COMMONWEALTH OF MASSACHUSETTS


Suffolk, ss. Division of Administrative Law Appeals

Department of Public Health-
WIC Program,

Petitioner

v. Docket No. PH-08-642

Shree Shakti Enterprise, Inc. d/b/a
Castleway Market, and Pravinkum R. Patel,

Respondents


Appearance for Petitioner:

Madeline Grace Piper, Esq.

Department of Public Health
Office of General Counsel
250 Washington Street, 2nd Floor
Boston, MA 02108-4619

Appearance for Respondents:

Arthur M. Pearlman, Esq.

P.O. Box 2507
Framingham, MA 01703

Administrative Magistrate:

Sarah H. Luick, Esq.

SUMMARY OF DECISION

The WIC Vendor was found in violation of the WIC Vendor Agreement with Class II, III & IV level violations after four visits to the store by an undercover compliance buyer. The most serious violations were Class II for a pattern of overcharging the WIC program, and for submitting the full costs of each WIC check for full reimbursement instead of submitting the checks for only the actual costs of the items the undercover compliance buyer purchased. The Class III violation was selling a non-WIC item to the compliance buyer on three of the visits, and the Class IV violation was for improper pricing of WIC items.

DECISION

On July 30, 2008, the Petitioner, Department of Public Health (DPH) - WIC Program, issued an "Agency Notice of Termination of WIC Vendor Agreement and Disqualification from the WIC Program with Right of Appeal" to the Respondents, Shree Shakti Enterprise, Inc. (d/b/a Castleway Market) and Pravinkum R. Patel. (Ex. A) The Respondents timely filed a claim for hearing on August 18, 2008 on the merits of the proposed termination and disqualification. (Exs. B & C.) The case was referred for hearing to the Division of Administrative Law Appeals (DALA). Thereafter, on October 22, 2008 a pre-hearing conference was held, and then on December 17, 2008 a hearing was held, both at the offices of DALA, 98 North Washington Street, 4th Floor, Boston, MA 02114, pursuant to 801 CMR 1.02, the Informal Rules of Procedure.

Various documents are in evidence. (Exs. A through D and Exs. 1-A, 1-B, 1-C, 2 through 19.) One tape was used. The Petitioner presented the testimony of Mary Blocksidge, the DPH-WIC Program Vendor Manager, and the testimony of the undercover compliance buyer. The Respondent presented no witnesses. Both parties made arguments on the record.

FINDINGS OF FACT

1. Pravinkum R. Patel is the owner/principal of Shree Shakti Enterprise, Inc., and the manager at its store, Castleway Market, located at 432 Mechanic Street in Fitchburg. Mr. Patel leases the space. He opened for business on October 5, 2004. The store has two cash registers. Three persons work in the store. It is an independent store with business hours from 6:00 AM to 10:00 PM, Monday through Sunday. The store carries a full line of grocery items including three or more brands to chose from. The store participates in the EBT/Food Stamp Program. Mr. Patel/Shree Shakti Enterprise, Inc. had no prior WIC Program participation. (Ex. 14. Testimony.)

2. In April 2006, Mr. Patel filed an application to become a WIC Program Vendor with Castleway Market. As required, he also filled out Food Vendor Price Lists and Food Vendor Surveys for Castleway Market. He and one of his employees, Janis Conlon, underwent the required WIC Vendor trainings in both 2006 and 2007, which included how to properly conduct WIC check transactions. Mr. Patel also received the brochure that summarizes the WIC Program and how to carry out a WIC check transaction for future reference. Once the application information was in order, Mr. Patel, Shee Shakti Enterprise, Inc. and Castleway Market joined the WIC Program as a WIC Vendor. The WIC Vendor Agreement was entered into for one year and then was renewed for subsequent years. (Exs. 1-A, 1-B, 1-C, 14, 15, 16, 17, 18 & 19. Testimony.)

3. In signing the WIC Vendor Agreements each year, Mr. Patel agreed to
satisfy various federally required criteria for participating in the WIC Program. (Ex. 14) One significant requirement is to:

Have the store manager and/or other authorized employee(s) of the store participate in, all required training programs or sessions at which WIC procedures and requirements are taught, including but not limited to annual WIC Vendor training sessions …. (Ex. 1-A)

Another important requirement makes the WIC Vendor:

Accountable for the actions of all … managers, agents, employees and personnel, paid or unpaid, who may be involved in WIC transactions at
the Vendor's store …. (Ex. 1-A)

4. The WIC Vendor Agreement sets forth the specific steps involved in a
WIC check transaction with a WIC shopper. Some of the basic procedures include:

Observe the authorized WIC shopper sign the WIC check in the presence of the cashier, and ensure that the signature on the WIC check matches an authorized signature in the WIC ID folder or an official Massachusetts WIC ID card ….

