PENNSYLVANIA LIQUOR CONTROL BOARD
HARRISBURG, PA    17124-0001
 
PENNSYLVANIA STATE POLICE,
BUREAU OF LIQUOR CONTROL
ENFORCEMENT
:
:
:
Citation No. 09-2152

v.
:
:
:
 
HUME MCNEAL BYERS
AMVETS POST 224 HOME
ASSOCIATION
750 North Fifth Avenue
Chambersburg, PA 17201-1275
:
:
: :                     
 
License No. CC-9195
 
LID 43534
 

Counsel for Licensee:

        
         Carol A. Redding, Esquire
         Patrick J. Redding, Esquire
Redding Law Offices
19 North Main Street
Memorial Square
Chambersburg, PA  17201
 
 
Counsel for Bureau:
John H. Pietrzak, Esquire
Pennsylvania State Police,
Bureau of Liquor Control Enforcement
3655 Vartan Way
Harrisburg, PA  17110
 
 
OPINION
        Hume McNeal Byers AmVets Post 224 Home Association (“Licensee”) appeals from the October 22, 2010 Adjudication and Order of Administrative Law Judge Felix Thau (“ALJ”), wherein the ALJ sustained counts one and three of Citation No. 09-2152, imposed a fine in the amount of one thousand dollars ($1,000.00) and suspended the liquor license for a period of one hundred and twenty (120) days on count one, and imposed a fine in the amount of one thousand dollars ($1,000.00) on count three.
        The Pennsylvania State Police, Bureau of Liquor Control Enforcement (“Bureau”) filed a cross-appeal from the same Adjudication and Order, wherein the ALJ dismissed counts two and four of Citation No. 09-2152.
        The first count of the Citation charged that for a two (2)-year period preceding July 7, 2009, Licensee, by its servants, agents or employees, violated sections 471 and 493(12) of the Liquor Code [47 P.S. §§ 4-471 and 4-493(12)], section 311 of the Local Option Small Games of Chance Act (“LOSGCA”) [10 P.S. § 311], and section 901 of the Department of Revenue Regulations [61 Pa. Code § 901][1], in that Licensee failed to maintain complete and truthful records covering the operation of the licensed business.   
        The second count of the Citation charged that during the periods February 8 through February 14, March 15 through March 21, April 19 through April 25, May 24 through May 30, and June 14 through June 20, 2009,  Licensee, by its servants, agents or employees, violated sections 471 of the Liquor Code [47 P.S. § 4-471] and section 315(b) of the LOSGCA [10 P.S. § 315(b)], by offering and/or awarding more than five thousand dollars ($5,000.00) in cash or merchandise in any seven (7)-day period.
        The third count of the Citation charged that during the period between February 17, 2008 through March 21, 2009, Licensee, by its servants, agents or employees, violated section 471 of the Liquor Code [47 P.S. § 4-471], section 314 of the LOSGCA [10 P.S. § 314], and section 901 of the Department of Revenue Regulations [61 Pa. Code § 901], in that Licensee derived funds from the operation of games of chance that were used for purposes other than those authorized by law.  
        The fourth count of the Citation charged that during the period between July 1, 2008 through July 31, 2009, Licensee, by its servants, agents or employees, violated section 493(12) of the Liquor Code [47 P.S. § 4-493(12)], in that Licensee falsified records covering the operation of the licensed business.
Pursuant to section 471 of the Liquor Code [47 P.S. § 4-471], the appeal in this case must be based solely on the record before the ALJ.  The Board shall only reverse the decision of the ALJ if the ALJ committed an error of law or abused his discretion, or if his decision was not based upon substantial evidence.  The Commonwealth Court defined “substantial evidence” to be such relevant evidence as a reasonable person might accept as adequate to support a conclusion.  Joy Global, Inc. v. Workers’ Compensation Appeal Bd. (Hogue), 876 A.2d 1098 (Pa. Cmwlth. 2005); Chapman v. Pennsylvania Bd. of Probation and Parole, 86 Pa. Cmwlth. 49, 484 A.2d 413 (1984).
On appeal, Licensee contends that with regard to count one, Licensee maintained accurate records.  With regard to count three, Licensee argues that the ALJ’s ruling was not supported by substantial evidence because the Bureau failed to establish that Licensee awarded more than five thousand dollars ($5,000.00) in cash or merchandise in any seven (7)-day period, and therefore, the Bureau could not establish that these funds were used for purposes other than those authorized by law.
Conversely, the Bureau argues on appeal that the ALJ properly sustained counts one and three, but erroneously dismissed counts two and four.  With regard to count two, the Bureau contends that the ALJ failed to base its finding upon substantial evidence because the testimony and documentation established that Licensee awarded more than five thousand dollars ($5,000.00) per seven (7)-day period in April, May, and June of 2009.  With regard to count four, the Bureau argues that the ALJ committed an error of law when the ALJ determined that count four was merely a restatement of count one.
The Board has reviewed the certified record, including the Notes of Testimony from the hearing held on September 23, 2010, as well as the ALJ’s Adjudication and Order, with the Licensee’s and Bureau’s contentions in mind and has concluded that the ALJ’s ruling is without error and is supported by substantial evidence with regard to counts one, three, and four of the Citation.  However, the ALJ erred in dismissing count two of the Citation.  Accordingly, we affirm in part and reverse in part.
