The Department of Banking News Bulletin
Bulletin # 2557 - Week Ending February 22, 2013
This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Connecticut Foreclosure Division Corp. and Alfred R. Beauchamp Directed to Cease and Desist from Regulatory Violations, Pay Restitution to Affected Investors Following Administrative Hearing
On February 20, 2013, following an administrative hearing, the Banking Commissioner entered Findings of Fact, Conclusions of Law and an Order (Docket No. CRF-12-7754-S) against Connecticut Foreclosure Division Corp. of Glastonbury, Connecticut and Alfred R. Beauchamp of West Hartford, Connecticut and Meriden, Connecticut. Alfred R. Beauchamp was the sole officer of Connecticut Foreclosure Division Corp.
The matter had been preceded by a May 29, 2012 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-12-7754-S) alleging that from approximately February, 2007 forward, the respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered promissory note investments bearing a minimum return of ten percent to at least three investors. The respondents allegedly represented to investors that investor funds would be used for company operating expenses, to buy leads and to purchase a property if one were located. In addition, the respondents allegedly represented to investors that their principal would be guaranteed against loss. In reality, investor funds were purportedly used in part to pay the personal expenses of respondent Beauchamp and his family. The action had also alleged that the respondents violated the antifraud provisions of the Act by failing to disclose any risk factors related to the investment, any financial information on the respondents or that the respondents would use part of the investors’ funds to pay for the personal, medical and household expenses of respondent Beauchamp and his family as well as the business expenses of respondent Beauchamp’s spouse.
In the February 20, 2013 Findings of Fact, the Commissioner noted that Connecticut Foreclosure Division Corp. was no longer in business and that respondent Beauchamp had represented that his assets were limited.
The Commissioner concluded that, based on the evidence presented at the hearing, 1) both respondents violated Section 36b-16 of the Act by offering and selling unregistered promissory note investments; and 2) the respondents violated the antifraud provisions in Section 36b-4(a) of the Act by omitting to disclose material risk factors, including factors bearing on repayment, as well as financial information on Connecticut Foreclosure Division Corp. and respondent Beauchamp. Counterpoised against such nondisclosure were respondents’ statements that the investments were practically guaranteed.
The February 20, 2013 action rendered permanent the May 29, 2012 Order to Cease and Desist issued against Connecticut Foreclosure Division Corp. and Alfred R. Beauchamp. However, the Commissioner declined to fine the respondents, observing that any available monies should more appropriately be directed back to affected investors; that Connecticut Foreclosure Division Corp. was no longer in business; and that respondent Beauchamp had represented that his financial resources were limited. The February 20, 2013 action also rendered permanent the May 29, 2012 Order to Make Restitution. In so doing, the action obligated the respondents to 1) provide a repayment affidavit to the department no later than March 15, 2013; 2) continue to repay two affected investors the sum of $33,000 and $50,000, respectively, in accordance with separate agreements introduced as exhibits during the hearing; and 3) repay the third affected investor $60,000 according to a prescribed schedule set forth in the Order.
CONSUMER CREDIT DIVISION ACTIVITY
Order to Cease and Desist, Order of Repayment of Fees and Order Imposing Civil Penalty
On January 2, 2013, the Commissioner issued an Order to Cease and Desist, Order of Repayment of Fees and Order Imposing Civil Penalty (“Order”) In the Matter of: Christopher Rojas d/b/a Legacy Holding Group, Inc. and Lauren Rojas d/b/a Legacy Holding Group, Inc. (collectively, “Respondents”), Chandler, Arizona. The basis of the Order was that Respondents engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, and that the fees charged by Respondents for debt negotiation services were excessive. Each Respondent was ordered to cease and desist from violating Section 36a 671(b) of the Connecticut General Statutes, in effect prior to October 1, 2011, to pay a civil penalty in the amount of $100,000, and to repay fees to certain identified Connecticut residents.
Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License and Notice of Intent to Issue Order to Cease and Desist
On January 3, 2013, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) in the Matter of: Creditors Interchange Receivable Management, LLC (“Respondent”), Cheektowaga, New York. The Notice was the result of an investigation by the Consumer Credit Division. The Notice alleges that Respondent failed to maintain a surety bond during the entire period of its consumer collection agency license for 80 Holtz Drive, Cheektowaga, New York, in violation of Section 36a-802(a) of the Connecticut General Statutes. The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist. Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
On January 3, 2013, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) in the Matter of: Creditors Interchange Receivable Management, LLC (“Respondent”), Tampa, Florida. The Notice was the result of an investigation by the Consumer Credit Division. The Notice alleges that Respondent failed to maintain a surety bond during the entire period of its consumer collection agency license for 3505 East Frontage Road, Colonial Concourse #3, Suite 130, Tampa, Florida, in violation of Section 36a-802(a) of the Connecticut General Statutes. The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist. Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
On January 3, 2013, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) in the Matter of: Creditors Interchange Receivable Management, LLC (“Respondent”), Ontario, Canada. The Notice was the result of an investigation by the Consumer Credit Division. The Notice alleged that Respondent failed to maintain a surety bond during the entire period of its consumer collection agency license for 224 Garrison Road, Suite 5, Fort Erie, Ontario, Canada, in violation of Section 36a-802(a) of the Connecticut General Statutes. The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist. Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
Dated: Tuesday, February 26, 2013