BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY ...On Aprii 16, 2008, tlie l3oa1;d issJ~ct C,ertifl~cl...

BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY DEPARTMENT OF CONSUMER AFFAIRS

STATE OF CALIFORNIA

In the Matter of the Accusation Against:

JASON M. SMITH Certified Public Accountant Certificate No. 101208;

J. TIGER CONSULTING, Fictitious Name Permit No. 2374;

JMSMITH, Fictitious Name Permit No. 2718; and,

MONROE SMITH ADVISORS, Fictitious Name Permit No. 2929,

Respondents.

Case No. AC-2015-25

OAHNo. 2016090487.1

DECISION

Pursuant to the California Board ofAccountancy's (Board) authority under Government Code section 11517, subdivision (c)(2)(C), the Board hereby revises and corrects the following technical error in the Proposed Decision:

• On page 20, paragraph 5, replace the word "Bureau's" with "Board's." .

With this clarification, the Proposed Decision is hereby adopted by the California Board ofAccountancy as its Decision in the above-captioned matter.

This decision shall become effective on f\uq\.l&+ Zf;· L?c\"\

IT IS SO ORDERED this 2-6 day of July 2017.

President California Board of Accountancy

BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY DEPARTMENT OF CONSUMER AFFAIRS

STATE OF CALIFORNIA

In the Matter of the First Amended Accusation Against:

. Case No. AC 2015-25 JASON M. SMITH, Certified Public Accountant Certificate No. 101208;

J. TIGER CONSULTING, Fictitious Name Permit No. 2374;

JMSMITH, Fictitious Name ~ermit No. 2718;

MONROE SMITH ADVISORS, Fictitious Name Permit No. 2929,

Respondents.

OAH No. 2016090487.1

PROPOSED DECISION

Administrative Law Judge Karen Reichmann, State of California, Office of Administrative Hearings, h~ard this matter on May 9 through May 11, 2017,in Oakland, California.

Geoffrey S. Alle~, Deputy Attorney General, represented complainant.

Respondent Jason Smith represented himself.

The record closed, and the matter was submitted on May 11, 2017.

FACTUAL FINDINGS

1. Complainant Patti Bowers made the first amended accusation in her official capacity as the Executive Officer of the California Board of Accountancy, Department of Consumer Affairs.

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2. On Aprii 16, 2008, tlie l3oa1;d issJ~ct C,ertifl~cl P~b~ic:Accountant Certificate No. 101208 to respondent Jason M, Smitll.. the Certificate has been in effect at all times relevant to the allegations in the accusation, with the exception of two periods during which it expired due to respondent's non~compliance with continuing education requirements: August 1, 2012 through.October 8, 2012, and August 1, 2014 through September 18, 2014. The Certificate has been renewed through July 31, 2018.

3. On May 21, 20l2, ~esponpent was issued Fictitious Name Permit No. 2374 for "J. TIGER CONSULTING.'' This Fictitious Name Permit has an expiration date ofMay 31, 2017, unless renewed.

4. . On March 20, 2014, respondent was issued Fictitious Name Permit No. 2718 for "JM SMITH." This Fictitious Name Perniit has an expiration date .of March 31, 2919, unless renewed.

5. On October 15, 2015, respondeht was issued Fictitious Name Permit No, 2929 for "MONROE SMITH ADVISORS." This Fictitious Nam~ ,~t?rll,li~ h~s ~u.e~pi,r~tiW~ d~r~of October 31, 2020, unless renewed.

6. The first amended accusation alleges 12 causes for d~~cipline;, The al~.eged violations came to the attention of the Board as the result of five complaints that were filed against respondent. Most of the underlying cdnduct oceq.r.recl in 2012.

Dennis Young Complaint (ClientsA.S.M. andD.P.P.)

7. Dennis Young is a certi~iedJ?.ublic,(\.ccountant in Mountain View. In 2012 Young acquired two clients who had recently been clients of respondent. Both clients had become 1~espondent's clients after n~spondent pu~ch.ase.d.the bookkeeping practi?e,of their former accountant, Bernard Stuehler. T.P,ese two clients· owned small businesses, A.S.M. and D.P.P: . 1

The clients toN '!o~UJ,g that rysp~mdent refu.s13d to pr()vide repo!ts that hac;l been paid for and refused to retrii'n docunieri'fs~·beduise· he chtimed thithe"\.Vas owed motiey. Young telephoned respondent, who yelled and swore at.hima'fl:q.refm~yd tc? prov~d~ t'tle requ~_steddocuments.

A.S.M. anti D.P.P: 'provided Young with c'Ompilatioris that had been prepared by respondent. Young checked with the state peer review committee and discovered that respondent was not registered for pet<rreview. It w,as Young's understanding ·a.s an accountant that any accountant peif6tin'ihg cdm~hdtions' iras required to be registered for peer review. Young visited respondent's website and saw that he was practi~ing under a fictitiOus' nathe (J, Tigei''Constilth1g)that WC\S no:t r~g1st~red WitHthe :Sclkrd.·

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1 Respondent's former clients are referred to by initials to protect their privacy:·

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Young believed that respondent's actions violated the Board's regulations and filed a complaint with the Board on May 16, 2012, alleging that respondent failed to return client documents, was not registered for peer review, and was using a fictitious name that was not registered with the Board.

Young provided the Board with copies of email exchanges between A.S.M. and D.P.P. and respondent. In an email date May 4, 2012, respondent wrote to clientA.S.M., "I will need full payment before releasing any documents."

Respondent ultimately returned the documents to A.S.M. but never returned the requested documents to D.P.P.

Young testified at hearing and described unpleasant interactions that he had with respondent. A week prior to hearing respondent sent an email which Young interpreted as threatening to sue him should he testify at the hearing.

8. Gogi Overhoff, an investigative CPA for the Board, conducted an investigation ofYoung's complaint.

During the course of the investigation, Overhoff mailed many letters to respondent at his address of record with the Board. Several of these letters were returned by the postal service.

On July 26, 2012; Overhoffwrote to respondent informing him ofYoung's complaint and requesting a written response within 30 days. Respondent was advised that failure to respond during this period constitutes a violation of California Code of Regulations, title 16, section 52, and Business and Professions Code section 5100, subdivision (g). Overhoff did not receive a response from respondent within 30 days.

On August 29,2012, Overhoff sent another letter to respondent, reiterating the queries contained in the first letter, and asking for responses and documentation relating to additional queries. Among the documents Overhoff asked respondent to provide were course completion certificates for continuing education courses. A response within 30 days was requested.

Respondent replied on September 15, 2012. In his response, he signed as "Jason Smith, CPA, CFP, MBA, MS." Respondent wrote that he had not replied sooner because he had been on vacation for five weeks, was undergoing tests for health issues, and had been the victim of fraud· from the seller of a business he had purchased.

In the letter, respondent explained the difficulties he faced from having purchased Stuehler's practice and accused Young ofharassment and of poaching his clients with the help of Stuehler. Respondent acknowledged in the letter that he experienced, "a-leaming curve with the operational and licensing component ofmy practice."

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~ha~ he had 'not .res~onded; to ~~r' S~~Y·:·~6.an4 Au,~St .29)~~ters..

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~espo~4ent replied t~,J?is fetter o9.' November 9, 2011, and attached his September 15 letter to his respoP:se. In th.e Novembe~ 9, 2012, letter, respondent stated: · · · · · · · ' ·

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· r di~ P-9~ [impose] ~fee. for retur~~~g .Ciient docume~ts,'I . . imposed a fee for providing, ~qditioJJ.a,l cop~~.s of W?rl~ t,tlrea.dY, •·· ': ; ; su,bmitted to those clients. [~] The compilations for A.S.M. and . ,D,.,J;».P. wer.~uverformed~pn~y:.for a sho~~ period oftime. [~] 'fh~ . bottom line is that these "clients" are old fashioned and when . ·. · taking over the practice they would not comply w!th my . ' · · r~qu,ests fp s.u,tnn.i~.t~~ir .fiV~gs yi.a ~lectt:m.J.ic format.·: T~fJS,, they . P!9.q~~~t.in~.~<r~ ll:ttd· ~4~n pr_t{~~:qted with the gr?~S neglig;~mce I'pinpointed 'from their pdor accqu;ntant they immeqiat~ly . . changed CPAs.

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· 10. ··:overh~ff'revie~e·d two d~cumet~ts pr~p~m~d,hy !~~Rq~deJit ~or.cl.iept&.A~~·Mi. (dated February 14, 2012) and D.P.P. (dated February 15, 2012). Both documents featured a c?v~r}~Ft~?f~ ?~ '.'r~~!P.~r Y~?:W;;l}~~~u.g"I~t:ted1:~~9, ~h.~f st~ted: . " . , ... :

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.. We have compiled the accompanymg balance sheet'of [client] as of December 31, 2011, and the related statements of income ~pdr~t~W·Y4 9~Ri.J}&~.a~?·:F~~~.tl~\Y!S ~qr :t~e ~z..1~19nt~s :t~~U. ~:n,..dted, ~1.1 aGP9f,dan~~ w1th. Stat~111enton Standm:ds fo.r Acc?u#t~~g: ~~4 ~~~~ew.s~~v{c~sissued_ ?,Y tJ1e ~er~can' Insttt~te:9f,Crrffrt~d,Acc91J.P.tant~..

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Acompilationis.limited:topres~~fi~{irithefornioffin~nciai Matewents ip.~qrmation th~t ~f:l, t~e represeptation$ .of ffi.a~ag.e~e~t< ~~ 1~~~!3 ~ot ap.~ite?. 9i r(}vie~e~the ~Y,~qmpap.ywg fin,.anctal. state91yMS ap~, afc~rdu~gly,, ,do ;q.~t ~xP:~~s~· a119p~~ibnor apy ,?tlir~lf9!1TI. qf a~~u,!.a~~e .Qn th~tf\.:

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Attached to the cover letter for each client was a balance sheet, statement of income, reco~cjl~Mio~ s.~mm.ary, 3;pj1J~~!ng jo,urn~l entrjes, an,d. ,generallegger.. Over~of{ ~X.:plained that,in·h~rqpj~~o'n a~. a CP,A,..~v~~tigator with th~ ~o~r4, these do'qu11,1ents co#sdt\lte .... ,... ;. comp.~l~tio~s. · $he note(tliaf r~S.P:o:pde~t u~·~d· l~riw!.~ge. i~dicating .~·coili.pPatioP.· and r~:fcrrr~4 to 'the ·~tatement' o'n Standiu:c18 for A~9o~.~t!ri~'1l.*~-~e\f~~~ ~yrv~p.~s~: ·. ·: ,· ;·.' ... · ; , ... l· · : ..·' _· ·. ···:.· '

. . Ove~·~~ff c9nclud~d th~~ .. l'espon~~t;t~'s p1·e_p:~ration pfth~ two compilati~ns ~';\& de~i~~~nr ~n, ~~~y ~~sp~cts;. S~e;not~q ..t~~tl '~ :r.r~p~r,ly P,~r!~lr;ll~d F<?~~il~tt~n;~~0~~?.' cont~P a tttle, an e4plan.at10n of th~ responsd)llttles· o:t the accountant and the cltent, and .an. . . engagclili.erit iett~i~' au bfwhl.qh' ~'ere 'missihgj. ~ S~e further notrid ~thatta#. ~dc~Hint~#t P,~ep,ari~~ a compilation is required to look' for glaring'errois. ln :tier' opin1on, there was· a glaring' etf6'r :

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in the A.S.M. compilation in that an item with a negative balance was listed as an "asset" when it should have been listed as a "liability." Similarly, Overhoff found what she believes is a glaring error in the DPP compilation, in that respondent listed a credit card credit as a "liability" when it should have been listed as an "asset." Overhoff also found the compilation deficient because the cover letters both stated that a cash flow statement is included, when none were. In addition, respondent failed to include a statement reflecting that he was not independent. Such a statement is necessary because respondent performed underlying accminting.services refleCted~ the compilations. Also, respondent failed to adhere to the Statement on Standards ·for Accounting and Review Services, as he promised to do.

Overhoff concluded that respondent's conduct r~gru:ding the compilations constituted gross negligence or repeated acts of negligence, in violatio~ of the laws governing accountants.

Overhoffexplained at hearing that' accountants who perform compilations must register for peer review and must take continuing education courses in Accounting & Auditing and in Fraud.

11. Overhoff reviewed respondent's 2012 renewal application and a peer review reporting form s-qbmitted in connection with the application. On the application, respondent stated that he was not subject to completing Accounting & Auditing and Fraud continuing education courses. In the peer review reporting form, signed by respondent on August 16, 2012, respondent answered ''No" to the question which asked whether he .had performed accounting and auditing services requiring a peer review, since the time of his last license renewal. These answers were false in light of the fact that he had prepared two compilations, as established in Factual Finding 10. ·

Overhoff observed that respondent had not complied with the Board's requirements· relating to continuing education when he submitted his 2012 renewal application. Respondent did not complete 20 hours of continuing education in the first. year of the renewal period, Respondent did not take any continuing education courses in Fraud or in Accounting & Auditing.

