COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. Division of Administrative Law Appeals


Department of Public Health-WIC Program,

Petitioner

v. Docket No. PH-07-702

Diaz Supermarket, Inc. and Antonio Diaz,

Respondents

Appearance for Petitioner:

Madeline Grace Piper, Esquire

Deputy General Counsel, MDPH
250 Washington Street, 2nd FL
Boston, MA 02108



Appearance for Respondent:

Michael Moriarty, Esquire

Ducharme, Moriarty and Turcotte
225 High Street, Suite 601
Holyoke, MA 01040



Administrative Magistrate:

Judithann Burke

DECISION

On September 5, 2007, the Petitioner, Department of Public Health-WIC Program
(DPH), issued a Notice of Termination of WIC Vendor Agreement and Disqualification from the WIC Program to the Respondents, Diaz Supermarket, Inc. and owner Antonio Diaz (WIC Vendor No. 2031). (Exhibit 1). The Respondents filed a timely appeal and request for hearing on September 11, 2007. (Exhibit 2). A hearing was held on February 29, 2008 at the offices of the Division of Administrative Law Appeals (DALA), 98 North Washington Street, Boston, MA, pursuant to G.L. 30A, 801 CMR 1.02 et. seq., the Informal Rules, and interagency agreement.

At the hearing, twenty-five (25) exhibits were marked. The DPH provided the
services of a Spanish interpreter. DPH presented the testimony of: the undercover Compliance Buyer for the WIC Program, whose identity was protected by a screen during testimony; and, Mary Blocksidge, Program Director of the DPH WIC Program.

The Respondent presented the testimony of: Antonio Diaz, owner of Diaz Supermarket, Inc.; and, Jose Reyes, store manager and the person responsible for the day-to-day operations of Diaz Supermarket, Inc. Both parties stated their arguments for the record.

Three (3) tapes were made of the proceedings.

FINDINGS OF FACT

Based upon the testimony and documents submitted during the hearing in the
above-entitled matter, I hereby render the following findings of fact:

1. The DPH is responsible for administering the Massachusetts WIC Program
and enforcing the laws, rules and regulations pertaining to said program. (Testimony).

2. The WIC Program is a nutrition and education program, whose purpose is to
provide food supplements and nutrition information to eligible low-income pregnant
women, breastfeeding mothers, infants and children up to five (5) years of age. The WIC

Program was created by the Federal Child Nutrition Act of 1996, and is found at 42 U.S.C. s. 1771 et. seq. Regulations governing the WIC Program are found at 7 CFR 246 et. seq. The program is administered on a federal level by the United States Department of Agriculture, and on the state level, by the DPH. (Id.).

3. Persons eligible for participation in the WIC program are issued WIC checks
[vouchers/prescriptions] which can be used to purchase prescribed WIC products at stores authorized to redeem them. (Id.).

4. These checks can be redeemed only at authorized WIC vendors' stores.

5. A store seeking to become an authorized WIC vendor must apply to the DPH
to participate.

6. The WIC Vendor Application is a written document that specifically states
that the store owner will be "bound by the WIC Program regulations and policies"
including:

…accepting responsibility on behalf of the store and its owner(s), manager(s), and employees including new, part-time, paid or paid employees for violations of WIC procedures committed. (Exhibit 21).

7. Every WIC vendor, including the Respondent, is provided with written training materials regarding the proper way to process WIC checks. Additional training is available at other times upon request. (Testimony and Exhibit 24).

8. The WIC Program is required to conduct vendor monitoring in order to
prevent waste and/or fraud that may result from the improper processing of WIC checks.

To this end, the WIC program has employed the services of an undercover Compliance Buyer who visits random WIC vendors and makes purchases with designated WIC checks. (Testimony and 7 CFR 246.12[j]).

9. The Respondent, Diaz Supermarket, Inc., located at 590 Main Street,
Springfield, MA, includes: Antonio Diaz, owner and corporate president, and Jose
Reyes, store manager. (Testimony and Exhibit 25).

10. Diaz Supermarket, Inc. applied to be a WIC vendor on or about
May 1, 2006. (Exhibit 21).

11. The Massachusetts WIC program Vendor Agreements for fiscal years 2007-
2008 and 2008-2009 (Agreement) include, at pages 7-12, the WIC Program Sanction Policy. Appendix A of the Agreement (pages 21-27) contains a listing of violations and the number of sanction points applicable to different classes of violations. Sanction points are charged against a vendor if violations of the Agreement are found. (Exhibit 3).

