Findings Of Fact At all times material hereto, the Respondent has been licensed as an ACLF by the Petitioner. During an inspection of Respondent's facility by Loveda Perry, public health nutritionist, on October 29, 1986, Perry observed a large, industrial size can opener which was used during food preparation. The can opener was dirty, and the gears and blade of the opener were filled with food and metal shavings. Perry considered the food to be old since it appeared that the food had built up and caked on the opener. On a revisit to the facility on November 12, 1986, Perry found that the can opener was clean. During an inspection of Respondent's facility on November 9, 1987, Perry again found the can opener was dirty, with built up food deposits and metal shavings on the blade and gears. There was also a build up of old food on the base of the can opener. On a revisit to the facility on March 21, 1988, Perry found that the can opener was clean. Metal shavings and a food build up on a can opener is likely to lead to the build up of bacteria, and can lead to food borne illnesses. According to Respondent's Administrator, it was the policy of the facility to clean the can opener once a week during the time these inspections took place. At the current time, however, employees are instructed to clean the can opener three to five times a day. In order to meet the minimum standards established by the Petitioner for ACLFs, can openers have to be cleaned after each use.
Recommendation Based upon the foregoing, it is recommended that the Petitioner enter a Final Order imposing an administrative penalty against the ACLF license of Respondent in the amount of 325.00. DONE AND ENTERED this 29th day of December, 1988, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4755 Rulings on the Petitioner's Proposed Findings of Fact: 1. Adopted in Finding of Fact 1. 2-3. Adopted in Finding of Fact 2. 4-5. Adopted in Finding of Fact 3. Rulings on the Respondent's Proposed Findings of Fact: The Respondent filed a letter which summarizes testimony resented at hearing. The letter does not present specific proposed rindings of fact, but is generally contrary to Findings of Fact 2 through 5. COPIES FURNISHED: Edward Haman, Esquire Office of Licensure and Certification 7827 North Dale Mabry Tampa, Florida 33614 Delema Rogers, Administrator The Verandah 4301 31st Street South St. Petersburg, Florida 3371 Sam Power, Clerk 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 =================================================================
The Issue The issue in this case is whether a tax on a warranty deed is an allowable property cost, as claimed in Petitioner’s Medicaid cost report.
Findings Of Fact Venice operates Sunset Lake, a licensed nursing facility that participates in the Florida Medicaid program as an institutional provider. AHCA is the agency responsible for administering the Florida Medicaid program. On or about June 1, 2005, Venice (or an affiliate, which need not be distinguished from Venice for purposes of this proceeding) purchased the nursing facility that is now known as Sunset Lake from Bon Secours-Venice Healthcare Corporation. Venice filed its initial Medicaid cost report with AHCA for the fiscal period ending December 31, 2005. The initial Medicaid cost report for a nursing facility is used to set the per diem rates at which the Medicaid program will reimburse the facility, both retroactively for the initial period of operations, and prospectively until the next cost report is filed and used to set a new per diem rate. AHCA contracted with an outside auditing firm to audit Venice’s initial cost report. The auditing firm produced an audit report, which identified proposed adjustments to Venice’s cost report. The audit report was reviewed by AHCA analyst Steven Diaczyk before it was finalized and sent to Venice. Venice initially contested 17 adjustments in the final audit report. Before the final hearing, Venice withdrew its challenge to 16 of the 17 adjustments. The only remaining dispute to be resolved in this proceeding is whether audit adjustment number four, which disallowed $49,540.00 of costs in the category of “Property Taxes – Real Estate,” should be reduced by $12,203.80. The disallowed $12,203.80 represents one-half of the tax assessed pursuant to section 201.02, Florida Statutes (2005),1/ on the warranty deed conveying the Sunset Lake real property (including the land, land improvements, and the building) to Venice. Venice claimed one-half of the tax on its cost report because that is the amount paid by Venice; the other half was paid by the seller. Venice contends that this tax is an ad valorem tax and/or a property tax,2/ which is an allowable property cost on the Medicaid cost report. AHCA contends that the tax on the warranty deed is an excise tax, not a property tax, and, therefore, not an allowable property cost. The