80 FR 29037 - Cove Inc., D/B/A Allwell Pharmacy; 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 | 29037-29053 | |
| FR Document | 2015-12131 |
[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)] [Notices] [Pages 29037-29053] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-12131] ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 11-71] Cove Inc., D/B/A Allwell Pharmacy; Decision and Order On April 23, 2013, Administrative Law Judge Christopher B. McNeil (hereinafter, ALJ) issued the attached Recommended Decision.\1\ Neither party filed exceptions to the ALJ's Recommended Decision. --------------------------------------------------------------------------- \1\ The ALJ's Recommended Decision is cited as R.D.; all citations to the Recommended Decision are to the slip opinion issued by the ALJ. --------------------------------------------------------------------------- Having reviewed the record in its entirety and the Recommended Decision, I have decided to adopt the ALJ's findings of fact and conclusions of law, except as discussed below. I further adopt the ALJ's recommended order that Respondent's application be denied. As explained in the ALJ's Recommended Decision, in making the public interest determination, Congress directed the Agency to consider ``the applicant's experience in dispensing . . . controlled substances.'' 21 U.S.C. 823(f)(2). The evidence showed that Respondent's President and majority owner is Mrs. Ogechi Abalihi, and that while Mrs. Abalihi is a registered nurse, she is not a pharmacist and has no experience working in a retail pharmacy. Moreover, when questioned both during the pre-registration investigation and at the hearing as to whether she was familiar with the federal controlled- substance recordkeeping and security requirements for retail pharmacies, Mrs. Abalihi responded by stating, in essence, that those matters would be addressed by the pharmacist she would retain. Tr. 143- 46. In her testimony, Mrs. Abalihi also made clear that she lacks knowledge of these requirements as they pertain to retail pharmacies, stating that ``if there's a requirement for me to do anything, know these things, study them, I will do them. But when I applied I was not made to understand that I need to know all this.'' Id. at 144. This is truly a remarkable answer, which fully demonstrates why granting Respondent's application ``would be inconsistent with the public interest.'' 21 U.S.C. 823(f). Notwithstanding that the Order to Show Cause specifically alleged that the Agency's investigation found Mrs. Abalihi ``had no knowledge of DEA regulations pertaining to the handling of controlled substances and related security requirements,'' ALJ Ex. 1, at 1; she still lacked knowledge of these requirements when she testified [[Page 29038]] some two years later.\2\ While neither the Controlled Substances Act (CSA), nor the Agency's regulations, prohibits a pharmacy, which is owned by a non-pharmacist, from holding a DEA registration, the holder of the registration is ultimately accountable for ensuring compliance by its pharmacists with the requirements of the CSA and the Agency's regulations. See United States v. Southern Union Co., 630 F.3d 17, 31 (1st Cir. 2010), rev'd on other grounds, 132 S.Ct. 2344 (2012) (quoted in Holiday CVS, L.L.C., d/b/a CVS/Pharmacy Nos. 219 and 5195, 77 FR 62315, 62317 (2012) (``[T]hose who manage companies in highly regulated industries are not unsophisticated. . . . It is part of [a company's] business to keep abreast of government regulation.'')). --------------------------------------------------------------------------- \2\ While Ms. Abalihi testified that she was not told prior to her interview with the DIs that ``she needed to study anything,'' Tr. 136, the Show Cause Order clearly provided notice that her lack of knowledge of DEA regulations was at issue. --------------------------------------------------------------------------- It is indisputable that absent knowledge of the CSA and the Agency's regulations, a registrant cannot properly supervise its pharmacists to protect against the diversion of controlled substances.\3\ Thus, Mrs. Abalihi's admitted lack of knowledge of these requirements provides reason alone to conclude that granting Respondent's application ``would be inconsistent with the public interest.'' 21 U.S.C. 823(f). --------------------------------------------------------------------------- \3\ Pharmacies which handle controlled substances are subject to extensive recordkeeping and security requirements. See 21 CFR 1301.75-1301.76 (security requirements); id. Sec. Sec. 1304.03- 1304.06; 1304.21-1304.22 (recordkeeping and reporting requirements). In addition, as the ALJ explained, their pharmacists are charged with the responsibility of dispensing only those prescriptions which are ``issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.'' 21 CFR 1306.04(a). See also generally 21 CFR part 1306 (setting forth various other requirements pertaining to prescriptions and the dispensing of controlled substances by pharmacies). --------------------------------------------------------------------------- I further adopt the ALJ's conclusion that the evidence with respect to factor five--such other conduct which may threaten public health and safety--supports the denial of Respondent's application. More specifically, the ALJ found that both Mrs. Abalihi and Ms. Taylor, who purportedly was to be Respondent's pharmacist-in-charge, made materially false statements to the Investigators when they were questioned regarding who would act as Respondent's pharmacist. However, upon review of the record, including the pleadings, I adopt the ALJ's conclusion only with respect to Ms. Taylor. The evidence showed that when DEA Diversion Investigators (DI or DIs) asked Mrs. Abalihi who would manage the pharmacy, she stated that Ms. Jacinta Taylor would do so. Tr. 34. Subsequently, the DIs interviewed Ms. Taylor, who is a licensed pharmacist (and the owner of ten percent of Respondent) and who stated that she would be the pharmacist-in-charge at Respondent. Id. at 38. Ms. Taylor also told the DIs that she would order the controlled substances and that the pharmacy would be open from nine to six on weekdays and nine to one on Saturday. Id. at 38-39. However, during the interview, Ms. Taylor told the DIs that she had a full time position at a Sweetbay Pharmacy in Tampa, and worked between the hours of ten to eight. Id. at 39. A DI further testified that according to the State Pharmacy Board, Ms. Taylor was not listed as Respondent's supervising pharmacist. Id. When the DI asked Ms. Taylor ``about that,'' she replied that ``she would leave Sweetbay if and when [Respondent] started to make money.'' Id. at 40. The DIs then asked Ms. Taylor who would be Respondent's pharmacist- in-charge given her full time position at Sweetbay and intent to continue working there until Respondent became profitable; Ms. Taylor identified a Ms. Mustafa, a co-worker at Sweetbay. Id. However, when the DIs told Ms. Taylor that they wanted to talk to Ms. Mustafa, Ms. Taylor stated that she did not think that Ms. Mustafa would want to be interviewed and added, ``[w]ell, perhaps she won't work there.'' Id. at 41. Subsequently, one of the DIs called Mrs. Abalihi and ``asked her to put [him] in touch with Ms. Mustafa.'' Id. at 42. While Mrs. Abalihi stated that she would contact Ms. Mustafa and either get her phone number for the DI ``or have her call'' him, he never received a call from Ms. Mustafa. Id. Ms. Taylor did not testify at the hearing. However, in an affidavit, Ms. Taylor stated that she ``was caught `flat footed' '' by the question and ``thought'' that Ms. Mustafa, ``another pharmacist who worked at Sweetbay, . . . might be willing to serve such role.'' RX 7, at 2. Ms. Taylor further acknowledged that at the time of the interview, she ``had not made formal arrangements for [a] replacement and had not yet asked Ms. Mustafa whether she would be willing to fulfill such role, but thought that Ms. Mustafa would be so willing.'' Id. Moreover, in her testimony, Ms. Abalihi stated that she did not know Ms. Mustafa, that she had never spoken with her, and that there was ``no plan'' to have her work at Respondent. Tr. 138-39. And when asked by the ALJ whether in March 2011, Ms. Taylor had told her ``that she would be relying on Ms. Mustafa,'' Mrs. Abalihi answered that Taylor ``did not say she would be relying on Ms. Mustafa, no. She said the name came to her when this question was thrown to her. She wasn't expecting it, but the name came to her.'' Id. at 161. Notwithstanding her assertion that she was caught flatfooted, Ms. Taylor's affidavit, as well as Ms. Abalihi's testimony, establishes that Taylor had no basis in fact for her statement to the Investigators that Ms. Mustafa would be Respondent's pharmacist-in-charge until Ms. Taylor decided to start working there. Accordingly, Ms. Taylor's statement was false. Moreover, her statement was materially false in that it had the capacity to influence the Agency's decision to grant Respondent's application, because of the obvious need to determine whether those who will actually engage in dispensing activities on behalf of a proposed pharmacy registrant, hold the necessary state license and have not previously violated federal or state laws related to controlled substances. See 21 U.S.C. 823(f)(2) & (4) (directing Agency to consider the applicant's experience in dispensing controlled substances and compliance with applicable laws related to controlled substances); see also 21 CFR 1301.76(a) (``The registrant shall not employ, as an agent or employee who has access to controlled substances, any person who has been convicted of a felony offense relating to controlled substances or who, at any time, had an application for registration with the DEA denied, had a DEA registration revoked or has surrendered a DEA registration for cause.''). I do not, however, adopt the ALJ's legal conclusion that Mrs. Abalihi made a material misrepresentation when she subsequently agreed to provide Ms. Mustafa's contact information rather than disclose that she knew nothing about Ms. Mustafa's role with the pharmacy. R.D. at 32. In support of his reasoning, the ALJ explained that ``[i]f Ms. Abalihi intended on using contract pharmacists at the start of Allwell's operation, she had an affirmative duty to say so when DEA investigators asked her about the role Ms. Mustafa was to play. By her silence, and by promising to provide contact information for Ms. Mustafa, Ms. Abalihi misled the investigators.'' Id. It may be that Ms. Abalihi misled the investigators, but the record is far from clear on this point. More specifically, while the record establishes that the DI called Ms. Abalihi and asked her about getting contact information for Ms. Mustafa, the record does not establish that the Investigator ever specifically ``asked her about the role Ms. Mustafa [[Page 29039]] was to play.'' Most significantly, the Government never alleged in either the Show Cause Order or its pre-hearing statements that Ms. Abalihi made a materially false statement or materially misled the DIs when she promised to get Ms. Mustafa's contact information. Nor did the Government make any such argument in its post-hearing brief.\4\ Accordingly, because the Government never provided notice in the charging documents that it intended to litigate the issue and makes no claim that the issue was litigated by consent, I reject the ALJ's conclusion that Mrs. Abalihi materially misled the Investigators.\5\ See Kenneth Harold Bull, 78 FR 62666, 62674 (2013); CBS Wholesale Distributors, 74 FR 36746, 36749-50 (2009). That being said, the material misrepresentation of Ms. Taylor, who owned ten percent of Respondent and who was designated by Respondent's majority owner as its pharmacist-in-charge, is properly charged to Respondent and supports the denial of its application under factor five. --------------------------------------------------------------------------- \4\ For the same reason, I need not decide whether, even assuming that Ms. Abalihi lacked the intent to deceive when she told the Investigators that she would obtain Ms. Mustafa's contact information, she had a duty to correct any erroneous information she provided the Investigators upon being told by Ms. Taylor that there was no plan for Ms. Mustafa to work at Respondent. \5\ I reject ALJ Finding of Fact number 5 and Conclusion of Law number 5 only to the extent they are based on the statements of Ms. Abalihi. --------------------------------------------------------------------------- Moreover, even as of the date of the hearing, the Agency still does not know who will be Respondent's pharmacist-in-charge. Beyond Ms. Taylor's statement that she did not intend to leave her job at Sweetbay Pharmacy until Respondent is profitable, the evidence further showed that at the time of the hearing, Ms. Taylor had left the Tampa area and was working at a pharmacy in Orlando. RX E; Tr. 156-57. Moreover, Ms. Taylor did not testify at the hearing. Because Respondent has failed to provide material information as to who will be its pharmacist-in-charge and oversee the dispensing of the controlled substances and compliance with the Agency's various regulations, I hold that the Agency had demonstrated that granting its application ``would be inconsistent with the public interest.'' 21 U.S.C. 823(f). * * * * * In the Show Cause Order, the Government also alleged as a basis for denial of the application that ``Mrs. Abalihi's husband participated in [the] unlawful dispensing of controlled substances that were prescribed over the Internet by physicians who did not personally examine the patients'' and that ``[t]his dispensing occurred while he was a pharmacist at a pharmacy that surrendered its DEA registration in December 2007 because of these illicit dispensing practices.'' ALJ Ex. 1, at 1. The Show Cause Order further alleged that Mrs. Abalihi's husband told the Agency's Investigators ``that these dispensing practices were lawful and that he intended to apply for a DEA registration to open his own retail pharmacy.'' Id. at 1-2. The parties stipulated that Mrs. Abilihi's husband, Alfred Abilihi ``is a registered pharmacist, [and] was a pharmacist at Moon Lake pharmacy who dispensed controlled substances based on unlawful internet prescriptions prior to Moon Lake Pharmacy surrendering its DEA registration on December 17th, 2007.'' Tr. 11-12. The evidence shows that on November 29, 2007, a DEA Investigator received an anonymous phone call from a pharmacist who had worked at Moon Lake for one day, GX 6C, at 1; the pharmacist alleged that ``the pharmacy was engaging in internet drug trafficking of [h]ydrocodone.'' Tr. 74. Accordingly, on December 7, two DIs went to the pharmacy, which was located in New Port Richey, and ``after several minutes of examination . . . found that the pharmacy was solely engaged in internet drug trafficking of [h]ydrocodone and some [s]chedule IV drugs such as Xanax and Valium,'' in violation of 21 CFR 1306.04(a). Id. at 75. The DI further testified that after ``a few minutes of investigation,'' he and another DI ``discovered that there were two physicians,'' one located in Virginia and one located in New York City, ``who had sent . . . hundreds of prescriptions for [h]ydrocodone to Moon Lake Pharmacy for filling'' and that the purported patients were located ``throughout the 50 states of the United States.'' Id. at 77- 78. The DI further explained that ``there was no contact between the patients and the so-called physicians'' and ``[e]verything was based on the submission of a credit card number,'' with the ``payment of several hundred dollars to a company that used [Moon Lake] to fill the prescriptions'' and that ``Moon Lake . . . was getting $75 per filled [h]ydrocodone prescription.'' Id. at 78. According to the DI, the pharmacy was not open to the public and it ``was extremely small, it looked like 600 square feet'' with ``no seating area for walk-ins.'' Id. at 79. Also, ``[t]here was no over- the-counter merchandise'' and ``no merchandise . . . other than the controlled substances.'' Id. Continuing, the DI explained that ``[t]here was essentially nothing except the compounding equipment, a fax machine, a scale, the counter, [and] little else.'' Id. The DI identified one Vivian Alberto as the owner of the pharmacy. Id. at 78. However, Ms. Alberto was not a licensed pharmacist. Id. Indeed, the only pharmacist the Investigators encountered at Moon Lake was Mr. Alfred Abalihi. Id. at 80. According to the DI, he and his partner approached Mr. Abalihi and stated that they had found ``hundreds of prescriptions being filled for people that have no contact with two physicians, one in Virginia [and] one in New York.'' Id. at 84. After telling Mr. Abalihi that he was ``creating these labels, [and] you know what's going on,'' the DI asked him if he thought ``it's legal that the patients are far removed from the doctors with no contact and they're getting [h]ydrocodone.'' Id. at 85. Mr. Abalihi replied that he did not see a problem with filling the prescriptions and that ``it was legal and . . . ethical to do so.'' Id. at 80. The DI further testified that while interviewing Mr. Abalihi, the latter stated that ``he would like to open up his own pharmacy.'' Id. at 81.