Case Title: WISAM 1, Inc. v. IL Liquor Control Comm'n

Citation: 2014 IL 116173

Docket Number: 116173

State: illinois

Court: Illinois Supreme Court

Date: 2014-05-22T00:00:00Z

Document:
Illinois Official Reports 
 
Supreme Court 
 
 
WISAM 1, Inc. v. Illinois Liquor Control Comm’n, 2014 IL 116173 
 
 
Caption in Supreme 
Court: 
WISAM 1, INC., d/b/a Sheridan Liquors, Appellant, v. ILLINOIS 
LIQUOR CONTROL COMMISSION et al., Appellees. 
 
 
 
Docket No. 
 
116173 
 
 
 
Filed 
Rehearing denied 
 
 
May 22, 2014 
September 22, 2014 
 
 
 
Held 
(Note: 
This 
syllabus 
constitutes no part of the 
opinion of the court but 
has been prepared by the 
Reporter of Decisions 
for the convenience of 
the reader.) 
 
 
Where municipal liquor licensees were barred from activity prohibited 
by federal law and a liquor store’s license was revoked after its 
manager’s conviction on federal money laundering charges, a claim of 
denial of due process was rejected where there was no challenge to the 
appropriateness of the penalty or the sufficiency of the evidence and 
where there had been a meaningful opportunity to be heard at every 
stage by presenting relevant evidence and defenses. 
 
 
 
 
 
Decision Under  
Review 
Appeal from the Appellate Court for the Third District; heard in that 
court on appeal from the Circuit Court of Peoria County, the Hon. 
Michael E. Brandt, Judge, presiding. 
 
 
 
Judgment 
 
Affirmed. 
 
 
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Counsel on 
Appeal 
Daniel G. O’Day, Daniel Hanuska, and Robert J. Hanauer, of Cusack, 
Gilfillan & O’Day, LLC, of Peoria, for appellant. 
 
Lisa Madigan, Attorney General, of Springfield (Carolyn E. Shapiro, 
Solicitor General, and Christopher M.R. Turner, Assistant Attorney 
General, of Chicago, of counsel), for appellee Illinois Liquor Control 
Commission. 
 
Sonni Choi Williams, Interim Corporation Counsel, for appellees City 
of Peoria et al. 
 
 
Justices 
JUSTICE THEIS delivered the judgment of the court, with opinion. 
Chief Justice Garman and Justices Freeman, Thomas, Kilbride, 
Karmeier, and Burke concurred in the judgment and opinion. 
 
 
 
OPINION 
 
¶ 1 
 
This appeal arises out of a decision by the Illinois Liquor Control Commission, which 
affirmed the decision of the deputy local liquor control commissioner of the City of Peoria 
(Local Commissioner) to revoke the liquor license of WISAM 1, Inc., doing business as 
Sheridan Liquors (Sheridan Liquors). The circuit court of Peoria County and the appellate 
court affirmed the decision on administrative review. 2013 IL App (3d) 110607-U. At issue is 
whether Sheridan Liquors was denied due process at the revocation proceeding before the 
Local Commissioner. For the following reasons, we hold that its due process rights were not 
violated and affirm the decision of the Commission. 
 
¶ 2 
 
 
 
 
BACKGROUND 
¶ 3 
 
Since 2002, Sheridan Liquors operated a liquor store at 2415 North Sheridan Road in 
Peoria, Illinois, and held a valid liquor license issued by the City of Peoria (the City). Adnan 
Asad was the president and owner of the business. His brothers, Mohamed (Mike) and Jalal 
Asad, managed and operated the business. 
¶ 4 
 
In 2009, Mike and Jalal were indicted in federal court on five counts of violating or 
conspiring to violate the Money Laundering Control Act of 1986 (31 U.S.C. § 5324(a)(3) 
(2006)).1 That Act requires a bank involved in a cash transaction exceeding $10,000 to file a 
report with the Secretary of the Treasury. 31 U.S.C. § 5313(a) (2006); 31 C.F.R. § 103.22(b) 
(2009). The purpose of this requirement is to ferret out criminal activity hidden through money 
laundering and other financial devices. United States v. MacPherson, 424 F.3d 183, 188 (2d 
Cir. 2005). The Act further makes it illegal to break up a single transaction above the reporting 
                                                 
 
1 Jalal fled the country prior to trial and is currently a wanted fugitive. www.interpol.int/ 
notice/search/wanted/2009-11204. His conduct is not at issue here. 
 
