By the Division of Banks

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
FOREIGN TRANSMITTAL
AGENCY LICENSING
Docket No. 2010-374

FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST

In the Matter of
OMNEX GROUP, INC. D/B/A
UNO REMITTANCE

Foreign Transmittal Agency License No(s): FT7198 and FT5205


The Commissioner of Banks ("Commissioner") having determined that two foreign transmittal agent locations operated by OMNEX GROUP, INC. D/B/A UNO REMITTANCE, ("Omnex Group" or the "Corporation") under license numbers FT7198 and FT5205 have engaged in, or are engaged in, or are 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. Omnex Group is, and at all relevant times has been, a foreign corporation conducting business in the Commonwealth of Massachusetts. Omnex Group's main office is located at 580 Sylvan Avenue, Englewood Cliffs, New Jersey.
  3. Omnex Group 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 Omnex Group on or about March 13, 2007, with license number FT5192. License number FT5192 authorized Omnex Group to operate as a foreign transmittal agency at 1287B Commonwealth Avenue, Allston, Massachusetts.
  4. According to records maintained on file with the Division, the Commissioner issued a foreign transmittal license to Omnex Group to operate as a foreign transmittal agency at 581 Boston Post Road, Marlboro, Massachusetts on or about March 13, 2007. According to the Division's records, France Santos is the Branch Manager who operates this location on behalf of Omnex Group under license number FT7198.
  5. According to records maintained on file with the Division, the Commissioner issued a foreign transmittal license to Omnex Group on or about March 13, 2007, with license number FT5205. License number FT5205 authorized Omnex Group to operate as a foreign transmittal agency at 177 Brighton Avenue, Allston, Massachusetts. According to the records maintained on file with the Division, Marcelino Barbosa is the Branch Manager who operates this location on behalf of Omnex Group.
  6. Omnex Group maintains a total of seventy (70) foreign transmittal licenses for authorized agents, for locations operated in the Commonwealth from which the Corporation conducts its foreign transmittal business.
  7. Omnex Group is a money service business as defined by the federal Bank Secrecy Act ("BSA") and its implementing regulation at 31 C.F.R. Part 103.
  8. Pursuant to Massachusetts General Laws chapter 169, section 10, the Division commenced an inspection of the books, accounts, papers, records, and files of Omnex Group on June 1, 2009 which continued through October 22, 2010 (the "2009 examination/inspection").
  9. The Division's Report of Examination/Inspection on Consumer Compliance (the "Report"), which was issued to Omnex Group on the effective date of this Temporary Order, presented findings of the 2009 examination/inspection and alleged significant failures to comply with applicable state and federal laws, rules, regulations, and regulatory guidelines governing the conduct of two of the Corporation's authorized agents engaged in the foreign transmittal business in the Commonwealth maintaining foreign transmittal agency license numbers FT7198 and FT5205 .

    Failure to Establish Adequate and Appropriate Supervision Over Authorized Agents

  10. The Division is an agency of the Commonwealth of Massachusetts and was created pursuant to Massachusetts General Laws chapter 26, section 1. Through the Commissioner, the Division has jurisdiction over the licensing and regulation of persons and entities engaged in the foreign transmittal business in Massachusetts pursuant to Massachusetts General Laws chapter 169, and applicable regulations found at 209 CMR 44.00 et seq., which are administered by the Commissioner.
  11. 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.