audit report did not explain the reason for disallowing the $12,203.80 tax, as part of the $49,540.00 adjustment. Instead, the audit report explained the entire $49,540.00 adjustment as necessary to “disallow unsupported costs,” suggesting a lack of documentation. However, no non- hearsay evidence was offered at hearing to prove that Venice failed to give the auditors sufficient documentation of the costs disallowed in adjustment number four. At least with respect to the disallowed $12,203.80 item, sufficient documentation was offered at hearing to support the cost as an actual cost incurred by Venice. The question is whether the documented cost is allowable as an ad valorem tax or property tax, as Venice claims. Documentation for the $12,203.80 tax on the warranty deed is found in the buyer/seller closing statement and on the face of the warranty deed. The closing statement sets forth the total purchase price of $7,500,000.00, which is also the amount of a mortgage loan from Bank of America. The closing statement allocates the total purchase price to the land ($477,000.00), land improvements ($496,500.00), the building ($2,513,250.00), FFE--furniture, fixtures, and equipment ($992,250.00), and personal property ($3,021,000.00). The closing statement also shows a separate category called credits and/or prorations, to appropriately account for items accruing over the calendar year. The first line item in this category is for “Ad Valorem Taxes.” If ad valorem taxes were due for calendar year 2005, they would have been prorated. However, the amount is shown to be zero. As confirmed at hearing, no ad valorem taxes were due for the Sunset Lake property in 2005, because as of January 1, 2005, the property was owned by a not-for-profit entity, making the property exempt from ad valorem taxes. The second line item in this category, for “Non-Ad Valorem Assessments,” for which there was no exemption, shows a total amount for 2005 of $8,235.29, which was prorated to credit the buyer for $3,270.65. The closing statement proration had the effect of charging the seller with its share of the assessments for the part of the year prior to closing.3/ A separate category on the closing statement addresses “Recording Fees.” The first line item in this category is for “Transfer Tax-snf [skilled nursing facility].” The taxable amount is shown as $3,486,800.00. The tax of $24,407.60 is split equally between buyer and seller, with $12,203.80 charged to each. The next line is for “Stamp Tax on mtg. [mortgage].” The taxable amount is shown as $7,500,000.00, the amount of the mortgage loan. The tax of $26,250.00 is charged to the buyer. Another line item is shown for “Intangible Tax on mtg.” Again, the taxable amount is shown as $7,500,000.00, and the tax of $15,000.00 is charged to the buyer. The top right corner of the warranty deed conveying the Sunset Lake property contains the following printed or stamped text in the space marked “(Space reserved for Clerk of Court):” RECORDED IN OFFICIAL RECORDS INSTRUMENT # 2005117710 7 PGS 2005 JUN 01 05:01 PM KAREN E. RUSHING CLERK OF THE CIRCUIT COURT SARASOTA COUNTY, FLORIDA MMARSH Receipt#635187 Doc Stamp-Deed: 24,407.60 [Bar/Scan Code with instrument number] As Venice’s representative confirmed, the reference on the face of the warranty deed to “Doc Stamp-Deed: 24,407.60,” affixed by the clerk of the court in the official records entry, means that a documentary stamp tax on the deed in the amount of $24,407.60 was paid. Because the tax was split between buyer and seller, Venice actually paid $12,203.80. Although the closing statement shows that the tax at issue was called a transfer tax and categorized as a “recording fee,” and not an “ad valorem tax,” Venice contends here that the documentary stamp tax on the deed was an ad valorem property tax, because the tax was assessed on the value of the property. As Venice summarized its position: That irrespective of whether the transfer tax is called an excise tax, a doc stamp tax or any other type of tax, the fact that it is based solely on the value of the assets makes it an ad valorem tax, which is considered by the state of Florida in all cases under Medicaid cost reporting purposes [sic] as a property tax. (AHCA Exh. 3, p. 14). AHCA disagrees. AHCA contends that the documentary stamp tax on the deed is an excise tax, assessed on the consideration for the property transferred by the deed. The parties do agree that the documentary stamp tax rate, applied to either the value of the property or the consideration for the property, was 70 cents per $100.00.4/ The parties also agree that the “property” at issue, which was conveyed by the warranty deed, includes the land, land improvements, and the building. That being the case, it appears from the closing statement that the “taxable amount” used to determine the documentary stamp tax on the deed (referred to as the “transfer