. 1.) |
| 3. | The Notice quoted provisions from §§ 36a-50, 36a-51 and 36a-52 concerning the consequences of a failure to appear at a scheduled hearing. (Tr. at 4-5; H.O. Ex. 1.) |
| 4. | The Notice alleges that Respondent Century Union’s failure to transmit money or monetary value received from Connecticut consumers constitutes conduct that is likely to otherwise materially prejudice the interests of purchasers, which constitutes an unsafe or unsound practice within the meaning of § 36a-608 (a). The Notice advised Respondents that such conduct constitutes sufficient grounds for the Commissioner to revoke Century Union’s license to engage in the business of money transmission in Connecticut pursuant to §§ 36a-608 (b) and 36a-51 (a) and (b), and forms the basis to issue an order to cease and desist against Century Union pursuant to §§ 36a-608 (c) and 36a-52 (a), and impose a civil penalty against Century Union pursuant to §§ 36a-608 (c) and 36a-50 (a). (Tr. at 4-5; H.O. Ex. 1.) |
| 5. | The Notice further alleges that the act of Century Union continuing to take monies from Connecticut consumers for money transmission to Brazil and representing to such consumers that such monies would be timely remitted, when Century Union had failed to do so for numerous other money transmissions to Brazil constitutes engaging in fraud, intentional misrepresentations or gross negligence. The notice advised Respondents that such conduct constitutes sufficient grounds for the Commissioner to revoke Century Union’s license to engage in the business of money transmission in Connecticut pursuant to §§ 36a-608 (b) and § 36a-51 (a) and (b), and forms the basis to issue an order to cease and desist against Century Union pursuant to §§ 36a-608 (c) and 36a-52 (a), and impose a civil penalty against Century Union pursuant to §§ 36a-608 (c) and 36a-50 (a). (Tr. at 4-5; H.O. Ex. 1.) |
| 6. | The Notice further alleges that Century Union’s failure to transmit money or monetary value received from Connecticut consumers fails to demonstrate that Century Union’s business will be conducted honestly, fairly, equitably, carefully and efficiently within the purposes and intent of §§ 36a-595 to 36a-612, inclusive, and in a manner commanding the confidence and trust of the community. The Notice advised Respondents that such failure would be sufficient grounds for the Commissioner to deny an application for a money transmission license pursuant to § 36a-600 (a) (2) and would be sufficient grounds for the Commissioner to revoke Century Union’s license to engage in the business of money transmission in Connecticut pursuant to §§ 36a-608 (b) and 36a-51 (a) and (b). (Tr. at 4-5; H.O. Ex. 1.) |
| 7. | The Notice further alleges that the statements that Barboza made to the Department constitute making statements in an investigation which are, at the time and in the light of the circumstances under which they are made, false or misleading in a material respect, in violation of Connecticut General Statutes § 36a-53a. The Notice advised Respondents that such violation forms the basis to issue an order to cease and desist against Barboza pursuant to § 36a-52 (a), and to impose a civil penalty against Barboza pursuant to § 36a-50 (a). (Tr. at 4-5; H.O. Ex. 1.) |
| 8. | The Notice further alleges that Barboza’s position as member of Century Union and his statements to the Department, which were, at the time and in the light of the circumstances under which they were made, false or misleading in a material respect, fails to demonstrate that each member of Century Union is in all respects properly qualified and of good character. The Notice advised Respondents that this failure would be sufficient grounds for the Commissioner to deny an application for a money transmission license pursuant to § 36a-600 (a) (3) (D) and sufficient grounds for the Commissioner to revoke Century Union’s license to engage in the business of money transmission in Connecticut pursuant to §§ 36a-608 (b) and 36a-51 (a) and (b). (Tr. at 4-5; H.O. Ex. 1.) |
| 9. | In the Temporary Order to Cease and Desist and Order of Summary Suspension that is part of the Notice, the Commissioner found that public safety and welfare imperatively required emergency action to summarily suspend Respondent Century Union’s license to engage in the business of money transmission in Connecticut and public welfare required immediate action to issue a temporary order requiring Respondent Century Union to cease and desist from violating the laws cited in the Notice. (Tr. at 4-5; H.O. Ex. 1.) |
