commodities in accordance with the PACA.

For the foregoing reasons and the reasons set forth in In re Janet S. Orloff (Decision as to Merna K. Jacobson), 62 Agric. Dec. (Jan. 7, 2003), Petitioner's Petition for Reconsideration is denied.

Section 1.146(b) of the Rules of Practice (7 C.F.R. § 1.146(b)) provides that the decision of the Judicial Officer shall automatically be stayed pending the determination to grant or deny a timely-filed petition for reconsideration.4 Petitioner's Petition for Reconsideration was timely filed and automatically stayed the January 7, 2003, Decision and Order as to Merna K. Jacobson. Therefore, since Petitioner's Petition for Reconsideration is denied, I hereby lift the automatic stay, and the Order in In re Janet S. Orloff (Decision as to Merna K. Jacobson), 62 Agric. Dec. (Jan. 7, 2003), is reinstated; except that

the effective date of the Order is the date indicated in the Order in this Order Denying Petition for Reconsideration as to Merna K. Jacobson.

For the foregoing reasons, the following Order should be issued.

ORDER

I affirm Respondent's February 21, 2001, determination that Petitioner was responsibly connected with Jacobson Produce, Inc. during June 1999 through January 2000, a period during which Jacobson Produce, Inc. violated the РАСА.

*In re PMD Produce Brokerage Corp., 61 Agric. Dec. 389, 404 (2002) (Order Denying Pet. for Recons. and Pet. for New Hearing on Remand); In re Mangos Plus, Inc., 59 Agric. Dec. 883, 890 (2000) (Order Denying Pet. for Recons.); In re Kirby Produce Co., 58 Agric. Dec. 1032, 1040 (1999) (Order Denying Pet. for Recons.); In re Michael Norinsberg, 58 Agric. Dec. 619, 625 (1999) (Order Denying Pet. for Recons. on Remand); In re Produce Distributors, Inc., 58 Agric. Dec. 535, 540-41 (1999) (Order Denying Pet. for Recons. as to Irene T. Russo, d/b/a Jay Brokers); In re JSG Trading Corp., 57 Agric. Dec. 710, 729 (1998) (Order Denying Pet. for Recons. as to JSG Trading Corp.); In re Allred's Produce, 57 Agric. Dec. 799, 801-02 (1998) (Order Denying Pet. for Recons.); In re Michael Norinsberg, 57 Agric. Dec. 791, 797 (1998) (Order Denying Pet. for Recons.); In re Tolar Farms, 57 Agric. Dec. 775, 789 (1998) (Order Denying Pet. for Recons.); In re Kanowitz Fruit & Produce, Co., 56 Agric. Dec. 942, 957 (1997) (Order Denying Pet. for Recons.); In re Five Star Food Distributors, Inc., 56 Agric. Dec. 898, 901 (1997) (Order Denying Pet. for Recons.); In re Havana Potatoes of New York Corp., 56 Agric. Dec. 1017, 1028 (1997) (Order Denying Pet. for Recons.); In re Andershock Fruitland, Inc., 55 Agric. Dec. 1234 (1996) (Order Denying Pet. for Recons.).

62 Agric. Dec. 293

Accordingly, Petitioner is subject to the licensing restrictions under section 4(b) of the PACA and the employment restrictions under section 8(b) of the PACA (7 U.S.C. §§ 499d(b), 499h(b)).

This Order shall become effective 60 days after service of this Order on Petitioner.

In re: NICK PENACHIO CO., INC.

PACA Docket No. D-01-0022.

Decision and Order by Reason of Failure to Appear.

Filed November 22, 2002.

Christopher P. Young-Morales, for Complainant.

Respondent, Pro se.

Decision and Order by Dorothea A. Baker, Administrative Law Judge.

PACA - Default, failure to appear at hearing - Payment, failure to make, prompt - Fraud Bid rigging.

Preliminary Statement

This is an administrative proceeding. It was initiated by a Notice to Show Cause and Complaint filed July 26, 2001, by the Associate Deputy Administrator, Fruit and Vegetable Programs, Agricultural Marketing Service, pursuant to the provisions of the Perishable Agricultural Commodities Act, 1930 as amended (7 U.S.C. §§ 499a et seq.), hereinafter sometimes referred to as the PACA, and the regulations issued pursuant thereto as well as the Rules of Practice Governing Former Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes (7 C.F.R. §§ 1.130 et seq.).

The Complaint constituted a disciplinary proceeding against Respondent Nick Penachio Co., Inc. alleging that it had committed willful, flagrant and repeated violations of section 2(4) of the PACA (7 U.S.C. § 499b(4)). There is also a Notice to Show Cause why Respondent Nick Penachio Co., Inc. should not be denied a license pursuant to section 4(d) of the PACA (7 U.S.C. § 499d(d)).

Among the allegations of the Complaint, are that, during the period October, 2000 through June, 2001, Respondent violated section 2(4) of the PACA by failing to make full payment promptly to 32 sellers of the agreed purchase prices or balances thereof, in the total amount of $268,915.00, for 162 lots of perishable agricultural commodities which were purchased, received, and accepted in interstate and foreign commerce.

It is further alleged that on May 7, 2001, Respondent filed a Voluntary Petition pursuant to Chapter 11 of the Bankruptcy Code (11 U.S.C. §§ 1100 et seq.) in the United States Bankruptcy Court for the Southern District of New York, being designated Case No. 01-12668-CB.