Write in the space provided on the WIC check a price no higher than the actual, current shelf price of only those WIC products authorized on the WIC check and purchased by the authorized WIC shopper;

Price each check for WIC products actually purchased and received by the authorized WIC shopper;

Never charge authorized WIC shoppers more than the current shelf price; never charge authorized WIC shoppers more for WIC products than non-WIC shoppers;

Never charge the WIC Program for WIC products provided in excess of those listed on the WIC check;

Do not price WIC transactions by check type instead of pricing each check
for the actual, authorized WIC products purchased and received;

Fill in the WIC check price only in the presence of the authorized WIC shopper after the authorized WIC shopper has obtained the WIC products and before the authorized WIC shopper has signed the WIC check; ensure that the authorized WIC shopper signs the WIC check only after the Vendor personnel fill in the WIC check price;

Never claim reimbursement for the sale of an amount of a specific WIC product that exceeds the store's documented inventory of that WIC product for a specified period of time. (Ex. 1-A)

5. The WIC Vendor stamp number is the identifier that appears on each WIC
check in order to be honored for reimbursement by the bank. The stamp identifies the region the store is in as well as the particular store. Each year after the WIC Vendor and store employees attend annual trainings, the WIC stamp is re-issued with a different design. The bank will not honor the prior stamp. (Exs. 1-A, 1-B & 1-C. Testimony.)

6. The DPH-WIC Program uses compliance buyers to monitor adherence to
the provisions of the WIC Vendor Agreement. Each year, the DPH-WIC Program is required to do compliance visits to at least ten percent of the WIC Vendor stores toward ensuring the federal WIC Program funds are properly spent and accounted for. The compliance buyers conduct transactions at WIC Vendor stores posing as WIC shoppers. Such undercover compliance purchases are tracked using particular WIC checks. The selection of stores for compliance visits is made by the DPH-WIC Program. A compliance buyer visited Castleway Market four times in April and May 2008. She worked for a private investigation firm and did these WIC compliance visits for her employer who contracts with the DPH-WIC Program to do these undercover compliance visits. Shortly after leaving the store after a compliance visit and away from the store owner and employees, the compliance buyer filled out a standard form the DPH-WIC Program uses for recording information about these visits. Within a short time after each visit, the form was delivered to the DPH-WIC Program where a review process occurred after each visit and before the next visit. (Exs. 1-A, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 & 13. Testimony.)

7. The undercover compliance buyer conducted a compliance visit to Castleway Market on April 2, 2008, and made purchases using WIC checks. The store clerk who serviced the compliance buyer checked the compliance buyer's WIC identification card. The prices of the items being purchased were rung up using a cash register. The store clerk entered the prices of the items next to the items listed on the two WIC checks that were used. The total costs were also entered on the WIC checks. The compliance buyer answered the questions on the reporting form and described the clerk as a female, 5'5" tall with a small build, 45 years old or older, wearing glasses and having black-grey hair, and of an ethnicity not white or black or Hispanic or Asian but perhaps Middle Eastern so she checked "other". (Exs. 2 & 3. Testimony.)

8. Mary Blocksidge, the DPH-WIC Program Vendor Manager, reviewed the
April 2, 2008 report of the compliance buyer along with the WIC checks that were used and that Castleway Market had submitted for reimbursement from the WIC Program. She found violations of the WIC Vendor Agreement. In performing her calculations on the WIC purchases she attributed to one of the checks the following: one gallon of Hood milk costing $4.29, two-14 oz. boxes of Cheerios each costing $4.39, and two-46 oz. containers of apple Juicy Juice each costing $2.69. For determining the proper prices for the purchases, she used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, the price on the Cheerios, and the June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $29.61 against the check by Castleway Market, but the total cost was only $18.61, so there was an overcharge of $11.16. The WIC purchases attributed to the other check were the following: one gallon of Hood milk costing $4.29, one-12 oz. Kraft Deluxe cheese costing $3.29, one-16 oz. container of Goya lentil beans costing $1.29, and one-46 oz. container of apple Juicy Juice costing $2.69. For determining the proper prices for the purchases, Ms. Blocksidge used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, the price on a sign for the cheese, the price on the Goya lentil beans, and a June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $17.05 against the check by Castleway Market, but the total cost was only $11.56, so there was an overcharge of $5.49. Castleway Market had received in reimbursement from the WIC Program the full value listed on each check although the total of all purchases made was less. (Exs. 2, 3, 4, 16 & 17. Testimony.)
9. Ms. Blocksidge followed the WIC Program's procedure once overcharging to the WIC Program is detected, and ordered more compliance visits to Castleway Market to determine if there was a pattern of overcharging. The DPH-WIC Program does a total of four compliance visits to determine if a pattern of overcharging has occurred. (Ex. 1-A. Testimony.)