| 10. | The Notice further advised Respondents that the Temporary Order to Cease and Desist shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the Notice. (Tr. at 4-5; H.O. Ex. 1.) |
| 11. | The Notice was sent by certified mail, return receipt requested, to Respondents. (Tr. at 4-5; H.O. Ex. 1.) |
| 12. | On November 9, 2016, Robes Barboza requested a hearing on the Notice on behalf of all Respondents. (Tr. at 5, 8, 11; H.O. Ex. 2.) |
| 13. |
On November 17, 2016, the Commissioner issued a Notification of Hearing and Designation of Hearing Officer stating that the hearing would be held on December 15, 2016, at 10 a.m. (“Hearing”), at the Department of Banking (“Department”) and appointing Attorney Amy LaChance as Hearing Officer. The Notification of Hearing and Designation of Hearing Officer also stated that the attorney representing the Department is Stacey L. Serrano, Staff Attorney. (Tr. at 8; H.O. Ex. 1.) |
| 14. | On December 1, 2016, Hearing Officer LaChance sent an email to Attorney Serrano and Robes Barboza, reminding each that a hearing was scheduled for December 15, 2016. (Tr. at 8; H.O. Ex. 3.) |
| 15. |
On December 8, 2016, Hearing Officer LaChance sent another email to Attorney Serrano and Robes Barboza, reminding each that a hearing would be held on December 15, 2016 and providing a copy of § 36a-1-31 of the Regulations of Connecticut State Agencies “that outlines the consequences of failure to appear at a hearing.” (Tr. at 8; H.O. Ex. 4.) |
| 16. | On December 12, 2016, Hearing Officer LaChance instructed Paralegal Specialist Laura DiMeola to contact Robes Barboza by telephone and fax at the numbers Mr. Barboza provided in his Request for Hearing. Ms. DiMeola attempted to contact Mr. Barboza three times throughout the day on December 12, 2016, but received an automated message each time indicating that the phone number was not accepting calls. The message did not provide an option to leave a voicemail message. In addition, Ms. DiMeola attempted to fax a copy of the December 8, 2016 email from Hearing Officer LaChance to Mr. Barboza twice on December 12, 2016. The fax was unsuccessful both times and, upon further review, the fax number Mr. Barboza provided in his Request for Hearing was a landline for a Massachusetts attorney. (Tr. at 8-9; H.O. Exs. 2, 5 and 6.) |
| 17. | On December 14, 2016, Hearing Officer LaChance sent a final email to Attorney Serrano and Robes Barboza indicating that the hearing would go forward on December 15, 2016 and advising Mr. Barboza to refer to the December 8, 2016 email regarding filing a motion and the consequences of failure to appear at a hearing and contact Ms. DiMeola with any questions. (Tr. at 9; H.O. Ex. 7.) |
| 18. | On December 15, 2016, a hearing was held at the Department. Attorney Serrano represented the Consumer Credit Division of the Department at the Hearing. (Tr. at 5.) |
| 19. | Neither Respondent appeared at the Hearing. (Tr. at 5, 9-10.) |
| 20. | The Hearing was conducted in accordance with the Connecticut Uniform Administrative Procedure Act. (Tr. at 6; H.O. 1.) |
| 21. | Century Union is a Massachusetts limited liability company with an office at 493 Broadway, Everett, Massachusetts, that currently maintains a license to engage in the business of money transmission in Connecticut. Century Union also lists offices at 107 Wilson Avenue, Newark, New Jersey, and 597 E Sample Road, Suite B, Pompano Beach, Florida. (Tr. at 4-5; H.O. Ex. 1.) |
| 22. | At all times relevant hereto, Century Union engaged in the business of money transmission from at least three locations in Connecticut: (1) BH Services, LLC or RBML Supermarket, LLC a/k/a Bull Boi Meat Supermarket located at 827 North Avenue, Bridgeport (“Bridgeport location”), (2) Multitransfer LLC or Bem Brasil Market, LLC located at 213 White Street #1, Danbury, and (3) Link Travel & Services LLC located at 1839 Park Street, Hartford (collectively, “Authorized Delegates”). (Tr. at 4-5; H.O. Ex. 1.) |
| 23. | At all times relevant hereto, Barboza was the managing member and sole owner of Century Union. Barboza was also the sole member of RBML Supermarket, LLC a/k/a Bull Boi Meat Supermarket and Bem Brasil Market, LLC. (Tr. at 4-5; H.O. Ex. 1.) |
