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IN THE MATTER OF: MICHAEL LYNN SPRADLIN ("Respondent")
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NOTICE OF INTENT TO REVOKE NOTICE OF INTENT TO ISSUE NOTICE OF INTENT TO IMPOSE AND NOTICE OF RIGHT TO HEARING |
I. LEGAL AUTHORITY AND JURISDICTION
The Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”.
Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if he 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 provides:
Pursuant to the authority granted by Section 36a-17 of the Connecticut General Statutes, the Commissioner, through the Consumer Credit Division (“Division”) of the Department of Banking, has investigated the activities of Respondent to determine if he 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 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-51 of the 2010 Supplement to the General Statutes provides, in pertinent part:
(a) The commissioner may . . . revoke or refuse to renew 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 or refuse to renew 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 or refusal to renew. 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 or refuse to renew the license. No such license shall be . . . revoked except in accordance with the provisions of chapter 54.
(c) Any licensee may surrender any license issued by the commissioner under any provision of the general statutes by surrendering the license to the commissioner in person or by registered or certified mail, but such surrender shall not affect the licensee’s civil or criminal liability, or affect the commissioner’s ability to impose an administrative penalty on the licensee pursuant to section 36a-50 for acts committed prior to the surrender. If, prior to receiving the license, the commissioner has instituted a proceeding to . . . revoke or refuse to renew such license, such surrender will not become effective except at such time and under such conditions as the commissioner by order determines. If no proceeding is pending or has been instituted by the commissioner at the time of surrender, the commissioner may still institute a proceeding to . . . revoke or refuse to renew a license under subsection (a) of this section up to the date one year after the date of receipt of the license by the commissioner.
Section 36a-52(a) 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 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.
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.
Section 4-182 of the Connecticut General Statutes provides, in pertinent part:
(b) When a licensee has made timely and sufficient application for the renewal of a license . . . , the existing license shall not expire until the application has been finally determined by the agency . . . .
(c) 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 licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license.
II. MATTERS ASSERTED
| 1. |
Respondent is an individual whose address last known to the Commissioner is 6 Bushy Hill Road, Simsbury, Connecticut. |
| 2. |
On December 5, 2006, Respondent was convicted of a felony in the State of Connecticut, Rockville GA 19. Such conviction has not been pardoned. |
| 3. |
On March 28, 2008, First World Mortgage Corporation filed a New Application for Registration of Loan Originators seeking to register Respondent as an originator (“Application”). |
| 4. |
In connection with the Application, Respondent filed a Loan Originator Addendum Form signed and dated March 1, 2008 (“Addendum Form”). In response to Question 1(a) on the Addendum Form which asked “[h]ave you ever been: . . . convicted of or pled guilty or nolo contendere (‘no contest’) in a domestic, foreign, or military court to any misdemeanor or felony (not including motor vehicle traffic misdemeanors)?” Respondent answered “No”.
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| 5. | On March 31, 2008, the Department issued an originator registration to Respondent. |
| 6. |
Effective July 1, 2008, Section 36a-486(b) of the Connecticut General Statutes, as amended by Public Acts 07-156 and 08-176, replaced the registration requirement for originators with a licensing requirement for mortgage loan originators. |
| 7. |
On October 6, 2008, Respondent transitioned onto the Nationwide Mortgage Licensing System (“NMLS”). On December 29, 2009, Respondent filed a Form MU4, “Uniform Individual Mortgage License/Registration & Consent Form” (“Form MU4”) on NMLS seeking to renew Respondent’s mortgage loan originator license (“Renewal Request”). As part of the Renewal Request, Respondent used a Social Security number that belonged to someone other than Respondent. |
| 8. | On March 18, 2010, the Division sent a letter by certified mail to Respondent, pursuant to Section 4-182(c) of the Connecticut General Statutes, giving Respondent an opportunity to show compliance with all lawful requirements for the retention of his mortgage loan originator license. To date, the Commissioner has not received a response to the March 18, 2010 letter. |
| 9. | On April 15, 2010, Respondent, through his attorney, filed a withdrawal of his Renewal Request, effective as of April 14, 2010. |
| 10. |
On May 5, 2010, Respondent filed a “Surrender/Cancellation Requested” of his mortgage loan originator license on NMLS.
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III. STATUTORY BASIS FOR REVOCATION AND REFUSAL TO RENEW
MORTGAGE LOAN ORIGINATOR LICENSE, ORDER TO CEASE AND DESIST
AND IMPOSITION OF CIVIL PENALTY
AND IMPOSITION OF CIVIL PENALTY
Section 36a-53a of the Connecticut General Statutes provides:
No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under this title, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.
Section 36a-494(a)(2) of the 2010 Supplement to the General Statutes provides, in pertinent part:
The commissioner may . . . revoke or refuse to renew any mortgage loan originator license . . . , in accordance with the provisions of section 36a-51, for any reason which would be sufficient grounds for the commissioner to deny an application for such license under sections 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b, or if the commissioner finds that the licensee . . . has violated any of the provisions of this title . . . .
Section 36a-489(b)(1) of the 2010 Supplement to the General Statutes provides, in pertinent part:
The commissioner shall not issue an initial license for a mortgage loan originator unless the commissioner, at a minimum, finds that the applicant has: . . . (B) notwithstanding the provisions of section 46a-80, not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon of a conviction shall not be a conviction for purposes of this subdivision; . . . and (F) not made a material misstatement in the application. . . .
Section 36a-489(b)(2) of the 2010 Supplement to the General Statutes provides, in pertinent part:
(A) The minimum standards for license renewal for a mortgage loan originator shall include the following: (i) The mortgage loan originator continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; . . . .