10. The same compliance buyer made another visit to Castleway Market on
on April 15, 2008. Two WIC checks were used to make purchases. The compliance buyer felt the same store clerk was helping her, and the description of the clerk entered on the report of this visit was the same information as contained in the April 2, 2008 report. The store clerk checked the compliance buyer's WIC identification card. The prices of the items being purchased were rung up using a cash register. The store clerk entered the prices of the items next to the items listed on the WIC checks. (Exs. 5 & 6. Testimony.)

11. Ms. Blocksidge reviewed the April 15, 2008 report of the compliance
buyer along with the WIC checks that were used and that Castleway Market had submitted for reimbursement. She found violations of the WIC Vendor Agreement. In performing her calculations on the WIC purchases Ms. Blocksidge attributed to one of the checks the following: one gallon of Hood whole milk costing $4.29, two-14 oz. boxes of Cheerios each costing $4.19, and two-46 oz. containers of Juicy Juice punch each costing $2.69. For determining the proper prices for the purchases, she used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, the price on the Cheerios, and the June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $29.61 against this check by Castleway Market, but the total cost was only $18.05, so there was an overcharge of $11.56. The WIC purchases attributed to the other check were the following: one gallon of Hood milk costing $4.29, one-16 oz. Goya Pigeon peas costing $1.99, and one-46 oz. container of Juicy Juice punch costing $2.69. She did not factor in the cost of one-8 oz. portion of cheese purchased since it was Swiss cheese, a product not approved for the WIC Program at this store. For determining the proper prices for the purchases, Ms. Blocksidge used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, the price on the Goya peas, and the June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $17.05 against the check by Castleway Market, but the total cost was only $8.97, so there was an overcharge of $8.08. Castleway Market had received in reimbursement from the WIC Program the full value listed on each check although the total of all purchases made was less. (Exs. 5, 6, 7, 15,16 & 17. Testimony.)

12. Another compliance visit to Castleway Market was made by the same compliance buyer on May 20, 2008. Two WIC checks were used to make purchases. The compliance buyer was helped by a different store clerk than on her prior two visits. The clerk was described on the report form of the visit as a male, 5'8" tall with a medium build, teenaged or twenty to twenty-five years old, wearing glasses and having black hair, and with an ethnicity she felt was Middle Eastern so she checked "other" on the form. The store clerk checked the compliance buyer's WIC identification card. The prices of the items being purchased were rung up using a cash register. The store clerk entered the prices of the items next to the items listed on the WIC checks. (Exs. 8 & 9. Testimony.)

13. Ms. Blocksidge reviewed the May 20, 2008 report of the compliance buyer along with the checks that were used and that Castleway Market had submitted for reimbursement. She found violations of the WIC Vendor Agreement. In performing her calculations on the WIC purchases she attributed to one of the checks the following: one gallon of Hood whole milk costing $4.29, two-14 oz. boxes of Cheerios each costing $3.99, and two-46 oz. containers of Juicy Juice each costing $2.69. For determining the proper prices for the purchases, she used the following sources: the September 26, 2007 price invoice Mr. Patel had on file for the cost of the milk, the price on the Cheerios, and the June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $27.22 against the check by Castleway Market, but the total cost was only $17.65, so there was an overcharge of $9.57. The WIC purchases attributed to the other check were the following: one gallon of Hood whole milk costing $4.29, one-16 oz. Goya black beans costing $1.09, and one-46 oz. container of Juicy Juice punch costing $2.69. For determining the proper prices for the purchases, she used the following sources: the September 26, 2007 price invoice Mr. Patel had on file for the cost of the milk, the price on the Goya beans, and the June 5, 2007 price list on file for the cost of the Juicy Juice. She did not factor in the cost of one-8 oz. portion of cheese purchased since it was Swiss cheese, a product not approved for the WIC Program at this store. The WIC Program was charged $17.05 against the check by Castleway Market, but the total cost was only $8.07, so there was an overcharge of $8.98. Castleway Market had received in reimbursement from the WIC Program the full value listed on each check although the total of all purchases made was less. (Exs. 8, 9, 10, 15, 16 & 17. Testimony.)

