The Department of Banking News Bulletin

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.

STATE BANK ACTIVITY

Branch Activity

Section 36a-145 of the Connecticut General Statutes requires certain applications for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided.  Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days.  Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.

Merger

On July 23, 2013, the Commissioner, pursuant to Section 36a-125 of the Connecticut General Statutes, approved the merger of The Bank of Fairfield with and into The Bank of New Canaan, a Connecticut-chartered bank and trust company and wholly-owned subsidiary of BNC Financial Group, Inc., the resulting bank to operate under the name “Bankwell Bank.”

CONSUMER CREDIT DIVISION ACTIVITY

Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty

On June 25, 2013, the Commissioner issued an Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  Debt Settlement Solutions, Inc. (“Respondent”), West Palm Beach, Florida.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent 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.  As part of the Order to Make Restitution, Respondent was ordered to repay fees to identified Connecticut residents plus interest, and to repay any other Connecticut residents who entered into an agreement for debt negotiation services with Respondent on and after October 1, 2009, any fees paid by such Connecticut residents to Respondent plus interest.  Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.

Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty

On June 25, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  Nationwide Debt Services, LLC and George Russo & Associates, P.C. (collectively, “Respondents”) of Orangeburg, New York, and Richmond Hill, New York, respectively.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that each Respondent 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 Section 36a-671(b) of the Connecticut General Statutes.  As part of the Order to Make Restitution, Respondents were ordered to repay fees to identified Connecticut residents plus interest and to repay any other Connecticut residents who entered into an agreement for debt negotiation services with either Respondent on and after October 1, 2009, any fees paid by such Connecticut residents to either Respondents, plus interest.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist against Respondents.  Respondents were afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.

On June 25, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  Independence Law Group, Inc. (“Respondent”), Sunrise, Florida.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes.  As part of the Order to Make Restitution, Respondent was ordered to repay fees to an identified Connecticut resident plus interest, and to repay any other Connecticut residents who entered into an agreement for debt negotiation services with Respondent on and after October 1, 2009, any fees paid by such Connecticut residents to Respondent plus interest.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent.  Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.

On June 27, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  Alarcon Law Group, P.C. (“Alarcon”), National Legal Associates Law Firm, P.A. a/k/a National Law Associates (“NLA”) and R.M.A. Legal Network a/k/a ATT Legal Network (collectively, “Respondents”), of Lake Grove, New York, St. Petersburg, Florida, and Holbrook, New York, respectively.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that (1) Alarcon 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; (2) NLA engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes; and (3) R.M.A. engaged in debt negotiation in this state without obtaining the required license, in violations of Section 36a-671(b) of the Connecticut General Statutes.  As part of the Order to Make Restitution, each Respondent was ordered to repay fees to identified Connecticut residents plus interest, and to repay any other Connecticut residents who entered into an agreement for debt negotiation services with such Respondent on and after October 1, 2009, any fees paid by such Connecticut residents to Respondents plus interest.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist against Respondents.  Respondents were afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.

On July 2, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  James F. Barker, Independent Rescore Systems, Inc., Deleting Your Debts Company, Inc. a/k/a Deleting Your Debts, Inc. and Intake Application Center, Inc. a/k/a Intake Application, Inc. (collectively, “Respondents”), California.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondents engaged or offered to engage 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.  As part of the Order to Make Restitution, Respondents were order to repay fees to identified Connecticut residents plus interest, and to repay any other Connecticut residents who entered into an agreement for debt negotiation services with Respondent on and after October 1, 2009, any fees paid by such Connecticut residents to Respondent plus interest.  The Commissioner also found that the public safety and welfare required the issuance of a Temporary Order to Cease and Desist.  Respondents were afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.