On July 7, 2009, Bureau Enforcement Officer Jerome Botchie went to the licensed premises and conducted a records inspection.  [N.T. 15, 17].  Officer Botchie reviewed the minutes of membership records and obtained copies of Licensee’s small games of chance records from February, March, April, and May of 2009, and a one (1)-year financial record.  [N.T. 16, 18]. 
Upon reviewing the records, Officer Botchie extrapolated the projected prize payouts from the number of games that were played.  For the week of February 8, 2009 through February 14, 2009, Officer Botchie determined that the records should have reflected payouts of five thousand two hundred fifty dollars ($5,250.00).  [N.T. 21-25; Exs. C-3, C-4].  For the week of March 15, 2009 through March 21, 2009, Officer Botchie determined that the records should have reflected payouts of thirteen thousand six hundred ninety dollars ($13,690.00).  [N.T. 25-27; Exs. C-3, C-4].  For the week of April 19, 2009 through April 25, 2009, Officer Botchie determined that the records should have reflected payouts of thirty-three thousand forty dollars ($33,040.00).  [N.T. 29; Exs. C-3, C-4].  For the week of May 24, 2009 through May 30, 2009, Officer Botchie determined that the records should have reflected payouts of thirty-two thousand four hundred fifty dollars ($32,450.00).  [N.T. 30; Exs. C-3, C-4].  For the week of June 14, 2009 through June 20, 2009, Officer Botchie determined that the records should have reflected payouts of thirty thousand ninety dollars ($30,090.00).  [N.T. 30; Exs. C-3, C-4]. 
Officer Botchie compared the projected payouts to Licensee’s profit and loss statement using a statistical analysis.  [N.T. 32-38; Ex. C-5].  From that analysis, Officer Botchie inferred that Licensee was recording some of the small games of chance income as liquor and beer sales.  [N.T. 38].  Officer Botchie does not have an accounting degree and was not qualified as an expert in forensic analysis.  [N.T. 38-39]. 
On July 31, 2009, Officer Botchie returned to the licensed premises and met with Licensee’s president, treasurer, and manager.  [N.T. 46].  Licensee’s treasurer confessed to Officer Botchie that beginning in July 2008, income from small games of chance was recorded as liquor and beer sales when Licensee neared the five thousand dollar ($5,000.00) maximum payout per seven (7)-day period. [N.T. 61].  The bartender, who was present when Officer Botchie interviewed Licensee’s treasurer, further explained that the practice of recording income from small games of chance as liquor and beer sales occurred from July 2008 through February or March of 2009.  [N.T. 63, 65].  According to the bartender, profits from these games were rung in thirty dollar ($30.00) increments.  [N.T. 66].  Further, Licensee’s president and treasurer both admitted to Officer Botchie that not all of the proceeds from the small games of chance were being used for charitable purposes and that some of the profits were applied to operational costs.  [N.T. 71-73]. 
Considering the preceding, the admissions by Licensee’s treasurer and bartender explaining how records were altered to hide proceeds from small games of chance by ringing the profits as liquor and beer sales constituted substantial evidence establishing that Licensee failed to maintain complete and truthful records.  As such, the ALJ properly sustained count one of the Citation.
Moreover, the ALJ properly sustained count three of the Citation because the admissions by Licensee’s president and treasurer constituted substantial evidence establishing that funds derived from the operation of small games of chance were used for purposes other than those authorized by law. 
Further, the ALJ properly dismissed count four of the Citation as a restatement of count one.  Like count one, count four also charged Licensee with falsifying records, and cited section 493(12) of the Liquor Code [47 P.S. § 4-493(12)], as its basis.  That section of the Code was also cited as one of the bases of the violation in count one.  As established in count one, Licensee falsified records by ringing the profits from small games of chance as liquor and beer sales.  Thus, the facts used to sustain count one were the same facts used to establish count four.  As such, count four was duplicative in this case, and was properly dismissed. 
However, the Board agrees with the Bureau that the ALJ improperly dismissed count two of the Citation because he believed that the Bureau failed to present substantial evidence to establish that during the periods February 8 through February 14, March 15 through March 21, April 19 through April 25, May 24 through May 30, and June 14 through June 20, 2009, Licensee awarded more than five thousand dollars ($5,000.00) in prizes.  The ALJ reasoned that the only evidence presented to support count two was inferences drawn by Officer Botchie based on a forensic analysis that he was not qualified to perform. 
The Bureau acknowledges that Licensee’s records relating to its operation of small games of chance were not complete or truthful, and therefore were untrustworthy, but only for the period of July 2008 through some time in March 2009.  Then Licensee began keeping accurate records relating to its small games of chance operations, according to its treasurer and bartender.  Thus, the payout records beginning in at least April 2009 were presumably truthful and accurate, by Licensee’s own admission, and reflect weekly payouts in excess of five thousand dollars ($5,000.00) in the seven (7)-day periods of April 19 through April 25, May 24 through May 30, and June 14 through June 20, 2009.  Therefore, for those periods, count two should have been sustained.
Accordingly, the ALJ’s decision is affirmed in part and reversed in part.    
 

