3-0-4 % STATE OF FLORIDA ME DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATIO. DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO“ Av Case No. 97-2261 (yn) P- C Ws GOLDEN SHOW, INC. d/b/a SOLIDGOLD +) (License No. 23-00030), ) Petitioner, ) ) ) VS. DEPARTMENT OF BUSINESS AND Final Order No. BPR-98-02485 Date 4-19-99 PROFESSIONAL REGULATION, FILED DIVISION OF ALCOHOLIC BEVERAGES Dept. of Business and Professional Regulation AND TOBACCO, AGENCY CLERK Sarah Wachmgn, Agency Clerk Respondent Locate Pi Pde espondent, By: x). vs. SILVER SHOW, INC., d/b/a SOLID GOLD (License No. 16-00504) vs. Case No. 97-2262 DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, Respondent, PURE PLATINUM (License No. 16-00010), Petitioner, ) ) ) ) ) ) ) ) ) ) ) PLATINUM SHOW, INC., d/b/a ) ) ) ) ) vs. ) ) Case No. 97-2263 DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) DIVISION OF ALCOHOLIC BEVERAGES ) AND TOBACCO, ) Respondent ) ) ) SSS 1 of 11 FINAL ORDER The Director, Division of Alcoholic Beverages and Tobacco, Department of Business and Professional Regulation (hereinafter’Division’), after consideration of the complete record of this case on file with the Division, hereby enters this Final Order. PRELIMINARY STATEMENT 1. On January 22, 1997, Petitioners filed three applications for transfer of alcoholic beverages licenses with the Division. The Petitioner, Solid Gold, Inc., d/b/a Solid Gold, filed an application for license number 23-00030 to sell alcoholic beverages at its premises located in Dade County, Florida. Petitioner, Platinum Show, Inc., d/b/a Pure Platinum, filed an application for license number 16-00010 to sell alcoholic beverages at its premises in Broward County, Florida. Petitioner, Silver Show, Inc., d/b/a Solid Gold, filed an application for license number 16-00504 to sell alcoholic beverages at its premises located in Broward County, Florida. 2. On May 8, 1997, the Division by means of a Notice of Disapproval advised Petitioners in writing that the temporary alcoholic beverage license applications were disapproved. The Notice of Disapproval also notified Petitioners of their right to a hearing pursuant to Chapter 120, Florida Statutes. Petitioners requested and were granted a hearing before an Administrative Law Judge which was scheduled for September 2, 3, and 4, 1997. 3. On September 2, 3, and 4, 1997, the Division of Administrative Hearings (hereinafter “DOAH”) conducted a hearing at Fort Lauderdale, Florida, with Administrative Law Judge Michael A. Parrish presiding. 2 of 11 On March 6, 1998, the Administrative Law Judge filed his Recommended Order in this cause. Petitioners filed exceptions to the Recommended Order on March 24, 1998. RULING ON AMENDED EXCEPTIONS FILED BY PETITIONERS 4. The Petitioners’ Counsel has filed six (6) exceptions to the Recommended Order issued on March 6, 1998. 5. Exception 1 In Exception 1, Petitioners argue that since §561.331(1), Florida Statutes provides that licenses are issued only to applicants upon “the filing of a properly completed application for transfer’ and the Division granted them a temporary license, the Administrative Law Judge's finding of fact that the Petitioners have submitted incomplete applications, failed to correct errors or omissions, or supply additional information to enable the Division to conduct a full investigation, is not supported by competent substantial evidence. This argument is misplaced. The law is well settled that an applicant for a license bears the burden of persuasion in proving his or her entitlement to the license. Department of Banking and Finance, Division of Securities and Investor Protection v. Osbome Stem and Company , 670 So. 2d 932, 934-35 (Fla. 1996). Petitioners are correct in pointing out that §561.331(1), Florida Statutes, authorizes the issuance of a temporary license for transfer upon the filing of a Properly completed application. However, pursuant to §561.18 and §561.19, Florida Statutes, the Division is required to conduct an investigation of the applicant's background to determine the applicant's fitness to hold the license. 3 of 11 It is within the context of this investigatory power that the Administrative Law J udge found the applications to be incomplete. In the instant case, Petitioners are asking the Division to reweigh the evidence presented and judge the credibility of the witnesses. This request is clearly prohibited by law. See, Department of Business and Professional Regulation v. McCarthy, 638 So. 2d 574, 575 (Fla. 1st DCA 1994); Heifetz v. Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 475 So. 2d 1277,1281 (Fla. ist DCA 1985). Likewise, Petitioners have failed to state with particularity in their Exception where in the Recommended Order there exists facts that are not supported by the record. Accordingly, the Administrative Law Judge’s findings of fact are supported by competent substantial evidence, and as such Exception 1 is thereby rejected. 