Bulletin # 2588 - Week Ending September 27, 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.

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.

CONSUMER CREDIT DIVISION ACTIVITY

Consent Orders

On September 3, 2013, the Commissioner entered into a Consent Order with Carollo, Joseph E. d/b/a Carollo Mortgage (NMLS # 93416) (“Carollo Mortgage”), South Glastonbury, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on June 24, 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 Carollo Mortgage failed to file certain annual information required by mortgage call reports in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  As part of the Consent Order, Carollo Mortgage paid $2,500 as a civil penalty.

On September 4, 2013, the Commissioner entered into a Consent Order with Gateway Mortgage Services, LLC (NMLS # 70340) (“Gateway Mortgage Services”), Waterford, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on June 24, 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 Gateway Mortgage Services failed to file certain annual and quarterly information required by mortgage call reports in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  As part of the Consent Order, Gateway Mortgage Services paid $2,500 as a civil penalty.

On September 6, 2013, the Commissioner entered into a Consent Order with USA Mortgage Network, Inc. (NMLS # 123701) (“USA Mortgage Network”), Indian Orchard, Massachusetts.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on June 24, 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 USA Mortgage Network failed to file certain quarterly information and failed to timely file certain annual information required by mortgage call reports in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  As part of the Consent Order, USA Mortgage Network paid $2,500 as a civil penalty.

On September 18, 2013, the Commissioner entered into a Consent Order with Polaris Funding Group, LLC (NMLS # 2540) (“Polaris Funding”), Newington, 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 Polaris Funding failed to timely file certain quarterly and 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, Polaris Funding paid $2,500 as a civil penalty.

On September 13, 2013, the Commissioner entered into a Consent Order with Visels Drug Store, Incorporated a/k/a Visels Pharmacy (“Visels Drug Store”), New Haven, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleges that Visels Drug Store, during the period of January 1, 2011 through March 31, 2013, engaged in the business of cashing checks, drafts or money orders for consideration without licensure for a general facility or limited facility at 714 Dixwell Avenue, New Haven, Connecticut, in violation of Section 36a-581(a) of the Connecticut General Statutes.  As part of the Consent Order, Visels Drug Store was ordered to pay $500 as a civil penalty.

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 September 13, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution (“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 (collectively “Notice”) in the Matter of:  Fairfield Connecticut Properties, LLC, Southbury, Connecticut, and Charles Wilson d/b/a CB Wilson (collectively “Respondents”).  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges 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.  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 Respondents 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 allegations set forth in the Notice.

On September 13, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution (“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 (collectively “Notice”) in the Matter of:  Forest Law Center, PLC a/k/a Forest Law Group (“Respondent”), Newport Beach, California.  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.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Consent Order Entered

On September 24, 2013, the Banking Commissioner entered a Consent Order (No. CO-13-7936-S) with respect to Howard Baldwin, Sr., director and control person of Hollywood Next Holdings LLC, a now defunct film production studio.  The Consent Order alleged that from various times between April 2008 and December 2008, Howard Baldwin sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act and made omissions of material fact in violation of Section 36b-4(a)(2) of the Act.  The Consent Order directed Howard Baldwin to cease and desist from regulatory violations and fined him $40,000.

Consent Order Entered

On September 25, 2013, the Banking Commissioner entered a Consent Order (No. CO-13-7907-S) with respect to New Heart LLC, Progenesis LLC and Oz III, LLC, all of Middletown, Connecticut.  Also named in the Consent Order was Wayne P. Franco, M.D., managing member of the entities.  The Consent Order alleged that the respondents offered and/or sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that respondent Franco transacted business an unregistered agent of issuer.  In addition, the Consent Order alleged that, at various times from September 2004 to May 2011, the respondents failed to disclose to investors that 1) checks earmarked for an investment in Progenesis LLC were actually deposited in New Heart LLC’s bank account and invested in New Heart LLC; and 2) approximately $29,000 of investor funds were used to pay respondent Franco’s medical malpractice insurance.  The Consent Order directed each of the respondents to cease and desist from regulatory violations and fined them $10,000 jointly and severally.  The Consent Order also required that, for five years, prior to soliciting or accepting funds for investment purposes, the respondents and their successors in interest retain experienced securities legal counsel to handle necessary regulatory filings and provide the Division with 30 days advance written notice of any such securities offers or sales.

Dated:  Tuesday, October 1, 2013