The Department of Real Estate accused a licensee of fraud, dishonest dealing, and dishonesty after the client failed to report a 2019 conviction for a misdemeanor violation of a Labor Code statute. The licensee had also been convicted of crimes twice before. Alleging a pattern of dishonest behavior, the DRE refused to offer the client a settlement and took the matter to hearing.
At hearing, the Administrative Law Judge rules that the client had not demonstrated dishonesty, and that his conviction stemmed from his failure to secure appropriate insurance for his business. The judge dismissed all allegations related to fraud, dishonesty, or a pattern of dishonest dealing. The judge also ruled that the client had satisfied many of the Department’s criteria for rehabilitation, despite the fact that the conviction was only two years old at the time of the hearing.
Despite the Department’s insistence that the licensee be prevented from practice, the license holder was placed on restriction but allowed to continue transacting real estate in California. This case illustrates the importance of fully evaluating the Department’s criteria for rehabilitation to establish the strongest possible defense, even when the Department’s charges are based on criminal convictions. A strong rehabilitation and mitigation defense can protect licensees even when they face multiple convictions against an inflexible agency.