By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
FOREIGN TRANSMITTAL
AGENCY LICENSING
Docket No. 2010-075

FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST


In the Matter of
ENVIOS R.D. CORP. D/B/A/ PRONTO ENVIOS
New York, New York

Foreign Transmittal Agency License No(s):
FT2581 et al.


The Commissioner of Banks ("Commissioner") having determined that ENVIOS R.D. CORP. d/b/a PRONTO ENVIOS, located at 2 Bennett Avenue, 3 rd Floor, New York, New York ("Pronto Envios" or the "Corporation") has engaged, or is engaged in, or is about to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 169, and applicable regulations found at 209 CMR 44.00 et seq., hereby issues the following ORDER TO CEASE AND DESIST pursuant to General Laws chapter 169, section 13(b).

FINDINGS OF FACT

  1. The Division of Banks ("Division"), through the Commissioner, has jurisdiction over the licensing and regulation of persons engaged in the business of a foreign transmittal agency pursuant to Massachusetts General Laws chapter 169.
  2. Pronto Envios is, and at all relevant times has been, a foreign corporation conducting business in the Commonwealth of Massachusetts. Pronto Envios' main office is located at 2 Bennett Avenue, 3 rd Floor, New York, New York.
  3. Pronto Envios is licensed by the Commissioner as a foreign transmittal agency under Massachusetts General Laws chapter 169. According to records maintained on file with the Division, the Commissioner initially issued a foreign transmittal license to Pronto Envios on or about May 20, 2002, with license number FT2581. License number FT2581 authorized Pronto Envios to operate as a foreign transmittal agency at 387 Columbia Road, Dorchester, Massachusetts.
  4. Pronto Envios maintains thirty four (34) additional foreign transmittal licenses for thirty-four authorized agents, for locations operated in the Commonwealth from which the Corporation conducts its foreign transmittal business.
  5. Pronto Envios is a money service business within the meaning of The Bank Secrecy Act and its implementing regulation at 31 C.F.R. Part 103.

    A. FAILURE TO DEMONSTRATE THE FINANCIAL RESPONSIBILITY, CHARACTER, REPUTATION, INTEGRITY, AND GENERAL FITNESS TO MAINTAIN A FOREIGN TRANSMITTAL AGENCY LICENSE

  6. Massachusetts General Laws chapter 169, section 12 relevant to the licensing of foreign transmittal agencies states:

    The commissioner may suspend or revoke any license issued pursuant to this chapter if he finds that: (a) the licensee has violated any provision of this chapter or any rule or regulation adopted hereunder or any other law applicable to the conduct of such business; or (b) any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the commissioner to refuse to issue such license.

  7. The Division's regulation 209 CMR 44.04(2)(b) states, in part:

    (b) The Commissioner may deny such an application [to engage in the business of a foreign transmittal agency] if the Applicant has:

    1. violated any provision of M.G.L. c. 169 or 209 CMR 44.00;

    2. violated or engaged in a pattern of violations of any state or federal law applicable to the conduct of the business of a foreign transmittal agency...P>

    i. Failure to Transmit Funds

  8. Massachusetts General Laws chapter 169, section 8 states, in part:

    All money received for transmission to a foreign country by any licensee shall be forwarded to the person to whom the same is directed within seven days following receipt thereof…

  9. The Division's regulation 209 CMR 44.10 states:

    Grounds for license revocation under M.G.L. c. 169, § 12 and the issuance of cease and desist orders under M.G.L. c. 169, § 13 shall include, but are not limited to, the following prohibited acts and practices by Licensees:

    (5) failing to forward all money received for transmission to a foreign country to the person to whom the same is directed within seven days following receipt thereof.

