80 FR 29025 - Keith Ky Ly, D.O.; Decision and Order
DEPARTMENT OF JUSTICE
Drug Enforcement Administration Federal Register Volume 80, Issue 97 (May 20, 2015)
Drug Enforcement Administration
Federal Register Volume 80, Issue 97 (May 20, 2015)
| Page Range | 29025-29037 | |
| FR Document | 2015-12139 |
[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)] [Notices] [Pages 29025-29037] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-12139] ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Drug Enforcement Administration Keith Ky Ly, D.O.; Decision and Order On January 24, 2013, I, the Administrator of the Drug Enforcement Administration, issued an Order to Show Cause and Immediate Suspension of Registration (hereinafter, OTSC-ISO or Order) to Keith Ky Ly, D.O. (Respondent), of Mountlake Terrace, Washington. GX 2, at 1. The Order proposed the revocation of Respondent's DEA Certificate of Registration, which authorizes him to dispense controlled substances in schedules II through V, as a practitioner, as well as the denial of any pending applications to renew or modify his registration, on the ground that his ``continued registration is inconsistent with the public interest, as that term is defined in 21 U.S.C. 823(f).'' Id. More specifically, the OTSC-ISO alleged that on February 2, 2012, law enforcement officers arrested Respondent's girlfriend, who was then driving his vehicle, for driving with a suspended license and that during a search of the vehicle, found ``one pound of marijuana, approximately $3,900 cash in a vacuum sealed bag located in [her] purse, $5,000 cash located in a hidden compartment, and three prescription bottles containing controlled substances located in'' her backpack. Id. at 2. The Order further alleged that Respondent had issued one of the prescriptions found in the backpack to an employee, and that during an interview when he attempted to recover the vehicle, Respondent stated that he lived with his girlfriend, that she worked at his medical practice, and that she and the employee whose medication was found in the backpack ``often shared medications.'' Id. The Order then alleged that this showed that Respondent had ``knowledge of illegal activity occurring between [his] employees and [took] no corrective action.'' Id. Next, the OTSC-ISO alleged that law enforcement officers discovered that several premises owned by Respondent were being used as marijuana- grow houses. Id. More specifically, the Order alleged that: (1) On May 30, 2012, the Renton, Washington fire department responded to a fire at his Quincy [[Page 29026]] Avenue property and seized approximately 700 marijuana plants; (2) on July 5, 2012, state and local law enforcement officers obtained a search warrant for his property located at 20118 14th Avenue NE., Shoreline, Washington, and seized approximately 489 marijuana plants and six bags of processed marijuana; (3) on July 6, 2012, state and local law enforcement officers executed a search warrant at Respondent's personal residence in Bothell, Washington, and ``seized $12,000 in cash, two firearms, marijuana grow documents, approximately 15 grams of processed marijuana, and multiple prescription bottles containing pills,'' including an unlabeled bottle containing hydrocodone, and a bottle containing clonazepam, which Respondent had prescribed for patient R.M.; and (4) on July 7, 2012, state and local law enforcement obtained a search warrant for his property located at 5006 104th Place NE., Marysville, Washington and seized marijuana leaves and grow equipment. Id. at 2-3. Next, the OTSC-ISO alleged that on July 13, 2012, DEA personnel ``conducted an inspection and audit at [Respondent's] registered address.'' Id. at 3. The Order alleged that Respondent had a 75 percent shortage of both testosterone 200mg/ml and phentermine 37.5mg, as well as a 14 percent shortage of hydrocodone 10/500mg. Id. Based on the audit results, the Order further alleged that Respondent ``failed to maintain accurate and complete records and failed to account for these controlled substances.'' Id. (citing 21 U.S.C. 827(a)(1) and 842(a)(5); 21 CFR 1301.71, 1304.03, 1304.04 (a) & (g), and 1304.21). The Order then alleged that Respondent had committed additional recordkeeping violations, in that he ``failed to take and maintain an initial or biennial inventory of all stocks of controlled substances on hand,'' ``failed to record essential elements on approximately 128 dispensing records,'' ``failed to maintain a dispensing/administration log for testosterone and Testim samples, located during the on-site inspection,'' and ``failed to maintain all Schedule III-V acquisition invoices and record the dates of receipt[ ] on the invoices.'' Id. at 3-4 (citations omitted). Finally, the OTSC-ISO alleged that Respondent ``failed to make required dispensing reports'' to the Washington State Prescription Monitoring Program ``on approximately 45 separate occasions from January to July 2012.'' Id. at 4. As the legal basis for this allegation, the Government noted that Washington State ``requires a dispensing physician to report to the . . . PMP all instances in which he or she dispenses more than a 24-hour supply of controlled substances.'' Id. (citing Wash. Rev. Code Sec. 70.225.020; Wash. Admin. Code Sec. 246-470-030). Based on the above, I made a preliminary finding that Respondent ``illegally manufactured controlled substances in violation of state and federal law, illegally possessed and distributed highly addictive controlled substances . . . and ha[d] generally failed to maintain effective controls to guard against theft and prevent diversion of controlled substances.'' Id. I therefore ordered that Respondent's registration be suspended effective immediately. Id. (citing 21 U.S.C. 824(d)). According to the Declaration of a DEA Diversion Investigator (DI), on January 28, 2013, DEA Special Agents and DIs went to Respondent's registered location and personally served him with the OTSC-ISO, along with ``a sample request for hearing form.'' DI Declaration, at 9. According to the DI, later that same day, he also hand-delivered a copy of the OTSC-ISO and the hearing request form to Respondent's ``attorney at the time.'' \1\ Id. --------------------------------------------------------------------------- \1\ The courts are clear that service of an initial pleading on an attorney does not constitute adequate service unless a party has granted authority to the attorney to accept process on his behalf. See, e.g., United States v. Ziegler Bolt & Parts Co., 111 F.3d 878, 881 (Fed. Cir.1997). There being no such evidence showing that Respondent granted such authority to the attorney, I rely only on the DI's statement that Respondent was personally served. --------------------------------------------------------------------------- The OTSC-ISO plainly advised that: (1) ``[w]ithin 30 days after the date of receipt of this Order to Show Cause and Immediate Suspension of Registration, you may file with the DEA a written request for a hearing in the form set forth in 21 CFR 1316.47''; (2) ``[i]f you fail to file such a request, the hearing shall be cancelled in accordance with paragraph 3''; (3) ``[s]hould you decline to file a request for a hearing . . . you shall be deemed to have waived the right to a hearing and the DEA may cancel such hearing''; (4) ``[c]orrespondence concerning this matter, including requests [for a hearing] should be addressed to the Hearing Clerk, Office of Administrative Law Judges [OALJ] . . . 8701 Morrissette Drive, Springfield, VA 22152''; and (5) ``[m]atters are deemed filed upon receipt by the Hearing Clerk.'' GX 2, at 4-5 (citations omitted). Notwithstanding this, Respondent did not file a request for hearing with the Office of Administrative Law Judges until April 4, 2013. GX 4, at 1. The matter was then assigned to an Administrative Law Judge (ALJ), who ordered that the proceeding be terminated because Respondent had ``failed to timely request a hearing and failed to assert good cause for his 36-day delay.'' Id. at 2. Thereafter, on April 18, 2013, Respondent, who was now represented by counsel (a different counsel than identified by the DI in his declaration), filed a motion to reconsider and re-open. GX 5. Therein, Respondent requested a full hearing on the allegations, as well as ``additional time to file his Request for Hearing based on this motion showing of good cause.'' Id. at 1. In the motion, Respondent did ``not contest that he was effectively served with a copy of the'' OTSC-ISO. Id. at 2. He also did not dispute that his prior attorney ``was in contact with [him] during and after the period for filing a timely appeal.'' Id. Rather, Respondent maintained that he ``sent a letter requesting appeal of the [OTSC-ISO] to [a] local Seattle-based DEA agent . . . by certified mail on February 4, 2013,'' who ``did not respond to the appeal letter or inform Respondent that an appeal of the [OTSC-ISO] could not be perfected by sending it to him.'' Id. at 2-3. Respondent further asserts that he ``sought the advice of and had several conversations with [his former] attorney,'' and that ``[b]ased on these conversations, [he] `filed' an appeal NOT with the DEA . . . Office of Administrative Law Judges, but instead with the Office of the Inspector General (OIG),'' and that he faxed the appeal ``to the OIG on February 20, 2013, and again on March 8, 2013.'' Id. at 3. According to Respondent, ``[t]he OIG suggested [he] contact the DEA.'' Id. Respondent further asserted that he ``discussed the matter with an assistant in his office, who believed the correct place to file the appeal was with the office of the United States Attorney General.'' Id. Respondent stated that ``[a]n `appeal' was sent to that address on February 11, 2013.'' Id. Next, Respondent contended that on March 14, 2013, he was advised by his then-counsel that the latter ``and his partner had decided not to represent [him] in this . . . proceeding,'' but that ``[t]his was after the request for hearing deadline had expired.'' Id. Respondent then contended that on March 28, he spoke with two Seattle-based DEA agents, ``who told him he needed to file the request for hearing right away.'' Id. According to Respondent, he then ``filed his request for hearing on April 4, 2013 with the DEA'' OALJ. Id. Respondent asserted that he ``was confused about how and where to file his request for a hearing'' and that ``[t]he source of his confusion came from his [[Page 29027]] contacts with [his former] attorney . . ., with his office assistant, and from the lack of response by [a DEA Agent], although a late effort to clarify the correct means to request a hearing was provided by the DEA agents.'' Id. at 3-4. He further maintained that he attempted ``in good faith to ask for a hearing'' and that ``[n]one of the alternatives employed by [him] were done for purposes of delay.'' Id. at 4. Respondent argued that his case is similar to that of Steven J. Watterson, 67 FR 67413 (2002). Therein, the Agency set aside a final order where a party had failed to file a request for a hearing based on ``conflicting guidance'' having been ``given to'' an Applicant by an Agency ``official concerning how and when the matter would be resolved.'' Id. at 67414. Respondent argued that Watterson stands for the proposition that `` `[g]ood cause' . . . to set aside and rescind a decision terminating a proceeding . . . require[s] a showing of both excusable neglect and a meritorious defense.'' GX 5, at 5. He then argued that ``[t]he acceptance and retention by'' the DI of his appeal request ``was misleading, particularly when [the DIs] actively encouraged [him] to file his appeal correctly AFTER the appeal period had lapsed,'' and that ``[t]his was a source of conflicting guidance for Respondent.'' Id. at 6. Respondent also relied on Pincay v. Andrews, 389 F.3d 853 (9th Cir. 2004) (en banc). There, a lawyer failed to file a notice of appeal within the thirty-day period provided for doing so in the Federal Rules of Appellate Procedure, based on his reliance on the erroneous advice of a paralegal that the notice of appeal need not be filed until sixty days after the issuance of a judgment, rather than the thirty days provided in the applicable Federal Rule of Appellate Procedure. Id. at 855. The Ninth Circuit held that the failure to timely file the notice of appeal constituted excusable neglect, notwithstanding its conclusions that the lawyer's reliance on the paralegal's reading of the rule was ``negligent'' and that the ``lawyer's failure to read an applicable rule is one of the least compelling excuses that can be offered.'' Id. at 859. The court nonetheless held that the district court did not abuse its discretion in concluding that the lawyer's untimely filing was the result of excusable neglect. Id. The court further noted that ``the decision whether to grant or deny an extension of time to file a notice of appeal should be entrusted to the discretion of the district court because the district court is in a better position than'' the appeals court to evaluate the relevant factors, and that the decision was to be determined ``within the context of the particular case,'' which, in Pincay, had gone on for fifteen years. Id. However, the court also observed that ``[h]ad the district court declined to permit the filing of the notice, we would be hard pressed to find any rationale requiring us to reverse.'' Id. Based on Pincay, Respondent argued that: (1) There is no prejudice to the Agency because his registration remains suspended; (2) the thirty-six day delay in filing his hearing request had no impact on the proceeding; (3) ``the reason for the delay was confusion on his part,'' that his conduct is no worse than that found excusable in Pincay and was ``based in part on omissions by'' the DI, and was not made in bad faith; and (4) that he acted promptly to rectify his untimely filing. GX 5, at 8-9. Accordingly, Respondent argued that he has shown good cause for setting aside the ALJ's termination order. Id. at 9. The ALJ granted Respondent's motion for reconsideration but then denied his motion to reopen the proceedings. Order Granting Respondent's Motion for Reconsideration and Denying Respondent's Motion to Reopen the Case, at 10 (Order on Reconsideration) (GX 7). While concluding that she had jurisdiction to consider Respondent's motion for reconsideration, the ALJ rejected Respondent's contention that he had shown good cause for his untimely filing. First, the ALJ rejected Respondent's contention that under Watterson, he had demonstrated good cause because he had received ``conflicting guidance'' from the DI to whom he sent his ``appeal'' letter. Id. at 7. The ALJ found that Watterson was not controlling because, during the period in which Respondent could have filed his hearing request, the DI did not provide conflicting guidance but rather no guidance at all. Id. at 8. Indeed, the DI did not provide any advice to Respondent regarding his hearing request until he met with the DI on March 28, 2013. Id. Next, the ALJ rejected Respondent's contention that ``good cause'' existed to excuse his untimely filing because his former attorney ``committed `excusable neglect.' '' Id. More specifically, the ALJ noted that the excusable neglect standard of the Federal Rules of Appellate Procedure, see Pincay, and the Federal Rules of Bankruptcy Procedure (Rule 9006(b)(1)), which was discussed by the Supreme Court in Pioneer Inv. Servs. v. Brunswick Assoc., 507 U.S. 380, 396 (1993), ``do not govern our [DEA] proceedings.'' \2\ Order on Reconsideration, GX 7, at 8. The ALJ further noted that even under Pioneer, ``respondents can `be held accountable for the acts and omissions of their chosen counsel.' '' Id. (quoting Pioneer, 507 U.S. at 397). --------------------------------------------------------------------------- \2\ While it true that DEA has not adopted any of the various federal rules of procedure, it has frequently looked to those rules for guidance in interpreting its procedural rules. See Bio Diagnostic Inc., 78 FR 39327, 39328-29 & n.1 (2013) (applying federal court decisions interpreting Fed. R. Civ. P. 56 (governing summary judgment), in determining whether summary disposition was appropriately granted in Agency proceeding); Glenn D. Kreiger, 76 FR 20020, 20021 n.3 (2011) (applying federal court decisions and holding that a challenge to the sufficiency of service of a Show Cause Order is waived if not raised in a respondent's first responsive pleading). In this regard, it is noted that the Federal Rules of Civil Procedure have expressly adopted the ``excusable neglect'' standard for determining whether ``good cause'' exists to extend the time for ``[w]hen an act may or must be done'' when a ``motion [is] made after the time has expired.'' Fed. R. Civ. P. 6(b)(1). As agency decisions make clear, the good cause standard is not limited to those instances where a respondent or his attorney are blameless in failing to timely file a pleading. See, e.g., Tony T. Bui, 75 FR 49979, 49980 (2010) (finding good cause existed to excuse untimely filed hearing request where attorney used an incomplete address to mail the request but when the request was returned, promptly proceeded to mail it to the correct address). --------------------------------------------------------------------------- The ALJ found that Respondent was represented by another attorney ``at the time [he] was served with the Order to Show Cause,'' and that this attorney did not inform him that he would not represent him in the DEA proceeding until after the deadline had passed for filing his hearing request. Id. at 8-9. The ALJ then concluded that while the ``[a]ttorney was negligent in failing to tell Respondent in a timely fashion that he would no longer represent [him], . . . Respondent cannot argue that he detrimentally relied on [the attorney] to send out the request for hearing.'' Id. at 9. This was so because ``Respondent, himself, sent out the letters to [the DI],\3\ OIG, and [the] Attorney General.'' Id. The ALJ thus concluded ``that Respondent was ultimately responsible for filing a timely request for hearing, despite his former attorney's shortcomings.'' Id. --------------------------------------------------------------------------- \3\ Regarding the letter to the DI, the ALJ noted that Respondent wrote: ``I am writing to you as an appeal for the immediate and urgent help in the matter of my DEA license reinstatement.'' Termination Order, at 9 n.8 (quoting Motion for Reconsideration, Ex. 29, at 1). The ALJ further noted that ``[w]hile Respondent's intent may have been to request a hearing, Respondent did not explicitly express this intent in the letters he sent before April 4, 2013.'' Id. --------------------------------------------------------------------------- Finally, the ALJ rejected Respondent's contention that his ``confusion . . . support[ed] a finding of `good cause.' '' Id. As the ALJ explained, ``[t]he clear language of the Order to Show Cause states that `[c]orrespondence concerning [[Page 29028]] this matter, including requests referenced in paragraphs 1 [i.e., a hearing request] and 2 above, should be addressed to the Hearing Clerk, Office of Administrative Law, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, VA 22152.' '' Id. (quoting OTSC-ISO, at 5). Finding ``that this language is an unmistakably clear explanation of where to send a request for hearing, especially for an educated professional, such as the Respondent,'' the ALJ held that ``Respondent's confusion does not justify a finding of `good cause.' '' Id. The ALJ thus rejected Respondent's contention that he had shown good cause to excuse his untimely filing. Id. She further concluded that ``Respondent's failure to file a timely request [constituted] a waiver of his right to a hearing under 21 CFR 1301.43(d).'' Id. at 9- 10. The ALJ thus denied Respondent's motion to reopen the matter. Thereafter, the Government forwarded a Request for Final Agency Action and the Investigative Record to me. Having reviewed the record, I adopt the ALJ's finding that Respondent did not demonstrate good cause for his failure to file his hearing request within the thirty-day period as required by 21 CFR 1301.43(a). As the ALJ explained, the OTSC-ISO provided a clear explanation as to the procedure to be followed for filing a hearing request. That procedure required that Respondent or his representative file his hearing request with the ``Hearing Clerk, Office of Administrative Law Judges, Drug Enforcement Administration, 8701 Morrissette Drive, Springfield, VA 22152,'' and that ``[m]atters are deemed filed upon receipt by the Hearing Clerk.'' GX 2, at 5. Moreover, the OTSC-ISO included an attachment entitled: ``REQUEST FOR HEARING.'' Id. at 6. The attachment states that ``[a]ny person desiring a hearing with regard to an Order to Show Cause must, within thirty (30) days from receipt of the Order to Show Cause, file a request for a hearing in the following format.'' Id. The attachment then provides a sample form, with the following address block: DEA Headquarters, Office of the Administrative Law Judges, Hearing Clerk, 8701 Morrissette Drive, Springfield, Virginia 22152. Id. Notably, neither the OTSC-ISO, nor the attachment, directed Respondent, if he desired a hearing, to file his hearing request with DEA field personnel, the Office of Inspector General, or the Attorney General himself. Also unavailing is Respondent's reliance on Pincay v. Andrews to argue ``good cause'' exists to excuse his untimely filing because either he or his lawyer committed ```excusable neglect.' '' \4\ Motion for Reconsideration, GX 5, at 7. As the Supreme Court explained in Pioneer, ``inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute excusable neglect.'' 507 U.S. at 392. Moreover, as the Ninth Circuit noted in Pincay, the ``failure to read an applicable rule is one of the least compelling excuses that can be offered.'' 389 F.3d at 859. Indeed, as the Ninth Circuit noted in Pincay, ``had the district court declined to permit'' the appellant to file his notice late, it ``would [have] be[en] hard pressed to find any rationale requiring us to reverse.'' Id. --------------------------------------------------------------------------- \4\ While the ALJ interpreted Respondent's excusable neglect argument as being based on his former attorney's failure to tell him that he would not represent Respondent until after the deadline had passed, Respondent's argument appears to rely on his own confusion as to where to file the hearing request and not on the aforesaid conduct of the attorney. --------------------------------------------------------------------------- In his affidavit, Respondent asserts that he ``sought the advice of and had several conversations with'' his former attorney ``concerning the OSC and filing an appeal,'' and that ``[b]ased on these conversations, I `filed' an appeal NOT with the DEA . . . Office of the Administrative Law Judges, but instead with the Office of the Inspector General.'' Respondent's Declaration, at 9. To the extent Respondent seeks to rely on the advice he received from his former attorney to support a showing of good cause, his vague assertions do not establish that he was ever told not to comply with the instructions on the OTSC- ISO. Nor does Respondent assert that his former attorney ever agreed to represent him in this matter, let alone that he agreed to file a request for a hearing on Respondent's behalf. To the extent Respondent relies on his own confusion as the reason for his untimely filing, see Mot. For Recon., at 8; there is no reason to excuse his neglect when the OTSC-ISO was personally served on him and set forth, with unmistakable clarity, the procedures to be followed for requesting a hearing.\5\ --------------------------------------------------------------------------- \5\ As for Respondent's letters to the OIG and the Attorney General, Respondent did not submit a copy of any of these letters with his motion. See generally Attachments to Respondent's Motion. Indeed, the only letter relevant to this issue which Respondent submitted for the record (other than his appeal request) was a copy of an April 4, 2013 letter he received from the OIG, which ``acknowledge[d] receipt of [his] correspondence dated July 11, 2011'' and explained that his ``complaint has been forwarded to'' the DEA ``Office of Professional Responsibility.'' Id. at Ex. 31. Obviously, this letter could not have been a response to a misfiled hearing request given that it referenced his correspondence, which was dated approximately eighteen months before he was even served with the OTSC-ISO. Nor, even if the OIG's letter was misdated, does it seem likely that it was prepared in response to a hearing request, given that it referred to his ``complaint'' and referred it to the ``Office of Professional Responsibility.'' Id. As for Respondent's assertion that he ``discussed the matter . . . with an assistant in [his] office, who believed that the correct place to send the appeal was to the office of the Attorney General,'' Resp. Decl., at 9; this begs the question of why he did not discuss where to file his appeal with the attorney (who had also received a copy of the OTSC-ISO) he was then consulting with. --------------------------------------------------------------------------- Respondent further argues that ``[t]he acceptance and retention by [the DI] of the appeal request . . . was misleading, particularly when he and [another DI] actively encouraged [him] to file his appeal correctly AFTER the appeal period had lapsed'' and that [t]his was a source of conflicting guidance for'' him. Id. at 6. However, as the ALJ noted, this argument goes nowhere because Respondent does not claim that he had any discussion with the DI regarding the manner for properly filing his hearing request within the thirty-day period, let alone that he was given misleading advice as to how to file his request.