12. Overhoff observed that respondent identified himself as a certified finan~ia:I planner on his website and in email communications and written communications. Overhoff discovered that respondent's certified financial planner designation expired on July 31, 2012. Respondent continued to use this designation after that date, including in correspondence with Overhoff.

Overhoff observed that respondent's website suggested that he was licensed as a CPA in Illinois. She researched respondent's status as a CPA in the state of Illinois and discovered that he was registered, but not licensed, in Illinois.

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13. , Former ~liel).t B.B. testified .at the hearing. She w:as a cliel}.t of Bernard.. Stuehltfr,b~f~re ~ec.o~ning.a qli~nt of.responqe~t.. B.B.. 'slate fatl~erhad qe~1\a cli.Y11t p;f. .. Stu~hl~t·'s.for n:~apy years.

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Towm:qs t~e end o,f ~0~2,,B.:S. b~_P,~tpe dis~ppo~nted with r~sp01ident's seryt~~W a.p.d decidec,l to find .. a n~w ac;;countant. .~~e macJ~---~umerous ,calls to. re~pon.d~nt, :: asking for him to return her records, and received no response. On November 30, 2012, h~r., attorney, John Breckinridge, sent a letter to respondent, asking for "all ~·~9~r¢ls/gocUll1enW/:(ile~'~ l:eladng.to,B.:a... ~_.he;t ~usin~ss, and her late fathef•·:R~S.}q9,W:lent did not responq tq BF~qld:nrid,g~'.s l~tter. · On Decen1:b~~ •?.0, +O 12,. :I,3re~k~r~ri~.ge 1 fil~d~a iCPmpla,iiQ.,t.. with the Board on behalf of B.B. , .1:. , . • • ,. •

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_Rrspo11dept .~ep.t B,.B.. a;n e'~~il. o:q _Decl;):mb.vr 23~. 2012, ,in·;w)1iqh 4e .wrqte, •' '

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I apologize : • • '

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immediately after receiving your request for copies of the r~.co~ds, I ~1ay:e.: 1..• ,,:Let this he official.~pp.~e,.that,Jqo.;qot ,l1a,:y~..· pos~~w~~o.n qf t~urprigina~.sour<;e do.c;~Jpe~t.~~i. ~ dq ,ha:v~_\popies i i. oft~x r~turn~,-sa~es tax retu,rps, qnd.w<;>r~f?apers,.cr~~~t(}d a~~: CPA. This is. MY p:rope!ty., I am·happy to J.1;1ak,~.you copies to ai~)D:.~O\lt._~Sf:~te:pa:s~: B,:pw~v;~~'l 1w:i~lp.yyQ to,:Hha~ge_.~;.~ .... , :r

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Bernie Stuehler and workpapers for the 3 q-g.art~r~Aa~si~ted yq~ .with. I will need a retainer of $500. My billing rate is $325 and

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B.B..refused to pay respondent, and he never returned ,I ,

aR-y.d<?,9)lmentsitp_B~~~·i B.B. explained that as a result of not having certain documents in .a timely fashion, she was no~.able..tq t~~~~x_f:il;e..h~! st~t.tf.l-J-P.etnploy~ent t~;~-~ ~p~w~~ ~§~es~~~P!f!Hr~~ l;>,y the ~t.~te.

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i7 ... , 1C.C.is ari~~he~··ior~ier client ~f Stu~hler's." c~c. resid~~~ in.Ne~~~;a;:_q.cl· ~J~~ a complaint with the Board on September 11, 2012. C.C. alleged that he provided tax re.9ord~ to r~~pq~d~n~,f~r: fi~f~g,~is ~P~~} tar: r~t9;f9-' ln Ap!~l::?R121. ~~~JlO,A?,f?qH~lyd a~l extens10n. p.c~ 1pq_JI1r~9 _~69~t th,~ p~ogr~ss o;n,.th~,retupl.Pfl ~eye_ralqc,sa~f~I}.S_f~om M~y through August. Responden~. e~en!~~~~Y, ~e.l}-f~~p; ;ap., lfll~~g~r,~ '~~~ft:' ;.f;~~~l~·~ ¥}; ~~1~88~, ~~d: demanded payll1:ent. C.C. pa1d respondent $675 ·on August 30, but tespondentp.t1ll dtd not provide a complete tax return that he could file with the IRS. C. C. also related· difficulties he had contacting respondent by phone and email.

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Overhoff investigated the C. C. complaint. She learned that C.C. hired another tax preparer'to file his 2011 return. The IRS accepted the return, which it would not have done had a return already been filed by respondent.

On March 8, 2013, Overhoff sent respondent a letter regarding the C. C. complaint, requesting responses and documentation. Respondent was advised to respond within 30 days. On March 15, Ovei:hoff emailed the letter to respondent, as a eourtesy. ·Respondent wrote Overhoff an email on March 17, in which he wrote:

Wow... a complaint? ... This guy is unbelievable ...hejust requested another copy on the 12th or something like that. And he owes me money. Unbelievable ... another one ofBernie · Stuehlers old clients ...the business I bought with a bunch of gross negligence in prior work ..Again .. .in the process of suing the past accountant.

Respondent did not respond to Overhoffsspecific queries and did not provide any documentation until Overhoff contacted him again in May 2013.

M.F. Complaint

18. M.F. testified at tlw hearing regarding a complaint she.filed with the Board on June 5, 2013. M.F. is a bookkeeper with an office in San Carlos. Respondent previously operated his business in another office in the same building. M.F. became acquainted with respondent in 2010 and used him as an accountant.

M.F. became aware that respondent was trading in commodities futures. She agreed to invest money in respondent's trading activities. In January 2012, M.F. wired $50,000 of . her retirement funds to respondent's investment entity, Tiger Capital Investors, L.P.

M.P. never received any reports from respondent regarding the performance bf her investment. She received a few informal email updates fwm respondent's associate, Tony Mak.

In November 2012, respondent notified M.P. that all her money was "lost." He explained that there had been a failure in trading communications at a critical moment and that all ofthe investors' funds had been "wiped out." M.F. never received tax documents for the losses.

19. M.F. stated that respondent moved from the San.Carlos office building around January 2013. At this time, she observed stacks of documents belonging to respondent in the building's garbage receptacle, including her own tax return containing confidential· information. She retrieved a large stack of documents from the garbage which included

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confide.nti~l, jnforo;u~ti~.n ~f ?,tp.~r .iJ.Isliyi~t;tals ~s, .w.ell ~s a larg~ nu111:?~~J?K ~~<;>mwed envelopes

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20. 2013, I I

On July 31, Overhoffwrote a letter :

to respondent • • I

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M.F. •

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compl~il)t. pverhoff directed .rrspondent to t:~SP,Ol~~.and ~.ttnd ~uppolitil}g ,d,oc~ll1~n.ta~ion by August 30;.~013., .O,y~r:hoff sen~ tlw letter by e-m~il ~swell as in the·rn,aif. .ln,here,mail, she remind~cfr~spondef1t thatJhy Bqard i~ reqrt1rvd ,tq send o~~cialc9~1l'P~Pond~twe tp th~ ad~~Q~~ of record. ·Respondent wrote Over~off an emaii 'sta~:p~ ·t~at ~M~li',; :~W;~s r(ep~~}tfy ~l~arged vv'ltl?fl'aud ... and ot· settled a civil suit for stealing [h]er clients funds. Its been recently discovered she has mental health issues an,(]. tal<:e :m~ds."· Overhoff asked ifre~ponden~wpuld be providing any addition.a). responsep .atid

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r~sp~ndent,replied: '. ',,

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M.:f,.,l}.~Y~f: il1;len.tio,ned a Ql'Aproblefll.·. ,Ft~~the~ PJ.o,re. ~h~; .•.. ~~ppe.d !O,tJt,.~d sa~~.I.. ~h~v,ld ~e~er,.contact her or:herJe~a~~. . domestic partner ... so can't resolve whatever issv~..it.,is if I . . .. , , wanted. Good news is I have 184 happy client and dont take riff raff cli~~~.~w~ymq~e. , . . . , ;,·.

~i. ·. ~ :,_!~ : ~·.;· .. ; -!J And a few minutes later, resporide~t wrote: . •....

I can complete a more complete response. All I know is that it . ~s a: P¥blic ,recprd an~ she came .to me fpr ~~set proteoti,o.n to .. . hide).J::! :QJ.qney. ·.Sh~ .creaied numerous. e!)t#tes f9r. w,hich J , : :. ·•. ~ssistedJii)he t!lx P,(ep.., ;She ~ign.ed'.o~f. on i~ ~nd(didn~, c~arge' ' ' . ' ···herformyworkanc1la6or. l\ · · '-· ·. ·••

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Onl-\'!lgust 9, r,espo,ndent ~ent.another emaU. to. Overho;ff,. promising a. for~~! reply soon. R~~~q~d~n~ cHd.'not pr~vlde ~ny,{~~~t~e.~ mspop~~. r!ega~(l~n~\he ¥:~.· co~pl~iti~ for, ~e~Hr.~lr . : more mont&. . · · · ;, "... ;.· ,.. :... 1,. . ,., .·:·::,

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.. · . ,

:,1· . ,

. , , ... ~ I ' • l ,r · , ' 1 I J ' ,I • , ,: ,l ; ..•·

• .. •,,

21. ,. 1 ,,,•~.,~' ' .. I·~~,,. f ·.~~ ,.''' i.t ~·~·,: ~ .'', ~·:•

Ari. investigative heiui:ng was held on january.I' '1''

30, 2014', l;l

regarding I'' •' •. f·,,1:, ;t •

a11'four l•: ''

. complaints discussed above. Respondent arrived late and was represented by counsel.

)' . '··l . ':'· •''•I I. I' .-·.l"·t' , .. ·' :!: •· .. · .. \. ~- .. ~1' ; ;~'11 ; I ·). ~(,.lt'•' I 1 ... · . .} $P ~

:''9n.:.~~~rwt~Y 1o~;~~~4, .9v~r):loff~?nt r.Y;~·~PP;cl~nt~!·f9,1Jo.w-uJ?.le~ter s.e~lql1~· \1.11·'·.. ... -i .:

'-' ::. ·i ... I

q~:c~p~nt~?. ftl1d r,.espo:o,~~s to iss'U~S .tha~ h~~ bee~ ~afse.<;l .~t· 1tp?, Iny<;}s~igadv1~ ~e:~ri~~· ,!¥.~ .:. : . 1etter contamed 3b quenes, pertammg to the four complaints investlgated by Overlioff.. , . ·,: Respondent

. was directed

• to respond within 30 days. ·

" . ". I

.. ~ n ~·: : . : ~I1f~'i~fter ·~~t.6~.Marc~ ·~ 0~ 20i ~. res~:?.n~~gt~s.~.oun~ei 'w~ot~. th~t4~!i~a~ 'Ypi·ldng ~~. '· a response., ,~;nd ,that S'Orhe ;r~sponses W:(;}!v .'llllJlVftll.~~le

1

because they wquld !eq11;1~~ {,

data ... 1 · • '

g'!ltdJtted •' • · , : :

GQtpputers. . · • 1, . , : . •

A . • r·, ~ · ·: . • t 1 • Jl ~ .l} '-~ • •' , .• •. .! ·. ' . ~

recove.~y.}rot¥ re~PPI1~~ to .t4~.remam~ng que~~Y.~ was,prorrtlsed . , • . .

.PY• • .•

..the encrof'the followiilg'week:i '· . . . '. '" •· ·" .; ' ',. •. '~ .' ' ' ,. ... . .... . ' ,.

' 8

No response was received by April22, 2014, and so Overhoff sent a letter to ·respondent's counsel requesting a response within 30 days.

On June 26,2014, respondent finally sent a response to the :February 10, 2014letter. In this letter, respondent provided the following explanation regardii1g M.F. 's $50,000 lost investment:

Unfortunately, all funds of Tiger Capital were lost within about 90 days of the time the investment of [M.P.] was made. This was largely due to a power outage ·which affected the computer system used by the brokerages in Singapore [which] Tiger Capital was using and which made it impossible to execute trades at a critical time.

Shortly before that time Tiger Capital had been using PFG Best, · an affiliate of Peregrine Financial Group, as its clearing broker.'

Coincidentally, Tiger Capital closed its account with P.PG Best about its bankruptcy filing, which followed disclosures of fraudulent activities. ·

But as a result of that bankruptcy it became impossible to obtain reports needed to prepare proper reports to investors in Tiger Capital. As a result no quarterly investment reports were produced, but [M;F.] was ftilly and immediately apprised of the fact that the entire investment of Tiger Capital was lost.

Michael Pitts Complaint (Client '

J. W.).

22. J.W. was also a client acquired by respondent upon the purchase of another accountant's business.· J.W. is an elderly individual who hired attorney Michael Pitts. Pitts discovered that respondent had filed a tax return for J.W. in 2011, and received tax records for 2012 and 2013, but did not file returns for those years. Pitts attempt~d to retrieve documents from respondent on behalf of J.W. in early 2015. Pitts contacted respondent in writing and placed several phone calls.2 Pitts visited the address of record with the Board and found that respondent was not a tenant there. Another address Pitts found online was similarly vacant. Respondent eventually left a phone message with Pitts stating that he could not comply until after tax season.