  12. 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…

  13. The Division's regulation 209 CMR 44.10(5) 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.

  14. On December 12, 2001, subsequent to the passage of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act"), the Division issued an Industry Letter to all licensed foreign transmittal agents (the "Division's Letter") that notified licensed foreign transmittal agents that maintained multiple licensed agent locations in the Commonwealth that it was the Division's policy that "when the Division grant[ed] a license to a foreign transmittal agency to conduct business at an authorized agent, it [did] not authorize the agent to transmit monies beyond the agent's agreement with the licensed foreign transmittal agency." The Division's Letter further advised all licensed entities that "An agent may not transmit funds for another licensed foreign transmittal agency on its own behalf without approval from the Division."
  15. The Division's Letter advised the industry that "any agent who transmitt[ed] money outside of the agent agreement with the licensee or on its own behalf w[ould] be deemed by the Division to be operating an illegal and unlicensed money transmitting business for the purpose of G.L. c. 169 and 18 USC 1960."
  16. A copy of the Division's Letter is posted on the Division's website and sent to all licensed entities, including Omnex Group, that are granted approval to engage in the foreign transmittal business from multiple agent locations.
  17. Books and Records reviewed by the Division's examiners during the 2009 examination/inspection revealed that Omnex Group failed to implement and maintain certain internal controls and quality control standards in the supervision of at least two foreign transmittal agents of Omnex Group.
  18. During the 2009 examination/inspection, the Division's examiners reviewed records including but not limited to transmittal receipts, from two of the Corporation's agent businesses, Gol Latino Market ("Gol Latino") located at 581 Boston Post Road, Marlboro, Massachusetts and Marcelino Money Transfer, ("Marcelino") located at 177 Brighton Avenue, Allston, Massachusetts. A review of the records reviewed revealed that both of Omnex Group's agent locations were engaged in the practice of conducting illegal transmittals through money remitters unrelated to Omnex Group or any other licensed money remitter.
  19. The Division's examiners review of one transaction processed at the Gol Latino location revealed that a copy of the receipt of the transaction maintained by the agent location appeared to have been processed through Omnex Group's transmission system. However, a review of the transaction report provided to the Division's examiners by the Corporation's main office did not reflect the transaction as one that was processed by or through Omnex Group or any other licensed money remitter.
  20. Omnex Group's agent operating from the Marlboro branch location was unable to produce any evidence demonstrating that the funds received for transmission from the Massachusetts consumer on behalf of Omnex Group had been transmitted and received within seven days.
  21. The Division's examiners discovered another transmittal receipt at the Gol Latino location that indicated that consumer funds were transmitted through a money remitter that was unrelated to Omnex Group or any other licensed money remitter. Additionally, the funds were remitted to Brazil through what appeared to be an unauthorized foreign agent in Brazil.
  22. Books and records reviewed by the Division's examiners during the 2009 examination/inspection revealed that Omnex Group's authorized agent located in Allston utilized the Gol Latino branch located in Marlboro, to transmit funds to Brazil. In response to an inquiry regarding the Allston's agents practices, the manager of the Allston location indicated that funds were transmitted from the Gol Latino agent location because there was a "better exchange rate," available at the Marlboro location. This practice raised serious questions as to whether the funds were being transferred to Brazil through authorized means.

    Unlicensed Check Cashing Activity

  23. General Laws chapter 169A, section 2 states in part:

    No person or entity shall engage in cashing checks, drafts or money orders for a consideration in excess of one dollar per item without first obtaining a license from the commissioner.

  24. Books and Records reviewed by the Division's examiners during the 2009 examination/inspection revealed that the Gol Latino agent location operating on behalf of Omnex Group was engaged in the business of check cashing without obtaining the appropriate license as required pursuant to General Laws chapter 169A, section 2.
  25. Books and Records reviewed by the Division's examiners revealed that the Gol Latino location routinely cashed checks for a fee for up to four percent of the check amount.
  26. Based upon the information in paragraph 24 of this Temporary Order, on or about April 20, 2010, the Division sent a Cease Activity letter to the Marlboro location and ordered Omnex Group to cease engaging in check cashing activity without first obtaining a license from the Division. The Cease Activity letter required a duly authorized officer to execute an Affidavit that certified that the entity had ceased operated as a check casher.
  27. In response to the Division's Cease Activity letter, the Division received the Affidavit signed by Alex R. Figueredo who represented himself as a duly authorized officer of Betel Variety Corp. The Division's records indicate that the agent operating from the Marlboro location is licensed to do business on behalf of Omnex Group as Gol Latino and the Division's records do not reflect Alex R. Figueredo as a designated officer or representative of Omnex Group.
  28. The Division's records indicate that Omnex Group is not licensed as a check casher in the Commonwealth.