14. The same compliance buyer made a fourth visit to Castleway Market on May 27, 2008. Two WIC checks were used to make purchases. The compliance buyer felt the same store clerk from the May 20, 2008 visit was helping her, and provided that same description of the clerk in the report of the visit. The store clerk checked the compliance buyer's WIC identification card. The prices of the items being purchased were rung up using a cash register. The store clerk entered the prices of the items next to the items listed on the WIC checks. (Exs. 11 & 12. Testimony.)

15. Ms. Blocksidge reviewed the May 27, 2008 report of the compliance buyer along with the checks that were used and that Castleway Market had submitted for reimbursement. She found violations of the WIC Vendor Agreement. In performing her calculations on the WIC purchases Ms. Blocksidge attributed to one of the checks the following: one gallon of Hood whole milk costing $4.29, two-14-oz. boxes of Cheerios each costing $4.29, and two-46 oz. containers of apple Juicy Juice each costing $2.69. For determining the proper prices for the purchases, she used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, an August 20, 2007 price list on file for the cost of the Cheerios, and the June 5, 2007 price list on file for the cost of the Juicy Juice. The WIC Program was charged $27.22 against the check by Castleway Market, but the total cost was only $18.25, so there was an overcharge of $8.97. The WIC purchases attributed to the other check were the following: one gallon of Hood whole milk costing $4.29, one-16 oz. Goya roman beans costing $1.29, and one-46 oz. container of apple Juicy Juice costing $2.69. For determining the proper prices for the purchases, Ms. Blocksidge used the following sources: the September 26, 2007 invoice Mr. Patel had on file for the cost of the milk, the June 5, 2007 price list on file using the highest priced beans for the cost of the Goya beans, and the price on the Juicy Juice. She did not factor in the cost of one-8 oz. portion of cheese purchased since it was Swiss cheese, a product not approved for the WIC Program at this store. The WIC Program was charged $17.05 against the check by Castleway Market, but the total cost was only $8.27, so there was an overcharge of $8.78. Castleway Market had received in reimbursement from the WIC Program the full value listed on each check although the total of all purchases made was less. (Exs. 11, 12, 13, 15, 16 & 17. Testimony.)

16. The compliance buyer was not able to identify at the hearing whether or not the male and female shown in separate photographs, purportedly store clerks at Castleway Market during April and May 2008, were the store clerks she dealt with at the compliance visits. (Testimony)

17. The DPH-WIC Program has no policy of informing the WIC Vendor that there was overcharging at a compliance visit to allow the WIC Vendor to try to prevent such overcharging in the future. Instead, the DPH-WIC Program scheduled more compliance visits to determine if there is a pattern of overcharging the WIC Program. A pattern of overcharging occurred because at each of the four compliance visits Mr. Patel, for Shree Sharti Enterprise, Inc. and Castleway Market, sought and received reimbursement from the WIC Program for more than the actual costs of the items purchased by the compliance buyer. (Ex. 1-A. Testimony)

18. Class II violations of the WIC Vendor Agreement at section 6.b were found at each compliance visit for, "Overcharging the WIC Program by writing on the [WIC] check an amount which is higher than the actual price of the products purchased by the authorized WIC compliance buyer." This series of overcharges to the WIC Program were found by the DPH-WIC Program to show a pattern of overcharging. The WIC Vendor Agreement addresses a pattern of overcharging as two or more occasions when it is found as per federal regulation at 7 CFR 246.12. The WIC Vendor Agreement does not require that a warning letter be issued to the WIC Vendor once such a Class II Violation is detected if to do so would compromise the investigation involving one or more unannounced site visits by an undercover compliance buyer over a finite period of time. (Exs. A & 1-A at Appendix A, 1. Disqualification, at A. Mandatory Disqualification and at C. Warning Letters. Testimony.)

