STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) DIVISION OF ALCOHOLIC )

BEVERAGES AND TOBACCO, )

)

Petitioner, )

)

vs. ) CASE NO. 95-3493

) DEBRA and RICHARD ELLIS, ) d/b/a ECONOMY MEATS, )

)

Respondents. )

)

RECOMMENDED ORDER

Final hearing was held in Naples, Florida, on September 25, 1995, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

The parties were represented at the hearing as follows: For Petitioner: Leslie Anderson-Adams

Senior Attorney

Department of Business and Professional Regulation

1940 North Monroe Street Tallahassee, Florida 32399-1007

For Respondent: Debra and Richard Ellis, pro se

316 South 1st Street Immokalee, Floirda 33934

STATEMENT OF THE ISSUE

The issue in this case is whether Respondents are guilty of food stamp fraud and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Action dated May 1, 1995, Petitioner alleged that Respondents hold a license for the sale of alcoholic beverages. Petitioner alleged that Respondents illegally trafficked in and fraudulently possessed federal food stamps in violation of Section 409.325. Petitioner alleged that Respondents committed food stamp fraud three times--March 14, March 23, and April 27, 1995.

By Request for Hearing dated May 24, 1995, Respondents requested a formal hearing on the charges.

At the final hearing, Petitioner called three witnesses and offered into evidence six exhibits, which were all admitted into evidence. Respondents called no witnesses and offered no exhibits into evidence.

No transcript was ordered. Rulings on timely filed proposed findings of fact are in the appendix.

FINDINGS OF FACT

1. Respondents hold alcoholic beverage license #21-00010, series 2-APS, for use at 402 South First Street N.W., Immokalee, Florida. Respondents are husband and wife.

   
   

2. On March 14, 1995, an investigator employed by the U.S. Department of Agriculture entered Respondents' licensed premises and approached Ricardo Ellis, who was behind the counter. Without identifying himself, the investigator asked Mr. Ellis if he could exchange food stamps for cash. Mr. Ellis agreed to do so and gave the investigator $100 in return for which the investigator gave Mr. Ellis food stamps with a value of $215.

   
   

3. On March 23, 1995, the investigator returned to the licensed premises. He approached Debra Ellis, who was behind the counter, and asked her where Mr. Ellis was. She reported that he was out of the store. Without identifying himself, the investigator asked Mrs. Ellis if she could exchange food stamps for cash. Mrs. Ellis agreed to do so and gave the investigator $100 in return for which the investigator gave Mrs. Ellis food stamps with a value of $200.

   
   

4. On April 27, 1995, the investigator returned to the licensed premises. Mr. Ellis was out of the store at the time. Without identifying himself, the investigator approached Ms. Ellis and asked her if she could exchange food stamps for cash. She agreed to do so and gave the investigator $159 in return for which the investigator gave her food stamps with a value of $265.

   
   

5. Petitioner recovered the food stamps exchanged in the March 23 transaction. They were endorsed by "Rick's Economy Meats" and the federal government had redeemed them by paying their face value to Economy Meats. The food stamps exchanged in the March 14 transaction have never been recovered. The food stamps exchanged in the April 27 transaction were recovered moments after the transaction took place, when law enforcement officers arrested Mrs. Ellis.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction over the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes.)

   
   

7. Retailers are authorized to accept food stamps only in exchange for eligible food. Retailers may not accept food stamps in exchange for cash, except when the cash is returned as change when food stamps are accepted as payment for eligible food. 7 Code of Federal Regulations 278.2(a).

   
   

8. Section 409.325(2) provides that it is a crime for a person "knowingly" to use, acquire, or traffic, or aid and abet another person in the use or traffic, of food stamps in a manner not authorized by law. Section 409.325(2)

   calls for disqualification from the food stamp program for 5-20 years for a violation of Section 409.326(2).