\6\ --------------------------------------------------------------------------- \6\ Six days later, Ms. Alberto voluntarily surrendered Moon Lake's DEA registration. Tr. 82. As the DI explained, he requested that Ms. Alberto surrender Moon Lakes' registration ``because everything [Ms. Alberto] was doing was criminal.'' Tr. 83. --------------------------------------------------------------------------- Mr. Abalihi testified that he worked for Moon Lake for only ``a few days,'' before the Investigators showed up and that he had obtained the job through a temporary staffing agency. Tr. 98-99. He further maintained that he did not know that Ms. Alberto was the owner because ``she speaks only Spanish'' and he does not. Id. at 102. He then claimed that prior to the Investigators' inspection of Moon Lake, no one at the pharmacy had explained how the prescriptions arrived there and that he had ``no'' idea how the patients obtained the prescriptions and that a Web site was used as part of the prescribing process. Id. at 102-03. And when asked whether he had any recollection that there was anything wrong with the prescriptions he filled for Moon Lake, Mr. Abalihi answered: ``No, I can't recollect.'' Id. at 103-04. In his testimony, Mr. Abalihi denied telling the Investigators that what he was doing was legal, as well as that he intended to open his own pharmacy. Id. at 104. He also claimed that the DIs ``didn't even tell me why they were there,'' although he also asserted that they told him that ``we didn't come here for you. If the pharmacy manager did what we told him to do the last time we came we wouldn't have been here.'' Id. [[Page 29040]] at 100-01.\7\ Yet, the evidence establishes that the DIs encountered Mr. Abalihi on their first visit to Moon Lake Pharmacy. GX 6C, at 2 (] 4). --------------------------------------------------------------------------- \7\ It is undisputed that Mr. Abalihi was never subjected to discipline by the Florida Board of Pharmacy. --------------------------------------------------------------------------- On cross-examination, Mr. Abalihi repeatedly maintained that he could not remember if he had dispensed prescriptions for hydrocodone or if hydrocodone was the main drug that was being dispensed at Moon Lake. Id. at 110-11. Indeed, Abalihi maintained that he could not recall having looked at any of the prescriptions he filled, did not know the size of the pharmacy, and could not recall whether Moon Lake was ``set up as a typical retail pharmacy'' and was ``selling other merchandise.'' Id. at 112. He also maintained that he did not discuss with anybody ``how they operate[d]'' and that ``[t]he only thing is that prescriptions were filled and brought to me to check, and I checked.'' Id.\8\ Moreover, when asked if he ``knew [that] what was going on at Moon Lake Pharmacy; that the operation was illegal with what they were doing with hydrocodone,'' Mr. Abalihi answered: ``I didn't say, sir.'' Id. at 120. --------------------------------------------------------------------------- \8\ When asked on cross-examination, whether as a Florida-based pharmacist, he would not fill a prescription issued by a New York doctor for a patient who lives in Georgia, Mr. Abalihi answered: It depends. If I see a prescription--and I call the doctor and verify that that prescription came there. I don't know if the doctor has met the patient. The onus lies on the doctor to make sure that he sees his patient, and my own is to make sure that the prescription is authentic. Tr. 114. However, Mr. Abalihi then testified that he did not recall that he ever called and asked a physician if he/she had contact with the patient when he worked at Moon Lake. Id. at 114-15. --------------------------------------------------------------------------- Mr. Abalihi also testified that he had tried to subsequently open his own pharmacy, but had withdrawn his application for a DEA registration after his then-attorney advised him that DEA intended to deny his application. Id. at 106. Moreover, Mr. Abalihi testified that he does not intend to work or otherwise operate Respondent and that he ``just wanted . . . to advise my wife how to do things,'' and he ``would have loved to work there, but the DEA wouldn't allow me to.'' Id. at 108. He further maintained that during the week, he works full time as a pharmacist at a Miami area pharmacy, and comes home to Tampa on the weekends. Id. at 109. Mr. Abalihi acknowledged that his wife had filed her application after he had withdrawn his application. Id. at 122. When asked if he had advised his wife regarding her application, he answered: ``I'm her husband. I knew she was going to apply to open a pharmacy.'' Id. After testifying that he did not have an ownership interest in Respondent and was neither a director nor officer of it, Mr. Abalihi further asserted he does not ``have any hand in running'' the pharmacy. Id. at 123. Likewise, Mrs. Abalihi asserted that she did not make her husband a co-owner of Respondent because he ``had tried in the past'' to ``open a pharmacy'' and was told by his counsel to withdraw his DEA application. Tr. 133. She further asserted that DEA has ``blacklisted'' her husband. Id. Mrs. Abalihi offered no testimony that her husband would not work at the pharmacy. According to Respondent's Exhibit C, which is a License Verification printout from the Florida Department of Health, Mr. Abalihi has a clear and active pharmacist license in the State of Florida, and has not been subject to discipline or a public complaint. RX C, at 1. Yet the License Verification printout also lists Mr. Abalihi's address of record as 1947 W. Dr. Martin Luther King Jr. Blvd. in Tampa, Florida. Id. This is the same address as Respondent. See RX B. Moreover, the License Verification printout does not list any secondary locations for Mr. Abalihi. Id. at 2. The ALJ rejected the Government's contention that Respondent's application should be denied because Mr. Abalihi's ``past negative history'' in dispensing controlled substances ``has a clear nexus'' to his wife's application. R.D. at 28-30 (citing Govt's Proposed Findings of Fact, Conclusions of Law, and Argument in Respondent to Respondent's Brief, at 10 (citing Matthew D. Graham, 67 FR 10229 (2002)). The ALJ rejected the Government's argument, noting that in Graham, the Agency had denied the application based on the misconduct of the applicant's business partner, who had previously surrendered a DEA registration for distributing large quantities of list I chemicals while having reasonable cause to believe they would be used to manufacture a controlled substance. See id. at 29. The ALJ thus reasoned that Graham was distinguishable because ``unlike the business plan presented by Ms. Abalihi, the registrant in Graham was economically tied to the third party'' but ``Ms. Abalihi presented a business plan that expressly removed Mr. Abalihi from all phases of the proposed pharmacy's operation'' and he ``would not directly participate as an officer or owner of'' Respondent. Id. While noting that Ms. Abalihi offered no testimony that ``she would prohibit her husband from working in the pharmacy,'' the ALJ credited her statement ``that she would keep her husband `apart from ownership and management' of the pharmacy.'' Id. The ALJ further reasoned that ``having considered the affidavit of Mr. Abalihi,\9\ and having considered the testimony from both Mr. and Mr. [sic] Abilihi, I find sufficient credible and unrebutted evidence to conclude Mr. Abalihi does not intend to perform a significant role in the operation of'' Respondent. Id. --------------------------------------------------------------------------- \9\ Having reviewed Mr. Abalihi's affidavit, I am at a loss as to what statement it contained that the ALJ found so persuasive on this issue. --------------------------------------------------------------------------- As for Mr. Abalihi's involvement at Moon Lake Pharmacy, the ALJ noted that he shared the same sense as the DIs ``that anyone in Mr. Abalihi's position would have had reason to question the legitimacy of the operation'' as well as the DIs' ``sense of incredulity that Mr. Abalihi would have failed to recognize the illegal nature of what was going on at Moon Lake, even though his stay there was brief.'' Id. at 29-30. After noting that Mr. Abalihi ``was not charged with any misconduct arising out of his service at Moon Lake,'' the ALJ explained that while ``Mr. Abalihi may have unwisely told the DEA investigators that Moon Lake's operations were legal . . . I cannot conclude from that piece of evidence that [he] was knowingly advancing Moon Lake's criminal enterprise when the DEA arrived.'' Id. at 30. Notwithstanding ``that the parties . . . stipulated that Mr. Abalihi dispensed controlled substances based on unlawful Internet prescriptions during his short tenure at Moon Lake,'' the ALJ explained that ``the most we can say for certain is that Mr. Abalihi was the pharmacist who was present when the DEA agents arrived at Moon Lake and brought its operation to an end.'' Id. And noting that Mr. Abalihi's record ``since then is unblemished,'' the ALJ reasoned that ``his plan to avoid direct involvement with [Respondent] adequately attenuates the link between him and the proposed pharmacy.'' Id. I reject the ALJ's conclusion that Mr. Abalihi was not knowingly advancing Moon Lake's criminal enterprise when DEA arrived. Indeed, this conclusion is irreconcilable with the ALJ's finding that there is ``sufficient credible evidence to conclude Mr. Abalihi was aware that the practices \10\ in this pharmacy were illegal.'' R.D. at 28. Moreover, as the ALJ found, the evidence shows that Mr. Abalihi committed criminal conduct by knowingly dispensing controlled substance prescriptions which were issued outside of the usual course of [[Page 29041]] professional practice and lacked a legitimate medical purpose. See 21 U.S.C. 841(a)(1); 21 CFR 1306.04(a). --------------------------------------------------------------------------- \10\ While I agree with the ALJ's finding, I do not rely on the DI's assertion that the pharmacy's compounding activities were illegal. --------------------------------------------------------------------------- Here, in addition to the stipulation that Mr. Abalihi dispensed controlled substances based on unlawful internet prescriptions, a DI testified that upon arriving at the pharmacy and reviewing the prescriptions, he found that the prescriptions were solely for hydrocodone, a schedule III controlled substance, and drugs such as Xanax and Valium, which are schedule IV benzodiazepines. Tr. 75. Most significantly, the evidence showed that the Investigators found that hundreds of prescriptions were being filled that had been written for controlled substances by two physicians, one of whom was located in Virginia and the other New York, and that the patients were located throughout the fifty States of the U.S. Id. at 77-78; 84. Moreover, the pharmacy did not have an area for walk-in patients, had no over-the- counter merchandise, and indeed, sold no merchandise other than controlled substances. Id. at 79. Under 21 CFR 1306.04(a), ``[a] prescription for a controlled substance . . . must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of . . . professional practice.'' Moreover, while ``[t]he responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner . . . a corresponding responsibility rests with the pharmacist who fills the prescription.'' Id. Accordingly, ``[a]n order purporting to be a prescription issued not in the usual course of professional treatment . . . is not a prescription within the meaning and intent of [21 U.S.C. 829] and the person knowingly filling such a purported prescription . . . shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances.'' Id.\11\ --------------------------------------------------------------------------- \11\ Well before Mr. Abalihi filled prescriptions for Moon Lake, several federal appeals courts had upheld the convictions of pharmacists under 21 U.S.C. 841(a)(1) for filling prescriptions which were issued over the internet by physicians, who did not practice in the same State where the patients resided, and who did not physically examine the patients, because the physician did not establish a legitimate doctor-patient relationship with the patient. See United States v. Nelson, 383 F.3d 1227, 1231-32 (10th Cir. 2004); United States v. Fuchs, 467 F.3d 889, 899-900 (5th Cir. 2006). So too, DEA had issued numerous decisions holding that both the act of prescribing over the internet, as well as the act of dispensing a prescription issued over the internet, by a physician who has either engaged in the unlicensed practice of medicine or failed to establish a legitimate doctor-patient relationship, violates 21 CFR 1306.04(a) and constitutes an unlawful distribution under 21 U.S.C. 841(a)(1). See United Prescription Services, Inc., 72 FR 50397, 50407-09 (2007); Trinity Health Care Corp., d/b/a Oviedo Discount Pharmacy, 72 FR 30849, 30855 (2007); EZRX, LLC, 69 FR 63178, 63181 (2004); see also William R. Lockridge, M.D., 71 FR 77791 (2006); Marvin L. Gibbs, Jr., M.D., 69 FR 11658 (2004); Rick Joe Nelson, M.D., 66 FR 30752 (2001). Moreover, in 2001, DEA issued a Guidance Document warning of the potential illegality of dispensing controlled substances based on prescriptions which were obtained through the internet and telephone consultations. DEA, Dispensing and Purchasing Controlled Substances over the Internet, 66 FR 21181, 21182-83 (2001). --------------------------------------------------------------------------- As held in numerous Agency decisions, under the Controlled Substances Act, ``it is fundamental that a practitioner must establish a bonafide doctor-patient relationship in order to act `in the usual course of . . . professional practice' and to issue a prescription for a `legitimate medical purpose.' '' See, e.g., David A. Ruben, M.D., 78 FR 38363, 38380 (2013) (citing United States v. Moore, 423 U.S. 122, 142-43 (1975); other citations omitted). So too, DEA has held that a physician who engages in the unauthorized practice of medicine, such as by prescribing controlled substances to patients who reside in a State where he/she is not licensed to practice, acts outside of the usual course of professional practice and therefore violates the CSA for this reason as well. United Prescription Services, 72 FR 50397, 50407 (2007) (``A controlled-substance prescription issued by a physician who lacks the license necessary to practice medicine within a State is therefore unlawful under the CSA.''). As the Supreme Court has explained: ``In the case of a physician, [the CSA] contemplates that he is authorized by the State to practice medicine and to dispense drugs in connection with his professional practice.'' Moore, 423 U.S. at 140-41 (emphasis added). Thus, I reject the ALJ's portrayal of Mr. Abalihi as a hapless bystander who was in the wrong place at the wrong time when the DIs arrived at Moon Lake. To the contrary, as the ALJ found, there was ``sufficient credible evidence to conclude [that he] was aware that the practices in this pharmacy were illegal.'' R.D. at 28. Indeed, the respective locations of the two prescribing physicians and the patients, who were located through the country, made it clear to Mr. Abilihi that the prescriptions lacked a legitimate medical purpose and were issued outside of the usual course of professional practice. 