Consent Order

On June 26, 2013, the Commissioner entered into a Consent Order with Thomson Mortgage Services, LLC. (NMLS # 105300) (“Thomson Mortgage”), Southington, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on March 22, 2013, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing.  The Commissioner alleged that Thomson Mortgage failed to timely file certain annual information required by mortgage call reports in violation of Section 36a 534b(c)(3) of the 2012 Supplement to the General Statutes in effect prior to October 1, 2012, and Section 36a-534b(c)(3) of the Connecticut General Statutes.  As part of the Consent Order, Thomson Mortgage paid $2,500 as a civil penalty.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine issued

On July 25, 2013, the Banking Commissioner entered an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-13-883-B) against Fundraising Co-Op, Inc. and Buyer Topia, Inc., both of Warminster, Pennsylvania.  Also named in the order were Nicholas C. Burkholder, an executive officer of respondents Fundraising Co-Op, Inc. and Buyer Topia, Inc.; Duncan H. Graham, the Executive Director of Fundraising Co-Op, Inc. and the Director of Development for Buyer Topia, Inc.; and John Weber, Treasurer of Fundraising Co-Op, Inc.  Fundraising Co-Op, Inc. and Buyer Topia, Inc. are in the purported business of selling advertising and product fundraising programs to enable purchasers to start their own home based business, earning commissions on products as well as a share of collateral advertising.

The action alleged that the respondents violated the Connecticut Business Opportunity Investment Act by offering and selling unregistered business opportunities; making unsubstantiated earnings claims; and engaging in fraudulent conduct in violation of Section 36b-67(6) of the Act.  The action also alleged that respondent Fundraising Co-Op, Inc. violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered interests in a cooperative.

The respondents were afforded an opportunity to request a hearing on the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.

On July 25, 2013, the Banking Commissioner entered an Order Imposing Fine and Order of Restitution (Docket No. CRF-12-8048-S) against DFS Capital Management, LP; John Vincent Greco, president of the firm; and DFS Fund, Limited Partnership, an affiliated investment fund.  The respondents had been the subject of a May 1, 2013 Consent Order which sought to resolve a November 6, 2012 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke Registration as an Investment Adviser and Notice of Intent to Fine (Docket No. CRF-12-8048-S).  The Consent Order had required the respondents to repay a negotiated amount to certain investors who purportedly had been harmed by respondents’ conduct.  The Consent Order also provided that a failure by the respondents to repay the affected investors on or before June 30, 2013 would result in an order of full restitution to the affected investors and the imposition of a $100,000 fine by the Commissioner.

Since the respondents did not fulfill their repayment obligation to the affected investors, the July 25, 2013 order directed the respondents to pay the affected investors $197,000 and $117,000, respectively, by September 6, 2013 and to pay a fine of $100,000 to the agency no later than October 4, 2013.

Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine issued

On July 23, 2013, the Banking Commissioner entered an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-13-8085-S) against Stephen Goodrich a/k/a Stephen W. Goodrich a/k/a Stephen Western Goodrich d/b/a Goodrich Financial of Bristol, Connecticut.  The action alleged that, from at least March 2006 forward, respondent Goodrich pooled approximately $1.9 million in investor funds from at least 23 investors primarily located in Connecticut; commingled investor funds and used the monies to pay off earlier investors and to cover his personal expenses such as liquor purchases and online gambling; provided investors with fictitious account statements containing falsely inflated account balances; falsely held himself out as a licensed investment professional; sold unregistered securities; and failed to provide investors with critical information concerning their investment.

The action further alleged that respondent Goodrich 1) violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered securities; 2) violated the antifraud provisions of Section 36b-4(a) of the Act; 3) transacted business as an unregistered investment adviser in contravention of Section 36b-6(c)(1) of the Act; 4) violated Section 36b-5(a) of the Act by engaging in fraudulent practices in connection with investment advisory activity; and 5) transacted business as an unregistered broker-dealer in violation of Section 36b-6(a) of the Act.

Respondent Goodrich was afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.

Dated:  Tuesday, July 30, 2013