Pitts filed a complaint with the Board on March 26, 2015, stating that he had been trying to get the documents since January 2015. Investigative'CPA Gregory Francis was

2 A dechiration by Pitts· was entered into evidence. In this declaration, Pitts stated that he called respondent at a phone number that was one digit off from respondent's phone number. Other evidence in the record established that Pitts did in fact call the correct number and that the phone number in the declaration was a typographical error.

9

• ' • ', ; : ' ~ • • : (; . • lf.l ~ :J ·C ..

assigned the '

matter. He· contacted : I

respon.dent.o'n June 2, 2QlS... Resp~nde~fyventuaUy..· returned the documents, after demanding that Pitts provide a 'power of attorney and travel to his office to retrieve them.

1 ; • ':

Respondent's ; lj

Evidence . ''

'

BACKGROUND ,, ; ,;• : (, I'

23. Re~pondent is.. :Q.ative of St. LoW,s,.. :Mi,~sQJiri.. ,.He.·rellil~t}d.w,it.~ pride that he excelled in sports despite 4f~.smail Statur~.: He describ~cl ,~ngag~ng in risky behavior during adolescence, includh~s .. exp~:~;im~:riting wit~' self-medicatiqn. HY, a~serts t~at h~ became sober in1992, with the help of a substance abuse counselor, an~ haa r.emai~e~ sqp_er,

Respo~g~~t has .a l?a9helol''s dy~r~e.From t~y· UtU,~er~.~ty o.f.Wipois. ~e moved to California in 2091... R~spond<;mt ~9fkyd it~ ~eyy~al.positiqn~.}n:,tp.e. fip.altcial industry, before bec9ming a C.P.A. in 2.0081r . ! , . • . ; :, • . . · • .• . . , . . . • ••

24. :,: 0

, ~; 00 ' • I, :: , • j I ~ i. .,· • ·, ',. •'. , '~·: ~ :~I ~

Respondent purchased the business of 0 ' o, i o o • ' ,

Stuehl~r in ~the fall of. 2011, for $55,000. Stuehler was an emolled agent. In a letter dated November. i; 2011~ Stuehler notified his clients that he was transfl':'rring.his business Jo.respondent. Stuehler w1~ote, "I have turned over to him alt'ofypur re~o~~ds, .going: b;aql~ Y,ear~ a~4'iearst. . ·:..., . ' . . : :

Responde1~t ~e~cl'iped problen.1~,JJ1~t lw_. e~q~tlrit~re.d ·~al~~p.g o~et· .'stpeh~pr's practice. He characterized the clients ~s. "~ySS ~1~11; :d~sir~ble" ;md h~:Vi:t{g l<?~((r, n~t. :w,~~lth than he seeks in his clients. ·

. . . t . ' ' .... , ... . . ; . : •. . . . ~. ~ ·~ ~

Respondent accused Stuehler of incompetence and suggested that it was '1 •

because ' ' '.. '

he '• i ·'

was, sep.ilK apd. m,e;l\t~ly ,ill., ~e~ponqy~t .~l.~p, ~P111P~Af!l€id t~at ..~~~~~~Ier .f~il€id to live up to his pr.qmise .of ~~sisJ~:qg,h~m..for a f~»\ ;nH;>,JJ.ths a~ ,hy t9ok oy~r. thf}.p~a~tj9e. ,~e~pllJ;J.dent r,el~te4.

· that .h~ ~ace~.~- 4il,ef9ni~,, i~ l~gh:t q~ t~~?. .~ac~ t4~t the client~ .. h~~ \J.~en ~~tisfied wit~ Stutt~Ier.';s, work. ~~-Y. .~el0}~"??:;tr1:14 e.it~~el' c~~tir~llf. .with,St~tehle~;:~r,l?l'actiRe~,w~wl) ;qe f~~t. w:ef,~. ·.: , , .. . . : defip~e»,\~.or be i~ tJ:re .a;o/.k,wa~dl pqsjtien. of tellin~,t~~ -<?¥em.~. tl}~t S:ru,epJel'~s w~rl~, h~q been, . : . po~rlyAone. R,~,spqn.dent state? t~~t he w9_r.ke~ h~rd fo.~ l?any)wur~ to try to .~9.Nf1Ct , , Stueh1et~' s: ;el',rpr~, bvt tlwt s~~~e~l~r. ~~t~t·y,e~e.~ .alf4 ;~p,q~~on~~:'1 the. cl+e?.ts .agaius!. ~~~nt.':' l • . . I

./Yr··~ .,i .... l;··~ ·~: ,l:•· 1 :;,J 'r• ·~· ~~:<:1~.. ~~·~·· .r~•ll

fitui~~i~fd1-ire~si~P:~·t:h~t o,!::,,t'l Ll •• , •.•• ·.~·· ~.·:·~' .•; ....... :.

RespCindent also asserts that he was tinder he .~~_,his #~\~y;.. became ill during this time. They suffered respiratory symptoms and fatigue as a result of a toxiq.P·?;91~ .~o~?i~P,p.in. their,. ap~rt~~l\~·. ,' . , . , 1 , : , : . • • • . •• ..., ....

. ~·,~·,:·, .. ,. f;r'~ / t.: ··~\:• .~;

Respondent acknowledged COlnmitting .. ··Pl . ~.~· . . ;t •'•t"·'' .::·:,~ .. ·.:,· ~ .,;· ~· .. ):1~

el'l'Ol'S when: he firstlook ovel' Stuehler's ·. ,·;·

1?-~~Gtic.e...He ,Y;x:pl~it~~d th~t he.h~s le~p1~1d from his mistak~s and.h.as gr~atly_ ~wproved.his praCtiCe~:: ·Jl~-~~~s)?:?W to cov'~f ~lto~ses. ·.Jtesp.o~q~~~ ?P;~~at,~s.. ~s a,~'~aperl.es~:',pr~~~~~e., so he does bot hav~ 1doc:umt:::J;!ts.t,o ~~t~rJ!.t~ chent~·: .. Chtfp.ts·~pl<?~d d9cuments w~1.ch ate.. automatically time~Stamped'; JtMpond~b.t'prides· hiiilself 'in his tkx phihning'ski11s~ He · ' '

I • 1 t' f • ' 1 • • f l • , '; ~ : '1 1 ~ ' ' 1 f 0 ~ ' ,; f

a

i

10

searches for ways to find money for his clients and believes that he takes good care of his clients.

COMPILATIONS

25. Respondent explained that he prepared the tWo compilations in the manner that Stuehler had performed them for clients A.S.M. and D.P.P. He did so because these clients expected them. Respondent did not view these as actual compilations, and he noted that Stuehler had been an enrolled agent rather than a CPA and should not have been preparing compilations. Respondent stated that the clients did not use the compilations and were not harmed by them. He denied preparing any other compilations during his career. For this reason, he did not register for peer review and did not believe he needed to take Accounting & Aud~ting and Fraud continuing education courses.

F AlLURE TO RETURN RECORDS

26. Respondent denied failing to return client documents. Regarding the delays in providing records to client J.W., respondent explained that he knew the client to be elderly and was concerned that the individual asserting that he was an attorney requesting the recordsmight be fraudulently posing as an attorney. Respondent explained this was a common "scamH in 2015. Regarding the other clients, respondent stated that he had difficulty_retrieving some documents due to issues with a hard drive. However, he also testified that he did not have any documents in his possession that he was required to return and that the clients mistakenly believed that he did. Respondent insisted that he .had returned all source documents and had already provided reports to these clients.

F AlLURE TO FILE TAX RETURN

27. Regarding client C.C., respondent asserted that he had filed his return. Respondent referred to C. C. as a "snake" and stated that C.C. never provided necessary documents for filing his tax return. Respondent presented evidence that appeared to pertain to a different client with the same last name. Respondent also asserted that C. C. did not pay him and disputed the veracity of a cancelled check made out to him from C.C.

FRAUD ALLEGATION

28. Respondent testified that M.F. had asked him to invest her money after she had observed him trading. Her $50,000 investment, along with $150,000 from respondent's father, and money from two of respondent's friends, was all lost. Respondent explained that the account was held by Straits Financial. Respondent stated that due to Hurricane Sandy, "the system was done." He attempted to call directly, but was unsuccessful and the money was lost. He has not made a trade since. Respondent accused M.F. of being a "serial plaintiff' with a history of falsely accusing people offraud for her own gain.

·

·

11

I' ~ 1 , ; } , ' ; • ' ... , ~ ~ I I ~ i ' \•,,

FICTITIOUS NAME AND FAILURE TO MAINTAIN ADDRESS FOR J. TIGER CONSULTING

29. Respondent acknowledged that he failed to register for a Fictitious Name Permit for J. Tiger CQI}.S"Qltit)g., so unti)

'

he 1 '

was " • '~

notlfied:~Y,};>ennisYoung' ' . ,' • . ,f

;He '•

explained I . ~ •

that t

he was '' ' ' J

:unaware ' ,/I. .

that 1 ~w' j' I

:was •..

'. 'I' '

required to do ;As soon a&.~e was 11\ad~.a~are of,:th,e . ,

reqq~rement, ,l).e reglstei~e.,d tl~e na~ne. Respon?ent cli4 ~ot cl~(3plj~~. ,th~~ he has .no.t ~pqare.d. ~~r . address o.n rec~~;d f~r J, Tiger Co~sulting, 'Yh1c~ remams h1~. ~opner adqress 1;n.San .9~#Qs~ :.. Ht( ~xp,~~i,net4,. thaq1e is PC? i9llg~r .usi.ng. thi~ p..~me, ~q 1he d~q, !]-9t p~l\e~~. he 11~r4~~~y?·I?~RY~d.~ an tW~a~e..9 addr~ss for it ~~,the Boarc,l. · . : , . .".. . , . ' .

: ·~ o t ' ' • ~ ~ l ' -{' ' + o' '. ·, '· I ' ,>

MISLEADING ADVERTISING . . .i; . . ': •.

··' .,,,~;.· .•.• ,( .. ·' .··,· ,ll·;·..• ~·-- \;~ 'l:~,;:f~h''

30. Respondent did not dispute that his website errm1:e~usly st~ted that ~e was a .Certified Financial Planner and erroneously suggested that he was licensed as a CPAin llli~tois.: Re&po:n-q~nt e?fpl~~ec.l, tha~ hi~ weq ,~.~Y5~l~J?yl' ha~ t~l~p!l inf<;>rmatioD: from respor;td,.~ne~ r~sun~e an4 'N~s ~o blame 1fcw. tlw~e ,nlt,s.~·epres~ntatl0t11· ....... , . ~,. . , . , . , l,. ..... ~· 1

· . ' ·., \ ' r ~ , • ' • ~ -'

FAILURE TO R,E$:POND BOARD INQUIR,IES . . . , . ' , ·.. ' . I':

TO .. <· . '. . . . ' . '

I ' ' ! t ~.~ ;·: ' • .~'d •.

I ., ,. , . , :. ~ ' . . . , , . • ' ' 'I '•,

·'

~

3f .'

Responde~t.I ! ' , , 1 :

. I

~9kn~W,ledged0 t • I , • ,, ,

't11at : , /,

he • ! '

.iri.i'

x'~p1ying •, ,' 0 ·, 0 •

was ''tardy';, to tlu; • o '0 ,

s:s.'''.:: •-' r { I I •

:Boru.:d0 '

.: .,

inquiries and stated that he i;n{tially di4 not i·ealize .l'how sedous ifw~s." He a,dded that .. : ·.: a~·ctiiional d~lay~ wete ·~a~s~d by his. attorney'..·He again statt?cl' t1~3;~ 'he 4ad d1ffi'c.ultie~ ~ ·· : . .· · retrieving infonnation q~e.tp probJeiris ~i~h ow~r.c~tP.p~tv! i~c:h*·qlq~y. ·~;q-:.:,. 1

: .: ; •. ' :··.• .~ .' : i,

CLIENT TESTIMONIALS ·~ : ~-.

32. . . Respo,nden.~ sul).mitt.eq ~~vvral client testimo:pials: It w~s not established wheth~r an~fot tl?-e auth~1·s'.w~ I awai·~'ofthe Bqard1sdi$'9ipli~ru·y proc~edfngs agai;nst .·. ·" ; ~ resp'?n~f?-t· 'tl;le~~ testi~~~~a,~: are. ~~~mmtr~~€(4 ~.~low:,:, · · · · · · · ·

,'t•• :·t~if·;vll•'• f:,,. ·•.,~,' .f.f.; ·' .. ' ~-: . ~ '• ,.'·,; .. : ~

.·•·:

·a.. •

ln ',·

an. email to .respondent 4o;•,

dated ·.

Fepruary. o!

