                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




           Vali Mohammad v. Department of Financial & Professional Regulation,
                               2013 IL App (1st) 122151




Appellate Court            MOHAMMAD VALI MOHAMMAD, Plaintiff-Appellant, v. THE
Caption                    DEPARTMENT OF FINANCIAL AND PROFESSIONAL
                           REGULATION; BRENT E. ADAMS, as SECRETARY OF THE
                           DEPARTMENT OF FINANCIAL AND PROFESSIONAL
                           REGULATION, and JORGE SOLIS, as DIRECTOR OF THE DIVISION
                           OF BANKING OF THE DEPARTMENT OF FINANCIAL AND
                           PROFESSIONAL REGULATION, Defendants-Appellees.


District & No.             First District, Fifth Division
                           Docket No. 1-12-2151


Filed                      June 14, 2013


Held                       The 2009 amendment of the Residential Mortgage License Act providing
(Note: This syllabus       that anyone with a felony conviction for a crime involving “fraud” is
constitutes no part of     ineligible for a mortgage loan originator license applied to plaintiff and
the opinion of the court   barred him from renewing his license because of his 2000 conviction for
but has been prepared      mail fraud, notwithstanding the fact that he had satisfied the discipline
by the Reporter of         imposed and renewed his license until his application in 2010, since the
Decisions for the          law was not a retroactive change, the language is unambiguous, and
convenience of the         despite the harshness of the result, the consequences can be avoided only
reader.)
                           by a change in the law, not judicial construction.


Decision Under             Appeal from the Circuit Court of Cook County, No. 11-CH-11663; the
Review                     Hon. Franklin U. Valderrama, Judge, presiding.


Judgment                   Affirmed.
Counsel on                  David S. Rodriguez, of Chicago, for appellant.
Appeal
                            Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro,
                            Solicitor General, and Clifford W. Berlow, Assistant Attorney General,
                            of counsel), for appellees.


Panel                       PRESIDING JUSTICE McBRIDE delivered the judgment of the court,
                            with opinion.
                            Justices Howse and Taylor concurred in the judgment and opinion.




                                               OPINION

¶1          Plaintiff Mohammad Vali Mohammad was a registered mortgage loan originator with
        defendant Illinois Department of Financial and Professional Regulation (Department) when
        he applied for license renewal and disclosed that he had been convicted of mail fraud in
        2000.1 The Department disciplined Vali Mohammad by suspending his license for 120 days,
        fining him $1,000, and placing him on two years’ probation; however, Vali Mohammad
        completed the discipline without incident and the Department renewed his annual license in
        2007, 2008, and 2009. At issue here is the Department’s denial of Vali Mohammad’s 2010
        application for renewal based on a 2009 amendment to the Residential Mortgage License Act
        of 1987 (205 ILCS 635/7-3 (West 2010)) (Mortgage License Act), which indicates
        individuals with felony convictions for crimes involving “fraud” are ineligible for mortgage
        loan originator licensing. Vali Mohammad challenged the Department’s denial in an
        administrative proceeding, arguing in part that his state and federal constitutional rights were
        being violated, but he was unsuccessful in that proceeding as well as in an administrative
        review action in the circuit court of Cook County. He appeals, contending the 2009 law
        should not be applied retroactively.
¶2          The record indicates that Vali Mohammad immigrated to the United States in 1971 and
        found work as a janitor at a plastic injection molding company in Des Plaines, Illinois, but
        by 1978 had progressed to supervising 15 people in production at the manufacturing facility.
        Between 1980 and 1995, he advanced from foreman to vice president of operations of a
        similar company in Buffalo Grove, Illinois, named Courtesy Corporation/Med-Tek. He left
        Courtesy Corporation/Med-Tek in part because his 10% ownership in the company meant

                1
                 Plaintiff’s name is spelled as either “Valimohammad” or “Vali Mohammad” at various
        points in the record on appeal. It is also unclear from the record whether his conviction disclosure
        was in 2005 or 2006; the consent order is numbered “2005-917” but was executed by Vali
        Mohammad on December 5, 2006, and by the Department on December 12, 2006.