 
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threshold into two or more separate transactions for the purpose of evading the reporting 
requirement. 31 U.S.C. § 5324(a)(3) (2006); 31 C.F.R. § 103.11(gg) (2009). 
¶ 5 
 
The indictment alleged that Mike and Jalal were involved in the management and operation 
of Sheridan Liquors, and that as part of the business, in addition to selling liquor and other 
products, they cashed checks for a fee. As a result of the check-cashing operation, they needed 
a substantial amount of cash. The cash generated from the sale of liquor and other products was 
insufficient to provide the amounts needed to cover the checks that were being cashed. From 
June 2003 to March 2007, they withdrew large amounts of cash from Sheridan Liquors’ bank 
account by writing checks payable to cash and, knowing of the federal reporting requirements, 
structured the withdrawal of more than $4 million from that account to evade the reporting 
requirements. For example, the indictment alleged that on the same date in 2006, two checks 
were written for $9,500 on Sheridan Liquors’ account at different branch offices in Peoria. The 
next day, a $9,800 and a $9,000 check were cashed at these same branch offices. The next 
month, eight checks were cashed in separate transactions each in increments of $9,000, $9,500, 
and $9,800 at various branch offices. 
¶ 6 
 
In June 2010, a jury found Mike guilty on all five counts in the federal indictment. He was 
subsequently sentenced to three years in prison. He did not appeal. 
¶ 7 
 
One month later, the City of Peoria issued a notice of hearing to Sheridan Liquors charging 
a violation of section 3-28 of the Peoria Municipal Code (the Code). That section prohibits, in 
relevant part, any liquor licensee or its agent or employee from engaging in any activity or 
conduct in or about the licensed premises that is prohibited by federal law. Peoria Municipal 
Code § 3-28 (adopted Apr. 20, 1993). The City alleged that between 2003 and 2007, Mike, as 
Sheridan Liquors’ agent or employee, engaged in illegal activity in or about the premises by 
conspiring to unlawfully structure financial transactions related to Sheridan Liquors’ 
operations to evade the federal reporting requirements, as charged in the federal indictment. 
¶ 8 
 
On August 4, 2010, an administrative hearing was held before the Local Commissioner. At 
the outset of the hearing, the City entered into evidence a stipulation between the parties. The 
stipulation, which was read into the record, provided as follows: 
 
“1. At all dates and time[s] as indicated in the notice of charge against the licensee, 
[Mike] Asad, was acting as a manager or employee or agent of the licensee. 
 
2. The attached Exhibit A is an accurate and true copy of the indictment against 
[Mike] Asad in the federal criminal case 09-10110 before the U.S. Central District 
Court. 
 
3. That [Mike] Asad was found guilty and convicted by a jury for committing 
federal criminal offenses, counts 1 through 5, as charged in [the] indictment contained 
in the federal criminal case 09-10110 before the U.S. Central District Court. 
 
4. The federal criminal offenses of which [Mike] Asad was convicted all related to 
the financial and business operations of Sheridan Liquors located [at] 2415 N. 
Sheridan, Peoria, Illinois. 
 
5. That as part of Sheridan Liquors’ business, [Mike] Asad and other employees of 
Sheridan Liquor[s] cashed checks for its customers.” 
¶ 9 
 
In addition to the stipulation and the attached indictment, the City introduced the three 
volume transcript from the federal criminal trial. Sheridan Liquors objected to the admission of 
the transcripts because the business and its owner, Adnan, were not parties to the criminal 
 
 
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proceeding against Mike and had no opportunity to defend in that proceeding or cross-examine 
those witnesses. The Local Commissioner admitted the evidence over objection. 
¶ 10 
 
After entering into evidence the stipulation, the attached indictment, and the trial 
transcripts, the parties made what they referred to as “opening statements.” Sheridan Liquors 
maintained that Mike’s federal conviction should not have preclusive effect against it in this 
case because Adnan, the owner, was never given an opportunity to present a defense in the 
federal criminal proceeding. Counsel stated that Adnan would seek to introduce evidence that 
he had a bona fide reason for structuring the transactions in amounts under the reporting 
requirement. Counsel additionally maintained that the indictment provided only that the 
transactions that were the subject of the federal offense occurred at the bank and not in or about 
the premises as required under section 3-28 of the Code. He provided the Local Commissioner 
with a packet of various ordinances and case law to support his arguments. 
¶ 11 
 
After responding to Sheridan Liquors’ arguments, the City then sought what it called a 
“directed finding” that Mike, as Sheridan Liquors’ agent, violated section 3-28 of the Code 
based upon the evidence it had presented.2 The Local Commissioner made an initial finding on 
the record that “there is a clear violation [of section 3-28] based upon the federal indictment.” 
He later clarified that his finding was based on the federal conviction. Thereafter, the following 
colloquy took place: 
 
“MR. O’DAY [counsel for Sheridan Liquors]: Can we present some evidence 
about the case, or are we precluded? 
 