\6\ Indeed, nothing prevented Respondent from filing a separate hearing request with the Office of Administrative Law Judges during the thirty-day period. I therefore reject Respondent's contention that his untimely filing should be excused because he relied on ``conflicting guidance'' he received from agency personnel. See Watterson, 67 FR at 67413. --------------------------------------------------------------------------- \6\ So too, if there was evidence that the DI had told Respondent that he would forward his hearing request to the Office of Administrative Law Judges and failed to do, I would order that a hearing be granted. Respondent, however, makes no such claim, but rather, relies only on the DI's silence during the period for requesting a hearing. --------------------------------------------------------------------------- Accordingly, I hold that Respondent has failed to demonstrate good cause to excuse his failure to timely file his hearing request. I therefore find that Respondent has waived his right to a hearing on the allegations and issue this Decision and Order based on the Investigative Record (including Respondent's Declaration) submitted by the Government. I make the following findings. Findings of Fact Respondent was the holder of DEA Certificate of Registration #BL6283927, pursuant to which he was authorized, prior to the Immediate Suspension of his registration, to dispense controlled substances in schedules II through V as a practitioner, at the registered address of 6603 220th Street SW., Mountlake Terrace, Washington 98043. GX 1. [[Page 29029]] Respondent's registration was due to expire on March 31, 2014. Id. However, according to the registration records of the Agency, on March 13, 2014, Respondent submitted an application to renew his registration. While under the Agency's regulation, his renewal application was untimely because he was subject to an Order to Show Cause and Immediate Suspension of Registration and did not submit the application ``at least 45 days before the date on which [his] registration [wa]s due to expire,'' 21 CFR 1301.36(i), and thus his registration has expired, his application remains pending before the Agency. Respondent is also licensed by the State of Washington (as well as by the States of Texas and California) as an Osteopathic Physician. Resp. Declaration, at 1. According to Respondent, he has never been subject to discipline by any state licensing body. Id. However, Respondent has been subject to discipline by the Texas Medical Board. Moreover, while this matter was pending, the Washington Board of Osteopathic Medicine and Surgery issued Respondent an Ex Parte Order of Summary Action which suspended his state license to practice as an osteopathic physician and surgeon. In re Keith Ky Ly (Wash. Bd. Osteopathic Med. & Surg., Sep. 22, 2014) (Ex Parte Order of Summary Action, at 1). With respect to the Texas Medical Board, on May 20, 2011, Respondent entered into an Agreed Order. See In re Application for Licensure By Keith Ly, D.O., at 6 (Tx. Med. Bd. 2011). Therein, the Texas Board found that Respondent failed to report on his application for a Texas Medical License that in February 1990, while undergoing his ``residency training,'' he had been ``placed on probation'' for being late and missing shifts, as well as for failing to report a 2007 arrest. Id. at 2. While the Board granted Respondent a license, it also assessed an administrative penalty of $5,000 and placed him on probation for two years.\7\ Id. at 3-4. --------------------------------------------------------------------------- \7\ Based on the Texas Board's action, the Washington Board filed a Statement of Allegations against Respondent. See In re Keith K. Ly, No. M2010-1665, Statement of Allegations and Summary of Evidence (Wash. Dept. Health, Oct. 12, 2012). However, these allegations were settled in a Stipulation To Informal Disposition, the terms of which included that it ``is not [a] formal disciplinary action.'' See Stipulation To Informal Disposition, In re Ly, at 2. However, the proceeding was still subject to reporting to the Health Integrity and Protection Databank and the National Practitioner Databank. Id. --------------------------------------------------------------------------- Accordingly, I find that notwithstanding his statement, Respondent has been subject to discipline by a state licensing body. While the basis of the Texas Board's action does not provide a reason under the CSA for DEA to take any action against Respondent's registration, Respondent's statement was nonetheless false and clearly offered to influence the decision of the Agency to grant him a hearing on the allegations. Accordingly, I consider Respondent's lack of candor in assessing the credibility of the various assertions contained in his declaration. The Arrest of Respondent's Girlfriend According to the DI, on February 2, 2012, Respondent's girlfriend (TB),\8\ who was driving his Mercedez Benz SL 65,\9\ was stopped by local police, cited for driving under a suspended license, and arrested. DI Decl., at 1; Resp. Decl., at 3. Respondent corroborated that the car was his, when in his declaration he addressed the allegation and stated, inter alia, that on January 24, 2012, he had withdrawn $5000 from his bank account to pay for the remodeling of his clinic and left the money ``in the small hidden compartment space of the car.'' Resp. Decl., at 3. Accordingly, I find that Respondent's statements corroborate the DI's assertion that the car was owned by Respondent. --------------------------------------------------------------------------- \8\ According to Respondent, TB has lived with him ``for the past 2 years'' and ``is now [his] wife.'' Resp. Decl., at 5. Moreover, TB worked in Respondent's clinic. Resp. Decl., at Ex. 4. \9\ According to the DI's affidavit, the car was registered to Respondent. DI's Decl., at 1. While the DI's affidavit offers no explanation as to the basis of knowledge for this assertion, Respondent, in his declaration, stated that a friend of TB ``had borrowed the car the previous day without my knowledge.'' Resp. Decl., at 3. I further note that in a March 3, 2012 letter to a local narcotic task force and the King County Prosecuting Attorney's Office, Respondent claimed that he owned the car and sought its return. Resp. Decl., at Ex.4. Accordingly, I find that Respondent owned the car that TB was driving when she was stopped and arrested. --------------------------------------------------------------------------- Following the arrest of Respondent's girlfriend, the police apparently impounded his car, and upon searching it, found one pound of marijuana,\10\ the aforesaid $5000, and a backpack which contained pain medication. Id.; DI Decl., at 2.\11\ As for the marijuana, Respondent asserted that it belonged to a medical marijuana patient (LHE) who was a friend of TB, and points to a statement from the purported owner of the marijuana. Resp. Decl., at 3; see also Resp. Mot., at Ex.1. Therein, LHE stated that she had an engine problem with her car and that she borrowed Respondent's car from TB ``for a few hours to pick-up . . . one [m]arijuana prescription bag'' from a marijuana collective. Resp. Mot., at Ex. 1. According to LHE, she ``was in a hurry to return the car to [TB and] forget [sic] to remove the bag behind the driver seat.'' Id. However, LHE's statement is unsworn, and given that the purported reason for borrowing Respondent's car was to obtain the marijuana, I find her story that she left a one pound bag of marijuana \12\ in the car because she was in such a hurry to return it to be utterly ludicrous.\13\ --------------------------------------------------------------------------- \10\ In his statement, Respondent does not dispute that the arresting authorities found a one pound bag of marijuana. Resp. Decl., at 3. \11\ According to the DI, the police also found $3900 in cash in a vacuum sealed bag in TB's purse. DI Decl., at 2. \12\ According to data collected by the Agency, during the period in which TB was stopped, one pound of marijuana had a street value of $1500 to $1800 in the Seattle area. At .5 grams per joint, one pound would be enough to make approximately 900 joints. \13\ I further note that in his March 3, 2012 letter to a local narcotics task force and the King County Prosecuting Attorney's Office, in which he sought the return of his car, while Respondent again denied knowledge of the marijuana, he made no mention of the story that LHE had borrowed the car from his girlfriend. --------------------------------------------------------------------------- As for the cash, Respondent offered two explanations for its source. First, he maintained that the day before, a patient paid him $5000 cash as a deposit for a liposuction procedure. Resp. Decl., at 3. Respondent also produced an unsworn letter from the purported patient to this effect and a form entitled: ``SmartLipo & Coolsculpting Price Quote.'' Id. at Ex. 2. While the latter purports to show that the patient paid a $5000 deposit in cash, the date of the deposit clearly appears to have been altered. See id. Second, as found above, Respondent maintained that he had withdrawn $5,000 from his bank account on January 24, 2012 to pay for clinic remodeling, and that he had placed the money ``in the small hidden compartment space of the car.'' Resp. Decl., at 3. To support his claim, Respondent produced a bank statement showing that he made a cash withdrawal of $5,000. Resp. Ex. 3. However, numerous entries in the statement, including Respondent's various balances for both his checking and savings account, are blacked out. Id. Putting aside that Respondent offered two different stories as for why so much cash was found in his car, I find neither explanation credible. As for the claim that the money was from a patient who had paid $5,000 cash the day before for a procedure, the patient's statement is unsworn and thus lacks even the most basic indicia of reliability. Moreover, on the price quote form, the date of the patient's deposit was clearly written over. Also, even acknowledging that the patient's procedure was likely not covered by insurance, it seems most unlikely that the patient would pay this [[Page 29030]] amount in cash rather than by check or credit card. As for his second story, it also seems most unlikely that Respondent would pay to remodel his clinic with cash (rather than check or credit card), let alone be carrying that much cash around in his car for nine days. By contrast, carrying large sums of cash is consistent with engaging in the distribution of marijuana. In his declaration, the DI also asserted that the search of the vehicle found ``multiple prescription bottles containing pills,'' and that one of the bottles bore a label indicating that the drugs had been prescribed to T.V., ``an office employee of'' Respondent. DI's Decl., at 2 (citing GX 9). The DI further stated that ``[t]wo of the bottles found in the vehicle . . . were unlabeled and contained phentermine and phendimetrazine.'' Id. (citing GX 10). Finally, the DI asserted that when Respondent ``attempted to recover his vehicle, he told law enforcement officers that his employees often shared their medication.'' Id. Respondent did not dispute that drugs were found in TB's backpack. Rather, he asserted that they ``belonged to my office manager,'' that he had prescribed the drugs ``for her liposuction procedure pain a few months prior,'' and that the drugs were ``left at my house when she visited for [a] dinner party.'' Resp. Decl., at 3. Respondent then maintained that ``[a]s a medical doctor, I do not encourage nor allow any patients to share medication'' and that he ``would absolutely terminate my employee if found engaging in sharing medication and would report them to the authorities.'' Id. Respondent did not, however, explain when the purported dinner party had occurred. Consistent with Respondent's admission, the record does include a photograph of a prescription vial; its label lists the patient as a person whose name corresponds with the initials T.V., the drug as hydrocodone/acetaminophen, and Respondent as the prescriber. See GX 9, at 1.\14\ Moreover, while the photograph does not show whether there were pills remaining in the vial, in his declaration, Respondent does not dispute that the vial contained pain medication, which hydrocodone is. I thus find that substantial evidence supports a finding that Respondent's girlfriend unlawfully possessed hydrocodone, which had been prescribed to another person. --------------------------------------------------------------------------- \14\ Government Exhibit 9, however, contains seven additional photographs, including: (1) A photograph of two unlabeled vials (only one of which clearly contains tablets); (2) a photograph of two plastic bags, which purportedly contain phentermine and a red document, the date of which is unclear; (3) a photograph of a plastic bag containing a drug similar in appearance to the drug in the previous photograph; (4) a photograph of a vial containing yellow capsules and orange tablets, the label of which had been removed; (5) a vial bearing a label for a prescription issued by Respondent for clonazepam to a patient whose initials are R.M.; (6) six bottles bearing manufacturer's labels (several of which are labelled as professional samples) for Viagra, Topiramate, Ultram ER, and Meridia; and (7) two vials, whose labels list Respondent as the prescriber, his girlfriend T.B. as the patient, and the drugs as lorazepam and hydrocodone/acetaminophen, with pills being visible only in the latter vial. Generally, the DI's declaration offers no statements linking these photographs to the various items which were purportedly seized during the various searches of Respondent's car and properties he owned. Moreover, Government Exhibits 8, 9, 10, 11a, 11b, 13, 14, and 15 each contain the exact same set of eight photographs, although not necessarily in the same order. Providing multiple copies of the exact same set of photographs does not, however, make the first set of photographs any more probative of the facts for which they were offered. --------------------------------------------------------------------------- In support of the DI's assertion that two unlabeled vials which contained phentermine and phendimetrazine were also seized, the DI cited Government Exhibit 10, but without regard to the specific page. However, in his declaration, the DI offered no statement to the effect that he participated in the search of Respondent's car, nor otherwise set forth the basis of his knowledge for making this assertion. Nor does the record contain any affidavits or police reports prepared by those officers who did participate in the arrest and search, nor other documents such as an inventory of the search, a chain of custody, and lab test results, which would support the DI's assertion.\15\ --------------------------------------------------------------------------- \15\ Even giving weight to the DI's assertion that Respondent ``purchased these items [i.e., phentermine and phendimetrazine] on August 5, 2011 from Distributor A.F. Hauser,'' DI's Decl., at 5 (] 34), this is not enough to overcome the insufficiency of the evidence with respect to the assertion that these drugs were seized during the February 2, 2012 search. --------------------------------------------------------------------------- Indeed, while Government Exhibit 10 contains eight photographs, in reviewing this matter it is apparent that the exhibit is not limited to the evidence that was seized following the search of Respondent's car, but also contained photographs of evidence that may well have been seized during several of the searches described below. Most significantly, the Exhibit contains two photographs of vials (one showing two vials, the other showing a single vial) which were missing their labels, with no identification of when and from whom the vials were seized. Finally, while at least two of the vials appear to contain tablets (the third vial being murky), the Government provided no evidence (such as lab test results) explaining the basis for the DI's assertion that these vials contained phentermine and phendimetrazine. The Searches of Respondent's Properties As noted above, the Show Cause Order also alleged that state and local law enforcement officers conducted searches of four different premises which Respondent owned, and found marijuana plants at his properties which were located in Renton and Shoreline, Washington, as well as six bags of processed marijuana at the latter property. GX 2, at 2. In addition, the Show Cause Order alleged that marijuana grow documents and ``15 grams of processed marijuana'' were found at Respondent's personal residence, and that both marijuana grow equipment and marijuana leaves were found at a fourth property he owns. Id. at 3. In his declaration, the DI made various assertions with respect to each of the searches. For example, with respect to the May 30, 2012 search of the Renton residence, the DI stated that the Renton Fire Department had responded to an electrical fire at the premises, which ``is owned by'' Respondent and ``discovered a large marijuana grow,'' and that thereafter, ``[t]he Renton Police Department executed a search warrant of the residence and seized approximately 700 marijuana plants.'' DI Decl., at 2. The DI further stated that Respondent ``told law enforcement that he rented the [premises] to [one] Jack Tran,'' but that the police ``were unable to locate and/or identify Mr. Tran.'' Id. at 3. While all of this may be true, here again, the DI's declaration offers no statement to the effect that he participated in the search, nor otherwise sets forth the basis of his knowledge. With respect to the July 5, 2012 search of the Shoreline residence, the DI stated that it was owned by Respondent, and that during the search by state and local law enforcement, ``approximately 489 marijuana plants and six (6) bags of processed marijuana'' were seized. Id. at 3. The DI further stated that TB and three other ``marijuana tenders were arrested leaving the Shoreline residence,'' that TB ``admitted'' to the police ``that she was learning to grow marijuana at the Shoreline residence,'' and that two ``of the marijuana tenders arrested at the Shoreline residence possessed loose phentermine tablets in their pockets.'' Id. (citing GX 11).\16\ Here [[Page 29031]] too, all of this may be true, but the DI's affidavit offers nothing bordering on substantial evidence to support any of these assertions.\17\ --------------------------------------------------------------------------- \16\ As explained below, while Respondent denies knowledge as to how his properties were being used, he does not dispute that marijuana was being grown at the various properties. Thus, his declaration corroborates the basic thrust of the DI's assertions. That being said, the DI's affidavit contains numerous assertions for which there is no foundation to conclude that they are based on the DI's ``personal knowledge'' as that term is commonly understood. Indeed, many of the DI's assertions regarding the searches of Respondent's properties appear to be based on hearsay statements, the reliability of which cannot be assessed because the DI did not identify the source of the information and the Government did not include various documents (such as police reports, search inventories, and test results) in the record. More specifically, the DI asserts that TB and three other persons were arrested during the search of the Shoreline residence; that during an interview with law enforcement, TB admitted that she was learning how to grow marijuana; and that two of the persons had loose phentermine tablets in their pockets. Again, the DI offered no statement to the effect that he participated in either the search of the Shoreline residence or the interview of TB. Nor did he set forth any other basis for these assertions. As for the two marijuana tenders who purportedly possessed loose phentermine, the DI further asserted that ``[s]tate law requires the labeling of dispensed medication'' and that ``[t]he lack of labeled prescription bottles suggests the controlled substances were diverted.'' DI's Decl., at 3. This too may be true, but there is no evidence in the record establishing the names of these individuals and that they obtained the controlled substances from Respondent. Indeed, while the DI cited GX 11 as support for his assertion that these individuals possessed phentermine, this exhibit simply contains a series of photographs including two of white tablets (one of which contains a red form which is illegible), various prescription vials (some of which contain pills, others which it is unclear if they do) and bottles containing various drug samples. Even assuming that the white tablets are phentermine (even though there is no evidence they were tested), nothing in the record establishes from whom and when these tablets were seized. \17\ Here too, even giving weight to the DI's assertion that Respondent ``purchased this exact item [i.e., more phentermine] on March 16, 2012 from Distributor A.F. Hauser,'' DI Decl., at 5 (] 35), this evidence does not overcome the insufficiency of the evidence with respect to the assertion that these drugs were seized from the marijuana tenders during the search of the Shoreline residence. And because the evidence is insufficient to establish that loose phentermine was seized from the two marijuana tenders who were purportedly at the Shoreline residence, the assertions of the DI that: (1) One of the tenders ``was never seen by'' Respondent, and (2) that while one of the tenders was seen by Respondent, he was not prescribed any controlled substance, id. at 5-6 (] 36), is insufficient to establish that Respondent unlawfully distributed the phentermine to either person. --------------------------------------------------------------------------- The DI further asserted that L.E. was one of the marijuana tenders arrested during this search, and that using the Washington State Prescription Monitoring Program, ``[i]t was discovered . . . that in June 2012, [Respondent] prescribed 30 dosage units of 10/500 mg hydrocodone to L.E.'' Id. Citing Government Exhibit 12, the DI further stated that he ``verified the prescriptions [sic] by obtaining a hard copy of the prescription through'' the pharmacy which filled it. Id. at 3-4. The DI then stated that on July 13, 2012, he subpoenaed ``L.E.'s patient chart from'' Respondent, but that ``[t]he office staff could not locate a patient chart for L.E., nor could they find his/her name in the electronic medical records.'' Id. at 4. Government Exhibit 12 is a copy of a prescription issued by Respondent on June 28, 2012 for thirty (30) tablets of Lortab (hydrocodone/acetaminophen) 10/500. See GX 12. However, the prescription was issued to a patient whose initials are H.L., and not L.E. See id. Thus, the prescription does not support the DI's assertion, and the Government points to no other evidence that Respondent prescribed a controlled substance to a patient whose name corresponds with the initials of L.E., let alone that he violated the CSA's prescription requirement in doing so. See GX 2, at 2, ] 3-b. (OTSC-ISO). Regarding the July 6, 2012 search of Respondent's and TB's residence (which is owned by the former), the DI asserted that state and local law enforcement seized ``firearms, marijuana grow documents, approximately 15 grams of processed marijuana, and multiple prescription bottles containing pills.'' DI Decl., at 4. The DI then stated that Investigators found ``an unlabeled'' vial, ``which contained hydrocodone''; one labeled vial, ``which contained clonazepam that [Respondent] prescribed to patient R.M. in 2010''; and two ``stock bottles that contained Meridia and diazepam''; even though Respondent ``was not, nor has ever been, registered with DEA at his Bothell residence.'' Id. (citing GXs 13, 14, and 15). As for the unlabeled prescription bottle which purportedly contained hydrocodone, here again, the DI's Declaration is devoid of any statement that he was present during the search and there is no other evidence establishing that the vials were seized from Respondent's residence. And while GX 13 contains a photograph of two vials, with pills that are barely visible in the vials, there is no photograph of the pills outside of the vials, which might have shown that the pills bore the NDC Code for hydrocodone. Nor is there any evidence establishing that the pills were tested by a laboratory and found to be hydrocodone.\18\ --------------------------------------------------------------------------- \18\ Even giving weight to the DI's assertion that Respondent ``purchased this item [i.e., hydrocodone] on March 16, 2012 from Distributor A.F. Hauser, Inc.,'' DI Decl., at 6 (] 37); this statement likewise does not overcome the lack of substantial evidence establishing that these drugs were seized during the search of Respondent's residence. --------------------------------------------------------------------------- As for the DI's assertion that the police also seized a vial containing clonazepam, here again, there is no evidence either that the DI was present during the search of Respondent's residence or that a vial containing this drug was seized during that search. And while the record contains a photograph of a vial, which bears a label listing Respondent as the prescriber, the drug as clonazepam, and the patient's name corresponding with the initials R.M., there is no evidence establishing that any pills were in the vial, let alone that the pills were clonazepam.