ORDER
 
    The decision of the ALJ is affirmed as to counts one, three, and four, but reversed as to the April, May, and June dates alleged in count two.
    The appeal of Licensee is dismissed.
    The appeal of the Bureau is dismissed as to count four and granted as to the April, May, and June dates alleged in count two.
    The fine of two thousand dollars ($2,000.00) has been paid in full.
    This case is hereby remanded to the ALJ for imposition of a penalty as to count two and/or new dates for the one hundred and twenty (120)-day suspension.
 
                                                        ___________________________________
                                                                         Board Secretary
 
 
Mailing Date:  May 4, 2011
 
PENNSYLVANIA LIQUOR CONTROL BOARD
HARRISBURG, PA    17124-0001
 
PENNSYLVANIA STATE POLICE,
BUREAU OF LIQUOR CONTROL
ENFORCEMENT
:
:
:
Citation No. 09-2152

v.
:
:
:
 
HUME MCNEAL BYERS
AMVETS POST 224 HOME
ASSOCIATION
750 North Fifth Avenue
Chambersburg, PA 17201-1275
:
:
: :                  :   
 
License No. CC-9195
 
LID 43534
 

Counsel for Licensee:

        
         Carol A. Redding, Esquire
         Patrick J. Redding, Esquire
Redding Law Offices
19 North Main Street
Memorial Square
Chambersburg, PA  17201
 
 
Counsel for Bureau:
John H. Pietrzak, Esquire
Pennsylvania State Police,
Bureau of Liquor Control Enforcement
3655 Vartan Way
Harrisburg, PA  17110
 