21 CFR 1306.04(a). Moreover, even if it was not immediately apparent to Mr. Abalihi that he was aiding and abetting a criminal enterprise, surely at some point during his first day at Moon Lake a reasonable pharmacist would have reached this conclusion, and in any event, Mr. Abalihi went back to the pharmacy a second day.\12\ --------------------------------------------------------------------------- \12\ The ALJ ``note[d] that Mr. Abalihi was not charged with any misconduct arising out of his service at Moon Lake.'' R.D. at 30. As has been repeatedly explained, this is totally irrelevant because there are any number of reasons why neither a prosecutor nor a state licensing body may bring charges. See Robert L. Dougherty, M.D., 76 FR 16823, 16833n.13 (2013). Rather, what matters is his underlying misconduct. --------------------------------------------------------------------------- In short, the evidence shows that Mr. Abalihi violated his corresponding responsibility and the CSA by filling prescriptions which lacked a legitimate medical purpose and were issued outside of the usual course of professional practice. Id.; see also 21 U.S.C. 841(a)(1). Moreover, Mr. Abalihi's testimony makes clear that he still does not understand the scope of his obligations in dispensing controlled substances. As found above, when asked if he would not fill a prescription written by a New York physician for a patient who lives in Georgia, he testified, in essence, that if he called the doctor and the doctor verified the prescription, he wouldn't ``know if the doctor ha[d] met the patient'' and that ``[t]he onus lies on the doctor to make sure that he sees his patient.'' Tr. 114. Not only did Mr. Abalihi offer no testimony that he had called either of the doctors whose prescriptions he filled while at Moon Lake, his understanding of the scope of his obligations under federal law has been repeatedly rejected by both this Agency and multiple United States Courts of Appeal. As the Fifth Circuit has explained, ``[v]erification by the issuing practitioner on request of the pharmacist is evidence that the pharmacist lacks knowledge that the prescription was issued outside the scope of professional practice. But it is not an insurance policy against a fact-finder's concluding that the pharmacist had the requisite knowledge despite a purported but false verification.'' United States v. Hayes, 595 F.2d 258, 261 (5th Cir. 1979). Thus, simply calling a physician to verify a prescription is not enough because a pharmacist has ``the responsibility not to fill an order that purports to be a prescription but is not a prescription within the meaning of the statute because he knows [or has reason to know] that the issuing practitioner issued it outside the scope of medical practice.'' Id. (quoted in East Main Street Pharmacy, 75 FR 66149, 66164 (2010)); see also United States v. Henry, 727 F.2d 1373, 1379 (5th Cir. 1984); Medic-Aid Pharmacy, 55 FR 30043, [[Page 29042]] 30044 (1990); Frank J. Bertolino, 55 FR 4729, 4730 (1990). Nor--notwithstanding that it is couched as being based on credibility findings--do I find persuasive the ALJ's conclusion that the link between Mr. Abalihi and Respondent is adequately attenuated because Mrs. Abalihi has kept her husband ``apart from [the] ownership and management of'' Respondent and Mr. Abalihi ``plan[s] to avoid direct involvement with'' the pharmacy. R.D. at 29-30. While Graham is undoubtedly distinguishable from this case, it does not reflect the limits of the Agency's authority to deny an application or revoke an existing registration based on the misconduct of a third party, particularly where that third party is a family relation of the applicant's principal. Indeed, in numerous cases--none of which are discussed in the Recommended Decision--the Agency has either revoked existing registrations or denied applications of pharmacies based on the closeness of the relationship between a person who diverted controlled substances or committed other serious CSA violations and another party who is either the applicant or new owner of a pharmacy. Accordingly, the Agency has held that it ``may look to who exerts influence over the registrant'' in determining whether to deny an application or revoke a registration. See, e.g., City Drug Co., 64 FR 59212, 59214 (1999). As the Agency explained in City Drug: ``sometimes the bonds linking the former owner to the new owner are too close to ensure that the former owner will have no influence over the operation of the pharmacy.'' Id. (citing Monk's Pharmacy, 52 FR 8988, 8989 (1987) and Carriage Apothecary, Inc., 52 FR 27599, 27599 (1987)). In Monk's Pharmacy, the Agency denied an application of a pharmacy, noting that the former owner, who had been convicted of a felony relating to controlled substances, had transferred ownership to his children and to a third-party, who was a registered pharmacist. 52 FR at 8988. The Agency denied the application, noting ``that the bonds linking the convicted [former pharmacy owner] with his children and the subject pharmacy are too close to permit a reasonable certainty that he will have no authoritative voice in its operation.'' Id. at 8989. So too, in Carriage Apothecary, the pharmacy's owner, who had committed recordkeeping violations, had transferred the stock of the corporation which owned the pharmacy to his children. 52 FR at 27599. Noting that ``[t]he Administrator has long held that he can look behind a corporate fa[ccedil]ade to determine who makes the decisions concerning the controlled substance business of a pharmacy,'' the Agency revoked the pharmacy's registration, holding that while the pharmacy was now owned by the children of the former owner, neither child was a pharmacist, and the former owner ``continues to exert influence or control over [the pharmacy] through the family-held corporation.'' Id. Moreover, in Unarex of Plymouth Road, d/b/a Motor City Prescription and Unarex of Dearborn, d/b/a/Motor City Prescription Center, 50 FR 6077 (1985), two pharmacists, who had been convicted of CSA violations (conspiracy and unlawful distribution), had transferred both their ownership interests and their respective office or directorship to their spouses. Noting that both pharmacists ``share[d] indirectly in the profits of'' the two pharmacies, the Agency revoked the registration of both pharmacies, holding that ``[i]t is appropriate that both registrations be revoked in light of this continued benefit'' received by the pharmacists.\13\ Id. at 6079. --------------------------------------------------------------------------- \13\ While the Administrator noted that one of the pharmacists continued to work in one of the stores, and thus declined to believe that this pharmacist ``no longer exerts influence over the operation'' of the pharmacy, no such evidence was presented as to the second store. 50 FR at 6079. --------------------------------------------------------------------------- Lawsons & Sons Pharmacy and Fenwick Pharmacy, 48 FR 16140 (1983), involved two pharmacies whose pharmacist was convicted of unlawfully distributing controlled substances. At the time of the proceeding, the pharmacist's wife owned 100 percent of one of the pharmacies and fifty percent of the other.\14\ Therein, the registrants provided an affidavit from the pharmacist's wife ``stat[ing] that she is an active and knowledgeable officer of each of the corporations and has come to understand the operation of the pharmacies,'' and that ``she ha[d] great trust in the two pharmacists she ha[d] hired to run these pharmacies and that her husband has withdrawn from [his] involvement in the pharmacies''; the registrants also provided an affidavit from one of the registrant's managing pharmacists stating that he understood that the convicted pharmacist's wife would ``discourage'' her husband ``from entering the store'' upon his release from incarceration. Id. at 16141. The Agency nonetheless rejected the registrants' evidence and revoked both registrations, holding that while the convicted pharmacist's wife ``has always had some administrative duties in the store, she is not a trained pharmacist and relies on the advice of the managing pharmacists at both stores. In light of [the convicted pharmacist's] past activities, the Acting Administrator cannot conclude that he will not attempt to exert some form of control over one or both of the pharmacies.'' Id. --------------------------------------------------------------------------- \14\ The Agency's decision does not state who owned the other fifty percent of this pharmacy. --------------------------------------------------------------------------- Here, the totality of the circumstances leads me to reject the ALJ's conclusion that the link between Mr. Abalihi and Respondent is too attenuated to support (in addition to the other bases set forth above) the denial of the latter's application.\15\ Notably, Mrs. Abalihi submitted the application only after Mr. Abalihi was informed (by his attorney) that the local DEA field office intended to deny his application and he withdrew it.\16\ --------------------------------------------------------------------------- \15\ The ALJ ``question[ed] whether there is a sufficient link established between Mr. Abalihi's past work at Moon Lake Pharmacy and Cove, Inc.'s proposal to operate'' Respondent. R.D. at 28; see also id. at 31 (``[T]he facts shown here do not establish the kind of ties that link Mr. Abalihi's past brief involvement with Moon Lake's illegal operation to the operation proposed by the Respondent here.''). To the extent the ALJ was suggesting that to the deny the application on this basis, the Government must show that Mrs. Abalihi intended to operate Respondent as a pharmacy which filled prescriptions obtained by soliciting customers over the internet and which were issued by physicians who did not establish a valid doctor-patient relationship with the customers, the Government was not required to make such a showing. Rather, it was only required to show that Mr. Abalihi had committed violations of the CSA and that there was reason to believe that he would exert influence or control over Respondent's operation. \16\ While the Abalihis maintain that they have been ``blacklisted'' by DEA, Tr. 98 & 133; instead of withdrawing his application, Mr. Abalihi could have challenged the proposed denial of his application and would have been entitled to a hearing. See 21 U.S.C. 824(c). At that hearing, he could have challenged the Government's evidence as well as put forward evidence relevant to the issue of whether his registration would be consistent with the public interest. See id. Sec. 823(f). --------------------------------------------------------------------------- Indeed, Mrs. Abalihi admitted that the reason she did not make her husband a co-owner was because of his prior failed attempt to obtain a DEA registration. Tr. 133. So too, while Mr. Alabihi was not made a shareholder of Respondent, he is married to Respondent's principal owner and would thus share, at least indirectly, in any of Respondent's profits. See Unarex, 50 FR at 6079. Mr. Abalihi would thus have a strong economic incentive to exercise influence over Respondent's operation.\17\ See id. --------------------------------------------------------------------------- \17\ While in Graham, there clearly was a business arrangement between the applicant and his partner (who had diverted list I chemicals), consistent with the cases discussed above, I reject the ALJ's reasoning that Graham is distinguishable on ground that ``unlike the business plan presented by Ms. Abalihi, the registrant in Graham was economically tied to the third party.'' R.D. at 29. Contrary to the ALJ's understanding, the Abalihi's marriage establishes that Mr. and Mrs. Abalihi are economically tied. Cf. Califano v. Jobst, 434 U.S. 47, 54 (1977) (``Both tradition and common experience support the conclusion that marriage is an event which normally marks an important change in economic status.''); Women Involved in Farm Economics v. USDA, 876 F.2d 994, 1005 (D.C. Cir. 1989) (noting with approval the assumption that ``whatever their roles, married men and women constitute one economic unit''). While I conclude that Mrs. Abalihi submitted the pending application as part of a ruse by the Abalihis to obtain a registration after Mr. Abalihi withdrew his application, and that the Abalihis planned all along for Mr. Abalihi to be Respondent's pharmacist-in-charge, contrary to the ALJ's understanding, the Agency's case law does not require that the Government prove that Mr. Abalihi ``intend[ed] to perform a significant role in the operation of'' Respondent. R.D. at 29. --------------------------------------------------------------------------- [[Page 29043]] Moreover, notwithstanding that Mr. Abalihi was not made a shareholder or officer, Mrs. Abalihi offered no testimony that he would not work at the pharmacy. R.D. at 29. Indeed, Respondent's own evidence shows that Mr. Abalihi listed Respondent as his address of record for his pharmacist license with the Florida Department of Health.\18\ RX C. Thus, while Mr. Abalihi claimed that he had no intention of working at Respondent, he offered no explanation for the inconsistency between his testimony and his action in listing Respondent as his address of record. Moreover, given Mr. Abalihi's claim, it is strange that he signed the return receipt card, manifesting service of the Show Cause Order, which was mailed to Respondent at its physical location of 1947 W. Dr. Martin Luther King Blvd. See GX 1, at 2. Thus, while the ALJ found credible Mr. Abalihi's testimony that he did not intend to work at Respondent, the ALJ never reconciled his finding with this evidence. --------------------------------------------------------------------------- \18\ Mr. Abalihi also testified that he was working full time at a pharmacy in Miami. Tr. 109. Yet he did not list this pharmacy as either his address of record or as a secondary location with the Florida Department of Health, see RX C, and I find it implausible that he would continue working full time in Miami if Respondent obtained a registration given the expense of hiring a pharmacist. --------------------------------------------------------------------------- Finally, Ms. Taylor, who Mrs. Abalihi represented as being Respondent's pharmacist-in-charge, told the DIs that she did not intend to leave her then-position at Sweetbay Pharmacy until Respondent was profitable. Moreover, when questioned as to who would be the pharmacist during the interim period, Ms. Taylor gave the name of a person she had never asked. Ms. Taylor, who has since taken a position in Orlando, did not testify in the proceeding, and while she did submit an affidavit, the affidavit contains no statement that she still intends to become Respondent's pharmacist-in-charge. Indeed, Mrs. Abalihi still has not disclosed who will be Respondent's pharmacist-in-charge.