\19\ --------------------------------------------------------------------------- \19\ In his Declaration, Respondent denied that he ``ha[s] or store[s] any [h]ydrocodone or [c]lonazepam at home.'' Resp. Decl., at 5. He further stated that ``[t]he prescription bottles are prescribed for my wife for her liposuction procedures post- operational pain where she had four liposuction procedures performed from 7/9/11 to 11/3/12.'' Id. --------------------------------------------------------------------------- Turning to the DI's assertion that Respondent ``also possessed two (2) stock bottles that contained Meridia and diazepam,'' here again, there is no evidence establishing that the DI participated in the search of Respondent's residence, or any other evidence establishing that these drugs were seized during that search. To be sure, the Government cites to an exhibit, which contains several photographs, including one which shows six white bottles (several of which are clearly marked as professional samples) which bear the manufacturer's label for such drugs as Viagra, Topiramate, Ultram ER, and Meridia. See GX 15, at 1. However, of these drugs, only Meridia (sibutramine) is a controlled substance under federal law, 21 CFR 1308.14(e), and putting aside the absence of any evidence as to where and when this drug was seized, here again, there is no evidence that there actually was any of the drug in the bottle at the time it was seized. As for the DI's assertion that a stock bottle of diazepam was also seized during the search of Respondent's residence, here too, there is no evidence (indeed, not even a photograph of the bottle) to support the DI's contention. Finally, the DI stated that on July 7, 2012, state and local law enforcement executed a search warrant at a fourth residence which is owned by Respondent and located in Marysville, Washington. DI Decl., at 5. The DI further stated that during the search, the officers ``seized some marijuana grow equipment and marijuana leaves.'' Id. Here again, the DI's affidavit does not establish the basis of his knowledge. Regarding the searches of the properties other than his residence, Respondent acknowledged that he owned ``three rental properties.'' Resp. Decl., at 3. He also acknowledged that [[Page 29032]] ``one of the rental houses had an electrical burn that shed light on the others that had illegal activities.'' Id. at 4. He then asserted that he ``had irresponsible tenants that took advantage of the locations by cultivating [m]arijuana for 6 months without [his] knowledge'' and that he ``do[es] not personally inspect, supervise, or manage the rentals on a regular basis,'' because he works six days a week in his medical practice, and that ``[w]hen the rent is timely paid with no complaints that need repair, [he has] no need to bother tenants at their home.'' Id. at 3-4. Later in his declaration, Respondent stated that ``[i]f something is broke they send me a bill for repair and I deduct it from the rent.'' Id. at 5. On May 22, 2013, Respondent was indicted in United States District Court for the Western District of Washington and charged with conspiracy to manufacture and distribute marijuana. DI Decl., at 11; see also GX 31. Moreover, on October 22, 2013, a superseding indictment was filed against Respondent and his girlfriend. The superseding indictment alleged that Respondent and others conspired to grow marijuana at several residential properties and that Respondent ``made at least three of those properties available . . . for the purpose of manufacturing marijuana,'' that he ``purport[ed] to rent [the houses] to others, knowing that the persons listed as `tenants' for these properties did not, in fact, reside there and/or did not pay rent,'' that he and his co-conspirators ``set up large- scale marijuana grows for the purpose of manufacturing marijuana within the houses'' and ``caused the electrical power in these houses to be diverted around the meters, thus stealing power to run the marijuana grows,'' and that he and his co-conspirators ``recruited and directed others to help grow and harvest the marijuana plants, and maintain the houses and yards at these properties.'' Superseding Indictment, at 2, United States v. Thi Nguyen Tram Bui and Keith Ky Ly, No CR13-157JCC (W.D. Wash. 2013) (citing, inter alia, 21 U.S.C. 841(a)(1) and (b)(1)(A), 846). The Indictment further charged Respondent with three counts of manufacturing marijuana at his properties in Renton, Shoreline and Marysville, Washington, as well as three counts of maintaining drug-involved premises. Id. at 4-7 (citing 21 U.S.C. 841(a)(1) and (b)(1)(B); 856(a)(1) and 856(b)). The indictment also set forth additional allegations regarding the quantities of marijuana plants and/or harvested marijuana that were seized during the searches of his Renton and Shoreline properties, as well as the quantity of marijuana which was seized from his girlfriend. Id. at 3. Respondent went to trial; the jury found him guilty on all counts.\20\ On December 19, 2014, the United States District Court convicted Respondent on each of the above counts and sentenced him to 60 months of imprisonment, imposed a four-year term of supervised release following his release from imprisonment, imposed an assessment of $1,000, and ordered that various property be forfeited. Judgment, at 1-6, United States v. Keith K. Ly (W.D. Wash. Dec. 19, 2014). --------------------------------------------------------------------------- \20\ Respondent was also charged and convicted of three counts of wire fraud, based on claims he made to an insurance company. --------------------------------------------------------------------------- The DEA Investigation According to the DI's affidavit, on July 13, 2012, DEA Investigators visited Respondent's registered location and upon obtaining his consent, conducted an inspection. DI's Decl., at 6; see also GX 20 (Notice of Inspection manifesting Respondent's consent to the inspection and witnessed by the DI). As part of the inspection, the Investigators asked Respondent to produce his records, including his controlled substance inventories, dispensing and administration logs, invoices, returns, distributions, as well as theft and loss reports. Id. The DIs determined that Respondent ``failed to take and maintain an initial or biennial inventory of all stocks of controlled substances on hand.'' Id. While Respondent produced a dispensing log, which covered the period from December 23, 2010 to July 11, 2012, according to the DI, 128 of the entries lacked required information. Id. More specifically, the DI asserted that 82 entries did not have the patient's address, the name of the controlled substance, the finished form, and the dispenser's initials. Id. at 6-7. According to the DI, another 46 entries lacked the patient's address, name of the controlled substance, the quantity dispensed, and the dispenser's initials. Id. at 7. As part of the record, the Government submitted a copy of Respondent's dispensing log. GX 21. A review of the log corroborates the DI's assertion that many of the entries which record the dispensing of controlled substances lack various items of information required by federal law, including the patient's address and the dispenser's initials. See id. at 6-9. As for the contention that numerous entries did not contain the name of the controlled substance that was dispensed, it is true that numerous entries were missing the ``Medication ID Sticker.'' Id. at 1-5. Yet the Government produced no evidence to prove that these dispensings actually involved controlled substances as opposed to non-controlled drugs. The DI also asserted that Respondent ``failed to maintain or provide any dispensing/administration records for Testosterone and Testim samples located at the registered location.'' DI Decl., at 7. The DI further asserted that Respondent did not ``maintain[ ] at least four Schedule III-V acquisition invoices and by not recording the dates of receipt on at least five invoices.'' Id.\21\ --------------------------------------------------------------------------- \21\ The DI also stated that during the inspection, Respondent did not provide any ``Report[s] of Theft or Loss of Controlled Substances'' (DEA Form 106). DI Decl., at 7. He also reviewed all of the hard copy Theft and Loss Reports on file with the Seattle Field Office, as well as queried the Drug Theft Loss database, which gathers all of the Form 106s which are submitted online, and determined that Respondent had not submitted any such reports. Id. --------------------------------------------------------------------------- The DIs also conducted an audit of the controlled substances which were located at Respondent's registered location. Id. In his declaration, the DI stated that ``DEA used an initial inventory date of January 1, 2012, beginning of business, and noted that the initial inventory was `zero' due to the lack of an initial or biennial inventory.'' Id. To determine the amounts of the various drugs Respondent purchased, the DIs relied on ``a summary of the invoices provided by distributor A.F. Hauser''; they also used his dispensing log to determine the amounts that he dispensed. Id. The DI further stated that he used ``the closing inventory assembled by DEA investigators during the on-site inspection.'' Id. The DI then asserted that the ``audit revealed large shortages of testosterone, phentermine, phendimetrazine, and a 14% shortage or[sic] hydrocodone.'' Id. More specifically, the DI asserted that Respondent had a shortage of 300 mg of Testosterone 200 mg/ml, 6,028 tablets of phentermine 37.5 mg,\22\ 2,102 tablets of phendimetrazine 35 mg, and 71 tablets of hydrocodone 10/500 mg. Id. at 8. --------------------------------------------------------------------------- \22\ According to the DI's declaration, the shortage was 6.028 tablets. DI Decl., at 8. Based on the audit chart, which lists the shortage as 6,028 tablets, GX 23, I conclude that the former figure is a typographical error. --------------------------------------------------------------------------- The Government also submitted a document which appears to be the aforesaid summary of Respondent's controlled substance purchases from A.F. Hauser between January 1, 2010 and July 24, 2012, see GX 16, as well as the audit computation chart. GX 23. Significantly, the audit chart lists the initial inventory date as ``1-1-2010 COB'' and not January 1, 2012 as set [[Page 29033]] forth in the DI's declaration. Compare GX 23 with DI Decl., at 7. This disparity has a material impact on the accuracy of the audit results. For example, according to the DI's declaration (and the computation chart), Respondent was short more than 6,000 dosage units of phentermine. Yet, according to the summary of Respondent's purchases and the invoices, Respondent only purchased 3,000 dosage units of phentermine during 2012. Thus, if--as stated by the DI--the beginning date of the audit period was January 1, 2012 and zero was assigned as the opening inventory, Respondent could not have been short 6,000 dosage units. So too, in his declaration, the DI asserted that Respondent was short more than 2,100 phendimetrazine tablets (the same figure listed on the computation chart, which also lists 3,000 dosage units as having been purchased). However, the Government's other evidence shows that Respondent did not purchase any phendimetrazine during 2012. See GX 16. Here again, Respondent could not have been short 3,000 dosage units if the beginning date of the audit period was January 1, 2012, as stated by the DI in his sworn declaration. As for the testosterone, while there is evidence that Respondent also purchased testosterone in February 2012, the data as presented in the computation chart suggests that he purchased 400 10ml bottles and that he could not account for 300 bottles. See GX 23 (listing drug as ``Testosterone 200mg/ml--10 ml bottle'' and listing the ``[t]otal purchased'' as 400.) However, the Government's other evidence, i.e., the listing of Respondent's purchases, which according to the DI was prepared by A.F. Hauser, lists the quantity of Respondent's purchases as only ``2.00.'' GX 19. Thus, here again, there is reason to question the reliability of the audit results.\23\ --------------------------------------------------------------------------- \23\ Moreover, even if the entry in the computation chart was actually intended to be 400mg (or two bottles) as opposed to 400 bottles, at most Respondent would not be able to account for 1.5 bottles. --------------------------------------------------------------------------- With respect to the remaining drugs, there is evidence that Respondent purchased 500 dosage units of hydrocodone during 2012 (GX 19) and was short 71 tablets. GX 23. There is also evidence that at the time of the July 2012 inspection, Respondent had on hand 21 Testim 1% samples. While the DIs concluded that Respondent had an overage of these 21 samples, there is no evidence as to who distributed the samples to him and there is no evidence the DIs asked Respondent for any of the documentation establishing the amount of Testim that was distributed to him.\24\ Finally, the Government's evidence shows that in March 2012, Respondent purchased 1,000 dosage units of Lorazepam, GX 16, and the computation chart indicates that the audit balanced with respect to this drug. GX 23. --------------------------------------------------------------------------- \24\ It is further noted that while the computation chart contains a column for the ``Total Purchased,'' which was added to the ``Initial Inventory'' to arrive at the ``Amount Accountable For,'' samples are not typically purchased and the chart contains no column for other means of acquisition. GX 23. --------------------------------------------------------------------------- In his declaration, the DI further asserted that Respondent failed to report to the State of Washington's Prescription Monitoring Program (PMP), ``at least 45 occasions from January through July 2012'' in which he ``dispensed more than a 24-hour supply of controlled substances.'' DI Decl., at 8. According to the DI, this was a violation of Washington law. Id. The Government did not, however, submit the PMP reports which establish the basis for its assertion. Regarding this allegation, Respondent stated that he ``was not aware of this Washington State law requirement . . . [and] thus cannot have . . . repeatedly failed'' to comply or to have shown a ``consistent disregard'' for this requirement. Resp. Decl., at 8. Respondent then stated that ``I am now made fully aware and will comply with the law. This is not an intentional violation.'' Id.\25\ --------------------------------------------------------------------------- \25\ Based on the DI's Declaration, the Government proposes that I make a factual finding that following the issuance of the Immediate Suspension Order, Respondent ``issued at least three (3) prescriptions to two (2) separate patients on February 1, March 2, and March 30, 2013, in violation of the Order.'' Request for Final Agency Action, at 5 (citing DI's Declaration at 9-10). However, in its Request for Final Agency Action, the Government does not propose that I make any conclusion of law based on this conduct. See id. at 6-12. Accordingly, I do not consider this conduct. --------------------------------------------------------------------------- Discussion Under the CSA, ``[a] registration pursuant to section 823 of this title to manufacture, distribute, or dispense a controlled substance . . . may be suspended or revoked by the Attorney General upon a finding that the registrant . . . has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.'' \26\ 21 U.S.C. 824(a)(4). The Act further provides that in determining ``the public interest'' with respect to a practitioner's application, the following factors be considered: --------------------------------------------------------------------------- \26\ Pursuant to 28 CFR 0.100(b), this authority has been delegated by the Attorney General to the Administrator of the Drug Enforcement Administration. (1) The recommendation of the appropriate State licensing board or professional disciplinary authority. (2) The [registrant's] experience in dispensing, or conducting research with respect to controlled substances. (3) The [registrant's] conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances. (4) Compliance with applicable State, Federal, or local laws relating to controlled substances. (5) Such other conduct which may threaten the public health and safety. 21 U.S.C. 823(f). ``[T]hese factors are . . . considered in the disjunctive.'' Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003). It is well settled that I ``may rely on any one or a combination of factors, and may give each factor the weight [I] deem appropriate in determining whether a registration should be revoked.'' Id.; see also MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011); Volkman v. DEA, 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005). Moreover, while I am required to consider each of the factors, I ``need not make explicit findings as to each one.'' MacKay, 664 F.3d at 816 (quoting Volkman, 567 F.3d at 222 (quoting Hoxie, 419 F.3d at 482)).\27\ --------------------------------------------------------------------------- \27\ ``In short, this is not a contest in which score is kept; the Agency is not required to mechanically count up the factors and determine how many favor the Government and how many favor the registrant. Rather, it is an inquiry which focuses on protecting the public interest; what matters is the seriousness of the registrant's misconduct.'' Jayam Krishna-Iyer, 74 FR 459, 462 (2009). Accordingly, as the Tenth Circuit has recognized, findings under a single factor can support the revocation of a registration. See MacKay, 664 F.3d at 821. --------------------------------------------------------------------------- The Government has the burden of proving, by a preponderance of the evidence, that the requirements for revocation or suspension pursuant to 21 U.S.C. 824(a) are met. 21 CFR 1301.44(e). This is so even in a non-contested case. In this matter, I have considered all of the factors. While I find that some of the allegations are not supported by substantial evidence, I nonetheless find that the Government's evidence with respect to factors one, two, three, and four establishes that he has committed acts which render his registration ``inconsistent with the public interest.'' 21 U.S.C. 823(f). While I have also considered Respondent's declaration with respect to the various allegations, I conclude that he has not presented sufficient evidence to rebut this conclusion. Accordingly, I will affirm the suspension of his registration and [[Page 29034]] further order that his pending application be denied. Factor One--The Recommendation of the State Licensing Board As found above, on September 22, 2014, the Washington Board of Osteopathic Medicine and Surgery issued Respondent an Ex Parte Order of Summary Action, pursuant to which, his authority to practice medicine in the State was suspended. Under the CSA, a practitioner's possession of authority to dispense controlled substances under the laws of the State in which he seeks registration is a prerequisite to obtaining a registration. See 21 U.S.C. 823(f) (``The Attorney General shall register practitioners . . . to dispense . . . controlled substances . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.''); see also id. Sec. 802(21) (defining ``[t]he term `practitioner' [to] mean[] a physician . . . licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices . . . to . . . dispense . . . [or] administer . . . a controlled substance in the course of professional practice''). Because Respondent is no longer authorized by the State of Washington to practice medicine and dispense controlled substances, he is not authorized to hold a registration in that State. This provides reason alone to deny his application. However, because the Government also seeks a final order based on the allegations of the Order to Show Cause and Immediate Suspension of Registration, I address the evidence with respect to the other public interest factors. Factor Two--Respondent's Experience in Dispensing Controlled Substances The Government contends that Respondent unlawfully distributed controlled substances to various persons who were arrested during the search of his Shoreline property. Req. for Final Agency Action, at 10 (citing, inter alia, 21 U.S.C. 841(a)(1)). More specifically, the Government contends that Respondent ``prescribed hydrocodone . . . to an individual arrested at the Shoreline'' property and could ``not locate a patient file at [his] registered location for this particular individual.'' Id. Based on the Investigators' ``determin[ation] that [Respondent] also purchased the loose phentermine tablets located on individuals at the Shoreline residence on March 16, 2012, despite the fact that he could not produce patient records when requested by law enforcement,'' the Government also apparently contends that Respondent unlawfully distributed the tablets to these individuals. Id. at 11. Neither of these allegations is proved by substantial evidence. As for the allegation regarding the hydrocodone prescription, as found above, in his Declaration, the DI repeatedly referred to this person as L.E. Yet to support the allegation, the Government offered a copy of a prescription which was issued to a patient whose initials are H.L. and not L.E. Moreover, the Government points to no other evidence that Respondent even prescribed hydrocodone (or any controlled substance for that matter) to a person whose initials are L.E. Thus, the allegation is unsupported by substantial evidence. As for the allegation that the phentermine was found on two persons who were arrested during the Shoreline search and was distributed to them by Respondent, while the Government produced evidence that Respondent had ordered phentermine from his distributor several months earlier, the evidence offered to establish that phentermine was found on these individuals was limited to the DI's assertion that it was. The DI did not, however, offer any basis for concluding that he personally participated in the search--notwithstanding his assertion that his declaration was based on ``personal knowledge''--nor otherwise explain the basis for his statement. Finally, the Government offered no other evidence to prove this assertion such as a police report, an affidavit of the arresting officer, or an inventory of the items found during the search conducted incident to the purported arrest of these individuals. The allegation therefore fails for lack of substantial evidence. The evidence further shows that Respondent purchased controlled substances including hydrocodone with acetaminophen, phentermine, phendimetrazine, testosterone, and lorazepam, which he dispensed directly to his patients. Under federal law, Respondent was required upon ``first engag[ing] in the . . . dispensing of controlled substances, and every second year thereafter, [to] make a complete and accurate record of all stocks thereof on hand.'' 21 U.S.C. 827(a)(1). Also, under federal law, because he engaged in the dispensing of the controlled substances, Respondent was required to ``maintain, on a current basis, a complete and accurate record of each such substance . . . received, sold, delivered, or otherwise disposed of by him.'' Id. Sec. 827(a)(3). DEA regulations further require that a dispenser maintain a record ``of the number of units or volume of such finished form dispensed, including the name and address of the person to whom it was dispensed, the date of dispensing, the number of units or volume dispensed, and the written or typewritten name or initials of the individual who dispensed or administered the substance on behalf of the dispenser.'' 21 CFR 1304.22(c). Finally, under this regulation, Respondent was required to maintain records of the controlled substances he acquired, to include ``[t]he name of the substance''; ``[e]ach finished form . . . and the number of units or volume of finished form in each commercial container''; and ``[t]he number of units of finished forms and/or commercial containers acquired from other persons, including the date of and number of units and/or commercial containers in each acquisition to inventory and the name, address, and registration number of the person from the units were acquired.'' Id. Sec. 1304.22(a)(2)(i), (ii), and (iv). Here, I give no weight to the audit results given the numerous problems found above, including the conflict in the Government's evidence as to what the DIs used as the beginning date for the audit period. Nonetheless, I find that the DI's declaration establishes that during the July 2012 inspection, Respondent could not produce the required inventories for the controlled substances he was handling, and was thus in violation of 21 U.S.C. 827(a)(1).\28\ Moreover, the DI's declaration establishes that while Respondent was engaged in dispensing controlled substances, many of the entries for his phentermine dispensings lacked the patient's address and the name or initials of the person who did the actual dispensing.\29\ Thus, Respondent violated the CSA and DEA regulations for these reasons as well.\30\ See 21 U.S.C. 827(a)(3); 21 CFR [[Page 29035]] 1304.22(c). Finally, the DI's declaration establishes that Respondent lacked complete records of the controlled substances he acquired from his distributor, in violation of 21 U.S.C. 827(a)(3), as well as 21 CFR 1304.22(c). See also 21 CFR 1304.22(a)(2)(i), (ii), and (iv). --------------------------------------------------------------------------- \28\ Regarding the lack of inventories, Respondent stated that he ``ha[d] invoices from [his distributor] as my initial inventory.'' Resp. Decl., at 7. Contrary to Respondent's contention, under the CSA, the requirement to take and maintain complete and accurate inventories is separate from the requirement to maintain records of the controlled substances a registrant acquires. Compare 21 U.S.C. 827(a)(1) with id. Sec. 827(a)(3); compare also 21 CFR 1304.11 with id. Sec. 1304.22. I therefore reject Respondent's contention. I further note that during the inspection, the DI found that Respondent did not have all of the invoices. \29\ While in his declaration Respondent states that this information was in the patient charts and that there is only limited space in his dispensing log, see Resp. Decl., at 7; DEA regulations require that the patient's address be documented in the dispensing log. 21 CFR 1304.22(c). \30\ As for the various entries in the dispensing log which lacked the name of the drug, because the Government provided no evidence that the dispensings involved controlled substances, I place no weight on this evidence. As for the Government's assertion that Respondent failed to maintain a ``dispensing/administration log for testosterone and Testim samples,'' Request for Final Agency Action, at 8; there is no evidence that he dispensed any Testim samples. As for the testosterone, the evidence does suggest that Respondent administered approximately 300 mg or 1.5 vials without documenting the administrations in his dispensing log. See 21 CFR 1304.03(d). --------------------------------------------------------------------------- As both the Agency and the federal courts have explained, recordkeeping is one of the CSA's fundamental features for preventing the diversion of controlled substances. See Gonzales v. Raich, 545 U.S. 1, 14 (2005) (``The CSA and its implementing regulations set forth strict requirements regarding . . . recordkeeping.''); United States v. Poulin, 926 F. Supp. 246, 250 (D. Mass. 1996) (``The [CSA] focuses on recordkeeping, in an attempt to regulate closely the distribution of certain substances determined by Congress to pose dangers, if freely available, to the public at large.'') (int. quotations and citation omitted); Paul H. Volkman, 73 FR 30630, 30644 (2008) (``Recordkeeping is one of the CSA's central features; a registrant's accurate and diligent adherence to this obligation is absolutely essential to protect against the diversion of controlled substances.''). Respondent's recordkeeping violations alone are sufficiently egregious to support the conclusion that he ``has committed such acts [which] render[ed] his registration . . . inconsistent with the public interest.'' 