12. Either the vendor or the state may terminate the Agreement for cause upon
fifteen (15) days written notice. (Id.).

13. Jose Reyes received training concerning the sanction policy on or about
September 21, 2005 and again on September 20, 2006. (Exhibit 4 and 5).

14. The Compliance Buyer made vendor monitoring visits to Diaz Supermarket,
Inc. on: May 10, 2007, June 7, 2007, June 14, 2007, July 10, 2007, and July 17, 2007. (Testimony and Exhibits 6, 9, 12, 15 and 18).

15. Following each of the visits on the dates specified above, the Compliance
Buyer prepared a written report that included information about what checks she had spent at the vendor's store, what items she purchased with those checks, whether or not the amount of her actual purchase was written on the WIC check in her presence and prior to the clerk asking her to sign the check, whether items she purchased had prices affixed to them, a description of the check-out person at the vendor's store, and other comments and information regarding what she did and observed while at the vendor's store on each date. (Id.).

16. At the time of the 1:40-1:52 P.M. May 10, 2007 monitoring visit to Diaz
Supermarket, the Compliance Buyer used two WIC checks (one Type 156A-1 and
one Type 156A-2). Using the check Type 156A-1, with a serial number ending with "44", the Compliance Buyer purchased: one gallon of Hood 2% milk (price not posted); two thirteen -ounce boxes of General Mills Kix cereal at $3.99 each as priced on each item; and, two forty-six ounce containers of peach Juicy Juice at $2.09 each as posted on the items. The price of the milk was later established as $3.49 per the April 26, 2006 price list on file with DPH.

Using the Type 156A-2 check, with a serial number ending in "45", the
Compliance Buyer purchased another gallon of Hood 2% milk at $3.49 (although price not posted); one sixteen-ounce Tropical Deluxe cheese at $4.29 as posted on the item; sixteen ounces of Goya lentil beans priced on the item as $.89; and, one more forty-six ounce container of peach Juicy Juice at $2.09.

These two purchases made with those WIC checks had actual costs of $9.57
and $10.76, respectively. The cashier, described in the Compliance Purchase Report as a middle-aged (over 45) Hispanic female approximately 5'6" tall with a medium build and blonde highlights in her hair, wrote a total of $20.73 on the fist check (Type 156A-1) and a total of $12.85 on the second check (Type 156 A-2). She did not ask the Compliance Buyer her for her WIC I.D. (Exhibits 6, 7 and 22).

17. The total charged by the store for the items purchased on May 10, 2007
with the 156A-1 check was $ 20.73, for an overcharge of $11.16. The total charged by the store on the 156A-2 check was $12.85, for an overcharge of $2.09. (Exhibits 6-8).

18. During the June 7, 2007 11:08-11:15 A.M. monitoring visit to the same
market, the Compliance Buyer spent another two WIC checks (one Type 156A-1 and one Type 156A-2). Using check Type 156A-1, with a serial number ending in "62", the Compliance Buyer purchased: one gallon of Hood whole milk at $3.49, per the April 27, 2006 price list (price not posted); two thirteen-ounce boxes of General Mills Kix cereal at $3.99 each as marked on the items; and two forty-six ounce containers of cherry Juicy Juice at $2.09 each, as posted on the items. With the Type 156A-2 check, with a serial number ending in "63", the Compliance Buyer purchased: a second gallon of Hood whole milk at $3.49 (price not posted); one cheese (unknown brand) with the affixed price of $4.29 (wrapped in plain plastic wrap with the price sticker attached); one pound of Goya pinto beans at the affixed price of $.89; and, one more forty-six ounce container of cherry flavored Juicy Juice at $2.09, as posted on the item.

The two purchases with the WIC checks on that date had actual costs of $9.57
and $10.76 respectively. A young female Hispanic cashier in her mid-twenties with red highlights in her hair assisted the Compliance Buyer on that date. She did not ask for the Compliance Buyer's WIC I.D. She wrote a total of $22.82 on the first check and $13.05 on the second check prior to the Compliance Buyer signing the checks. (Exhibits 9 and 10).