tax-snf”) was the sum of the purchase price allocations for the land ($477,000.00), land improvements ($496,500.00), and the building ($2,513,250.00).5/ The documentary stamp tax on the warranty deed was based on the consideration for the property stated in the closing statement.6/ Venice asserts that the documentary stamp tax was based on the “assessed value of the property (land, land improvements and the building) [of] $3,486.750.00[.]” (Venice PRO at ¶ 24, n. 1). However, Venice offered no evidentiary support for this assertion. The amount Venice calls the “assessed value” is actually the amount of the total purchase price allocated in the closing statement to the land, land improvements, and the building. In contrast, the “assessed value” for this property in 2005, according to the Sarasota County Tax Collector’s bill, was $3,724,300.00. The documentary stamp tax on the warranty deed was not based on the assessed value of the property. Venice also contends that subsequent action by the Department of Revenue supports Venice’s position that the documentary stamp tax on the deed was based on the value of the property and not on the consideration for the property. Venice offered in evidence portions of correspondence between representatives of Venice’s parent company with the Department of Revenue in 2008 that resulted in a determination that Venice owed additional documentary stamp tax on the Sunset Lake warranty deed. According to Venice, “the Department [of Revenue] did not agree with the value of assets that Venice had reported and paid taxes on.” (Venice PRO at ¶ 32). Contrary to Venice’s characterization, the portions of correspondence with the Department of Revenue in evidence confirm that the documentary stamp tax on the Sunset Lake warranty deed was based on the consideration for the real property (i.e., the land, land improvements, and the building). The Department of Revenue sought additional information from Venice to establish what the consideration was. The Department of Revenue “Official Request for Information” form asked for “Total Consideration (Purchase/Transfer Price)” for the property conveyed by warranty deed. The form completed on Venice’s behalf reported that the consideration was $3,486,750.00--the purchase price allocation in the closing statement to the land, land improvements, and the building. Along with the completed form, a letter of explanation on Venice’s behalf (with attachments not offered in evidence) went into great detail in an attempt to justify these purchase price allocations, and ended on the following note: We are hopeful that the enclosed documentation and the foregoing explanation of the purchase price allocations will provide sufficient information for the Department to determine that the correct amount of documentary stamp taxes was paid on each of the deeds, based in each case on the agreed consideration paid for the respective real estate assets. Thus, from the evidence offered by Venice, the focus of the Department of Revenue inquiry, as well as the Venice response to the inquiry, was entirely on the consideration paid for the property. The fact that the Department of Revenue ultimately determined that Venice owed more documentary stamp taxes on the warranty deed than was paid is not evidence that the tax was assessed on the “value” of the real property, as Venice argues. Instead, the material suggests that the Department of Revenue disagreed with what Venice contended was the total consideration and/or with Venice’s allocation of the total purchase price to the real property (the land, land improvements, and the building) and to the other assets acquired in the transaction, including furniture, equipment, and personal property. Venice also takes the position that the tax on the warranty deed is an allowable cost pursuant to two provisions in the federal Provider Reimbursement Manual (PRM), which is one of the sources used to determine allowable costs. First, PRM section 2122.1 provides the “general rule” that “taxes assessed against the provider, in accordance with the levying enactments of the several States and lower levels of government and for which the provider is liable for payment, are allowable costs.” Next, PRM section 2122.2 provides in pertinent part: Certain taxes . . . which are levied on providers are not allowable costs. These taxes are: * * * C. Taxes in connection with financing, refinancing, or refunding operations, such as taxes on the issuance of bonds, property transfers, issuance or transfer of stocks, etc. Generally, these costs are either amortized over the life of the securities or depreciated over the life of the asset. They are not, however, recognized as tax expense. Venice contends that the documentary stamp tax paid on the warranty deed must be allowed because it is a tax that meets the general rule in section 2122.1, and it is not an excluded tax