6. Exception 2 Exception 2 is geared towards the Administrative Law Judge's finding of fact in regards to [2 of the Respondent's Notice of Disapproval. Petitioners’ grounds for this exception are the same as those listed for Exception 1. Petitioners may disagree with the Administrative Law Judge’s findings, but the Division is not authorized to overturn those findings of fact, if the Administrative Law Judge’s findings are supported by competent substantial evidence as it is here. McCarthy, supra. Similarly, Petitioners have failed to state with particularity in their Exception where in the Recommended Order there exists facts that are not supported by the record. Therefore, Exception 2 is rejected. 4 of 11 7. Exception 3 In Exception 3, Petitioners challenge the Administrative Law Judge's findings that there is competent substantial evidence that Skobeltsyn is precluded by federal law from holding an alcoholic beverage license. Petitioners argue forcefully that “[t]here is nothing in statutory language of the immigration law which precludes corporate applicants from seeking and holding an alcoholic beverage license because their 100% stockholder may not meet the Title 8 U.S.C. §1621 definition of a qualified alien.” See, Petitioners’ Revised Exceptions to the Recommended Order. Petitioners’ argument in this regard is unpersuasive for the following reasons. First, the authority of an agent or an employee to operate and manage a license premises derives from the authority of the principal license holder. Consequently, “[ajn act which, if done by the principal, would be illegal because in violation of a statute cannot be done for him by an agent’. Boatright v. City of Jacksonville, 334 So. 2d 339, 344 (Fla. 1st DCA 1976). The Administrative Law Judge’s reasoning with respect to piercing the corporate veil is correct and should not be disturbed. Second, Petitioners do not refute the fact that Mr. Skobeltsyn, the individual, is by definition of 8 U.S.C. §1621, ineligible to receive the alcoholic beverage licenses sought in this instance.. Thus, as an alternative, Petitioners contend that Mr. Skobeitsyn’s corporate entities, of which is he is the 100% stockholder, is not prohibited by federal law from obtaining that which, Mr. Skobeltsyn as an individual cannot possess. Petitioners’ Position is inapposite to the plain meaning of 8 U.S.C. §1621 and as such the Division may not reject the Administrative Law Judge's findings. 5 of 11 Petitioners have failed to demonstrate that there is no competent substantial evidence from which the Administrative Law Judge's finding could reasonably be inferred. Therefore, Exception 3 is rejected. 8. Exception 4 Petitioners state two reasons for the basis of Exception 4. First, Petitioners argue that there is no competent substantial evidence in the record supporting the finding that Michael J. Peter has a direct or indirect financial interest in the businesses sought to be licensed. Petitioners rely on the testimony of Debbie Pender, the Division’s chief licensing administrator to support their Proposition that Michael J. Peter does not have the ability to control the sale of alcoholic beverages, the entertainment provided at the premises, the management or operation of the business or the ability to purchase alcoholic or derive any income from the premises. See, Petitioners’ Revised Exceptions to the Recommended Order, filed on March 24, 1998. A complete review of Ms. Pender’s testimony reveals more than Petitioners’ creative advocacy would Suggest at first reading. Ms. Pender’s testimony, in pertinent parts, on the subject is as follows: Q: Effectively, is there any difference between a directly interested party anda co-licensee? They still have the same disclosure requirements, they still have the Same qualifications requirements; correct? A: Well, | don’t think | made a distinction as to whether Mr. Peter’s involvement is direct or indirect. | said that he has an interest. And because of the amount interest. | thought that the control was such that they would have to become a co- licensee in the business.(emphasis supplied). 6 of 11 Q: Okay. Then by virtue of the amendments, the interest, for lack of a better way, was reduced to agree where they no longer, the licensee no longer needed to be on as a co-licensee? A: Correct. Q: But they still needed to be ask, disclosed to AB&T as a directly interested party, as an interested party? A: Correct. Q: So no matter how much the men -- strike that. So after everything is said and done, the two amendments are made, ail that is accomplished is the that the interest of the licensor drops in degree from requirements of being the co-licensee to the requirements of being an interested Party. A: Correct. Q: But, as an interested party, they still need to be disclosed on the application? A: Correct. (Tr. P. 282, In. 7-25 - P. 283, In. 1-13). Michael J. Peter is a convicted felon and is therefore. not qualified to hold an alcoholic beverage license. See, §561.15(1), Florida Statutes. Nevertheless, Mr. Peter continues to own certain trademarks, that are essential to the successful operation of the Petitioners’ clubs. Mr. Peter has sought to protect his trademark interests by conditioning their usage on his right to control certain aspects of the Petitioners’ business decision making processes. The record clearly reflects that the testimony at the hearing supports the Administrative Law Judge's findings that Mr. Peter has an interest in Petitioners’ clubs. Next, Petitioners argue that as a matter of law, the filing of the Chapter 11 bankruptcy Proceeding severed all of Mr. Peter's legal and equitable interests in the businesses. The Administrative Law Judge rejected the Division's argument that without legal ownership, Petitioners lacked authority to control and manage the business. 