\19\ The evidence thus suggests that the plan all along was for Mr. Abalihi to be Respondent's pharmacist-in-charge. --------------------------------------------------------------------------- \19\ Notwithstanding that many of the Agency cases have involved pharmacies whose prior owners were convicted of criminal offenses, a criminal conviction of either the pharmacy or its pharmacist/owner is not required to sustain the denial of an application or the revocation of a registration. For example, in Carriage Apothecary, the pharmacy and pharmacist were not convicted of any offense but agreed to pay a civil penalty. 52 FR at 27599. --------------------------------------------------------------------------- Accordingly, based on the record as a whole, I reject the ALJ's conclusion that the links between the applicant and Mr. Abalihi are sufficiently attenuated to conclude that he will exercise no influence or control over Respondent.\20\ I further conclude that the record supports a finding that Mrs. Abalihi submitted the application as part of a ruse to obtain a registration after her husband withdrew his application. This finding provides additional reason to reject the application.\21\ --------------------------------------------------------------------------- \20\ I therefore reject the ALJ's finding of fact number seven. See R.D. at 34. I also reject the ALJ's conclusion of law number four. See id. at 35-36. \21\ In one of Respondent's filings, it asserts that its case is ``most analogous'' to the Agency's decision in Terese, Inc., D/B/A Peach Orchard Drugs, 76 FR 46843 (2011). It's not. In Terese, the Government sought the revocation of the registration of a pharmacy, which was owned by the wife of a pharmacist, who along with his pharmacy, had been convicted of health care fraud and required to surrender his DEA registration as part of his sentence. While the Government argued that the pharmacy was simply the alter ego of a previous pharmacy, which had been subject to mandatory exclusion from federal health care programs by virtue of its conviction, see 21 U.S.C. 824(a)(5) and 42 U.S.C. 1320a-7(a), I noted that the respondent was not subject to mandatory exclusion but rather only permissive exclusion, and that Congress had not granted the Agency authority to revoke a registration on the latter basis. 76 FR at 46846-48. While the Government also alleged that the former pharmacy and its pharmacist had diverted controlled substances, I rejected the allegation for lack of substantial evidence. Id. at 46846 & n.9. However, I also explained that ``had the evidence established that [the owner's husband or the former pharmacy had] violated the CSA or state controlled substance laws, the Agency case law on piercing the corporate veil would authorize the revocation of [the] [r]espondent's registration.'' Id. --------------------------------------------------------------------------- ORDER Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well as 28 CFR 0.100(b), I order that the application of Cove, Incorporated, doing business as Allwell Pharmacy, for a DEA Certificate of Registration as a retail pharmacy, be, and it hereby is, denied. This order is effective immediately. Dated: May 11, 2015. Michele M. Leonhart, Administrator. Brian Bayly, Esq., for the Government Daniel G. Musca, Esq., and Brian C. Chase, Esq., for the Respondent RECOMMENDED RULINGS, FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECISION OF THE ADMINISTRATIVE LAW JUDGE Nature of the Proceeding Christopher B. McNeil, Administrative Law Judge. On March 3, 2011, Ogechi E. Abalihi submitted a request on behalf of Cove, Inc., seeking a new retail pharmacy DEA Certificate of Registration, allowing it to dispense controlled substances through a business that would be known as Allwell Pharmacy in Tampa, Florida. On July 26, 2011, finding cause to believe this registration would be inconsistent with the public interest, the Drug Enforcement Administrator, through the Deputy Assistant Administrator, issued an order to show cause why the Administrator should not deny the application. In response, on August 22, 2011, the Respondent requested an extension of the time permitted to file a response, which was granted by DEA Administrative Law Judge Timothy J. Wing. Judge Wing thereafter received what he found to be a waiver of Cove, Inc.'s right to a hearing on the matter and terminated the administrative review Cove had requested. In her review of the record, the Administrator concluded there were factual disputes that warranted further development and remanded the matter to the Office of Administrative Law Judges, with instructions to permit the parties to present evidence at a hearing to be conducted in Tampa, Florida. At this point, Judge Wing was no longer with the DEA Office of Administrative Law Judges, so Administrative Law Judge Gail Randall issued an order for prehearing statements. On December 3, 2012, prior to the submission of prehearing statements, Chief Administrative Law Judge John J. Mulrooney II reassigned the case from ALJ Randall to the undersigned, and I presided over an evidentiary hearing conducted in Tampa, Florida, on February 13, 2013. Issue The general issue to be adjudicated by the Administrator, with the assistance of this recommended decision, is whether the record as a whole establishes, by substantial evidence, that Cove, Inc.'s application for a Certificate of Registration with the DEA should be denied as inconsistent with the public interest, as that term is used in 21 U.S.C. Sec. 823(f). The issue arose after DEA investigators completed an evaluation of the evidence supporting Cove, Inc.'s application. In this evaluation, investigators learned that the 90 percent owner of Cove, Inc., Ogechi Abalihi, R.N., had no experience as a pharmacist and limited knowledge about DEA regulations pertaining to the retail distribution of controlled substances. Investigators also found that the ten percent owner of Cove, Inc., pharmacist Jacinta Taylor, was not planning on being present at the pharmacy until after it became profitable. The investigators noted that Ms. Taylor gave them conflicting information regarding who would serve as Allwell's pharmacist up to the time when Ms. Taylor would participate in the operation of the pharmacy. Investigators also [[Page 29044]] were concerned that Ms. Abalihi's husband, Alfred Abalihi, R. Ph., although not a Cove, Inc. shareholder or manager of Allwell, had been associated with a different pharmacy that had been compelled to surrender its DEA Certificate in 2007 due to illegal dispensing operations. Based on the information presented to them in the course of Cove, Inc.'s application, the Diversion Investigators concluded that granting Cove, Inc. a Certificate of Registration would be inconsistent with the public interest, prompting the show cause order that would deny this application. The specific issue thus is whether by at least a preponderance of the evidence the Government has established that granting a DEA Certificate of Registration to Cove, Inc. would be inconsistent with the public interest, as that term is used in 21 U.S.C. 823(f) After carefully considering the testimony elicited at the hearing, examining the admitted exhibits, evaluating the arguments of counsel, and weighing the record as a whole, I have set forth my recommended findings of fact, conclusions of law, and analysis below, recommending that the DEA deny Cove, Inc.'s Application for a Certificate of Registration. Evidence Allwell Pharmacy's proposed DEA-registered location is 1947 W. Dr. Martin Luther King, Jr. Blvd., Tampa, Florida 33609. The proposed DEA-registered location is not open for business or operating at this time as a pharmacy or other commercial business, but the pharmacy is licensed as a retail pharmacy in the State of Florida and retains a Florida community pharmacy license. Allwell Pharmacy's owner is Cove, Inc., and the corporation has two shareholders: Ogechi E. Abalihi, who owns 90 percent of the company, and Jacinta Taylor, who owns ten percent.\1\ --------------------------------------------------------------------------- \1\ Tr. at 10-11. --------------------------------------------------------------------------- Ms. Abalihi has no experience either as a pharmacist or owning a retail pharmacy, but she does have extensive experience as a Registered Nurse licensed as such since 2001, and throughout such period has worked with controlled substances. Jacinta Taylor has extensive experience working as a Florida-licensed pharmacist, working as a pharmacist and dispensing controlled substances.\2\ --------------------------------------------------------------------------- \2\ Id. --------------------------------------------------------------------------- Testimony from the DEA Diversion Investigators Kenneth Boggess has been a Diversion Investigator for the DEA for 26 years.\3\ He graduated from the Federal Law Enforcement Training Center in 1980 and from the FBI Academy in 1986.\4\ In this course of study, he has become familiar with sections of the Code of Federal Regulations, with the identification of controlled substances, and with the means and processes of illegally diverting controlled substances.\5\ Throughout his tenure as a DEA Diversion Investigator, Mr. Boggess has participated in continuing education courses and has participated in numerous investigations, including those pertaining to pharmacies.\6\ --------------------------------------------------------------------------- \3\ Tr. at 30. \4\ Id. \5\ Id. at 32. \6\ Id. at 31. --------------------------------------------------------------------------- Investigator Boggess explained that he was involved in evaluating the application submitted by Cove, Inc., the Respondent in this matter.\7\ Part of that evaluation included meeting with one of Cove, Inc.'s two owners, Ogechi Abalihi.\8\ He said his first meeting with Ms. Abalihi took place on March 22, 2011, at the DEA's Tampa office, and that DEA Diversion Investigator Ira Wald also attended this meeting.\9\ --------------------------------------------------------------------------- \7\ Id. at 32. \8\ Id. \9\ Id. at -32-33. --------------------------------------------------------------------------- According to Investigator Boggess, Ms. Abalihi obtained her nursing degree in Lagos, Nigeria, and moved to New York in 1992.\10\ He said that upon arriving in New York, Ms. Abalihi worked for a health care corporation, moving to Tampa in the early 2000s, where she began working with the Veterans Administration as a part-time nurse.\11\ --------------------------------------------------------------------------- \10\ Id. at 33. \11\ Id. at 33-34. --------------------------------------------------------------------------- As part of the application investigation, Investigator Boggess said he questioned Ms. Abalihi about her plan to manage the proposed pharmacy. He said when he asked Ms. Abalihi who would actually manage Allwell Pharmacy, she told him it would be managed by the other co-owner, Jacinta Taylor.\12\ According to Investigator Boggess, Ms. Abalihi is the 90 percent owner of Cove, Inc., and Ms. Taylor is the ten percent owner.\13\ Investigator Boggess said he questioned Ms. Abalihi about the business relationship between her and Ms. Taylor, and was told she met Ms. Taylor in 2010, in the course of treatment in a therapist's office.\14\ --------------------------------------------------------------------------- \12\ Id. at 34. \13\ Id. at 36. \14\ Id. at 34. --------------------------------------------------------------------------- During the interview conducted on March 22, 2011, Investigator Boggess questioned Ms. Abalihi about how the proposed pharmacy would maintain its records and maintain compliance with DEA regulations concerning the dispensing of controlled substances.\15\ When asked, on cross examination, whether this kind of questioning was part of his ``standard operating procedure,'' Investigator Boggess said yes, adding that Tampa ``has significant problems with applicants here, and the Internet problems and this oxycodone problem.'' \16\ He explained that the questions he uses when evaluating an applicant have been generated through suggestions from DEA headquarters and from the experiences of DEA officers in Tampa, but that these questions are not published for public consumption.\17\ There was, however, some indication, according to Investigator Boggess, that word of the kind of questions being asked in these applications is getting around, such that the applicants ``have a good idea what we're going to ask.'' \18\ --------------------------------------------------------------------------- \15\ Id. at 35. \16\ Id. at 60. \17\ Id. \18\ Id. at 61. --------------------------------------------------------------------------- Investigator Boggess explained that when he questions an applicant about the applicant's knowledge of DEA regulations, he ends the inquiry if it is clear the person knows nothing about those regulations, because ``there's no point in badgering someone.'' \19\ That appears to have been the case here, during his interview with Ms. Abalihi. He described his questions as being ``simple,'' and gave as an example: ``How do you plan on maintaining your invoices?'' \20\ Investigator Boggess said in response to the questions he posed regarding DEA regulations, Ms. Abalihi deferred all questions about controlled substances and about the security of those substances to Ms. Taylor, electing not to answer them herself.\21\ When asked who would be responsible for ordering controlled substances being dispensed in the pharmacy, Ms. Abalihi told Investigator Boggess that she intended to give Ms. Taylor power of attorney, and they would use either Harvard Drug or Cardinal as their wholesale supplier.\22\ --------------------------------------------------------------------------- \19\ Id. at 64. \20\ Id. \21\ Id. at 36. \22\ Id. --------------------------------------------------------------------------- The following week, Investigator Boggess contacted Jacinta Taylor and met with her on March 30, 2011 at the DEA office in Tampa, along with Investigator Wald.\23\ Investigator Boggess said after confirming her identity and her credentials as a pharmacist, he inquired about the proposed business operation.\24\ He said Ms. Taylor confirmed that she met Ms. Abalihi ``socially at some type of therapy session'' in 2010.\25\ He testified that Ms. Taylor initially told him she would be the pharmacist in charge of the pharmacy when it opened, and that she expected to be the person who would order controlled substances, most likely using Great Lakes Harvard Drug as the pharmacy's supplier.\26\ She told him the pharmacy would be operating from 9:00 a.m. until 6:00 p.m., Mondays through Fridays, and from 9:00 a.m. until 1 p.m. on Saturdays, and would be closed on Sundays.\27\ --------------------------------------------------------------------------- \23\ Id. at 37. \24\ Id. at 37-38. \25\ Id. at 38. \26\ Id. \27\ Id. at 38-39. --------------------------------------------------------------------------- When Investigator Boggess considered these operating hours, he asked Ms. Taylor about her current employment and the hours she was on duty with that job, as a pharmacist at Sweetbay. According to Investigator Boggess, Ms. Taylor then acknowledged working at Sweetbay on a full-time basis, with hours from 10:00 a.m. until 8:00 p.m.