under section 2122.2(C). The documentary stamp tax paid by Venice on the warranty deed satisfies the general elements of section 2122.1; AHCA does not contend otherwise. Instead, AHCA contends that the documentary stamp tax must be considered an excluded tax under section 2122.2(C). AHCA is correct that the documentary stamp tax on warranty deeds transferring real property is essentially a transfer tax. However, it is not a tax in connection with financing, refinancing, or refunding operations. An example of such a tax would be the documentary stamp tax that Venice paid on the mortgage on Sunset Lake, because it was a tax in connection with the financing for the property. Venice correctly points out that, grammatically, section 2122.2(C) suggests that the only taxes excluded under that subsection are taxes in connection with financing, refinancing, or refunding operations. The use of the phrase “such as” suggests that everything that follows that phrase must be considered an example of what precedes the phrase. AHCA acknowledges that consideration of the grammatical structure of section 2122.2(C) alone would support Venice’s interpretation. However, AHCA’s expert testified, reasonably and without contradiction, that Venice’s interpretation would render the phrase “property transfers” meaningless. As AHCA’s expert explained, a tax on a property transfer is not a tax on financing, refinancing, or refunding operations. Therefore, despite the grammatical structure, taxes on property transfers must be considered a separate type of excluded tax under section 2122.2(C). As further support for this interpretation, AHCA’s expert pointed to the second sentence, providing that the excluded costs referred to in the first sentence “are either amortized over the life of the securities or depreciated over the life of the asset.” AHCA’s expert explained that taxes on financing, refinancing, or refunding operations would all be amortized, whereas taxes on property transfers would be depreciated over the life of the depreciable assets transferred (i.e., the land improvements and the building). Venice relies solely on the grammatical structure of section 2122.2(C), offering no response to AHCA’s reasoning for interpreting the subsection in a way that is contrary to the meaning suggested only by grammatical structure. Venice did not explain how a tax on property transfers could be considered a tax on financing, refinancing, or refunding operations (so as to give meaning to the phrase “property transfers”), nor did Venice explain when taxes on financing, refinancing, or refunding operations would be depreciated over the life of the asset (so as to give meaning to that phrase in the second sentence).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Health Care Administration enter a Final Order disallowing $12,203.80 claimed as a property tax expense in Venice’s initial Medicaid cost report. DONE AND ENTERED this 25th day of July, 2014, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of July, 2014.
Findings Of Fact Dunya Safford is a resident of Gadsden County, Florida. The parties have stipulated that he was admitted to the Tallahassee Memorial Hospital on December 30, 1977, in an emergency medical condition, and that the treatment performed by the hospital was of an emergency nature. The parties have further stipulated that the Tallahassee Memorial Hospital is a regional referral hospital within the meaning of 154.304(4), Florida Statutes (1977). Dunya Safford, then less than one year old, was admitted to the hospital on December 30, 1977 and discharged on January 4, 1978. Dunya is the child of David and Carrie Safford. The total bill for services rendered by the hospital was $1,816.30. The hospital submitted a bill to Gadsden County in the amount of $633.95 for the services. This latter amount is the portion of the bill which can be billed to the county of residence in accordance with the Florida Health Care Responsibility Act. Gadsden County has refused to pay the bill, contending that the patient was not indigent. The patient has not paid the bill. The patient's parents have a total of eight children. One of the children married and moved out of the household prior to the patient's hospitalization. Another of the children is Mrs. Safford's child, but not Mr. Safford's child, although Mr. Safford has taken responsibility for complete support of the child. During the six months prior to the hospitalization, Mrs. Safford had no income. Mr. Safford had approximate average weekly income of $95 in his employment as an agricultural worker. The Saffords were, during that period, food stamp recipients. They received $2,552 in food stamps, and paid $669 for them. They thus received net food stamp benefits of $2,178, or an average of $363 per month.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint and, if so, the penalties that should be imposed.