    CONCLUSIONS OF LAW

  29. Based on the information contained in Paragraphs 1 through 28, Omnex Group 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 General Laws chapter 169, section 6 the Division's regulation 209 CMR 44.03, and the Division's regulation 209 CMR 44.04.
  30. Based upon the information contained in Paragraphs 1 through 28, Omnex Group failed to establish risk-based policies, procedures and controls designed to ensure that authorized agents operating on behalf of Omnex Group were not engaged in the practice of conducting illegal transmittals through money remitters unrelated to Omnex Group in violation of General Laws chapter 169, regulation 209 CMR 44.00 et seq. and the Division's Industry letter issued on or about December 12, 2001.
  31. Based on the information contained in Paragraphs 1 through 28, Omnex Group, failed to retain records to ensure that funds received for transmissions to Brazil were remitted within seven days of receipt thereof in violation of General Laws chapter 169 section 8 and the Division's regulation 209 CMR 44.10(5).
  32. Based on the information contained in Paragraphs 1 through 28, by cashing checks, for a consideration in excess of one dollar per item without first obtaining a license from the Division, Omnex Group has violated General Laws chapter 169A, section 2.
  33. Based upon the information contained in Paragraphs 1 through 28, had the facts and conditions found therein existed at the time of Omnex Group's original foreign transmittal agency license applications for license numbers FT7198 and FT5205, the Commissioner would have been warranted in refusing to issue such licenses.
  34. Based upon the information contained in Paragraphs 1 through 28, 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, two agents operating on behalf of Omnex Group have collected funds from Massachusetts consumers for illegal transmittals through money remitters unrelated to Omnex Group and at least one agent has engaged in unlicensed check cashing activity. As of the date of this Temporary Order, Omnex Group has failed to demonstrate that those funds received for transmissions from Massachusetts consumers were remitted within seven days of receipt.
  35. Based upon the information contained in Paragraphs 1 through 28, the Commissioner has determined that:
    1. Two authorized agents maintaining foreign transmittal license numbers FT7198 and FT5205 have engaged, or are about to engage in, acts or practices which warrant the belief that they are 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 against license numbers FT7198 and FT5205 maintained by Omnex Group.

    ORDER TO CEASE AND DESIST

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

  36. ORDERED that, any and all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 581 Boston Post Road, Marlboro, Massachusetts, with license number FT7198 on behalf of Omnex Group, 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, except as otherwise expressly permitted by the terms of this Temporary Order or by the Commissioner.
  37. IT IS FURTHER ORDERED that, any and all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 177 Brighton Avenue, Allston, Massachusetts with license number FT5205 on behalf of Omnex Group, 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, except as otherwise expressly permitted by the terms of this Temporary Order or by the Commissioner.
  38. IT IS FURTHER ORDERED that Omnex Group shall immediately terminate its relationship with all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 177 Brighton Avenue, Allston, Massachusetts, with license number FT5205 and all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 581 Boston Post Road, Marlboro, Massachusetts, with license number FT7198.
  39. IT IS FURTHER ORDERED that within (5) days of the effective date of this Temporary Order, Omnex Group shall submit to the Commissioner: a detailed record of the Corporation's pending transmittal orders for funds received from Massachusetts consumers from agent locations operating under the license numbers FT7198 and FT5205. The records to be provided shall be as of the effective date of this Temporary Order.
  40. IT IS FURTHER ORDERED that Omnex Group, shall reimburse all fees collected by the Corporation for unlicensed check cashing activity. Reimbursements shall be made to each person on a per transaction basis in an amount equal to the entire portion of the fee retained by the Corporation for such transaction. A record shall be provided to the Division of the names and addresses of all individuals whom the Corporation charged a fee for the purpose of cashing a check, the total fees charged on each transaction, and check numbers of payments issued by the Corporation to evidence reimbursements made to consumers, and the amount reimbursed to each individual.
  41. 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.
  42. 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 19th day of November, 2010

By: Steven L. Antonakes
Commissioner of Banks
Commonwealth of Massachusetts

This Temporary Order was terminated pursuant to a Consent Order entered into on May 10, 2011