19. Other Class II violations at 6.g were found at each compliance visit for, "Charging an authorized shopper and/or the WIC Program a set price by check type instead of pricing each check for the actual items purchased." That is, on each visit the "same amount was written on the [WIC] checks regardless of what was actually purchased." Specifically, "Four checks of one type were submitted for payment with $17.05 … on 4/2/08, 4/15/08, 5/20/08, and 5/27/08. Two checks of another type were submitted for payment with $29.61 … on 4/2/08 and 4/15/08 and two checks of this type were submitted for payment with $27.22 on 5/20/08, and 5/27/08." (Exs. A & 1-A. Testimony.)

20. According to the WIC Vendor Agreement at page 8:

Violations classified in the Class II category are serious, often involve criminal conduct, prevent WIC Program goals from being achieved, undermine the integrity of the WIC Program, and will result in mandatory disqualification for three years for first time offenders, with increased penalties for repeat offenders.
(Ex. 1-A)

21. Other WIC Vendor Agreement violations were found during the compliance visits including these Class IV violations listed at section 9.e for, "Failure to comply with Federal, State and Local laws and regulations pertaining to the disclosure of prices for any items offered for sale in violation of M.G.L. c. 93A, § 2 as defined in 940 CMR 3.13(1)(a) [for engaging in] 'an unfair and deceptive act or practice … fail[ure] to affix to any goods offered for sale to consumers the price at which the goods are to be sold'." These violations occurred on April 2, 2008, April 15, 2008, May 20, 2008, and May 27, 2008 on the sale of Juicy Juice. They also occurred on May 27, 2008 on the sale of Cheerios, beans and Juicy Juice. (Exs. A & 1-A. Testimony)

22. Another series of WIC Vendor Agreement violations were found during the compliance visits including these Class III violations listed at section 4.f for, "Provision or substitution of unauthorized food products for authorized WIC products specified on the WIC check." Such violations were found for checks used at the April 15, 2008, May 20, 2008 and May 27, 2008 compliance visits when 8 oz. packages of Swiss cheese, which is a non-WIC approved item, were purchased. (Exs. A & 1-A. Testimony.)

23. For the Class IV violations of the WIC Vendor Agreement, the DPH-WIC Program imposed sanction points. The Class IV violations are described in the WIC Vendor Agreement:

State Agency Violations … of Massachusetts WIC Program rules, regulations, policies or procedures, violations of the Vendor Agreement, administrative and technical violations, as well as irregularities in pricing and check acceptance and redemption. Vendors who commit Class IV Violations will be assigned Sanction Points and may be disqualified depending on the cumulative value of Sanction Points issued; the nature and severity of violations; or the Vendor's history of compliance with WIC policies and procedures. (Ex. 1-A at 8)

For the Class IV violations, the DPH-WIC Program imposed ten sanction points for each of the violations found at each compliance visit at Castleway Market, for a total of 40 sanction points. The WIC Vendor Agreement explains:

If the Vendor commits a Class IV Violation, the Massachusetts WIC Program shall assign Sanction Points ranging from five (5) for less serious violations or ten (10) for more serious violations …

Sanction Points shall be assigned for each incidence of a violation. Sanction Points shall remain in effect for three (3) years from the date of the violations … (Ex. 1-A at 9)

24. Class III violations occurred at the April 15, May 20 and May 27, 2008 compliance visits where the compliance buyer was able to purchase Swiss cheese using a WIC check even though that is not an approved WIC item. The WIC Vendor Agreement describes Class III violations:

Provision of unauthorized WIC products to WIC participants, undermine the public health purpose of the WIC Program, prevent the WIC nutritional goals from being achieved, and will result in mandatory disqualification for one year for first time offenders, with increased penalties for repeat offenders. (Ex. 1-A at 8)

25. Because Class II violations are involved, the following occurs:

Where during the course of a single investigation, the Massachusetts WIC Program determines that a Vendor has committed multiple violations … the Massachusetts WIC Program shall disqualify the Vendor for the period corresponding to the most serious violation …. (Ex. 1-A at 9)

26. On July 30, 2008 the DPH-WIC Program issued a "Notice of Termination of WIC Vendor Agreement and Disqualification from the WIC Program/Right of Appeal" to Mr. Patel and Shree Shakti Enterprise, Inc. d/b/a Castleway Market, for the Class II, Class III and Class IV violations of the WIC Vendor Agreement that were based on the compliance buys that occurred on the visits of April 2 and 15, 2008, and May 20 and 27, 2008. On August 18, 2008, Mr. Patel filed a timely request for hearing. (Exs. A & B.)