~2, 201'~, .J.\1ic~ael G,o~ski .wrot~? , . "I've finally found the CPA' I've been searching" for:' [Re'spondent] iS'notjust a immhei~ l' '

cruncher. He strives to understand how taxes impact my current fi:P~l;lcial ~itq.a;tion as well as help me plan to meet my future financial goals." ·· ' ' · ·

. rl'.:l)?:'.. , .··I,~·~~~ ,ewai~.to:i~s~~~de~t.d~t~~/anhary.jd,: zd~t~;Ali ·9#a~~kn~ wroty;· ,) I ! :l

''[lt~spondep,t] 4a~ be~p. r~SP9.nS~V~ t.O. my 0;eeds... J-t~ ~as.. prov1ded..e~9ellent taX,: C\,dVlCe ~na ,.. ·prep~;~d.soi~~~ yery' 9~h1pl~~)~~i~~t~~118 01:1 fni b:~ha,t51 ... · ,::. • · 1 1

· · · · · .. :. 1 . : · ;: · .·' ' · ":;

··· ··~: ··· '·ntaI~ttet· dat~4 ~ebr~~l!y .i1, 26:17, <;ertified ·public ~<;couht~n( Ga~y 'IGu#n~·: ... writes that' r~spo~~~rrt ~as te(M~~'d .~~~ tp prov~gy _a. se~9nd opi1li~J1 o~ ~~~, .J?P$1~~?n~.~e tr~~.. recommendmg to chents. i<rutllla descnbes respondent as concerned With perlormmg h1s fiduciary responsibilities and providing quality services to his·clients.

'12

d. In an undated letter, Charles J. Coachman of Keller Williams Realty Silicon Valley, writes that he has used respondent's services for three years and that he appreciates respondent's electronic.system. Coachman adds, "Each year seems to bring new challenges for my wife and I to deal with when it comes to our taxes, having them filed on time and correctly by [respondent] is not one of them."

e. In an undated letter, James Lucas writes that his experience with respondent has been "great." R~.spondent spent time with Lucas to make sure he understood his returns.

f. In an email dated December 20, 2016, Jenn August wrote "Before I started working with [respondent], I was always stressed out about taxes and dreading tax season. When I started working with [respondent] I finally felt like I had a powerful ally on my side."

g. In an email dated October 11, 2016, Joe Me~doza writes that respondent replaced his former accountant, and "stepped up, dug in, and made sure [the] job was· done and done right."

h. In an email dated February 3, 2017, Ungenita Prevost writes that respondent has been her personal and business accountant for three years. She writes that respondent has "patiently assisted me in every way imaginable .... He has a strong work ethic, and does everything by the book .... He doubles and triple checks EVERYTHING, which always gives me peace of mind."

i. In a letter dated January 25, 2017, Christian Baer writes that respondent has been his accountant for five years. Baer appteciates respondent's secured accoimting technology platfonn. B'aer praises respondent's knowledge and expertise,·and concludes "I highly recommend [respondent] as a CPA you Cal! trust as well as leru.n from."

Credibility

33. Respondent's testimony was conttadictory and at times implausible. Accordingly, respondent is found to be less credible than th~ Board's witnesses, who all ·provided consistent, forthright, and credible testimony.

Costs

34. In connection with the investigation of these allegations, the Board has incurred investigation costs of $40,451.73. These costs are supported by a certification dated May 2, 2017, signed by Dominic Franzella, Chief ofthe Board's Enforcement Division.

-~n addition, the Department of Justice has billed the Board $25,327.50 in prosecution costs. The costs are supported by a certification dated May 8, 2017, signed by Deputy Attorney General Geoffrey S. Allen. The total costs for investigation and prosecution is $65, 779.23.

·

13

~ • ;' t ,: ;I

!'ig~tof. 1.'

. . . In the'n~t~be~ o.f cp~plaints):V.~.d an,d ·r~sp<_md~fl:t's delay~ .~n pooper~t~~?~--~itJ;l the mve$tlgatmn,

,,

these costs I ,

~re 0

fou.nd , •

to be reasonable. ,

, . . i .

:, .

'·. ·. :": .~

LEGAL CONCLUSIONS . i ,I .·1

1. ~ .. ' ; .:.·. ::J~, .. ·.··~ ... ,.··.~··,~.·.. : :.~

The burden of proof 'is on the Board to establish cause for discipline, by clear and CQD;~incing evidence. cr;:tq._re v. Stat~Bd. ofAqca~~_!W;tCY_(~?R~).J.Q Gf1~./~pp.4th 294.)

; ' ···' · : : ·. .. • ; d .. : r .! .:~~ ·!. · · .' · ·· · . : ., . 2. ., '

. Business

. ,' ; ' ' r . • ' and

I ' Professions ~ ' '

Code j t I

section ~ ' •

.5100 • . '

states: . ' •

: : ' J •

.. ' ' ' ;,

After notice and hearing the board may revoke, suspend, or refuse to renew any .'.. l".f•.

permit, p1: cert~ficate,~ .. f.o.r .unprofe~~!or:~I ~qp.<;luctthtlt inylm;les,_~ut.i~ n,qp~m.ited to, one or an~C~?lJ;lbipation of th~tollow.ing .. saus,~~.: . . . . . . . . . · .. . , . . . . ·, .· : :· , 1 :! .. ,

[~] ... [~]

·.:! : . ) .::

• ·, I·,'I

. . .' ,,

. .·:

(b) A... :~·: ;'' .... ~·

violation of Se.ction 478, :· •• • ··(; 1

49.8., ;. ,t ~·.• ··~:~.

or 499, '; .)

dealing :

vv:ith • ·' i,i·r···~ .; t... , •

fals~t~tate.1p.ents or. oJ;l;lis.siqn~ in.t~~ .~ppiica~i?!l .~or 'a VP~!1S~, iP obtai~hlg! ·~:.R~rti#R~tY. ~s ~ ~~rt~fi~,~ rw§Mc acqq9pt~ntr i~:' I'

obtaill;iJ}& :regi~tr.~tiori up.~er this. chapt~r,· or,in. 9b~~,i~nip.g a:p~rrp.it to l?raqtice _public d' .. ·., ' .

accountancyunderthis.chapter. . · . ·. ·.... ,··,, _..··· ~-: ,~· ..

.. . . ; ,~P), J?i~.?o;nes_t~.' .-~~uq, gr?~s ne~Ji&~l]~r'.! p~ ryp~~~e~d,,,lf~gl~gen$ .~q~~. ,cQ~i~ted.tn the same or slf.£f~rent; .en~~geme.nt~1 for .th~. samr Pr 9~er,~n,~ ph~nt~, or.an~ 9qJ,IlRH}-~tlpp 9~ ~ :· .!'.•· ' ?n~~gemen~s pr .client~, ~~ch r~~ul~~~g i!l. ~ :viql~~~~m-.R~apP,_hC:aple profe~slptwl-s!~n.~:a~d~, t;h,a~ mdtcate a .1ack ofco~pet~ncy;lll th~ pr~~t~~'l\Yf)ub,t<; accp~nt~p~y, q~ lll: th~ perf<;>~~a:qq~ p~booldceepmg operations descnbed 111 Section 5052.

[~] ... [~] ·I,

: (g) win~ul :yioJ~tioh .?f,i~4~~: ~~~nt(1r.. or:~ny r·~~,·;-qf'regq~.atjp~ p,r_~~ui.gatyd _by t~r. ,; board under the authonty granted under tb~s q~apter.- . '! ,. • . • .

.• ' . \' . J.l . • . ' . . . .

. . • . . .

~ . , . .

. .l •

(D .fi~~a~·?isJton.esty ?~ ?!e~~~,pf fid~c~~f~l~~pon~iP~lit~, 9f ~~y.J~in4.

mat:JR,~t:r.f~1};,".:~~1llrl~!~~~i~t~~~~?~.::i~~~; kf~UdiJl~i.i,,:;,' :·, , ',;

· · •

Jf~• ' . , ,•' I :, !•. :'.

~~~-~rzle~~nt, ~hr~t,,If

~~~~.~~!?~f!~ti~~i' II· , t~ .~ '! ,;') ~·~L .4 ·:' • ~~:,tl' ·~~

..w; ~Bds ~~ pr9p~rty~. o~. ~b!~~~i:tl~)lio~~~\ ':,

: pr~pe~tX~ .. ~~ ~thery~l11;able ~~~l~e!ah~n:HX.Jra~~ul~P:\·m~~~f· or f~!s~. pry~((l}Se.~t ..... ,. ·''~. ,. , . ;,.. .

3. First Cause for Discipline -'Gross Negligence

Businyss and Professions Code sections 5100, subdivision (c), and 5062 provide that the Board may suspend or revoke the Certificate and Fictitious Name Permits of a licensee who engages in gross negligence or repeated negligent acts violating professional standards. This allegation pertains to respondent's preparation of compilations for clients A.S.M. and D.P.P. Clear and convincing evidence established that respondent's compilations did not conform to professional standards in significantrespects. Even crediting respondent's testimony that he was copying the work performed by the clients' previous accountant and did not intend to prepare compilations, respondent's actions constitute gross negligence . Accordingly, cause for discipline for gross negligence was established. (Finding 10.) .

4. Second Cause for Discipline -Fraud

Business and Professions Code section 5100, subdivisions (c), (i), G), and (k), provide tl;lat the Board may suspend or revoke the Certificate and Fictitious Name Permits of a licensee who engages in unprofessional conduct by dishonesty or fraud, knowingly disseminating false information, misappropriating funds, or obtaining money by fraudulent means.

This allegation pertains to respondent's conduct surrounding the $50,000 investment of M.F. in a hedge fund respondent operated. Clear and convincing evidence established that respondent committed fraud, fiscal dishonesty, disseminated false information, and · misappropriated funds in the handling of M.F.' s investment. Cause for discipline for fraud was established. (Finding 18.)

5. Third Cause for Discipline- Disclosure ofCoriftdential Information

Business and Professions Code sections 5100, subdivision (g), and 5063.3; California Code of Regulations, title 16, sections 54.1 and 68.1, subdivision (b); and Civil Code sections 1798.81 and 1798.81.5, provide that the Board may suspend or revoke the. Certificate and Fictitious Name Permits of a licensee who discloses confidential client information. Clear and convincing evidence established that respondent discarded documents containing confidential client information in an unsecured manner. Cause for discipline for disclosure of confidential information was established. (Finding 19 .)

6. Fourth Cause for Discipline -Failure to Return Client Documents

Business and Professions Code sections 5100, subdivision (g), and 5037, and_ California Code of Regulations, title 16, sections 68 and 68.1, provide that the Board may suspend or revoke the Certificate and Fictitious N arne Permits of a licensee who fails to return client documents upon request. Clear and convincing evidence established that respondent either failed to return documents or unreasonably delayed in the return of documents requested by clients A.S.M., D.P.P., B.B., and M.P. -Cause for discipline for failure to return client documents was established. (Findings 7, 16, and 22.)

.

15

~.. ..\. ·~ .,.. . . (

' I ' • ' ' • • • ' • • ? : . ~ ·.•.I .. . i . . • . • : ' •. . . . ; . . • ~

: , ,. Busin~~s. an,o Prof~.ss.imJ:s. Code se.cti.on 5~po, Sl.ll;>diyisi.O,tl (b)~ proy.~9es ,tha~ ~~1e Bc,>~f4· may suspend. o:r: revoke' t4~. C,er.~ifiqat~ ~11<1 Fictitiq.us. ~a11;1~ :P~r:m,.its ~f alice!ls~e wh9 m.a.~w~: false stat~ments or omissions in. an applicatiQn fprlicensl.lr~. ResponcleP,J,fal~ely, stated on •·· his i<h2rtmew.~l 'application at1d on his .ZR:l2:peer f~Y~eW, l:epprting' fO.l'l?J. f.i1~9: w~th th,e ~ <ll( I,;

Board that .h<f had Jlot-pl'Ovided set;vi<r~~ whiv;h requ,ifed, himJegist~r fq1;.pyer r~w'il\'w and .to. ' take Accounti~~.g.& AucJW~1g,.a,nd Bpt~g p~l}ti~U,in,g; .. e~ucatiqn;c?,u;r$es~. ~a.IJ.~e ;f.or. ~U~qiplin:e:; for making a false s~atem~nt ~n ~i} ~pplipatio.n:w~s

.I .

e~tabl~.~he.Q.,•(fiP:d!:ng.1~•

.. ) . . ; ·. , ·

8. Sixth Cause for Discipline c.:Fpilure t.o. Com,ple.t(( aJ::.~~r, .«~view.

. . . Business a;n.ct,Prq:f~s~ions Cp4~ .. ~~~~iq~s, .5109,. Sl,l,b,~ivj.~i.on;,(g) ;~1l~;~$.Q76;. ~nd,.. Califoxn~tl: Code of.R<1gVl!!tion~,; tid~,~6,.~y.cti_qps 40,a,\}q 4Sj.P,rqyiqyJh~~,.th~.BoardiQla.,y, .. . suspend o~ revo~~e .tJ.1~~.9.~xti~i9~t~, ~~9 .:f:f~~tjou~.~~me .P.~r!Pi~tl.Of a..liy~ns~e.·-who. ~aUs tQ.. . partic,ipat~ ,in a pee.r re:vie;w:progra1-11 'Yh.en 'pe.~·fqrlt).iqg, s~rtai:t]. ..~ervice~,).l).cl,~ping ~ .. '.! . . .

compilations. Clear and convincing evidence established that respondent performed two:. .)~ compilations in February 2012 and failed to enroll in a peer review program. Cause for di~c.~plil~e ~~ilur~to c?.t~pl~te .a ppt(r.review:w~s ~s~~~l~~h~4~ ,.(Fit;}.(;lings 7, 11~ ~nd z.s,) s~venth Causefo,r.D.isc~ptin~"7":Dish~n~s~:.. .:· ·: ·. ·'~~ :: (.. .,·. :·. ·· .. ·..· .:.·: . ;·.';.~·:: .. ,

r~!. }; I ~·t · ··

9. ~· : .. ~··. t :.~. ;. ~..~... : .: .. ~ 1 dd~·. ·· .·· .. J !·,.·. ·• ·.•.. · ·>.'..: ~ ·,.;i -~; ··.·~·:·.ir· ~:· .::..: ·., ··<.:).~-~-:-.