MR. TURNER [Local Commissioner]: Well, since this is a more relaxed 
atmosphere, I don’t have a problem with you presenting any additional information.” 
¶ 12 
 
Sheridan Liquors introduced various items of evidence into the record. It offered some 
insurance policy declarations pages which purported to show relevant business insurance 
coverage with limits of $10,000 for cash on the premises. It explained the purpose in 
introducing these policies was to support a defense theory that the reason for structuring the 
transactions below $10,000 was not to evade the reporting requirements but, instead, because 
the insurance coverage on the premises was limited to $10,000 cash on hand. Sheridan Liquors 
requested that the policies be admitted into evidence,3 and sought a finding that they were not 
admitted at the federal trial. It additionally introduced a subpoena for Adnan in the federal 
criminal trial, but explained that Adnan was never called to testify. It also asked the court to 
take judicial notice of various sections of the Code, and then stated, “that’s all I have.” 
¶ 13 
 
The Local Commissioner allowed Sheridan Liquors the opportunity to make a further 
record. Sheridan Liquors presented various legal arguments, including that the finding of guilt 
against the agent should not be binding on the licensee in the revocation proceeding. The City 
responded to those arguments, and the Local Commissioner addressed those legal arguments. 
                                                 
 
2A directed finding is generally made by a defendant at the close of the plaintiff’s case where the 
defendant contends the plaintiff has not established a prima facie case. See 735 ILCS 5/2-1110 (West 
2010). We will refer to it simply as a finding. 
 
 
3The record reflects that some of the policy declarations pages covered periods outside the time 
period alleged in the City’s notice of hearing and the indictment, and provided coverage limits of only 
$5,000 inside the premises which was inconsistent with the defense theory. 
 
 
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¶ 14 
 
The parties then presented evidence related to the penalty phase of the proceedings. In 
support of the revocation of the liquor license as a penalty for the violation, the City presented 
testimony from a neighbor and several local police officers regarding loitering, litter, and 
potential drug use around the store. Additionally, the City entered into evidence a 2005 order 
from the local liquor commissioner, finding that Sheridan Liquors had sold liquor to a minor in 
violation of section 3-28 of the Code. Counsel for Sheridan Liquors then cross-examined each 
of the witnesses and entered into evidence letters from the Peoria police department indicating 
that the establishment had subsequently complied with law enforcement with regard to the sale 
of alcohol to minors. 
¶ 15 
 
In its defense, Sheridan Liquors presented the testimony of Adnan. In response to a 
question from counsel, Adnan testified that he was familiar with “the insurance declarations 
pages that we’ve put into evidence.” Adnan stated that he was familiar with the insurance 
provisions which covered up to $10,000 if money was stolen in a robbery at the store. Adnan 
further reiterated that he attempted to limit the amount of cash on hand in the store to less than 
$10,000 for insurance and safety purposes and denied that it was to avoid currency transaction 
reporting requirements. Adnan acknowledged that the store had a sign indicating that it cashed 
paychecks and that the liquor store employees would cash checks for its customers in order for 
the customers to have money to spend in the store. 
¶ 16 
 
At the conclusion of the two-and-a-half-hour hearing, the Local Commissioner made the 
following statement: 
 
“I don’t take the City’s request for revocation lightly. So what I want to do is I want 
to review all of the testimony, the exhibits, and the evidence that has been presented 
here today over the next few days and render a decision that is based on the findings of 
fact and the information that was presented here today.” 
¶ 17 
 
Thereafter, the Local Commissioner issued a written order revoking Sheridan Liquors’ 
license. Therein, he made the following findings of fact. Based on the stipulation, Mike was 
acting as a manager and employee or agent of Sheridan Liquors at all dates and times indicated 
in the notice of hearing, Mike was found guilty by a jury of committing counts I through V as 
charged in the federal indictment in the federal case, and the federal criminal offenses for 
which Mike was convicted all related to the financial and business operations of Sheridan 
Liquors. Additionally, the Local Commissioner found that, based on the testimony presented 
during the federal trial, the operation of Sheridan Liquors was “intricate and central to the 
motive, means and manner in which the federal criminal offenses were committed.” 
¶ 18 
 