20. The total charged by the store for the items purchased on June 7, 2007
with check Type 156A-1 was the $22.82, for an overcharge of $7.17. The amount
charged for the items on the Type 156A-2 check, $13.05, resulted in an overcharge of $2.29. (Exhibits 9-11).

21. The Compliance Buyer returned to Diaz Supermarket again from 11:43-
11:49 A.M. on June 14, 2007. Using a Type 156A-1 check with a serial number ending in "66", she purchased: one gallon of Hood whole milk at $3.49, per the April 27, 2006 price list (price not posted on or near item); two thirteen-ounce boxes of General Mills Kix cereal at $3.99 each as posted on each box; and, two forty-six ounce containers of cherry Juicy Juice at $2.09 each as posted on each item. Using Type 156A-2 check with a serial number ending "67", the Compliance Buyer purchased: another gallon of Hood whole milk (price not posted); one pound of Tropical Deluxe cheese labeled at $4.29; one pound of Goya lentil beans labeled as $.89; and, another forty-six ounce container of cherry Juicy Juice labeled as $2.09.

The two purchases totaled $9.57 and $10.76 respectively. On that date, the
Compliance Buyer was assisted by the same Hispanic female who had assisted her on June 7, 2007. The Compliance Buyer was not asked to provide her WIC I.D. The amounts were entered on the checks prior to the Compliance Buyer affixing her signature. The cashier entered amounts on the two checks as $22.82 and $14.95, respectively. (Exhibits 12 and 13).

22. The total amount charged by Diaz Supermarket for the items purchased
on June 14, 2007 with check Type 156A-1 was the $22.82, for an overcharge of $7.17. The total charged by the store for the items purchased that day with check Type 156A-2 was $14.95, for an overcharge of $4.19. (Exhibits 12-14).

23. Another compliance monitoring took place on July 10, 2007 from 3:54 -
4:01 P.M. The Compliance Buyer used a check Type 156A-1, with a serial number ending in "99", to purchase the following items: one gallon of Hood whole milk at $3.49, (per the April 27, 2006 price list-no price on or near item); two twelve-ounce boxes of General Mills Kix cereal at $3.99 each per prices on the boxes; and, two forty-six ounce containers of tropical Juicy Juice at $2.09 per the price on the items. Using a Type 156A-2 check, the Compliance Buyer purchased: another gallon of Hood whole milk at $3.49 (price not on or near item); one pound of Tropical cheddar cheese at $4.49, as marked on the item; one pound of Goya lentil beans labeled at $.89; and, one more forty-six ounce container of tropical Juicy Juice at $2.09.

The same young red-haired Hispanic female assisted the Compliance Buyer on
July 10, 2007, per the Compliance Purchase Report. She did not ask the Compliance Buyer for her WIC I.D. and she wrote the amounts on the checks prior to the Compliance Buyer signing them. The cashier entered amounts on the checks of $22.82 and $14.95, although the actual amounts only totaled $15.65 and $10.96, respectively. (Exhibits 15 and 16).

24. The Diaz Supermarket submitted the amount of $22.82 on the July 10, 2007
Type 156A-1 check, for an overcharge of $ 7.17. The amount written on the Type 156A- 2 check, $ 14.95, resulted in an overcharge of $3.99. (Exhibits 15-17).

25. The final compliance monitoring visit took place on July 17, 2007 from 2:33
to 2:39 P.M. The Compliance Buyer used a Type 156A-1 check to purchase: one gallon of Hood 1 % milk at $3.49 per the April 27, 2006 price list (price not affixed to or near item); two twelve-ounce boxes of General Mills Kix cereal at $3.99 per box as marked; and two forty-six ounce containers of grape Juicy Juice marked at $2.09 each. The Compliance Buyer used a Type 156A-2 check to purchase a second gallon of 1% Hood milk at $3.49 (price not on item); one pound of Tropical Deluxe cheese marked at $4.29; one pound of Goya pinto beans marked at $.89; and another forty-six ounce grape Juicy Juice at $2.09. On this occasion, the Compliance Buyer was assisted by a blonde Hispanic female in her mid to late twenties with a large build. She asked the Compliance
Buyer for her WIC I.D., then proceeded to write the amounts on the checks prior to the Buyer affixing her signature. The cashier entered the amounts on the checks as $22.82 and $10.76, although the actual amounts of the purchases totaled $15.65 and $10.76 respectively. (Exhibits 18 and 19).