Business and Professions Code section 5100, sup.<#;vi~~o;n ~c)~ pro;v;id~s. tJ;lci,q~f1: Board may suspend or revoke the Certificate and Fictitious Naine Permits of a licensee who commits a. di~ho,:p,es~ act.,. Cle~r..anq ipo~vj.lJ.q~n,g,,eyjde~p~\.~~~~bli~.~e.g;tJlat r.e.~pcmdent... committed a dishonest act by accepting payment for preparing a tax return for client C.C.

· w~ic~. ¥e .~id·not .fi~~·,. ;C~~~~ f<?~ 9~~pipl~~yJO!J;1~~4enesty ;wasr e~tf:lblishe~L (fin~jp.g 17.) '.• lo• I .'·:·• ). • .I ;;·'·i; ·····,• : .~ }", I ,t,.; i··?"l • •( ',• • ,:• ;.r/~ ~·· ;, . :,, • \ • '. ,;~_It

Eighth CaT;t~ff for.J?J$q?pljpe 7 Fa.ilure. tQ:~eg(~~erl!i~A~(ipu~1JY.a,rru~, 1> , . · · ~ . · . . . ' '.

10. .' i ':.\: ·.~· ·. ·:. -~-· ·' 11 ••~. ~~. : ,j:. '.:.::·? ... . 't.- : ~: -~· ",1 ' _,;_:•. ;.; . . ' . • ' . : .••• · •. ,··~ < ·~· •

~l.l.~iness.~np.P.x~f~s.sio~~ ·C?~Y.~;~~C.~~p~~ ~~·~Qql ;sv.~sJ~visioJ?., (g), 5050., S,Q~.1, ~nd 5060,,. and. Calif9~9~~.~ody of Regulfl:ti9~s, V~le .16~. sec;t~Q~ ,97, pr9,y;\d,e. tha~J~e.~oa:~;d, ~p.y_,. ; , .suspend or r~vqk~ )~~e:= ~er.t~#-~te. ~;nq:P~rt.i.t~o.U.~, ~att;J.e .. P,Mrll,li~s. 1pf ~·Jiqr:t?:~~e.wP:o,use~ a.. .:· s . .(, fictitious b11;siness name that has not been registered with the Board. The undisputed evidence ~s~~~li~hed th~t.l~fi?SBOl_l,q~p.t~s.eq .t~e :p.ame,J.. ,'Wg~{\CQ~Sl!lti,:n.g p,rtor tp regist~ring this name with the Board on May 21, 2012. Cause for discipline for failure to register a · fictitious ~fl):ne(w:~sl es,ta?~.~~r.,~·. (RiP:~~ng;s ta:n,9 2~.).,: . '; ~ ' ' >: .; I ; . i· ): : i .~':.1 • ; l n .

· .•• , •. : . .' • . , • tl. ,l1' .••. · ; " ~ ·, •. ·:, . ~: . · ·l·1 · i .··t .. ·' r ~ ·. . · ..: •

Nintli.pfl~~~~lC?!..P.f~cfplp?ret ·.. i . ·:

'-,'¥t~le,a:di.!'li A4ve~ti~irf¥.:l;, : · ,:·:···~' ~u:o.,~.n .·1 .r. , • ~. ~ ~ L. "