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     he worked a lot of overtime hours and was at the facility as many as six or seven days a week
     and in part because he did not feel that his contribution was appreciated. He moved on and
     became plant manager of an injection molder known as Stepco Corporation that had facilities
     in Arlington Heights and Streamwood, Illinois. During his career in the plastic molding field,
     Vali Mohammad was credited in industry publications for aggressively modernizing
     production and reducing waste.
¶3       During the last 5 years of his 15-year employment at Courtesy Corporation/Med-Tek,
     Vali Mohammad and two of the company’s primary owners sold the company’s plastic waste
     for personal profit instead of allowing it to be sent to a landfill. This sideline ended badly for
     Vali Mohammad. He indicates that a third major partner at Courtesy Corporation/Med-Tek
     was angered by his departure for the Stepco job, sued him for diverting the company’s assets,
     and made as many as 40 complaints to federal authorities until they charged Vali Mohammad
     with one count of mail fraud pursuant to 18 U.S.C. § 1341 (2000). Vali Mohammad
     mortgaged his house and rental properties in order to return 100% of the profits and pay the
     plaintiff’s attorney fees, and on September 7, 2000, he pled guilty to the felony charge and
     was sentenced to 18 months in prison. With good behavior, Vali Mohammad qualified for
     early release after serving 11 months.
¶4       Upon his release from prison in 2001, Vali Mohammad returned to his old job at Stepco,
     but because manufacturing jobs were moving overseas, he also started his own loan
     origination and real estate company in Mundelein, Illinois. By 2006, he had five employees,
     owned his commercial building and five rental homes, and was the recipient of two awards
     from the Chicago Association of Realtors and one from the chamber of commerce for the
     communities of Green Oaks, Libertyville, Mundelein, and Vernon Hills, Illinois.
¶5       As we indicated above, when Vali Mohammad applied for renewal of his mortgage loan
     originator license in either 2005 or 2006, he informed the Department of his mail fraud
     conviction and the Department determined, in its discretion, that this warranted a brief
     suspension of his license, a fine, and a short term of probation. Section 1-4(hh) of the
     Mortgage License Act defines a “loan originator” as “any natural person who, for
     compensation or in the expectation of compensation, either directly or indirectly makes,
     offers to make, solicits, places, or negotiates a residential mortgage loan” and section 1-3(a)
     specifies that no person “shall engage in the business of *** originating *** residential
     mortgage loans without first obtaining a license.” 205 ILCS 635/1-3(a), 1-4(hh) (West 2010).
     Section 7-1 of the Mortgage License Act indicates loan originators must be registered and
     authorizes the creation of rules and regulations prescribing relevant qualifications, fees,
     examinations, education, supervision, enforcement, and other criteria. 205 ILCS 635/7-1
     (West 2006). A long-standing companion administrative rule indicates applicants must
     disclose any criminal convictions or adverse civil judgments involving monies, breach of
     trust, moral turpitude, or misfeasance or malfeasance. See 38 Ill. Adm. Code 1050.2110(a)(6)
     (2005). The mail fraud statute is a broadly worded federal law which states in relevant part:
             “Whoever, having devised or intending to devise any scheme or artifice to defraud,
         or for obtaining money or property by means of false or fraudulent pretenses,
         representations, or promises, or to sell, dispose of, loan, exchange, alter, give away,
         distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin,