   
   

9. Section 409.327(2) provides that Petitioner shall suspend or revoke a retailer's license if the retailer is guilty of a "pattern of fraud." The subsection defines a "pattern of fraud" as:

   
   

   at least two incidents of fraud that have the same or similar intents, results,

   accomplices, victims, or methods of commission or that are otherwise interrelated by distinguishing characteristics and are not isolated incidents, if the last such incident occurred within 5 years after a prior incident of fraud.

   
   

10. Section 409.327(3) provides that a retailer guilty of engaging in a pattern of fraud shall be prohibited for at least 10 years from securing a license to sell alcoholic beverages.

    
    

11. Petitioner must prove the material allegations against Respondents by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

    
    

12. The licensees in this case are Debra Ellis and Ricardo Ellis. Economy Meats is a fictitious name and, as such, does not hold the subject license. Nothing in the law, including the definition of "licensee" under Section 561.01(14), suggests that either spouse can be held strictly liable, regarding patterns of fraud, for the fraudulent acts of the other spouse. Petitioner argues that Mr. and Mrs. Ellis are joint licensees. This argument is unsupported by the record, which, among other things, does not contain a copy of the license in question.

    
    

13. Petitioner has proved that Mrs. Ellis has violated Section 409.326(2) on two occasions and that Mr. Ellis has violated Section 409.326(2) on one occasion. There is no proof that either spouse aided or abetted the other. On March 23 and April 27, Mrs. Ellis acted alone in the commission of food stamp fraud, and, on March 14, Mr. Ellis acted alone in the commission of food stamp fraud. Thus, Petitioner has also proved a pattern of fraud by Mrs. Ellis, but not Mr. Ellis.

    
    

14. However, Section 561.29(1) provides that Petitioner may revoke or suspend an alcoholic beverage license if the licensee or his agents violated any state or federal law. In this case, Petitioner has proved that Mr. Ellis violated state and federal law on the one occasion of food stamp fraud in which he personally participated.

    
    

15. Rule 61A-2.022, Florida Administrative Code, provides penalty guidelines for Petitioner. A violation consisting of a pattern of fraud under Section 409.327 calls for license revocation.

    
    

16. Under the rule governing patterns of fraud, the appropriate penalty against Mrs. Ellis is revocation of her license to sell alcoholic beverages. Under the statute governing simple food stamp fraud, the appropriate penalty against Mr. Ellis is disqualification for a period of 5-20 years. However, as noted above, Petitioner is authorized to revoke Mr. Ellis' alcoholic beverage

    license for his violation of state and federal law in the single act of food stamp fraud of which he has been proved guilty.

    
    

17. There is no evidence of aggravating or mitigating circumstances.

RECOMMENDATION

Based on the foregoing, it is

RECOMMENDED that the Division of Alcoholic Beverages and Tobacco, Department of Business and Professional Regulation, enter a final order against Debra Ellis revoking her license to sell alcoholic beverages and against Ricardo Ellis revoking his license to sell alcoholic beverages and disqualifying each of them from participation in the food stamp program for 10 years.

ENTERED on October 19, 1995, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings on October 19, 1995.

APPENDIX

Rulings on Petitioner's Proposed Findings 1-3: adopted or adopted in substance.

4: rejected as subordinate.

5-6: adopted or adopted in substance. 7-8: rejected as subordinate.

9: adopted or adopted in substance. 10: rejected as subordinate.

11: adopted or adopted in substance. 12-14: rejected as irrelevant.

15-16: adopted or adopted in substance. 17-19: rejected as subordinate.

COPIES FURNISHED:

Linda Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792

Ricardo and Deborah Ellis 2925 4th St NW

Naples, FL 33964

Ricardo and Deborah Ellis

316 S. 1st St.

Immokalee, FL 33934

Leslie Anderson-Adams, Senior Attorney Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-1007

John J. Harris, Director

Division of Alcoholic Beverages and Tobacco Department of Business and

Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 95-003493

Orders for Case No: 95-003493