Temporary Order to Cease and Desist  New Age Financial Services, Inc., dba South Exchange Money Transfers, Nutibara Envios

Date:	09/22/2011
Organization:	Division of Banks
Docket Number:	2011-085
Location:	East Boston, MA

New Age Financial Services, Inc., dba South Exchange Money Transfers, Nutibara Envios, East Boston, MA - Temporary Order to Cease and Desist

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
FOREIGN TRANSMITTAL
AGENCY LICENSING
Docket No. 2011-085

FINDINGS OF FACT AND
TEMPORARY ORDER TO
CEASE AND DESIST

In the Matter of
NEW AGE FINANCIAL SERVICES, INC. d/b/a
SOUTH EXCHANGE MONEY TRANSFERS

Nutibara Envios
148 Maverick Street, East Boston, Massachusetts
Foreign Transmittal Agency License No: FT4152

The Commissioner of Banks ("Commissioner") having determined that one foreign transmittal agent location operated by NEW AGE FINANCIAL SERVICES, INC. D/B/A SOUTH EXCHANGE MONEY TRANSFERS ("New Age Financial" or the "Corporation") under license number FT4152 has engaged in, 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 Massachusetts 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 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.
2. New Age Financial is, and at all relevant times has been, a foreign corporation conducting business in the Commonwealth of Massachusetts. New Age Financial's main office is located at 80 South West 8th Street, Suite 120, Miami, Florida.
3. New Age Financial 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 New Age Financial on or about November 17, 1998, with license number FT1776. License number FT1776 currently authorizes New Age Financial to operate as a foreign transmittal agency at 945 Concord Street, Framingham, Massachusetts.
4. According to records maintained on file with the Division, the Commissioner issued a foreign transmittal license to New Age Financial on or about September 23, 2005, with license number FT4152. License number FT4152 authorized Nutibara Envios to operate as a foreign transmittal agency at 148 Maverick Street, East Boston, Massachusetts on behalf of New Age Financial ("East Boston location"). According to the Division's records, Gloria P. Betancur, also known as Gloria Betancourt, is the Branch Manager who manages this location on behalf of New Age Financial.
5. New Age Financial is a money service business within the meaning of The Bank Secrecy Act and its implementing regulation at 31 C.F.R. Chapter X.

   A. Failure to Transmit Funds

6. 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...

7. 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.

8. On or about September 16, 2011, the Division became aware New Age Financial's agent failed to transmit funds received by the Corporation's East Boston location for at least one transaction to a beneficiary in a foreign country within seven days following the receipt thereof.
9. Based upon information and belief, on or about September 6, 2011, the East Boston location operating from 148 Maverick Street, East Boston, Massachusetts received funds for transmission through New Age Financial of approximately two thousand dollars ($2,000.00) on behalf of a Massachusetts consumer, ("Consumer A") for transmittal of those funds to a beneficiary located in Colombia, South America.
10. Based upon information and belief, the East Boston location failed to transmit the funds received from Consumer A to the designated beneficiary located in Colombia, South America and those funds appeared to have been retained by the Corporation's agent at the East Boston location.

    B. Failure to Establish Adequate and Appropriate Supervision Over Authorized Agents to Ensure Compliance with State Law

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. On September 19, 2011, representatives of Division contacted New Age Financial's controller/corporate compliance officer to discuss the information in Paragraphs 8 through 10 of this Temporary Order.
13. During the September 19, 2011 teleconference, the Corporation's representative, notified the Division that New Age Financial was aware of the agent's failure to remit funds and had been aware of the matter for approximately one week. The representative further notified the Division that approximately twenty (20) transmittals had not been sent to the appropriate beneficiaries by the agent at the East Boston location.
14. During the September 19, 2011 teleconference, the Corporation was unable to provide any additional information regarding the pending transmittals, including but not limited to whether any money received for transmission by the East Boston location had been transmitted within seven days following receipt thereof as required by Massachusetts General laws chapter 169, section 8.
15. New Age Financial's representative was unable to assure the Division that the Corporation had implemented and maintained certain internal controls and quality control standards in the supervision of its authorized foreign transmittal agent operating on behalf of the Corporation from the East Boston location.
16. Based upon information and belief as of the date of this Temporary Order, New Age Financial has failed to forward money received for transmittal from the East Boston location to foreign countries. It is unknown how many Massachusetts consumers have been affected by New Age Financial's failure to transmit such funds, or if the practice is continuing to date.

    C. Failure to Notify the Division of the Closing of a Location

17. The Division's regulation 209 CMR 44.09(2) states:

    Licensees shall obtain the Commissioner's written prior approval of any change in or closing of a Massachusetts location. Written application to the Commissioner shall be made prior to any such change or closing and shall contain such other information as the Commissioner may require.