Findings Of Fact At all times relevant to this proceeding, Respondent was a restaurant subject to Petitioner's regulation. That regulation required Petitioner to comply with all relevant provisions set forth in Florida Statutes, Florida Administrative Code, and the Food Code. Petitioner's license number is 1614578. Respondent's restaurant is located at 5001 North University Drive, Lauderhill, Florida (the subject premises). At the times relevant to this proceeding, Ana Rosa Castro was the manager of the restaurant. Two inspections of the subject premises are relevant to this proceeding. The first inspection was a routine inspection on December 15, 2009 (the routine inspection). Michele Schneider conducted the routine inspection. A callback inspection was conducted on February 24, 2010 (the callback inspection). Terrence Diehl and Tatiana Joy conducted the callback inspection. Ms. Schneider and Mr. Diehl are experienced and properly trained to conduct inspections of food service facilities to ensure compliance with applicable regulations. For both inspections, an inspector prepared a report on a personal data assistant, printed the report at the establishment, and provided a copy of the report to the person in charge prior to leaving the establishment. The inspectors discussed the report with Ms. Castro and explained the reasons the violations were cited. The routine inspection report and the callback inspection report were admitted into evidence as Petitioner's exhibits 2 and 3, respectively. Ms. Schneider's report noted multiple violations, including the four violations that are issue in this proceeding. Ms. Schneider's report contained a warning that required Respondent to correct each cited violation on or before February 20, 2010, at 8:00 a.m. Ms. Schneider and Ms. Castro signed the routine inspection report. Mr. Diehl and Ms. Joy performed the callback inspection on February 24, 2010. Ms. Joy, working under Mr. Diehl's supervision,2 prepared the callback inspection report setting forth the findings she and Mr. Diehl made. Ms. Joy and Mr. Diehl reviewed the findings with Ms. Castro and explained to her the reasons for the violations identified in the report. Ms. Joy, Mr. Diehl, and Ms. Castro signed the callback inspection report. The four violations at issue in this proceeding had not been corrected following the routine inspection. Violations of the Food Code are classified as either critical or non-critical. Critical violations are violations that are likely to result in a food-borne illness or an environmental health hazard. Non-critical are violations of the Food Code that have not been classified as critical, and are less likely to contribute to a food-borne illness or an environmental health hazard. Each of the four alleged violations in this proceeding is designated a critical violation.3 Food Code Rule 3-501.16(A) requires that except in circumstances inapplicable to this proceeding, food shall be maintained at or below 41 degrees Fahrenheit. On December 15, 2009, and on February 24, 2010, the cook-line reach-in cooler was not maintaining potentially hazardous food at or below 41 degrees Fahrenheit. This is a critical violation because foods that are maintained above 41 degrees become a potential danger for the growth of bacteria that could harm a consumer of the food. Food Code Rule 6-301.14 requires a food establishment to have a sign or poster at a sink used by food service employees notifying the employees to wash their hands. There was no such signage posted during the routine inspection or the callback inspection. This is a critical violation because employee hand-washing is a basic requirement for good hygienic practices, and the sign reminds employees of the requirement that they wash their hands before returning to work. Food Code Rule 7-102.11 requires that "working containers used for storing poisonous or toxic materials such as cleaners and sanitizers taken from bulk supplies shall be clearly and individually indentified with the common name of the material." The routine inspection noted the following as a violation: "[o]bserved unlabeled spray bottle dishroom [sic]." On the callback inspection, Mr. Diehl observed several unlabeled bottles that had liquids in them. There was no evidence as to what type liquids were in the spray bottles. Specifically, there was no evidence that the unlabeled spray bottles had to be labeled because they were "containers used for storing poisonous or toxic materials such as cleaners and sanitizers taken from bulk supplies." Pursuant to section 509.049(5), Respondent was required provide training of its employees and was required to provide proof of such training to an inspector. On December 15, 2009, Ms. Castro could not provide proof to Ms. Schneider that her employees had been trained. On February 24, 2010, Ms. Castro could not provide proof to Ms. Joy and Mr. Diehl that her employees had been trained. The testimony of Mr. Diehl established that this failure is a critical violation because untrained employees may not be aware of the importance of proper hygiene and proper food handling, which can result in contaminated food and the exposure of the consumer to food-borne illness. On June 16, 2009, Petitioner filed an Administrative Complaint against Respondent in case number 2009032247. That Administrative Complaint contained five alleged violations of the Food Code, at least one of which was a critical violation. The alleged violations were resolved by the entry of a Stipulation and Consent Order filed July 21, 2009. By that action, Respondent agreed to pay an administrative fine in the amount of $1,200.00.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Petitioner enter a final order finding Respondent not guilty of the violation alleged in paragraph 3 of the Administrative Complaint. It is further RECOMMENDED that the final order find Respondent guilty of the violations alleged in paragraphs 1, 2, and 4 of the Administrative Complaint. It is further RECOMMENDED that Administrative Fines be imposed against Respondent in the amount of $600.00 for each of the three violations, for a total fine of $1,800.00. DONE AND ENTERED this 24th day of June, 2011, in Tallahassee, Leon County, Florida. S CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 2011.
