New York Criminal Lawyer Blog
In March 1983, the respondent New York State Liquor Authority (the Authority) issued an on-premises liquor license to the petitioner for its premises. Thereafter, the license was renewed annually upon application. By notice, the Authority instituted a proceeding pursuant to Alcoholic Beverage Control Law § 118 to revoke petitioner’s license, upon charging him of permitting the storage, possession, trafficking or sale of a controlled substance on the licensed premises in violation of subdivision 6 of Section 106 of the Alcoholic Beverage Control Law and of four counts of the crime of Cocaine Sale of a controlled substance in the Third degree, New York Penal Law, Section 220.39, a Class B Felony, was of such improper nature as to warrant revocation, cancellation, or suspension of its license in accordance with Rule 36.1(n) of the Rules of the State Liquor Authority.
A Suffolk County Criminal lawyer said that the petitioner entered a plea of “not guilty” to the charges and a statutory hearing was held before an Administrative Law Judge. The only witnesses to testify at the hearing were an undercover police officer and the principal stockholder of petitioner corporation. The undercover officer testified that on the four dates in issue cocaine was purchased on the premises and that on the initial date, defendant identified himself as the owner of the premises. The officer further testified that defendant was arrested for cocaine sale of a controlled drug substance in the third degree.
Admitted into evidence was a Suffolk County Police Department Court Disposition Report indicating that defendant pleaded guilty to attempted cocaine sale of a controlled substance in the third degree, in full satisfaction of a multicountindictment. The report also indicated that he was sentenced to six months in the County Jail and five years probation.
Also admitted into evidence were documents showing that at the time in issue, defendant, a vice-president of the petitioner, was a 10% shareholder, owning two of the petitioner’s twenty shares. The other eighteen shares, or 90%, were then owned by the petitioner’s president.
At the administrative hearing, no evidence was proffered by the president to controvert the undercover officer’s testimony concerning the on-premises sales of cocaine. Rather, the president’s testimony was addressed to his alleged lack of responsibility for Russo’s actions and to the severe hardship that the penalty would cause him.
Based upon the record, the Court concludes that there is substantial evidence to support the findings of the Administrative Law Judge, which findings were adopted by the Authority, that the petitioner, as charged, “suffered or permitted the licensed premises to become disorderly” etc. and that the petitioner’s conduct “by its Vice President and Director, was of such improper nature as to warrant * * * suspension of its license in accordance with Rule 36.1(n) of the Rules of the State Liquor Authority [9 NYCRR 53.1(n) ]”.
Further, given the seriousness of the charges and the fact that defendant was a 10% shareholder, vice-president of the petitioner corporation, and manager of the premises, the Authority’s determination was appropriate insofar as it imposed a forfeiture of the $1,000 bond and revoked petitioner’s license.
However, the Court concludes that the Authority’s determination prohibiting licensure of the premises for 24 months is so disproportionate to the violations charged, in light of all of the circumstances, as to be shocking to one’s sense of fairness.
At the hearing, the petitioner’s principal stockholder at the time in question testified that he had been in business some 20 years as a general contractor. His work involved commercial and residential home improvement. His son had been interested “in going into the bar business” but had not had sufficient financial backing to accomplish his goal. However, the son was killed in an automobile accident at the age of twenty-three. In his son’s memory, he decided to purchase a bar and, with the proceeds of a $40,000 insurance policy, he purchased a bar and renamed it which had been his son’s nickname.
His partner had previous experience in bar management and consequently the partner became the manager of the bar. Soon thereafter he began to have “a lot of problems with the business partner: mismanagement, missing funds, et cetera”. Her had no managerial responsibilities and, indeed, did not work on the premises.
In approximately July 1983, the partner hired defendant to be the bartender. He subsequently told the president that the partner was stealing money from the bar. The president eventually bought out his partner’s interest for $7,500 and the stealing stopped. Russo then became a salaried manager and He gratuitously transferred 10% of his interest in the petitioner to Russo in recognition of “his initiative and the way he was working for his interests”. Defendant also became the petitioner’s vice-president.
At or about this time, the president decided to sell the premises because he was losing money. According to him, 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 discloses that while the president solved the stealing problem by purchasing the partner’s interest and then replacing him with the defendant, his trust was again betrayed when defendant sold controlled substances at the premises on four occasions. He had never seen defendant 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 owner/president himself had never been arrested and, in fact, came from a family of police officers.
The president testified that the arrest, which apparently did not take place, was not publicized. To his knowledge, and from what appears in the record, defendant was not incarcerated after his arrest. He testified that he was advised of defendant’s arrest for the first time in June, 1984 by defendant himself. Defendant 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 demanded defendant’s resignation but he–who, as previously noted, obtained his 10% interest in the petitioner gratuitously–now demanded that defendant pay $1,000 for that interest. Finally, defendant resigned and transferred his interest in the petitioner to defendant.
With respect to the impact of the two-year licensing prohibition imposed on the premises by the Authority, it is significant that, without knowledge of defendant’s unlawful conduct and obviously without knowledge of defendant’s arrest, which took place approximately one month later, entered into a contract for the sale of the bar to a third party.
The contract itself was not placed in evidence at the hearing, but was submitted with petitioner’s motion for a stay pending determination of this CPLR article 78 proceeding. The contract discloses that petitioner’s lease is for the term of 1 year, and that the sales price is $155,000.
In his motion for a stay pending a determination of this CPLR article 78 proceeding, president averred that during the remodelling of the premises, he took a second mortgage on his home and borrowed approximately $50,000 from other sources in his own name; 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 upon defendant who had received a 10% interest.
Under the unusual circumstances of this case, we conclude that “the maximum penalty the record will sustain” is the forfeiture of the $1,000 bond and revocation of petitioner’s license, and that the further penalty of a two-year proscription against licensing of the premises is “so grave in its impact on the individual subjected to it that it is disproportionate to the misconduct”. Accordingly this matter is remitted to the respondent New York State Liquor Authority for reconsideration of the appropriate penalty to be imposed, in accordance herewith.
As a part of a right of an accused, the latter’s right against harm and excessive punishment should be upheld. Here in Stephen Bilkis and Associates, our Suffolk County Cocaine attorneys will determine as to whether there will be an abuse against the accused. If so, our Suffolk County Criminal lawyers will make the necessary remedies for the protection of the right of the accused.