26. The Diaz Supermarket submitted the amount of $22.82 on the Type 156A-1
check, for an overcharge of $7.17. The Type 156A-2 check was for the correct amount. There was no overcharge. (Exhibits 18-20).

27. Overcharging is a Class II violation, as set forth in the WIC Vendor
Agreement. The Agreement provides at page 21:

Vendors who commit Class II violations shall be disqualified from the WIC Program for three years.

(Exhibit 3).

28. The compliance buyer's written Compliance Purchase Reports also reflect
myriad Class IV violations by Diaz Supermarket, Inc. These violations are:

a. The repeated failure of the cashier to check the WIC I.D. folder to ensure that the signature of the buyer matched the signature on the WIC check; (40 sanction points)

b. The failure of the store to affix prices on all of the items; (5 sanction points) (Id.).

29. Class IV violations warrant five (5) or ten (10) sanction points each. (Exhibit
3).

30. The WIC Program determined that the disqualification of Diaz
Supermarket, Inc. will not have an unduly adverse impact on WIC participants. (Exhibit 23).

30. Within fifteen minutes each of the purchases made during the compliance
monitoring visits, the compliance buyer completed the written reports and then donated the purchased food items to a non-profit agency. Receipts were provided for the items, and, these were turned in with the WIC Compliance Purchase Reports. (Testimony).

31. On September 5, 2007, DPH terminated the Respondent's Vendor Agreement
and disqualified Diaz Supermarket, Inc. and its managers from participation in the
WIC Program for a period of three (3) years. The DPH charged the Respondent with the following violations:

Class II violation- overcharging the WIC Program by writing a higher amount on the WIC check than the actual purchase on five occasions, May 10, June 7, June 14, July 10 and July 17, 2007;

Class IV violation- failure to observe the authorized WIC shopper sign the WIC check and ensure that the signature on the WIC check matches the authorized signature in the WIC I.D. folder on four occasions: May 10, June 7, June 14
and July 10, 2007. (40 points).

(Exhibit 1).

32. The Respondents were not charged with the following Class IV violation:

failure to comply with federal, state, and local laws and regulations pertaining to the disclosure of prices for any items offered for sale, including 940 CMR 3.13(1)(a) which states: "It is an unfair and deceptive act to fail to affix to any goods offered for sale to the public the price at which the goods are to be sold".

This infraction occurred with respect to the sale of Hood milk during all of the compliance monitoring visits. The Respondents were not charged any sanction points. (Id.).

33. The Respondent filed a timely appeal. (Exhibit 2).

CONCLUSION

The DPH has met its burden of proving by a preponderance of the evidence that the statutory and regulatory Class II and Class IV violations set forth in the September 5, 2007 Notice of Termination of the WIC Vendor Agreement and Disqualification From the WIC Program took place on May 10, June 7, June 14, July 10 and July 17, 2007.

The Petitioner has put forth a strong and credible case both in documentary and
testimonial evidence which the Respondents have failed to refute. In rendering this conclusion, I have credited the testimony of the Compliance Buyer who systematically recorded observations and the items purchased within a very short period of time after each monitoring visit. The individual appeared to be a methodical professional who demonstrated no bias or other hidden agenda against the Respondents or any other motive to be less than truthful. Any testimony proffered by the Respondent's witnesses did not cancel out any aspect of the Petitioner's case as set forth by its two witnesses or in the documents. Further, I did not find the testimony of Mr. Reyes to be credible.

The Respondents have raised neither any legitimate legal issues concerning the alleged lack of due process in the Petitioner's management of this case, nor, any regulatory or legal violations by the Petitioner that would negate the Findings of Fact set forth herein or those actions taken by the Petitioner in pursuit of the sanctions to be imposed upon the Respondents.

Accordingly, the Vendor Agreement for Diaz Supermarket, Inc. is
terminated, and, there is a disqualification from participating in the WIC Program for three years.

So ordered.

Division of Administrative Law Appeals,

Judithann Burke
Administrative Magistrate

DATED: May 1, 2008


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