Findings Of Fact The Petitioners filed a timely petition challenging the subject rule published by the State of Florida, Department of Health and Rehabilitative Services (HRS). The rule was published at 10 FAW 2323, and was numbered as 10C- 3.60, which would be used as the publication number in the Florida Administrative Code. The publication of the notice of the proposed rule occurred on July 27, 1984 and the Petitioners submitted their challenge on August 10, 1984. The proposed rule establishes terms under which food stamp recipients throughout the state may be required to participate in "workfare programs;" however, at present, this rule may only be utilized in two counties. This limitation is based upon the fact that necessary funding for the implementation of the terms of the rule has only been appropriated for two counties. Funding is pursuant to the 1984 General Appropriations Act of the State of Florida Legislature. That funding is pursuant to the proviso within the Appropriations Act which states: Of the fund in Specific Appropriations 764, up to two hundred thousand dollars from the General Revenue Fund shall be used to continue or establish workfare projects in two counties for recipients of food stamps. The workfare program idea as expressed in the subject rule is an adjunct of the food stamp program, a joint federal-state program authorized by the Food Stamp Act of 1977, as amended, 7 U.S.C., Section 2011, et. seq. HRS administers the Florida version of the food stamp program based upon the authority set forth in Section 409.275, Florida Statutes. The subject rule is under the claimed authority of Section 409.026 - .028, Florida Statutes. Petitioners are heads of households and would potentially be affected by the implementation of the workfare program contemplated by the proposed rule. They are residents of Orange County, Florida who are recipients of food stamps. The contingency of the implementation of a workfare program in Orange County, Florida pursuant to the proposed rule has not occurred. HRS has yet to decide which of the two Florida counties it would accept under the financing envisioned by the General Appropriations Act. As a consequence, no determination has been made on the subject of which food stamp recipients will be affected by the terms of the proposed rule. In making its program choice, HRS provided all of the chairpersons of the various County Commissions within the State of Florida with an announcement of the possible availability of funds for the food stamp workfare program. An example of this notice may be found as the Petitioner's exhibit No. 10 admitted into evidence. That notice contemplated that the counties which are interested in participation would express their interest in writing on or before September 1, 1984, through a letter of intent to participate in the workfare program. This invitation was dated July 25, 1994. Orange County did not express an interest in keeping with this opportunity and is not one of the two counties that will be the recipient of the funds for administration of the workfare program. The recipients will be chosen from the counties which submitted a written statement of interest. As a result, at present, Petitioners will not be required to abide by the terms of the subject rule. For the Petitioners to be subjected to the rule's terms, additional funding must be appropriated beyond that available for the two counties envisioned by the General Appropriations Act, Orange County must opt for participation in the workfare program and the Petitioners must be residing in Orange County, when the first two events occur.
The Issue The issue is whether the Respondent's certification should be revoked or otherwise penalized based on the acts alleged in the Administrative Complaint.
