Order Condor Capital Corp.

Date:	05/13/2014
Organization:	Division of Banks
Docket Number:	2014-010
Location:	Hauppauge, NY

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Condor Capital Corp., Hauppauge, NY - Order to Cease and Desist, Order to Show Cause and Notice of Intent to Revoke Motor Vehicle Sales Finance Company License

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MOTOR VEHICLE SALES FINANCE
COMPANY LICENSING
Docket No. 2014-010

ORDER TO CEASE AND DESIST,
ORDER TO SHOW CAUSE AND
NOTICE OF INTENT TO REVOKE
MOTOR VEHICLE SALES FINANCE
COMPANY LICENSE

In the Matter of

CONDOR CAPITAL CORP.
Hauppauge, New York

Motor Vehicle Sales Finance Company
License No.: MV0449

ADMINISTRATIVE COMPLAINT

The Commonwealth of Massachusetts Division of Banks (the Division), by and through the Commissioner of Banks of the Commonwealth of Massachusetts (the Commissioner), for its Order to Cease and Desist, Order to Show Cause and Notice of Intent to Revoke (Order and Notice), alleges as follows:

The Division brings this action under Massachusetts General Laws chapter 255B, section 7 to revoke Condor Capital Corp’s (Condor Capital or the Corporation) motor vehicle sales finance company license MV0449 and to obtain other equitable relief as may be necessary due to Condor Capital’s failure to comply with the provisions of Massachusetts General Laws chapter 255B and the Corporation’s failure to maintain and exercise the financial responsibility, character, reputation, integrity, and general fitness that would warrant the belief that its business will be operated honestly, fairly, soundly, and efficiently in the public interest in violation of Massachusetts General Laws, chapter 255B, section 2 and the Division’s regulation 209 CMR 20.03.
JURISDICTION AND VENUE
The Division is an agency of the Commonwealth of Massachusetts with jurisdiction over matters relating to the licensing and regulation of those engaged in the business of a motor vehicle sales finance company pursuant to Massachusetts General Laws chapter 255B, section 2.
At all relevant times, Condor Capital has been engaged in the business of a motor vehicle sales finance company in Massachusetts.
RESPONDENT
Condor Capital is, and at all relevant times has been, a foreign corporation conducting business in the Commonwealth with its main office located at 165 Oser Avenue, Hauppauge, New York.
Condor Capital is licensed by the Commissioner as a motor vehicle sales finance company under Massachusetts General Laws chapter 255B section 2. According to records maintained on file with the Division, the Commissioner initially issued a motor vehicle sales finance company license, number MV0449 on or about June 14, 2000.
According to the Division’s records, Stephen Baron is the 100% percent owner of Condor Capital.
According to records maintained by the Division, in 2013 Condor Capital acquired 713 contracts in Massachusetts totaling $11.1 Million, and Condor Capital’s total loan portfolio for Massachusetts consumers was 1,324 totaling $17.1 Million.
FINDINGS OF FACT AND REGULATORY BACKGROUND