21 U.S.C. 824(a)(4); see also Volkman, 73 FR at 30644 (holding that recordkeeping violations alone can support revocation or denial of an application). Factor Three--Respondent's Conviction Record Under Federal and State Laws Related to the Manufacture, Distribution, and Dispensing of Controlled Substances As found above, following a jury trial, on December 19, 2014, Respondent was convicted by the United States District Court on seven felony counts related to the manufacture and distribution of marijuana, including conspiracy to distribute or manufacture marijuana, three counts of manufacturing marijuana, and three counts of maintaining drug involved premises.\31\ Each of these convictions provides reason alone to deny his application. And under the doctrine of collateral estoppel, the convictions also preclude any challenge to the allegations that he was engaged in the unlawful manufacture of marijuana. See Robert L. Daugherty, 76 FR 16823, 16830 (2011). --------------------------------------------------------------------------- \31\ As to the latter offense, the CSA renders it unlawful to ``knowingly use[] or maintain any place, whether permanently or temporarily, for the purpose of manufacturing, distributing, or using any controlled substance.'' 21 U.S.C. 856(a)(1). As the evidence shows that Respondent used and maintained the three properties for the purpose of manufacturing marijuana and not simply as places to use the drugs, I conclude that his convictions for maintaining drug-involved premises fall within factor three. --------------------------------------------------------------------------- Factor Four--Compliance With Applicable Laws Related to Controlled Substances With respect to this factor, the Government raises three main allegations. First, based on the various searches, the Government argues that Respondent possessed and was engaged in the manufacture of marijuana, a schedule I controlled substance. Request for Final Agency Action, at 8-9 (citing 21 U.S.C. 841(a)(1), 844(a); 812(c)). Second, the Government alleges that during the search of Respondent's residence, several vials of controlled substances were found including one each of clonazepam and hydrocodone, the latter being in an unlabeled vial, as well as stock bottles of Meridia and diazepam, and that Respondent's possession of the drugs violated federal law because he was not registered at his residence. Id. (citing 21 U.S.C. 844(a); 21 CFR 1301.75(b)). Third, the Government alleges that Respondent violated state law by failing to report to the Washington Prescription Monitoring Program some 45 instances in which he dispensed more than a twenty-four hour supply of a controlled substance. Id. at 9. As for the latter allegation, Respondent did not dispute that he had failed to report various dispensings to the State's PMP. Resp. Decl., at 8. Rather, he claimed his violations were unintentional because he was unaware of the law but would now comply. Id. However, this is not a valid defense as the Washington courts follow the traditional rule that ignorance of the law is no excuse. See State v. Reed, 928 P.2d 469, 471 (Wash. Ct. App. 1997) (other citation omitted). Accordingly, I find that Respondent violated Washington law by failing to report various dispensings to the State's PMP. See Wash. Rev. Code Sec. 70.225.020(2). As for the allegations pertaining to the controlled substances that the police found during the search of Respondent's residence, I conclude that the Government did not provide substantial evidence to support the allegations with respect to any of the four drugs (Meridia, diazepam, clonazepam (in a vial indicating that Respondent had prescribed the drug to R.M.) or hydrocodone (in an unlabeled vial)). With respect to the diazepam, the Government produced absolutely no evidence that the drug was even seized during the search. With respect to the Meridia, the Government's evidence was limited to a photograph of a white professional sample bottle and the DI's unsupported assertion, with no other evidence to establish that the bottle was seized from Respondent's residence, let alone that there were any pills in the bottle when it was seized. So too, with respect to the hydrocodone and clonazepam, there is no evidence other than photographs and the DI's unsupported assertion that these drugs were seized during the search of Respondent's residence. To be sure, in his declaration, Respondent stated that he prescribed the hydrocodone and clonazepam to his wife for several procedures. However, Respondent explicitly denied having or storing clonazepam or hydrocodone at his home and his statements do not constitute an admission of any part of this allegation. Accordingly, these allegations fail for lack of substantial evidence. I also find that substantial evidence supports the remaining marijuana-related allegation--that on February 2, 2012, Respondent violated federal law by possessing marijuana, and that he did so with the intent to distribute. Most significantly, it is undisputed that upon the February 2, 2012 arrest of TB, (Respondent's then live-in girlfriend and now wife), who was then driving his car, the police impounded his vehicle and during the subsequent search of the vehicle found one pound of marijuana and $5,000 in cash; the police also found $3,900 in cash in TB's purse. As found above, the street value of the marijuana was approximately $1,500 to $1,800, and the quantity would provide approximately 900 joints. Respondent denied having any knowledge of the marijuana, asserting that it had been left in his car by LHE, a friend of TB and a purported medical marijuana patient who TB allowed to borrow his car, and provided an unsworn statement from LHE to this effect. However, as I found above, her statement (that she left the marijuana in the car because she was in [[Page 29036]] such a hurry to return the car to TB and forgot it) is utterly ludicrous.\32\ I therefore reject Respondent's explanation for why the police found one pound of marijuana in his car. --------------------------------------------------------------------------- \32\ As also noted, in a March 3, 2012 letter to the local prosecutor in which Respondent sought the return of his car, he denied having any knowledge of the marijuana that was found therein. See Resp. Decl., at Ex. 4. Yet he made no mention of LHE's story. See id. --------------------------------------------------------------------------- Moreover, given the closeness of the relationship between Respondent and TB in that they were living together and that TB also worked for him, I find it implausible that Respondent lacked knowledge of the marijuana. Rather, I find that Respondent had the ability to exercise dominion or control over the marijuana through TB and thus constructively possessed the drug. See United States v. Sanders, 341 F.3d 809, 816 (8th Cir. 2003) (`` `To prove constructive possession, the government had to present evidence that appellants had knowledge and ownership, dominion or control over the contraband itself, or dominion over the vehicle in which the contraband is concealed.' '') (quoting Ortega v. United States, 270 F.3d 540, 545 (8th Cir. 2001)). So too, Respondent's attempt to explain the presence of the large sum of cash (nearly $9,000) that was found in his car and on his wife's person does not persuade. As for the money which was purportedly paid by a patient the day before as a deposit on a liposuction procedure, as found previously, while the ``Price Quote'' document indicates that the patient paid a $5,000 cash deposit, the date was clearly written over. And while the purported patient provided a letter to support Respondent, it too was unsworn. As an additional explanation for why so much money was found in his car, Respondent stated that the money had been withdrawn to pay for remodeling his clinic. To support this claim, Respondent submitted a copy of a bank statement (on which the various balances are blacked out), which documents that he made a withdrawal nine days before his girlfriend was arrested. However, Respondent offered no further evidence to support this contention, and in any event, his explanation begs the question of why he would risk the potential theft or loss of a large sum of cash, rather than pay for the purported remodeling with a check or credit card. I therefore find that both the quantity of the marijuana (which would provide a single person with three joints a day for approximately ten months), and the large amount of cash which was found in Respondent's vehicle, support a finding that the marijuana was intended for distribution. See United States v. Collins, 412 F.3d 515, 519 (4th Cir. 2005) (holding that ``intent to distribute can be inferred from a number of factors, including . . . the quantity of drugs'' and ``the amount of cash seized with the drugs.''). I further find that Respondent ``had the right to exercise dominion and control over'' the marijuana ``either directly or through'' TB. United States v. Staten, 581 F.2d 878, 883 (D.C. Cir. 1978). I therefore find that Respondent knowingly possessed marijuana with the intent to distribute it.\33\ See 21 U.S.C. 841(a)(1). --------------------------------------------------------------------------- \33\ In his Declaration, Respondent disputed that he owned the marijuana plants, the processed marijuana, and related items that were seized in the searches of his three properties. See Resp. Decl., at 3 (``I have three rental properties. I had irresponsible tenants that took advantage of the locations by cultivating Marijuana for 6 months without my knowledge.''). He also claimed that because he was a busy physician, who did not bother his tenants if they paid their rent and did not request repairs, he ``did not know of . . . nor . . . in any way participate in the growing of marijuana at these rental houses.'' Id. at 4. Based on Respondent's convictions for conspiracy to manufacture marijuana, unlawful manufacture of marijuana at each of the three grow houses, and maintaining drug-involved premises at each of the three residences, I reject his assertions as utterly false. --------------------------------------------------------------------------- Based on Respondent's violation of federal law by possessing marijuana with the intent to distribute, as well as his admitted failure to report multiple dispensings of controlled substances to the Washington PMP, I find that factor four also supports a finding that he has committed acts which rendered his registration ``inconsistent with the public interest.'' \34\ 21 U.S.C. 823(f) & 824(a)(4). --------------------------------------------------------------------------- \34\ Having already addressed the various false statements regarding the marijuana-related allegations which Respondent has made in his declaration, I deem it unnecessary to repeat this discussion under factor five. --------------------------------------------------------------------------- Sanction Under Agency precedent, where, as here, ``the Government has proved that a registrant has committed acts inconsistent with the public interest, the registrant must ` ``present sufficient mitigating evidence to assure the Administrator that [he] can be entrusted with the responsibility carried by such a registration.'' ' '' Medicine Shoppe--Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 (1988))). ``Moreover, because `past performance is the best predictor of future performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), [DEA] has repeatedly held that where a registrant has committed acts inconsistent with the public interest, the registrant must accept responsibility for [his] actions and demonstrate that [he] will not engage in future misconduct.'' Medicine Shoppe, 73 FR at 387; see also Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Prince George Daniels, 60 FR 62884, 62887 (1995). See also Hoxie, 419 F.3d at 483 (``admitting fault'' is ``properly consider[ed]'' by DEA to be an ``important factor[]'' in the public interest determination). So too, in making the public interest determination, ``this Agency also places great weight on an [applicant's] candor, both during an investigation and in [a] subsequent proceeding.'' Robert F. Hunt, 75 FR 49995, 50004 (2010) (citing The Lawsons, Inc., t/a The Medicine Shoppe Pharmacy, 72 FR 74334, 74338 (2007) (quoting Hoxie, 419 F.3d at 483) (``Candor during DEA investigations properly is considered by the DEA to be an important factor when assessing whether a . . . registration is consistent with the public interest.'')). Moreover, while a registrant must accept responsibility and demonstrate that he will not engage in future misconduct in order to establish that granting his application for registration is consistent with the public interest, DEA has repeatedly held these are not the only factors that are relevant in determining whether to grant or deny an application. See, e.g., Joseph Gaudio, 74 FR 10083, 10094 (2009); Southwood Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007). Obviously, the egregiousness and extent of a registrant's misconduct are significant factors in determining the appropriate disposition. Cf. Jacobo Dreszer, 76 FR 19386, 19387-88 (2011) (explaining that a respondent can ``argue that even though the Government has made out a prima facie case, his conduct was not so egregious as to warrant revocation''); see also Paul H. Volkman, 73 FR 30630, 30644 (2008); Gregory D. Owens, 74 FR 36751, 36757 n.22 (2009). Moreover, as I have noted in several cases, `` `[n]either Jackson, nor any other agency decision, holds . . . that the Agency cannot consider the deterrent value of a sanction in deciding whether a registration should be [suspended or] revoked,' '' or whether an application should be denied. Gaudio, 74 FR at 10094 (quoting Southwood, 72 FR at 36503 (2007)); see also Robert Raymond Reppy, 76 FR 61154, 61158 (2011); Michael S. Moore, 76 FR 45867, 45868 (2011). This is so, both with respect to the respondent in a particular case and the community of registrants. See Gaudio, 74 FR at 10095 (quoting [[Page 29037]] Southwood, 71 FR at 36504). Cf. McCarthy v. SEC, 406 F.3d 179, 188-89 (2d Cir. 2005) (upholding SEC's express adoption of ``deterrence, both specific and general, as a component in analyzing the remedial efficacy of sanctions''). As found above, the Government has established that Respondent: 1) committed multiple recordkeeping violations in that he did not have required inventories, was missing invoices, and his dispensing log lacked required information; 2) was engaged in the manufacture and distribution of marijuana; and 3) failed to report multiple dispensings of controlled substances to the Washington PMP. I find that the proven misconduct is sufficiently egregious to affirm the Order of Immediate Suspension and to deny his pending application to renew his registration. See, e.g., Moore, 76 FR at 45870 (imposing one-year suspension on physician who manufactured marijuana, notwithstanding ALJ's finding that physician accepted responsibility and demonstrated he would not engage in future misconduct).\35\ I further find that the Agency's interest in deterring similar acts on the part of both Respondent and others supports the denial of his pending application. --------------------------------------------------------------------------- \35\ In Moore, I agreed with the ALJ's finding that the physician's conduct in manufacturing and distributing marijuana supported revocation of his registration. 76 FR at 45868. However, I also agreed with the ALJ's finding that the physician had accepted responsibility for his misconduct and demonstrated that he would not engage in future misconduct. Id. By contrast, here, the record establishes that in addition to his marijuana-related misconduct, for which he disingenuously denies any responsibility, Respondent also committed multiple recordkeeping violations and violated state law by failing to report numerous dispensings to the State PMP. Also, in contrast to Moore, I find that Respondent has not accepted responsibility for his misconduct. --------------------------------------------------------------------------- Having carefully reviewed Respondent's declaration, I further find that Respondent has not accepted responsibility for his misconduct. Regarding his recordkeeping violations, Respondent entirely denied that he failed to keep the required inventories and that he was missing various invoices. Moreover, he further claimed that the reason his dispensing log was missing essential information such as patient addresses was because there was no room to make these entries. Yet in DEA's experience, thousands of other registrants who engage in dispensing have no problem complying with the latter requirements. With respect to the marijuana allegations, Respondent offered the far-fetched story that the marijuana belonged to an acquaintance of his wife, who had borrowed his car to obtain her medical marijuana but who was in such a hurry to return the car that she forgot to retrieve it even though it was her medicine. So too, Respondent's alternative explanations for why thousands of dollars of cash were found in his car defy credulity. Similarly, his claim that he was unaware of the marijuana growing activities which were being conducted at not one, not two, but three of his properties, is clearly disingenuous.\36\ Accordingly, based on his various false statements regarding the marijuana-related activity, as well as his blatantly false assertion that he has never been subject to discipline by a state licensing authority (all of which are clearly material to the outcome of this proceeding), I further find that Respondent lacks candor. --------------------------------------------------------------------------- \36\ With regard to his failure to report dispensings to the Washington PMP, Respondent claimed that he was unaware of the law. However, the legislation which created the Washington PMP was enacted in 2007, more than four years earlier, and as a physician who engaged in the highly regulated activity of dispensing controlled substances, Respondent was obligated to keep abreast of legislation and regulatory developments applicable to his medical practice. Moreover, while Respondent asserted that he is now aware of the requirement and will comply in the future, his various statements regarding the events at issue (including that he had never been disciplined by a state board) support a finding that he lacks candor. Accordingly, I give no weight to his statement that he would comply with the State's PMP reporting requirement in the future. --------------------------------------------------------------------------- Based on his failure to acknowledge his misconduct, his failure to offer any credible evidence of remedial efforts, and his lack of candor, I conclude that Respondent has failed to present sufficient evidence to rebut the Government's prima facie showing that his registration would be ``inconsistent with the public interest.'' 21 U.S.C 823(f); see also id. 824(a)(4). Therefore, I will affirm the issuance of the Order of Immediate Suspension and order that any pending application to renew Respondent's registration be denied. ORDER Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 824(a), as well as 28 CFR 0.100(b), I affirm the Order of Immediate Suspension of DEA Certificate of Registration BL6283927, issued to Keith Ky Ly, D.O. I further order that the application of Keith Ky Ly, D.O., to renew his registration, be, and it hereby is, denied. This Order is effective June 19, 2015. Dated: May 11, 2015. Michele M. Leonhart, Administrator. [FR Doc. 2015-12139 Filed 5-19-15; 8:45 am] BILLING CODE 4410-09-P
![Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices 29025
The reasons for withdrawal are not material, Government meets its burden of establishing Date: October 7, 2014.
given the statutory language set forth above. grounds to deny an application for Christopher B. Mcneil,
registration upon sufficient proof establishing
Analysis, Findings of Fact and Conclusions Administrative Law Judge.
the applicant does not possess a state
of Law pharmacy license. That proof is in the record [FR Doc. 2015–12128 Filed 5–19–15; 8:45 am]
In determining whether to grant the before me, and it warrants the summary BILLING CODE 4410–09–P
Government’s Motion for Summary denial of Respondent’s application for a DEA
Disposition, I am required to apply the Certificate of Registration.
principle of law that holds such a motion I am mindful of the arguments raised by DEPARTMENT OF JUSTICE
may be granted in an administrative Respondent in its Answer to Movant’s
proceeding if no material question of fact Motion, including the fact that Respondent’s Drug Enforcement Administration
exists: lack of a pharmacy license is based on
It is settled law that when no fact question Respondent’s voluntary withdrawal of its Keith Ky Ly, D.O.; Decision and Order
is involved or the facts are agreed, a plenary, pharmacy license to avoid state sanctions as
adversary administrative proceeding a result of delays by the DEA.49 These On January 24, 2013, I, the
involving evidence, cross-examination of difficulties do not, however, change the fact Administrator of the Drug Enforcement
witnesses, etc., is not obligatory—even that without a state pharmacy license, Administration, issued an Order to
though a pertinent statute prescribes a Respondent is not a ‘‘practitioner’’ and Show Cause and Immediate Suspension
hearing. In such situations, the rationale is cannot be granted a Certificate of of Registration (hereinafter, OTSC–ISO
that Congress does not intend administrative Registration. Equitable principles, even were
or Order) to Keith Ky Ly, D.O.
agencies to perform meaningless tasks they available in this forum, fail to lead to
(citations omitted).43 a different outcome. As made clear in Potter (Respondent), of Mountlake Terrace,
In this context, I am further guided by prior and Halil, the lack of timeliness in processing Washington. GX 2, at 1. The Order
decisions before the DEA involving an application for a DEA Certificate of proposed the revocation of
certificate holders who lacked licenses to Registration does not overcome the public Respondent’s DEA Certificate of
distribute or dispense controlled substances. interest. Registration, which authorizes him to
On the issue of whether an evidentiary Some care should be taken to assure the dispense controlled substances in
hearing is required, ‘‘it is well settled that parties that the actions taken in this schedules II through V, as a practitioner,
when there is no question of material fact administrative proceeding conform to as well as the denial of any pending
involved, there is no need for a plenary, constitutional requirements. I have examined
administrative hearing.’’ 44 Under this
applications to renew or modify his
the parties’ contentions with an eye towards
guidance, the Government’s motion must be ensuring all tenets of due process have been registration, on the ground that his
sustained unless a material fact question has adhered to. There is, however, no authority ‘‘continued registration is inconsistent
been presented. for me to evaluate the facts that underlie with the public interest, as that term is
The sole determinative fact now before me Respondent’s contentions. In the proceedings defined in 21 U.S.C. 823(f).’’ Id.
is that Respondent lacks a Texas pharmacy now before me, the only material question More specifically, the OTSC–ISO
license. In order for a pharmacy to receive a was answered by Respondent in its Request alleged that on February 2, 2012, law
DEA registration authorizing it to dispense for Hearing. Further, while the Order to enforcement officers arrested
controlled substances under 21 U.S.C. 823(f), Show Cause sets forth a non-exhaustive Respondent’s girlfriend, who was then
it must meet the definition of ‘‘practitioner’’ summary of facts and law relevant to a
as found in the Controlled Substances Act.45 driving his vehicle, for driving with a
determination that granting this application
Such an entity must be ‘‘licensed, registered, would be inconsistent with the public
suspended license and that during a
or otherwise permitted by . . . the interest under 21 U.S.C. 823(f), the search of the vehicle, found ‘‘one pound
jurisdiction in which he practices . . . to conclusion, order and recommendation that of marijuana, approximately $3,900 cash
distribute, dispense, [or] administer . . . a follow are based solely on a finding that in a vacuum sealed bag located in [her]
controlled substance in the course of Respondent is not a ‘‘practitioner’’ as that purse, $5,000 cash located in a hidden
professional practice.’’ 46 Delegating to the term is defined by 21 U.S.C. 802(21), and I compartment, and three prescription
Attorney General the authority to determine make no finding regarding whether granting bottles containing controlled substances
who may or may not be registered to perform this application would or would not be
these duties, Congress permitted such
located in’’ her backpack. Id. at 2. The
inconsistent with the public interest. Order further alleged that Respondent
registration only to ‘‘practitioners’’ as defined
by the Controlled Substances Act.47 Order Granting the Government’s Motion for had issued one of the prescriptions
As cited by the Government in its Motion Summary Disposition and Recommendation found in the backpack to an employee,
for Summary Disposition, there is substantial I find there is no genuine dispute regarding and that during an interview when he
authority both through agency precedent and whether Respondent is a ‘‘practitioner’’ as attempted to recover the vehicle,
through decisions of courts in review of that that term is defined by 21 U.S.C. 802(21), and Respondent stated that he lived with his
precedent, holding that an application for a that based on the record the Government has girlfriend, that she worked at his
retail pharmacy DEA registration is established that Respondent is not a medical practice, and that she and the
dependent upon the applicant having a state practitioner and is not authorized to dispense
license to dispense controlled substances.48
employee whose medication was found
controlled substances in the state in which it
Under the doctrine before me, the seeks to operate under a DEA Certificate of
in the backpack ‘‘often shared
Registration. I find no other material facts at medications.’’ Id. The Order then
43 NLRB v. International Assoc. of Bridge, 549 issue, for the reasons set forth in the alleged that this showed that
F.2d 634, 638 (9th Cir. 1977) (quoting United States Government’s Motion for Summary Respondent had ‘‘knowledge of illegal
v. Consolidated Mines & Smelting Co., Ltd., 455 Disposition. Accordingly, I GRANT the activity occurring between [his]
F.2d 432, 453 (9th Cir. 1971)). Government’s Motion for Summary employees and [took] no corrective
44 See Michael G. Dolin, M.D., 65 FR 5661 (DEA
Disposition. action.’’ Id.