| 24. | On October 4, 2016, a Connecticut consumer complained to the Department that on September 8, 2016, he provided $10,000 to Century Union for money transmission to Brazil at the Bridgeport Location, which was never remitted to the intended recipient in Brazil (“Connecticut Complaint”). The receipt for such money transmission provides an address for Century Union of 597 E Sample Road, Suite B, Pompano Beach, Florida, and indicates that the monies will be available in “24 Hours to Seven (7) Business Days”. (Tr. at 4-5; H.O. Ex. 1.) |
| 25. | On October 5, 2016, the Department commenced an investigation into the activities of Century Union (“Investigation”) and forwarded the Connecticut Complaint to Barboza. Barboza responded to the Department via email later the same day implying that the reason for Century Union’s failure to transmit monies was that the banks in Brazil have been on strike for over 30 days. Barboza also indicated in the email that “we have posted info to all our locations and also sent message to all our clients to wait until bank is open.” (Tr. at 4-5; H.O. Ex. 1.) |
| 26. | Since October 5, 2016, the Department has received additional complaints that Century Union failed to transmit monies on behalf of Connecticut consumers to Brazil. Based on information obtained from Century Union, Century Union failed to transmit monies to persons in Brazil totaling at least $121,577 in connection with 64 transactions from August 2 through September 26, 2016, from the Bridgeport Location (“Bridgeport Money Transmission”). (Tr. at 4-5; H.O. Ex. 1.) |
| 27. | On October 17, 2016, in a telephone conversation with examiners from the Department, Barboza reiterated his statements made on October 5, 2016, that the cause of money transmissions not being remitted to the intended recipients in Brazil on behalf of Connecticut consumers was the bank strike in Brazil and that signage alerting customers to such fact had been posted at its Connecticut locations. Barboza also represented that all outstanding money transmissions to Brazil on behalf of Connecticut consumers would be made by October 26, 2016. (Tr. at 4-5; H.O. Ex. 1.) |
| 28. | As a result of the Investigation, the Department found that, contrary to the statements made by Barboza on October 5 and October 17, 2016, information has not been posted at all of Century Union’s locations in Connecticut and the bank strike appears to have taken place from September 6 to October 6, 2016, dates well after the dates on which the majority of the Bridgeport Money Transmissions were purchased by Connecticut consumers. (Tr. at 4-5; H.O. Ex. 1.) |
| 29. | Furthermore, from August through at least October 2016, Century Union, with the knowledge that numerous previous money transmissions had not been remitted to the intended recipients in Brazil on behalf of Connecticut consumers, continued to take thousands of dollars on behalf of Connecticut consumers, representing to such consumers that such monies would be timely transmitted including during the dates of the bank strike. In fact, Connecticut consumers provided monies to Century Union in connection with approximately 29 of the Bridgeport Money Transmissions during the dates of the bank strike, including the transmission which was the subject of the Connecticut Complaint. (Tr. at 4-5; H.O. Ex. 1.) |
| 30. | As of October 14, 2016, the money transmission which was the subject of the Connecticut Complaint had been transmitted to Brazil, but approximately 43 of the Bridgeport Money Transmissions totaling $104,109 remained outstanding and have not yet been transmitted to the intended recipients in Brazil. (Tr. at 4-5; H.O. Ex. 1.) |
| 31. | By email dated October 20, 2016, Barboza acknowledged to the Department that the outstanding money transmissions on behalf of Connecticut consumers had not yet been remitted to Brazil but represented that such transmissions would be made by October 26, 2016. (Tr. at 4-5; H.O. Ex. 1.) |
| 32. | During the hearing, Attorney Serrano stated that “it appears that Century Union received over $200,000 on behalf of over a hundred Connecticut consumers during this three-month period which never made its way to the intended recipients in Brazil.” (Tr. at 12.) |