Additionally, it is alleged that on February 20, 2001, Respondent and its president Nicholas A. Penachio waived indictment pursuant to Rule 7(b) of the Federal Rules of Criminal Procedure and pled guilty to an eight count Superseding Information which charged them with participating in schemes to rig bids of frozen food, produce, dairy, and other products supplied to the New York City Board of Education, the Department of Citywide Administrative Services, the Nassau County Department of General Services, and the Newark Public Schools. These charges included, among other things, conspiring to defraud through a kickback and fraud scheme using the United States Mail, conspiring to defraud the I.R.S. by filing false and fraudulent federal tax returns, and obstruction of justice by causing the destruction of incriminating documents that had been subpoenaed by the Grand Jury.

Respondent had a license pursuant to the provisions of the PACA [Number 741326] from March, 1974 until March 4, 2001 when it was terminated because Respondent failed to pay the required annual renewal fee.

An Answer to said Complaint was filed by Respondent on August 8, 2001. The case was set for hearing to commence on March 6, 2002, in New York City. On February 20, 2002 the Judge was notified for the first time that a Petition for Review had been filed by Tony Penachio with respect to a determination dated January 4, 2002 by the PACA Branch Chief that Tony Penachio is responsibly connected with Nick Penachio Co., Inc. (the Respondent). As a result of a conference call it was agreed that there would be a consolidation of the cases and a postponement of the scheduled oral hearing date of March 6 and 7, 2002. Subsequently, the parties agreed that the oral hearing would take place on June 19, 2002. The case was subsequently rescheduled for hearing for June 20, 2002, in New York City.

On February 4, 2002, Tony Penachio filed a Petition for Review in regards to a letter of determination dated January 4, 2002 by the PACA Branch Chief that he was responsibly connected with Nick Penachio Co., Inc. during the period October, 2000 through June, 2001 during which period there was a failure to pay 32 vendors $268,915.00 for perishable agricultural commodities.

The Petition for Review was consolidated with the present proceeding and an oral hearing on both cases was scheduled for June 20-21, 2002. Under date of June 12, 2002, Tony Penachio withdrew his Petition for Review and consented to the determination of the PACA Branch Chief. The Government accepted said withdrawal and the Judge granted the withdrawal and removed

62 Agric. Dec. 293

"Tony Penachio, Petitioner" from the caption of the proceeding. October 15, 2002, a letter was filed by Tony Penachio which stated, in part:

I have received your letter to William A. Hrabsky, Esq. of October 1, 2002 today. Please be advised that Mr. Hrabsky, who had been representing me in the matter of PACA Docket No. APP-02-0003, passed away in late July, 2002 and therefore Mr. Hrabsky has not filed a brief on my behalf in this matter.

I will now be representing myself, pro se, in the remainder of this action.

In lieu of my requesting to file a brief on my behalf I am respectfully requesting the mercy of the court in the decision of my appeal in this matter; please be so kind as to advise the Administrative Law Judge accordingly.

On

The matter of Tony Penachio, PACA Docket No. APP-02-0003, was concluded with his withdrawal of his Petition for Review.

A hearing in this matter was held on June 20, 2002, in New York City, New York before Administrative Law Judge Dorothea A. Baker. Complainant was represented by Christopher Young-Morales, Esquire, Office of the General Counsel, Department of Agriculture. Respondent and its counsel failed to appear at the scheduled hearing on June 20, 2002. In all matters prior to the date of the hearing, Respondent was represented by Harry D. Jones, Esquire, of Gersten, Savage & Kaplowitz, New York, New York. The hearing was conducted in Respondent's absence pursuant to § 1.141(e)(1) of the Rules of Practice Governing Formal Adjudicatory Administrative Proceedings Instituted by the Secretary (7 C.F.R. §§ 1.130 through 1.151; hereinafter the "Rules of Practice"). The Complainant presented its evidence in the absence of Respondent. The parties were given until November 6, 2002, within which to file simultaneous briefs. The Complainant did so; the Respondent did not.

Pertinent Statutory Provisions

Section 2(4) of the PACA (7 U.S.C. § 499b(4)) provides in part:

It shall be unlawful in or in connection with any transaction in interstate or foreign commerce-

(4) For any commission merchant, dealer, or broker to make, for a

fraudulent purpose, any false or misleading statement in connection with any transaction involving any perishable agricultural commodity which is received in interstate or foreign commerce by such commission merchant, or bought or sold, or contracted to be bought, sold, or consigned, in such commerce by such dealer, or the purchase or sale of which in such commerce is negotiated by such broker; or to fail or refuse truly and correctly to account and make full payment promptly in respect of any transaction in any such commodity to the person with whom such transaction is had; or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction; or to fail to maintain the trust as required under Section 5(c). However, this paragraph shall not be considered to make the good faith offer, solicitation, payment, or receipt of collateral fees and expenses, in and of itself, unlawful under this Act.

§ 499h. Grounds for suspension or revocation of license

(a) Authority of Secretary

Whenever (1) the Secretary determines, as provided in section 499f of this title, that any commission merchant, dealer, or broker has violated any of the provisions of section 499b of this title, or (2) any commission merchant, dealer, or broker has been found guilty in a Federal court of having violated section 499n(b) of this title, the Secretary may publish the facts and circumstances of such violation and/or, by order, suspend the license of such offender for a period not to exceed ninety days, except that, if the violation is flagrant or repeated, the Secretary may, by order, revoke the license of the offender.

Section 4(d) of the PACA (7 U.S.C. § 499d(d)) provides:

The Secretary may withhold the issuance of a license to an applicant, for a period not to exceed thirty days pending an investigation, for the purpose of determining (a) whether the applicant is unfit to engage in the business of a commission merchant, dealer, or broker because the applicant, or in case the applicant is a partnership, any general partner, or in case the applicant is a corporation, any officer or holder of more than 10 per centum of the stock, prior to the date of the filing of the application engaged in any practice of the character prohibited by this Act or was convicted of a felony in any State or Federal Court, or (b)