The state Office of the Attorney General has filed a complaint in Jacksonville against two companies and their owner alleging deceptive trade practices designed to target owners of new businesses and licensed real estate agents.
Alfredo Zambrano, owner of Florida Regulation Enforcement Council and Florida Real Estate Council LLC, is accused of violating the Florida Deceptive and Unfair Trade Practices Act.
In the case, assigned to 4th Judicial Circuit Judge Virginia Norton, the state seeks civil penalties, consumer restitution, attorney’s fees and injunctions against Zambrano and his companies.
According to the complaint, Zambrano, operating under the name Florida Regulation Enforcement Council and possibly others, has since 2014 used the names and contact information of newly formed Florida corporations and limited liability companies to send “official-looking documents” through the U.S. mail to solicit payments for “certificates of status.”
The solicitation allegedly gives new business owners the impression that the solicitation is from an official department or agency and that the Division of Corporations requires recipients to send a $65 fee to FREC for a “certificate of status” to complete the process of becoming a corporation or LLC.
In fact, the state says, the Division of Corporations issues certificates of status for a payment of $8.75 for corporations and $5 for LLCs, but the certificates are “entirely optional decorative pieces of paper” that have no bearing on a corporation or LLC’s official status.
“Defendants provide no additional value which justifies increasing the price of certificates of status to 1300% of the actual price” charged by the state Division of Corporations, the complaint states.
Zambrano also is alleged to have, acting as Florida Real Estate Council LLC, created and mailed deceptive solicitations for money to as many as 160,000 Florida licensed real estate agents from 2016 through 2017.
The telephone number at the address listed on the summons for Zambrano is disconnected.
The state contends that the mailings were designed to appear to be from an official government agency called the “Florida Board of Realtors,” but no such agency by that name exists.
The mailings state that Florida real estate agents are required by state statute to self-report criminal convictions on their record to “the department.” The mailings threaten action that could include fines or license revocation for failure to answer three “yes” or “no” questions on the form and return it to FBR with a $225 “fee.”
The complaint states that licensed real estate agents are required by law to inform the state Department of Business and Professional Regulation if they are convicted of a felony, but there is no fee associated with reporting to DBPR.
The Northeast Florida Association of Realtors became aware of the alleged scheme through inquiries from members who received the letters, said spokeswoman Melanie Green.
The association investigated and then sent its members emails warning them about the deceptive letters on March 6, 2017, and again on June 27, 2017, advising “do not pay this invoice under any circumstances!”
But some real estate professionals who received the solicitation may have responded with a payment.
“Realtors can be an easy target because they are used to paying fees,” Green said.
Under state law, any entity or person that willfully engages in a deceptive or unfair act is liable for a civil penalty of $10,000 for each violation. The penalty may be up to $15,000 per violation involving senior citizens, veterans or members of their families or disabled people.
The complaint also asserts the language of the letters violated the Misleading Solicitations Statute by failing to make it clear to the recipient that there was no obligation to make the payment.
In addition, the complaint asks the court to grant restitution from the defendants to “fully reimburse every consumer who paid them money in response to their deceptive, misleading, unfair, unconscionable and unlawful solicitations.”