7. Bad Check

97 DOS 94 Matter of DOS v. Swift - presumption of delivery of mailed notice; DOS has burden of proof; evidence of check returned for insufficient funds is not presumptive evidence of insufficiency of funds at time of issuance of check, which is material element of offense of issuing a bad check; proof that representative broker issued check for commission on account of unlicensed entity and that it was twice dishonored for insufficient funds does notconstitute substantial evidence of untrustworthiness or incompetence; no vicarious liability where failure to prove representative broker acted wrongfully

214 DOS 97 Matter of DOS v. Laymon - accounting to client; bad check; deposits; failure to pay judgments; proper business practices; jurisdiction; DOS retains jurisdiction after expiration of license (for failure to pay renewal fee) where acts occurred during licensure; violation of 19 NYCRR 175.1 by depositing clients’ funds into operating account and failing to maintain special bank account; violation of 19 NYCRR 175.2 for failing to account to client; broker engaged in fraudulent practices by accepting monies he was required to retain in escrow, depositing said monies into his operating account, failing to return same to its rightful owner and by purporting to make refunds by issuing bad checks; in light of broker’s financial inability to do so, failure to promptly satisfy judgments was not a demonstration of untrustworthiness; there was no violation of 19 NYCRR 175.3(b) where broker was not managing rental properties; real estate broker’s license revoked; reapplication for broker’s license conditioned upon proof of payment of restitution with interest and proof of satisfaction of judgment with interest

314 DOS 98 Matter of DOS v. Eng - due process; failure to appear at hearing; accounting to client; bad checks; fraudulent practice; ex parte hearing is permissible upon proof of proper notice of hearing; broker acting in capacity as managing agent for a rental building violated 19 NYCRR 175.2 and engaged in fraudulent practice when he failed to account to his principal for money collected; issuance of bad checks pursuant to settlement agreement demonstrates untrustworthiness and incompetency; failure to respond to or claim from post office letters from investigator constitutes failure to cooperate with DOS investigation; broker’s license revoked, reapplication conditioned upon proof of payment of restitution with interest

140 DOS 99 Matter of DOS v. Nrekic - apartment information vendor; bad check; DOS fails its burden of proof; engaging in unlicensed activity as apartment information vendor; although broker’s check was returned for insufficient funds when presented, fraud requires evidence to establish that the broker did not have an account with or had insufficient funds at the time check was uttered; DOS fails to establish insufficient funds at time check uttered and fails to establish broker employed an unlicensed salesperson, demanded and retained unearned commissions, and failed to indicate in advertisement he was a real estate broker; $1,000.00 fine

292 DOS 99 Matter of DOS v. Simmons - bad check; DOS fails its burden of proof; failure to cooperate with DOS investigation; unearned commissions; mistaken issuance of a bad check is incompetency; DOS fails to establish that broker commingled funds or failed to satisfy a judgment; broker fails to cooperate with DOS investigation by misleading its investigators; DOS must show that broker acted in bad faith to establish retention of an unearned commission as untrustworthiness; $750.00 fine

32 DOS 00 Matter of DOS v. Pahl - bad check; forgery; failure to coperate with DOS investigation; restitution; salesperson commits conversion of funds forging client’s signature to a refund check; issuance of bad check for converted funds; fraudulent business practices; failure to cooperate with DOS investigation by failing to respond to investigator’s request letter; salesperson may be required to return money received to which she is not entitled; salesperson’s license revoked

827 DOS 02 DOS v. Vision Realty Corp. – bad check; disclosure of agency relationships; DOS fails its burden of proof; vicarious liability; salesperson and broker failed to provide agency disclosure form; representative broker retained an unearned commission in a rental transaction where prospective tenant neither occupied nor took possession of the rental accommodation; DOS fails to establish fraudulent practice, breach of fiduciary duty, misrepresentation, failure to supervise, failure to deal honestly with a member of the public, illegally retaining deposit monies or converting monies; notice of protest is presumptive evidence that check was dishonored but not presumptive evidence of insufficiency of drawer’s funds at the time of utterance; DOS fails to establish violation of bad check statute; salesperson admonished; corporate broker and representative broker ordered to refund $850.00 commission and pay $500.00 fine

861 DOS 02 DOS v. Birch – bad check; disclosure of agency relationships; deposits; failure to appear at hearing; failure to cooperate with DOS investigation; proper business practices; vicarious liability; ex parte hearing may proceed upon proof of proper service; broker was directed to hold deposit check until offer was accepted and by depositing check without the offer having been accepted she breached her fiduciary duties; broker issued bad checks drawn on her escrow account; broker commingled funds by not withdrawing her earned commissions from escrow account promptly and allowing the money to remain in the account; broker failed to cooperate with DOS investigation by responding to document requests; broker operated business at an unlicensed address; corporate broker is responsible for the acts of its representative broker; broker fails to deal honestly and fairly by failing to advise purchaser that her offer had been accepted by only one of two owners of the property; corporate broker’s and representative broker’s licenses revoked; salesperson fined $1,000.00