18. On or about September 16, 2011, the Division became aware that the East Boston location was not operational and had been closed. On September 20, 2011, the Division's examiners attempted to conduct a visitation of the East Boston location. The Division's examiners were unable to gain access to the agent location and it appeared that the location had been abandoned.
19. As of the date of this Temporary Order, New Age Financial has not provided the required written notification of the closure of the East Boston location.

    Conclusions of Law

20. Based on the information contained in Paragraphs 1 through 19, New Age Financial 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.
21. Based on the information contained in Paragraphs 1 through 19, New Age Financial failed to remit 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).
22. Based upon the information contained in Paragraphs 1 through 19, New Age Financial failed to establish risk-based policies, procedures and controls designed to ensure that an authorized agent operating on behalf of New Age Financial was conducting business in compliance with state law requirements in violation of General Laws chapter 169, regulation 209 CMR 44.00 et seq.
23. Based on the information contained in Paragraphs 1 through 19, New Age Financial failed to notify the Division of the closure of a location in violation of the Division's regulation 209 CMR 44.09(2).
24. Based upon the information contained in Paragraphs 1 through 19, had the facts and conditions found therein existed at the time of New Age Financial's original foreign transmittal agency license application for license number FT4152, the Commissioner would have been warranted in refusing to issue such license.
25. Based upon the information contained in Paragraphs 1 through 19, 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, one agent operating on behalf of New Age Financial has failed to remit funds collected from one or more Massachusetts consumers. As of the date of this Temporary Order, New Age Financial has failed to demonstrate that those funds received for transmissions from the Massachusetts consumer were remitted within seven days of receipt.
26. Based upon the information contained in Paragraphs 1 through 19, the Commissioner has determined that:
    1. The authorized agent maintaining foreign transmittal license number FT4152 has engaged, or is about to engage in, acts or practices which warrant the belief that it 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 number FT4152 maintained by New Age Financial.

    ORDER TO CEASE AND DESIST

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

27. ORDERED that, any and all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 148 Maverick Street, East Boston, Massachusetts, with license number FT4152 on behalf of New Age Financial, 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.
28. IT IS FURTHER ORDERED that New Age Financial shall immediately terminate its relationship with all officers, directors, employees, independent contractors, or agents engaged in the foreign transmittal business at 148 Maverick Street, East Boston, Massachusetts, with license number FT4152.
29. IT IS FURTHER ORDERED that New Age Financial shall immediately process and remit all transmittal orders for funds received from Massachusetts consumers at the East Boston location with no loss to the consumer. It being understood that "no loss to the consumer" shall mean that if the Corporation is unable to remit funds collected for transmittal, the consumer shall be entitled to a refund of all funds and any fees collected by New Age Financial. New Age Financial shall submit a detailed record to evidence compliance of this Paragraph in conjunction with the Report submitted to the Division as outlined in Paragraph 30 of this Temporary Order. Evidence of compliance shall include but not be limited to: receipts confirming the transmittal of funds; check numbers of payments issued by the Corporation to evidence reimbursements made to consumers, and the amount reimbursed to each individual.
30. IT IS FURTHER ORDERED that within two (2) days of the effective date of this Temporary Order New Age Financial 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 September 1, 2011 through the date of submission, of all transmittal orders for funds received from Massachusetts consumers from the East Boston location. The report submitted to the Division shall include:
       1. Transactions that were processed, including those transactions that were paid out, cancelled, voided, and/or reissued through another licensed money transmitter or remain unresolved. If the transactions were processed through another money transmitter, the Corporation shall submit receipts of all transactions processed through the money transmitter.
       2. The Corporation's record shall also include the names and addresses of all Massachusetts consumers from whom funds were collected for transmission. Additionally, the record shall include the dollar amount of all transmittal orders for funds received from Massachusetts consumers and a detailed list of any fees collected by the Corporation for the transmissions.
    2. A detailed record, prepared as of the date of submission, of an 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 New Age Financial's failure to remit funds, including but not limited to, any late charges incurred or penalties imposed on accounts.
31. IT IS FURTHER ORDERED that within five (5) days of the effective date of this Temporary Order, New Age Financial shall reimburse all fees collected by the Corporation for any transaction in which the Corporation received funds which were not transmitted within seven days following receipt thereof as required by Massachusetts General Laws chapter 169, section 8. 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, 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.
32. 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.
33. 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 22nd day of September, 2011

By:
David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts

(Temporary Order terminated upon entering of Consent Order on December 20, 2012)