In the matter of:
David Jennings & Rebecca Scruggs ) Case No. 05-ABC-100
DBA Jen-X Grocery )
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This case was brought on for hearing before the Kentucky Alcoholic Beverage Control Board on June 30, 2005, pursuant to an order directing the Licensees to show cause, if any they could, why their alcoholic beverage license should not be suspended or revoked because of alleged violations of: (1) KRS 243.390 and KRS 243.500(2), False statement in license application; and, (2) KRS 243.500(5), Tax Delinquency.
The full Board was present, Chairman Lavoyed Hudgins presiding. The Licensee, Mr. David Jennings, was present at the hearing and was represented by counsel, the Hon. William P. Whalen, Jr. The Hon. David W. Barr represented the Office.
Based upon the testimony and evidence presented at the hearing, the record herein, having considered the arguments, and being otherwise sufficiently advised, a majority of the Board, pursuant to KRS 243.550, hereby makes the following findings:
David Jennings & Rebecca Scruggs, d/b/a, Jen-X Grocery, hold Retail Beer License No. 059-B-6445, for premise located at 347 East 13th Street, Covington, Kentucky. The premise is operated as a convenience type store.
Ms. Brandy Shular, a representative
from the Kentucky Revenue Cabinet, testified that the Licensees are currently
indebted to the
Retail Beer License No. 059-B-6445 was issued to David Jennings and Rebecca Scruggs on August 9, 2002. This license was issued based upon an application and supporting documents submitted by David Jennings and Rebecca Scruggs. The Licensees submitted with their application a “Lease Agreement” dated July 1, 2002. This lease agreement was purportedly signed by “Jackie Jennings,” the purported owner of the realty where the licensed premise is located. Investigator Dale Cross conducted the original field report and noted no problems with the premise at that time.
On January 25, 2005, Investigator
Cross was contacted by the ABC and was advised that Ms. Jacqueline Jennings, the
“Leasee” (sic) on the original Jen-X Grocery application, had called the Office
and complained that her signature had been forged on the original lease. Ms. Jennings learned of the lease as a result
of an audit by the Social Security Administration. The Social Security
Administration had conducted a routine check on Ms. Jennings and found that she
was allegedly receiving $350.00 monthly rental income from the Jen-X Grocery in
Investigator Cross then contacted the Licensee, Mr. David Jennings, concerning Ms. Jennings’ signature on the lease. Mr. Jennings stated he would provide a copy of the lease. Investigator Cross picked up a copy of a lease at the Jen-X Grocery and noticed some problems on the lease. The lease provided by the Licensee was titled “Commercial Lease” and was between David Jennings, as the “Lessor” (sic), and Mr. Derrick L. Humphrey, as the “Lessee” (sic). The annual rent was $1.00. The term of the lease was for five (5) years, but the lease had no beginning or ending lease dates, was not notarized, and was only signed by Mr. David Jennings. This lease was never filed with the ABC.
The official ABC licensing file for
the Licensee contains an original Lease Agreement, notarized July 1, 2002
between “Jackie” Jennings and David Jennings and Rebecca Scruggs. Page 1 of the Lease Agreement, line 1 has the
names David Jennings, Rebecca Scruggs whited-out, and “Jackie”
Ms. Jacqueline Jennings testified
that she originally purchased the property at
Ms. Jennings knows Mr. David Jennings (her ex-brother-in-law), but does not know Ms. Rebecca Scruggs. Ms. Jennings acknowledged that she filed a complaint with the Office in January 2005 regarding her forged signature on documents submitted to the ABC by David Jennings and Rebecca Scruggs. Ms. Jennings testified that Mr. Otto Asaosula with the Tax Department, Social Security Administration, conducted an audit on her account and notified Ms. Jennings that their records showed that she was receiving $350.00 monthly rental income from the Jen-X Grocery premises and that her monthly check was going to stop. Mr. Asaosula also told Ms. Jennings that she owed back taxes on the property. Ms. Jennings testified that she did not sign the Lease Agreement that is on file with the Office and she has never leased or sold the premises to David Jennings and Rebecca Scruggs. Ms. Jennings testified that Mr. John Jennings told her that he personally signed her name to the lease. Mr. John Jennings was in jail at the time. Ms. Jennings testified that when she found out about the Lease Agreement, she contacted the ABC and a copy of the Lease Agreement from the licensing file was mailed to her.
Ms. Jennings provided a copy of a Warranty
Deed, dated June 5, 1998, wherein Ms. Jennings purchased the property at
The Board finds the signatures of Jacqueline Jennings on the Warranty Deed of June 5, 1998 and the Quitclaim Deed notarized on August 25, 2004 are true and identical. The Board further finds these signatures do not match the signature of “Jackie Jennings” on the Lease Agreement of July 1, 2002 filed with the ABC by the Licensees.
