Link to Final Agency Decision

3-1003-16766-2

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE COMMISSIONER OF COMMERCE

 

 

In the Matter of the Mortgage Originator License Application of

Shaun Lafaurie

FINDINGS OF FACT,

CONCLUSIONS AND

RECOMMENDATION

          The above-entitled matter came on for hearing before Administrative Law Judge Kathleen D. Sheehy on October 14, 2005.  The OAH record closed at the conclusion of the hearing.

Michael J. Tostengard, Assistant Attorney General, 1200 NCL Tower, 445 Minnesota Street, St. Paul, MN 55101-2130, appeared on behalf of the Minnesota Department of Commerce (Department).

The Respondent, Shaun Lafaurie, 329 S. Main Street, Lonsdale, MN 55046, appeared on his own behalf without counsel. 

NOTICE

          This Report is a recommendation, not a final decision.  The Commissioner of Commerce will make the final decision after reviewing the record and may adopt, reject or modify these Findings of Fact, Conclusions, and Recommendation.  Under Minn. Stat. § 14.61, the Commissioner’s decision shall not be made until this Report has been available to the parties to the proceeding for at least ten (10) days.  An opportunity must be afforded to each party adversely affected by this Report to file exceptions and present argument to the Commissioner.  Parties should contact Kevin Murphy, Deputy Commissioner, Minnesota Department of Commerce, 85 Seventh Place East, Suite 500, St. Paul, MN 55101 to ascertain the procedure for filing exceptions or presenting argument to the Commissioner.

 

          If the Commissioner fails to issue a final decision within 90 days of the close of the record, this report will constitute the final agency decision under Minn. Stat. § 14.62, subd. 2a (2004).  The record closes upon the filing of exceptions to the report and the presentation of argument to the Commissioner, or upon the expiration of the deadline for doing so.  The Commissioner must notify the parties and the Administrative Law Judge of the date on which the record closes.

STATEMENT OF ISSUES

1.               Did the Respondent engage in  fraudulent, deceptive, or dishonest practices that would preclude him from receiving a mortgage originator license pursuant to Minn. Stat. § 58.12, subd. 1(b)(2)(iv)?

2.       Did the Respondent engage in acts or practices demonstrating that he is untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to receive a mortgage originator license pursuant to Minn. Stat.          § 45.027, subd. 7(a)(4)?

3.       Has the Respondent been found by a court of competent jurisdiction to have engaged in conduct evidencing fraud, misrepresentation, or deceit that would preclude him from receiving a mortgage originator license pursuant to Minn. Stat. § 58.12, subd. 1(b)(2)(viii)?

4.       Did the Respondent engage in an act or practice that demonstrates untrustworthiness, financial irresponsibility, or incompetence that would preclude him from receiving a mortgage originator license pursuant to Minn. Stat. § 58.12, subd. 1(b)(2)(v)?

 Based upon all of the files, records and proceedings herein, the Administrative Law Judge makes the following:

FINDINGS OF FACT

          1.       The Respondent is a 23-year-old man who grew up in Lakeville, Minnesota.  He has the equivalent of a high school diploma and a certificate from Dakota County Technical College in chef training.  From January through May 2005, he worked as a telemarketer for Mastermind Mortgage in Lakeville, Minnesota.  He now works part-time for a commercial cleaning service.  He receives Social Security Disability benefits because he has been diagnosed with bipolar disorder, for which he currently takes medication.[1]

          2.       On October 20, 2000, the Respondent was charged with disorderly conduct in connection with an incident at the Oasis Market in Lakeville.  The Respondent was with a group of people, some of whom got into a fight with another person at the gas station.  On April 11, 2001, the Respondent was convicted of disorderly conduct.[2]

          3.       On February 8, 2001, the Respondent and his brother Jason were  arrested and later charged with felony receiving stolen property (firearms) and felony possession of a controlled substance (cocaine), after stolen firearms and drugs were found in their home.  On April 3, 2001, the Respondent entered a plea of guilty to these charges and was sentenced to 36 months stayed on the condition that he serve 150 days in jail; 20 years of probation; and restitution in the amount of approximately $8,000.[3] He received a stay of imposition on the drug conviction.[4]  The Respondent’s brother was also convicted and was required to pay approximately $100,000 in restitution.[5]       

          4.       The Respondent violated the terms of his probation three times over the next few years and served an additional seven to nine months in jail for those probation violations.

