An agency issued a license to a company and was renewed annually. By notice, the agency then initiated a proceeding to revoke the company’s license on the ground that on four different occasions the licensee suffered or permitted the licensed premises to become disorderly by suffering or permitting the storage, possession, trafficking or sale of a controlled substance drug and that the licensee’s conduct by its vice president leading to his arrest of four counts of the crime of criminal sale of a controlled substance in the third degree, a Class B felony, was of such improper nature as to warrant revocation, cancellation, or suspension of its license in accordance with the law. But, the company entered a plea of not guilty to the charges and a legal proceeding was held.
The only witnesses to testify at the hearing were an undercover police officer and the principal stockholder of the company. The undercover officer testified that cocaine was purchased on the premises of the company and from the vice president of the company.
Sources revealed that a report indicating that the company’s vice president pleaded guilty to attempted criminal sale of a controlled substance in the third degree in full satisfaction of a multi-count indictment was admitted into evidence. The report also indicated that he was sentenced to six months in the jail and five years probation.
Moreover, documents showing that the company’s vice president was a 10% shareholder, owning two of the company’s twenty shares were also admitted into evidence. The other eighteen shares, or 90%, were then owned by the company’s president.
At the hearing, no evidence was presented by the company’s president to contradict the undercover officer’s testimony concerning the sales of cocaine on the company’s premises. Rather, the president’s testimony was addressed to his alleged lack of responsibility for the vice president’s actions and to the severe hardship that the penalty would cause him.
Based on the record, the court conclude that there is significant evidence to support the findings that the company, as charged, suffered or permitted the licensed premises to become disorderly and that the company’s conduct by its vice president was of such improper nature as to warrant suspension of its license.
Further, given the seriousness of the charges and the fact that the company’s vice president was a 10% shareholder, the court stated that the agency’s findings was appropriate as it imposed a forfeiture of the $1,000 bond and revoked the company’s license.
However, they conclude that the agency’s findings prohibiting licensure of the premises for twenty-four months is so disproportionate to the violations charged as to be shocking to one’s sense of equality.
At the hearing, the president of the company testified that he had been in business for twenty years as a general contractor. His work involved commercial and residential home improvement. He further stated that his son had been interested in going into the bar business but had not had sufficient financial backing to accomplish his goal. However, his son was killed in an automobile accident at the age of twenty-three. In his son’s memory, the president decided to purchase a bar and, with the proceeds of a $40,000 insurance policy, he purchased a bar.
The president had his partner and consequently became the manager of the bar. Soon thereafter the president began to have a lot of problems with his partner’s mismanagement, missing funds and others. But, the president had no managerial responsibilities and did not work on the premises.
Soon after, the president’s partner hired a man, the company’s present vice president, to be the bartender. The man subsequently told the president that his partner was stealing money from the bar. The president eventually bought out his partner’s interest. The man then became a salaried manager and the president gratuitously transferred 10% of his interest in the company to the man in recognition of his initiative and the way he was working. Subsequently, the man became the company’s vice-president.
In a while, the president decided to sell the premises because he was losing money. He stated that he was into the hole at that time for over $100,000 which included the initial $40,000 investment. In addition, he had been borrowing from one of his corporations to keep the other one going.
The evidence revealed that while the president solved the stealing problem by purchasing his partner’s interest, his trust was again betrayed when the vice-president sold controlled substances at the company’s premises for four different occasions.
The company’s president stated that he had never seen his vice president sell controlled substances on the premises. Indeed, the record reveals that on two of the dates in question he was not in the country and on the other two dates he was not at the premises. The president himself had never been arrested and, in fact, came from a family of police officers.
The president testified that the arrest was not publicized. To his knowledge and from what appears in the record, the vice president was not imprisoned after his arrest. He also testified that he was advised of the vice president’s arrest for the first time by the vice president himself. The vice president also told him that he was set up in the place by a female high school teacher, that he was not guilty, that he had hired lawyers and he was going to fight the case.
The president further asserted that he demanded his vice-president’s resignation but the vice president now demanded to pay him back $1,000 for the interest. Finally, the vice president resigned and transferred his interest in the company.
With regards to the two-year licensing prohibition imposed on the premises by the agency, the president, without knowledge of the vice-president’s unlawful conduct and obviously without knowledge of his arrest entered into a contract for the sale of the bar to a third party.
Based on records, the contract was not placed in evidence but was submitted with the company’s motion for a stay pending determination. The contract shows that the company’s lease is for the term and that the sales price is $155,000.
In the motion for a stay pending a determination, the president asserted that during the remodeling of the premises, he took a second mortgage on his home and borrowed approximately $50,000 from other sources in his own name. With that, if he is forced to close the premises and also lose the contract of sale of the premises, he and his family would lose their life’s savings and he would be personally bankrupt. All of which resulted from his misplaced trust and reliance on his company’s past vice-president who had received a 10% interest.
Under the unusual condition of the case, the court conclude that the maximum penalty the record will sustain is the forfeiture of the $1,000 bond and revocation of the company’s license, and that the further penalty of a two-year prohibition against licensing of the premises is so severe in its impact on the individual subjected to it that it is disproportionate to the misconduct. Consequently, the issue is referred back to the agency for reconsideration of the appropriate penalty to be imposed, in accordance of the order.
Nowadays, it is hard to entrust your business with someone. If you need legal guidance, you can seek assistance and representation from the Suffolk County Criminal Attorney. However, if someone accused you of being involved on drug related issues, you can contact the Suffolk County Cocaine Possession Lawyer at Stephen Bilkis and Associates.