Sheridan Liquors appealed the decision to the Illinois Liquor Control Commission (the 
Commission), pursuant to section 7-9 of the Liquor Control Act of 1934 (235 ILCS 5/7-9 
(West 2010)). After extensive argument by both parties, the Commission affirmed the 
revocation order and denied Sheridan Liquors’ petition for rehearing. The Commission found 
that the Local Commissioner proceeded in a lawful manner by providing the necessary due 
process to be heard and by basing his order on section 3-28 of the Code. The Commission 
further found that the findings of the Local Commissioner were supported by substantial 
evidence in light of the whole record. Specifically, it found that the stipulation established all 
of the elements of a violation of the ordinance, and that the federal transcripts confirmed that 
the premises were central to the criminal activity. Additionally, the Commission found that the 
conduct was fairly related to the control of liquor, and that the transcripts were properly 
admitted to identify the location of the illegal act committed by Mike. 
 
 
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¶ 19 
 
Thereafter, Sheridan Liquors filed a complaint for administrative review in the circuit court 
of Peoria County pursuant to the Administrative Review Law (235 ILCS 5/7-11 (West 2010); 
735 ILCS 5/3-101 et seq. (West 2010)). Therein, Sheridan Liquors alleged, inter alia, that the 
Local Commissioner violated its right to procedural due process when he summarily 
determined its liability without allowing it the opportunity to present a defense or be otherwise 
heard. After a hearing, the circuit court affirmed the decision of the Commission. The court 
concluded that Sheridan Liquors had been provided with due process, and that there was 
sufficient competent evidence in the record to support the Commission’s decision. 
¶ 20 
 
The appellate court affirmed. Although it found that Sheridan Liquors “was not given the 
opportunity to present its defense in the normal manner, or to cross-examine witnesses,” it 
found that Sheridan Liquors could not show prejudice caused by any lack of due process. 2013 
IL App (3d) 110607-U, ¶ 14. It based its determination on the facts that Sheridan Liquors had 
proper notice, attended the hearing, and entered into a stipulation that the Commission found 
was sufficient evidence to support the revocation. Id. The appellate court further found that the 
admission of the federal transcripts was not prejudicial error where there was sufficient 
competent evidence to support the revocation. Id. Justice McDade dissented. She would have 
held that there was insufficient competent evidence to support a finding that the prohibited 
conduct occurred in or about the premises, it was an abuse of discretion for the Local 
Commissioner to admit the federal transcripts, and their improper admission resulted in 
significant prejudice. Id. ¶¶ 27-29 (McDade, J., dissenting). 
¶ 21 
 
This court allowed Sheridan Liquors’ petition for leave to appeal. Ill. S. Ct. R. 315(a) (eff. 
July 1, 2013). 
 
¶ 22 
 
 
 
 
ANALYSIS 
¶ 23 
 
In its brief before this court, Sheridan Liquors raises three issues: (1) the Local 
Commissioner denied it due process; (2) the Local Commissioner’s findings were not 
supported by substantial evidence; and (3) the Local Commissioner’s decision to revoke its 
license was not supported by the record. As a preliminary matter, Sheridan Liquors concedes 
that, whether the revocation was an appropriate penalty was an issue not raised below or in its 
petition for leave to appeal and is therefore forfeited. People v. Fitzpatrick, 2013 IL 113449, 
¶ 26 (issues not raised in the petition for leave to appeal are forfeited); Vine Street Clinic v. 
HealthLink, Inc., 222 Ill. 2d 276, 301 (2006) (arguments not raised in either the circuit or 
appellate court are forfeited). Additionally, we find that Sheridan Liquors did not raise a 
sufficiency of the evidence claim in its petition for leave to appeal. Accordingly, that issue is 
also forfeited. Fitzpatrick, 2013 IL 113449, ¶ 26. Therefore, we confine our consideration to 
the issue of due process, which was preserved for review. To the extent that the sufficiency of 
the evidence is relevant to Sheridan Liquors’ due process contentions, we will consider it in 
that context. 
¶ 24 
 