7 of 11 Specifically, the Administrative Law Judge accepted the Petitioners’ position and took judicial notice of the Bankruptcy Court's Order which authorized Cinderella Ice, Inc., to assume management and possession of the assets of the businesses. It is within this context that the Administrative Law Judge concluded that Mr. Peter's interest is not based on the interests vested in the Bankruptcy estate. Rather, the Administrative Law Judge concluded that Mr. Peter's interest is based on his continued ability to control and manage the trademarks that are essential to the successful operation of Petitioners’ businesses. Petitioners are asking the Division to reweigh the evidence presented or otherwise interpret the evidence to fit their desired outcome. This was clearly within the province of the Administrative Law Judge and cannot be reweighed by the Division. McCarthy, supra. Accordingly, Exception 4 is rejected. 9. Exception 5 In Exception 5, Petitioners purport that “[t]here is no competent substantial evidence in the record to support the finding of fact that the applicants have falsely sworn to the alcoholic beverage license applications in accordance with Paragraph 7 of the Respondents’ Notice of Disapproval.” See, Petitioners’ Revised Exceptions to the Recommended Order, 95. In essence, Petitioners’ seem to be arguing that there is no competent, substantial evidence to support Agent Krause’s testimony that the wire transfers involving international Value Group and its parent entity, Tathimtrans; SS Trans, Inc., and Oakdale Trading to and from the Parex Bank constitutes a “direct or indirect financial interests” in those companies. 8 of 11 The record and the Recommended Order are replete with examples of the financial web that has been crafted by International Value Group, Inc.; Tathimtrans, LLP; S.S. Trans, Incorporated and Oakdale Trading, Ltd. The evidence in the record amply demonstrates that all these companies contributed funds that were eventually transferred to Cinderella Ice, Inc., for the purpose of buying Petitioners’ businesses. None of the vague references to Agent Krause’s testimony cited by Petitioners in this exception overcomes this finding of fact. The weight given to this evidence is within the province of the Administrative Law Judge, and should not be overturned by the Division if supported by competent substantial evidence. Heifetz, supra. The Administrative Law Judge’s finding of fact is supported by competent substantial evidence. Accordingly, Exception 5 is rejected. 9. Exception 6 in Exception 6, Petitioners contend that there is no competent, substantial evidence in the record to support the finding of fact that the Petitioners have falsely sworn on the alcoholic beverage license applications by declaring that the source of the investment funds was an $8.2 million dollar commercial loan from the Parex Bank and thereby violated §559.791, Florida Statutes. The Administrative Law Judge acknowledged the evidence cited by Petitioners in this exception in 9[14-15 and 1164-80 of the Recommended Order and rejected it. The weight given to this evidence is within the province of the Administrative Law Judge, and should not be overturned by the Division if supported by competent, substantial evidence. Heifetz, supra. Therefore, the Administrative Law Judge’s finding of fact is supported by competent, substantial evidence, Exception 6 is rejected. 9 of 11 FINDINGS OF FACT 10. The Division hereby adopts and incorporates by reference the Finding of Fact in foto, as set forth in the Recommended Order. CONCLUSIONS OF LAW 11. The Division hereby adopts and incorporates by reference the Conclusion of Law in toto, as set forth in the Recommended Order. ORDER Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that all three applications for alcoholic beverage licenses are DENIED. Petitioners must tender at once temporary alcoholic beverage license number 16-00504, Series 4-COP; license number 1 6-00010, Series 4-COP and license number 23-00030 Series 4-COP to the Division upon the rendition of this Order. DONE AND ORDERED this_/'4 day of April, 1998. Cr, RICHARD A. BOYD, Direct8r Division of Alcoholic Beverages and Tobacco 1940 North Monroe Street Tallahassee, Florida 32399-1020 (850) 488-3227 RIGHT TO APPEAL This Final Order may be appealed pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure, by filing a Notice of Appeal 10 of 10 Co; pies furnished: Louis J. Terminello, Esq. Ch adroff, Terminello & Terminello 2700 Southwest 37th Avenue Miami, Florida 33133-2728 Bruce S. Rogow, Esquire Beverly A. Pohl, Esquire 500 East Broward Boulevard, Suite 1930 Fort Lauderdale, Florida 33394 The Honorable Michael A. Parrish Administrative Law Judge Division of Administrative Hearings Ca pt. Allen F. Nash Fort Lauderdale District Supervisor Miguel Oxamendi Office of the General Counsel George G. Lewis Office of the General Counsel TH IS ORDER SERVED ON ee BY. DATE. See Me 11 of 11

Docket for Case No: 97-002262

Orders for Case No: 97-002262