February 4, 2000); Jesus R. Juarez, M.D., 62 FR
Upon this finding, I ORDER that this case
mstockstill on DSK4VPTVN1PROD with NOTICES
14945 (DEA March 28, 1997); see also Philip E. Next, the OTSC–ISO alleged that law
Kirk, M.D., 48 FR 32887 (DEA July 19, 1983), aff’d be forwarded to the Administrator for final enforcement officers discovered that
sub nom. Kirk v. Mullen, 749 F.2d 297 (6th Cir. disposition and I RECOMMEND the
several premises owned by Respondent
1984). Administrator DENY Respondent’s
45 21 U.S.C. 802(21). application for a DEA Certificate of were being used as marijuana-grow
46 Id. Registration. houses. Id. More specifically, the Order
47 21 U.S.C. 823(f). alleged that: (1) On May 30, 2012, the
48 Government’s Motion for Summary Disposition 49 Respondent’s Answer to Movant’s Motion for Renton, Washington fire department
at 7 and cases cited therein. Summary Disposition at 2. responded to a fire at his Quincy
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![29026 Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices
Avenue property and seized more than a 24-hour supply of ordered that the proceeding be
approximately 700 marijuana plants; (2) controlled substances.’’ Id. (citing Wash. terminated because Respondent had
on July 5, 2012, state and local law Rev. Code § 70.225.020; Wash. Admin. ‘‘failed to timely request a hearing and
enforcement officers obtained a search Code § 246–470–030). failed to assert good cause for his 36-day
warrant for his property located at Based on the above, I made a delay.’’ Id. at 2. Thereafter, on April 18,
20118 14th Avenue NE., Shoreline, preliminary finding that Respondent 2013, Respondent, who was now
Washington, and seized approximately ‘‘illegally manufactured controlled represented by counsel (a different
489 marijuana plants and six bags of substances in violation of state and counsel than identified by the DI in his
processed marijuana; (3) on July 6, 2012, federal law, illegally possessed and declaration), filed a motion to
state and local law enforcement officers distributed highly addictive controlled reconsider and re-open. GX 5. Therein,
executed a search warrant at substances . . . and ha[d] generally Respondent requested a full hearing on
Respondent’s personal residence in failed to maintain effective controls to the allegations, as well as ‘‘additional
Bothell, Washington, and ‘‘seized guard against theft and prevent time to file his Request for Hearing
$12,000 in cash, two firearms, marijuana diversion of controlled substances.’’ Id. based on this motion showing of good
grow documents, approximately 15 I therefore ordered that Respondent’s cause.’’ Id. at 1.
grams of processed marijuana, and registration be suspended effective In the motion, Respondent did ‘‘not
multiple prescription bottles containing immediately. Id. (citing 21 U.S.C. contest that he was effectively served
pills,’’ including an unlabeled bottle 824(d)). with a copy of the’’ OTSC–ISO. Id. at 2.
containing hydrocodone, and a bottle According to the Declaration of a DEA He also did not dispute that his prior
containing clonazepam, which Diversion Investigator (DI), on January attorney ‘‘was in contact with [him]
Respondent had prescribed for patient 28, 2013, DEA Special Agents and DIs during and after the period for filing a
R.M.; and (4) on July 7, 2012, state and went to Respondent’s registered location timely appeal.’’ Id. Rather, Respondent
local law enforcement obtained a search and personally served him with the maintained that he ‘‘sent a letter
warrant for his property located at 5006 OTSC–ISO, along with ‘‘a sample requesting appeal of the [OTSC–ISO] to
104th Place NE., Marysville, request for hearing form.’’ DI [a] local Seattle-based DEA agent . . .
Washington and seized marijuana leaves Declaration, at 9. According to the DI, by certified mail on February 4, 2013,’’
and grow equipment. Id. at 2–3. later that same day, he also hand- who ‘‘did not respond to the appeal
Next, the OTSC–ISO alleged that on delivered a copy of the OTSC–ISO and letter or inform Respondent that an
July 13, 2012, DEA personnel the hearing request form to appeal of the [OTSC–ISO] could not be
‘‘conducted an inspection and audit at Respondent’s ‘‘attorney at the time.’’ 1 perfected by sending it to him.’’ Id. at
[Respondent’s] registered address.’’ Id. Id. 2–3. Respondent further asserts that he
at 3. The Order alleged that Respondent The OTSC–ISO plainly advised that: ‘‘sought the advice of and had several
had a 75 percent shortage of both (1) ‘‘[w]ithin 30 days after the date of conversations with [his former]
testosterone 200mg/ml and phentermine receipt of this Order to Show Cause and attorney,’’ and that ‘‘[b]ased on these
37.5mg, as well as a 14 percent shortage Immediate Suspension of Registration, conversations, [he] ‘filed’ an appeal
of hydrocodone 10/500mg. Id. Based on you may file with the DEA a written NOT with the DEA . . . Office of
the audit results, the Order further request for a hearing in the form set Administrative Law Judges, but instead
alleged that Respondent ‘‘failed to forth in 21 CFR 1316.47’’; (2) ‘‘[i]f you with the Office of the Inspector General
maintain accurate and complete records fail to file such a request, the hearing (OIG),’’ and that he faxed the appeal ‘‘to
and failed to account for these shall be cancelled in accordance with the OIG on February 20, 2013, and again
controlled substances.’’ Id. (citing 21 paragraph 3’’; (3) ‘‘[s]hould you decline on March 8, 2013.’’ Id. at 3. According
U.S.C. 827(a)(1) and 842(a)(5); 21 CFR to file a request for a hearing . . . you to Respondent, ‘‘[t]he OIG suggested
1301.71, 1304.03, 1304.04 (a) & (g), and shall be deemed to have waived the [he] contact the DEA.’’ Id.
1304.21). The Order then alleged that right to a hearing and the DEA may Respondent further asserted that he
Respondent had committed additional cancel such hearing’’; (4) ‘‘discussed the matter with an assistant
recordkeeping violations, in that he ‘‘[c]orrespondence concerning this in his office, who believed the correct
‘‘failed to take and maintain an initial or matter, including requests [for a place to file the appeal was with the
biennial inventory of all stocks of hearing] should be addressed to the office of the United States Attorney
controlled substances on hand,’’ ‘‘failed Hearing Clerk, Office of Administrative General.’’ Id. Respondent stated that
to record essential elements on Law Judges [OALJ] . . . 8701 ‘‘[a]n ‘appeal’ was sent to that address
approximately 128 dispensing records,’’ Morrissette Drive, Springfield, VA on February 11, 2013.’’ Id.
‘‘failed to maintain a dispensing/ 22152’’; and (5) ‘‘[m]atters are deemed Next, Respondent contended that on
administration log for testosterone and filed upon receipt by the Hearing March 14, 2013, he was advised by his
Testim samples, located during the on- Clerk.’’ GX 2, at 4–5 (citations omitted). then-counsel that the latter ‘‘and his
site inspection,’’ and ‘‘failed to maintain Notwithstanding this, Respondent did partner had decided not to represent
all Schedule III–V acquisition invoices not file a request for hearing with the [him] in this . . . proceeding,’’ but that
and record the dates of receipt[ ] on the Office of Administrative Law Judges ‘‘[t]his was after the request for hearing
invoices.’’ Id. at 3–4 (citations omitted). until April 4, 2013. GX 4, at 1. deadline had expired.’’ Id. Respondent
Finally, the OTSC–ISO alleged that The matter was then assigned to an then contended that on March 28, he
Respondent ‘‘failed to make required Administrative Law Judge (ALJ), who spoke with two Seattle–based DEA
dispensing reports’’ to the Washington agents, ‘‘who told him he needed to file
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1 The courts are clear that service of an initial
State Prescription Monitoring Program the request for hearing right away.’’ Id.
pleading on an attorney does not constitute
‘‘on approximately 45 separate adequate service unless a party has granted
According to Respondent, he then ‘‘filed
occasions from January to July 2012.’’ authority to the attorney to accept process on his his request for hearing on April 4, 2013
Id. at 4. As the legal basis for this behalf. See, e.g., United States v. Ziegler Bolt & with the DEA’’ OALJ. Id.
allegation, the Government noted that Parts Co., 111 F.3d 878, 881 (Fed. Cir.1997). There Respondent asserted that he ‘‘was
being no such evidence showing that Respondent
Washington State ‘‘requires a dispensing granted such authority to the attorney, I rely only
confused about how and where to file
physician to report to the . . . PMP all on the DI’s statement that Respondent was his request for a hearing’’ and that ‘‘[t]he
instances in which he or she dispenses personally served. source of his confusion came from his
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contacts with [his former] attorney . . ., was to be determined ‘‘within the our [DEA] proceedings.’’ 2 Order on
with his office assistant, and from the context of the particular case,’’ which, Reconsideration, GX 7, at 8. The ALJ
lack of response by [a DEA Agent], in Pincay, had gone on for fifteen years. further noted that even under Pioneer,
although a late effort to clarify the Id. However, the court also observed ‘‘respondents can ‘be held accountable
correct means to request a hearing was that ‘‘[h]ad the district court declined to for the acts and omissions of their
provided by the DEA agents.’’ Id. at permit the filing of the notice, we would chosen counsel.’ ’’ Id. (quoting Pioneer,
3–4. He further maintained that he be hard pressed to find any rationale 507 U.S. at 397).
attempted ‘‘in good faith to ask for a requiring us to reverse.’’ Id. The ALJ found that Respondent was
hearing’’ and that ‘‘[n]one of the represented by another attorney ‘‘at the
Based on Pincay, Respondent argued time [he] was served with the Order to
alternatives employed by [him] were
done for purposes of delay.’’ Id. at 4. that: (1) There is no prejudice to the Show Cause,’’ and that this attorney did
Respondent argued that his case is Agency because his registration remains not inform him that he would not
similar to that of Steven J. Watterson, 67 suspended; (2) the thirty-six day delay represent him in the DEA proceeding
FR 67413 (2002). Therein, the Agency in filing his hearing request had no until after the deadline had passed for
set aside a final order where a party had impact on the proceeding; (3) ‘‘the filing his hearing request. Id. at 8–9. The
failed to file a request for a hearing reason for the delay was confusion on ALJ then concluded that while the
based on ‘‘conflicting guidance’’ having his part,’’ that his conduct is no worse ‘‘[a]ttorney was negligent in failing to
been ‘‘given to’’ an Applicant by an than that found excusable in Pincay and tell Respondent in a timely fashion that
Agency ‘‘official concerning how and was ‘‘based in part on omissions by’’ the he would no longer represent [him],
when the matter would be resolved.’’ Id. DI, and was not made in bad faith; and . . . Respondent cannot argue that he
at 67414. Respondent argued that (4) that he acted promptly to rectify his detrimentally relied on [the attorney] to
Watterson stands for the proposition untimely filing. GX 5, at 8–9. send out the request for hearing.’’ Id. at
that ‘‘ ‘[g]ood cause’ . . . to set aside and Accordingly, Respondent argued that he 9. This was so because ‘‘Respondent,
rescind a decision terminating a has shown good cause for setting aside himself, sent out the letters to [the DI],3
proceeding . . . require[s] a showing of the ALJ’s termination order. Id. at 9. OIG, and [the] Attorney General.’’ Id.
both excusable neglect and a The ALJ granted Respondent’s motion The ALJ thus concluded ‘‘that
meritorious defense.’’ GX 5, at 5. He for reconsideration but then denied his Respondent was ultimately responsible
then argued that ‘‘[t]he acceptance and motion to reopen the proceedings. Order for filing a timely request for hearing,
retention by’’ the DI of his appeal Granting Respondent’s Motion for despite his former attorney’s
request ‘‘was misleading, particularly Reconsideration and Denying shortcomings.’’ Id.
when [the DIs] actively encouraged Respondent’s Motion to Reopen the Finally, the ALJ rejected Respondent’s
[him] to file his appeal correctly AFTER Case, at 10 (Order on Reconsideration) contention that his ‘‘confusion . . .
the appeal period had lapsed,’’ and that (GX 7). While concluding that she had support[ed] a finding of ‘good cause.’ ’’
‘‘[t]his was a source of conflicting jurisdiction to consider Respondent’s Id. As the ALJ explained, ‘‘[t]he clear
guidance for Respondent.’’ Id. at 6. language of the Order to Show Cause
motion for reconsideration, the ALJ
Respondent also relied on Pincay v. states that ‘[c]orrespondence concerning
Andrews, 389 F.3d 853 (9th Cir. 2004) rejected Respondent’s contention that
(en banc). There, a lawyer failed to file he had shown good cause for his 2 While it true that DEA has not adopted any of
a notice of appeal within the thirty-day untimely filing. the various federal rules of procedure, it has
period provided for doing so in the First, the ALJ rejected Respondent’s frequently looked to those rules for guidance in
contention that under Watterson, he had interpreting its procedural rules. See Bio Diagnostic
Federal Rules of Appellate Procedure, Inc., 78 FR 39327, 39328–29 & n.1 (2013) (applying
based on his reliance on the erroneous demonstrated good cause because he federal court decisions interpreting Fed. R. Civ. P.
advice of a paralegal that the notice of had received ‘‘conflicting guidance’’ 56 (governing summary judgment), in determining
appeal need not be filed until sixty days from the DI to whom he sent his whether summary disposition was appropriately
after the issuance of a judgment, rather granted in Agency proceeding); Glenn D. Kreiger, 76
‘‘appeal’’ letter. Id. at 7. The ALJ found FR 20020, 20021 n.3 (2011) (applying federal court
than the thirty days provided in the that Watterson was not controlling decisions and holding that a challenge to the
applicable Federal Rule of Appellate because, during the period in which sufficiency of service of a Show Cause Order is
Procedure. Id. at 855. The Ninth Circuit Respondent could have filed his hearing waived if not raised in a respondent’s first
held that the failure to timely file the responsive pleading). In this regard, it is noted that
request, the DI did not provide the Federal Rules of Civil Procedure have expressly
notice of appeal constituted excusable conflicting guidance but rather no adopted the ‘‘excusable neglect’’ standard for
neglect, notwithstanding its conclusions guidance at all. Id. at 8. Indeed, the DI determining whether ‘‘good cause’’ exists to extend
that the lawyer’s reliance on the did not provide any advice to the time for ‘‘[w]hen an act may or must be done’’
paralegal’s reading of the rule was when a ‘‘motion [is] made after the time has
Respondent regarding his hearing expired.’’ Fed. R. Civ. P. 6(b)(1). As agency
‘‘negligent’’ and that the ‘‘lawyer’s request until he met with the DI on decisions make clear, the good cause standard is not
failure to read an applicable rule is one March 28, 2013. Id. limited to those instances where a respondent or his
of the least compelling excuses that can attorney are blameless in failing to timely file a
be offered.’’ Id. at 859. The court Next, the ALJ rejected Respondent’s pleading. See, e.g., Tony T. Bui, 75 FR 49979, 49980
nonetheless held that the district court contention that ‘‘good cause’’ existed to (2010) (finding good cause existed to excuse
excuse his untimely filing because his untimely filed hearing request where attorney used
did not abuse its discretion in an incomplete address to mail the request but when
concluding that the lawyer’s untimely former attorney ‘‘committed ‘excusable the request was returned, promptly proceeded to
filing was the result of excusable neglect.’ ’’ Id. More specifically, the ALJ mail it to the correct address).
noted that the excusable neglect 3 Regarding the letter to the DI, the ALJ noted that
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neglect. Id. The court further noted that
‘‘the decision whether to grant or deny standard of the Federal Rules of Respondent wrote: ‘‘I am writing to you as an
Appellate Procedure, see Pincay, and appeal for the immediate and urgent help in the
an extension of time to file a notice of matter of my DEA license reinstatement.’’
appeal should be entrusted to the the Federal Rules of Bankruptcy Termination Order, at 9 n.8 (quoting Motion for
discretion of the district court because Procedure (Rule 9006(b)(1)), which was Reconsideration, Ex. 29, at 1). The ALJ further
discussed by the Supreme Court in noted that ‘‘[w]hile Respondent’s intent may have
the district court is in a better position been to request a hearing, Respondent did not
than’’ the appeals court to evaluate the Pioneer Inv. Servs. v. Brunswick Assoc., explicitly express this intent in the letters he sent
relevant factors, and that the decision 507 U.S. 380, 396 (1993), ‘‘do not govern before April 4, 2013.’’ Id.
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this matter, including requests Also unavailing is Respondent’s Respondent further argues that ‘‘[t]he
referenced in paragraphs 1 [i.e., a reliance on Pincay v. Andrews to argue acceptance and retention by [the DI] of
hearing request] and 2 above, should be ‘‘good cause’’ exists to excuse his the appeal request . . . was misleading,
addressed to the Hearing Clerk, Office of untimely filing because either he or his particularly when he and [another DI]
Administrative Law, Drug Enforcement lawyer committed ‘‘‘excusable actively encouraged [him] to file his
Administration, 8701 Morrissette Drive, neglect.’ ’’ 4 Motion for Reconsideration, appeal correctly AFTER the appeal
Springfield, VA 22152.’ ’’ Id. (quoting GX 5, at 7. As the Supreme Court period had lapsed’’ and that [t]his was
OTSC–ISO, at 5). Finding ‘‘that this explained in Pioneer, ‘‘inadvertence, a source of conflicting guidance for’’
language is an unmistakably clear ignorance of the rules, or mistakes him. Id. at 6. However, as the ALJ noted,
explanation of where to send a request construing the rules do not usually this argument goes nowhere because
for hearing, especially for an educated constitute excusable neglect.’’ 507 U.S. Respondent does not claim that he had
professional, such as the Respondent,’’ at 392. Moreover, as the Ninth Circuit any discussion with the DI regarding the
the ALJ held that ‘‘Respondent’s noted in Pincay, the ‘‘failure to read an manner for properly filing his hearing
confusion does not justify a finding of applicable rule is one of the least request within the thirty-day period, let
‘good cause.’ ’’ Id. compelling excuses that can be offered.’’ alone that he was given misleading
The ALJ thus rejected Respondent’s 389 F.3d at 859. Indeed, as the Ninth advice as to how to file his request.6
contention that he had shown good Circuit noted in Pincay, ‘‘had the Indeed, nothing prevented Respondent
cause to excuse his untimely filing. Id. district court declined to permit’’ the from filing a separate hearing request
She further concluded that appellant to file his notice late, it with the Office of Administrative Law
‘‘Respondent’s failure to file a timely ‘‘would [have] be[en] hard pressed to Judges during the thirty-day period. I
request [constituted] a waiver of his find any rationale requiring us to therefore reject Respondent’s contention
right to a hearing under 21 CFR reverse.’’ Id. that his untimely filing should be
1301.43(d).’’ Id. at 9–10. The ALJ thus In his affidavit, Respondent asserts excused because he relied on
denied Respondent’s motion to reopen that he ‘‘sought the advice of and had ‘‘conflicting guidance’’ he received from
the matter. several conversations with’’ his former agency personnel. See Watterson, 67 FR
Thereafter, the Government forwarded attorney ‘‘concerning the OSC and filing at 67413.
a Request for Final Agency Action and an appeal,’’ and that ‘‘[b]ased on these Accordingly, I hold that Respondent
the Investigative Record to me. Having conversations, I ‘filed’ an appeal NOT has failed to demonstrate good cause to
reviewed the record, I adopt the ALJ’s with the DEA . . . Office of the excuse his failure to timely file his
finding that Respondent did not Administrative Law Judges, but instead hearing request. I therefore find that
demonstrate good cause for his failure to with the Office of the Inspector Respondent has waived his right to a
file his hearing request within the General.’’ Respondent’s Declaration, at hearing on the allegations and issue this
thirty-day period as required by 21 CFR 9. To the extent Respondent seeks to Decision and Order based on the
1301.43(a). rely on the advice he received from his Investigative Record (including
As the ALJ explained, the OTSC–ISO former attorney to support a showing of Respondent’s Declaration) submitted by
provided a clear explanation as to the good cause, his vague assertions do not the Government. I make the following
procedure to be followed for filing a establish that he was ever told not to findings.
hearing request. That procedure comply with the instructions on the Findings of Fact
required that Respondent or his OTSC–ISO. Nor does Respondent assert
representative file his hearing request that his former attorney ever agreed to Respondent was the holder of DEA
with the ‘‘Hearing Clerk, Office of represent him in this matter, let alone Certificate of Registration #BL6283927,
Administrative Law Judges, Drug that he agreed to file a request for a pursuant to which he was authorized,
Enforcement Administration, 8701 hearing on Respondent’s behalf. To the prior to the Immediate Suspension of
Morrissette Drive, Springfield, VA extent Respondent relies on his own his registration, to dispense controlled
22152,’’ and that ‘‘[m]atters are deemed confusion as the reason for his untimely substances in schedules II through V as
filed upon receipt by the Hearing filing, see Mot. For Recon., at 8; there is a practitioner, at the registered address
Clerk.’’ GX 2, at 5. no reason to excuse his neglect when of 6603 220th Street SW., Mountlake
Moreover, the OTSC–ISO included an the OTSC–ISO was personally served on Terrace, Washington 98043. GX 1.
attachment entitled: ‘‘REQUEST FOR him and set forth, with unmistakable
could not have been a response to a misfiled
HEARING.’’ Id. at 6. The attachment clarity, the procedures to be followed hearing request given that it referenced his
states that ‘‘[a]ny person desiring a for requesting a hearing.5 correspondence, which was dated approximately
hearing with regard to an Order to Show eighteen months before he was even served with the
Cause must, within thirty (30) days from 4 While the ALJ interpreted Respondent’s OTSC–ISO. Nor, even if the OIG’s letter was
excusable neglect argument as being based on his misdated, does it seem likely that it was prepared
receipt of the Order to Show Cause, file in response to a hearing request, given that it
former attorney’s failure to tell him that he would
a request for a hearing in the following not represent Respondent until after the deadline referred to his ‘‘complaint’’ and referred it to the
format.’’ Id. The attachment then had passed, Respondent’s argument appears to rely ‘‘Office of Professional Responsibility.’’ Id.
provides a sample form, with the on his own confusion as to where to file the hearing As for Respondent’s assertion that he ‘‘discussed
following address block: DEA request and not on the aforesaid conduct of the the matter . . . with an assistant in [his] office, who
attorney. believed that the correct place to send the appeal
Headquarters, Office of the 5 As for Respondent’s letters to the OIG and the was to the office of the Attorney General,’’ Resp.