Pursuant to section 7-11 of the Liquor Control Act (235 ILCS 5/7-11 (West 2010)), 
decisions of the Commission are subject to judicial review in accordance with the provisions of 
the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2010)). Where judicial 
review of an agency’s decision is governed by the Administrative Review Law, “[t]he 
applicable standard of review, which determines the degree of deference given to the agency’s 
decision, depends upon whether the question presented is one of fact, one of law, or a mixed 
question of law and fact.” AFM Messenger Service, Inc. v. Department of Employment 
 
 
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Security, 198 Ill. 2d 380, 390 (2001). Whether Sheridan Liquors was provided with the 
necessary due process is a question of law which this court reviews de novo. Lyon v. 
Department of Children & Family Services, 209 Ill. 2d 264, 271 (2004). 
¶ 25 
 
The fourteenth amendment prohibits states from depriving a person of life, liberty, or 
property, without due process of law. U.S. Const., amend. XIV. Initially, we note that although 
a liquor license is generally regarded as a privilege, and not a property right under the Liquor 
Control Act (235 ILCS 5/6-1 (West 2010)), once issued, it becomes a property right in a 
functional sense for due process purposes because it is only revocable for cause. Club Misty, 
Inc. v. Laski, 208 F.3d 615, 619 (7th Cir. 2000); Lopez v. Illinois Liquor Control Comm’n, 120 
Ill. App. 3d 756, 760 (1983) (“a licensee must be afforded the basic rights of procedural due 
process”). 
¶ 26 
 
Due process is “a flexible concept and requires only such procedural protections as 
fundamental principles of justice and the particular situation demand.” Abrahamson v. Illinois 
Department of Professional Regulation, 153 Ill. 2d 76, 92 (1992). Thus, in administrative 
matters, due process is satisfied when the party concerned has the “opportunity to be heard in 
an orderly proceeding which is adapted to the nature and circumstances of the dispute.” Obasi 
v. Department of Professional Regulation, 266 Ill. App. 3d 693, 702 (1994). A fair hearing 
includes the right to be heard, the right to cross-examine adverse witnesses, and impartiality in 
ruling on the evidence. Abrahamson, 153 Ill. 2d at 95. 
¶ 27 
 
Nevertheless, the process due in an administrative setting does not necessarily require a 
proceeding akin to a judicial proceeding, and not all judicial procedures are appropriate in 
administrative proceedings. Stratton v. Wenona Community Unit District No. 1, 133 Ill. 2d 
413, 433 (1990); Desai v. Metropolitan Sanitary District of Greater Chicago, 125 Ill. App. 3d 
1031, 1033 (1984). Administrative proceedings are less formal and technical than judicial 
proceedings. Id. 
¶ 28 
 
With these principles in mind, we consider Sheridan Liquors’ contentions of error. It raises 
three due process arguments: (1) the Local Commissioner should have allowed it to relitigate 
Mike’s federal criminal conviction; (2) the Local Commissioner made a premature finding on 
its liability, denying it a meaningful opportunity to refute the City’s evidence; and (3) the Local 
Commissioner improperly admitted the federal transcripts as substantive evidence, prejudicing 
its ability to defend. 
 
¶ 29 
 
 
 
 
Right to Relitigate 
¶ 30 
 
We reject Sheridan Liquors’ argument that the Local Commissioner denied it due process 
by not allowing it to relitigate Mike’s criminal conviction. Sheridan Liquors misunderstands 
the nature of its liability in these proceedings. When a licensee accepts the privilege of a liquor 
license, he impliedly agrees to abide by the provisions of the Liquor Control Act. A liquor 
license may be revoked where the licensee has violated any valid local ordinance as long as the 
violation is fairly related to liquor control. 235 ILCS 5/7-5 (West 2010); Sip & Save Liquors, 
Inc. v. Daley, 275 Ill. App. 3d 1009, 1020 (1995) (citing Lopez, 120 Ill. App. 3d at 761). 
¶ 31 
 
Additionally, section 10-3 of the Liquor Control Act specifically provides: 
“Every act or omission of whatsoever nature constituting a violation of any of the 
provisions of this Act, by any officer, director, manager or other agent or employee of 
any licensee, shall be deemed and held to be the act of such employer or licensee, and 
 
 
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said employer or licensee shall be punishable in the same manner as if said act or 
omission had been done or omitted by him personally.” 235 ILCS 5/10-3 (West 2010). 
¶ 32 
 