1130 DOS 03 DOS v. Golding - disclosure of agency relationships; bad check; deposits; DOS fails its burden of proof; failure to appear at hearing; ex parte hearing may proceed upon proof of proper service; broker accepts earnest money deposit and deposits same into his general operating account, not maintaining an escrow account; broker fails to maintain records of transaction; charge dismissed when no evidence is presented with regards to whether broker presented an agency disclosure form; ALJ considers broker’s offer to refund deposit monies and that the offer was rebuffed by DOS investigator; broker’s license suspended for one year, broker to refund deposit in the sum of $1,000.00

28 DOS 04 DOS v. Montolio - bad check; deposits; failure to cooperate with DOS investigation; broker issues bad check in attempt to refund commission in exchange for withdrawal of complaint; broker intended to induce DOS to renew his license under false pretenses claiming that complaint had been satisfactorily resolved; broker fails to provide documents requested by DOS; broker’s license suspended for one year, ordered to refund $1,300.00

716 DOS 04 DOS v. Prince - bad check; unlicensed activity; broker engaged in licensed activity under assumed unlicensed names; DOS fails to prove that broker failed to present agency disclosure forms and failed to provide services contracted for; broker issued numerous bad checks, both in licensed and unlicensed activities; broker engaged in the unauthorized practice of law by using a lease which was not jointly approved by the local bar association and local association of Realtors nor has an attorney’s approval clause; lease contained an attorney’s consultation clause in favor of tenant only; broker failed to cooperate with DOS investigation where he falsely advised DOS investigator that complaint had been withdrawn; charge that broker failed to pay outstanding judgments dismissed where broker lacks means to satisfy judgments; DOS failed to prove that broker failed to pay another real estate broker its share of cooperating commission where broker has the right to dispute amounts due and owing; ALJ considers fact that in 2000 broker pleaded nolo contendere to charges

764 DOS 05 DOS v. Lalla – disclosure of agency relationships; bad checks; deposits; forgery; unlicensed activity; salesperson offered for sale property which was not listed with her, failed to provide agency disclosure forms, breached her fiduciary duties to her client by having buyer issue deposit checks to an entity controlled by her sons and not to the owner, failed to provide buyers with a copy of the purchase contract, issued refund checks drawn on accounts with insufficient funds, engaged in a fraudulent practice by telling co-workers she would give them money to cover a check she issued to replace a deposit and then failed to do so, conducted a transaction without the knowledge of a supervising broker, failed to refund purchaser’s deposit money in a cancelled transaction, issued a deposit check on an account with insufficient funds, held herself out and acted as a real estate salesperson when not licensed to do so, failed to cooperate with DOS’s investigation by failing to meet or provide requested documents, and engaged in a fraudulent practice by submitting a renewal application containing the forged signature of her sponsoring broker; salesperson’s license revoked and directed to refund $15,000.00 deposit.

851 DOS 05 DOS v. Jenkins – bad checks; deposits; failure to cooperate with DOS investigation; vicarious liability; broker failed to make refund of deposit money towards a rental of an apartment when the rental was not consummated; broker issued check drawn on her escrow account which was dishonored due to insufficient funds; broker failed to honor her agreement to make good on the dishonored checks; broker failed to cooperate with DOS investigation by failing to respond to DOS’s numerous telephone messages; broker may be required to return money to which it is not entitled; corporate broker bound by the knowledge acquired by and is responsible for the acts committed by it’s representative broker; corporate broker and individual broker fined $2,000.00 and ordered to refund $1,600.00.

285 DOS 06 DOS v. Adewoyin- deposits; bad checks; broker deposited purchaser’s $5,000.00 deposit in an operating account and thereafter converted the funds to his own use due to divorce and illness; after sale terminated and parties agreed that deposit would be paid to seller, broker executed a promissory note to seller to repay the converted deposit and thereafter issued a bad check and defaulted on the promissory note; broker subsequently filed for bankruptcy protection under Chapter 13 naming seller as a creditor; corporate broker took no part in the misconduct and therefore charges against corporate broker are dismissed; broker’s license revoked

1021 DOS 06 matter of Godard – fraudulent practices, altered check, unlicensed corporation, restitution, 6-month suspension

3 DOS 07 Matter of Clark – failure to refund deposit, bad check, equivocal evidence on agency status and disclosures, untrustworthiness, restitution and $1,000 fine

1517 DOS 07 Matter of Bizzari- Broker; fraud and breach of fiduciary duty re deposit; bad check; commingling (19 NYCRR §175.1) unauthorized demand for 50% down payment; fraud and misrepresentation as registered HUD agent; false statement that purchase would be owner-occupied; failure to disclose broker ownership interest in listed property (19 NYCRR 175.6); failure to deliver duplicate original (19 NYCRR 175.12); agency disclosure notice (RPL § 443[3][b]); use of unlicensed name (RPL § 440-a; 441 [1][a]); incompetency; revocation

871 DOS 08 Matter of Rodriguez – broker; unlicensed salesperson; post dated check with insufficient funds; failure to maintain escrow account (175.1); unlicensed name (RPL §441[1][a]); relocation of office without approval (RPL §175.20[d]); 6-month suspension and refund $9,500 with interest

1434 DOS 08 Matter of Zackson – broker; property management; failure to provide RPL 443 agency disclosure; issue check with insufficient funds; bad checks not reimbursed; failure to account (175.2); failure to cooperate; revocation

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