Administrative Law Judges, Hearing Attorney General, Respondent did not submit a Decl., at 9; this begs the question of why he did not
Clerk, 8701 Morrissette Drive, copy of any of these letters with his motion. See discuss where to file his appeal with the attorney
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Springfield, Virginia 22152. generally Attachments to Respondent’s Motion. (who had also received a copy of the OTSC–ISO)
Indeed, the only letter relevant to this issue which he was then consulting with.
Id. Notably, neither the OTSC–ISO, nor Respondent submitted for the record (other than his 6 So too, if there was evidence that the DI had told
the attachment, directed Respondent, if appeal request) was a copy of an April 4, 2013 letter Respondent that he would forward his hearing
he desired a hearing, to file his hearing he received from the OIG, which ‘‘acknowledge[d] request to the Office of Administrative Law Judges
receipt of [his] correspondence dated July 11, 2011’’ and failed to do, I would order that a hearing be
request with DEA field personnel, the and explained that his ‘‘complaint has been granted. Respondent, however, makes no such
Office of Inspector General, or the forwarded to’’ the DEA ‘‘Office of Professional claim, but rather, relies only on the DI’s silence
Attorney General himself. Responsibility.’’ Id. at Ex. 31. Obviously, this letter during the period for requesting a hearing.
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Respondent’s registration was due to discipline by a state licensing body. . . . one [m]arijuana prescription bag’’
expire on March 31, 2014. Id. However, While the basis of the Texas Board’s from a marijuana collective. Resp. Mot.,
according to the registration records of action does not provide a reason under at Ex. 1. According to LHE, she ‘‘was in
the Agency, on March 13, 2014, the CSA for DEA to take any action a hurry to return the car to [TB and]
Respondent submitted an application to against Respondent’s registration, forget [sic] to remove the bag behind the
renew his registration. While under the Respondent’s statement was nonetheless driver seat.’’ Id. However, LHE’s
Agency’s regulation, his renewal false and clearly offered to influence the statement is unsworn, and given that the
application was untimely because he decision of the Agency to grant him a purported reason for borrowing
was subject to an Order to Show Cause hearing on the allegations. Accordingly, Respondent’s car was to obtain the
and Immediate Suspension of I consider Respondent’s lack of candor marijuana, I find her story that she left
Registration and did not submit the in assessing the credibility of the a one pound bag of marijuana 12 in the
application ‘‘at least 45 days before the various assertions contained in his car because she was in such a hurry to
date on which [his] registration [wa]s declaration. return it to be utterly ludicrous.13
due to expire,’’ 21 CFR 1301.36(i), and As for the cash, Respondent offered
The Arrest of Respondent’s Girlfriend
thus his registration has expired, his two explanations for its source. First, he
application remains pending before the According to the DI, on February 2,
maintained that the day before, a patient
Agency. 2012, Respondent’s girlfriend (TB),8
paid him $5000 cash as a deposit for a
Respondent is also licensed by the who was driving his Mercedez Benz SL
liposuction procedure. Resp. Decl., at 3.
State of Washington (as well as by the 65,9 was stopped by local police, cited
Respondent also produced an unsworn
States of Texas and California) as an for driving under a suspended license,
letter from the purported patient to this
Osteopathic Physician. Resp. and arrested. DI Decl., at 1; Resp. Decl.,
effect and a form entitled: ‘‘SmartLipo &
Declaration, at 1. According to at 3. Respondent corroborated that the
Coolsculpting Price Quote.’’ Id. at Ex. 2.
Respondent, he has never been subject car was his, when in his declaration he
While the latter purports to show that
to discipline by any state licensing addressed the allegation and stated,
the patient paid a $5000 deposit in cash,
body. Id. However, Respondent has inter alia, that on January 24, 2012, he
had withdrawn $5000 from his bank the date of the deposit clearly appears
been subject to discipline by the Texas to have been altered. See id.
Medical Board. Moreover, while this account to pay for the remodeling of his
clinic and left the money ‘‘in the small Second, as found above, Respondent
matter was pending, the Washington
hidden compartment space of the car.’’ maintained that he had withdrawn
Board of Osteopathic Medicine and
Resp. Decl., at 3. Accordingly, I find that $5,000 from his bank account on
Surgery issued Respondent an Ex Parte
Respondent’s statements corroborate the January 24, 2012 to pay for clinic
Order of Summary Action which
DI’s assertion that the car was owned by remodeling, and that he had placed the
suspended his state license to practice
Respondent. money ‘‘in the small hidden
as an osteopathic physician and
Following the arrest of Respondent’s compartment space of the car.’’ Resp.
surgeon. In re Keith Ky Ly (Wash. Bd.
girlfriend, the police apparently Decl., at 3. To support his claim,
Osteopathic Med. & Surg., Sep. 22,
impounded his car, and upon searching Respondent produced a bank statement
2014) (Ex Parte Order of Summary
it, found one pound of marijuana,10 the showing that he made a cash
Action, at 1).
aforesaid $5000, and a backpack which withdrawal of $5,000. Resp. Ex. 3.
With respect to the Texas Medical
contained pain medication. Id.; DI Decl., However, numerous entries in the
Board, on May 20, 2011, Respondent
at 2.11 As for the marijuana, Respondent statement, including Respondent’s
entered into an Agreed Order. See In re
asserted that it belonged to a medical various balances for both his checking
Application for Licensure By Keith Ly,
marijuana patient (LHE) who was a and savings account, are blacked out. Id.
D.O., at 6 (Tx. Med. Bd. 2011). Therein,
the Texas Board found that Respondent friend of TB, and points to a statement Putting aside that Respondent offered
failed to report on his application for a from the purported owner of the two different stories as for why so much
Texas Medical License that in February marijuana. Resp. Decl., at 3; see also cash was found in his car, I find neither
1990, while undergoing his ‘‘residency Resp. Mot., at Ex.1. Therein, LHE stated explanation credible. As for the claim
training,’’ he had been ‘‘placed on that she had an engine problem with her that the money was from a patient who
probation’’ for being late and missing car and that she borrowed Respondent’s had paid $5,000 cash the day before for
shifts, as well as for failing to report a car from TB ‘‘for a few hours to pick-up a procedure, the patient’s statement is
2007 arrest. Id. at 2. While the Board unsworn and thus lacks even the most
granted Respondent a license, it also
8 According to Respondent, TB has lived with
basic indicia of reliability. Moreover, on
him ‘‘for the past 2 years’’ and ‘‘is now [his] wife.’’ the price quote form, the date of the
assessed an administrative penalty of Resp. Decl., at 5. Moreover, TB worked in
$5,000 and placed him on probation for Respondent’s clinic. Resp. Decl., at Ex. 4. patient’s deposit was clearly written
two years.7 Id. at 3–4. 9 According to the DI’s affidavit, the car was over. Also, even acknowledging that the
Accordingly, I find that registered to Respondent. DI’s Decl., at 1. While the patient’s procedure was likely not
DI’s affidavit offers no explanation as to the basis covered by insurance, it seems most
notwithstanding his statement, of knowledge for this assertion, Respondent, in his
Respondent has been subject to declaration, stated that a friend of TB ‘‘had
unlikely that the patient would pay this
borrowed the car the previous day without my
7 Based on the Texas Board’s action, the knowledge.’’ Resp. Decl., at 3. I further note that in 12 According to data collected by the Agency,
Washington Board filed a Statement of Allegations a March 3, 2012 letter to a local narcotic task force during the period in which TB was stopped, one
against Respondent. See In re Keith K. Ly, No. and the King County Prosecuting Attorney’s Office, pound of marijuana had a street value of $1500 to
M2010–1665, Statement of Allegations and Respondent claimed that he owned the car and $1800 in the Seattle area. At .5 grams per joint, one
mstockstill on DSK4VPTVN1PROD with NOTICES
Summary of Evidence (Wash. Dept. Health, Oct. 12, sought its return. Resp. Decl., at Ex.4. Accordingly, pound would be enough to make approximately 900
2012). However, these allegations were settled in a I find that Respondent owned the car that TB was joints.
Stipulation To Informal Disposition, the terms of driving when she was stopped and arrested. 13 I further note that in his March 3, 2012 letter
10 In his statement, Respondent does not dispute
which included that it ‘‘is not [a] formal to a local narcotics task force and the King County
disciplinary action.’’ See Stipulation To Informal that the arresting authorities found a one pound bag Prosecuting Attorney’s Office, in which he sought
Disposition, In re Ly, at 2. However, the proceeding of marijuana. Resp. Decl., at 3. the return of his car, while Respondent again
was still subject to reporting to the Health Integrity 11 According to the DI, the police also found denied knowledge of the marijuana, he made no
and Protection Databank and the National $3900 in cash in a vacuum sealed bag in TB’s purse. mention of the story that LHE had borrowed the car
Practitioner Databank. Id. DI Decl., at 2. from his girlfriend.
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amount in cash rather than by check or while the photograph does not show assertion that these vials contained
credit card. whether there were pills remaining in phentermine and phendimetrazine.
As for his second story, it also seems the vial, in his declaration, Respondent
most unlikely that Respondent would The Searches of Respondent’s
does not dispute that the vial contained
pay to remodel his clinic with cash Properties
pain medication, which hydrocodone is.
(rather than check or credit card), let I thus find that substantial evidence As noted above, the Show Cause
alone be carrying that much cash supports a finding that Respondent’s Order also alleged that state and local
around in his car for nine days. By girlfriend unlawfully possessed law enforcement officers conducted
contrast, carrying large sums of cash is hydrocodone, which had been searches of four different premises
consistent with engaging in the prescribed to another person. which Respondent owned, and found
distribution of marijuana. In support of the DI’s assertion that marijuana plants at his properties which
In his declaration, the DI also asserted two unlabeled vials which contained were located in Renton and Shoreline,
that the search of the vehicle found phentermine and phendimetrazine were Washington, as well as six bags of
‘‘multiple prescription bottles also seized, the DI cited Government processed marijuana at the latter
containing pills,’’ and that one of the Exhibit 10, but without regard to the property. GX 2, at 2. In addition, the
bottles bore a label indicating that the specific page. However, in his Show Cause Order alleged that
drugs had been prescribed to T.V., ‘‘an declaration, the DI offered no statement marijuana grow documents and ‘‘15
office employee of’’ Respondent. DI’s to the effect that he participated in the grams of processed marijuana’’ were
Decl., at 2 (citing GX 9). The DI further search of Respondent’s car, nor found at Respondent’s personal
stated that ‘‘[t]wo of the bottles found in otherwise set forth the basis of his residence, and that both marijuana grow
the vehicle . . . were unlabeled and knowledge for making this assertion. equipment and marijuana leaves were
contained phentermine and Nor does the record contain any found at a fourth property he owns. Id.
phendimetrazine.’’ Id. (citing GX 10). affidavits or police reports prepared by at 3.
Finally, the DI asserted that when those officers who did participate in the In his declaration, the DI made
Respondent ‘‘attempted to recover his arrest and search, nor other documents various assertions with respect to each
vehicle, he told law enforcement such as an inventory of the search, a of the searches. For example, with
officers that his employees often shared chain of custody, and lab test results, respect to the May 30, 2012 search of
their medication.’’ Id. which would support the DI’s the Renton residence, the DI stated that
Respondent did not dispute that drugs assertion.15 the Renton Fire Department had
were found in TB’s backpack. Rather, he Indeed, while Government Exhibit 10 responded to an electrical fire at the
asserted that they ‘‘belonged to my contains eight photographs, in premises, which ‘‘is owned by’’
office manager,’’ that he had prescribed reviewing this matter it is apparent that Respondent and ‘‘discovered a large
the drugs ‘‘for her liposuction procedure the exhibit is not limited to the evidence marijuana grow,’’ and that thereafter,
pain a few months prior,’’ and that the that was seized following the search of ‘‘[t]he Renton Police Department
drugs were ‘‘left at my house when she Respondent’s car, but also contained executed a search warrant of the
visited for [a] dinner party.’’ Resp. Decl., photographs of evidence that may well residence and seized approximately 700
at 3. Respondent then maintained that have been seized during several of the marijuana plants.’’ DI Decl., at 2. The DI
‘‘[a]s a medical doctor, I do not searches described below. Most further stated that Respondent ‘‘told law
encourage nor allow any patients to significantly, the Exhibit contains two enforcement that he rented the
share medication’’ and that he ‘‘would photographs of vials (one showing two [premises] to [one] Jack Tran,’’ but that
absolutely terminate my employee if vials, the other showing a single vial) the police ‘‘were unable to locate and/
found engaging in sharing medication which were missing their labels, with or identify Mr. Tran.’’ Id. at 3. While all
and would report them to the no identification of when and from of this may be true, here again, the DI’s
authorities.’’ Id. Respondent did not, whom the vials were seized. Finally, declaration offers no statement to the
however, explain when the purported while at least two of the vials appear to effect that he participated in the search,
dinner party had occurred. contain tablets (the third vial being nor otherwise sets forth the basis of his
Consistent with Respondent’s murky), the Government provided no knowledge.
admission, the record does include a evidence (such as lab test results) With respect to the July 5, 2012 search
photograph of a prescription vial; its explaining the basis for the DI’s of the Shoreline residence, the DI stated
label lists the patient as a person whose that it was owned by Respondent, and
name corresponds with the initials T.V., labels list Respondent as the prescriber, his
that during the search by state and local
the drug as hydrocodone/ girlfriend T.B. as the patient, and the drugs as
lorazepam and hydrocodone/acetaminophen, with law enforcement, ‘‘approximately 489
acetaminophen, and Respondent as the pills being visible only in the latter vial. Generally, marijuana plants and six (6) bags of
prescriber. See GX 9, at 1.14 Moreover, the DI’s declaration offers no statements linking processed marijuana’’ were seized. Id. at
these photographs to the various items which were
14 Government Exhibit 9, however, contains seven purportedly seized during the various searches of 3. The DI further stated that TB and
additional photographs, including: (1) A Respondent’s car and properties he owned. three other ‘‘marijuana tenders were
photograph of two unlabeled vials (only one of Moreover, Government Exhibits 8, 9, 10, 11a, 11b, arrested leaving the Shoreline
which clearly contains tablets); (2) a photograph of 13, 14, and 15 each contain the exact same set of residence,’’ that TB ‘‘admitted’’ to the
two plastic bags, which purportedly contain eight photographs, although not necessarily in the
same order. Providing multiple copies of the exact
police ‘‘that she was learning to grow
phentermine and a red document, the date of which
is unclear; (3) a photograph of a plastic bag same set of photographs does not, however, make marijuana at the Shoreline residence,’’
containing a drug similar in appearance to the drug the first set of photographs any more probative of and that two ‘‘of the marijuana tenders
mstockstill on DSK4VPTVN1PROD with NOTICES
in the previous photograph; (4) a photograph of a the facts for which they were offered. arrested at the Shoreline residence
vial containing yellow capsules and orange tablets, 15 Even giving weight to the DI’s assertion that
possessed loose phentermine tablets in
the label of which had been removed; (5) a vial Respondent ‘‘purchased these items [i.e.,
bearing a label for a prescription issued by phentermine and phendimetrazine] on August 5, their pockets.’’ Id. (citing GX 11).16 Here
Respondent for clonazepam to a patient whose 2011 from Distributor A.F. Hauser,’’ DI’s Decl., at
initials are R.M.; (6) six bottles bearing 5 (¶ 34), this is not enough to overcome the 16 As explained below, while Respondent denies
manufacturer’s labels (several of which are labelled insufficiency of the evidence with respect to the knowledge as to how his properties were being
as professional samples) for Viagra, Topiramate, assertion that these drugs were seized during the used, he does not dispute that marijuana was being
Ultram ER, and Meridia; and (7) two vials, whose February 2, 2012 search. grown at the various properties. Thus, his
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too, all of this may be true, but the DI’s DI then stated that on July 13, 2012, he As for the DI’s assertion that the
affidavit offers nothing bordering on subpoenaed ‘‘L.E.’s patient chart from’’ police also seized a vial containing
substantial evidence to support any of Respondent, but that ‘‘[t]he office staff clonazepam, here again, there is no
these assertions.17 could not locate a patient chart for L.E., evidence either that the DI was present
The DI further asserted that L.E. was nor could they find his/her name in the during the search of Respondent’s
one of the marijuana tenders arrested electronic medical records.’’ Id. at 4. residence or that a vial containing this
during this search, and that using the Government Exhibit 12 is a copy of a drug was seized during that search. And
Washington State Prescription prescription issued by Respondent on while the record contains a photograph
Monitoring Program, ‘‘[i]t was June 28, 2012 for thirty (30) tablets of of a vial, which bears a label listing
discovered . . . that in June 2012, Lortab (hydrocodone/acetaminophen) Respondent as the prescriber, the drug
[Respondent] prescribed 30 dosage units 10/500. See GX 12. However, the as clonazepam, and the patient’s name
of 10/500 mg hydrocodone to L.E.’’ Id. prescription was issued to a patient corresponding with the initials R.M.,
Citing Government Exhibit 12, the DI whose initials are H.L., and not L.E. See there is no evidence establishing that
further stated that he ‘‘verified the id. Thus, the prescription does not any pills were in the vial, let alone that
prescriptions [sic] by obtaining a hard support the DI’s assertion, and the the pills were clonazepam.19
copy of the prescription through’’ the Government points to no other evidence Turning to the DI’s assertion that
pharmacy which filled it. Id. at 3–4. The that Respondent prescribed a controlled Respondent ‘‘also possessed two (2)
substance to a patient whose name stock bottles that contained Meridia and
declaration corroborates the basic thrust of the DI’s
corresponds with the initials of L.E., let diazepam,’’ here again, there is no
assertions. evidence establishing that the DI
That being said, the DI’s affidavit contains alone that he violated the CSA’s
prescription requirement in doing so. participated in the search of
numerous assertions for which there is no
foundation to conclude that they are based on the See GX 2, at 2, ¶ 3–b. (OTSC–ISO). Respondent’s residence, or any other
DI’s ‘‘personal knowledge’’ as that term is evidence establishing that these drugs
commonly understood. Indeed, many of the DI’s Regarding the July 6, 2012 search of were seized during that search. To be
assertions regarding the searches of Respondent’s Respondent’s and TB’s residence (which sure, the Government cites to an exhibit,
properties appear to be based on hearsay is owned by the former), the DI asserted
statements, the reliability of which cannot be which contains several photographs,
assessed because the DI did not identify the source
that state and local law enforcement including one which shows six white
of the information and the Government did not seized ‘‘firearms, marijuana grow bottles (several of which are clearly
include various documents (such as police reports, documents, approximately 15 grams of marked as professional samples) which
search inventories, and test results) in the record. processed marijuana, and multiple
More specifically, the DI asserts that TB and three bear the manufacturer’s label for such
other persons were arrested during the search of the
prescription bottles containing pills.’’ DI drugs as Viagra, Topiramate, Ultram ER,
Shoreline residence; that during an interview with Decl., at 4. The DI then stated that and Meridia. See GX 15, at 1. However,
law enforcement, TB admitted that she was learning Investigators found ‘‘an unlabeled’’ vial, of these drugs, only Meridia
how to grow marijuana; and that two of the persons ‘‘which contained hydrocodone’’; one
had loose phentermine tablets in their pockets. (sibutramine) is a controlled substance
Again, the DI offered no statement to the effect that
labeled vial, ‘‘which contained under federal law, 21 CFR 1308.14(e),
he participated in either the search of the Shoreline clonazepam that [Respondent] and putting aside the absence of any
residence or the interview of TB. Nor did he set prescribed to patient R.M. in 2010’’; and evidence as to where and when this
forth any other basis for these assertions. two ‘‘stock bottles that contained
As for the two marijuana tenders who
drug was seized, here again, there is no
purportedly possessed loose phentermine, the DI
Meridia and diazepam’’; even though evidence that there actually was any of
further asserted that ‘‘[s]tate law requires the Respondent ‘‘was not, nor has ever the drug in the bottle at the time it was
labeling of dispensed medication’’ and that ‘‘[t]he been, registered with DEA at his Bothell seized. As for the DI’s assertion that a
lack of labeled prescription bottles suggests the residence.’’ Id. (citing GXs 13, 14, and
controlled substances were diverted.’’ DI’s Decl., at stock bottle of diazepam was also seized
3. This too may be true, but there is no evidence
15). during the search of Respondent’s
in the record establishing the names of these As for the unlabeled prescription residence, here too, there is no evidence
individuals and that they obtained the controlled bottle which purportedly contained (indeed, not even a photograph of the
substances from Respondent. Indeed, while the DI
cited GX 11 as support for his assertion that these
hydrocodone, here again, the DI’s bottle) to support the DI’s contention.
individuals possessed phentermine, this exhibit Declaration is devoid of any statement Finally, the DI stated that on July 7,
simply contains a series of photographs including that he was present during the search 2012, state and local law enforcement
two of white tablets (one of which contains a red and there is no other evidence executed a search warrant at a fourth
form which is illegible), various prescription vials
(some of which contain pills, others which it is establishing that the vials were seized residence which is owned by
unclear if they do) and bottles containing various from Respondent’s residence. And Respondent and located in Marysville,
drug samples. Even assuming that the white tablets while GX 13 contains a photograph of Washington. DI Decl., at 5. The DI
are phentermine (even though there is no evidence two vials, with pills that are barely further stated that during the search, the
they were tested), nothing in the record establishes
from whom and when these tablets were seized. visible in the vials, there is no officers ‘‘seized some marijuana grow
17 Here too, even giving weight to the DI’s photograph of the pills outside of the equipment and marijuana leaves.’’ Id.
assertion that Respondent ‘‘purchased this exact vials, which might have shown that the Here again, the DI’s affidavit does not
item [i.e., more phentermine] on March 16, 2012 pills bore the NDC Code for establish the basis of his knowledge.
from Distributor A.F. Hauser,’’ DI Decl., at 5 (¶ 35),
this evidence does not overcome the insufficiency hydrocodone. Nor is there any evidence Regarding the searches of the
of the evidence with respect to the assertion that establishing that the pills were tested by properties other than his residence,
these drugs were seized from the marijuana tenders a laboratory and found to be Respondent acknowledged that he
during the search of the Shoreline residence. And hydrocodone.18 owned ‘‘three rental properties.’’ Resp.
because the evidence is insufficient to establish that
mstockstill on DSK4VPTVN1PROD with NOTICES
loose phentermine was seized from the two Decl., at 3. He also acknowledged that
marijuana tenders who were purportedly at the 18 Even giving weight to the DI’s assertion that
Shoreline residence, the assertions of the DI that: Respondent ‘‘purchased this item [i.e., 19 In his Declaration, Respondent denied that he
(1) One of the tenders ‘‘was never seen by’’ hydrocodone] on March 16, 2012 from Distributor ‘‘ha[s] or store[s] any [h]ydrocodone or
Respondent, and (2) that while one of the tenders A.F. Hauser, Inc.,’’ DI Decl., at 6 (¶ 37); this [c]lonazepam at home.’’ Resp. Decl., at 5. He further
was seen by Respondent, he was not prescribed any statement likewise does not overcome the lack of stated that ‘‘[t]he prescription bottles are prescribed
controlled substance, id. at 5–6 (¶ 36), is substantial evidence establishing that these drugs for my wife for her liposuction procedures post-
insufficient to establish that Respondent unlawfully were seized during the search of Respondent’s operational pain where she had four liposuction
distributed the phentermine to either person. residence. procedures performed from 7/9/11 to 11/3/12.’’ Id.