  10. On or about February 3, 2010, the Division became aware that Pronto Envios failed to transmit funds received by the Corporation's Agents for at least two transactions to beneficiaries in foreign countries within seven days following the receipt thereof.
  11. On December 14, 2009, an authorized agent of the Corporation located in Lawrence, Massachusetts received funds for transmission through Pronto Envios in the amount of one hundred ($100.00) dollars on behalf of a Massachusetts consumer, ("Consumer A") and provided instructions to Pronto Envios to transmit those funds to a beneficiary located in the Dominican Republic.
  12. On December 14, 2009, an authorized agent of the Corporation located in Lawrence, Massachusetts received funds for transmission through Pronto Envios in the amount of one hundred eighty ($180.00) dollars on behalf of a Massachusetts consumer, ("Consumer B") and provided instructions to Pronto Envios to transmit those funds to a beneficiary located in the Dominican Republic.
  13. Based upon information and belief, Pronto Envios failed to transmit the funds received from Consumer A and Consumer B to the designated beneficiaries located in the Dominican Republic, and those funds were retained by the Corporation.
  14. Based upon information and belief, the authorized agent, at its own expense, thereafter transmitted funds on behalf of Consumer A and Consumer B through another licensed Foreign Transmittal Agency subsequent to receiving notification that the funds were not received by the beneficiaries.
  15. Based upon information and belief as of the date of this Temporary Order, Pronto Envios failed to forward money received for transmittal to foreign countries. It is unknown how many Massachusetts consumers have been affected by Pronto Envios' failure to transmit such funds, or if the practice is continuing to date.

    ii. Failure to Timely Disclose Regulatory Actions

  16. Massachusetts General Laws chapter 169, section 6 relevant to the licensing and renewal of such license of foreign transmittal agencies states in part:

    ...Each application for a license shall be accompanied by an investigation fee to be determined annually by the commissioner of administration under the provisions of section three B of chapter seven. Said commissioner may reject an application for a license or an application for a renewal of a license if he finds that the financial responsibility, character, reputation, integrity and general fitness of the applicant and the members thereof if such applicant is a partnership or association, and of the officers and directors if the applicant is a corporation are not such as to warrant belief that the business will be operated in accordance with law and in the public interest.

  17. On March 6, 2006, the State of California, Department of Financial Institutions issued a Cease and Desist Order pursuant to Financial Code Section 1818 ("Cease and Desist") against Pronto Envios.
  18. On May 1, 2006, the Division received Pronto Envios' 2007 Foreign Transmittal License Renewal Application ("2007 License Renewal Application"), which was completed and signed by the Corporation as required pursuant to the Division's licensing requirements.
  19. Question 10 of the 2007 License Renewal Application, signed under the pains and penalties of perjury, asked the following question: "In the past twelve (12) months, has any governmental or regulatory agency ever initiated an informal or formal regulatory action or order against the applicant, or any of its parent companies subsidiaries, affiliates, senior officers (including the location manager(s)), directors, principal stockholders/partners, or beneficiaries (of a trust)?" The answer to the question provided by Pronto Envios on the License Renewal Application was "No."
  20. On May 2, 2007, the New Hampshire Banking Department issued an Order to Show Cause ("Order to Show Cause"), Case Number 07-067 against Pronto Envios. The Order to Show Cause alleged that the Corporation had engaged in unlicensed activity prior to licensure in New Hampshire.
  21. On May 14, 2007, the Division received Pronto Envios' 2008 Foreign Transmittal License Renewal Application ("2008 License Renewal Application"), which was completed and signed by the Corporation as required pursuant to the Division's licensing requirements.
  22. Question 10 of the 2008 License Renewal Application, signed under the pains and penalties of perjury, asked the following question: "In the past twelve (12) months, has any governmental or regulatory agency ever initiated an informal or formal regulatory action or order against the applicant, or any of its parent companies subsidiaries, affiliates, senior officers (including the location manager(s)), directors, principal stockholders/partners, or beneficiaries (of a trust)?" The answer to the question provided by Pronto Envios on the License Renewal Application was "No."
  23. On June 6, 2007, Pronto Envios and the New Hampshire Banking Department entered into a Consent Agreement, Case Number 07-067 to resolve the matters alleged in the Order to Show Cause.
  24. On April 29, 2009, the Division received Pronto Envios' 2009 Foreign Transmittal License Renewal Application ("License Renewal Application"), which indicated that the Corporation had been subject to a regulatory action. The Corporation answered question 10 on the License Renewal Application in the affirmative and disclosed the New Hampshire Banking Department Order approximately twenty-two (22) months subsequent to its issuance.
  25. On January 15, 2010, the State of Connecticut Department of Banking ("Connecticut Banking Department") issued a Temporary Order to Cease and Desist, ("Order") against Pronto Envios for violations of Connecticut laws including a failure to remit funds as required and failure to notify the Connecticut Banking Department of both the California and the New Hampshire Banking Department Orders.
  26. As of the date of this Temporary Order, Pronto Envios has not notified the Division of the Cease and Desist order issued by the State of California, Department of Financial Institutions and the Order issued by the Connecticut Banking Department.