          5.       On January 14, 2002, the police noticed footprints in the snow leading from car to car in a residential neighborhood in New Hope, Minnesota.  They followed the footprints to a locked garage, which the police entered with the consent of the owner.  Inside they found the Respondent, his brother Jason, two CD players, an assortment of CDs and CD holders, and a radar detector apparently taken from vehicles in the neighborhood.  The Respondent was arrested for burglary and later charged with lurking and lying in wait, in violation of a Brooklyn Park ordinance.  The charge was continued for dismissal on June 5, 2002.[6]

6.       On February 16, 2003, the Respondent was in a car being driven by his girlfriend.  When she was stopped by the police for speeding, the Respondent identified himself to the police officer as Jason Lafaurie, his brother.  The Respondent subsequently pleaded guilty to a gross misdemeanor charge of providing false information to a police officer and served 30 days in jail.[7]

          7.       The Respondent was charged with two felonies, burglary and assault causing substantial bodily harm, in connection with an incident on August 16, 2003, in Northfield, Minnesota.  According to police incident reports, the Respondent and his brother entered the apartment of an acquaintance and assaulted him with a knife in retaliation for an incident the day before, in which the acquaintance beat up the Respondent because the Respondent had hit his girlfriend.  The charges against the Respondent were dismissed on November 16, 2004, when the victim did not appear to testify at the trial.[8]

8.       On April 12, 2005, the Respondent applied for a license as a Residential Mortgage Originator.  The Department received the application on April 15, 2005.  The Respondent indicated “yes” on the application form, in response to a question asking whether he had been charged with, indicted for, convicted of, or entered a plea to any criminal offense other than traffic violations in any state or federal court.[9]  With the application the Respondent submitted a letter disclosing the convictions and other charges described above.[10]

          9.       On April 27, 2005, an investigator in the Financial Examinations Division of the Department wrote to the Respondent and asked him to provide copies of the criminal complaints and sentencing orders relating to the charges and convictions disclosed in his application.[11]  The Respondent complied with this request.[12]

          10.     As of May 17, 2005, the Respondent was in compliance with the terms of his probation except that he has failed to make restitution payments.[13]

11.     After reviewing the materials submitted by the Respondent, the Department determined that the Respondent’s felony conviction for receiving stolen property, his gross misdemeanor conviction for providing false information to a police officer, the misdemeanor conviction for disorderly conduct, and the lurking/lying in wait incident sufficiently demonstrated that the Respondent was not trustworthy and should not receive a Mortgage Originator license.[14] 

12.     On August 1, 2005, the Department served the Respondent by mail with the Notice of and Order for Hearing, Order for Prehearing Conference, Order to Show Cause, and Statement of Charges.[15]

13.     The Respondent contends that these incidents were youthful indiscretions and that most of them involved bad conduct by his brother for which the Respondent unfairly received the blame.  He maintains that he has done well on probation for the past year since he started taking medications for bipolar disorder.  The Respondent now has two children to support, and he needs a license as a mortgage originator in order to resume employment at Mastermind Mortgage. 

Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:

CONCLUSIONS

1.          The Administrative Law Judge and the Commissioner of Commerce are authorized to consider the charges against Respondent under Minn. Stat. §§ 45.027, subd. 7, 58.12 and 14.50 (2004).

2.          Respondent received due, proper and timely notice of the charges against him, and of the time and place of the hearing.  This matter is, therefore, properly before the Commissioner and the Administrative Law Judge.