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‘‘one of the rental houses had an well as the quantity of marijuana which Sticker.’’ Id. at 1–5. Yet the Government
electrical burn that shed light on the was seized from his girlfriend. Id. at 3. produced no evidence to prove that
others that had illegal activities.’’ Id. at Respondent went to trial; the jury these dispensings actually involved
4. He then asserted that he ‘‘had found him guilty on all counts.20 On controlled substances as opposed to
irresponsible tenants that took December 19, 2014, the United States non-controlled drugs.
advantage of the locations by cultivating District Court convicted Respondent on The DI also asserted that Respondent
[m]arijuana for 6 months without [his] each of the above counts and sentenced ‘‘failed to maintain or provide any
knowledge’’ and that he ‘‘do[es] not him to 60 months of imprisonment, dispensing/administration records for
personally inspect, supervise, or manage imposed a four-year term of supervised Testosterone and Testim samples
the rentals on a regular basis,’’ because release following his release from located at the registered location.’’ DI
he works six days a week in his medical imprisonment, imposed an assessment Decl., at 7. The DI further asserted that
practice, and that ‘‘[w]hen the rent is of $1,000, and ordered that various Respondent did not ‘‘maintain[ ] at least
timely paid with no complaints that property be forfeited. Judgment, at 1–6, four Schedule III–V acquisition invoices
need repair, [he has] no need to bother United States v. Keith K. Ly (W.D. Wash. and by not recording the dates of receipt
tenants at their home.’’ Id. at 3–4. Later Dec. 19, 2014). on at least five invoices.’’ Id.21
in his declaration, Respondent stated
The DEA Investigation The DIs also conducted an audit of
that ‘‘[i]f something is broke they send
the controlled substances which were
me a bill for repair and I deduct it from According to the DI’s affidavit, on July
located at Respondent’s registered
the rent.’’ Id. at 5. 13, 2012, DEA Investigators visited
On May 22, 2013, Respondent was location. Id. In his declaration, the DI
Respondent’s registered location and
indicted in United States District Court stated that ‘‘DEA used an initial
upon obtaining his consent, conducted
for the Western District of Washington inventory date of January 1, 2012,
an inspection. DI’s Decl., at 6; see also
and charged with conspiracy to beginning of business, and noted that
GX 20 (Notice of Inspection manifesting
manufacture and distribute marijuana. the initial inventory was ‘zero’ due to
Respondent’s consent to the inspection
DI Decl., at 11; see also GX 31. the lack of an initial or biennial
and witnessed by the DI). As part of the
Moreover, on October 22, 2013, a inventory.’’ Id. To determine the
inspection, the Investigators asked
superseding indictment was filed amounts of the various drugs
Respondent to produce his records,
against Respondent and his girlfriend. Respondent purchased, the DIs relied on
including his controlled substance
The superseding indictment alleged ‘‘a summary of the invoices provided by
inventories, dispensing and
that Respondent and others conspired to distributor A.F. Hauser’’; they also used
administration logs, invoices, returns,
grow marijuana at several residential his dispensing log to determine the
distributions, as well as theft and loss
properties and that Respondent ‘‘made amounts that he dispensed. Id. The DI
reports. Id.
at least three of those properties The DIs determined that Respondent further stated that he used ‘‘the closing
available . . . for the purpose of ‘‘failed to take and maintain an initial or inventory assembled by DEA
manufacturing marijuana,’’ that he biennial inventory of all stocks of investigators during the on-site
‘‘purport[ed] to rent [the houses] to controlled substances on hand.’’ Id. inspection.’’ Id.
others, knowing that the persons listed While Respondent produced a The DI then asserted that the ‘‘audit
as ‘tenants’ for these properties did not, dispensing log, which covered the revealed large shortages of testosterone,
in fact, reside there and/or did not pay period from December 23, 2010 to July phentermine, phendimetrazine, and a
rent,’’ that he and his co-conspirators 11, 2012, according to the DI, 128 of the 14% shortage or[sic] hydrocodone.’’ Id.
‘‘set up large-scale marijuana grows for entries lacked required information. Id. More specifically, the DI asserted that
the purpose of manufacturing marijuana More specifically, the DI asserted that Respondent had a shortage of 300 mg of
within the houses’’ and ‘‘caused the 82 entries did not have the patient’s Testosterone 200 mg/ml, 6,028 tablets of
electrical power in these houses to be address, the name of the controlled phentermine 37.5 mg,22 2,102 tablets of
diverted around the meters, thus substance, the finished form, and the phendimetrazine 35 mg, and 71 tablets
stealing power to run the marijuana dispenser’s initials. Id. at 6–7. of hydrocodone 10/500 mg. Id. at 8.
grows,’’ and that he and his co- According to the DI, another 46 entries The Government also submitted a
conspirators ‘‘recruited and directed lacked the patient’s address, name of the document which appears to be the
others to help grow and harvest the controlled substance, the quantity aforesaid summary of Respondent’s
marijuana plants, and maintain the dispensed, and the dispenser’s initials. controlled substance purchases from
houses and yards at these properties.’’ Id. at 7. A.F. Hauser between January 1, 2010
Superseding Indictment, at 2, United As part of the record, the Government and July 24, 2012, see GX 16, as well as
States v. Thi Nguyen Tram Bui and submitted a copy of Respondent’s the audit computation chart. GX 23.
Keith Ky Ly, No CR13–157JCC (W.D. dispensing log. GX 21. A review of the Significantly, the audit chart lists the
Wash. 2013) (citing, inter alia, 21 U.S.C. log corroborates the DI’s assertion that initial inventory date as ‘‘1–1–2010
841(a)(1) and (b)(1)(A), 846). The many of the entries which record the COB’’ and not January 1, 2012 as set
Indictment further charged Respondent dispensing of controlled substances lack
with three counts of manufacturing various items of information required by 21 The DI also stated that during the inspection,
marijuana at his properties in Renton, federal law, including the patient’s Respondent did not provide any ‘‘Report[s] of Theft
Shoreline and Marysville, Washington, address and the dispenser’s initials. See or Loss of Controlled Substances’’ (DEA Form 106).
as well as three counts of maintaining DI Decl., at 7. He also reviewed all of the hard copy
id. at 6–9. As for the contention that Theft and Loss Reports on file with the Seattle Field
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drug-involved premises. Id. at 4–7 numerous entries did not contain the Office, as well as queried the Drug Theft Loss
(citing 21 U.S.C. 841(a)(1) and (b)(1)(B); name of the controlled substance that database, which gathers all of the Form 106s which
856(a)(1) and 856(b)). The indictment was dispensed, it is true that numerous are submitted online, and determined that
also set forth additional allegations entries were missing the ‘‘Medication ID
Respondent had not submitted any such reports. Id.
22 According to the DI’s declaration, the shortage
regarding the quantities of marijuana
was 6.028 tablets. DI Decl., at 8. Based on the audit
plants and/or harvested marijuana that 20 Respondent was also charged and convicted of chart, which lists the shortage as 6,028 tablets, GX
were seized during the searches of his three counts of wire fraud, based on claims he made 23, I conclude that the former figure is a
Renton and Shoreline properties, as to an insurance company. typographical error.
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forth in the DI’s declaration. Compare documentation establishing the amount application, the following factors be
GX 23 with DI Decl., at 7. of Testim that was distributed to him.24 considered:
This disparity has a material impact Finally, the Government’s evidence (1) The recommendation of the appropriate
on the accuracy of the audit results. For shows that in March 2012, Respondent State licensing board or professional
example, according to the DI’s purchased 1,000 dosage units of disciplinary authority.
declaration (and the computation chart), Lorazepam, GX 16, and the computation (2) The [registrant’s] experience in
Respondent was short more than 6,000 chart indicates that the audit balanced dispensing, or conducting research with
dosage units of phentermine. Yet, with respect to this drug. GX 23. respect to controlled substances.
according to the summary of (3) The [registrant’s] conviction record
In his declaration, the DI further under Federal or State laws relating to the
Respondent’s purchases and the
invoices, Respondent only purchased asserted that Respondent failed to report manufacture, distribution, or dispensing of
3,000 dosage units of phentermine to the State of Washington’s controlled substances.
Prescription Monitoring Program (PMP), (4) Compliance with applicable State,
during 2012. Thus, if—as stated by the Federal, or local laws relating to controlled
DI—the beginning date of the audit ‘‘at least 45 occasions from January
through July 2012’’ in which he substances.
period was January 1, 2012 and zero (5) Such other conduct which may threaten
was assigned as the opening inventory, ‘‘dispensed more than a 24-hour supply
the public health and safety.
Respondent could not have been short of controlled substances.’’ DI Decl., at 8.
21 U.S.C. 823(f).
6,000 dosage units. According to the DI, this was a violation
So too, in his declaration, the DI of Washington law. Id. The Government ‘‘[T]hese factors are . . . considered
asserted that Respondent was short did not, however, submit the PMP in the disjunctive.’’ Robert A. Leslie,
more than 2,100 phendimetrazine reports which establish the basis for its M.D., 68 FR 15227, 15230 (2003). It is
tablets (the same figure listed on the assertion. well settled that I ‘‘may rely on any one
computation chart, which also lists Regarding this allegation, Respondent or a combination of factors, and may
3,000 dosage units as having been stated that he ‘‘was not aware of this give each factor the weight [I] deem
purchased). However, the Government’s Washington State law requirement . . . appropriate in determining whether a
other evidence shows that Respondent [and] thus cannot have . . . repeatedly registration should be revoked.’’ Id.; see
did not purchase any phendimetrazine failed’’ to comply or to have shown a also MacKay v. DEA, 664 F.3d 808, 816
during 2012. See GX 16. Here again, ‘‘consistent disregard’’ for this (10th Cir. 2011); Volkman v. DEA, 567
Respondent could not have been short requirement. Resp. Decl., at 8. F.3d 215, 222 (6th Cir. 2009); Hoxie v.
3,000 dosage units if the beginning date Respondent then stated that ‘‘I am now DEA, 419 F.3d 477, 482 (6th Cir. 2005).
of the audit period was January 1, 2012, made fully aware and will comply with Moreover, while I am required to
as stated by the DI in his sworn the law. This is not an intentional consider each of the factors, I ‘‘need not
declaration. violation.’’ Id.25 make explicit findings as to each one.’’
As for the testosterone, while there is MacKay, 664 F.3d at 816 (quoting
evidence that Respondent also Discussion Volkman, 567 F.3d at 222 (quoting
purchased testosterone in February Hoxie, 419 F.3d at 482)).27
2012, the data as presented in the Under the CSA, ‘‘[a] registration The Government has the burden of
computation chart suggests that he pursuant to section 823 of this title to proving, by a preponderance of the
purchased 400 10ml bottles and that he manufacture, distribute, or dispense a evidence, that the requirements for
could not account for 300 bottles. See controlled substance . . . may be revocation or suspension pursuant to 21
GX 23 (listing drug as ‘‘Testosterone suspended or revoked by the Attorney U.S.C. 824(a) are met. 21 CFR
200mg/ml—10 ml bottle’’ and listing the General upon a finding that the 1301.44(e). This is so even in a non-
‘‘[t]otal purchased’’ as 400.) However, registrant . . . has committed such acts contested case.
the Government’s other evidence, i.e., as would render his registration under In this matter, I have considered all of
the listing of Respondent’s purchases, section 823 of this title inconsistent the factors. While I find that some of the
which according to the DI was prepared with the public interest as determined allegations are not supported by
by A.F. Hauser, lists the quantity of under such section.’’ 26 21 U.S.C. substantial evidence, I nonetheless find
Respondent’s purchases as only ‘‘2.00.’’ 824(a)(4). The Act further provides that that the Government’s evidence with
GX 19. Thus, here again, there is reason in determining ‘‘the public interest’’ respect to factors one, two, three, and
to question the reliability of the audit with respect to a practitioner’s four establishes that he has committed
results.23 acts which render his registration
With respect to the remaining drugs, 24 It is further noted that while the computation
‘‘inconsistent with the public interest.’’
there is evidence that Respondent chart contains a column for the ‘‘Total Purchased,’’ 21 U.S.C. 823(f). While I have also
which was added to the ‘‘Initial Inventory’’ to arrive
purchased 500 dosage units of at the ‘‘Amount Accountable For,’’ samples are not considered Respondent’s declaration
hydrocodone during 2012 (GX 19) and typically purchased and the chart contains no with respect to the various allegations,
was short 71 tablets. GX 23. There is column for other means of acquisition. GX 23. I conclude that he has not presented
also evidence that at the time of the July 25 Based on the DI’s Declaration, the Government
sufficient evidence to rebut this
2012 inspection, Respondent had on proposes that I make a factual finding that following
the issuance of the Immediate Suspension Order,
conclusion. Accordingly, I will affirm
hand 21 Testim 1% samples. While the Respondent ‘‘issued at least three (3) prescriptions the suspension of his registration and
DIs concluded that Respondent had an to two (2) separate patients on February 1, March
overage of these 21 samples, there is no 2, and March 30, 2013, in violation of the Order.’’ 27 ‘‘In short, this is not a contest in which score
evidence as to who distributed the Request for Final Agency Action, at 5 (citing DI’s is kept; the Agency is not required to mechanically
mstockstill on DSK4VPTVN1PROD with NOTICES
Declaration at 9–10). However, in its Request for count up the factors and determine how many favor
samples to him and there is no evidence Final Agency Action, the Government does not the Government and how many favor the registrant.
the DIs asked Respondent for any of the propose that I make any conclusion of law based Rather, it is an inquiry which focuses on protecting
on this conduct. See id. at 6–12. Accordingly, I do the public interest; what matters is the seriousness
23 Moreover, even if the entry in the computation not consider this conduct. of the registrant’s misconduct.’’ Jayam Krishna-Iyer,
chart was actually intended to be 400mg (or two 26 Pursuant to 28 CFR 0.100(b), this authority has 74 FR 459, 462 (2009). Accordingly, as the Tenth
bottles) as opposed to 400 bottles, at most been delegated by the Attorney General to the Circuit has recognized, findings under a single
Respondent would not be able to account for 1.5 Administrator of the Drug Enforcement factor can support the revocation of a registration.
bottles. Administration. See MacKay, 664 F.3d at 821.
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further order that his pending unlawfully distributed the tablets to volume of such finished form
application be denied. these individuals. Id. at 11. dispensed, including the name and
Neither of these allegations is proved address of the person to whom it was
Factor One—The Recommendation of by substantial evidence. As for the dispensed, the date of dispensing, the
the State Licensing Board allegation regarding the hydrocodone number of units or volume dispensed,
As found above, on September 22, prescription, as found above, in his and the written or typewritten name or
2014, the Washington Board of Declaration, the DI repeatedly referred initials of the individual who dispensed
Osteopathic Medicine and Surgery to this person as L.E. Yet to support the or administered the substance on behalf
issued Respondent an Ex Parte Order of allegation, the Government offered a of the dispenser.’’ 21 CFR 1304.22(c).
Summary Action, pursuant to which, copy of a prescription which was issued Finally, under this regulation,
his authority to practice medicine in the to a patient whose initials are H.L. and Respondent was required to maintain
State was suspended. Under the CSA, a not L.E. Moreover, the Government records of the controlled substances he
practitioner’s possession of authority to points to no other evidence that acquired, to include ‘‘[t]he name of the
dispense controlled substances under Respondent even prescribed substance’’; ‘‘[e]ach finished form . . .
the laws of the State in which he seeks hydrocodone (or any controlled and the number of units or volume of
registration is a prerequisite to obtaining substance for that matter) to a person finished form in each commercial
a registration. See 21 U.S.C. 823(f) (‘‘The whose initials are L.E. Thus, the container’’; and ‘‘[t]he number of units
Attorney General shall register allegation is unsupported by substantial of finished forms and/or commercial
practitioners . . . to dispense . . . evidence. containers acquired from other persons,
controlled substances . . . if the As for the allegation that the including the date of and number of
applicant is authorized to dispense . . . phentermine was found on two persons units and/or commercial containers in
controlled substances under the laws of who were arrested during the Shoreline each acquisition to inventory and the
the State in which he practices.’’); see search and was distributed to them by name, address, and registration number
also id. § 802(21) (defining ‘‘[t]he term Respondent, while the Government of the person from the units were
‘practitioner’ [to] mean[] a physician produced evidence that Respondent had acquired.’’ Id. § 1304.22(a)(2)(i), (ii), and
. . . licensed, registered, or otherwise ordered phentermine from his (iv).
permitted, by the United States or the distributor several months earlier, the Here, I give no weight to the audit
jurisdiction in which he practices . . . evidence offered to establish that results given the numerous problems
to . . . dispense . . . [or] administer phentermine was found on these found above, including the conflict in
. . . a controlled substance in the individuals was limited to the DI’s the Government’s evidence as to what
course of professional practice’’). assertion that it was. The DI did not, the DIs used as the beginning date for
Because Respondent is no longer however, offer any basis for concluding the audit period. Nonetheless, I find that
authorized by the State of Washington that he personally participated in the the DI’s declaration establishes that
to practice medicine and dispense search—notwithstanding his assertion during the July 2012 inspection,
controlled substances, he is not that his declaration was based on Respondent could not produce the
authorized to hold a registration in that ‘‘personal knowledge’’—nor otherwise required inventories for the controlled
State. This provides reason alone to explain the basis for his statement. substances he was handling, and was
deny his application. However, because Finally, the Government offered no thus in violation of 21 U.S.C.
the Government also seeks a final order other evidence to prove this assertion 827(a)(1).28 Moreover, the DI’s
based on the allegations of the Order to such as a police report, an affidavit of declaration establishes that while
Show Cause and Immediate Suspension the arresting officer, or an inventory of Respondent was engaged in dispensing
of Registration, I address the evidence the items found during the search controlled substances, many of the
with respect to the other public interest conducted incident to the purported entries for his phentermine dispensings
factors. arrest of these individuals. The lacked the patient’s address and the
allegation therefore fails for lack of name or initials of the person who did
Factor Two—Respondent’s Experience
substantial evidence. the actual dispensing.29 Thus,
in Dispensing Controlled Substances The evidence further shows that Respondent violated the CSA and DEA
The Government contends that Respondent purchased controlled regulations for these reasons as
Respondent unlawfully distributed substances including hydrocodone with well.30 See 21 U.S.C. 827(a)(3); 21 CFR
controlled substances to various persons acetaminophen, phentermine,
who were arrested during the search of phendimetrazine, testosterone, and 28 Regarding the lack of inventories, Respondent
his Shoreline property. Req. for Final lorazepam, which he dispensed directly stated that he ‘‘ha[d] invoices from [his distributor]
Agency Action, at 10 (citing, inter alia, to his patients. Under federal law, as my initial inventory.’’ Resp. Decl., at 7. Contrary
to Respondent’s contention, under the CSA, the
21 U.S.C. 841(a)(1)). More specifically, Respondent was required upon ‘‘first requirement to take and maintain complete and
the Government contends that engag[ing] in the . . . dispensing of accurate inventories is separate from the
Respondent ‘‘prescribed hydrocodone controlled substances, and every second requirement to maintain records of the controlled
. . . to an individual arrested at the year thereafter, [to] make a complete substances a registrant acquires. Compare 21 U.S.C.
827(a)(1) with id. § 827(a)(3); compare also 21 CFR
Shoreline’’ property and could ‘‘not and accurate record of all stocks thereof 1304.11 with id. § 1304.22. I therefore reject
locate a patient file at [his] registered on hand.’’ 21 U.S.C. 827(a)(1). Also, Respondent’s contention. I further note that during
location for this particular individual.’’ under federal law, because he engaged the inspection, the DI found that Respondent did
Id. Based on the Investigators’ in the dispensing of the controlled not have all of the invoices.