    Conclusions of Law

  27. Based on the information contained in Paragraphs 1 through 26, Pronto Envios has failed to demonstrate the financial responsibility, character, reputation, integrity, and general fitness that would warrant the belief that the business will operated honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 169, section 6, the Division's regulation 209 CMR 44.03, and the Division's regulation 209 CMR 44.04.
  28. Based on the information contained in Paragraphs 1 through 26, Pronto Envios, failed to transmit funds received for transmissions to a foreign country within seven days of receipt thereof in violation of M.G.L. chapter 169 section 8 and the Division's regulation 209 CMR 44.10(5).
  29. Based on the information contained in Paragraphs 1 through 26, by failing to disclose the Regulatory Actions issued by both the California Department of Financial Institutions and New Hampshire Banking Department through the license renewal application, during the relevant time Pronto Envios has failed to demonstrate the character, reputation, integrity, and general fitness that would warrant the belief that the business will be operated honestly, fairly, and soundly in the public interest in violation of Massachusetts General Laws chapter 169 section 6.
  30. Based upon the information contained in Paragraphs 1 through 26, the public interest will be harmed by delay in issuing an Order to Cease and Desist under General Laws chapter 169, section 13(b) because, upon information and belief, Pronto Envios' failure to transmit money collected for transmittal to foreign countries here and in Connecticut may be a continuing practice, possibly affecting a growing number of Massachusetts consumers.
  31. Based upon the information contained in Paragraphs 1 through 26, the Commissioner has determined that:
    1. Pronto Envios has engaged, or is about to engage in, acts or practices which warrant the belief that the Corporation is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a foreign transmittal agency including, but not limited to, the provisions under General Laws chapter 169 and the Division's regulations at 209 CMR 44.00 et seq.
    2. The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Pronto Envios.
  32. Based upon the information contained in Paragraphs 1 through 26, had the facts and conditions found therein existed at the time of Pronto Envios' original foreign transmittal agency license application, the Commissioner would have been warranted in refusing to issue such license.

    ORDER TO CEASE AND DESIST

    After taking into consideration the FINDINGS OF FACT and CONCLUSIONS OF LAW stated herein, it is hereby:

  33. ORDERED that Pronto Envios, any and all officers, directors, employees, independent contractors, or agents operating on behalf of Pronto Envios, and their successors or assigns, shall immediately cease engaging directly or indirectly in the business of a foreign transmittal agency in Massachusetts, as defined in M.G.L. chapter 169, section 1.
  34. IT IS FURTHER ORDERED that Within two (2) days of the effective date of this TEMPORARY ORDER Pronto Envios shall submit to the Commissioner:
    1. A detailed record, prepared as of the date of submission, of the Corporation's accounting of the number and amount of Massachusetts transactions as of December 1, 2009 through the date of submission, including but not limited to, transactions that were processed, including those transactions that were paid out, cancelled, voided, and/or reissued through another licensed money transmitter or remain unresolved.
    2. A detailed record, prepared as of the date of submission, of all of the Corporation's authorized agents' accounting of any monetary damages caused to any Massachusetts consumers or any intended recipient of monies or monetary value received for transmission as a result of Pronto Envios failure to remit funds, including but not limited to, any late charges incurred or penalties imposed on accounts.
  35. IT IS FURTHER ORDERED that this Temporary Order shall become effective immediately and shall remain in effect unless set aside, limited or suspended by the Commissioner or upon court order after review pursuant to General Laws chapter 30A.
  36. IT IS FURTHER ORDERED that a hearing will be scheduled on this matter to determine whether or not such Temporary Order shall become permanent and final only upon receipt of a written request for such a hearing from the Licensee within twenty (20) days of the effective date of this Temporary Order. If no hearing is requested within this twenty (20) day period, this Temporary Order shall become permanent and final until it is modified or vacated by the Commissioner.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 5th day of February, 2010

By: Steven L. Antonakes
Commissioner of Banks