Thus, the Act holds the licensee strictly accountable for any conduct of its agent which 
constitutes a violation of the Act. 235 ILCS 5/10-3 (West 2010). The purpose of holding a 
licensee to a higher standard is to ensure that the holder of a license for alcoholic beverages has 
an affirmative responsibility to see that his liquor business is not conducted by its employees in 
violation of the law. Nappi v. License Appeal Comm’n, 50 Ill. App. 3d 329, 330 (1977) 
(recognizing that the legislature sought to ensure the licensee’s accountability for violations of 
the Act, knowing that a liquor licensee may conduct business through agents and employees). 
¶ 33 
 
Illinois case law has consistently applied the Act to hold the licensee strictly accountable 
for the conduct of its agent where the violation fairly relates to liquor control and is on the 
licensed premises. See, e.g., Byrne v. Stern, 103 Ill. App. 3d 601, 606 (1981) (“the law imposes 
strict liability upon the licensee for the action or conduct of his agents or employees on the 
premises regardless of whether the licensee has exercised control over the conduct of his 
employees or agents”); Maldonado v. License Appeal Comm’n, 100 Ill. App. 3d 639, 641 
(1981) (licensee accountable for the actions of his employee in performing an act of 
prostitution on the premises); Cox v. Daley, 93 Ill. App. 3d 593, 597 (1981) (licensee was 
accountable for agent’s battery with the use of a deadly weapon upon a patron); Daley v. 
Ferguson, 21 Ill. App. 3d 888 (1974) (abstract of op.) (licensee was responsible for agent’s act 
of allowing solicitation for prostitution on the premises); Daley v. Resnick, 5 Ill. App. 3d 683, 
684 (1972) (recognizing that the acts of a licensee’s agent in violating a statute prohibiting the 
solicitation for prostitution would be attributable to the licensee); Daley v. Richardson, 103 Ill. 
App. 2d 383, 388 (1968) (licensee was strictly accountable for the assault committed by his 
employee on the premises). 
¶ 34 
 
Here, the City sought to revoke Sheridan Liquors’ license based on its agent’s violation of 
a liquor ordinance prohibiting illegal conduct on the premises. Section 3-28 of the Code 
provides, in relevant part: 
 
“No licensee or any *** agent or employee of such licensee shall engage in any 
activity or conduct or suffer or permit any other person to engage in any activity or 
conduct in or about the licensed premises which is prohibited by any *** law of the *** 
United States.” Peoria Municipal Code § 3-28 (adopted Apr. 20, 1993). 
Specifically, the City alleged that Mike, as an agent or employee of Sheridan Liquors, had 
engaged in illegal activities on the licensed premises between June 2003 and March 2007, by 
conspiring to structure financial transactions relating to the operation of the premises to evade 
federal reporting requirements in violation of section 5324(a)(3) of the Money Laundering 
Control Act (31 U.S.C. § 5324(a)(3) (2006)). Thus, the City sought to hold Sheridan Liquors, 
the licensee, strictly accountable for the conduct of its agent, Mike. 
¶ 35 
 
The parties stipulated that Mike was an agent of the licensee, and stipulated that Mike was 
found guilty by a jury in the federal criminal proceeding of conspiring to structure the financial 
transactions to evade the federal reporting requirements. Sheridan Liquors does not dispute 
that a licensee can be held accountable for the conduct of his agent. Rather, Sheridan Liquors 
argues that, because it was not a party to the criminal proceeding, it should be able to challenge 
Mike’s conviction in the administrative proceeding. 
¶ 36 
 
We disagree. To allow the licensee to relitigate its agent’s federal conviction would render 
the strict accountability provisions of the Act meaningless. As indicated, the licensee stands in 
 
 
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the shoes of his agent. 235 ILCS 5/10-3 (West 2010). Therefore, based on Mike’s criminal 
conviction, Sheridan Liquors could not relitigate the fact that Mike’s conduct violated federal 
law. 
¶ 37 
 
That is not to say that Sheridan Liquors’ claim, that it had a legitimate reason to structure 
the financial transactions, was irrelevant. Rather, it was relevant to whether the revocation of 
the license was an appropriate sanction as a consequence of Mike’s conviction. A licensee may 
always challenge whether revocation is warranted, notwithstanding the conduct of its agent. 
See, e.g., Byrne, 103 Ill. App. 3d at 606-07; Hanson v. Illinois Liquor Control Comm’n, 201 Ill. 
App. 3d 974, 984 (1990). Indeed, Adnan, the owner of Sheridan Liquors, testified in this regard 
during the penalty phase of the hearing. He testified that he had a legitimate business reason for 
structuring the transactions under the reporting requirements, and that he directed his 
employees to maintain less than $10,000 on the premises because of coverage limitations in his 
business insurance policies and for safety reasons. 
¶ 38 
 