\28\ When this scheduling conflict was brought to Ms. Taylor's attention, Investigator Boggess said Ms. Taylor amended her previous answer: rather than stating she would be the pharmacist in charge of the pharmacy when it opened, she told him that she would leave her job at Sweetbay ``if and when Allwell started to make money.''\29\ Investigator Boggess pursued this inquiry, asking Ms. Taylor who would be Allwell's pharmacist in charge in the meantime. In response, Ms. Taylor told [[Page 29045]] him the interim pharmacist in charge would be a coworker of hers, Dalya Mustafa.\30\ --------------------------------------------------------------------------- \28\ Id. at 39. \29\ Id. at 40. \30\ Id. --------------------------------------------------------------------------- When he learned that Ms. Taylor intended to use Ms. Mustafa as the interim pharmacist in charge of the applicant pharmacy, Investigator Boggess told Ms. Taylor he would need to interview Ms. Mustafa, given the significant role Ms. Mustafa would be playing with the new pharmacy.\31\ According to Investigator Boggess, at this point in the interview Ms. Taylor ``stuttered and said, `Well, perhaps [Ms. Mustafa] won't work there.''' \32\ At the conclusion of this interview, Investigator Boggess called Ms. Abalihi and asked if she would provide contact information so that he could call Ms. Mustafa and confirm the role she would be playing in the proposed pharmacy.\33\ According to Investigator Boggess, Ms. Abalihi talked with Investigator Boggess on either the 30th or 31st of March 2011, and told him she would contact Ms. Mustafa and either have her call him or provide him with her phone number. Investigator Boggess said that despite this, Ms. Mustafa never contacted him and he heard nothing further from Ms. Abalihi regarding Ms. Mustafa.\34\ --------------------------------------------------------------------------- \31\ Id. at 41. \32\ Id. \33\ Id. at 41. \34\ Id. at 42. --------------------------------------------------------------------------- In addition to inquiring of Ms. Abalihi how Cove, Inc. would ensure compliance with DEA controlled substance regulations, Investigator Boggess said he and Investigator Wald were also concerned about the role Alfred Abalihi--Ms. Abalihi's husband-- would play in the new pharmacy. Here, both Investigator Wald and Investigator Boggess described an investigation their office conducted four years earlier, involving Moon Lake Pharmacy. According to Investigator Boggess, during the initial interview on March 22, 2011 Investigator Wald told Ms. Abalihi that he had conducted an inspection of Moon Lake Pharmacy back in 2007, and that during this inspection Mr. Abalihi was the pharmacist on duty.\35\ Investigator Boggess said that the inspection of Moon Lake had been prompted by information indicating it was illegally distributing controlled substances over the Internet.\36\ Investigator Boggess said that during the inspection of Moon Lake, Mr. Abalihi told Investigator Wald that, while he knew nothing about the owner or operator of the pharmacy and was only working on a short-term contractual basis through his employer, HealthCare Consultants, he believed there was nothing illegal about what Moon Lake was doing and added that ``he himself . . . wouldn't mind opening a pharmacy'' of his own.\37\ --------------------------------------------------------------------------- \35\ Id. at 35. \36\ Id. at 35. \37\ Id. --------------------------------------------------------------------------- The record reflects that Moon Lake surrendered its DEA Certificate of Registration shortly after this inspection, based on the investigators' charge that the operation was illegal. The record also shows that Mr. Abalihi was then dispatched to serve as a temporary pharmacist at numerous other locations, as an employee of HealthCare Consultants, all without incident or disciplinary action. Investigator Boggess testified that at the conclusion of the investigation into Cove, Inc.'s application for DEA registration, DEA's Diversion Group Supervisor, Roberta Goralczyk determined that the application should be denied.\38\ He said he then spoke to both Ms. Abalihi and Ms. Taylor, and learned that Ms. Taylor wished to withdraw the application but that Ms. Abalihi would not drop the request for the DEA Certificate.\39\ Investigator Boggess told Ms. Taylor, however, that as she was not the actual applicant, she could not withdraw the application.\40\ He said that after this discussion, both Ms. Taylor and Ms. Abalihi spoke with him at the end of March, 2011 and asked for a list of the DEA's objections, indicating that they both wished to have the application go forward.\41\ --------------------------------------------------------------------------- \38\ Id. at 43. \39\ Id. \40\ Id. at 44. \41\ Id. --------------------------------------------------------------------------- Investigator Boggess testified that as of January 2013, when he last drove past Allwell's proposed location, the pharmacy had not opened.\42\ He added that five other pharmacies were operating within a few hundred yards of the proposed location, all in close proximity to St. Joseph's Hospital.\43\ He said he recently visited these pharmacies, and confirmed they all held DEA Certificates allowing them to dispense controlled substances.\44\ Through this testimony, Investigator Boggess established there is an ongoing concern by pharmacists regarding the proliferation of pain medication prescriptions, particularly regarding OxyContin 15 and 30 mg. tablets.\45\ On cross examination, Investigator Boggess confirmed that it is common for health care professionals and pharmacies to cluster around a hospital.\46\ He also confirmed that there is no evidence to suggest St. Joseph's Hospital is a ``pill mill hospital,'' nor did he believe there was evidence to suggest any of the pharmacies constituted problems for the DEA with respect to their dispensation practices.\47\ --------------------------------------------------------------------------- \42\ Id. at 45. \43\ Id. \44\ Id. at 45-46. \45\ Id. at 47-59. \46\ Id. at 65. \47\ Id. at 66-67. --------------------------------------------------------------------------- During his visit to David's Pharmacy on January 18, 2013, Investigator Boggess observed a sign on the divider between the pharmacy and the patients indicating that the pharmacy would not dispense oxycodone 15 or 30 mg. tablets.\48\ He said he spoke with the owner, pharmacist David Cataya, and to Mr. Cataya's wife, Carmen, about concerns the pharmacist had regarding the dispensing of controlled substances in this neighborhood.\49\ He learned the pharmacist saw the trend for oxycodone had gone down, but that demand for hydromorphone (Dilaudid) had gone up such that it was now the drug of choice of drug seekers in their neighborhood.\50\ As a result, the pharmacist preferred to fill controlled substance prescriptions only for those individuals who could prove they lived in the neighborhood and who were his established customers.\51\ --------------------------------------------------------------------------- \48\ Id. at 47. \49\ Id. at 48. \50\ Id. \51\ Id. at 50. --------------------------------------------------------------------------- Investigator Boggess described making similar trips to and receiving similar input from four other nearby pharmacies, including Hillsborough River Compounding Pharmacy, run by Mr. Uba, Care Plus Pharmacy run by Mr. Bakari, CVS Pharmacy, run by Mr. Alicea, and Walgreens Pharmacy, run by Mr. Luu. In these interviews, Investigator Boggess learned that the nearby hospital did not generate many prescriptions for controlled substances.\52\ He also learned that while some of those he interviewed felt there was a high demand for oxycodone, not all found there to be a shortage.\53\ Mr. Alicea reported attempts by drug seeking customers to seek out oxycodone and to attempt to learn the price charged for the drug, prompting Mr. Alicea to refuse to fill prescriptions for more than 100 dosage units of the drug, and to post a sign in the pharmacy stating ``No Oxycodone,'' in large print on an 8 by 11 sheet of paper at the pharmacy counter.\54\ At the Walgreens Pharmacy, Mr. Luu reported there was a high demand for oxycodone, and that he would not fill prescriptions for Schedule II medications.\55\ --------------------------------------------------------------------------- \52\ Id. at 49, 51. \53\ Id. at 51-55. \54\ Id. at 56. \55\ Id. at 59. --------------------------------------------------------------------------- When asked on cross examination why he waited until 2013 to conduct these interviews with the nearby pharmacies, Investigator Boggess agreed that ``the two-year delay is a good question, period, for this whole process,'' but that he was working with 30 other applications at the time and the interviews were done when he ``finally got around to [them]''.\56\ He added, however, that there is no regulation that requires his office to avoid saturation of a market when evaluating an application for a pharmacy.\57\ He specifically denied any practice of denying an application based on over-saturation in the Tampa Bay area.\58\ --------------------------------------------------------------------------- \56\ Id. at 68. \57\ Id. at 69. \58\ Id. at 70. --------------------------------------------------------------------------- DEA Diversion Investigator Ira Wald also testified. He stated he has been a Division Investigator for 38 years, having been hired in 1975 and having completed several months of initial training in DEA auditing techniques, legal procedure, and investigative techniques, with periodic refresher courses.\59\ Mr. Wald stated that from this course of study, and based on his experience in investigating the application of pharmacies seeking DEA certification, he is familiar with the Code of Federal Regulations pertaining to the distribution and dispensing of controlled substances.\60\ --------------------------------------------------------------------------- \59\ Id. at 72-3. \60\ Id. at 73-4. --------------------------------------------------------------------------- With respect to his concerns about the role Mr. Abalihi might play in the operation of Allwell Pharmacy, Investigator Wald testified that in 2007, after receiving an anonymous call about Moon Lake Pharmacy, he visited [[Page 29046]] the pharmacy at its location in New Port Richey, Florida.\61\ Investigator Wald said that after determining that the pharmacy was engaged in Internet trafficking of hydrocodone, Xanax, and Valium, and after determining there were violations of compounding regulations, Investigator Wald questioned the pharmacist present at the time of this visit--Alfred C. Abalihi, who is Ms. Abalihi's husband.\62\ --------------------------------------------------------------------------- \61\ Id. at 75. \62\ Id. at 79. --------------------------------------------------------------------------- According to Investigator Wald, the pharmacy was small--about 600 square feet in size--and it did not appear it was open to the public, but was instead a compounding site.\63\ Investigator Wald said the compounding room had thousands of hydrocodone capsules in a transparent two-gallon jug, along with 100 grams of pure hydrocodone powder.\64\ According to Investigator Wald, this type of storage was a violation because ``compounding by definition requires that the compounder, the pharmacist, make up the prescription[s] one at a time pursuant to need, not thousands beforehand pursuant to projected sales possibilities.'' \65\ According to Investigator Wald, when questioned about this operation, Mr. Abalihi stated he ``saw no problem with it,'' and stated ``it was legal and proper, ethical to do so''.\66\ Mr. Abalihi added that ``he would like to open up his own pharmacy.'' \67\ --------------------------------------------------------------------------- \63\ Id. \64\ Id. at 76. \65\ Id. \66\ Id. at 80. \67\ Id. at 81. --------------------------------------------------------------------------- When asked during cross examination about Moon Lake's compounding methods, Investigator Wald stated he did not know if compounding in advance based on anticipated need was permitted under Florida law, but knew that federal law forbids advanced compounding absent registration as a manufacturer.\68\ Investigator Wald also acknowledged that upon his initial visit to Moon Lake Pharmacy, he did not see Mr. Abalihi actually compounding drugs, and from his review of the pharmacy records he did not see Mr. Abalihi listed as either the prescription department manager or as an officer or director of the pharmacy.\69\ --------------------------------------------------------------------------- \68\ Id. at 86. \69\ Id. at 88. --------------------------------------------------------------------------- Investigator Wald explained that after meeting with Mr. Abalihi at Moon Lake Pharmacy he arranged to meet with the pharmacy's owner, Vivian Alberto.\70\ During this meeting and a meeting that followed shortly thereafter, Investigator Wald requested and received the surrender of the pharmacy's DEA registration, putting the pharmacy out of business ``because everything [Ms. Alberto] was doing was criminal.'' \71\ --------------------------------------------------------------------------- \70\ Id. at 82. \71\ Id. at 83. --------------------------------------------------------------------------- Moon Lake Pharmacy surrendered its former DEA registration number, FM0523870, on or about December 17, 2007, because the pharmacy dispensed controlled substances based on illegal Internet prescriptions. The parties have stipulated that Mr. Abalihi was a pharmacist at Moon Lake who dispensed controlled substances based on unlawful Internet prescriptions.\72\ The parties also have stipulated that Mr. Abalihi was never an owner, officer, pharmacist- in-charge, or prescription department manager of Moon Lake Pharmacy.\73\ --------------------------------------------------------------------------- \72\ Id. at 11-12. \73\ Id. --------------------------------------------------------------------------- Regarding the initial investigation into Cove, Inc.'s application for a DEA Certificate of Registration for Allwell Pharmacy, Investigator Wald confirmed the testimony of Investigator Boggess regarding standard procedures in these investigations. He said it is normal for his office to quiz new DEA applications on their familiarity with DEA regulations.\74\ Further, he said his office requires the applicants to meet with the investigators, to describe their operations, their backgrounds, and their professional expertise in operating a pharmacy--this because of the ``many criminal violations coming from retail pharmacies.'' \75\ --------------------------------------------------------------------------- \74\ Id. at 89. \75\ Id. at 89. --------------------------------------------------------------------------- Investigator Wald confirmed the salient points addressed by Investigator Boggess. He recalled that during the initial interviews with Ms. Abalihi and Ms. Taylor, he and Investigator Boggess asked about the ownership of Cove, Inc., and about Ms. Abalihi's training, education, and experience with pharmacies in the past, and about how much of her attention she was going to devote to the pharmacy.