Carl Cole fought for real estate license once before
| Friday, Jul 25 2008 07:40 PM
Last Updated Friday, Mar 27 2009 06:05 PM
Crisp & Cole hearing
What?An administrative hearing, much like a civil court trial, of the California Department of Real Estate’s complaint against Crisp, Cole & Associates.
Where?Bakersfield’s Masonic Temple at 1920 18th St.
When?Starting 10 a.m. Monday. The temple is booked for three weeks although it’s not known if the hearing will take that long.
Who?Carl Cole and David Crisp, the former principals of Crisp, Cole & Associates, and former employee Robinson Nguyen all have real estate licenses on the line.
Two other former employees named in the complaint, Jill Louise Pinheiro and Sneha Mohammadi, have already made deals.
Pinheiro received a 30-day license suspension that might never be enforced if she has no disciplinary issues during a two-year probation period, an agreement set to take effect Aug. 12 shows.
Mohammadi’s broker license will be revoked Aug. 12.
The complaint also named Crisp’s wife, his mother-and-law and a former office worker. None were licensed. The department therefore has no jurisdiction and the three face no charges at Monday’s hearing.
More:Like a court trial, most of the hearing will be open to the public.
Administrative Law Judge Humberto Flores is scheduled to hear opening and closing arguments, evidence and witness testimony from both sides.
The state Office of Administrative Hearings says its judges are independent of the agencies whose cases they hear in order to be “neutral fact-finders.”
The judge’s written decision will likely take some time after the hearing wraps up — 30 days is typical, the hearing office says.
Tom Pool, the real estate department’s spokesman, said penalties could range from license revocation to case dismissal.
Both sides will be able to appeal the judge’s decision, Pool said.
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Carl Cole
When Carl Cole comes before an administrative judge in Bakersfield Monday morning to face mortgage fraud allegations, it will be the second time his license is on the line in such a trial.
When the former Crisp & Cole Real Estate broker first applied to sell California real estate, a prior felony — stemming from Cole’s conduct as an educator — stood in his way.
Cole, now 61, had been convicted of a crime against nature for engaging in oral sex with an 18-year-old man by a Moore County, North Carolina jury In 1988, administrative hearing and criminal court records show.
Cole was the victim’s principal, and the incident took place in his office at Big Oak Christian School, according to hearing records.
Cole was arrested on an additional charge of sexual activity by a custodian, which was dismissed, court records and newspaper archives show.
Oral sex between adults is not a crime in California.
But the California Department of Real Estate denied Cole’s license application in March 1991, Office of Administrative Hearings records show.
California’s real estate regulators argued, in part, that Cole’s professional license should be denied because the crime involved “a relationship of trust and authority — that of principal and student,” records show.
An administrative judge overruled the agency on June 20, 1991, and Cole got his license.
Cole did not respond to numerous attempts to contact him over a period of weeks through phone messages and visits to four Bakersfield properties owned by Cole, his wife and a son. One attempt included delivery of a letter inviting his comments prior to The Californian’splanned publication of a story about the North Carolina felony conviction.
Cole’s former partner, David Crisp, 28, also has a license on the line at Monday’s hearing along with a former employee.
When contacted at a Southern Oaks house owned by a local broker Wednesday, Crisp said he did not know of Cole’s whereabouts and declined further comment.
A SCHOOL ‘RUINED’
When Cole was arrested, he had been principal at the private, church-affiliated, kindergarten through grade 12 school near Eagle Springs, N.C. for 18 years, hearing records show. He was 40 at the time.
Cole was accused of sexual activities involving students and resigned after criminal charges were filed, according to a newspaper article published at the case’s conclusion.
Cole took the stand in his own defense, arguing some prosecution witnesses who had been expelled from school held a bias, trial transcripts show.
He was sentenced to a suspended three-year prison term, fined $500 and given five years probation.
Sex with an 18-year-old may not be a crime in California, but a sexual relationship between an employee and a student of any age would not be condoned in the Kern High School District, spokesman John Teves said.
Any allegations of such a relationship would be investigated, and the teacher or administrator could be subject to discipline, including termination.
“It would certainly not be considered ethical,” Teves said.
Cole’s two-decades-old crime rang a bell with Pinehurst, N.C., Police Chief Ronnie Davis, who in 1988 was the lead investigator on the case for the Moore County Sheriff’s Department.