A. Failure To Demonstrate the Financial Responsibility, Character, Reputation Integrity, and General Fitness to Maintain a Motor Vehicle Sales Finance Company License
Massachusetts General Laws chapter 255B, section 2 states, in part:
The commissioner may reject any application for a license or any application for the renewal of a license if he is not satisfied that the financial responsibility, character, reputation, integrity and general fitness of the applicant and of the owners, partners or members thereof, if the applicant be a partnership or association, and of the officers and directors, if the applicant be a corporation, are such as to command the confidence of the public and to warrant the belief that the business for which the application for a license is filed will be operated lawfully, honestly and fairly.
The Division’s regulation 209 CMR 20.03(2)(c) states:
An Applicant shall submit information demonstrating that the Applicant possesses the character, reputation, integrity and fitness to engage in the business of a sales finance company or a premium finance agency in an honest, fair, sound and efficient manner.
The Division’s regulation 209 CMR 20.04(2)(d) states:
The commissioner may deny such an application if the Applicant has engaged in conduct which has resulted in the suspension or revocation of its license to engage in any business by the licensing authority of any other state.
On April 23, 2014, that the Superintendent of Financial Services of the State of New York (NYDFS) filed a civil complaint in the District Court for the Southern District of New York, Case #: 1:14−cv−02863−CM (Complaint) against both Condor Capital and Stephen Baron individually pursuant to Section 1042(a)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Sections 309 and 408 of the New York Financial Services Law, and Section 499 of the New York Banking Law.
The Complaint stated that the NYDFS sought to “enjoin and remedy Condor Capital’s admitted, systematic, knowing and abusive theft of funds from customers and Condor’s unfair, deceptive and abusive treatment of its customers’ personally identifiable information, and to prevent further harm to customers in New York State and more than two dozen other states across the country.”
The Complaint further stated that the NYDFS superintendent was seeking “the appointment of a receiver to halt, investigate, and remedy the egregious mismanagement of Condor [Capital] which ha[d] led to, and enabled the concealment of, Condor [Capital’s] theft of millions of dollars from customers and the egregious security risk to its customers’ personal and financial information.”
The NYDFS requested immediate relief pursuant to Section 1055 of Dodd-Frank, 12 U.S.C. § 5565, Section 309 of the Financial Services Law, and the Courts equitable powers, by granting any preliminary injunctive necessary to avoid consumer harm during the pendency of the action.
On or about April 23, 2014, a Temporary Restraining Order was issued against Condor Capital, the Temporary Restraining Order was modified on April 28, 2014.
The April 28, 2014 modified Temporary Restraining Order prohibited Condor Capital from entering, soliciting, quoting, acquiring, or taking assignment of new loan agreements or retail installment contracts with consumers, and prohibited Condor Capital from purchasing, receiving by assignment or acquiring any new loans or retail installment contracts from an automobile dealer. The modified order lifted an asset freeze that had previously been imposed by the April 23, 2014 Temporary Restraining Order, so that the Corporation was able to pay employees. The April 28, 2014 order restricted any payment to Stephen Baron, the owner of Condor Capital.
The provisions of the Temporary Restraining Order did not prohibit existing customers from accessing their accounts and did not restrict them from the ability to make any scheduled payments.
On May 12, 2014, an Order to Show Cause hearing was held at the District Court of the Southern District of New York, before the federal judge appointed to the case. The hearing was scheduled to hear oral arguments on the proposed preliminary injunction requested by the NYDFS. On May 13, 2014, the federal judge appointed to the case issued a letter to all counsel on the case and notified the parties that a preliminary injunction would be entered immediately, and it would “continue nearly all of the relief encompassed by the [Temporary Restraining Order].” Additionally, the federal judge also appointed a named receiver of Condor Capital.
Based upon information and belief as of the date of this Order and Notice Condor Capital’s abusive theft of funds from customers and the Corporation’s unfair, deceptive and abusive treatment of its customers’ personally identifiable information as alleged in the Complaint filed by the NYDFS indicated that Condor Capital had not demonstrated the adequate financial responsibility, character, reputation, integrity and general fitness to hold a motor vehicle sales finance company license in the Commonwealth.
B. Failure to Update the Nationwide Multi State Licensing System Record Regarding the Occurrence of a Significant Event
On February 3, 2014, in executing a renewal application for Condor Capital on the Nationwide Multistate Licensing System (NMLS) Donald Kalechofsky as an authorized representative of Condor Capital attested that all information and statements contained therein, were current, true, accurate and complete, and were made under the penalties of perjury
In executing the application for renewal on the NMLS, Donald Kalechofsky on behalf of Condor Capital attested that he would keep the information contained in the application form current and that he would file accurate supplementary information on a timely basis [emphasis added].
Donald Kalechofsky acting on behalf of Condor Capital answered “no” to each of the following Disclosure Questions in subsections C, F and G of the Corporation’s 2014 NMLS renewal application which asks the following questions:
Regulatory Action Disclosure

(C) In the past 10 years, has any State or federal regulatory agency or foreign financial regulatory authority or self-regulatory organization (SRO) ever:

(1) found the entity or a control affiliate to have made a false statement or omission or been dishonest, unfair or unethical?

(3) found the entity or a control affiliate to have been a cause of a financial services-related business having its authorization to do business denied, suspended, revoked or restricted?

(4) entered an order against the entity or a control affiliate in connection with a financial services-related activity?