Not only was that evidence presented to the Local Commissioner for consideration, the 
Commission was mandated to consider the whole record which included the testimony of 
Adnan and the group insurance exhibits that were made part of the record in support of his 
testimony in mitigation.4 See 235 ILCS 5/7-9 (West 2010). There is no indication that the 
Local Commissioner or the Commission failed to consider that evidence for its proper purpose 
as mitigation. The Local Commissioner affirmatively stated on the record that he was going to 
“review all of the testimony, the exhibits, and the evidence that has been presented” prior to 
rendering his decision whether to revoke the license. Accordingly, we reject Sheridan Liquors’ 
argument that due process required that it be allowed to relitigate Mike’s federal criminal 
conviction in the revocation proceeding. 
 
¶ 39 
 
 
 
 
Premature Finding 
¶ 40 
 
We next consider Sheridan Liquors’ argument that the Local Commissioner entered a 
premature finding, after opening statements, that it violated the liquor ordinance, denying it a 
meaningful opportunity to refute and test the City’s evidence. Sheridan Liquors correctly 
asserts that Mike’s conviction alone does not satisfy the necessary elements to support its 
liability for a violation of section 3-28 of the Code. To prove a violation of section 3-28, the 
City had to establish (1) an agency relationship; (2) that the agent committed a violation of 
federal law; and (3) that the conduct occurred in or about the licensed premises. See Peoria 
Municipal Code § 3-28 (adopted Apr. 20, 1993). 
¶ 41 
 
The record established that prior to any finding on its liability, Sheridan Liquors stipulated 
to the agency relationship, stipulated that Mike was convicted of the federal offenses as 
charged in the indictment, stipulated that the offenses for which Mike was convicted all related 
to the financial and business operations of Sheridan Liquors, and stipulated that the business 
operations included check cashing on the premises. 
¶ 42 
 
In People v. Woods, 214 Ill. 2d 455 (2005), this court explained the nature and effect of a 
stipulation. A stipulation is “an agreement between parties or their attorneys with respect to an 
issue before the [tribunal].” Id. at 468. They are looked upon favorably because they promote 
the disposition of cases, simplify the issues, and save expense to the parties. Id. “ ‘A stipulation 
                                                 
 
4We note that in its own pretrial memorandum before the Commission, Sheridan Liquors indicated 
that the insurance policies were admitted into evidence. 
 
 
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is conclusive as to all matters necessarily included in it’ [citation] and ‘[n]o proof of stipulated 
facts is necessary, since the stipulation is substituted for proof and dispenses with the need for 
evidence’ [citation].” Id. at 469. “Generally speaking, a [party] is precluded from attacking or 
otherwise contradicting any facts to which he or she stipulated.” Id. Thus, based on the 
stipulation, Sheridan Liquors was precluded from attacking or otherwise contradicting the fact 
of an agency relationship and, as explained, was precluded from attacking the federal 
conviction. 
¶ 43 
 
With respect to whether the conduct occurred in or about the premises, Sheridan Liquors 
indeed had an opportunity to refute the City’s evidence on this element prior to any finding by 
the Local Commissioner. Although Sheridan Liquors characterizes its statements as merely an 
“opening statement,” we note that the statement was made after evidence was admitted by its 
stipulation. Additionally, during Sheridan Liquors’ “opening,” it made various legal 
arguments and introduced case law and other authority. Notably, Sheridan Liquors argued that 
section 3-1 of the Code defines premises to mean the area within a building for which a license 
to sell alcoholic liquor is issued. Peoria Municipal Code § 3-1 (adopted Apr. 20, 1993). 
Sheridan Liquors further argued that the evidence presented by the City, namely the 
indictment, indicated that the transactions relating to the conviction occurred at a bank. 
Specifically, counsel made the following argument: 
 
“And in the case of this federal indictment, which is part of the stipulation here, you 
know, that’s already been entered without our objection by the City into evidence, if 
you turn to, for example, Page 4 of the indictment, which is attached to the stipulation. 
They say that these transactions occurred at National City Bank’s facilities in or near 
Peoria, Illinois. These would be the transactions that were the subject of the federal 
indictment that were supposedly structured improperly to be less than $10,000 at a 
time. 
 
