RSS Feed
Print Story
E-mail Story
Regulators lay out 'lies,' 'abject failure' at Crisp & Cole hearing
| Tuesday, Aug 5 2008 7:47 PM
Last Updated: Wednesday, Aug 6 2008 7:31 AM
State regulators laced scathing descriptions of former Crisp & Cole Real Estate principals into closing arguments Tuesday of a weeklong license hearing.
BAKERSFIELD.COM HOT TOPICS:
Loading Stories
Advertisement
• The administrative law judge hearing the case, Humberto Flores, has 30 days to write a proposed decision.
• The proposed decision goes to the state real estate commissioner, who has another 30 days to make a final decision.
• The judge’s proposed decision will become public after the final decision by the state commissioner.
Photos:
David Crisp looks over papers before the start of his hearing in July.
Carl Cole, left, speaks with his attorney, Glenn Kottcamp, before the start of his hearing Tuesday.
Related Stories:
David Crisp “lied to the lenders” on loan applications, said Michael B. Rich, attorney for the California Department of Real Estate, and showed a “low moral compass” by paying staffers in a scam to put properties in their name in order to later funnel sales profits to the company.
Carl Cole, meanwhile, was an “abject failure” as supervising broker of Crisp & Cole and its former mortgage brokerage, Tower Lending, Rich said, adding Cole “enabled his sales licensee partner” — Crisp — “to run amok.”
The state wants real estate licenses of Cole, 61, and Crisp, 28, revoked.
Cole’s attorney, Glenn Kottcamp of Fresno, repeated in closing arguments what has been the mainstay of Cole’s defense: Cole was so busy with a proposed project at Cal State Bakersfield he wasn’t aware of what was going on and his signature was forged on many of the documents in loan and escrow files under scrutiny.
Kottcamp described Cole’s former partnership with Crisp as one between “two vastly different people.”
Throughout Tuesday’s testimony, Kottcamp referred several times to a late 2005 profile of Crisp and Cole in the industry magazine LORE called “The Rock & The Rocket.”
Cole was the “rock,” Kottcamp and Cole both testified, conservative and cautious, while Crisp was the risk-taker.
Kottcamp asked the judge for less than a license revocation for his client, such as a suspension or downgrade, for example, based on Cole’s having employed an unlicensed loan broker.
Crisp, representing himself, declined to testify when the state department called him as a witness.
With prompting from the administrative judge hearing the case, Crisp noted an ongoing criminal investigation of Crisp & Cole and invoked his Fifth Amendment right against self-incrimination.
He made no closing arguments and did not respond to reporters’ questions after the hearing.
BUSY DAY
Before Tuesday’s closing arguments wrapped up six says of administrative license hearings, other testimony made for a busy day.
In the morning, Cole took the stand in his own defense, the only witness called by his side.
Later, Crisp’s only witness, a house painter, testified.
The state’s closing argument, dense with details, threaded a timeline through boxes of documents submitted as evidence.
After the hearing, both Cole and his lawyer spoke at length to a bank of television cameras and radio mics.
Some highlights:
• State lawyers refuted assertions by Cole and his lawyer that another man, Jack Doremus, was the so-called “designated broker” legally responsible for Crisp & Cole’s real estate activities for most of the transactions under scrutiny.
Doremus did not take over until October 2006, filings with the real estate department and state business regulators show, even though he was hired to work for Crisp & Cole in April 2005.
The state submitted minutes from a Crisp & Cole board meeting in October 2006 that showed Doremus took over Cole’s role as vice president then.
• More employment details emerged about former staffer Jayson Costa, who had no real estate license yet who worked under Cole originating loans at Tower Lending for more than a year before regulators stepped in. Costa had been paid as an independent contractor, tax filings show, something not allowed under department rules, which also require the supervising broker to be in possession of an employee’s real estate license before he or she goes to work.
• Crisp, Cole & Associates, the corporation behind Crisp & Cole Real Estate named in the state complaint, took in more than $488,000 in commissions from the 13 properties referred to in the complaint, Rich said during his closing rebuttal.
Tower Lending earned about $120,000 for originating loans on most of the properties named.
• Cole, talking to reporters after the hearing, continued to assert a loan made to him had been changed by lenders to reflect a lease agreement he’d made with the seller.
Rich, the state’s attorney, said that is untrue: The loan was issued assuming Cole would live in the house as his primary residence, a material fact banks consider when making loans, as several documents signed by Cole in the loan file indicated.
The case, run much like a civil trial, was heard in the basement of Bakersfield’s downtown Masonic Temple by the state Office of Administrative Hearings’ Los Angeles division.
The state’s 25-page complaint was filed against Crisp & Cole in September, two days before FBI and IRS agents raided 13 Bakersfield locations to seize documents and other evidence related to Crisp & Cole operations.
No charges have been filed in the federal case.