27. The WIC Vendor Agreement at II. "Civil Monetary Penalties In Lieu of Disqualification" allows the DPH-WIC Program to determine whether or not the WIC Vendor, otherwise facing disqualification, would be able to remain in the WIC Program. This is an outcome the DPH-WIC Program would only consider if there were no alternative WIC Vendors in the geographical area where Castleway Market is located. There are about 30 other stores in this same area that are WIC Vendors. (Exs. 1-A at 11-12. Ex. 18. Testimony.)

Conclusion

I found the testimony, along with the back-up data and reports from the undercover compliance buyer on the visits to Castleway Market, to be credible, well explained, and sufficient to support the violations found by the DPH-WIC Program at all four of the compliance visits in April and May 2008. Because the compliance buyer was not able to identify the store clerks as the persons in the photographs she was shown during cross examination, does not diminish the worth of her testimony. Moreover, no witness was presented by the Respondents to state whether the photographs were or were not store clerks at Castleway Market during April and May 2008.

I found the testimony of Ms. Blocksidge that explained her calculations on the data from the WIC purchases at all four visits to be understandable and justifiable under the provisions in the WIC Vendor Agreement. Most important for purposes of the three year disqualification, I found the evidence established a pattern of overcharging. The Respondents were unable to refute this evidence. Also, because Exhibit 18 contains a list of thirty other WIC Vendor stores in the same area as Castleway Market, the imposition of the three year disqualification upon Mr. Patel, Shree Shakti Enterprises, Inc., and Castleway Market will not prevent WIC shoppers in the area from being able to make WIC purchases. Understanding the basic requirements of a DPH-WIC Program check transaction does not require familiarity with detailed, complicated information. But, it does require due care on the part of the WIC Vendor and his employees to ensure no serious violations of the WIC Vendor Agreement and WIC check transactions occur. The fact that overcharging occurred at each of the undercover compliance buyer's four visits to Castleway Market within a two month time span is significant support for finding a pattern of overcharging. The WIC Vendor Agreement explains that a pattern of overcharging can be established after just two monitoring visits, and it gives the DPH-WIC Program the authority to continue to investigate for overcharging with further compliance visits without informing the WIC Vendor about the first occasion of overcharging. The Respondents contend that this practice of providing no warning is unfair to the WIC Vendor, who may simply have relied upon employees who did not follow the proper WIC check transactions unbeknownst to the WIC Vendor. Nevertheless, the WIC Vendor Agreement clearly permits the investigation for uncovering a pattern of overcharging to override any requirement that the DPH-WIC Program immediately to inform the WIC Vendor about the first instance of overcharging. This shows the seriousness of the overcharging violation. In any event, the DPH-WIC Program typically conducts four, and not just the two required, monitoring visits to uncover a pattern of overcharging. This is sufficient to establish that the overcharging is in fact a pattern.

The other Class II violations of the WIC Vendor Agreement that occurred at each compliance visit consisting of charging a set price by check type and not just charging against each check the actual costs of the items purchased. These are also serious violations. They lend further support for the conclusion that a pattern of overcharging and improper WIC check transactions occurred at Castleway Market.

Class IV violations of the WIC Vendor Agreement for improper pricing of the items for sale to WIC shoppers occurred at all four compliance visits, and the DPH-WIC Program was justified in determining that they were a serious and supported the imposition of ten sanction points per visit. The three compliance visits where Class III violations occurred for selling Swiss cheese to the undercover compliance buyer as a WIC product when it is not, has been established by the account of the compliance buyer as set forth in the reports on these three visits and by examining the Price Lists in evidence. (Exs. 15 & 16.) This is further support for the determination that there was a failure by the Respondents to properly conduct WIC transactions, to properly process WIC checks, and to properly stock WIC products. Finally, the existence of the Class II violations of the WIC Vendor Agreement justifies the imposition of the three year disqualification because they are more serious violations than the Class III and Class IV violations.

For these reasons, the WIC Vendor Agreement for Mr. Patel, Shree Shakti Enterprises, Inc., and Castleway Market shall be terminated. The disqualification runs for three years. SO ORDERED.

DIVISION OF ADMINISTRATIVE
LAW APPEALS


/s/ Sarah H. Luick, Esq.
Administrative Magistrate

DATED: March 13, 2009