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IN THE MATTER OF:
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ORDER IMPOSING FINE
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the Connecticut General Statutes, the Connecticut Business Opportunity Investment Act (“Act”);
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation into the activities of Respondent, its officers, agents, representatives and employees, pursuant to Section 36b-71(a) of the Act, to determine if any of them had violated, were violating or were about to violate provisions of the Act;
WHEREAS, on May 30, 2008, based on the investigation by the Division, the Commissioner, acting pursuant to Sections 36b-72(a) and 36b-72(b) of the Act, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated by reference herein;
WHEREAS, the Order stated that Respondent is to cease and desist from directly or indirectly violating the provisions of the Act and from the further sale or offer to sell business opportunities constituting or which would constitute a violation of the provisions of the Act;
WHEREAS, the Order provided that it would remain in effect and become permanent against Respondent if a hearing was not requested within 14 days of its receipt;
WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Respondent, that a hearing (“Fine Hearing”) would be held on the matters alleged in the Fine Notice on July 15, 2008, at the Department, and that if Respondent failed to appear at the Fine Hearing, the Commissioner may order that a maximum fine of Thirty Thousand Dollars ($30,000) be imposed upon Respondent;
WHEREAS, on June 2, 2008, the Notice was sent by certified mail, return receipt requested, to Respondent (Certified Mail No. 70031680000085235352);
WHEREAS, on June 5, 2008, Respondent received the Notice;
WHEREAS, Attorney Paul A. Bobruff, was appointed Hearing Officer for the Fine Hearing;
WHEREAS, in the Notice the Commissioner alleged that Respondent, through its agents, sold to least three Connecticut purchasers a coffee franchise that included training in merchandising, operations product assembly and other areas, site selection, pre- and post-opening assistance, an advertising program, specifications for equipment and décor, and specifications and required sources for supplies necessary to enable such prospective purchasers to begin a coffee shop and retail store (“Coffee Franchise”);
WHEREAS, in the Notice the Commissioner alleged that at the time such sales were made, the Coffee Franchise was not registered as a business opportunity in Connecticut and no registration for the Coffee Franchise as a business opportunity had been made effective by order of the Commissioner under subsections (a) and (d) of Section 36b-62 of the Act;
WHEREAS, 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”;
WHEREAS, the Commissioner found in the Order, with respect to the activity described therein, that Respondent violated Section 36b-67(1) of the Act;
WHEREAS, on June 23, 2008, a certification was issued rendering the Order issued against Respondent permanent as of June 20, 2008, which certification is incorporated by reference herein;
WHEREAS, Attorney Jesse B. Silverman represented the Department at the Fine Hearing;
WHEREAS, on July 15, 2008, Respondent failed to appear at the Fine Hearing;
WHEREAS, Section 36a-1-31(b) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to appear at a scheduled hearing, the allegations against the party may be deemed admitted”;
AND WHEREAS, Section 36b-72(b)(2) of the Act provides, in pertinent part, that “[i]f such person . . . fail[s] to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person . . . .”;
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
The facts as set forth in paragraphs 6 through 12, inclusive, of the Notice shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and the conclusions set forth in paragraphs 13 through 19, inclusive, of the Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
The Commissioner finds that the offer and sale of the Coffee Franchise, absent registration and absent the Commissioner having declared the business opportunity effective, constitutes a violation of Section 36b-67(1) of the Act.
|3.||The Commissioner finds that the offer and sale of the Coffee Franchise, absent registration and absent the Commissioner having declared the business opportunity effective, in violation of Section 36b-67(1) of the Act, constitutes a basis for the imposition of a fine against Respondent under Section 36b-72(b) of the Act.|
|4.||The Commissioner finds that the facts require the imposition of a fine against Respondent. The record establishes that Respondent from at least October 16, 2006 to January 26, 2007, Respondent violated Section 36b-67(1) of the Act when it sold through its agents an unregistered coffee franchise to at least three Connecticut purchaser-investors. The Department is seeking a civil monetary penalty of Ten Thousand Dollars ($10,000) per violation for three violations of Section 36b-67(1) of the Act for a total of Thirty Thousand Dollars ($30,000) rather than the statutory maximum of Three Hundred Thousand Dollars ($300,000) due to the fact that the Division found no fraud in the transaction. There is no evidence in the record that Respondent has offered or provided restitution to the three Connecticut purchaser-investors. The Commissioner finds that a fine of Thirty Thousand Dollars ($30,000) is in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act.|
|5.||The Commissioner finds that the Notice was given in compliance with the provisions of Section 36b-72(b)(1) of the Act.|
Having read the record, I hereby ORDER, pursuant to Section 36b-72(b)(2) of the Act, that:
A fine of Thirty Thousand Dollars ($30,000) imposed against Java’s Brewin Development, Inc., 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 45 days from the date this Order is mailed; and
This Order shall become effective when mailed.
Dated at Hartford, Connecticut
this 8th day of October 2008. ________/s/_________
Howard F. Piktin
This Order was mailed by certified mail,
return receipt requested, to Respondent
on October 9, 2008.
Java’s Brewin Development, Inc.
290 Turnpike Road, Suite 6, #367
Westborough, MA 01581-2843 Certified Mail No. 7007 2680 0001 3136 7238