| 33. | During the hearing, Attorney Serrano also stated that “Barboza [] told the Department that information concerning the bank strike had been posted to all Century Union locations, a statement which was false. When DOB Examiner Min Liu visited the Bridgeport location there was no information posted and the manager at such location confirmed that no information had ever been posted.” (Tr. at 14.) |
| 34. | Century Union had net outstanding remittances totaling $237,950.27 as of December 12, 2016. (Tr. at 21-23; DOB Ex. 2.) |
| 35. | At the hearing, Attorney Serrano requested that the following action be taken against Respondent Century Union Services, LLC: issuance of an order revoking Century Union’s license to engage in the business of money transmission in Connecticut; issuance of an order to cease and desist; and imposition of a civil penalty in the amount of $200,000. (Tr. at 15-16.) |
| 36. |
At the hearing, Attorney Serrano also requested that the following action be taken against Respondent Robes Barboza: issuance of an order to cease and desist and imposition of a civil penalty in the amount of $100,000. (Tr. at 16-17.)
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CONCLUSIONS OF LAW
Jurisdiction and Procedure
| 1. | The Commissioner has jurisdiction over the licensing and regulation of persons engaged in the business of money transmission in Connecticut pursuant to §§ 36a-595 to 36a-612, inclusive. |
| 2. | The Notice issued by the Commissioner complied with the requirements of Connecticut General Statutes §§ 4-177 (b) and 4-182 (c), as well as the notice requirements of §§ 36a-50 [civil penalty], 36a-51 [revocation] and 36a-52 [cease and desist order]. |
| 3. |
The Respondents received notice that the hearing was scheduled for December 15, 2016.
Respondents’ Failure to Appear at Hearing
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| 4. | Connecticut General Statutes § 4-177 (c) provides, in pertinent part that “Unless precluded by law, a contested case may be resolved by . . . the default of a party.” |
| 5. |
§ 36a-1-31 (b) of the Regulations of Connecticut State Agencies provides that:
When a party fails to appear at a scheduled hearing, the allegations against the party may be deemed admitted. Without further proceedings or notice to the party, the presiding officer shall submit to the commissioner a proposed final decision containing the relief sought in the notice, provided the presiding officer may, if deemed necessary, receive evidence from the department, as part of the record, concerning the appropriateness of the amount of any civil penalty, fine or restitution sought in the notice. 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. |
| 6. |
In accordance with § 36a-1-31 (b), the factual and legal allegations against the Respondents which were contained in the Notice are deemed admitted and adopted in the Findings of Fact and Conclusions of Law herein contained.
Revocation of Money Transmitter License Pursuant to § 36a-51
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| 7. |
§ 36a-51 provides, in part, that:
(a) The commissioner may . . . revoke . . . any license issued by the commissioner under any provision of the general statutes by sending notice to the licensee by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt…(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 . . . 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.”
(Emphasis added.) |
| 8. |
The express terms of § 36a-51 (a) require that the Commissioner revoke Respondent Century Union’s license given Respondent Century Union’s failure to appear at the hearing.
Issuance of Cease and Desist Order Pursuant to § 36a-52
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| 9. | Subject to a respondent’s right to request a hearing on the matters alleged, § 36a-52 (a) authorizes the Commissioner to issue a cease and desist order where 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, or any regulation, rule or order adopted or issued thereunder. § 36a-52 (a) also provides, in part, that, “If the person . . . 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.” (Emphasis added.) The express terms of § 36a-52 (a) require that the Commissioner issue a cease and desist order against the Respondents given the Respondents’ failure to appear at the hearing. |
| 10. |
The express terms of § 36a-52 (a) require that the Commissioner issue an order to cease and desist against Respondents given their failure to appear at the hearing.