 
OPINION
        Hume McNeal Byers AmVets Post 224 Home Association (“Licensee”) appeals from the Opinion and Order Upon Remand from the Pennsylvania Liquor Control Board (“Board”) of Administrative Law Judge Felix Thau (“ALJ”), mailed January 25, 2011, wherein the ALJ, in accordance with the Board’s Opinion and Order mailed January 12, 2011, entered an additional finding of fact and conclusion of law sustaining the second count of the Citation and imposing a penalty consisting of a fine of one thousand dollars ($1,000.00) and a sixty (60)-day license suspension.[1]
        The second count of the Citation charged that during the periods February 8 through February 14, March 15 through March 21, April 19 through April 25, May 24 through May 30, and June 14 through June 20, 2009,  Licensee, by its servants, agents or employees, violated sections 471 of the Liquor Code [47 P.S. § 4-471] and section 315(b) of the Local Option Small Games of Chance (“LOSGCA”) [10 P.S. § 315(b)], by offering and/or awarding more than five thousand dollars ($5,000.00) in cash or merchandise in any seven (7)-day period.
        Pursuant to section 471 of the Liquor Code [47 P.S. § 4-471], the appeal in this case must be based solely on the record before the ALJ.  The Board shall only reverse the decision of the ALJ if the ALJ committed an error of law or abused his discretion, or if his decision was not based upon substantial evidence.  The Commonwealth Court defined “substantial evidence” to be such relevant evidence as a reasonable person might accept as adequate to support a conclusion.  Joy Global, Inc. v. Workers’ Compensation Appeal Bd. (Hogue), 876 A.2d 1098 (Pa. Cmwlth. 2005); Chapman v. Pennsylvania Bd. of Probation and Parole, 86 Pa. Cmwlth. 49, 484 A.2d 413 (1984).
A hearing was held on Citation No. 09-2152 on September 23, 2010.  At the hearing, Licensee was represented by counsel.  By Order mailed October 22, 2010, the ALJ sustained the first and third counts and dismissed the second and fourth counts.  The ALJ imposed an aggregate fine of two thousand dollars ($2,000.00) and a one hundred twenty (120)-day suspension.  Licensee timely appealed the ALJ Order mailed October 22, 2010, as to Counts 1 and 3.  The Bureau filed a cross-appeal from the same Order, as to Counts 2 and 4.  By Order mailed January 12, 2011, the Board remanded the case to the ALJ for an imposition of penalty as to the second count.  By Order mailed January 25, 2011, the ALJ sustained the second count and imposed a fine of one thousand dollars ($1,000.00) and a sixty (60)-day suspension.
 
In the instant appeal, Licensee challenges only the imposition of penalty imposed by the ALJ on the second count of the Citation.  Therefore, only the penalty for the second count of the Citation, as issued in the ALJ’s Opinion and Order Upon Remand from the Pennsylvania Liquor Control Board, will be addressed.[2]
Licensee argues that the one thousand dollar ($1,000.00) fine and the sixty (60)-day suspension was excessively harsh.  The imposition of penalties is the exclusive prerogative of the ALJ.  The Board may not disturb penalties that are within the parameters set forth in section 471(b) of the Liquor Code.  [47 P.S. § 4-471(b)].  Section 471(b) specifically prescribes a penalty of license suspension or revocation or a fine of fifty dollars ($50.00) to one thousand dollars ($1,000.00), or both, for the second count.  The statute does not set an upper limit to the number of days a license can be suspended.  Thus, the one thousand dollar ($1,000.00) fine and the sixty (60)-day suspension are clearly permissible and well within the scope of section 471(b).  Accordingly, the Board finds that the penalty was not excessive and the ALJ’s decision is affirmed.    
 

ORDER
 
The decision of the ALJ is affirmed.
Licensee’s appeal is dismissed.
The fine of one thousand dollars ($1,000.00) on Count 2 has been paid.
        The case is hereby remanded to the ALJ to ensure compliance with this Order and to impose new dates for the suspension(s).
 
                                                        ___________________________________
                                                                         Board Secretary
 
 


[1] Licensee’s appeal to the Board’s Opinion mailed January 12, 2011, is currently pending before the Franklin County Court of Common Pleas.
 
[2] Contemporaneous with its present appeal, Licensee filed an Application for Supersedeas. This application was unnecessary because Licensee was not charged with a violation that was subject to an enhanced penalty.  The filing of the appeal acts as a supersedeas or stay of the ALJ’s Order, without the need to file an Application for Supersedeas.  [47 P.S. § 4-471(b)].
 
 
 


[1] Although the Bureau cites to section 901 of the Department of Revenue Regulations [61 Pa. Code § 901] in the Citation, the Board notes that the regulations governing local option small games of chance are found at section 901.701 through section 901.811 of the Department of Revenue Regulations [61 P.S. §§ 901.701-901.811].
 


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