Civil Disclosure

(F) Has any domestic or foreign court:

(1) in the past ten years enjoined the entity or a control affiliate in connection with any financial services-related activity?

(2) in the past ten years found the entity or a control affiliate was involved in a violation of any financial services-related statute(s) or regulation(s)?

(G) Is there a pending financial services-related civil action in which the entity or a control affiliate is named for any alleged violation described in (F)?
On or about May 9, 2014, the Connecticut Department of Banking issued a Notice of Automatic Suspension, Notice of Intent to Revoke Sales Company Finance License and Notice of Right to Hearing (“Notice of Intent to Revoke”) against Condor Capital for the Corporation’s a failure to demonstrate that the financial responsibility, character, reputation, integrity and general fitness of Condor Capital would be sufficient to warrant the belief that the Corporation would be operated soundly and efficiently consistent with Connecticut laws and governing sales finance companies. The Notice of Intent to Revoke was issued as a result of the allegations as cited in the Complaint filed by the NYDFS on April 23, 2014.
On April 27, 2007, the Connecticut Department of Banking issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Revoke Sales Finance Company License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (collectively, the “Notice”) against Condor Capital as a result of the Corporation’s material misstatement or failure to give true reply in an application, regarding litigation that Condor Capital was a party to. Additionally the Notice also alleged that Condor Capital failed to respond a consumer complaint filed with the Consumer Affairs section the Connecticut Department of Banking. On July 3, 2007, Condor Capital entered into a Settlement Agreement with the Connecticut Department of Banking to resolve the April 27, 2007 Notice.
On March 8, 2005, Condor Capital entered into a Settlement Agreement with the State of New York Department of Financial Services.
As of the date of this Order and Notice, Condor Capital has failed to appropriately notify the Division of the events referenced in Paragraphs 23 through 25, and update its answers to disclosure questions on the NMLS.
CONCLUSIONS OF LAW
Based upon the information contained in Paragraphs 1 through 26, Condor Capital has failed to demonstrate that its financial responsibility, character, reputation, integrity and general fitness are such as to command the confidence of the public and to warrant the belief that the motor vehicle sales finance business will be operated lawfully, honestly and fairly, in violation of Massachusetts General Laws chapter 255B, section 2 and the Division’s regulation 209 CMR 20.03 (2)(c).
Based upon the information contained in Paragraphs 1 through 26, by failing to timely update the Corporation’s information on the NMLS and notify the Division of the federal Civil Complaint filed against the Corporation and the Temporary Restraining Order issued by the District Court of the Southern District of New York, Condor Capital has failed to demonstrate that its financial responsibility, character, reputation, integrity and general fitness are such as to command the confidence of the public and to warrant the belief that the motor vehicle sales finance business will be operated lawfully, honestly and fairly, in violation of Massachusetts General Laws chapter 255B, section 2.
Based upon the information contained in Paragraphs 1 through 26, by failing to timely update the Corporation’s information on the NMLS and notify the Division of the regulatory action taken against the Corporation by the Connecticut Banking Department and the New York Department of Financial Services, Condor Capital has failed to demonstrate that its financial responsibility, character, reputation, integrity and general fitness are such as to command the confidence of the public and to warrant the belief that the motor vehicle sales finance business will be operated lawfully, honestly and fairly, in violation of Massachusetts General Laws chapter 255B, section 2.
Based upon the information contained in Paragraphs 1 through 26, the public interest will be harmed by delay in issuing an Order and Notice because, upon information and belief, Condor Capital has a portfolio of Massachusetts retail installment loans the Corporation is currently servicing which require immediate action to protect the interests of any affected Massachusetts consumers. As Condor Capital is currently in the midst of a federal civil action, a determination of when the Division would be able to evaluate the financial condition of the Corporation remains uncertain.
Based upon the information contained in Paragraphs 1 through 26, the Commissioner has determined that:
1. Condor Capital has engaged in, or is about to engage in, acts or practices which warrant the belief that Condor Capital is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a motor vehicle sales finance company including, but not limited to, the provisions of M.G.L. chapter 255B and the Division’s regulations at 209 CMR 20.00 et seq.;
2. The severity of problems are beyond management’s ability to control or correct;
3. Regulatory measures are necessary to protect the interests of consumers; and
4. The public interest will be irreparably harmed by delay in issuing an ORDER TO CEASE AND DESIST to Condor Capital.
Based upon the information contained in Paragraphs 1 through 26, had the foregoing been known to the Division at the time of Condor Capital’s motor vehicle sales finance company license application, the Commissioner would have been warranted in refusing to issue such license. Further, the facts and conditions set forth in Paragraphs 1 through 26 present sufficient grounds for the revocation of Condor Capital’s motor vehicle sales finance company license pursuant to Massachusetts General Laws chapter 255B, section 8.
I. ORDER TO CEASE AND DESIST

