South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Kevin Allen vs. SCDCA

AGENCY:
South Carolina Department of Consumer Affairs

PARTIES:
Petitioner:
Kevin Allen

Respondent:
South Carolina Department of Consumer Affairs
 
DOCKET NUMBER:
05-ALJ-30-0401-CC

APPEARANCES:
Willie F. Bradley, Esquire
For Petitioner

Charles M. Knight, Esquire
For Respondent
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

The above-captioned matter is before this Court pursuant to S.C. Code Ann. § 40-58-55(A) (Supp. 2005) for a contested case hearing. In this matter, Petitioner Kevin Allen challenges the decision of Respondent South Carolina Department of Consumer Affairs (Department) to deny his application for a mortgage loan originator’s license. The Department denied Petitioner’s application because, in reviewing his application, it discovered that he had been convicted of two counts of employment security fraud in 1998. After timely notice to the parties, a hearing of this case was held on January 12, 2006, at the South Carolina Administrative Law Court in Columbia, South Carolina. Based upon the evidence presented at the hearing, I find that Petitioner’s application for a mortgage loan originator’s license should be granted.

FINDINGS OF FACT

Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:

1. On August 5, 2005, Petitioner Kevin Allen submitted an application for a mortgage loan originator’s license to the Department. Among other things, the application contained the following question regarding Petitioner’s criminal history:

Have you ever been convicted of a felony or of an offense involving breach of trust, moral turpitude or dishonest dealings within the past ten years? Provide details about the offense, including conviction date, court, penalty and attach a certified copy of the Criminal Docket Sheet and the Presentence Investigation Report.

(Resp’t Ex. # 1, at 2.) In response to this question, Petitioner checked the box marked “NO” and did not provide any further information regarding his criminal record. At the close of the application, Petitioner also signed a sworn statement acknowledging that “all information contained herein is true, current and correct” and that he understood “that giving false information constitutes cause for denial or revocation of the application.” (Resp’t Ex. # 1, at 2.)

2. In reviewing Petitioner’s application, the Department obtained a copy of Petitioner’s criminal record from the South Carolina Law Enforcement Division (SLED). Petitioner’s record indicated that he had been convicted of two counts of employment security fraud in August 1998. Based upon this record, the Department denied Petitioner’s application for a mortgage loan originator’s license by a letter dated August 12, 2005, because Petitioner had, in fact, been convicted of a crime involving fraud within ten years of the date of his application. (Resp’t Ex. # 3.) Petitioner now challenges this denial before this Court.

3. Petitioner has been employed as a loan officer in the residential mortgage lending industry since May 2001 and has built a successful career in the industry. In particular, during his employment as a loan officer over the course of the past four years, Petitioner has not received any complaints regarding his lending activities from either his clients or his employers and has not been the subject of any disciplinary actions by licensing or other regulatory agencies.

4. At the hearing of this matter, Petitioner testified that he had provided accurate and truthful information regarding his criminal record on his license application, as he understood the question at the time he completed the application. Specifically, Petitioner explained that he understood the question relating to criminal convictions as applying not to the technical date on which the criminal charges were resolved, but the date on which the underlying criminal activity took place. Accordingly, he did not indicate on the application that he had any qualifying convictions within the past ten years, because, while he had been convicted of employment security fraud in 1998, the underlying incidents had actually occurred in 1995, more than ten years prior to the date on which he filed his license application. Further, while he forthrightly acknowledged the criminality of the behavior that led to his convictions for employment security fraud, Petitioner explained that the crimes, which stemmed from his cashing of two weekly unemployment checks after he had secured gainful employment, resulted from his mistaken belief that he could continue to accept unemployment checks during the two-week period between the date on which he began working at his new job and the date on which he received his first paycheck at the new job. Petitioner made restitution for the checks he improperly cashed and accepts full responsibility for his actions.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude the following as a matter of law:

1. This Court has jurisdiction over this contested case proceeding pursuant to S.C. Code Ann. § 37-6-414 (Supp. 2005), S.C. Code Ann. § 40-58-55(A) (Supp. 2005), and S.C. Code Ann. § 1-23-600(B) (Supp. 2005).

2. In presiding over this contested case, this Court serves as the finder of fact and makes a de novo determination regarding the licensing matters at issue. See S.C. Code Ann. § 1-23-600(B) (Supp. 2005); Marlboro Park Hosp. v. S.C. Dep’t of Health & Envtl. Control, 358 S.C. 573, 577-79, 595 S.E.2d 851, 853-54 (Ct. App. 2004); Brown v. S.C. Dep’t of Health & Envtl. Control, 348 S.C. 507, 512, 560 S.E.2d 410, 413 (2002).

3. In order to be licensed as a mortgage loan originator, an applicant must be at least eighteen years of age and must have at least six months of experience in residential mortgage lending or complete eight hours of continuing education within ninety days of employment. S.C. Code Ann. § 40-58-50(D) (Supp. 2005). Further, before issuing a license to a mortgage loan originator, the licensing authority must find that the applicant’s “financial responsibility, experience, character, and general fitness . . . are such as to command the confidence of the community and to warrant belief that the business may be operated honestly, fairly, and efficiently according to the purposes of this chapter [i.e., Chapter 58 of Title 40, which pertains to the licensing of mortgage loan brokers].” S.C. Code Ann. § 40-58-60(A) (Supp. 2005). In determining whether an applicant has the requisite character and fitness to be licensed as a mortgage loan originator, the licensing authority may consider such factors as whether the applicant has “(1) violated a provision of this chapter or an order of the [D]epartment; (2) withheld material information in connection with an application for a license or its renewal, or made a material misstatement in connection with the application; [or] (3) been convicted of a felony or of an offense involving breach of trust, moral turpitude, fraud, or dishonest dealing within the past ten years.” See S.C. Code Ann. § 40-58-55(A).

4. In the case at hand, Petitioner has been convicted of a crime involving fraud within the past ten years and Petitioner did fail to provide material information regarding his convictions on his application. Nevertheless, when such failings are balanced against Petitioner’s unblemished four-year track record as a successful mortgage loan officer and the mitigating circumstances surrounding his criminal offenses, I find that Petitioner does possess the financial responsibility, experience, character, and general fitness necessary to secure licensure as a mortgage loan originator.

ORDER

Based upon the Findings of Fact and Conclusions of Law stated above,

IT IS HEREBY ORDERED that the Department shall GRANT Petitioner’s application for licensure as a mortgage loan originator.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731

February 1, 2006

Columbia, South Carolina


 

 

 

 

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