u·.:::· :, · · ,.: , :: ... ..!\ ,.·:!·.·

0

. tt,: ! .. ·13,1p~i~ps~ ; • '' , , .• •

~~~tt;8f~~&i9~~,Pq4~ ! , • • • • " ,· ; ' o •

~pp#~u~ : • • , ; '•, • ',I ' t . -' \ • ' )• • • ; " • . ') I ~

$~qp,, ·~~~4iyisi?n ;(~)~ illi(~7S9P:r.:~~g, · • \ • ' ' "o ' , • ' • ' ' "; 1 : I :

...Cahfq.t:ma Cp~y8f)\figp,tafl0ns~ t~~lr ,16, Sl;,}qtion,. 63 prQyideJh~t th~ ~9a,rq,~~l.Y. s:u~pe,t.,J.p,gr, ;;, revoke the"t~ei:tifiC.#e. ~~d'Fict#i~us Natjle Permit~

1

q~ a lic.ens~·e vy~~ ~ni~g,~~ ·.~~· iits~. ;. ·::· .::; I advertising. Respohdent~~(website;'d6rrespotiderice,' and emaifs identified respondent as a -

;.:.1

16

certified financial planner after he was no longer certified. Respondent's website suggested that he was licensed in Illinois. Respondent's website used the name J. Tiger Consulting before this name was registered with the Board. Cause for discipline for misleading advertising was established. (Findings 7, 12, and 29.)

Tenth Cause for Discipline- Failure to Respond to Board Inquiries

12. Business and Professions Code section 5100, subdivision (g), and California Code of Regulations, title 16, section 52, provide that the Board may suspend or revoke the Certificate and Fictitious Name Permits of a licensee who fails to respond to a Board inquiry

·within 30 days. Respondent failed to respond to the Board within 30 days to inquiries sent to him on July 26, 2012, March 15, 2013, July 31, 2013, and February 10, 2014. It was not established that respondent failed to respond to the Board's August 29, 2012letter. Cause for failure to respond to Board inquiries was established. (Findings 8, 17, and 21.)

Eleventh Cause for Discipline- Failure to Comply with Continuing Education Requirements

13. Business and Professions Code section 5100, subdivision (g), provides thatthe · Board may suspend or revoke the license of a licensee who willfully violates any of the Board's rules and regulations. California Code of Regulations, title 16, section 87, sets forth continuing education requirements for the Board's licensees. Respondent did not comply with the continuing education requirements for the period of August 2010 through July 2012, in that he did not complete 20 hours during the first year of the_renewal period and did not take any courses in Fraud and Accounting & Auditing. Cause for discipline for failure to comply with continuing education requirements was established. (Finding 11.)

Twelfth Cause for Discipline··- Failure to Notify Board ofChange ofAddress

14. Business and Professions Code section 5100, subdivision (g), and California Code of Regulations, title 16, section 3, provide that the Board may suspend or revoke the Certificate and Fictitious Name Permits of a licensee who fails to notify the Board of a change of address within 30 days after the change. The undisputed evidence established that respondent has failed to notify the Board ofthe change of address for J. Tiger Consulting.

·Respondent has not canceled the J. Tiger Consulting Fictitious Name Permit and the address of record for this entity remains that of a former place of business that respondent vacated several years ago. Cause for discipline for failure to notify the Board of a change of address was established. (Finding 29.)

Appropriate Discipline

15. The Board has set forth matters in aggravation and mitigation in its disciplinary guidelines. Matters in aggravation include: 1) evidence that the violation13 were knowingly committed; 2) history of prior discipline; 3) whether the actions resulted in financial damage to clients or consumers and the amount of damage caused; 4) failure to comply with a notice to appear before the Board or its representatives; 5) failure to comply

·

17

' .~;, '; :• f .:· ~.; 1 ' l, ;,' .f. ~ ,•' 4 1',r' "J ~, . • :j~~.'i ;, ~; ·~.

6.) : ..... :{1 ~'

with c~n,timpng, educatio~~reqljl,irelt\~J]-ts.;. .evi4~U:C~ th~~: tll,~ I~censye f~il~_q ~p. cooper<*~ · . :. with the ~Ra~·d's·~t?;veS.tigatipn; .. ~) tnis~p,p~·opri~~i~1,1 or·ytm~usted Rn,lds,Pr,qt,ht?,t· bre~ql~ o.f. , , .. fiduciary responsibility; 8) duration of yiolations; 9) ev~dence that tht? liCt?PSee lq1ew or .. should have known

athat his actions could harm his clients; and 10) evidence that' the licensee

took advantage of client for p~r~onal gain,. especi,~ll.y. i( d~~- ,to igtw_ra:nc,:~~~ ~ge;, OJ; Jacko~,. 1

sophistication of the client. / : ~· I ~ • . ~~·

rpitigatt91l • • • ,. ' ~:

.M,atte:cs I I ·' ~ ) . . . ,1 . ' ''

it\ incltlde: •

1) .c?operati~n.~~tlJ. tJ}e,..Board's. inve~tigation, other. as;e:p.ci~% .~.n9: t~1ff fl~.jure.~·.par~i~s; ,2). p.~ss~g~,of cqns~q~pl\J.le .tim~ sine~ .th1f1 act~: :o/ith, .J;l,Q: ,~ .

. ~vidence· of recux~ence or, qther misc9:pdu.st; 3) convin~ing~p.r9,ofpf rehabilita~on; 4) · . , :, ! . dempnstratj.op. of remor~e; 5} r,ecognitio;n ·O~ wrongs{~i~g al)d .demo.D:stratio:Q.,' of ~o~reC?ti~~, n.

acti9n; ·~nd..9) :~~r~l;}ction ot the vipl~tAons withoufmApytar.y JWi&es a:IJ:d/or P.~Yll\~:P.t of .:. ; . restitt1tio11. t •· ~ \ . • . : .• : · • 1 • ,. ••• , . ·' : • ~ . • .. .... -":l . : • ~ 1 . . ~ ~ .t ..

16. . ,R,.espQ.n,dent fl,d11,1itted.tl,1at hf} violated qe~t~i;n ·Boar~·regl,ll~tions..1)n,<l ~:x;p~~#'lJ:ah that he had not been familiar with them. Respondent appem·s to have corrected some of these practices. But.r~t11~r t.~an take ~:esponsibil~ty f.or .his a~ti9ps,. responq~nt. PI~med othets, includ~~g his clien,tst, ;He .exp~essed.littl.e, ~e1:n._.wse .for)J.i~. t,P,isqo~quct or for ~~e 4~rW;rne1 .J·u:. < . ~au~ed.. . \. -.·. . . ~;.: .. ;., i ~·)_.;_~ :·j.._, .• :.r.- ~ , .. :·r .. ,.~·:,.~_.-:~.

_.··. ·;'•,J J• .' ·' ..' .. I .. '.',·;.·~ -~ : ·~ :.. '.::.. ~· ;,~ :· .'':.L:'':• f.·: •. ~ :- ·. 'I: ..~:;~: ~ :,•.···· ~~ . Mally;,q!_ the viola~ipm~ resulted in,hflpn to .Bli~nt~~, ~~~pc>.ndyn~ ~ajle~ ~o ;proyicJ~ ~. J, .,, credible explanationfort~e apparent di$apperu:.~P~~.9~.M.l"_.'lil .mpney and the.failur,eto .:. ·J :i;

prov;ide. her with ~ll1Y. documentat!Qn1 ~e~pondent, ~~p~~~.~e.d po. !e:~pol'~e for.l~ay~ng ,"~cmr .: . this $50,000 inv~stment and his own loss.

•.

Respondent's , , '. ." . • 1 • • •

il)steacl accuseq explanation

· ' ' · · • ,(

for .• . ~

1\':l.F.,pf the

' • ~ , • ·• • · , ·' m.enta.UHne·ss

cause ,

of ' :

the ' 'I • •,'

~npJt:aup,, loss

• ,

of ·' .' ,.,

the I •

investment , : 1 ,· ~ r '

a;qcl f , · •

be6)pflne,dwas

' I · ' ' I

implausible. Respq:q.den~ ~ail~'.~. to.~iJ,e, a, ~Jt~:.r€t{prp. fqr, C.,9.. a:Q.d p~~s~n~eq ~yi9eiJCv "Yl?-A~fl. , , \· appeared to pertain to a diffth·ent client. Respondent caused harm to several clients by failing to :.f~tur{.l Aocu:p:1;ent~ \in ~.t~~Jy. ~aspio~ .qn4·.RX": f~nnK tQ pro~ect qm~i~~nti~J.iJ?.forma~ion. ·

' . : . • '. ; : : l I • : •• ' ', ~ •• ,· ' :. ! ~ ~ • ,. f : : •'• ' I . . ~ . . 4 • • •• ! ' ' ' l •

.Respo,:n4crnt ,cymiqifed a qisr~~~!,d ,f.pr:: t~vr r.~es ~:q.¢1 !egu,,l.a.tions g9ve,~ning;. ce~tifiy,4,.,. , pu?lif a~~?p.tt~nt~. pyj; ~ll.lQ:U~.oth~rJhi:t)gs,, f~4in~ tocq:rnpiy .~Hh:PO.nti~~ing .. ~duc,atipn .· ;:· 1;

requi~efP:~P.f~~ _fa~l,~n~ to !~gis~erJ:~r p~~r,.rey~~w:~ andJf!:~l}:ng.;~q ~.e.~~~tFf fo~ ft· W9tW9N~;~JJ~v~~Perm~t. Resp9~4~W was ,,a~. 111 respo:v,du,1g t9 ~9.ard .inqui~~e~ on sevyfa.l qp,ya~i<;l,n>'3 .. HJs. r..... , respop.~~s~,~b~~~~,y)J.t1 ,~~W}P,~Qlllplet~ ~~~.dispqra~ingpf.4is,J~~~~ts~ ,.. ..i'' :; .• :~: ·:. ·.._1·, . _., L

>:~ :.r:i;~··· . , ,.,_n~j: ; ..11; · \' L· ::~~ -~;: .... \;·:·~ •· ~· .. :i!··~:~ ~.':~ ...;qih··:.·-·~·:d ;t··~ -'. !1 > :.~., ,.; ··:.~ ... ;, Giveir'respondent's unc?operative attitude towards the 139~t.~, ~~ ~r.em~)1igh~y'..

unlikely that respondent would comply with the conditions of probation, should the Board grant him a probationary license. The seriousness of the misconduct, ~Q,\l,)?,l,e.4 ..Wtk .. ,. , , ; .. respondent's dismissive attitude towards the Board, compel revocation. It would not be iri the pub!ic i~~r~fsf.!~ a~~C!~r~spo~de1.J,(~?~_c.9~WJJ:te .t:o pr~?Y~e: ~§ ~;,r,ertifi~~ J,J(\lplic ac.~ountant, e:ve~.~t~l1 1 aprobaqon~rr~tcpnse....-...:':··· . :..,-·.1: .• :l.. . 1 ... ··, _.: \!.,

\. 1 ' '; ; ~ •' ; I ; ~ ' ' ,o ' • " ' ·: ; \ ~,: • . ~ .: .. ' , • .,·: • ' 4 I .1'. •' ' ,'· ~ ' •' ' '' '

. ,_ .. ,.... ;

.. '~i,i:: .;~ .... ~ ···.) '!'.• \,·· •• ··.;;~.~~:~:.'=.~·:' ; : • r ~ : .J 1 • 1 ; ' • : .~ • ' • • , ' j \ ! , '. ' • • ' ' , ! •

'• , ... \ ~ . 'I '' ~ (~ . . : ~ ; . ~ .... :~ ' : . ~ .; ..

18

,.

Costs

17. Business and Professions Code section 5107, subdivision (a), authorizes the Board to recover in disciplinary proceedings its reasonable costs of investigation and enforcement In Zuckerman v. Board ofChiropractic Examiners (2002) 29 Cal. 4th 32, the California Supreme Court set forth factors to be considered in determining the reasonableness of costs &ought pursuant to statutory provisions. These factors include: (a) whether the licensee has been successful at hearing in getting charges dismissed or reduced; (b) the licensee's subjective good faith belief in the merits ofhis position; (c) whether the licensee has raised a colorable challenge to the proposed discipline; (d) the financial ability of the licensee to pay; and (e) whether the scope of the investigation was appropriate in light of the alleged misconduct

Taking these factors into consideration, no cause to reduce costs has been established. Respondent will be ordered to pay $65, 779.23 in cost recovery, pursuant to Business and Professions Code section 5107.

18. In the first amended accusation, complainant seeks the imposition of "administrative penalties, pursuant to Business and Professions Code section 5116." No further evidence or authority was provided to support the imposition of administrative penalties. Accordingly, the request for administrative penalties pursuant to Business and Professions Code section 5116 is denied. ·

19

•...,

' ....... ORDER ·•'

.,.•,.

. \ .. 1. ~!· t.c~rti~~d gu\Jliy.A.c~qufl:t~nt 9ertificat~.No. 1Q~2~8,issu.~d.to 1~espondentJasonM.Smith,isr,~vo~y~·.;

' ' 2:,· ~ic,\ftiou~:N~~ne'

.P~r~i~ i~r~:2374, js~u~d to r~~p~nd{1\lt ~a~~ll M. S~ith fqr. J!,/,,

Tige~·· C~P$V~ting,is revoke9. ,<.. . ; , . .1 . , . ,

· i~ •: · ...

• 3~,:., ,.I~ic,~itiqu~ Name Permit No. :~.718, issued to r~sponqent.Jasou M .. Smith. for JM. Smith, is revoked.

4. . . : F~~~it~9¥,~ Na.IJ,l.e ~Pepnit N;o, 2929,,issu~~t to r~spppd~~t,J.ason M, Sm~tb for Mo:o.ro_e S:t,nith.A.C\visors, is.rpv:oked.. ..

5. Respondent shall pay the Bureau's costs associated with the investigation and enforcement.of,this.acpon .P:Uf§~~u~t ~oJ3usiness and ].>~o~es~i<?:P~.Cod~ ~ectjon. 5107, in the amounto.f$65,779...~3... ··,

..·, ·:, · .. · ·'·· ., · ... · · ... .. . .,. . . , .

' . . '

' '

· fr. ,.·.,:r~ •:1! • •. ~,:·.! :.~i~ . . ·~):·:.; . I · ; ~.'1 ··~·.• '·, .· .·,,,';~~; • ·~ : ..•,;, .~ .. :-:

.. · 1

~· '· , . . : , . ,,. ..... :... l· .. · , . ! . ·; : ,. ,

~ , : . , ' : J ~~I i(; ! ~ l 1 t: '" ; . :

"·. ,. · · . . .. ... · .. 'i, · •. · ··i;· . · :·, ••..•.

• i; ' I • :, ' ·i • . ' ~ ' ; ' .... ·'

' I 1, ; ''•\ ·' ' ,.1 ' • f ~: i :· . I' II .• , • r l •

~ ••• •• ·.' :, • t': ... DATED: June 6, 2017.

KAREN REICHMANN Administrative Law Judge Office of Administrative Hearings

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1 KAMALA D. HARRIS Attorney General of California DIANN SOKOLOFF Supervising Deputy Attorney General GEOFFREY S. ALLEN Deputy Attorney General State Bar No. 193338

1515 Clay Street, 20th Floor P.O. Box 70550 Oakland, CA 94612-0550 Telephone: (510) 622-4455 Facsimile: (510) 622-2270 E-mail: Geoffrey .Allen@doj .ca.gov

Attorneys for Complainant

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8 BEFORE. THE· .

9 CALIFORNIA BOARD OF ACCOUNTANCY DEPARTMENT OF CONSUMER AFFAIRS

STATE OF CALIFORNIA

11 In the Matter of the First Amended Accusation Against:

JASON M. SMITH 5450 Thornwood Drive, Suite 0 ~an Jose, CA 95123

Certified Public Accountant Certificate No. 101208

Respondent

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' 16

Case No. AC-20 15-25

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18 J. TIGER CONSULTING 790 Laurel Street, Suite 14 San Carlos, CA 94070

Fictitious Name Permit No. 2374

Respondent.

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22 JMSMITH777 N. 1st Street, Suite 230 San Jose, CA 95112


Respondent.

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1

(JASON M. SMITH) FIRST AMENDED ACCUSATION

-----·- ... ·-· ·-· ......................_, _________,__,_____ ·-- ...... -------- --- ....... -------------- ---·- _, _______ , .................. - -· ______........................

FIRST AMENDED

ACCUSATION

mailto:[email protected]

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I Ii.

2 MONROE SMITH ADVISORS 5450 Thornwood Drive, Suite 0 San Jose, CA 95123


Respondent.

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6 Complainant alleges:

7 PARTIES

8 1. Patti Bowers (Complainant) brings this Accusation solely in her official capacity as

the Executive Officer of the California Board of Accountancy (CBA), Department of Consumer

Affairs.

2. On or about April 16, 2008, the CBA issued Certified Public Accountant Certificate

Number 101208 (Certificate) to Jason Smith (Respondent). The Certificate was in full force and

effect at all times relevant to the charges brought herein, except the Certificate expired August 1,

2012, through August 21; 2012; and August 1, 2014, through September 18, 2014, due to non

compliance with specific continuing education regulations. The Certificate will expire on July

31, 2016, unless renewed.

3. On or about May 21, 2012, the CBA iss~ed Fictitious Name Permit Number (FNP)

2374 to Respondent' for J. Tiger Consulting. FNP No. 2374 will expire on May 31,2017, unless

renewed.

4. On or about March 20, 2014, the CBA issued FNP No. 2718 to Respondent for JM

Smith. FNP No. 2718 will expire on March 31, 2019, unless renewed.

5. On or about October 15, 2015, the CBA issued FNP No. 2929 to Respondent for

Monroe Smith Advisors. FNP No. 2929 will expire on October 31, 2020, unless renewed.

JURISDICTION

6. This Accusation is brought before the CBA, Department of Consumer Affairs, under

the authority of the following laws. All statutory references are to the Business and Professions

Code unless otherwise indicated.

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2

(JASONM. SMITH) FIRST AMENDED ACCUSATION

.. . --------------·----. ---- -··--·-··· ---------- -

7. Code section 5100 states:

After notice and hearing the board may revok~. suspend, or refuse to renew any permit or certificate granted undyr Article 4 (commencing with Section 5070) and Article 5 (commencing with Section 5080), or may censure the holder of that permit or certificate for unprofessional conduct that includes, but is not limited to, one or any combination of the following causes:

(b) A violation of Section 4 78, 498, or 499 dealing with false statements or omissions in the application for a license, in obtaining a certificate as a certified public accountant, in obtaining registration under this chapter, or in obtaining a permit to practice public accountancy under this chapter.

(c) Dishonesty, fraud, gross negligence, or repeated negligent acts committed in the same or different engageinents, for the same or different clients, or any combination of engagements or clients, each resulting in a violation of applicable professional standards that indicate a lack of competency in the practice ofpublic accountancy or in the performance of the bookkeeping operations described in Section 5052.

.

(g) Willful violation of this chapter or any rule or regulation promulgated by the board under the authority granted under this chapter. . . .

(i) Fiscal dishonesty or breach of fiduciary responsibility of any kind.

G) Knowing preparation, publication, or dissemination of false, fraudulent, or materially misleading financial statements, reports, or information.

(k) Embezzlement, theft, misappropriation of funds or property, or obtaining money, property, or other valuable consideration by fraudulent means or false pretenses.

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The expiration, cancellation, forfeiture, or suspension of a license, practice privilege, or other authority to practice public accountancy by operation of law or by order or decision ofthe board or a court of law, the placement of a license on a retired status, or the voluntary surrender of a license by a licensee shall not deprive the board ofjurisdiction to commence or proceed with any investigation of or action or disciplinary proceeding against the licensee, or to render a decision suspending or revoking the license.

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(a) The board, after appropriate notice and an opportunity for hearing, may order any licensee or applicant for licensure or examination to pay an administrative penalty as provided in this article as part of any disciplinary proceeding or other proce_eding provided for in this chapter.

(b) The board may assess administrative penalties under one or mor~ provisions ofthis article. However, the total administrative penalty to be paid by the licensee shall not exceed the amount ofthe highest administrative penalty authori;z;ed by this article.

(c) The board shall adopt regulations to establish criteria for assessing administrative penalties based upon factors, including, but not limited to, actual and potential consumer harm, nature and severity of the violation, the role of the person in the violation, the person's ability to pay the administrative penalty, and the level of administrative penalty necessary to deter future violations of this chapter.

(d) Administrative penalties assessed under this article shall be in addition to any other penalties or sanctions imposed on the licensee or other person, including, but not limited to, license revocation, license suspension, denial of the application for licensure, denial of the petition for reinstatement, or deriial of admission to the licensing examination. Payment of these administrative penalties may be included as a condition of probation when probation is ordered.

(e) All administrative penalties collected under this article shall be deposited in the Accountancy Fund.

STATUTORY PROVISIONS