(B) The license of a mortgage loan originator that fails to satisfy the minimum standards for license renewal shall expire. . . .
Section 36a-489(d) of the 2010 Supplement to the General Statutes provides that:
Withdrawal of an application for a license filed under subsection (a) or (b) of this section shall become effective upon receipt by the commissioner of a notice of intent to withdraw such application. The commissioner may deny a license up to the date one year after the effective date of withdrawal
| 1. |
Respondent’s felony conviction in 2006 which has not been pardoned, as more fully described in paragraph 2 of the Matters Asserted, would be sufficient grounds for the Commissioner to deny an application for a mortgage loan originator license under Section 36a-489(b)(1)(B) of the 2010 Supplement to the General Statutes, which would be sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s mortgage loan originator license pursuant to Sections 36a-494(a)(2) and 36a-51 of the 2010 Supplement to the General Statutes. Such felony conviction also causes Respondent to fail to meet minimum standards for renewal under Section 36a-489(b)(2) of the 2010 Supplement to the General Statutes, which shall cause such license to expire. |
| 2. |
Respondent’s “no” response to Question 1(a) of the Addendum Form, as more fully described in paragraph 4 of the Matters Asserted, constitutes the making in a document filed with the Commissioner a statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes. Such violation constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s mortgage loan originator license pursuant to Sections 36a-494(a)(2) and 36a-51 of the 2010 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty against Respondent pursuant to 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 Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Two Thousand Five Hundred Dollars ($2,500), subject to his right to a hearing on the allegations set forth above. |
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Respondent’s use of a Social Security number of someone other than Respondent’s, as more fully described in paragraph 7 of the Matters Asserted, constitutes the making of a material misstatement in the Renewal Request which prevents the Commissioner from renewing Respondent’s license to act as a mortgage loan originator pursuant to Sections 36a-489(b)(2) and 36a-489(b)(1)(F) of the 2010 Supplement to the General Statutes, which constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s mortgage loan originator license pursuant to Sections 36a-494(a)(2) and 36a-51 of the 2010 Supplement to the General Statutes. |
| 4. |
Respondent’s use of a Social Security number of someone other than Respondent’s, as more fully described in paragraph 7 of the Matters Asserted, constitutes the making in a document filed with the Commissioner a statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect, in violation of Section 36a-53a of the Connecticut General Statutes. Such violation constitutes sufficient grounds to revoke and refuse to renew Respondent’s mortgage loan originator license pursuant to Sections 36a-494(a)(2) and 36a-51 of the 2010 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty against Respondent pursuant to 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 Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation. The Commissioner intends to impose a maximum civil penalty upon Respondent not to exceed Two Thousand Five Hundred Dollars ($2,500), subject to his right to a hearing on the allegations set forth above.
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IV. NOTICE OF INTENT TO REVOKE AND REFUSE TO RENEW MORTGAGE LOAN
ORIGINATOR LICENSE, NOTICE OF INTENT TO ISSUE ORDER TO
CEASE AND DESIST, NOTICE OF INTENT TO IMPOSE CIVIL PENALTY
AND NOTICE OF RIGHT TO HEARING
ORIGINATOR LICENSE, 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 Respondent has engaged in acts or conduct which constitutes sufficient grounds for the Commissioner to revoke and refuse to renew Respondent’s license to act as a mortgage loan originator in Connecticut pursuant to Sections 36a-494(a)(2) and 36a-51 of the 2010 Supplement to the General Statutes, and forms the basis to issue an order to cease and desist against Respondent pursuant to Section 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty against Respondent pursuant to Section 36a-50(a) of the Connecticut General Statutes.
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to REVOKE and REFUSE TO RENEW Respondent’s license to act as a mortgage loan originator in Connecticut, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-53a of the Connecticut General Statutes and to impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations set forth above.
NOW THEREFORE, notice is hereby given to Respondent that the Commissioner intends to REVOKE and REFUSE TO RENEW Respondent’s license to act as a mortgage loan originator in Connecticut, issue an order requiring Respondent to CEASE AND DESIST from violating Section 36a-53a of the Connecticut General Statutes and to impose a CIVIL PENALTY upon Respondent as set forth herein, subject to Respondent’s right to a hearing on the allegations 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 his receipt of this Notice of Intent to Revoke and Refuse to Renew Mortgage Loan Originator License, 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 Section 36a-51 of the 2010 Supplement to the General Statutes. This Notice of Intent to Revoke and Refuse to Renew Mortgage Loan Originator License, 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 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 July 13, 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 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.
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 and refusing to renew Respondent’s license to act as a mortgage loan originator in Connecticut, which refusal to renew shall cause Respondent’s mortgage originator license in Connecticut to be deemed EXPIRED, issue an order that Respondent cease and desist from violating Section 36a-53a of the Connecticut General Statutes and may order that the maximum civil penalty of Five Thousand Dollars ($5,000) be imposed upon Respondent.
So ordered at Hartford, Connecticut
this 7th day of June 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
this 7th day of June 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 8th day of June 2010, the foregoing Notice of Intent to Revoke and Refuse to Renew Mortgage Loan Originator License, 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 Michael Lynn Spradlin, 6 Bushy Hill Road, Simsbury, Connecticut 06070, registered mail no. RB028037080US; and Brian J. Woolf, LLC, 50 Founders Plaza, 2nd Floor, East Hartford, Connecticut 06108, registered mail no. RB028037133US.
________/s/_________
Doniel Kitt
Prosecuting Attorney
Prosecuting Attorney