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         obligation, security, or other article, or anything represented to be or intimated or held
         out to be such counterfeit or spurious article, for the purpose of executing such scheme
         or artifice or attempting so to do, places in any post office or authorized depository for
         mail matter, any matter or thing whatever to be sent or delivered by the Postal Service,
         or deposits or causes to be deposited any matter or thing whatever to be sent or delivered
         by any private or commercial interstate carrier, or takes or receives therefrom, any such
         matter or thing, or knowingly causes to be delivered by mail or such carrier according to
         the direction thereon, or at the place at which it is directed to be delivered by the person
         to whom it is addressed, any such matter or thing, shall be fined under this title or
         imprisoned not more than 20 years, or both.” 18 U.S.C. 1341 (2000).
     See Rubloff Development Group, Inc. v. SuperValu, Inc., 863 F. Supp. 2d 732, 745 (N.D. Ill.
     2012) (commenting that the “wire and mail fraud statutes are incredibly broad, and require
     only ‘a willful act by the defendant with the specific intent to deceive or cheat, usually for
     the purpose of getting financial gain for oneself or causing financial loss to another’ ”
     (quoting United States v. O’Connor, 656 F.3d 630, 644 (7th Cir. 2011)); United States v.
     Martin, 195 F.3d 961, 965 (7th Cir. 1999) (“Concern has long been expressed that the failure
     of the ‘mail fraud statute’ to define ‘fraud’ invites prosecutorial overreaching.”) John C.
     Coffee, The Metastasis of Mail Fraud: The Continuing Story of the “Evolution” of a White-
     Collar Crime, 21 Am. Crim. L. Rev. 1, 3 (1983) (“the reach of the statute continues to be
     extended further into sensitive areas not previously thought to be subject to the criminal law
     of fraud”).
¶6       Vali Mohammad complied with all of the Department’s disciplinary terms and for the
     next few years his applications for license renewal were routinely granted. However, on June
     30, 2010, the Department notified Vali Mohammad by mail that section 7-3 of the Mortgage
     License Act had been amended effective July 31, 2009, that section 7-6(a)(1) indicates
     renewing licensees must meet the requirements of section 7-3, and that the Department had
     determined that the amendment disqualified Vali Mohammad from ever again being licensed
     as a loan originator. 205 ILCS 635/7-3, 7-6 (West 2010). As amended, section 7-3 of the
     Mortgage License Act provides in pertinent part:
         “Issuance of license. The Director shall not issue a mortgage loan originator license
         unless the Director makes at a minimum the following findings:
             ***
             (2) The applicant has not been convicted of, or pled guilty or nolo contendre to, a
         felony in a domestic, foreign, or military court:
                  (A) during the 7-year period preceding the date of the application for licensing
             and registration; or
                  (B) at any time preceding such date of application, if such felony involved an act
             of fraud, dishonesty, or a breach of trust, or money laundering;
         provided that any pardon of a conviction shall not be a conviction for purposes of this
         item (2).” 205 ILCS 635/7-3 (West 2010).
¶7       Vali Mohammad appealed the Department’s refusal to renew and requested a formal
     evidentiary hearing. An administrative law judge received written briefs and conducted a

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     one-day hearing in 2010. Vali Mohammad contended in part that “mail fraud” was not
     typically thought of as “fraud” as that term was used in the Mortgage License Act (205 ILCS
     635/7-3(2) (West 2010)), and that the Department should look beyond the statute’s title and
     review that law as well as the actual conduct and circumstances that led to his conviction.
     Furthermore, he had voluntarily paid “every penny” of restitution long before the case
     progressed to the sentencing stage and the only money the federal judge ordered him to pay
     was a $50 court fee. He also contended that his conduct had otherwise been exemplary and
     that he met all the other requirements for licensing. He tendered a detailed log of the
     mortgage loans he generated between 2003 and 2010, testified that none of the 533 loans had
     “gone bad,” and expressed confidence that any client the Department contacted would vouch
     for him. He also testified that it was “not that easy” to compile such a stellar record when
     “[y]ou meet all kinds of people.” Vali Mohammad also contended that the new law was
     being applied retroactively with “inequitable consequences.” The Department responded that
     the new licensing standards were imposed by the federal Secure and Fair Enforcement for
     Mortgage Licensing Act of 2008 or “SAFE Act” (12 U.S.C. § 5104 (Supp. II 2009), and
     intended to create uniform licensing standards within the United States, reduce fraud, and
     protect consumers; and that the Department was correctly interpreting the Illinois amendment
     to bar Vali Mohammad from relicensing.
¶8       The administrative law judge summarized that Vali Mohammad “testified credibly that
     his conviction stemmed from a plea agreement in an effort to bring about the end of a lengthy
     and costly legal battle with a former employer.” Also, Vali Mohammad had been “a reliable
     and productive worker for the companies he represented,” his conviction was unrelated to
     his work as a loan originator, and he wanted to continue working in the field in order to “help
     his community” and support his family. The administrative law judge concluded:
         “[J]udging from the ample evidence presented by the Registrant, this Court does not feel
         that this conviction is an accurate representation of Registrant’s normal business
         practices as a loan originator. Rather[,] it was a regrettable choice as a means to end a
         lengthy and expensive legal battle resulting from a bitter business dispute.
             Unfortunately, the applicable law of the State of Illinois is very clear on this matter.
         A felony conviction involving fraud or dishonesty is a clear violation of 205 ILCS 635/7-
         3(2) and a complete bar to holding a loan originator license.”
     Accordingly, the administrative law judge recommended that the Department adhere to its
     decision of nonrenewal. The Department adopted the recommendation as its final order.
¶9       Vali Mohammad filed for administrative review in the circuit court of Cook County.
     After reviewing the record and the parties’ arguments, the circuit court judge also found that
     the new law was unequivocal and led to unusually harsh consequences:
         “Plaintiff does not deny that he pled guilty to the crime of ‘mail fraud.’ Contrary to the
         Plaintiff’s assertion, the Court finds that his felony crime of mail fraud falls squarely
         within the ambit of section 7-3(2) of the Act. The Court finds Plaintiff’s assertion that
         the Department is required to go beyond the label of the crime and ascertain the facts
         giving rise to the conviction untenable and unpersuasive.
             Admittedly, this conclusion leads to a harsh result. Apparently, since his conviction,