After taking into consideration the Information stated herein, it is hereby:
ORDERED that Condor Capital, any and all officers, directors, employees, independent contractors, or agents operating on behalf of Condor Capital, and their successors or assigns, shall immediately cease engaging directly or indirectly in the business of a motor vehicle sales finance company in Massachusetts, as defined in General Laws chapter 255B, section 1, except as otherwise expressly permitted by the terms of this Order and Notice or by the Commissioner. This shall include ceasing the purchasing, receiving by assignment, or otherwise acquiring any new loan or retail installment contract signed by a buyer in the Commonwealth from any automobile dealer or retail seller.
IT IS FURTHER ORDERED that Condor Capital shall notify all independent contractors, or agents operating on behalf of Condor Capital to immediately cease engaging directly or indirectly in the business of a motor vehicle sales finance company on behalf of Condor Capital.
IT IS FURTHER ORDERED that Condor Capital shall immediately secure all records, files, and documents (Records) relative to the Corporation’s motor vehicle sales finance company business in Massachusetts. Condor Capital is prohibited from destroying, altering, and/or modifying any of the referenced Records. The Records shall be available to the Commissioner in their entirety upon request.
IT IS FURTHER ORDERED that within one (1) day of the effective date of this Order and Notice, Condor Capital shall submit to the Division a detailed record, prepared as of the date of submission, of all of the information on file regarding the Corporation’s total Massachusetts contract servicing portfolio including but not limited to:
1. the borrower’s addresses and telephone numbers;
2. the loan number;
3. the account balance; and
4. the location of the funds currently held for each account.
The record should include telephone numbers of appropriate contact persons who are familiar with the Corporation’s contracts.
On the first day of each month following the issuance of this Order and Notice, Condor Capital shall provide to the Commissioner an updated written status report of the list of retail installment loans currently serviced by the Corporation. The status report shall include the categories of information required Paragraph 36 of this Order and Notice. The reporting requirement shall continue until the Commissioner modifies the provisions of this Paragraph of the Order and Notice.
IT IS FURTHER ORDERED that Condor Capital shall immediately place all payments collected from Massachusetts consumers relative to any motor vehicle loans serviced by the Corporation in a separate escrow account maintained at a federally insured bank.
IT IS FURTHER ORDERED that this Order and Notice shall not be construed as approving any act, practice, or conduct not specifically set forth herein which was, is, or may be in violation of relevant state or federal laws and regulations. The provisions of this Paragraph shall necessarily require Condor Capital to continue to abide by any court order imposed as a result of the Corporation’s pending case in the District Court for the Southern District of New York, Case #: 1:14−cv−02863−CM.
II. ORDER TO SHOW CAUSE, NOTICE OF INTENT TO REVOKE AND NOTICE OF RIGHT TO A HEARING

