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Supreme Court upholds officials' immunity from prosecution

New Hampshire Union Leader

November 18. 2015 10:23AM

CONCORD — A Manchester businessman who says he was the victim of a witch hunt by a former attorney general and banking commissioner failed to convince the state Supreme Court, which on Tuesday upheld a lower court decision granting the state officials immunity from prosecution.

That’s not likely to be the last word in a case that has been working its way through the courts since 2010, when the state launched its investigation of Jeffrey Frost and his real estate enterprise, Chretien/Tillinghast. Frost was arrested and charged with unlicensed mortgage lending, a misdemeanor, stemming from the seller-financed sale of a $475,000 lakefront home in Alexandria.

The buyer in late 2009 filed a complaint against Frost with the Consumer Protection Bureau of the Attorney General’s Office, alleging among other things that Frost had fraudulently induced him to enter into the sale.

Frost was originally charged with failing to allow the state Banking Department to examine records, violating a banking commissioner order, and two counts of unlicensed mortgage banking. The charges were later dismissed by a District Court judge because of a faulty search warrant.

Until July 2009, anyone in New Hampshire could legally execute up to four first mortgage loans in a calendar year without obtaining a license from the Banking Department. The law was changed in July 2009 to remove that exemption, but Frost’s transaction took place in March.

Within days of losing their criminal case, state officials decided to prosecute Frost administratively through the Banking Department. Frost went to court seeking a stay and won that case. The Banking Department then appealed to the state Supreme Court, and was again rejected.

In 2012, having spent $180,000 defending himself against three separate state actions, Frost sued the attorney general, the state Banking Department and several state employees of both departments, claiming the state retroactively applied a new law, lied in court, conducted an illegal search and overlooked the reasons for the initial complaint that triggered the investigation.

Frost also claimed violation of his Constitutional rights against unreasonable search and seizure, and brought negligent supervision claims against several state officials and agencies.

All of those claims were dismissed in Superior Court under the doctrine of “official immunity,” which placed a heavy burden of proof on Frost.

The Supreme Court on Tuesday upheld that ruling, quoting a precedent which stated, “This exacting standard gives government officials breathing room to make reasonable but mistaken judgments by protecting all but the plainly incompetent or those who knowingly violate the law.”

Frost, a retired airline pilot and former candidate for state representative, resigned as chairman of the board for the American Red Cross in Manchester because of his arrest, according to his lawsuit. On Tuesday, he said he plans to appeal to the United States Supreme Court.

“We will see what the U.S. Supreme Court feels about this prejudicial decision in our plans to appeal because, clearly here again, the private citizen does not have equal protection from powerful government law enforcement personnel protected by the state,” he said.

Deputy Attorney General Ann Rice declined to comment on behalf of the N.H. Department of Justice.

Two state representatives introduced a House resolution earlier this year that would have required the state to reimburse Frost for $176,448 in legal expenses, with the money to come from the Banking Department and Department of Justice, because of what the lawmakers called their “wrongful and illegal conduct.”

The bill was introduced in January and voted “inexpedient to legislate” in February.

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