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           Plaintiff has been rehabilitated and done well in his profession. The Act, however, does
           not take into consideration rehabilitation and other mitigating factors. Indeed, as written,
           the Act provides for no exceptions. That the Court might favor that the Act provide the
           Department some discretion is of no import. It is the Court’s duty to apply the Act as
           written and carry out the legislature’s intent. InPhoto Surveillance, Inc. v. Crowe, Chizek
           & Co., LLP, 338 Ill. App. 3d 929, 933 (2003). In construing a statute, a court is not at
           liberty to depart from its plain language and meaning by reading into the statute
           exceptions, limitations, or conditions where the statute is unambiguous. Id. at 933-34.
           Thus, since Plaintiff was convicted of felony fraud, he cannot qualify to be a loan
           originator in the State of Illinois under the Residential Mortgage Licensing Act of 1987,
           as amended.”
¶ 10       We review the decision of the administrative agency rather than the decision of the circuit
       court (Wilson v. Illinois Department of Financial & Professional Regulation, 2013 IL App
       (1st) 121509) and we address the issues de novo (Wilson, 2013 IL App (1st) 121509; Jackson
       v. City of Chicago, 2012 IL App (1st) 111044, ¶ 20, 975 N.E.2d 153 (constitutionality of
       statute addressed de novo)). The objective of statutory construction is to ascertain and give
       effect to the legislature’s intent. People ex rel. Sherman v. Cryns, 203 Ill. 2d 264, 279, 786
       N.E.2d 139, 150 (2003); County of Knox ex rel. Masterson v. Highlands, LLC, 188 Ill. 2d
       546, 556, 723 N.E.2d 256, 263 (2000). We study the language of a challenged statute, as it
       is usually “ ‘the most reliable indicator of the legislature’s objectives in enacting a particular
       law.’ ” Cryns, 203 Ill. 2d at 279, 786 N.E.2d at 151 (quoting Michigan Avenue National
       Bank v. County of Cook, 191 Ill. 2d 493, 504, 732 N.E.2d 528, 535 (2000)); County of Knox,
       188 Ill. 2d at 556, 723 N.E.2d at 263. If the language of the statute is plain, clear and
       unambiguous, it becomes our sole basis for discerning the intent of the legislature and we do
       not need to resort to other principles of statutory construction. Gem Electronics of
       Monmouth, Inc. v. Department of Revenue, 183 Ill. 2d 470, 475, 702 N.E.2d 529, 532 (1998);
       County of Knox, 188 Ill. 2d at 556, 723 N.E.2d at 263. We are never at liberty to depart from
       the plain language and meaning of a statute by reading into the language unstated exceptions,
       limitations, or conditions. Gem Electronics, 183 Ill. 2d at 475, 702 N.E.2d at 532; County
       of Knox, 188 Ill. 2d at 556, 723 N.E.2d at 263.
¶ 11       As the Department has argued, the amendment at issue was adopted by the Illinois
       legislature in 2009, in response to the new federal SAFE Act which Congress enacted in the
       wake of the national subprime mortgage problem. 12 U.S.C. §§ 5101 to 5116 (Supp. II
       2009); Bryce Gray, The Secure and Fair Enforcement for Mortgage Licensing Act of 2008,
       31 Rev. Banking & Fin. L. 51 (2011) (discussing the circumstances that led to passage of the
       SAFE Act and explaining the law’s components); Lauren Hassouni, The Nuts, Bolts, Carrots,
       and Sticks of the Mortgage and Foreclosure Crisis and a Suggested Solution, 2010 Ann.
       Surv. Bankr. L. 17 (2011) (explaining the circumstances that led to the housing bubble that
       burst in 2006 and fueled widespread financial crisis in the United States and abroad). The
       SAFE Act imposed uniform national standards in order to curb predatory lending practices
       and required fingerprinting and issuance of unique, life-time identifiers to prevent
       unscrupulous mortgage loan originators from simply moving from jurisdiction to jurisdiction.
       Gray, supra. Among the SAFE Act’s “minimum standards for licensing and registration” for

