SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before me pursuant to a request for a contested case hearing filed by Capers McCants (Petitioner). Petitioner challenges the decision by the South Carolina Department of Consumer Affairs (Department) to deny the renewal of his Mortgage Broker Company License based upon fraudulent check convictions. A hearing was held before me on February 23, 2006 at the offices of the Administrative Law Court (ALC or Court) in Columbia, South Carolina.

FINDINGS OF FACT

Having observed the witnesses and exhibits presented at the hearing and closely passed upon their credibility, taking into consideration the burden of persuasion of parties, I make the following findings of fact by a preponderance of evidence:

1. Notice of the time, date, place and subject matter of the hearing was timely given to both parties.

2. Petitioner is a South Carolina resident and has resided in South Carolina his entire life. He attended Benedict College and Midlands Technical College and has taken courses in Civil Engineering and Business Administration.

3. Petitioner has been in the mortgage business for many years. He began working as a loan officer in 1988 and worked continuously in that capacity until 2004, when he became licensed as a Mortgage Broker. In 2004 he started his own mortgage company, The McCants Mortgage Group. His duties include meeting with customers, generating loans for them, and assisting them in obtaining financing or refinancing of a home. Petitioner has successfully operated in the mortgage business without any incidents other than those mentioned above.

4. In September 2005, Petitioner submitted a renewal application for his Mortgage Broker Company License to the Department. In completing his application, on Supplemental Form “A” Petitioner submitted a sworn statement that all information contained in the application was true, current and correct. Furthermore, Petitioner answered “NO” to the question on the form, “Have you ever been convicted of a felony or of an offense involving breach of trust, moral turpitude or dishonest dealings within the last ten years?”

5. Petitioner’s arrest record from the South Carolina Law Enforcement Division (SLED) shows two convictions within the last ten years for fraudulent checks, one in 1996 and one in 1999. Petitioner did not disclose the two convictions on his application because he had forgotten about them.

6. The fraudulent checks were made payable to grocery stores. At the time he wrote the checks, Petitioner believed he had sufficient funds to cover them. He paid the checks when he became aware that there were insufficient funds in his account to pay them.

7. Petitioner has had no arrests or convictions since 1999.

CONCLUSIONS OF LAW

Based upon the above findings of fact, I conclude the following as a matter of law:

1. S.C. Code Ann. §§ 40-58-55 (Supp. 2005), 1-23-310 et seq. (2005) and 1-23-600 (2005) grant jurisdiction to the Administrative Law Court to hear this contested case.

2. Specifically, S.C. Code Ann. § 40-58-55(A)(3) (Supp. 2005) provides:

Upon request for a contested case hearing by a person whose application for a license or renewal of a license has been denied, the Administrative Law Court may review the determination by the department that the applicant or his agent has:

(1) violated a provision of this chapter or an order of the department;

(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;

(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….

3. Furthermore, S.C. Code Ann. § 40-58-60 (A) (Supp. 2005) states:

Upon the filing of an application for a license, if the department finds that the financial responsibility, experience, character, and general fitness of the applicant, and of the members if the applicant is a copartnership, association, or limited liability company, and of the officers and directors if the applicant is a corporation, 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, it shall license the applicant and issue a license….

4. Petitioner’s two convictions for writing fraudulent checks, are offenses which involve fraud and moral turpitude under S.C. Code Ann. § 40-58-55(A)(3) (Supp. 2005). See also State v. Harrison, 298 S.C. 333, 380 S.E.2d 818 (1989). Furthermore, Petitioner’s failure to disclose these convictions constitutes a withholding of material information in connection with an application for a license or its renewal under S.C. Code Ann. § 40-58-55(A)(2) (Supp. 2005). However, I find that Petitioner did not intend to mislead the Department in this matter. The amounts of these checks were minor and they were paid by Petitioner immediately upon notification. Accordingly, based upon Petitioner’s numerous years of work experience in the mortgage industry without incident, his experience managing his own company, and his timeliness in paying the amounts due on the checks once notified of insufficient funds, I find that Petitioner’s Mortgage Broker Company License should be renewed. Petitioner has demonstrated financial responsibility, experience, character, and general fitness sufficient to command the confidence of the community and to warrant belief that his business will be operated honestly, fairly, and efficiently. See S.C. Code Ann. § 40-58-60 (Supp. 2005). Notwithstanding, I conclude that Petitioner’s actions in omitting these convictions should not be ignored completely.

5. S.C. Code Ann. § 40-58-80 (C) (2005) provides that an administrative law judge “…may impose upon persons violating the provisions of this chapter administrative fines of not more than five hundred dollars for each offense or not more than five thousand dollars for the same set of transactions or occurrences. Each violation constitutes a separate offense.” Therefore, Petitioner shall pay to the Department a fine in the amount of $250.00 for each fraudulent check, and a fine in the amount of $250.00 for withholding material information on an application, for a total fine of $750.00. Petitioner is cautioned that a subsequent violation of a provision of this chapter may result in revocation of his Mortgage Broker Company License.

ORDER

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

IT IS HEREBY ORDERED that Petitioner pay to the Department a fine in the amount of $250.00 for each fraudulent check, and a fine in the amount of $250.00 for withholding material information on an application, for a total fine of $750.00; and

IT IS FURTHER ORDERED that the Department renew Petitioner’s Mortgage Broker Company License upon Petitioner’s remittance of the $750.00 in fines.

AND IT IS SO ORDERED.

_________________________________

Marvin F. Kittrell

Chief Administrative Law Judge

March 7, 2006

Columbia, South Carolina