UNITED STATES DEPARTMENT OF EDUCATION
WASHINGTON, D.C. 20202
In the Matter
PROPOSED DEBARMENT OF
JAMES F. MOORED, Debarment Proceeding
Appearances: Peter S. Leyton, Esq., and Gerald M. Ritzert, Esq.,
Ritzert & Leyton, P.C., Fairfax, Virginia, for James F. Moored.
Edmund J. Trepacz, II, Esq., Office of
the General Counsel, United States
Department of Education, Washington, D.C., for the Office of Student Financial
Before: Judge Richard F. O'Hair
Mr. Moored exercised his right to oppose this proposed debarment in accordance with the provisions of 34 C.F.R. § 85.313, by filing a brief and exhibits with this tribunal.See footnote 1 * He also
requested the opportunity for oral argument and a hearing on this matter to address what he
described as disputes over material facts in issue. These disputes include an allegation that the
proposed debarment is premised on factual inaccuracies. Additionally, he expressed a desire to
elaborate on mitigation factors and to argue that a debarment would be punitive and not serve
The regulations do not require that any additional proceedings,
such as an oral argument
or an evidentiary hearing, be conducted in a situation, such as here, where the debarment is
upon a conviction or civil judgment. 34 C.F.R. § 85.314(a). Conducting an additional
proceeding is reserved for situations where there is a genuine dispute as to facts material to the
debarment. 34 C.F.R. § 85.314(b)(1). Mr. Moored's argument that the proposed
premised on factual inaccuracies refers to errors which occurred during the sentencing
proceeding and were corrected at the appellate level. The conviction, which was based upon Mr.
Moored's plea of guilty, was not addressed by the appellate court. Consequently, I find there is
no dispute as to the material fact, his federal conviction for wire fraud, which forms the
foundation for this proposed debarment. The remaining issues he wishes to address in an
evidentiary hearing, i.e., personal factors which mitigate the seriousness of his offense, and the
punitive nature of a debarment, have been adequately addressed by both parties in their written
submissions to this tribunal. I conclude there is no dispute over the facts material to the
proposed debarment and, therefore, respondent's request for an oral argument or an evidentiary
hearing is denied.
The August 10, 1995, Notice of Proposed Governmentwide
Debarment, references Mr.
Moored's March 30, 1992, guilty plea to one count of wire fraud in violation of 18 U.S.C.
in the United States District Court, Western District of Michigan, Southern Division. He was
charged with submitting certain false information on May 4, 1990, with intent to defraud, via
facsimile machine, from Washington, D.C. to Kent County, Michigan, to further his application
for a loan in an amount in excess of $868,239. The false information was contained in a
document entitled "Ratification of May 1, 1991 Stock Purchase Agreement" and it was
submitted as evidence of a stock option Mr. Moored possessed. The document was transmitted
to an attorney for the private, professional lender, to be used as collateral for Mr. Moored's
requested loan. This stock option purportedly represented stock worth at least the value of the
loan, when in fact it was only worth between $530,000 and $650,000. A check in the amount of
$868,239, representing the loan proceeds, was delivered to Mr. Moored and was cashed, but it
was not paid by the lender's bank. Mr. Moored subsequently repaid this amount to the necessary
party. The parties agreed that the lender suffered no loss and Mr. Moored realized no gain as a
result of this fraud.
Mr. Moored raises an objection that debarring him would be a Fifth
violation because it would punish him twice for the same offense. In support of his argument he
refers to a Supreme Court decision, United States v. Halper, 490 U.S. 435 (1989),
wherein the Court held that a defendant who already has been punished in a criminal prosecution
may not be
subjected to an additional civil sanction to the extent that the second sanction may not fairly be
characterized as remedial, but only as a deterrent or retribution. Clearly, the nature of this
debarment proceeding is not meant to serve as a deterrent, a form of retribution, or any other
purpose of punishment, but solely as a means available to the Federal government to protect its
assets. 34 C.F.R. § 85.115. Despite his assertions to the contrary, I find the debarment
remedial in that it serves as a legitimate governmental means to prevent a person who has
engaged in serious misconduct from having access to governmental assets for a specified period
of time. This is a civil remedy which is not so extreme or divorced from the needs of the
government so as to constitute a punishment within the realm of the Double Jeopardy Clause.
See Bae v. Shalala, 44 F.3d 489 (7th Cir. 1995); United States v. Furlett, 974
F.2d 839 (7th Cir. 1992); United States v. Bizzell, 921 F.2d 263 (10th Cir. 1990).
In a debarment proceeding, the cause for debarment must be proved
by a preponderance
of the evidence, and where the debarment is based upon a conviction, the standard shall be
deemed to have been met. 34 C.F.R. § 85.314(c)(1). Accordingly, I find that Mr.
March 30, 1992 federal conviction for wire fraud supports the proposed Governmentwide
debarment. Furthermore, his debarment is remedial in nature because his misconduct indicates a
lack of business integrity and honesty which, in turn, questions the propriety of Federal
government dealings with him for a specified period of time.
Mr. Moored next argues that, in light of many mitigating
circumstances, the period of the
debarment should be less than the three years advocated by ED. He explains that a three year
debarment period would substantially deprive him of his livelihood because the bulk of his
professional career has involved some level and type of involvement with student financial aid
and Title IV services. Since 1990 he has been the president of his consulting firm where he has
been involved in providing training in financial aid program management and computer systems,
as well as handling institutional accreditation matters. He supports his wife and three children
from income predominantly (approximately 75%) derived from this Title IV consulting work. In
an attempt to minimize the seriousness of the offense, he points out that within days of the
discovery of the false documents he confessed his wrongdoing and ultimately pleaded guilty to
one count of wire fraud. Subsequent to this 1992 conviction he served a sentence of slightly
more than six months in prison. He also emphasizes the absence of a history of any violations
and the fact that his fraudulent act did not involve any Federal activity or Title IV funds, thus it
was not a public transaction.
Under the provisions of 34 C.F.R. § 85.320(a) the period of debarment should be commensurate with the seriousness of the cause and in no case should exceed three years. After considering the fact that the wire fraud offense did not involve Title IV funds, all funds were
repaid to the lender, the length of time which has elapsed since the offense and conviction, the
absence of evidence of any other misconduct, and the detrimental effect this debarment may
on Mr. Moored's ability to provide financial support for his family, I have decided to limit the
period of this debarment to one year and six months.
Judge Richard F. O'Hair
Deciding Debarment and Suspension Official
Dated: April 3, 1996
A copy of the attached initial decision was sent by certified mail, return receipt requested to the
Peter S. Leyton, Esq.
Gerald M. Ritzert, Esq
Ritzert & Letyon, P.C.
10387 Main Street
Fairfax, VA 22030
Edmund J. Trepacz, II, Esq.
Office of the General Counsel
U.S. Department of Education
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110