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       mortgage loan originators was:
           “The applicant has not been convicted of, or pled guilty or nolo contendre to, a felony in
           a domestic, foreign, or military court–
                   (A) during the 7-year period preceding the date of the application for licensing
               and registration; or
                   (B) at any time preceding such date of application, if such felony involved an act
               of fraud, dishonesty, or a breach of trust, or money laundering.” 12 U.S.C.
               § 5104(b)(2) (Supp. II 2009).
       Consistent with the SAFE Act, Illinois law effective July 31, 2009, precludes the Department
       from issuing a mortgage loan originator license unless:
           “[t]he applicant has not been convicted of, or pled guilty or nolo contendre to, a felony
           in a domestic, foreign, or military court:
                   (A) during the 7-year period preceding the date of the application for licensing
               and registration; or
                   (B) at any time preceding such date of application, if such felony involved an act
               of fraud, dishonesty, or a breach of trust, or money laundering.” Pub. Act 96-112, § 5
               (eff. July 31, 2009) (amending 205 ILCS 635/7-3(2) (West 2008)).
¶ 12       We find that a plain reading of section 7-3 as amended establishes that it applies to Vali
       Mohammad’s conviction in 2000 for a single act of mail fraud and precludes the Department
       from ever again renewing his mortgage loan originator license. Vali Mohammad has readily
       admitted to his conviction for the federal felony crime known as “mail fraud” and has
       disputed only whether this crime is fairly characterized as “fraud” within the meaning of
       section 7-3 of the Mortgage License Act and whether section 7-3 violates the prohibition on
       retroactive laws.
¶ 13       On appeal, he has abandoned the first argument2 and we agree that it is an unpersuasive
       one. Although one might argue that “mail fraud” ranks low on the scale of “fraud,
       dishonesty, or a breach of trust, or money laundering” (205 ILCS 635/7-3(2)(B) (West
       2010)), “mail fraud” is unquestionably a form of “fraud” as that latter term is used in the
       amended Mortgage Licensing Act. We will not read in an unexpressed exception, limitation,
       or condition into the General Assembly’s plain and unambiguous statute. The statute does
       not provide an exception for mail fraud or authorize the Department to consider evidence of
       rehabilitation or reasons for reducing the length of Vali Mohammad’s ban from the field. It
       makes no difference that Vali Mohammad disclosed the felony conviction prior to the change
       in federal and state law and that the Department annually evaluated him and repeatedly


               2
                The argument makes a fleeting appearance in Vali Mohammad’s reply brief, but an
       appellant waives any argument he fails to include in his opening brief. City of Belleville v. Human
       Rights Comm’n, 167 Ill. App. 3d 834, 522 N.E.2d 268 (1988) (citing Ill. S. Ct. R. 341(e)(7) (eff. July
       1, 1984) (now Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2008))). An appellant also waives any argument
       unsupported by reasoned argument and citation to relevant authority. Ill. S. Ct. R. 341 (eff. July 1,
       2008). In any event, we have addressed it.