(b) A licensee shall furnish to his or her client or former client, upon request and reasonable notice:'

(1) A copy of the licensee's working papers, to the extent that those working papers include records that would ordinarily constitute part of the client's records and are not other-Wise available to the client.

(2) Any accounting or other records belonging to, or obtained from or on behalf of, the client which the licensee removed from the client's premises or received for the client's account. The licensee may make and retain cppies of documents of the client when they form the basis· for work done by him or her.

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(a) Except as provided in subdivisions (b) and (c) ofthis section, in subdivision (a) of Section 5054, and in Section 5096.12, no person shall engage in the practice of public accountancy in this state unless the person is the holder of a va1id permit to practice public accountancy issued by the board or a holder of a practice privilege pursuant to Article 5.1 (commencing with Section 5096).

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4 (JASONM. SMITH) FIRST AMENDED ACCUSATION

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(b) Nothing in this chapter shall prohibit a certified public accountant, a public accountant, or a public accounting firm lawfully practicing in another state from temporarily practicing in this state incident to practice in another state, provided that an individual providing services under this subdivision may not solicit California clients, may not assert or imply that the individual is licensed to practice public accountancy in California, and may not engage in the development, implementation, or marketing to California consumers of any abusive tax avoidance transaction, as defined in subdivision (c) ofSectionl9753 of the Revenue and Taxation Code. A firm providing services under this subdivision that is not registered to practice public accountancy in California may not solicit California clients, may not assert or imply that the firm is licensed to practice public accountancy in California, and may not engage in the development, implementation, or marketing to California consumers of any abusive tax avoidance transaction, as defined in subdivision (c) of Section 19753 of the Revenue and· Taxation Code. This subdivision shall become.inoperative on January 1, 2011.


Except as provided in Sections 5052 and 5053, a person shall be deemed to be engaged in the practice ofpublic accountancy within the meaning and intent of this chapter ifhe or she does any of the following:

(a) Holds himself or herself out to the public in any manner as one skilled in the knowledge, science, and practice of accounting, and as qualified and ready to render professional service therein as a public accountant.for compensation.

(b) Maintains an office for the transaction of business as a public accountant.

(c) Offers to prospec~ive clients to perform for compensation, or who does perform on behalf of clients for compensation, professional services that involve or require an audit, examination, verification, investigation, certification, presentation, or review of :financial transactions and accounting records.

(d) Prepares or certifies for clients reports on audits or examinations ofbooks or records of account, balance sheets, and other financial, accounting and related schedules, exhibits, statements, or reports that are to be used for publication, for the purpose of obtaining credit, for filing with a court of law or with any governmentalagency, or for any other purpose.

(e) In general or as an incident to that work, renders professional services to clients for compensation in any or all matters relating to accounting procedure and to the recording, presentation, or certification of financial information or data.

(f) Keeps books, makes trial balances, or prepares statements, makes audits, or prepares reports, all as a part of booldceeping operations for clients.

(g) Prepares or signs, as the tax preparer, tax returns for clients.

(h) Prepares personal financial or investment plans or provides to clients products or services of others in implemeqtation of personal fina~cial or investment plans.

(i) Provides management consulting services to clients.

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(JASONM. SMITH) FIRST AMENDED ACCUSATION

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The activities set forth in subdivisions (f) to (i), inclusive, are "public accountancy" only when performed by a certified public accountant or public accountant, as defined in this chapter.

A person is not engaged in the practice of public accountancy if the only services he or she engages in are those defined by subdivisions (f) to (i), inclusive, and he or she does not hold himself or herself out, solicit, or advertise for clients using the certified public accountant or public accountant designation. A person is not holding himself or herself out, soliciting, or advertising for clients within the meaning ofthis section solely by reason of displaying a CPA or PA certificate in his or her office or identifying himself or herself as a CPA or P A on other than signs, advertisements, letterhead, business cards, publications directed to clients or potential clients, or financial or tax documents of a client.


(a) No person or firm may practice public accountancy under any name which is false or misleading.

(b) No person or firm may practice public accountancy under any name other than the name under which the person or firm holds a valid permit to practice issued by the board.

(c) Notwithstanding subdivision (b), a sole proprietor may practice under a name other than the name set forth on his or her permit to practice, provided the name is registered by the board, is in good standing, and complies with the requirements of subdivision (a).

(d) The board may adopt regulations to implement, interpret, and make specific the provisions of this section including, but not limited to, regulations designating particular forms of names as being false or misleading.

14. Code section 5062 states, "A licensee shall issue a report which confonns to

professional standards upon completion of a compilation, review or audit of financial statements."

15. Code section 5063.3 states:

(a) No confidential information obtained by a licensee, in his or her· professional capacity, concerning a client or a prospective client shall be disclosed by the licensee without the written permission of the client or prospective client, except the following:

(1) Disclosures made by a licensee in compliance with a subpoena or a summons enforceable by order of a court.

(2) Disclosures made by a licensee regarding a client or prospective client to the extent the licensee reasonably believes it is necessary to maintain or defend himself or herself in a legal proceeding initiated by the client or prospective client.

(3) Disclosures made by a licensee in respon.se to an official inquiry from a . federal or state government regulatory agency.

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(4) Disclosures made by a licensee or a licensee's duly authorized representative to another licensee in connection with a proposed sale or merger of the licensee's professional practice.

(5) Disclosures·made by a licensee to either of the following:

(A) Another licensee to the extent necessary for purposes ofprofessionalconsultation.

(B) Organizations that provide professional standards review and ethics or quality control peer review.

(6) Disclosures made when specifically require? by law.

(7) Disclosures specified by the board in regulation.

(b) In the event that confidential client information may he disclosed to persons or entities outside the United States of America in connection with the services provided, the licensee shall inform the client in writing and obtain the client's written permission for the disclosure.


(a) In order to renew its registration in an active status or convert to an active status, a firm, as defined in Section 5035.1, shall have a peer review report of its accounting and auditing practice accepted by a board-recognized peer review program no less frequently than every three years.

(b) For purposes of this article, the following definitions apply:

·(1) "Peer review" means a study, appraisal, or review conducted in accordance with professional standards of the professional work of a firm, and may include an evaluation of other factors in accordance with the requirements specified by the board in regulations. The peer review report shall be issued by an individual who has a valid and current license, certificate, or permitto practice public accountancy from this state or another state and is unaffiliated with the firm being reviewed.

(2) "Accounting and auditing practice" includes any services that were performed in the prior three years using professional standards defined by the board in regulations.

(c) The board shall adopt regulations as necessary to implement, interpret, and make specific the peer review requirements in this section, inchiding, but not limited to, regulations specifying the requirements for board recognition of a peer review program, standards for administering a peer review, extensions of time for fulfilling the peer review requirement, exclusions from the peer review program, and document submission.

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17. Civil Code section 1798.81 states:

A business shall take all reasonable steps to dispose, or arrange for the disposal, of customer records within its custody or control containing personal information when the records are no longer to be retained by the business by (a) shredding, (b) erasing, or (c) otherwise modifying the personal information in those records to make it unreadable or undecipherable through any means.

18. Civil Code section 1798.81.5 states:

(a) (1) It is the intent of the Legislature to ensure that personal information about California residents is protected. To that end, the purpose of this section is to encourage businesses that own, license, or maintain personal information about Californians to provide reasonable security for that information.

(2) For the purpose of this section, the terms "own" and "license" include personal information that a business retains as part of the business' internal customer account or for the purpose ofusing that information in transactions with the person to whom the information relates. The term "maintain" includes personal information that a business maintains but does not own or license.

(b) A business that owns, licenses, or maintains personal information about a California resident shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to·protect the personal infonnation from unauthorized access, destruction, use, modification, or disclosure.

(c) A business that discloses personal information about a California resident pursuant t.o a contract with a nonaffiliated third party that is not subject to subdivision (b) shall require by contract that the third party implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from ·unauthorized access, destruction, use, modification, or disclosure.

(d) For purposes of this section, the following terms have the following meanings:

(1) "Personal information" means an individual's first name or first initial and his or her last name in combination with any one or more of the following data elements, when either the name or the data elements are not encrypted or redacted:

(A) Social security number.

(B) Driver's license number or California identification card number.

(C) Account number, credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual's financial account.

(D) Medical information.

· (2) "Medical information" means any individually identifiable information, in electronic or physical form, regarding the individual's medical history or medical treatment or diagnosis by a health care professional.

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(3) "Personal information" does not include publicly available information that is lawfully made available to the general public from federal, state, or local government records.

(e) The provisions of this section do not apply to any of the following:

(1) A providet• of health care, health care service plan, or contractor regulated· by the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) ofDivision 1).

(2) A financial institution as defined in Section 4052 of the Financial Code and subject to the California Financial Information Privacy Aqt (Division 1.2 (commencing with Section4050) of the Financial Code).

(3) A covered entity governed by the medical privacy and security rules issued by the federal Department of Health and Human Services, Parts 160 and 164

of Title 45 of the Code ofFederal Regulations, established pursuant to the Health Insurance Portability and A vail ability Act of 1996 (HIP AA).

(4) An entity that obtains information under an agreement pursuant to Article 3 (commencing with Section 1800) of Chapter 1 ofDivision 2 ofthe Vehicle Code and is subject to the confidentiality requirements of the Vehicle Code.

(5) A business that is regulated by state or federal law providing greater protection to personal information than that provided by this section in regard to the subjects addressed by this section. Compliance with that state or federal law shall be deemed compliance with this. section with regard to those subjects. This paragraph does not relieve a business from a duty to comply with any other requirements of other state and federal law regarding the protection and privacy of personal information.

19. Title 16, California Code of Regulations (CCR) section 3 states:

(a) Address Notification -Individual Licensees

(1) Each licensee shall notify the Board of any change in his or her address of record within 30 days after the change. The address of record is public information. If the address of record is a post office box or mail drop, the change of address notification shall include the street address of either the licensee's primary place of employment or his or her residence,.

(2) For purposes of this section, "licensee" includes any holder of an active, inactive, suspended, or expired certified public accountant license ·or public accountant license issued by the Board which is not canceled or revoked.

(3) All notification required under this subsection shall be in writing and shall be signed ~y the licensee.

(b) Notification of Change of Address -Licensed Firm

(1) Each licensed firm shall notify the Board of any change in its address of record within 3 0 days after the change. The address of record is public infom1ation. If the address of record is a post office box or mail drop, the change of address notification shall include the street address of the firm's principal office.

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(2) For purposes of this section "licensed firm" includes any partnership or professional corporation licensed by the Board to practic~ public accountancy even if the license is suspended or expired, provided the license is not canceled or revoked.

(3) All notifications required under this subsection shall be in writing and shall be signed by a licensed partner or licensed shareholder of the firm.

20. CCR section 39, subdivision (a) states:

(a) Accounting and Auditing Practice: Any services that are performed using the following professional standards: Statements on Auditing Standards (SASs), Statements on Standards for Accounting and Review Services (SSARS), Statements on Standards on Attestation Engagements (SSAEs), Government Auditing · Standards, and audits of non-Security Exchange Commission (SEC) issuers performed pursuant to the standards of the Public Company Accounting Oversight Board (PCAOB).

21. CCR section 40, subdivision (b), states, "A firm performing services as defined in

Section 39(a) for the first time shall have a peer review report accepted by a Board-recognized

peer review program within 18 months of the date it completes those services."

22. CCR section 45 states:

(a) Beginning on January 1, 2014, at the time of renewal, a licensee shall report to the Board specific peer review information as required on Form PR-1 (Rev. 1/12), which is hereby incorporated by reference.

(b) Prior to January 1, 2014; the date for existing California licensees to report peer review results, on the form indicated in subsection (a), shall be based on the licensee's license number a~cording to the following schedule: for license numbers ending with 01-33 the reporting date is no later than July 1, 2011; for license numbers ending with 34-66 the reporting date is no later than July 1, 2012; for license numbers ending with 67-00 the reporting date is no later than July 1, 2013.

(c) A licensee's willful making of any false, fraudulent, or misleading statement, as part of, or in support of, his/her peer review reporting shall constitute cause for disciplinary action pursuant to Section 51 OO(g) of the Accountancy Act. Failure to submit a completed Form PR-1 (Rev. 1/12) shall be grounds for nonrenewal or disciplinary action pursuant to Section 5100(g) of the Accountancy Act.


(a) A licensee shall respond to any inquiry by the Board or its apr.ointed representatives within 30 days. The response shall include making avatlable all files, working papers and other documents requested.

(b) A licensee shall respond to any subpoena issued by the Board or its executive officer or the assistant executive officer in the absence of the executive officer within 30 days and in accordance with the provisions of the Accountancy Act and other applicable laws or regulations.

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(c) A licensee shall appear in person upon written notice or subpoena issued by the Board or its executive officer or the assistant executive officer in the absence of the execut~ve officer.

(d) A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any Board inquiry, investigation, hearing or proceeding.

24. CCR section 54.1 states:

(a) No confidential information obtained by a licensee, in his or her professional capacity, concerning a client or a prospective client shall be disclosed by the licensee without the written permission of the client or prospective client, except for the following:

(1) disclosures made by a licensee in compliance with a subpoena or a summons enforceable by order of a court;

(2) disclosures made by a licensee regarding a client or prospective client to the extent that the licensee reasonably believes that it is necessary to maintain or defend himself/herself in a legal proceeding initiated by that client or prospective client;

(3) disclosures made by a licensee in response to an official inquiry from a federal or state government regulatory agency;

(4) disclosures made by a licensee or a licensee's duly authorized representative to another licensee in connection with a proposed sale or merger of the licensee's professional practice;

(5) disclosures made by a licensee to (A) another licensee to the extent necessary for purposes ofprofessional consultation and to (B) professional standards review, ethics or quality control peer review organizations;

(6) disclosures made when specifically required by law;

(7) disclosures made at the direct request of the client to a person or entity that is designated by the client at the time of the request.

(b) In the event that confidential client information may be disclosed to persons or entities outside the United States in connection with the services provided, the licensee shall so inform the client in writing arid obtain the client's written permission for the disclosure.

25. CCR section 58, provides that licensees engaged in the practice ofpublic

accountancy shall comply with all applicable professional standards, including but.not limited to

generally accepted accounting principles and generally accepted auditing standards.

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26. CCR section 63 states, "A licensee shall not advertise or use other forms of

solicitation in any manner which is false, fraudulent, misleading, or in violation of Section 17500

of the Business and Professions Code."


It is unlawful for any person, firm, corporation or association, or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any sta,tement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by

the exercise of reasonable care should be known, to be untrue or misleading, or for any person, firm, or corporation to so make or disseminate or cause to be so made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services, professional or otherwise, so advertised at the price stated therein, or as so advertised. Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.

28. CCR section 65 states, "A licensee shall be independent in the performance of

servic6il in accordance with professional standards."

29. CCR section 67 states, "No sole proprietor may practice under a name other than

the name set forth on his or her permit to practice unless such name has been registered with the

Board. Any registration issued under this section shall expire five years after the date of issuan~e

unless renewed prior to its exp~ration."


A licensee, after demand by or on behalf of a client, for books, records or pther data, whether in written or machine sensible form, that are the client's records shall not retain such records. Unpaid fees do not constitute justification for retention of client records.

Although, in general the accountant's working papers are the property of the licensee, if such working papers include records which would ordinarily constitute part of the client's books and records and are not otherwise available to the client, then the information on those working papers must be treated the same as if it were part of the client's books and records.

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12 (JASON M. SMITH) FIRST AMENDED ACCUSATION

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31. CCR section 68.1 states:

(a) Working papers are the Iicensee1s records of the procedures applied, the tests performed, the information obtained and the pertinent conclusions reached in an audit, review, compilation, tax, special report or other engagement. They include, but are not limited to, audit of other programs, analyses, memoranda, letters.of confirmation and representations, abstracts of company documents and schedules or commentaries prepared or obtained by the licensee. The form of working papers may be handwriting, typewriting, printing, photocopying, photographing, computer, data, or any other letters, words, pictures, sounds, or symbols or combinations thereof.

(b) Licensees shall adopt reasonable procedures for the safe custody of working papers and shall retain working papers for a period sufficient tq meetthe needs of the licensee's practice and to satisfy applicable professional standards and pertinent legal requirements for record retention.

(c) Licensees shall retain working papers during the pendency of any Board investigation, disciplinary action, or other legal action involving the licensee. Licensees shall not dispose of such working papers until notified in writing by the

Board of the closure of the investigation or until final disposition of the legal action or proceeding if no Board investigation is pending.


(a) 80 Hours. As a condition for renewing a license in an active status, a licensee shall complete at least 80 hours of continuing education in the two-year period immediately preceding license expiration, and meet the reporting requirements described in Section 89(a). A licensee engaged in the practice of public accountancy as defined in Section 5051 of the Business and Professions Code is required to hold a license in an active status. No carryover of continuing education is permitted from one license renewal period to another.

(1) A licensee renewif].g a license in an active status, shall complete a minimum of20 hours in each year of the two-year license renewal period, with a minimum of 12 hours of the required 20 hours in technical subject areas as described in subsection (a)(2).

(d) Accounting and Auditing Continuing Education Requirement.

A licensee who engages in planning, directing, performing substantial portions of the work, or reporting on an audit, review, compilation, or attestation service, shall complete 24 hours of the 80 hours of continuing education required pursuant to subsection (a) in the course subject matter pertaining to financial statement preparation and/or reporting (whether such statements are prepared on the basis of generally accepted accounting principles or other comprehensive bases of accounting), auditing, reviews, compilations, industry accounting, attestation services, or assurance services. This continuing education shall be completed in the same two-year license renewal period as the report is issued. If no report is issued because the financial statements are not intended for use by third parties, the ·

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continuing education shall be completed in the same two-year license renewal period as the financial statements are submitted to the client.

(e) A licensee who must complete continuing education pursuant to subsections (c) and/or (d) ofthis section shall also complete an additional four hours of continuing education specifically related to the prevention, detection, and/or reporting of fraud affecting financial statements. This continuing education shall be part of the 80 hours of continuing education required by subsection (a), but shall not be part of the continuing education required by subsections (c) or (d).

(f) Failure to Comply.

A licensee1s willful failure to comply with the requirements of this section shall constitute cause for disciplinary action pursuant to Section 51 OO(g) of the Accountancy Act.

COST RECOVERY .

33. Code section 5107, subdivision (a), states:

The executive officer of the board may request the administrative law judge, as part of the proposed decision in a disciplinary proceeding, to direct any holder of a permit or certificate found to .have committed a violation or violations of this chapter to pay to the board all reasonable costs of investigation and prosecution of the case, including, but not limited to, attorneys1 fees. The board shall not recover costs incurred at the administrative hearing.

FIRST CAUSE FOR DISCIPLINE

(Gross Negligence)

34. Respondent has subjected his Certificate and his Fictitious Name Permits to

disciplinary action under Code sections 5100, subdivision (c), and 5062; and Title 16, California

Code of Regulations (CCR) sections 58 and 65 in that Respondent was grossly negligent in his

performance of compilations and issuance of accountant's compilation reports on February 14,

2012, and February 15, 2012 for A. S.M., Inc., and D.P. P., respectively. The compilations and

reports failed to comply with the Statement on Standards for Accounting and Review Services

and/or with generally accepted accounting principles. Respondent made original bookkeeping

entries and correcting journal entries without obtaining client approval for client A. S. M., Inc.

which impaired his independence. This impaired independence was not disclosed in his

compilation reports in violation ofprofessional standards.

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SECOND CAUSE FOR DISCIPLINE 1

(Fraud)2 3 35. Respondent has subjected his Certificate and his Fictitious Name Permits to

disciplinary action under Code section 5100, subdivisions (c), (i), G) and (k), in that Respondent

fraudulently took $50,000.00 from M. F. The circumstances are as follows:

36. On or about January 5, 2012, Respondent invited M. F. to invest in a partnership

,operated by Respondent. M. F. invested $50,000.00 in Respondent's partnership. Respondent

stated that all funds were lost within 90 days of the investment. Respondent has provided no

documentation to support the loss of the investment. Respondent has provided no documentation

to substantiate that any bona fide investment occurred.

THIRD CAUSE FOR DISCIJ;>LINE

(Disclosure of Confidential Information)


disciplinary action under Code sections 5100, subdivision (g), and 5063.3; CCR sections 54.1 and

68.1, subdivision (b); and Civil Code sections 1798.81 and 1798.81.5, in that Respondent

disclosed confidential information by failing to properly secure documents received from,.and for

clients. The circumstances are that a member of the public was able to retrieve confidential

personal information. regarding Respondent's clients, such as social security numbers and tax

information, by sorting through the garbage outside Respondent's place of business.

FOURTH CAUSE FOR DISCIPLINE

(Return of Client Documents)


disciplinary action under Code sections 5100, subdivision (g), and 5037; and CCR sections 68

and 68.1, in that Respondent failed to return client documents upon request. Respondent only

returned the records to the client after receiving multiple requests for them, after a substantial

delay, and/or after a direct request from the CBA to return the records.

The circumstances are as follows:

39. Respondent failed to return client documents to A. S.M., Inc. upon request.

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40. Respondent failed to return client documents to D.P. P. upon request.

41. Respondent failed to return client documents to J. B. on behalf of B. B. upon request.

42. Respondent failed to return client documents toM. P. on behalf of J. W. upon request.

FIFTH CAUSE FOR DISCIPLINE

(False Statement in the Application)


disciplinary action under Code section 5100, subdivision (b), in that Respondent on both his

August 31, 2012, renewal application and on his July 30, 2012, peer review reporting form,

indicated that he had not provided services that required a peer review. However he had in fact

provided such services. Respondent had issued at least two compilation reports in February 2012,

both requiring a peer review.

SIXTH CAUSE FOR DISCIPLINE

(Peer Review)


disciplinary action under Code sections 5076 and 5100, subdivision (g), and CCR sections 40 and

45, in that Respondent failed to complete a Peer Review when legally required to have one

completed. The circumstances are as follows:

45. On or about February 14, 2012, and February 15, 2012, Respondent completed two

compilation reports. The completion of these two reports by Respondent triggered a requirement

for Respondent to complete a Peer Review. To date, Respondent has not completed a Peer

Review.

SEVENTH CAUSE FOR DISCIPLINE

(Dishonesty)


disciplinary action under Code section 5100, subdivision (c), in that Respondent committed a

dishonest act. The circumstances are as follows:

47. On o'r about April 2, 2012, Respondent was hired to complete and file an individual

2011 tax return for C. C. Respondent was paid for his services on or about August 30, 2012.

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Respondent never prepared or filed a tax return for C. C. Alternatively, Respondent never

provided C. C. with a paper copy for filing.

EIGHTH CAUSE FOR DISCIPLINE

(Name afFirm)


disciplinary action under Code sections 5100, subdivision (g), 5050, 5o'51, and 5060; and CCR

section 67, in that Respondent advertised and performed accounting services using a name not

registered with the CBA. The circumstances are as follows:

49. On or about May 16, 2012, and continuing until May 21, 2012, Respondent

advertised accounting services on a website using the name J. Tiger Consulting, a name not

registered with the CBA. Respondent also corresponded with clients using the name J. Tiger

.Consulting prior to May 21, 20 12; and issued compilation reports on J. Tiger Consulting

letterhead prior to May 21,2012. T~e name J. Tiger Consulting was not registered with the CBA

until May 21, 2012.

NINTH CAUSE FOR DISCIPLINE

(Misleading Advertising)


disciplinary action under Code sections 5100, subdivision (g), and 17500; and CCR section 63, in

that Respondent engaged in false advertising. The circumstances are as follows: ·

51. On or about July 31, 2012, Respondent's status as a Certified Financial Planner

expired. After its expiration Respondent con~inued to advertise his services as a Certified

Financial Planner on his websites. He also used the designation in emails and correspondence

with clients and the CBA.

52. Respondent advertised as being licensed as a registered CPA by the State of Illinois,

when he was not.

53. On or about May 16,2012, and continuing untll May 21, 2012, Respondent

advertised accounting services on a website using the name J. Tiger Consulting, a name not

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1 registered with the CBA. The name J. Tiger Consulting was not registered with the CBA until

May 21,2012.

TENTH CAUSE FOR DISCIPLINE

(Response to Board Inquiry)


disciplinary action under Code section 5100, subdivision (g), and CCR section 52 in that

Respondent failed to respond to inquires form the CBA. The circumstances are as follows:

55. The CBA sent letters to Respondent on July 26,2012, and August 29,2012, regarding

a complaint :filed with the CBA by D. Y: The CBA requested information regarding the

complaint from Respondent and that the Respondent reply within 30 days. Respondent failed to

respond as required.

56. The CBA sent a letter to Respondent on March 15,2013, regarding Respondent's

client C. C. The C.BA requested information regarding the client from Respondent and that the

Respondent reply within 30 days. Respondent failed to respond as required. The CBA sent

additional letters on February 10,2014, and April22, 2014, to Respondent. Respondent

responded in an untimely fashion.

57. The CBA sent a letter to Respondent on July 31,2013, regarding a complaint :filed

with the CBA by M. F. The CBA.requested information regarding the complaint from

Respondent and that the Respondent reply within 3 0 days. Respondent failed to respond as

required.

ELEVENTH CAUSE FOR DISCIPLINE

(Continuing Education)



Respondent failed to comply with the continuing education requirements for renewing his

Certificate. Respondent's Certificate expired on July 31, 2012, and was not renewed until August

21, 2012. Respondent completed all of his necessary education hours in August of2012. He did

not complete the minimum of 20 hours required to be completed in the :first year of the renewal

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III I1 period, August 1, 2010, to July 31, 2011. Respondent also failed to takes courses in Fraud, and

Accounting and Auditing, as required.

TWELFTH CAUSE FOR DISCIPLINE

(Change of Address)



Respondent failed to notify the CBA of the change of address of J. Tiger Consulting.

PRAYER

WHEREFORE, Complainant requests that a hearing be held on the matters herein alleged,

and that following the hearing, the California Board of Accountancy issue a decision:

. 1. Revoking or suspending or otherwise imposing discipline upon Certified Public

Accountant Certificate Number 101208, issued to Jason M. Smith

2. Revoking or suspending or otherwise imposing discipline upon Fictitious Name

' Permit Number 2374,issued to Jason M. Smith for J. Tiger Consulting;


Permit Number 2718, issued to Jason M. Smith for JM Smith;


Permit Number 2929, issued to Jason M. Smith for Monroe _Smith Advisors;

5. Ordering Jason M. Smith to pay the California Board ofAccountancy the reasonable

costs of the investigation and enforcement of this case, pursuant to Business and Professions

Code section 5107,

6. Ordering Jason M. Smith to pay the California Board ofAccountancy administrative

penalties~ pursuant to Business and Professions Code section 5116; and,

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1 7. Taking such other and further action as deemed necessary and proper.

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DATED: \ / \ \ I '?O ) b

PAT IB Executive Officer California Board of AccountancyDepartment of Consumer Affairs State of CaliforniaComplainant

SF2015900252 Smith first amended accusation.docx

BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY ...On Aprii 16, 2008, tlie l3oa1;d issJ~ct C,ertifl~cl...

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Transcript of BEFORE THE CALIFORNIA BOARD OF ACCOUNTANCY ...On Aprii 16, 2008, tlie l3oa1;d issJ~ct C,ertifl~cl...