Findings Of Fact William H. Wood was certified by the Criminal Justice Standards and Training Commission on November 16, 1973, and issued certificate number 02-9291. On September 22, 1986, Wood answered an advertisement in a publication known as Linn's Stamp News. The publication caters to the interests of stamp collectors. The advertisement read as follows: MINT POSTAGE wanted. Ungummed, uncancelled postage under 10 and postage dues - 50%, ungummed, uncancelled postage over 9 , special deliveries, postal stationary and officials - 65%. The advertisement was placed by a Maryland stamp dealer who was assisting United States Postal Service inspectors. The advertisement was placed in an effort to identify persons engaged in the unlawful activity of reuse of previously used postage stamps for mailing. Wood answered the advertisement on September 22, 1986, by letter. He stated in the letter: Sir, you advertised in Linn's Stamp News that you are buying ungummed mint postage. The ad had no shipping instructions. I have the following. A quantity and various denomination of stamps that's listed, with dollar value at the stated percentage in the ad. Please advise shipping instructions. The cooperating stamp dealer forwarded a reply to Wood on September 29, 1986, which indicated a willingness to begin buying stamps from Wood if they were "ungummed, uncancelled." "Ungummed" refers to the condition of a postal stamp which lacks the adhesive backing usually present on unused postage stamps. "Uncancelled" postage refers to stamps which have not been previously utilized to post a letter or a parcel. "Mint" postage refers to stamps which are gummed, uncancelled, and in pristine condition. On October 6, 1986, Wood forwarded about 1800 postage stamps of various denominations with an aggregate face value of about $258.00 to the cooperating Maryland stamp dealer. Soon thereafter, Wood was sent a check for $164.89 in payment for the stamps. Many of the stamps supplied by Wood bore evidence of being previously used to post a letter or a parcel. The cooperating stamp dealer sent a letter to Wood on October 15, 1986, which thanked him for his shipment of stamps and indicated a need for stamps of $100.00 face value per month. The letter also stated that the stamp dealer knew a friend named Jenkins who was in the mail order business and had similar needs for stamps. On January 6, 1987, the cooperating stamp dealer, "Chuck," received another shipment of postage stamps from Wood. "Chuck" forwarded a check payable in the amount of $32.92 to Wood in payment for the receipt of stamps with a face value of $51.00. "Chuck" enclosed a letter to Wood with the check which stated in part: You will notice that it is a J.J. Enterprise check. Jeff has been needing so much of this postage for his business mailings he has been buying most all of my shipment that I get in. Therefore, if you would be kind enough to just send any future shipments directly to his address, I would appreciate it. I will still make my share. Thank you. For your records his address again is Jeff Jenkins, J.J. Enterprises, Box 22015, Baltimore, Maryland 21203. . . . "Jeff Jenkins" is an assumed name of Postal Inspector John T. Evans, acting in an undercover investigative capacity. "J.J. Enterprises" likewise is a fictitious, non-existent business created for purposes of the investigation of Wood by the Postal Service. Subsequent to January 6, 1987, seven more shipments of stamps were received from Wood by postal inspectors. The last arrived on June 16, 1988. In each case, Wood received a check in payment for the stamps. The types of stamps forwarded by Wood in all the shipments would have been of little value for stamp collection purposes. Accordingly, the market value for such a purpose would have been far below the amounts paid to Wood for the stamps. The sum of the face value of the stamps was $753.10. The price paid to Wood was consistent with the value of used stamps which were to be unlawfully reused for postage to lower mailing expenses. In one of the correspondences forwarded by Postal Inspector John Evans, posing as "Jeff Jenkins," Wood was told of a friend, Don Wilson, who lived in Alabama. The Respondent was told that Don Wilson was interested in buying "these type stamps." "Don Wilson" is an assumed name of Postal Inspector Larry Dodson, acting in an undercover investigative capacity. On June 23, 1988, Inspector Dodson telephone Wood, posing as Don Wilson. Inspector Dodson told Wood that he was interested in buying stamps in order to reduce mailing expenses. Wood stated that he would be willing to sell stamps to Don Wilson. On June 29, 1988, Inspector Dodson and four other postal inspectors served a search warrant at Wood's home. The search yielded thirteen shallow plastic trays and a plastic tub of the type used to soak stamps off paper envelopes. Inspector Dodson also found a quantity of stamps which had been removed from the corners of envelopes by soaking. Inspector Dodson found approximately 5100 mailing envelopes utilized by the West Florida Gas Company to receive utility payments. He also located about 1800 mailing envelopes utilized by Gulf Coast Electrical Cooperative to receive utility payments. The utilities' envelopes bore some cancelled and some uncancelled postage stamps. Inspector Dodson also found about 173,000 used postage stamps of various denominations, most packaged in glassine envelopes, one hundred stamps per envelope. The quantities and types of stamps which Wood had stored were of little collector value. On April 11, 1989, pursuant to federal charges filed against him by the United States Attorney in the Northern District of Florida, Wood pleaded guilty to the charge of dealing in cancelled postage stamps in violation of 18 U.S.C. Section 1720.