VIOLATIONS

NOW, THEREFORE, based upon the Findings of Fact and Regulatory Background set forth above, the Division hereby sets forth the following Charges against Condor Capital:
The Division hereby re-alleges and incorporates by reference the Findings of Fact and Regulatory Action Background presented in Paragraphs 1 through 26 of the Order and Notice as though fully set forth.
The Division hereby re-alleges and incorporates by reference the Conclusions of Law presented in Paragraphs 27 through 32 of the Order and Notice as though individually set forth as separate Charges providing the basis of this Order and Notice
ORDER TO SHOW CAUSE
WHEREAS, finding it necessary and appropriate and in the public interest, and consistent with the purposes of the laws governing licensed motor vehicle sales finance companies in the Commonwealth;
WHEREAS, pursuant to General Laws chapter 255B, section 7, the Commissioner may suspend or revoke a motor vehicle sales finance company license on a failure to comply with the provisions of General Laws chapter 255B; and
WHEREAS, finding that the Charges set forth above, if found to be true and correct, form the legal basis for the action sought to be taken under General Laws General Laws chapter 255B, section 7.
IT IS HEREBY ORDERED that Condor Capital shall show cause why its motor vehicle sales finance company license, MV0449 should not be revoked pursuant to General Laws chapter 255B, section 7.
PRAYER FOR RELIEF
WHEREFORE, the Division, by and through the Commissioner, prays for a final decision as follows:
1. For a final Agency decision awarding temporary and preliminary injunctive relief, and any other ancillary relief, as may be necessary to protect the public interest during the pendency of this matter.
2. For a final Agency decision in favor of the Division and against Condor Capital for each Charge set forth in this Order and Notice.
3. For a final Agency decision revoking Condor Capital motor vehicle sales finance company license MV0449, to conduct business as a motor vehicle finance company in Massachusetts.
4. For costs and fees of the Division’s investigation of this matter.
5. For such additional equitable relief as the Administrative Hearing Officer may deem just and proper.
NOTICE OF HEARING
You or an authorized representative are required to file an Answer or otherwise respond to the Charges contained in this Order and Notice within twenty-one (21) days of the effective date of this Order and Notice, pursuant to the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.01(6)(d). Failure to file an answer may result in a default judgment against you. The Answer, and any subsequent filings that are made in conjunction with this proceeding, shall be directed to the Administrative Hearings Officer, Division of Banks, with a copy to Prosecuting Counsel.
You are hereby notified that a hearing on this Order and Notice will be scheduled at a time and date to be determined. You will be provided with at least 10 days’ prior written notice of the time and location of such hearing, in compliance with M.G.L. chapter 255B, section 8. The hearing will be conducted in accordance with M.G.L. chapter 30A and the Standard Adjudicatory Rules of Practice and Procedure, 801 CMR 1.00 et seq. Failure to appear at the hearing will result in the entry of an order of default, summary decision and/or decision on the pleadings against you for the relief requested in the Order and Notice.

All papers filed with the Division shall be addressed to the attention of:

Administrative Hearings Officer
Division of Banks
1000 Washington Street, 10th Floor
Boston, Massachusetts 02118

Prosecuting Counsel for this matter is:

Aimee Desai, Esq. and Nicole Palumbo, Esq.
Division of Banks
1000 Washington Street, 10th Floor
Boston, Massachusetts 02118

Dated at Boston, Massachusetts, this 13th day of May, 2014

Cynthia A. Begin
Chief Risk Officer
Commonwealth of Massachusetts

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Order Condor Capital Corp.

Table of Contents

Condor Capital Corp., Hauppauge, NY - Order to Cease and Desist, Order to Show Cause and Notice of Intent to Revoke Motor Vehicle Sales Finance Company License

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS. COMMISSIONER OF BANKS MOTOR VEHICLE SALES FINANCE COMPANY LICENSING Docket No. 2014-010 ORDER TO CEASE AND DESIST, ORDER TO SHOW CAUSE AND NOTICE OF INTENT TO REVOKE MOTOR VEHICLE SALES FINANCE COMPANY LICENSE

In the Matter of CONDOR CAPITAL CORP. Hauppauge, New York Motor Vehicle Sales Finance Company License No.: MV0449

ADMINISTRATIVE COMPLAINT

JURISDICTION AND VENUE

RESPONDENT

FINDINGS OF FACT AND REGULATORY BACKGROUND

CONCLUSIONS OF LAW

Help Us Improve Mass.gov with your feedback

Suffolk, SS.

COMMISSIONER OF BANKS
MOTOR VEHICLE SALES FINANCE
COMPANY LICENSING
Docket No. 2014-010

ORDER TO CEASE AND DESIST,
ORDER TO SHOW CAUSE AND
NOTICE OF INTENT TO REVOKE
MOTOR VEHICLE SALES FINANCE
COMPANY LICENSE

In the Matter of

CONDOR CAPITAL CORP.
Hauppauge, New York

Motor Vehicle Sales Finance Company
License No.: MV0449