                                                    -7-
       deemed him fit to practice as a mortgage loan originator. The 2009 amendment has changed
       the minimum requirements for practice and Vali Mohammad does not meet the amended
       requirements.
¶ 14        On appeal, Vali Mohammad contends only that the law is impermissibly
       retroactive–which is an argument that we considered and rejected in Wilson, 2013 IL App
       (1st) 121509, ¶ 12. As we explained there, the law is not retroactive because it does not reach
       back in time and either change the penalty that was imposed by the federal judge in 2000 or
       penalize Vali Mohammad for conduct that was permissible at the time. The law does not
       concern his previous work as a mortgage loan originator. Instead, the law concerns Vali
       Mohammad’s conduct subsequent to the amendment’s effective date in 2009, and it restricts
       his present and future participation in the mortgage loan market. The law is not retroactive
       and it is properly interpreted to bar Vali Mohammad from renewing his mortgage loan
       originator license. He relies heavily on Valdez, but that case is not like this case. Valdez v.
       Zollar, 281 Ill. App. 3d 329, 665 N.E.2d 560 (1996). Maryann Valdez and Nida Gaffud were
       nursing students who sat for a licensing exam when Illinois law limited them to six attempts
       but had no time constraint. Valdez, 281 Ill. App. 3d at 331, 665 N.E.2d at 561. After Valdez
       failed the exam four times within two years and Gaffud failed twice within 6 months, Illinois
       law was amended to require a passing score within three years of the first attempt or the
       candidate would have to repeat their entire course of nursing studies before being eligible for
       retesting. Valdez, 281 Ill. App. 3d at 331-32, 665 N.E.2d at 561-62. Valdez finally passed on
       her eighth attempt in 10 years and Gaffud passed on her sixth attempt in 6 years. Valdez, 281
       Ill. App. 3d at 331-32, 665 N.E.2d at 561-62. The Department denied their licensing
       applications, but the courts concluded the women had a vested right to rely on the law as it
       existed when they first sat for the test. Valdez, 281 Ill. App. 3d at 333, 665 N.E.2d at 563.
       The women had detrimentally relied on the prior version of the law and lost the opportunity
       to attempt additional exams before the three-year time limit expired. Valdez, 281 Ill. App.
       3d at 333, 665 N.E.2d at 563. Vali Mohammad, however, cannot claim he reasonably relied
       on the terms of a prior version of the licensing law when he entered into the plea bargain,
       because the licensing law did not even exist at the time. The licensing law was first enacted
       after Vali Mohammad was working as a loan originator and the amendment at issue was
       enacted several years later. We reject his reliance on Valdez and adhere to our conclusion that
       the law is not a retroactive change.
¶ 15        Accordingly, we affirm the Department’s decision of nonrenewal. This outcome is
       unquestionably harsh. Vali Mohammad had a successful career and unblemished record as
       a self-employed mortgage loan originator. Apparently none of the 533 loans he helped
       generate since 2003 resulted in any complaint to the Department. It is unfortunate that his
       conviction for a single count of mail fraud, more than a decade ago, in an unrelated
       profession, has led to a life-time prohibition from the mortgage loan field rather than the
       statute’s seven-year prohibition for lesser crimes. However, the law, as it is currently written,
       dictates this result. “ ‘Where the words employed in a legislative enactment are free from
       ambiguity or doubt, they must be given effect by the courts even though the consequences
       may be harsh, unjust, absurd or unwise. [Citations.] Such consequences can be avoided only
       by a change of the law, not by judicial construction ***.’ ” County of Knox, 188 Ill. 2d at

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       557, 723 N.E.2d at 363 (quoting People ex rel. Pauling v. Misevic, 32 Ill. 2d 11, 15, 203
       N.E.2d 393 (1964)).

¶ 16      Affirmed.




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