COMMONWEALTH OF MASSACHUSETTS


Suffolk, ss. DIVISION OF ADMINISTRATIVE LAW APPEALS

Department of Public Health (DPH),
WIC Program

Petitioner
Docket No. PH-09-34
v.


AA & AG Inc., d/b/a Liriano Brothers Market et al.,

Respondents

Appearance for Petitioner:

Madeline Piper, Esq.

Department of Public Health
250 Washington Street
Boston, MA 02108

Appearance for Respondent:

Dennis Benzan, Esq.

689 Massachusetts Avenue
Cambridge, MA 02135

Administrative Magistrate:

Joan Freiman Fink, Esq.


SUMMARY OF DECISION


The Department of Public Health (DPH) was fully warranted in imposing the sanctions as outlined in the December 9, 2008 notice of termination of WIC Vendor Agreement in light of the fact that AA & AG Inc., d/b/a Liriano Market, has committed multiple Class II and Class IV Violations of the WIC Vendor Agreement which are serious and undermine the integrity of WIC Program.


DECISION

On December 9, 2008, the Petitioner, the Department of Public Health - WIC Program, issued a Notice of Termination of WIC Vendor Agreement for Fiscal Year 2008-2009 and Disqualification from the WIC Program for three years to the Respondents, AA & AG Inc. d/b/a Liriano Brothers Market, Angel Mario Costa, the owner of the store, and Dinerys Acosta, his wife and co-worker at the store, located at 160 Bunker Hill Street, Charlestown, Massachusetts. (Exhibit 1.) The Respondent filed a timely claim of an appeal of this termination and disqualification. (Exhibit 2.) The case was referred for hearing to the Division of Administrative Law Appeals (DALA) and on May 4, 2009, a Pre-hearing Conference was held. On July 20, 2009, a full hearing in this matter was held at the offices of DALA, 98 North Washington Street, 4th Floor, Boston, MA pursuant to 801 CMR 1.02, the Informal Rules of Procedure.


Various documents were entered into evidence at the hearing (Exhibits 1 - 20). Mary Blocksidge, the Vendor Manager for the Massachusetts WIC Program for the past twenty-four years, testified on behalf of the Petitioner as did the Compliance Buyer . Angel Costa, the owner of AA & AG, Inc., d/b/a Liriano Brothers Market testified on behalf of the Respondent. Maria Calderon, a board certified interpreter, provided Spanish interpretation services for the Respondent. Two cassette tape recordings were made of the hearing.


FINDINGS OF FACT:


At the outset of the hearing, the parties presented agreed to stipulations of fact, which I hereby adopt. In addition, based on the testimony and evidence presented, I make the following findings of fact:


1. The WIC Program is a special supplemental federal food program for women, infants, and children that is administered in Massachusetts for the U.S. Department of Agriculture by the DPH in accordance with 42 U.S.C. 1786 and 7 CFR 246. (Testimony of Mary Blocksidge).

2. The Respondent, AA & AG, Inc. d/b/a Liriano Brothers Market is a closely held corporation. (Stipulation.)

3. The owners of AA & AG Corporation are Angel Mario Acosta, President, and Dinerys Acosta, Secretary. (Stipulation.)

4. AA & AG, Inc. is located at 160 Bunker Hill Street in Charlestown, Massachusetts and does business at Liriano Brothers Market. (Stipulation.)

5. On or about May 8, 2006, AA & AG, Inc. applied to become a WIC Vendor and entered into a WIC Vendor Agreement with the Massachusetts WIC Program on September 18, 2006. (Stipulation.)

6. All potential WIC Program Vendors have to meet certain criteria in order to be selected as a Vendor. These criteria are outlined in the Vendor Application Packet that is given to each applicant who desires to participate in the WIC Program. (Testimony of Mary Blocksidge).

7. After being selected as a participant in the WIC Program, a Vendor must undergo a specified training program including a detailed review of the regulations outlined in the Vendor Agreement. (Testimony of Mary Blocksidge).

8. Angel M. Acosta received WIC Vendor training on September 18, 2006 from the Massachusetts WIC Program and the Chelsea/Revere Local WIC Program, and received annual WIC Vendor training again in 2007 and 2008. (Stipulation.)

9. The AA & AG, Inc. d/b/a as Liriano Brothers Market is assigned WIC Vendor Stamp #0711. (Stipulation.)

10. All WIC checks accepted by a WIC vendor must be stamped with the Vendor's WIC Vendor Stamp prior to being deposited in the bank. (Stipulation.)