Ms. Jennings produced her Ohio
Drivers License and copies of her employment timesheets showing that she always
prints her name instead of writing it in cursive. Ms. Jennings testified that the printed name
of Jacqueline Jennings on the Quitclaim Deed was her signature and the signed
David Jennings testified before the Board. When Mr. Jennings was asked about the signatures on the Lease Agreement, Mr. Jennings testified that his brother, Mr. John C. Jennings (while incarcerated), asked him if he wanted to lease the Jen-X Grocery. David Jennings testified that he prepared a lease and that he and Ms. Scruggs signed the lease, and he then personally delivered the lease to his brother. David Jennings admitted that, at that time, the purported signature of Ms. Jennings had not been affixed to the lease. David Jennings testified John Jennings signed his wife’s name to the lease and had someone at the jail notarize it. When asked if John Jennings signed Jacqueline Jennings’ name to the lease, in his presence, David Jennings abruptly changed his testimony. David Jennings then testified that he mailed the lease to his brother and that it was mailed back to him with Ms. Jennings signature affixed.
David Jennings testified he had never seen Jacqueline Jennings’ signature before and didn’t know the signature on the lease was not that of Jacqueline Jennings. Nonetheless, Mr. Jennings testified that he sends the $350.00 monthly rent to John Jennings’ girlfriend, “Kim”, who in turn gives the money to John Jennings. John Jennings was not a party to the lease and was not an owner of the real property.
The Board finds David Jennings’ testimony to not be credible. The Board finds David Jennings knew that Jacqueline Jennings did not sign the Lease Agreement. The Board further finds David Jennings knew his brother forged, or had forged, his wife’s name to the lease. The Board further finds David Jennings knew these facts when he filed his original application. The Board finds the Licensees have violated KRS 243.390 and 243.500(2).
The Board is authorized to examine
business relationships to determine whether they are a sham designed to subvert
public policy or circumvent regulatory obligations.
The hearing in this matter provided the Board with much information and knowledge so as to better understand and evaluate the business and personal relationship between Ms. Jacqueline Jennings and Mr. David Jennings and Ms. Rebecca Scruggs. There is no business relationship between Jacqueline Jennings and the Licensees. Based upon testimony and evidence presented at the hearing, the Board finds that the signature of Ms. Jackie Jennings on the Lease Agreement filed with the Retail Beer License application of August 2002 is forged, false and fraudulent. David Jennings and Rebecca Scruggs have been operating Jen-X Grocery, located at 347 East 13th Street, Covington, Kentucky, as a front for John C. Jennings, who is in jail and therefore unable to have a liquor license in his name.
KRS 243.500, Causes for which licenses may be revoked or suspended, in pertinent part, provides:
(2) Making any false, material statements in an application for a license or supplemental license.
KRS 243.390, Sworn information in applications, given under oath, states in part:
A statement that neither the applicant nor any other person referred to in this section has been convicted of; any misdemeanor directly or indirectly attributable to alcoholic beverages; any violation of KRS 218A.050, 218A.060, 218A.070, 218A.080, 218A.090, 218A.100, 218A.110, 218A.120, or 218A.130 within the two (2) years immediately preceding the application; any felony, within five (5) years from the later of the date of parole or the date of conviction; or providing false information to the department preceding the application;
The Board believes Mr. John C. Jennings, who was ineligible to hold a retail alcohol license, was always envisioned as the license holder and Mr. David Jennings and Ms. Rebecca Scruggs’ application was filed as an alter ego to Mr. John C. Jennings. The Board further believes the signature on the Lease Agreement filed with David Jennings and Rebecca Scruggs retail beer license application was not that of Ms. Jacqueline Jennings, and the Licensees are still indebted to the Kentucky Revenue Cabinet.
Based upon the evidence and the record herein, and being otherwise sufficiently advised, the Board finds the facts to be as set out in the Order to Show Cause. The Board further finds that the Licensees’ license should be REVOKED.
IT IS, THEREFORE, ORDERED that Retail Beer License No. 059-B-6445, issued to David Jennings & Rebecca Scruggs, d/b/a, Jen-X Grocery, be and is hereby REVOKED, effective the close of business on Monday, October 3, 2005.
All final orders of the Board may be appealed to Franklin Circuit Court in accordance with KRS 13B.140(1). To appeal, you should file a petition in Franklin Circuit Court within thirty (30) days after the mailing date of this Final Order. Copies of the petition must be served upon the Office and all parties of record in this proceeding. The petition shall include the names and addresses of all parties of record in this proceeding, including the Office. The petition shall also present a statement of the grounds upon which the review is requested. A copy of this Final Order shall accompany the petition.
SO ORDERED this the _________ day of _______________, 2005.
ALCOHOLIC BEVERAGE CONTROL BOARD
STEVEN A. EDWARDS
DISTILLED SPIRITS ADMINISTRATOR
JOHN C. BARTON
MALT BEVERAGE ADMINISTRATOR
ANGELA F. DONAHUE
Hon. William P. Whalen, Jr.
David Jennings and Rebecca Scruggs
DBA Jen-X Grocery
City ABC Administrator
Ms. Brandi Shular
Division of Collections
Investigators Cross, West