\76\ The record reflects that under her proposed business plan, Ms. Abalihi would operate the retail pharmacy herself, along with a co- owner who is a registered pharmacist and who would be responsible for dispensing controlled substances. He also confirmed Investigator Boggess's observation that St. Joseph's Hospital, which is near the location of the proposed Allwell Pharmacy, is not currently regarded as a ``pill mill,'' and that while it does generate prescriptions for controlled substances, it does not dispense them--patients who are treated at the hospital but who are not actually admitted to the hospital will, for the most part, fill their prescriptions off- site.\77\ --------------------------------------------------------------------------- \76\ Id. at 91. \77\ Id. at 92, 95. --------------------------------------------------------------------------- Testimony in Support of the Application Testifying in support of Cove, Inc.'s application, Ogechi E. Abalihi stated that she has a diploma of Nursing from Lagos University Teaching Hospital as well as a diploma in Midwifery from University College Hospital. Ms. Abalihi obtained both degrees in Nigeria, where she worked between 1988 and 1992 as a Registered Nurse.\78\ In addition, Ms. Abalihi has a Bachelor's Degree from City College New York, and in 2012 earned a Master's Degree in Nursing from the University of South Florida.\79\ She explained that courses in the Master's program included pharmacology and advanced pharmacology, which covered the legalities of prescribing controlled substances in Florida.\80\ --------------------------------------------------------------------------- \78\ Id. at 125-6. \79\ Id. at 125. \80\ Id. at 128. --------------------------------------------------------------------------- After moving from Nigeria to New York in 1992, Ms. Abalihi worked with the Health and Hospitals Corporation in Harlem Hospital for about ten years: \81\ ``As a Registered Nurse, I worked in orthopedics, massage, I did a little bit of psychiatric nursing, I worked in [the] intensive care unit.'' \82\ Ms. Abalihi said she had the knowledge and education associated with the professional standards of service as a Registered Nurse, including knowledge of medication inventorying, dispensing, and safekeeping.\83\ --------------------------------------------------------------------------- \81\ Id. at 126-7. \82\ Id. at 127. \83\ Id. --------------------------------------------------------------------------- Ms. Abalihi said she moved to Tampa in 2001, working both at the Veterans Administration Hospital there and operating a group home, between 2007 and 2010, as the home's Director of Nursing.\84\ She said in this capacity she was involved with patients who had prescriptions for controlled substances, so she was responsible for inventory, dispensing, and safe handling of the drugs.\85\ She currently works as a Registered Nurse at the Veterans Administration Hospital, in the hospital's critical care unit.\86\ She described this as full-time work in the intensive care unit, the cardiac unit, and the surgical unit, where she is required to make sure prescription doses are correct, and has to understand medication side effects, ``how it's going to impact my patient, and how much this patient can get at a particular time. Basically, standard nursing procedures for dispensing [and] safety [ ] of controlled substances.'' \87\ --------------------------------------------------------------------------- \84\ Id. \85\ Id. at 127-28. \86\ Id. at 125, 128. \87\ Id. at 133. --------------------------------------------------------------------------- Ms. Abalihi testified that through her work as a nurse and through her formal education, she has been trained in dispensing controlled substances: ``I inventory controlled substances as a Registered Nurse, and I have knowledge of safekeeping processes with relationship to [the] nursing profession.'' \88\ This experience, she said, includes ``knowledge of inventory, safety of controlled drugs [,] and dispensing.'' \89\ She said she has held a nursing license from New York for over ten years, and has held her Florida license since 2001, and has never been disciplined by any governmental entity nor convicted of any crime.\90\ --------------------------------------------------------------------------- \88\ Id. at 125. \89\ Id. at 126. \90\ Id. at 140. --------------------------------------------------------------------------- Ms. Abalihi said she applied for a DEA Certificate of Registration in early 2011 so that Cove, Inc. could operate Allwell Pharmacy.\91\ She acknowledged she never has owned a retail pharmacy, has never worked in a pharmacy, and is not a licensed pharmacist, and as such she would not be dispensing controlled substances.\92\ She said the plan was to operate a standard retail community pharmacy with a co-owner who [[Page 29047]] was a pharmacist, and to serve as a supplier of drugs to assisted living facilities.\93\ She explained that she had recently operated a group home, which she stated is ``kind of assisted living,'' and believed she could serve this kind of population.\94\ She said she had no trouble obtaining a Florida state license to operate the pharmacy, and applied for a DEA Certificate of Registration shortly after obtaining a state license.\95\ --------------------------------------------------------------------------- \91\ Id. at 129. \92\ Id. at 141, 143. \93\ Id. at 129. \94\ Id. at 130. \95\ Id. at 130-31. --------------------------------------------------------------------------- According to Ms. Abalihi, she and Jacinta Taylor own Cove, Inc., with Ms. Taylor owning ten percent and Ms. Abalihi owning 90 percent. Ms. Abalihi is the sole officer and director.\96\ Ms. Taylor is a pharmacist licensed in Florida. Ms. Abalihi met Ms. Taylor socially, as both have children in the autism spectrum and met each other while taking their children to autism therapy.\97\ --------------------------------------------------------------------------- \96\ Id. at 131. \97\ Id. at 131, 133. --------------------------------------------------------------------------- Ms. Abalihi testified that when she was invited to the DEA to discuss her application, Investigator Wald referred to her husband, and told her ``there were issues'' with a pharmacy he had worked at.\98\ Ms. Abalihi said she told Investigator Wald ``[w]ell, I don't know about that. I'm just doing this on my own.'' \99\ She testified that she told the investigators that Mr. Abalihi would not have anything to do with Allwell Pharmacy, and that she was ``engaging the services of Jacinta Taylor, who is a licensed pharmacist, to be the one--the pharmacy manager or the prescriptions department manager, whichever one is being referred to.'' \100\ She told the investigators that Mr. Abalihi had been ``blacklisted'' from owning or operating a pharmacy.\101\ --------------------------------------------------------------------------- \98\ Id. at 134. \99\ Id. \100\ Id. at 135. \101\ Id. --------------------------------------------------------------------------- Ms. Abalihi said that at the conclusion of the interview, Investigator Boggess asked when she planned to open the pharmacy, and offered to provide whatever help she needed, leaving her assured that she ``had a good interview.'' \102\ She added, however, that she was never told that she needed to study anything about regulations pertaining to the DEA, so ``whatever questions they asked me, I answer[ed] to the best of my knowledge. The ones I could not answer I refer[red] them to my prescription manager, you know those things that I knew I didn't know anything about, for her to answer [.]'' \103\ --------------------------------------------------------------------------- \102\ Id. \103\ Id. at 136. --------------------------------------------------------------------------- By her own account, Ms. Abalihi recognized that she lacked the experience needed to operate a pharmacy if the pharmacy dispensed controlled substances. Recognizing this limitation, Ms. Abalihi testified that she would address this by engaging the services of a registered pharmacist to assist in the daily operation of the store. Ms. Abalihi said her familiarity and experience with controlled substances is based wholly on ``nursing professional standards''. When asked on cross-examination whether she was ``familiar with the record-keeping requirements for controlled substances for a retail pharmacy,'' she did not answer the question directly, but stated only ``[a]gain, like I said, in terms of controlled substances my experience is with nursing.'' \104\ When asked about controlled substance regulations concerning biannual inventories, or concerning the different physical security requirements applicable to Schedule II controlled substances (in contrast with those applicable to Schedules III through V), Ms. Abalihi again would not answer the questions, but said questions and issues like these would have to be addressed by a pharmacist working at Allwell.\105\ When asked what percentage of prescriptions she anticipated would be for controlled substances, Ms. Abalihi responded by saying that if anyone could answer that question, it would be the pharmacy manager, not herself.\106\ --------------------------------------------------------------------------- \104\ Id. at 144. \105\ Id. at 144, 146. \106\ Id. at 146. --------------------------------------------------------------------------- Ms. Abalihi described the arrangement she entered into with the prospective pharmacist, Ms. Taylor. She agreed, during cross examination, that Allwell would have to completely rely on the pharmacist working there in order to ensure compliance with DEA controlled substances regulations.\107\ --------------------------------------------------------------------------- \107\ Id. --------------------------------------------------------------------------- Ms. Abalihi testified that the business plan for Allwell was to have it open and operational from 9:00 a.m. until 6:00 p.m. Monday through Friday, and from 9:00 a.m. to 1 p.m. on Saturdays, with the pharmacy closed on Sundays.\108\ She acknowledged that when they were interviewed by the DEA investigators, Ms. Taylor was working at Sweetbay as a pharmacist, but stated that Ms. Taylor would come to work at Allwell as soon as Ms. Abalihi got the required license.\109\ --------------------------------------------------------------------------- \108\ Id. at 156. \109\ Id. at 137. --------------------------------------------------------------------------- Ms. Abalihi acknowledged that presently, Ms. Taylor works full time as a pharmacist in Orlando, having moved from Tampa sometime after this application was filed.\110\ When asked whether she knew if Ms. Taylor was planning on moving back to Tampa if Cove, Inc. gets the Certificate it seeks for Allwell, Ms. Abalihi stated ``We can't say for sure until this whole thing is over. I mean I don't expect her to, you know, just not do something with her life with this whole thing--I mean this whole thing has to be over for her to--that is my perception, for her to make a decision what she wants to do.'' \111\ She added that despite what Ms. Taylor told Investigator Boggess about the plan to use Ms. Mustafa as a second pharmacist, Ms. Abalihi did not know Ms. Mustafa, had never met her, and had never spoken with her.\112\ She offered no explanation for telling the DEA investigators that she would either provide them with Ms. Mustafa's contact information or have Ms. Mustafa contact them--actions which indicate that she was complicit in Ms. Taylor's prevarication regarding the purported plan to use Ms. Mustafa when Allwell began its operation. --------------------------------------------------------------------------- \110\ Id. at 157. \111\ Id. \112\ Id. at 138. --------------------------------------------------------------------------- When pressed to explain this, Ms. Abalihi denied knowing Ms. Mustafa, denied ever speaking to Ms. Mustafa, and denied that Ms. Taylor said she would be relying on Ms. Mustafa. According to Ms. Abalihi, ``[Ms. Taylor] did not say she would be relying on Ms. Mustafa, no. She said the name came to her when this question was thrown to her. She wasn't expecting it, but the name came to her.'' \113\ When asked, however, whether there was a plan in effect to actually have Ms. Mustafa work at the pharmacy, Ms. Abalihi said ``not exactly. Jacinta Taylor mentioned her after--you know, after her interview with the DEA she mentioned her to me as a possibility of coverage for her. And I know very well that you can actually get coverage. And I know very well that you can actually get coverage.'' \114\ --------------------------------------------------------------------------- \113\ Id. at 138, 161. \114\ Id. at 139. --------------------------------------------------------------------------- I am thus presented with two significantly different versions of what was said when Diversion Investigators Boggess and Wald questioned Ms. Abalihi and Ms. Taylor. The Diversion Investigators testified that Ms. Taylor indicated she would leave her job at Sweetwater and join the operation of Allwell only when it started to become profitable--not at its inception. Both investigators testified that Ms. Taylor initially told them she would have a coworker, Ms. Mustafa, serve as the pharmacy's pharmacist between the time it began its operation and the time when Ms. Taylor joined the store as its pharmacist. Investigator Boggess testified that in furtherance of this representation, Ms. Abalihi committed to providing him with Ms. Mustafa's contact information--a commitment Ms. Abalihi now denies ever making. Because the two Diversion Investigators' testimony is internally consistent, is consistent with the evidence as a whole, is consistent with a common sense understanding of the events being described, and does not appear to be tainted with bias or a motivation to prevaricate, and because I do not find other indicia of unreliability, I give substantial weight to the statements of Investigators Boggess and Wald regarding this exchange. Further, because I find Ms. Abalihi's testimony to be internally contradictory, inconsistent with the evidence as a whole, and inconsistent with that of Ms. Taylor's statements to the investigators and her averments in the affidavit introduced as evidence, and because I find Ms. Abalihi and Ms. Taylor both had a financial interest in claiming that Allwell would have a registered pharmacist on duty in order to obtain a DEA Certificate (even if that was not going to be the case), I do not give substantial weight to Ms. Abalihi's claim that she never committed to giving the investigators contact information for Ms. Mustafa. From this contradictory account, I find Ms. Abalihi compounded the falsehood Ms. Taylor initiated, by failing to disclose the true lack of involvement of Ms. Mustafa in the planned operation of Allwell Pharmacy; and I find that Ms. Taylor falsely stated to the [[Page 29048]] investigators that Ms. Mustafa would play a role in the pharmacy when it began its operations. During her testimony, Ms. Abalihi attempted to minimize the significance of the role Ms. Taylor or Ms. Mustafa would play in the initial stage of Allwell's operation. Ms. Abalihi said that there are agencies (like the one employing her husband) that can cover pharmacies, ``so out of the issue of Mustafa as a coverage, a substitute, I don't think it was an issue for running that pharmacy.'' \115\ There is, however, no evidence that Ms. Abalihi told the DEA investigators that she intended to start Allwell's operation using temporary agency pharmacists, like the one employing her husband. She recognized, however, that DEA certification was essential to her business plan. She testified that without the DEA Certificate she could not find suppliers or insurers that would work with the pharmacy.