Enforcement committee authorizes formal proceedings, adds investigation costs to settlement recommendations and recommends revocations after guilty pleas

The Tennessee State Board of Accountancy’s enforcement committee on Oct. 20 reviewed its case and complaint report, voted to close a set of matters, authorized multiple formal proceedings for proposed discipline, and for the first time included staff‑calculated investigation costs as part of settlement recommendations.

Committee Chair Andy Bonner and legal counsel explained that staff had prepared a memorandum outlining statutory authority for boards to assess actual and reasonable costs of investigation, prosecution and hearing under the Uniform Administrative Procedures Act. Counsel said the board historically added costs only after a hearing but recommended including investigation costs at the settlement stage to ensure ‘‘bad actors’’ bear investigatory expense rather than the profession. Committee members and counsel discussed how costs would be tracked and applied; staff said investigator time and case‑specific costs were being added to proposed settlement offers and would be reported to the full board the following day.

As a package the committee voted to close cases 1–12 on the consent agenda (staff had found no pursuable violations or lacked jurisdiction in those matters). The committee then authorized formal proceedings — and provided settlement authority where appropriate — for proposed discipline matters numbered 13–21 on the legal report. The recommended penalties for those proposed disciplines included civil penalties in amounts described in the legal report (ranging from several hundred to multiple thousands of dollars per matter) and inclusion of half of the investigation costs in the settlement offers; staff committed to listing exact dollar costs in the full‑board report the next day.

The committee also debated and then approved a targeted settlement approach for a higher‑profile matter (identified in staff materials as case number 22). That case concerns a licensee’s refusal to provide a client with requested documents, communications asking the client to withdraw a complaint and related conduct tied to an ongoing civil matter. Counsel recommended authorization to commence formal charges under several board rules and to offer settlement via consent with a civil penalty in the aggregate amount of $6,000 plus half of investigation costs. Committee members discussed whether penalties should be calculated per‑day under the statute’s per‑violation limits; the committee approved the authorization and settlement authority as described and added the half‑costs instruction.

Two other matters that had been held in litigation monitoring because of parallel criminal proceedings (cases 23 and 24) were brought back after guilty pleas. In both matters staff recommended, and the committee authorized, commencement of formal proceedings and settlement offers that include surrender or revocation of the license (the committee noted the respondents pleaded guilty to crimes that included bank fraud and filing false returns in one matter, and a federal wire fraud conviction in another). In one case the committee recommended full revocation of the license as the settlement outcome.

Committee members emphasized that the legal report and cost recommendations are only recommendations to the full board; the full board will review and may modify or accept the committee’s recommendations at the Oct. 21 meeting.

Committee materials and discussion are available in the meeting record; enforcement counsel said staff will include the dollar amount of investigator costs in the full‑board legal report for transparency.