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Criminal Justice Standards and Training Commission enter a Final Order and therein revoke the certification of William H. Wood. DONE and ENTERED this 30th day of July, 1990, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1990. Copies furnished to: Joseph S. White Assistant General Counsel Florida Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 William H. Wood 104 North Claire Drive Panama City, Florida 32401 Jeffrey Long, Director Criminal Justice Standards and Training Commission Post Office Box 1489 Tallahassee, Florida 32302 James T. Moore, Commissioner Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 Rodney Gaddy, General Counsel Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302
Findings Of Fact The Petitioners herein, Lorisna Pierre, Dieuala St. Hilaire and St. Helene Joimelus, are Cuban/Haitian refugees who possess Immigration and Naturalization Service (INS), cards 1-94 which contain the "Cuban Haitian Entrant" stamp thereon. At some time subsequent to their entrance into the United States, the Petitioners applied for food stamps for themselves and their families and were determined to be ineligible. Therefore, the Petitioners are, and it is so stipulated by Respondent, substantially affected by the challenged rule which formed the basis for the denial of their applications. By letter dated September 16, 1985, Marshall E. Kelly, Program Staff Director for Economic Services within DHRS, issued a letter memorandum, Number 85-131, in which he recites that information received from the U.S. Department of Agriculture indicates that the "Cuban/Haitian Entrant" stamp which appears on certain INS 1-94 cards may be questionable and thereafter outlines certain procedures to be followed when that particular card bearing the questioned stamp is presented by an alien applying for food stamps. Thereafter, DHRS, on April 1, 1986, promulgated a new Chapter 10 to its Manual Number 165-6U, dealing with Food Stamp Certification which at subparagraph 10-12 defines illegal aliens as persons who have entered the United States unlawfully and declares these individuals to be ineligible for food stamps, and at subparagraph 10-18, defines and describes the various types of 1- 94 cards which may be presented as identification by aliens applying for food stamps. It goes further to display samples of the various cards in question and indicate which are acceptable and which are not as well as what benefits are attached to each. This chapter in question is of general applicability as it applies to all potential applicants for food stamps within the State of Florida about whom there is or may be some question regarding eligibility based on citizenship or alien status. This new version of Chapter 10 was, upon promulgation, distributed to all food stamp offices statewide for immediate implementation and is used by food stamp eligibility workers in determining the eligibility of applicants for food stamps. The chapter as currently written interprets the INS rules displaying, as was stated previously- samples of specific 1-94 cards and the variations thereof that exist, implements, explains and otherwise gives guidelines for the application of the food stamp regulation, and goes further than the actual U.S. Department of Agriculture regulation by suggesting methods of resolution regarding questionable information when determining the eligibility of an applicant. In shorts substantial additional information not contained in the basic Department of Agriculture food stamp regulation is contained within the provisions of Chapter 10 of the DHRS manual which is the basic guideline for the implementation of the food stamp regulation as it pertains to aliens within the State of Florida. In the preparation and implementation of this paragraphs DHRS did not give any public notice of what it intended to do or what it was proposing. No explanation of the purpose and effect of the proposal was publicized or was the specific legal authority authorizing the adoption of the proposals or a summary of the economic impact of the proposal noticed. In facto no notice was given to anyone who would be impacted by the proposal prior to its implementation. No publication was made of the proposed promulgation in the Florida Administrative Weekly or any other public news dissemination source nor was the general public including Petitioners, offered an opportunity to present evidence and/or argument on the issues under consideration.
The Issue The issue in this case is whether Respondents are guilty of food stamp fraud and, if so, what penalty should be imposed.
Findings Of Fact 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. 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. 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. 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. 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.
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