\116\ --------------------------------------------------------------------------- \115\ Id. at 139. \116\ Id. at 138. --------------------------------------------------------------------------- Ms. Abalihi's husband, Alfred Abalihi, also testified in support of Cove, Inc.'s application. Mr. Abalihi stated that while he would not be part of the business operation, he did have experience in the operation of a pharmacy.\117\ He holds a license to practice as a pharmacist in Florida, based on an accredited Bachelor of Pharmacy degree from the University of Ife [now Obafemi Awolowo University], in Nigeria.\118\ He has held the Florida license since 2003, and has never been subject to discipline by any governmental entity with respect to that license, nor has he ever been charged with or convicted of any crime by any governmental entity.\119\ --------------------------------------------------------------------------- \117\ Id. at 108. \118\ Id. at 97. \119\ Id. --------------------------------------------------------------------------- Mr. Abalihi said he was aware that his wife was attempting to secure a DEA Certificate of Registration that would permit Cove, Inc. to operate the Allwell Pharmacy but said he was never made an owner of that corporation. According to Mr. Abalihi, ``[t]o my understanding I've been made to believe that [the] DEA have [sic] blacklisted me based on the temporary work I did at Moon Lake Pharmacy in 2007.'' \120\ --------------------------------------------------------------------------- \120\ Id. at 98. --------------------------------------------------------------------------- Mr. Abalihi explained that he did not know much about Moon Lake's operation and was working there under contract as assigned by his employer, HealthCare Consultants.\121\ He said he worked at Moon Lake only a few days and that this was one of many assignments he had been dispatched to as an employee of HealthCare Consultants.\122\ He said he never interviewed for the job at Moon Lake, knew nothing about who owned the pharmacy, and never spoke with anyone at the pharmacy before starting his work there--adding that the owner worked there as a technician, but spoke only Spanish, which Mr. Abalihi said he neither speaks nor understands.\123\ --------------------------------------------------------------------------- \121\ Id. at 99. \122\ Id. at 100, 102. \123\ Id. at 101, 102. --------------------------------------------------------------------------- Mr. Abalihi said that the DEA agents visited Moon Lake on the last day on this assignment.\124\ According to Mr. Abalihi, when he asked Investigator Wald whether he was in any kind of trouble, Investigator Wald told him ``No, we didn't come here for you. If the pharmacy manager did what we told him to do the last time we came, we wouldn't have been here. So it's not about you.'' \125\ Mr. Abalihi testified that before working at Moon Lake Pharmacy, he knew nothing about how that pharmacy received its prescriptions--and did not know there was an Internet Web site used as part of the prescribing process.\126\ --------------------------------------------------------------------------- \124\ Id. at 100. \125\ Id. \126\ Id. at 103. --------------------------------------------------------------------------- Prior to the hearing, the parties stipulated that Mr. Abalihi ``dispensed controlled substances based on unlawful Internet prescriptions'' while working at Moon Lake Pharmacy.\127\ During the hearing, however, Mr. Abalihi said he now could not recall any specific prescriptions he filled during the few days that he was working at Moon Lake, and had no recollection of there being anything wrong with any of the prescriptions he filled there.\128\ He said he knew Moon Lake was compounding hydrocodone into dosage units, but said the compounding was done when he was not present.\129\ He denied, however, ever telling Investigator Wald that what he was doing was legal, saying ``I never made any statement like that.'' \130\ Mr. Abalihi said he worked with two other people at Moon Lake--a husband and wife--both of whom ``ran away'' and escaped from the pharmacy when the DEA investigators arrived.\131\ Mr. Abalihi added that his assignment at Moon Lake was to end on the day the DEA investigators visited the pharmacy, so he did not return, and that he has never been disciplined by the Florida Board of Pharmacy for his work at Moon Lake.\132\ --------------------------------------------------------------------------- \127\ Id. at 11-12. \128\ Id. at 103. \129\ Id. at 111. \130\ Id. at 104. \131\ Id. at 118-19. \132\ Id. at 104. --------------------------------------------------------------------------- Mr. Abalihi testified that after this experience, he attempted to open his own pharmacy through Masters Worldwide Ventures, doing business as My Master's Pharmacy.\133\ He said that his business plan was to operate a community pharmacy and to dispense drugs in some assisted living facilities, apparently pursuing a business plan similar to the one described by his wife with respect to the operation of Allwell Pharmacy.\134\ He said he would have no arrangements with any pain clinics, adding that he did not even know any such clinics.\135\ --------------------------------------------------------------------------- \133\ Id. at 106. \134\ Id. at 107. \135\ Id. --------------------------------------------------------------------------- Mr. Abalihi said he ended this venture at the advice of an attorney, ``based on the fact that DEA has told [his lawyer] that they have made up their mind to deny me the license.'' \136\ He said he personally never spoke to or met with DEA representatives when attempting to secure a Certificate to operate My Master's Pharmacy, electing instead to have his attorney meet with those agents.\137\ He said he actually tried to operate My Master's Pharmacy without a DEA Certificate of Registration, but found that drug wholesalers would not supply drugs without that Certificate. Further, Mr. Abalihi realized that if he was unable to dispense controlled substances his customers would ``quickly go to the other pharmacies that have a controlled [substances] license, leaving me to lose in business.'' \138\ --------------------------------------------------------------------------- \136\ Id. at 106. \137\ Id. at 121. \138\ Id. at 107. --------------------------------------------------------------------------- When asked whether he intends to work at or otherwise operate Allwell Pharmacy once it opens for business, Mr. Abalihi responded ``No. I just wanted to stay as--to advise my wife how to do things. But I would have loved to work there, but the DEA wouldn't allow me to.'' \139\ When asked on cross-examination whether he gave advice to his wife about having her own application for a DEA pharmacy, Mr. Abalihi did not answer directly, but instead responded ``I'm her husband. I knew she was going to apply to open a pharmacy.'' \140\ --------------------------------------------------------------------------- \139\ Id. at 108. \140\ Id. at 122. --------------------------------------------------------------------------- After hearing her husband's testimony, Ms. Abalihi was asked, on cross examination, ``what is your understanding why [the] DEA `blacklisted' Mr. Abalihi'', Ms. Abalihi said she cannot answer the question, nor could she answer the Government's question whether it is her belief that her husband violated any DEA laws.\141\ When she was asked, however, why her husband withdrew his application for a DEA Certificate on behalf of My Master's Pharmacy, she stated the only reason for doing that was the advice given by counsel.\142\ When asked whether either Investigator Wald or Investigator Boggess told her that her husband had been blacklisted, Ms. Abalihi stated ``[t]hey didn't tell me that.'' \143\ --------------------------------------------------------------------------- \141\ Id. at 153. \142\ Id. at 155. \143\ Id. at 163. --------------------------------------------------------------------------- Analysis The Administrator is being asked to grant a Certificate of Registration that would permit Cove, Inc., to dispense controlled substances through a pharmacy to be known as Allwell Pharmacy. When presented with such an application, the Administrator is guided by provisions in the United States Code mandating that she determine whether granting such a Certificate ``would be inconsistent with the public interest.'' \144\ In determining the public interest, the following factors shall be considered: --------------------------------------------------------------------------- \144\ 21 U.S.C.A. Sec. 823 (West), current through Public Law 112-283, approved 1-15-13. --------------------------------------------------------------------------- (1) The recommendation of the appropriate State licensing board or professional disciplinary authority. (2) The applicant's experience in dispensing, or conducting research with respect to controlled substances. (3) The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances. [[Page 29049]] (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.\145\ --------------------------------------------------------------------------- \145\ 21 U.S.C.A. Sec. 823, eff. 4/15/2009, current through Public Law 112-283, approved 1-15-13. --------------------------------------------------------------------------- As correctly noted in the Government's post-hearing brief, an application denial may be based on any one, or any combination, of the five factors cited above.\146\ When exercising authority as an impartial adjudicator, the Administrator may properly give each factor whatever weight she deems appropriate in determining whether an application should be rejected.\147\ Moreover, the Administrator is ``not required to make findings as to all of the factors[.]'' \148\ The Administrator is not required to discuss each factor in equal detail, or even every factor in any given level of detail.\149\ The balancing of the public interest factors ``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[.]'' \150\ --------------------------------------------------------------------------- \146\ Government's Proposed Findings of Fact, Conclusions of Law, and Argument in Response to ``Respondent's Brief'' at 3 (citing Richard J. Lanham, M.D., 57 FR 40475-01 (August 27, 1992), Henry J. Schwartz, Jr., M.D., 54 FR 16442-01 (April 24, 1989). Also cited is Neveille H. Williams, D.D.S., 51 FR 17556 (1986), but the entry at that citation corresponds to the matter of Paul Stepak, M.D., 51 FR 17556 (May 13, 1986), and is inapposite here. \147\ Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005); JLB, Inc., d/b/a Boyd Drugs, 53 FR 43945-02, 43947 (October 31, 1988); see also David E. Trawick, D.D.S., 53 FR 5326-01, 5327 (February 23, 1988). \148\ Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005). \149\ Trawick v. DEA, 861 F.2d 72, 76 (4th Cir. 1988). \150\ Jayam Krishna-Iyer, M.D., 74 FR 459-01, 462 (January 6, 2009). --------------------------------------------------------------------------- In this case, the Government does not contend there is a history of professional discipline by a licensing board, nor did it offer evidence of a criminal conviction pertaining to any party, nor did it allege Cove, Inc., or any material party failed to comply with applicable laws relating to controlled substances. Accordingly, Factors One, Three, and Four in 21 U.S.C. 823(f) are not presented as bases for revoking this Certificate. I would note parenthetically that there is evidence supporting the Respondent's application that neither party directly addresses. There is undisputed evidence that the Respondent obtained the required license from Florida authorities, permitting it to operate a retail pharmacy in Tampa. In a recent DEA adjudication, obtaining such a license was considered by the Administrator as evidence in support of the application under Factor One (``recommendation of the appropriate State licensing board or professional disciplinary authority'').\151\ ``Although not dispositive, Respondent's possession of a valid retail pharmacy license . . . weighs against a finding that Respondent's registration would be inconsistent with the public interest.'' \152\ In this case, however, neither party cites to 21 U.S.C. 823(f)(1). Given the focus on Factors Two and Five, it should suffice to note, as the ALJ did in the earlier case, that `[a]lthough not dispositive, Respondent's possession of a valid retail pharmacy license . . . weighs against a finding that Respondent's registration would be inconsistent with the public interest.'' \153\ --------------------------------------------------------------------------- \151\ See Physicians Pharmacy, L.L.C., 77 FR 47096, 47104 (August 7, 2012). \152\ Id. (citing Robert A. Leslie, M.D., 68 FR 15,227, 15,230 (March 28, 2003) (state license is a necessary but not a sufficient condition for registration, and therefore, this factor is not dispositive)). \153\ Id. --------------------------------------------------------------------------- In his Order to Show Cause, the Deputy Assistant Administrator, Office of Diversion Control, identified two factors as the bases for denying Cove, Inc.'s application. First, he referred to Factor Two, noting that Ms. Abalihi ``had no prior experience with operating or working at a retail pharmacy and had no knowledge of DEA regulations pertaining to handling of controlled substances and related security requirements.'' \154\ Also under Factor Two, the Deputy Assistant Administrator charged that the role Mr. Abalihi played in the operation of Moon Lake Pharmacy and his stated intention to obtain his own Certificate of Registration to operate a pharmacy created a risk to the public interest.\155\ The Order also identified Factor Five as a basis for denying the application, stating that ``[t]he only pharmacist that Mrs. Abalihi stated would work at Allwell Pharmacy gave DEA investigators evasive and conflicting information about the pharmacy's operation.'' \156\ --------------------------------------------------------------------------- \154\ Order to Show Cause, found in ALJ Exhibit 1, at 1. \155\ Id. \156\ Id. at 2. --------------------------------------------------------------------------- In hearings regarding the denial of a proposed DEA Certificate of Registration, ``the Administration shall have the burden of proving that the requirements for such registration pursuant to section 303 or section 1008(c) and (d) of the Act (21 U.S.C. 823 or 958(c) and (d)) are not satisfied.'' \157\ Accordingly, in order to establish cause to deny Cove, Inc.'s application, the Government must establish by at least a preponderance of the evidence that it would be inconsistent with the public interest to grant this application, given the applicant's experience in dispensing controlled substances (Factor Two), given Mr. Abalihi's past history and present association with the new pharmacy (Factor Two), and given evidence of other conduct which may threaten the public health and safety (Factor Five). --------------------------------------------------------------------------- \157\ 21 CFR 1301.44, current through April 4, 2013. --------------------------------------------------------------------------- Factor Two Regarding Experience of Cove, Inc., Ms. Abalihi, and Ms. Taylor The evidence establishes that the applicant did not have personnel with the requisite experience in dispensing controlled substances to support its application. Considering first the experience attributed to Ms. Abalihi, I find the scope of nursing practice does, to some degree, include exposure to regulations pertaining to the distribution of controlled substances. Ms. Abalihi competently testified that in the course of her nursing practice, she has had occasion to deliver controlled substances to persons in her care. Further, there is evidence that as a nurse, Ms. Abalihi has been required to account for controlled substance inventories, and to guard against improper diversion of such inventories. The scope of this experience, however, leaves material and significant areas of expertise unmet. Pharmacists must conform to the corresponding responsibilities imposed upon them under DEA regulations. These responsibilities are unique to pharmacists, and are not likely to be recognized or met by a person whose sole function is as a Registered Nurse. DEA regulations impose upon pharmacists affirmative obligations regarding the distribution of controlled substances once a prescribing source (such as a doctor or physician's assistant) issues a prescription. Those obligations collectively are referred to as ``corresponding responsibilities,'' as they impose duties on pharmacies and pharmacists that correspond with those of treating sources.