Imposition of Civil Penalty Pursuant to § 36a-50
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| 11. |
Subject to a respondent’s right to request a hearing on the matters alleged, § 36a-50 (a) authorizes the Commissioner to issue a notice of intent to impose a civil penalty of up to $100,000 per violation where 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, or any regulation, rule or order adopted or issued thereunder.
Subdivisions (2) and (3) of subsection (a) of § 36a-50 provide, in pertinent part, that:
(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, regulation, rule or order, 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 . . . 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 chapter 54. |
(Emphasis added.)
| 12. | The express terms of § 36a-50 (a) allow the Commissioner to issue a civil penalty against each Respondent not exceeding one hundred thousand dollars per violation given Respondents’ failure to appear at the hearing. In addition, the Connecticut Supreme Court has stated that “[t]he assessment of civil penalties is a fact-specific and broadly discretionary determination.” Rocque v. Light Sources, Inc., 275 Conn. 420, 450 (2005). |
| 13. |
Pursuant to § 36a-1-31(b), the Hearing Officer, deeming it necessary, received evidence from the Department as part of the record solely concerning the appropriateness of the amount of the civil penalty and restitution sought in the Notice. |
| 14. | In accordance with § 36a-1-31 (b), the Commissioner finds that Respondent Century Union: (1) engaged in an unsafe and unsound practice; and (2) engaged in fraud, intentional misrepresentation or gross negligence. |
| 15. |
In accordance with § 36a-1-31 (b), the Commissioner finds that Respondent Robes Barboza violated § 36a-53a. |
| 16. | Future harm to Connecticut residents will be deterred through the imposition of a civil penalty against each Respondent. |
| 17. | There were no mitigating factors regarding Respondents’ violations that justify a lesser sanction in this case. |
| 18. | The Commissioner finds that the imposition of a civil penalty in the amount of Two Hundred Thousand Dollars ($200,000) against Century Union and a civil penalty in the amount of One Hundred Thousand Dollars ($100,000) against Robes Barboza is warranted based upon the record and the matters alleged in the Notice. |
ORDER
I hereby find sufficient evidence to recommend to the Commissioner that the Commissioner ORDER, pursuant to §§ 36a-50, 36a-51, 36a-52 and 36a-608, that:
| 1. | The license of Respondent Century Union to engage in the business of money transmission in Connecticut is hereby REVOKED; |
| 2. | Respondent Century Union CEASE AND DESIST from engaging in an unsafe or unsound practice and engaging in fraud, intentional misrepresentations or gross negligence; |
| 3. |
A CIVIL PENALTY of Two Hundred Thousand Dollars ($200,000) be imposed against Respondent Century Union, 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; |
| 4. | Respondent Robes Barboza CEASE AND DESIST from violating § 36a-53a; |
| 5. | A CIVIL PENALTY of One Hundred Thousand Dollars ($100,000) be imposed against Respondent Robes Barboza, 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; |
| 6. | In accordance with § 36a-52 (b), the Temporary Order to Cease and Desist contained in the Notice shall no longer be in effect upon entry of the Permanent Order to Cease and Desist herein contained; and |
| 7. |
The Order shall become effective when mailed. |
*Parenthetical references relate to exhibits entered into the hearing record by the Hearing Officer (“H.O. Ex.”), or by the Department (“DOB Ex.”). Transcript (“Tr.”) pages reflect where an exhibit was entered into the record or where relevant testimony was given.
So ordered at Hartford, Connecticut
this 1st day of March, 2017. ________/s/_________
Jorge L. Perez
Banking Commissioner
This Order was sent by
certified mail, return receipt requested,
to Robes Barboza on March 2, 2017.
Robes Barboza Certified Mail No. 7014 2120 0003 8270 5646
Century Union Services, LLC
493 Broadway
Everett, MA 02149
This Order was hand-delivered to
Stacey L. Serrano, Esq., counsel for the
Department of Banking, on March 2, 2017.