11. Section 6 of the WIC Vendor Agreement with AA & AG. Inc. states: "Follow WIC check pricing procedures as established by Federal and State requirements: (b) 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 actually purchased by the authorized WIC shopper." (Exhibit 3.)

12. Section 9 (e) of the WIC Vendor Agreement with AA & AG Inc. provides as follows: "It is an unfair and deceptive act or practice for any person subject to 940 CMR 3.13 to fail to affix to any good offered for sale to consumers the price at which the goods are to be sold." (Exhibit 3.)

13. Section 5(e) of the WIC Vendor Agreement with AA & AG Inc. provides as follows: "Observe the authorized WIC shopper as she/he signs the WIC check, and be sure the signature on the WIC check matches the authorized signature in the WIC ID folder on the official Massachusetts WIC ID card …." (Exhibit 3.)

14. Monitoring compliance buys occurred on 8/13/08, 8/21/08, 9/10/08, and 9/19/08 at Liriano Brothers Market located at 160 Bunker Hill Street in Charlestown, MA. (Stipulation.)

15. On August 13, 2008, a compliance buyer for the WIC Program as part of her assigned duties visited AA & AG Inc. d/b/a Liriano Brothers Market. She was given two authorized checks to make specific purchases of milk, cheese, beans, juice, and cereal. (Testimony of the compliance buyer; Exhibit 6).

16. The prices of the authorized WIC food items that the compliance buyer actually purchased that day were $17.55 and $12.76, respectively. However, the vendor at AA & AG Inc. submitted these checks for payment with prices of $30.21 and $17.05 written in, resulting in an overcharge of $16.95. (Testimony of the compliance buyer; Exhibits 4 & 6.)

17. On August 21, 2008, the compliance buyer made a second visit to AA & AG Inc. d/b/a Liriano Brothers Market. On that day, for the checks used by the buyer, the prices of authorized WIC food items actually purchased were $17.55 and $13.06 respectively. However, the vendor submitted these checks for payment with prices of $14.86 and $17.05 written in, resulting in an overcharge of $1.30. (Testimony of the compliance buyer; Exhibits 7 & 9.)

18. On September 10, 2008, the compliance buyer made a third visit to AA & AG Inc. On that day, the prices of the authorized WIC food items actually purchased by her were $17.55 and $12.76 respectively. However, the vendor submitted these checks for payment with prices of $25.73 and $14.36 written in, resulting in a total overcharge of $9.78. (Testimony of the compliance buyer; Exhibits 10 & 12.)

19. On September 19, 2008, the compliance buyer made a fourth and final visit to AA & AG Inc. On that day, the prices of WIC food items actually purchased by her were $17.55 and $12.86 respectively. However, the vendor submitted these checks for payment with prices of $30.21 and $15.85 written in, resulting in a total overcharge of $15.85. (Testimony of the compliance buyer; Exhibits 13 & 15.)

20. WIC checks bearing numbers 440, 441, 444, 445, 891, 892, 881, and 882 were submitted to the bank for deposit with WIC Vendor stamp #0711. (Stipulation.)

21. The same clerk at AA & AG Inc. waited on the compliance buyer on all four of her visits in August and September of 2008. On three of these visits, i.e., 8/21, 9/10, and 9/18, the clerk failed to observe the compliance buyer sign the WIC check and further failed to ensure that the signature on the WIC check matched the authorized signature in the WIC ID folder. (Testimony of the compliance buyer).

22. On each of the four visits, the cheese and Juicy Juice authorized WIC food items offered for sale did not have a price affixed to them. (Exhibits 6, 9, 12 & 15.)

23. Angel Costa has owned Liriano Brothers Market for the past five years and has been a licensed WIC Vendor for the past four years. Mr. Costa was present and working behind the counter at Liriano Brothers Market on all four dates in August and September 2008 that the compliance buyer shopped in his store (Testimony of Angel Costa.)

24. Liriano Brothers Market is a very busy store and sometimes it is difficult for store personnel to keep up with customers including shoppers who purchase authorized WIC food items. (Testimony of Angel Costa.)

25. On December 9, 2008, DPH sent the Respondent, AA & AG Inc. d/b/a Liriano Brothers Market, and Angel Mario Acosta, President and Dinerys Acosta, Secretary, a Notice of Termination of WIC Vendor Agreement for Fiscal Year 2008-2009 and Disqualification from the WIC Program for three years. (Exhibit 1.)

26. On January 5, 2009, Angel Mario Acosta, on behalf of AA & AG Inc. and Dinerys Acosta, filed an appeal of that decision and requested an adjudicatory hearing. (Exhibit 2.)