29 While in his declaration Respondent states that
mstockstill on DSK4VPTVN1PROD with NOTICES
‘‘determin[ation] that [Respondent] also substances, Respondent was required to
this information was in the patient charts and that
purchased the loose phentermine tablets ‘‘maintain, on a current basis, a there is only limited space in his dispensing log, see
located on individuals at the Shoreline complete and accurate record of each Resp. Decl., at 7; DEA regulations require that the
residence on March 16, 2012, despite such substance . . . received, sold, patient’s address be documented in the dispensing
the fact that he could not produce delivered, or otherwise disposed of by log. 21 CFR 1304.22(c).
30 As for the various entries in the dispensing log
patient records when requested by law him.’’ Id. § 827(a)(3). DEA regulations which lacked the name of the drug, because the
enforcement,’’ the Government also further require that a dispenser maintain Government provided no evidence that the
apparently contends that Respondent a record ‘‘of the number of units or dispensings involved controlled substances, I place
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1304.22(c). Finally, the DI’s declaration maintaining drug involved premises.31 As for the allegations pertaining to the
establishes that Respondent lacked Each of these convictions provides controlled substances that the police
complete records of the controlled reason alone to deny his application. found during the search of Respondent’s
substances he acquired from his And under the doctrine of collateral residence, I conclude that the
distributor, in violation of 21 U.S.C. estoppel, the convictions also preclude Government did not provide substantial
827(a)(3), as well as 21 CFR 1304.22(c). any challenge to the allegations that he evidence to support the allegations with
See also 21 CFR 1304.22(a)(2)(i), (ii), was engaged in the unlawful respect to any of the four drugs
and (iv). manufacture of marijuana. See Robert L. (Meridia, diazepam, clonazepam (in a
As both the Agency and the federal Daugherty, 76 FR 16823, 16830 (2011). vial indicating that Respondent had
courts have explained, recordkeeping is prescribed the drug to R.M.) or
Factor Four—Compliance With hydrocodone (in an unlabeled vial)).
one of the CSA’s fundamental features Applicable Laws Related to Controlled
for preventing the diversion of With respect to the diazepam, the
Substances Government produced absolutely no
controlled substances. See Gonzales v.
With respect to this factor, the evidence that the drug was even seized
Raich, 545 U.S. 1, 14 (2005) (‘‘The CSA
Government raises three main during the search. With respect to the
and its implementing regulations set
allegations. First, based on the various Meridia, the Government’s evidence
forth strict requirements regarding . . .
searches, the Government argues that was limited to a photograph of a white
recordkeeping.’’); United States v.
Respondent possessed and was engaged professional sample bottle and the DI’s
Poulin, 926 F. Supp. 246, 250 (D. Mass.
in the manufacture of marijuana, a unsupported assertion, with no other
1996) (‘‘The [CSA] focuses on
schedule I controlled substance. Request evidence to establish that the bottle was
recordkeeping, in an attempt to regulate
for Final Agency Action, at 8–9 (citing seized from Respondent’s residence, let
closely the distribution of certain
21 U.S.C. 841(a)(1), 844(a); 812(c)). alone that there were any pills in the
substances determined by Congress to
Second, the Government alleges that bottle when it was seized.
pose dangers, if freely available, to the So too, with respect to the
public at large.’’) (int. quotations and during the search of Respondent’s
residence, several vials of controlled hydrocodone and clonazepam, there is
citation omitted); Paul H. Volkman, 73 no evidence other than photographs and
FR 30630, 30644 (2008) substances were found including one
each of clonazepam and hydrocodone, the DI’s unsupported assertion that
(‘‘Recordkeeping is one of the CSA’s these drugs were seized during the
central features; a registrant’s accurate the latter being in an unlabeled vial, as
well as stock bottles of Meridia and search of Respondent’s residence. To be
and diligent adherence to this obligation sure, in his declaration, Respondent
is absolutely essential to protect against diazepam, and that Respondent’s
possession of the drugs violated federal stated that he prescribed the
the diversion of controlled hydrocodone and clonazepam to his
substances.’’). law because he was not registered at his
residence. Id. (citing 21 U.S.C. 844(a); wife for several procedures. However,
Respondent’s recordkeeping 21 CFR 1301.75(b)). Third, the Respondent explicitly denied having or
violations alone are sufficiently Government alleges that Respondent storing clonazepam or hydrocodone at
egregious to support the conclusion that violated state law by failing to report to his home and his statements do not
he ‘‘has committed such acts [which] the Washington Prescription Monitoring constitute an admission of any part of
render[ed] his registration . . . Program some 45 instances in which he this allegation. Accordingly, these
inconsistent with the public interest.’’ dispensed more than a twenty-four hour allegations fail for lack of substantial
21 U.S.C. 824(a)(4); see also Volkman, supply of a controlled substance. Id. at evidence.
73 FR at 30644 (holding that I also find that substantial evidence
9.
recordkeeping violations alone can supports the remaining marijuana-
As for the latter allegation, related allegation—that on February 2,
support revocation or denial of an Respondent did not dispute that he had
application). 2012, Respondent violated federal law
failed to report various dispensings to by possessing marijuana, and that he
Factor Three—Respondent’s Conviction the State’s PMP. Resp. Decl., at 8. did so with the intent to distribute. Most
Record Under Federal and State Laws Rather, he claimed his violations were significantly, it is undisputed that upon
Related to the Manufacture, unintentional because he was unaware the February 2, 2012 arrest of TB,
Distribution, and Dispensing of of the law but would now comply. Id. (Respondent’s then live-in girlfriend
Controlled Substances However, this is not a valid defense and now wife), who was then driving
as the Washington courts follow the his car, the police impounded his
As found above, following a jury trial, traditional rule that ignorance of the law vehicle and during the subsequent
on December 19, 2014, Respondent was is no excuse. See State v. Reed, 928 P.2d search of the vehicle found one pound
convicted by the United States District 469, 471 (Wash. Ct. App. 1997) (other of marijuana and $5,000 in cash; the
Court on seven felony counts related to citation omitted). Accordingly, I find police also found $3,900 in cash in TB’s
the manufacture and distribution of that Respondent violated Washington purse.
marijuana, including conspiracy to law by failing to report various As found above, the street value of the
distribute or manufacture marijuana, dispensings to the State’s PMP. See marijuana was approximately $1,500 to
three counts of manufacturing Wash. Rev. Code § 70.225.020(2). $1,800, and the quantity would provide
marijuana, and three counts of approximately 900 joints. Respondent
31 As to the latter offense, the CSA renders it denied having any knowledge of the
no weight on this evidence. As for the unlawful to ‘‘knowingly use[] or maintain any
mstockstill on DSK4VPTVN1PROD with NOTICES
marijuana, asserting that it had been left
Government’s assertion that Respondent failed to place, whether permanently or temporarily, for the
maintain a ‘‘dispensing/administration log for purpose of manufacturing, distributing, or using
in his car by LHE, a friend of TB and
testosterone and Testim samples,’’ Request for Final any controlled substance.’’ 21 U.S.C. 856(a)(1). As a purported medical marijuana patient
Agency Action, at 8; there is no evidence that he the evidence shows that Respondent used and who TB allowed to borrow his car, and
dispensed any Testim samples. As for the maintained the three properties for the purpose of provided an unsworn statement from
testosterone, the evidence does suggest that manufacturing marijuana and not simply as places
Respondent administered approximately 300 mg or to use the drugs, I conclude that his convictions for
LHE to this effect. However, as I found
1.5 vials without documenting the administrations maintaining drug-involved premises fall within above, her statement (that she left the
in his dispensing log. See 21 CFR 1304.03(d). factor three. marijuana in the car because she was in
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such a hurry to return the car to TB and in Respondent’s vehicle, support a registrant has committed acts
forgot it) is utterly ludicrous.32 I finding that the marijuana was intended inconsistent with the public interest, the
therefore reject Respondent’s for distribution. See United States v. registrant must accept responsibility for
explanation for why the police found Collins, 412 F.3d 515, 519 (4th Cir. [his] actions and demonstrate that [he]
one pound of marijuana in his car. 2005) (holding that ‘‘intent to distribute will not engage in future misconduct.’’
Moreover, given the closeness of the can be inferred from a number of Medicine Shoppe, 73 FR at 387; see also
relationship between Respondent and factors, including . . . the quantity of Jackson, 72 FR at 23853; John H.
TB in that they were living together and drugs’’ and ‘‘the amount of cash seized Kennedy, 71 FR 35705, 35709 (2006);
that TB also worked for him, I find it with the drugs.’’). I further find that Prince George Daniels, 60 FR 62884,
implausible that Respondent lacked Respondent ‘‘had the right to exercise 62887 (1995). See also Hoxie, 419 F.3d
knowledge of the marijuana. Rather, I dominion and control over’’ the at 483 (‘‘admitting fault’’ is ‘‘properly
find that Respondent had the ability to marijuana ‘‘either directly or through’’ consider[ed]’’ by DEA to be an
exercise dominion or control over the TB. United States v. Staten, 581 F.2d ‘‘important factor[]’’ in the public
marijuana through TB and thus 878, 883 (D.C. Cir. 1978). I therefore find interest determination). So too, in
constructively possessed the drug. See that Respondent knowingly possessed making the public interest
United States v. Sanders, 341 F.3d 809, marijuana with the intent to distribute determination, ‘‘this Agency also places
816 (8th Cir. 2003) (‘‘ ‘To prove it.33 See 21 U.S.C. 841(a)(1). great weight on an [applicant’s] candor,
constructive possession, the government Based on Respondent’s violation of both during an investigation and in [a]
had to present evidence that appellants federal law by possessing marijuana subsequent proceeding.’’ Robert F.
had knowledge and ownership, with the intent to distribute, as well as Hunt, 75 FR 49995, 50004 (2010) (citing
dominion or control over the his admitted failure to report multiple The Lawsons, Inc., t/a The Medicine
contraband itself, or dominion over the dispensings of controlled substances to Shoppe Pharmacy, 72 FR 74334, 74338
vehicle in which the contraband is the Washington PMP, I find that factor (2007) (quoting Hoxie, 419 F.3d at 483)
concealed.’ ’’) (quoting Ortega v. United four also supports a finding that he has (‘‘Candor during DEA investigations
States, 270 F.3d 540, 545 (8th Cir. committed acts which rendered his properly is considered by the DEA to be
2001)). registration ‘‘inconsistent with the an important factor when assessing
So too, Respondent’s attempt to public interest.’’ 34 21 U.S.C. 823(f) & whether a . . . registration is consistent
explain the presence of the large sum of 824(a)(4). with the public interest.’’)).
cash (nearly $9,000) that was found in Moreover, while a registrant must
his car and on his wife’s person does Sanction accept responsibility and demonstrate
not persuade. As for the money which Under Agency precedent, where, as that he will not engage in future
was purportedly paid by a patient the here, ‘‘the Government has proved that misconduct in order to establish that
day before as a deposit on a liposuction a registrant has committed acts granting his application for registration
procedure, as found previously, while inconsistent with the public interest, the is consistent with the public interest,
the ‘‘Price Quote’’ document indicates registrant must ‘ ‘‘present sufficient DEA has repeatedly held these are not
that the patient paid a $5,000 cash mitigating evidence to assure the the only factors that are relevant in
deposit, the date was clearly written Administrator that [he] can be entrusted determining whether to grant or deny an
over. And while the purported patient with the responsibility carried by such application. See, e.g., Joseph Gaudio, 74
provided a letter to support Respondent, a registration.’’ ’ ’’ Medicine Shoppe— FR 10083, 10094 (2009); Southwood
it too was unsworn. Jonesborough, 73 FR 364, 387 (2008) Pharmaceuticals, Inc., 72 FR 36487,
As an additional explanation for why (quoting Samuel S. Jackson, 72 FR 36504 (2007). Obviously, the
so much money was found in his car, 23848, 23853 (2007) (quoting Leo R. egregiousness and extent of a
Respondent stated that the money had Miller, 53 FR 21931, 21932 (1988))). registrant’s misconduct are significant
been withdrawn to pay for remodeling ‘‘Moreover, because ‘past performance is factors in determining the appropriate
his clinic. To support this claim, the best predictor of future disposition. Cf. Jacobo Dreszer, 76 FR
Respondent submitted a copy of a bank performance,’ ALRA Labs, Inc. v. DEA, 19386, 19387–88 (2011) (explaining that
statement (on which the various 54 F.3d 450, 452 (7th Cir. 1995), [DEA] a respondent can ‘‘argue that even
balances are blacked out), which has repeatedly held that where a though the Government has made out a
documents that he made a withdrawal prima facie case, his conduct was not so
nine days before his girlfriend was 33 In his Declaration, Respondent disputed that he egregious as to warrant revocation’’); see
arrested. However, Respondent offered owned the marijuana plants, the processed also Paul H. Volkman, 73 FR 30630,
no further evidence to support this marijuana, and related items that were seized in the 30644 (2008); Gregory D. Owens, 74 FR
contention, and in any event, his searches of his three properties. See Resp. Decl., at 36751, 36757 n.22 (2009).
3 (‘‘I have three rental properties. I had
explanation begs the question of why he irresponsible tenants that took advantage of the
Moreover, as I have noted in several
would risk the potential theft or loss of locations by cultivating Marijuana for 6 months cases, ‘‘ ‘[n]either Jackson, nor any other
a large sum of cash, rather than pay for without my knowledge.’’). He also claimed that agency decision, holds . . . that the
the purported remodeling with a check because he was a busy physician, who did not Agency cannot consider the deterrent
bother his tenants if they paid their rent and did
or credit card. not request repairs, he ‘‘did not know of . . . nor
value of a sanction in deciding whether
I therefore find that both the quantity . . . in any way participate in the growing of a registration should be [suspended or]
of the marijuana (which would provide marijuana at these rental houses.’’ Id. at 4. Based revoked,’ ’’ or whether an application
a single person with three joints a day on Respondent’s convictions for conspiracy to should be denied. Gaudio, 74 FR at
manufacture marijuana, unlawful manufacture of
mstockstill on DSK4VPTVN1PROD with NOTICES
for approximately ten months), and the marijuana at each of the three grow houses, and
10094 (quoting Southwood, 72 FR at
large amount of cash which was found maintaining drug-involved premises at each of the 36503 (2007)); see also Robert Raymond
three residences, I reject his assertions as utterly Reppy, 76 FR 61154, 61158 (2011);
32 As also noted, in a March 3, 2012 letter to the false. Michael S. Moore, 76 FR 45867, 45868
local prosecutor in which Respondent sought the 34 Having already addressed the various false
(2011). This is so, both with respect to
return of his car, he denied having any knowledge statements regarding the marijuana-related
of the marijuana that was found therein. See Resp. allegations which Respondent has made in his
the respondent in a particular case and
Decl., at Ex. 4. Yet he made no mention of LHE’s declaration, I deem it unnecessary to repeat this the community of registrants. See
story. See id. discussion under factor five. Gaudio, 74 FR at 10095 (quoting
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Southwood, 71 FR at 36504). Cf. who had borrowed his car to obtain her DEPARTMENT OF JUSTICE
McCarthy v. SEC, 406 F.3d 179, 188–89 medical marijuana but who was in such
(2d Cir. 2005) (upholding SEC’s express a hurry to return the car that she forgot Drug Enforcement Administration
adoption of ‘‘deterrence, both specific to retrieve it even though it was her [Docket No. 11–71]
and general, as a component in medicine. So too, Respondent’s
analyzing the remedial efficacy of alternative explanations for why Cove Inc., D/B/A Allwell Pharmacy;
sanctions’’). thousands of dollars of cash were found Decision and Order
As found above, the Government has in his car defy credulity. Similarly, his
established that Respondent: 1) claim that he was unaware of the On April 23, 2013, Administrative
committed multiple recordkeeping marijuana growing activities which Law Judge Christopher B. McNeil
violations in that he did not have were being conducted at not one, not (hereinafter, ALJ) issued the attached
required inventories, was missing two, but three of his properties, is Recommended Decision.1 Neither party
invoices, and his dispensing log lacked clearly disingenuous.36 Accordingly, filed exceptions to the ALJ’s
required information; 2) was engaged in based on his various false statements Recommended Decision.
the manufacture and distribution of regarding the marijuana-related activity, Having reviewed the record in its
marijuana; and 3) failed to report as well as his blatantly false assertion entirety and the Recommended
multiple dispensings of controlled that he has never been subject to Decision, I have decided to adopt the
substances to the Washington PMP. I discipline by a state licensing authority ALJ’s findings of fact and conclusions of
find that the proven misconduct is (all of which are clearly material to the law, except as discussed below. I further
sufficiently egregious to affirm the outcome of this proceeding), I further adopt the ALJ’s recommended order that
Order of Immediate Suspension and to find that Respondent lacks candor. Respondent’s application be denied.
deny his pending application to renew Based on his failure to acknowledge As explained in the ALJ’s
his registration. See, e.g., Moore, 76 FR his misconduct, his failure to offer any Recommended Decision, in making the
at 45870 (imposing one-year suspension credible evidence of remedial efforts, public interest determination, Congress
on physician who manufactured and his lack of candor, I conclude that directed the Agency to consider ‘‘the
marijuana, notwithstanding ALJ’s Respondent has failed to present applicant’s experience in dispensing
finding that physician accepted sufficient evidence to rebut the . . . controlled substances.’’ 21 U.S.C.
responsibility and demonstrated he Government’s prima facie showing that 823(f)(2). The evidence showed that
would not engage in future his registration would be ‘‘inconsistent Respondent’s President and majority
misconduct).35 I further find that the with the public interest.’’ 21 U.S.C owner is Mrs. Ogechi Abalihi, and that
Agency’s interest in deterring similar 823(f); see also id. 824(a)(4). Therefore, while Mrs. Abalihi is a registered nurse,
acts on the part of both Respondent and I will affirm the issuance of the Order she is not a pharmacist and has no
others supports the denial of his of Immediate Suspension and order that experience working in a retail
pending application. any pending application to renew pharmacy. Moreover, when questioned
Having carefully reviewed both during the pre-registration
Respondent’s registration be denied.
Respondent’s declaration, I further find investigation and at the hearing as to
that Respondent has not accepted ORDER whether she was familiar with the
responsibility for his misconduct. Pursuant to the authority vested in me federal controlled-substance
Regarding his recordkeeping violations, by 21 U.S.C. 823(f) and 824(a), as well recordkeeping and security
Respondent entirely denied that he as 28 CFR 0.100(b), I affirm the Order requirements for retail pharmacies, Mrs.
failed to keep the required inventories of Immediate Suspension of DEA Abalihi responded by stating, in
and that he was missing various Certificate of Registration BL6283927, essence, that those matters would be
invoices. Moreover, he further claimed addressed by the pharmacist she would
issued to Keith Ky Ly, D.O. I further
that the reason his dispensing log was retain. Tr. 143–46. In her testimony,
order that the application of Keith Ky
missing essential information such as Mrs. Abalihi also made clear that she
Ly, D.O., to renew his registration, be,
patient addresses was because there was lacks knowledge of these requirements
and it hereby is, denied. This Order is
no room to make these entries. Yet in as they pertain to retail pharmacies,
effective June 19, 2015.
DEA’s experience, thousands of other stating that ‘‘if there’s a requirement for
registrants who engage in dispensing Dated: May 11, 2015.
me to do anything, know these things,
have no problem complying with the Michele M. Leonhart, study them, I will do them. But when
latter requirements. Administrator. I applied I was not made to understand
With respect to the marijuana [FR Doc. 2015–12139 Filed 5–19–15; 8:45 am] that I need to know all this.’’ Id. at 144.
allegations, Respondent offered the far- BILLING CODE 4410–09–P This is truly a remarkable answer,
fetched story that the marijuana which fully demonstrates why granting
belonged to an acquaintance of his wife, 36 With regard to his failure to report dispensings
Respondent’s application ‘‘would be
to the Washington PMP, Respondent claimed that inconsistent with the public interest.’’
35 In Moore, I agreed with the ALJ’s finding that he was unaware of the law. However, the legislation
the physician’s conduct in manufacturing and which created the Washington PMP was enacted in 21 U.S.C. 823(f). Notwithstanding that
distributing marijuana supported revocation of his 2007, more than four years earlier, and as a the Order to Show Cause specifically
registration. 76 FR at 45868. However, I also agreed physician who engaged in the highly regulated alleged that the Agency’s investigation
with the ALJ’s finding that the physician had activity of dispensing controlled substances, found Mrs. Abalihi ‘‘had no knowledge
accepted responsibility for his misconduct and Respondent was obligated to keep abreast of
demonstrated that he would not engage in future legislation and regulatory developments applicable of DEA regulations pertaining to the
mstockstill on DSK4VPTVN1PROD with NOTICES
misconduct. Id. By contrast, here, the record to his medical practice. Moreover, while handling of controlled substances and
establishes that in addition to his marijuana-related Respondent asserted that he is now aware of the related security requirements,’’ ALJ Ex.
misconduct, for which he disingenuously denies requirement and will comply in the future, his 1, at 1; she still lacked knowledge of
any responsibility, Respondent also committed various statements regarding the events at issue
multiple recordkeeping violations and violated state (including that he had never been disciplined by a these requirements when she testified
law by failing to report numerous dispensings to the state board) support a finding that he lacks candor.
State PMP. Also, in contrast to Moore, I find that Accordingly, I give no weight to his statement that 1 The ALJ’s Recommended Decision is cited as
Respondent has not accepted responsibility for his he would comply with the State’s PMP reporting R.D.; all citations to the Recommended Decision are
misconduct. requirement in the future. to the slip opinion issued by the ALJ.
VerDate Sep<11>2014 23:50 May 19, 2015 Jkt 235001 PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 E:\FR\FM\20MYN1.SGM 20MYN1](https://thefederalregister.org/doc/80_FR_29122/page/13.svg)
Document Created: 2018-02-21 10:29:34
Document Modified: 2018-02-21 10:29:34
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 29025 |
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