And the premises of a bank of a liquor licensee would not be included within the 
definition of premises in the city ordinance. Thus, when Section 3-28 refers to 
premises, that would not include any conduct that occurs at a bank as opposed to on the 
licensed premises themselves.” 
Thus, the record reflects that prior to any finding that Sheridan Liquors violated the ordinance, 
it had a meaningful opportunity to test, explain, and refute the City’s evidence by arguing that 
the definition of premises in the Code did not include a bank, and by relying on the indictment 
as evidence to support its position that the City did not meet its burden of proof to show that the 
conspiracy occurred in or about the licensed premises. Therefore, we reject Sheridan Liquors’ 
contention that a premature finding was made, denying it an opportunity to refute the City’s 
evidence. 
 
¶ 44 
 
 
 
 
Federal Transcripts 
¶ 45 
 
Finally, we consider Sheridan Liquors’ argument that it was denied due process when the 
Local Commissioner admitted the federal transcripts as substantive evidence. Sheridan 
Liquors maintains that the testimony was inadmissible hearsay that was prejudicial because it 
represented the only proof that the offenses occurred in or about the premises, and Sheridan 
Liquors had no opportunity to cross-examine those witnesses. 
¶ 46 
 
Generally, procedural due process protections preclude the admission of hearsay evidence 
in an administrative proceeding. Abrahamson, 153 Ill. 2d at 94; Sudzus v. Department of 
 
 
- 11 - 
 
Employment Security, 393 Ill. App. 3d 814, 828 (2009). However, “ ‘where there is sufficient 
competent evidence to support an administrative decision, the improper admission of hearsay 
testimony in the administrative proceeding is not prejudicial error.’ ” Abrahamson, 153 Ill. 2d 
at 94 (quoting Goranson v. Department of Registration & Education, 92 Ill. App. 3d 496, 501 
(1980)); Sudzus, 393 Ill. App. 3d at 828. 
¶ 47 
 
We agree with Sheridan Liquors that the City improperly sought to admit the entire 
transcript of proceedings from the federal trial, without identifying the purpose for which it 
sought to use the testimony, and without identifying what specific testimony it sought to rely 
upon. The Local Commissioner could not properly consider whether the City had established 
an adequate basis for admission of this evidence. Nevertheless, we need not consider whether 
the testimony was inadmissible hearsay where there was sufficient competent evidence to 
support the administrative decision. 
¶ 48 
 
The Commission had before it the stipulation, the attached indictment, and the testimony of 
Adnan. As explained, the stipulation established that Mike was an agent of Sheridan Liquors, 
and that he had been found guilty by a jury of conspiring to structure financial transactions to 
evade the federal reporting requirements. Although the stipulation and attached indictment did 
not expressly state that the illegal conduct occurred on the premises, the Commission was 
entitled to draw reasonable inferences from the facts established. See, e.g., People v. Reynolds, 
358 Ill. App. 3d 286, 298 (2005) (finding that the stipulation supported a reasonable inference 
of criminal intent). 
¶ 49 
 
The stipulation provided that the conduct for which Mike was convicted related to the 
business operations of Sheridan Liquors located at 2415 North Sheridan Road in Peoria, 
Illinois. The stipulation and attached indictment further provided that the business operations 
included check cashing on the premises. The check cashing operation on the premises was the 
impetus for requiring large amounts of cash which resulted in the need to structure the cash 
withdrawals to evade the reporting requirements. Additionally, Adnan testified that the 
purpose of the check cashing services at the liquor store was specifically to bring people into 
the store to promote the purchase of liquor. 
¶ 50 
 
Taking all of this competent evidence together, a reasonable and logical inference could be 
made that the conspiracy to structure the transactions to evade the federal reporting 
requirements occurred “in or about the licensed premises.” Therefore, the admission of the 
transcripts was not prejudicial error warranting reversal. 
 
¶ 51 
 
 
 
 
CONCLUSION 
¶ 52 
 
Based upon our consideration of the whole record, including the 148-page transcript of the 
two-and-one-half-hour hearing before the Local Commissioner, we hold that Sheridan Liquors 
was not denied due process. It had an opportunity to present relevant evidence and relevant 
defenses. Procedural due process does not guarantee an outcome, it only guarantees a 
meaningful opportunity to be heard. Sheridan Liquors had a thorough opportunity to be heard 
at every stage of the proceedings. Consequently, we affirm the decision of the Commission. 
 
¶ 53 
 
Affirmed.