CONCLUSION

After reviewing the testimony and evidence presented, I conclude that the DPH was fully justified in its decision to terminate the Vendor Agreement for AA & AG Inc. d/b/a Liriano Brothers Market for Fiscal Year 2008 - 2009 and to Disqualify AA & AG Inc., Angel Acosta, and Dinerys Acosta from the WIC Program for a period of three years.

Section 6 of the WIC Vendor Agreement with AA & AG Inc. d/b/a Liriano Brothers Market provides as follows: "Follow WIC check pricing procedures as established by Federal and State requirements: (b) 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 actually purchased by the authorized WIC shopper."

By overcharging the WIC Program by writing on checks amounts that are higher than the actual price of the products purchased on at least four separate occasions in August and September of 2008, AA & AG Inc. d/b/a Liriano Brothers Market violated Section 6(b) of the WIC Vendor Agreement.

Section 5(e) of the WIC Vendor Agreement provides that the vendor must "observe the authorized WIC shopper as she/he signs the WIC check, and be sure the signature on the WIC check matches the authorized signature in the WIC ID folder on the official Massachusetts WIC ID card …."

By failing to observe the compliance buyer sign the WIC check and ensure that the signature on the WIC check matches the authorized signature in the WIC ID folder, AA & AG Inc. d/b/a Liriano Brothers Market violated Section 5(e) of the WIC Vendor Agreement.

Section 9 (e) of the WIC Vendor Agreement states that "It is an unfair and deceptive act or practice for any person subject to 940 CMR 3.13 to fail to affix to any good offered for sale to consumers the price at which the goods are to be sold."

By failing to affix the price on the authorized WIC food items of Juicy Juice and cheese on all four occasions in August and September of 2008 that the compliance buyer purchased items in the store, AA & AG Inc. d/b/a Liriano Brothers Market violated Section 9 (e) of the WIC Vendor Agreement.
The Respondent, Angel Acosta, did not dispute any of the allegations made by the DPH. Rather, Mr. Acosta noted that the store is extremely busy and that if discrepancies were made, they were made accidentally. Mr. Acosta further stressed that he is well respected in the community and that he often extends credit to customers who are unable to purchase items due to lack of funds. Accordingly, he requests that Liriano Brothers Market's WIC Vendor License not be terminated as the market provides a valuable service to a significant segment of the population in the area who require financial assistance in order to secure important nutritional items.

Despite Mr. Acosta's request, I conclude that sanctions must be imposed in this case in accordance with both Federal and Massachusetts Regulations. Consistent with Federal regulations that govern vendor disqualification from the WIC Program, 7 CFR 246.12, the Massachusetts WIC Program has classified violations into several different categories: Class I, Class II, Class III, and Class IV. Appendix A of the WIC Vendor
Agreement with AA & AG Inc. d/b/a Liriano Brothers Market lists which violations fall into the various categories.


The violations committed by AA & AG Inc. d/b/a Liriano Brothers Market for overcharging the WIC Program constitute Class II violations of the Agreement.
Failing to observe the authorized WIC shopper as well as failing to ensure that the signature on the WIC check matches the authorized signature in the WIC ID folder constitutes Class IV violations of the Agreement. Failure to affix to the goods offered for sale to consumers the price at which the goods are to be sold also constitutes a Class IV violation.

The Agreement specifically provides that: "vendors who commit a Class II Violation shall be disqualified from the WIC Program for three (3) years."
Mary Blocksidge, an employee of the WIC Program in Massachusetts for the past twenty-four years, gave credible testimony to the effect that the success of the WIC Program is largely dependent on the reliability and integrity of its Vendors. Thus, it is extremely important that the WIC Program have utmost confidence in the individuals who have been selected as WIC Program Vendors.
In light of the fact that AA & AG Inc. d/b/a Liriano Brothers Market has committed Class II and Class IV Violations of the WIC Vendor Agreement, violations which are serious and undermine the integrity of WIC Program, the DPH was fully warranted in imposing the sanctions as outlined in the Agreement. Accordingly, the decision of DPH to terminate AA & AG Inc.'s WIC Vendor Agreement for Fiscal Year 2008-2009 and to disqualify Angel Acosta, the owner, and Dinerys Acosta, the Secretary, from participation in the WIC Program for a period of three years is affirmed.

SO ORDERED.


DIVISION OF ADMINISTRATIVE LAW APPEALS
\s\
______________________________________________ Joan Freiman Fink, Esq.
Administrative Magistrate
Dated: 8/11/09