The scandal shut down Big Oak Christian, Davis said.
“It was kind of sad that it ruined the school,” he said.
UNRESTRICTED
After his arrest, Cole moved with his wife, Rebecca, and two sons to Bakersfield, where he found work as an office manager for a roofing contractor, hearing records show.
He was still on probation when he applied for a license to sell real estate.
The application asks about criminal convictions, and Cole disclosed his felony when he applied, Department of Real Estate spokesman Tom Pool said.
Cole denied the sexual encounter ever took place and “did not show any remorse for the conduct,” hearing records state.
Any felony or misdemeanor conviction can form the basis for denying a real estate license, Pool said. Failing to pay taxes, patterns of flaunting the law and even misdemeanors — especially crimes such as shoplifting, which suggest a lack of honesty — can be cited in a denial.
But no single offense automatically bars someone from getting a real estate license.
“We are a country of second chances,” Pool said.
Law requires the department prove a substantial relationship between a crime and the licensed activity.
“We argued the crime was substantially related based on the fact that real estate agents can get into people’s homes,” Pool said of Cole’s case.
The agency denied more than 1,200 licenses in each of the past three fiscal years, Pool said.
Appeals of those denials to an administrative law judge are fairly common. Judges have the discretion to affirm a denial, overturn the decision or issue a restricted license which gives state regulators more oversight, Pool said.
It’s rare for an unrestricted license to be issued after a denial, he said.
In Cole’s case, Administrative Judge Muriel Evens concluded Cole’s conviction was not substantially related to the functions and duties of a real estate licensee.
She cited regulatory guidelines defining “substantially related” criminal sexual conduct as activity that caused physical harm or emotional distress to an observer or nonconsenting participant.
“Such harm or distress was simply not proved,” Evens concluded.
She granted Cole an unrestricted license.
$78 MILLION
As late as 1994, Cole was trying to fight his North Carolina conviction, court records show.
He filed a motion for a new trial, alleging he had been denied effective counsel and that the trial judge made errors. A new judge dismissed the motion.
Afterward Cole worked quietly in Bakersfield for more than a decade, eventually earning top producer awards from his former employer, Kyle Carter Homes.
He and Crisp struck out on their own in 2005, forming several businesses and blitzing the city with luxury-oriented Crisp & Cole Real Estate advertisements.
But the Department of Real Estate turned its scrutiny toward him again in March 2007, charging Cole had allowed an unlicensed salesman, Jayson Costa, to work on loans at Tower Lending, a now-defunct mortgage brokerage that functioned alongside Crisp & Cole Real Estate’s other operations.
On Sept. 10, Cole, Crisp and three former employees of Crisp, Cole & Associates were accused of deceiving lenders on more than $12 million worth of loans in a 25-page Department of Real Estate complaint.
The document contained a string of fraud allegations, including charges the company and its employees lied on loan applications.
As Crisp & Cole’s designated broker — the most senior position held by those charged — Cole was responsible for the activities of the corporation and its employees at all times, the complaint states.
Two days later, FBI and IRS agents seized various business and financial documents from 13 properties connected to Crisp & Cole. No charges have been filed in the ongoing federal investigation.
Monday’s hearing will consider the state complaint, which includes allegations the company paid “straw” buyers to put houses in their names so the firm could later skim profits through sales, claimed simultaneous primary residences for favorable loan terms and reported nonexistent jobs for Crisp’s wife and mother-in-law when applying for loans.
Cole and Crisp could be stripped of their licenses if the judge eventually rules in the state’s favor.
At least 113 properties connected to Cole, Crisp, their friends, family and associates have been foreclosed on as of Friday, according to an ongoing Californian tally. Most were single family homes in the Bakersfield metropolitan area.
Almost $70 million was borrowed against those properties, the tally shows.
Another $8 million worth of Crisp & Cole related loans have gone into default, the first legal step in the foreclosure process, or avoided foreclosure through so-called “short” sales.
In addition, lawsuits and liens seek hundreds of thousands in monetary claims against the company. Most recently, a federal income tax lien was filed against Crisp, Cole & Associates in June for more than $155,000, county records show.
— Californian staff writers Robert Price and Gretchen Wenner contributed to this report.