3.          The Department has complied with all relevant procedural requirements. 

4.          The Commissioner may deny a residential mortgage originator license upon finding that the applicant has violated a standard of conduct or engaged in a fraudulent, coercive, deceptive, or dishonest act or practice, whether or not the act or practice involves the residential mortgage lending business.[16]

5.          The Commissioner may deny a mortgage originator’s license if the applicant has engaged in an act of practice, whether or not the act or practice directly involves the business which the person is licensed or authorized, which demonstrates that the applicant or licensee is untrustworthy, financially irresponsible, or otherwise incompetent or unqualified to act under the authority or license granted by the commissioner.[17]

6.       The Commissioner may deny a residential mortgage originator license upon finding that the applicant has been found by a court of competent jurisdiction to have engaged in conduct evidencing gross negligence, fraud, misrepresentation, or deceit.[18]

7.       The Commissioner may deny a residential mortgage originator license upon finding that the applicant has engaged in an act or practice, whether or not the act or practice involves the business of making a residential mortgage loan, that demonstrates untrustworthiness, financial irresponsibility, or competence.[19]

          8.       The Respondent’s recent felony conviction for receiving stolen property, his felony-level possession of drugs, his gross misdemeanor conviction for providing false information to a police officer, and the circumstances surrounding the lurking and lying in wait charge in New Hope establish that the Respondent has engaged in deceptive or dishonest acts that demonstrate untrustworthiness pursuant to Minn. Stat. §§ 58.12, subd. 1(b)(2)(iv), (b)(2)(viii), and (b)(2)(v); and 45.027, subd. 7(a)(4).

9.       An Order denying the Respondent’s Mortgage Originator license application would be in the public interest.

          Based upon the foregoing Conclusions, the Administrative Law Judge makes the following:

RECOMMENDATION

IT IS HEREBY RECOMMENDED: that the Commissioner of Commerce deny Respondent’s application for a mortgage originator’s license.

Dated this 21st day of October, 2005.

                                                                

s/ Kathleen D. Sheehy

KATHLEEN D. SHEEHY

Administrative Law Judge

 

Reported:  Tape recorded (one tape)

 

NOTICE

Under Minn. Stat. § 14.62, subd. 1, the agency is required to serve its final decision upon each party and the Administrative Law Judge by first class mail or as otherwise provided by law.

MEMORANDUM

Residential mortgage originators are responsible for handling large financial transactions on behalf of the public, and the Department properly requires that applicants demonstrate a history of honesty and integrity in dealing with the property of others in order to obtain a license in this area.  Although the Respondent has done well in the past year, his criminal convictions are recent, serious, and go directly to his trustworthiness.  The Department could not grant the Respondent a license on this record.        

                                                                      K.D.S.

 

 


[1] Testimony of Shaun Lafaurie.

[2] Ex. 4, Summons dated October 20, 2000; Sentencing Order dated April 11, 2001.

[3] Ex. 4, BCA Records.

[4] Ex. 4, Sentencing Order dated April 3, 2001.

[5] Testimony of Shaun Lafaurie.

[6] Ex. 4, New Hope Police Department Incident Report January 14, 2002; Hennepin County Case History.

[7] Ex. 4, Sentencing Order dated September 29, 2003.

[8] Ex. 4.

[9] Ex. 1 at 3.

[10] Ex. 2.

[11] Ex. 3.

[12] Ex. 4.

[13] Ex. 5.

[14] Testimony of Robin Brown.

[15] There is nothing in the record to indicate that the Department denied the license application.  The Notice of and Order for Hearing states that the Department “initiated this action to provide Respondent with the opportunity to show cause why his application for licensure as a mortgage originator should not be denied.”

[16] Minn. Stat. § 58.12, subd. 1(a) & (b)(2)(iv).

[17] Minn. Stat. § 45.027, subd. 7(a)(4).

[18] Minn. Stat. § 58.12, subd. 1(a) & (b)(2)(viii).

[19] Id., subd. 1(a) & (b)(2)(v).