\158\ There is no corollary set of obligations imposed on Registered Nurses in the course of their professional duties. ``The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription.'' \159\ --------------------------------------------------------------------------- \158\ See Sun & Lake Pharmacy, 76 FR 24523-02, 24525 (May 2, 2011) (citing 21 CFR 1306.04(a)). \159\ 21 CFR 1306.04(a) (2005), current through February 21, 2013. --------------------------------------------------------------------------- Driving this corresponding responsibility is the standard, also found in DEA regulations, that a prescription for a controlled substance ``must be issued for a legitimate medical purpose,'' and that it be prescribed by ``an individual practitioner acting in the usual course of his professional practice.'' \160\ Although the record shows Ms. Abalihi has formal education in the fields of basic and advanced pharmacology, and has experience in administering medications including controlled substances, the record also shows that she has no experience in understanding and applying the corresponding responsibilities imposed on pharmacists who dispense controlled substances under DEA regulations. To the contrary--from her testimony and from her business plan, it is clear Ms. Abalihi disavows having such knowledge, electing to defer all questions on these regulations to her business partner, Ms. Taylor. --------------------------------------------------------------------------- \160\ Id. --------------------------------------------------------------------------- Such deference would create a risk of harm to the public in this case. Diversion Investigator Boggess's testimony regarding the experiences of local pharmacists, and their collective concern about drug-seeking activity involving addictive pain killers like Oxycodone, establishes that there is a clear and present danger posed by persons who present themselves to pharmacies in the area, hoping to obtain drugs by questionable [[Page 29050]] prescriptions. Nothing in Ms. Abalihi's training suggests she is familiar with the practices of persons who present questionable prescriptions to pharmacists in the hope of securing controlled substances illegally. Further, as a corporate entity, Cove, Inc. itself has no history of experience in the distribution of controlled substances. Allwell Pharmacy would be this corporation's first and only venture into such activity, and neither of its shareholders has ever operated a pharmacy before. The evidence calls into question whether Ms. Taylor would actually participate in the operation of Allwell Pharmacy, at least at the beginning of operations. When this application was presented to the DEA, Ms. Taylor was employed at another pharmacy on a full-time basis, during hours that would have made it impossible for her to be present when Allwell was open for business. When asked to describe her intentions in this regard, Ms. Taylor told the DEA investigators that she planned on working at Allwell only once it became profitable--not at the very beginning. Since then, Ms. Taylor has moved to Orlando, and there is no evidence indicating she has any plans to return to Tampa any time soon. I am mindful that Ms. Abalihi now disputes the DEA investigators' reports regarding when Ms. Taylor would actually begin work. I am persuaded, however, to attribute greater weight to the testimony on this point provided by Investigator Boggess and Investigator Wald, than I attribute to Ms. Abalihi's version of what was said. It is clear from the record that Ms. Taylor had no clear investment in Cove, Inc. nor in Allwell Pharmacy. As a minority shareholder with no proven financial investment in the company, Ms. Taylor was in no way obligated to quit her job at Sweetbay in order to work at Allwell. The record offers no evidence that Ms. Taylor contributed capital or cash in exchange for receiving her ten percent shares in the corporation. Further, there is no evidence establishing any kind of agreement between Cove, Inc. and Ms. Taylor requiring her to provide professional services. There is, for example, no evidence that Ms. Taylor faced any adverse consequence should she decide not to end her employment at Sweetbay and begin working at Allwell. Ms. Abalihi's claim that Ms. Taylor would quit her job at Sweetbay in order to accept a position at Allwell is not supported by any competent evidence, and is contradicted by what I find to be credible testimony from the two DEA investigators, to the effect that Ms. Taylor was going to take a ``wait and see'' approach before lending her expertise to this new enterprise--an approach Ms. Abalihi appears to have endorsed.\161\ --------------------------------------------------------------------------- \161\ See Tr. at 157. --------------------------------------------------------------------------- This conclusion is buttressed by the evidence regarding the role of Dayla Mustafa. The need for someone to play the role attributed to Ms. Mustafa would arise only upon Ms. Taylor's absence from Allwell during the initial operation of the new pharmacy. The evidence establishes that based on Ms. Taylor's admission that she would not be present initially, and upon the investigators' query, Ms. Taylor offered Ms. Mustafa as the person who would provide the requisite experience initially. The evidence establishes that this was a falsehood--that in fact Ms. Mustafa never agreed to play such a role, and Ms. Taylor came up with the name only because she felt the need to address concerns being raised by the DEA investigators. Ms. Abalihi tacitly confirmed this false representation and compounded the problem when she offered to provide the investigators with Ms. Mustafa's contact information. Thus, the evidence establishes that no one having the requisite knowledge and experience to operate a pharmacy and to conform to DEA diversion control requirements would be present initially. I do note the Respondent's complaint regarding the practice, attributed to Investigators Boggess and Wald, of asking applicant's questions regarding their familiarity with DEA diversion control regulations.\162\ After stating that ``there is no law or regulation supporting this practice,'' the Respondent avers that ``everyone knows that the DEA does not go around interviewing Walgreens or Wal- Mart shareholders or management whenever those pharmacy chains decide to open up a new location in the area.'' \163\ I cannot endorse this conclusion, as it is not supported by any evidence in the record before me. Further, I am obliged to focus on the application before me. Here, the 90 percent shareholder and sole officer of the corporation that proposes to dispense controlled substances has only limited experience handling controlled substances, and has never operated a pharmacy. Ms. Abalihi recognized the importance of this shortfall, and proposed to fill the gap by taking on a ten percent shareholder, expecting this person to bring with her the experience needed to ensure compliance with DEA diversion control regulations. That shareholder, however, was already committed to a full-time job that prevented her from working at the new pharmacy. When this gap was raised, the ten percent shareholder lied to the DEA investigators, falsely stating a co-worker, Ms. Mustafa, would be filling the gap until the new pharmacy was operational. --------------------------------------------------------------------------- \162\ Respondent's Post-Hearing Brief, at 12. \163\ Id. --------------------------------------------------------------------------- Given the evidence before me, I cannot endorse the Respondent's claim that ``short of being licensed as a practicing pharmacist, Mrs. Abalihi has about as much experience properly handling controlled substances as anyone is likely to have.'' \164\ From her own testimony, it is clear Ms. Abalihi was unfamiliar with DEA diversion control requirements and was unwilling to answer any questions regarding the regulatory environment in which pharmacies must operate. This was true during the investigation into this application, and it was also true during the evidentiary hearing. Thus, even though Ms. Abalihi has continued her professional development by attending courses that included pharmacology, she continues to lack the knowledge and experience required to operate a pharmacy that dispenses controlled substances. She has no experience as a pharmacist, professed no knowledge of the standards of care that must be met by registered pharmacists, and proposed no concrete plan to have a pharmacist actually working at the pharmacy, at least until the enterprise was established and operational. Upon this evidence, the Government has established by at least preponderance that issuing a Certificate of Registration to the Respondent would be inconsistent with the public interest, under Factor Two. --------------------------------------------------------------------------- \164\ Respondent's Post-Hearing Brief, at 11. --------------------------------------------------------------------------- Factor Two and the Nexus Between Cove, Inc. and Alfred Abalihi The Government also offered evidence under Factor Two regarding Ms. Abalihi's husband, Alfred Abalihi. In the Order to Show Cause, the Deputy Assistant Administrator reports that Mr. Abalihi ``participated in unlawful dispensing of controlled substances'' while employed at a pharmacy in 2007.\165\ The Government alleged that Moon Lake Pharmacy had been engaged in illegally dispensing controlled substances based on Internet prescription activity. The general premise in this part of the charge is that Mr. Abalihi told DEA investigators in 2007 that he believed the pharmacy's operations were legal, and that he hoped someday to open his own pharmacy. Further, in its post-hearing brief, the Government calls into question Mr. Abalihi's credibility in his claim that he did not know Moon Lake's operations were illegal. From this, the Government argues that Mr. Abalihi's ``negative controlled substance experience'' has a ``clear nexus with his wife's present experience'' warranting a denial of the claim under Factor Two.\166\ --------------------------------------------------------------------------- \165\ Order to Show Cause, at 1. \166\ Government's Proposed Findings of Fact, Conclusions of Law, and Argument in Response to ``Respondent's Brief,'' at 8. --------------------------------------------------------------------------- At the outset, I agree with the Government's skepticism regarding Mr. Abalihi's representation that he did not know Moon Lake's operations were illegal. It may be that current business practices tend to increase reliance on temporary or contract employees, including pharmacists; and that such practices increase the likelihood that the pharmacist will be unaware of the true nature of the pharmacy's operation. It is worth noting that to the extent such a practice exposes the pharmacist to the risk of working in an illegal shop, the pharmacist is not excused from his or her responsibility to act within the law, and must face the consequences of maintaining a blind eye to such an obviously illegal operation. Here, however, I need not rely on any such inference, because I have before me the parties' express stipulation that while at Moon Lake Mr. Abalihi ``dispensed controlled substances based on unlawful Internet prescriptions [.]'' \167\ --------------------------------------------------------------------------- \167\ Tr., at 11-12. --------------------------------------------------------------------------- Given the very small office in which this compounding and dispensing was occurring, I find sufficient credible evidence to conclude Mr. Abalihi was aware that the [[Page 29051]] practices in this pharmacy were illegal. Having said that, however, I cannot conclude that this evidence supports the Government's contention that the circumstances arising from Mr. Abalihi's work at Moon Lake Pharmacy establish cause to find Cove, Inc.'s application is inconsistent with the public interest. The evidence establishes that Mr. Abalihi would not directly participate as an officer or owner of Cove, Inc. Thus, I must question whether there is a sufficient link established between Mr. Abalihi's past work at Moon Lake Pharmacy and Cove, Inc.'s proposal to operate Allwell Pharmacy. In support of its claim that such a nexus exists and must be recognized, the Government offers as guidance the decision in In Re Matthew D. Graham.\168\ As noted in the Government's brief, Graham involved the application for a List 1 Chemical Registration under 21 U.S.C. 823(h) (and not registration under 21 U.S.C. 823(f)). The DEA challenged the application because the applicant's business partner had in the past surrendered a DEA registration after the partner illegally sold pseudoephedrine. In the Final Order, Graham's application was denied, in part by applying language similar to language found in Section 832(f)'s Factor Two, which calls for the ``public interest'' inquiry to consider ``[a]ny past experience of the applicant in the manufacture and distribution of chemicals[.]'' \169\ While thus not precisely on point, the discussion in Graham does highlight those factors that should be considered when determining whether to deny a registration based on the past misconduct of a third party. --------------------------------------------------------------------------- \168\ Government's Proposed Findings of Fact, Conclusions of Law, and Argument in Response to ``Respondent's Brief,'' at 10, citing In re Matthew D. Graham, 67 FR 10229-01 (March 6, 2002). \169\ Id. at 10230, quoting 21 U.S.C. 823(h)(4). --------------------------------------------------------------------------- The Graham opinion explained: Regarding factor four, the applicant's past experience in the distribution of chemicals, the DEA investigation revealed that Graham has no previous experience related to handling or distributing listed chemicals. As set forth previously, however, his business partner Snodell surrendered a DEA registration because a DEA and KBI investigation revealed he was distributing large quantities of List I chemical products having reasonable cause to believe the chemical would be used to manufacture a controlled substance. Graham admitted to DEA investigators that Snodell was his source of information concerning the business of distributing listed chemicals. . . . For the above-stated reasons, the Administrator concludes that it would be inconsistent with the public interest to grant the application of Graham.\170\ --------------------------------------------------------------------------- \170\ Id. at 10230. The agency thus may attribute to a registrant the prior misconduct of third party. The conditions in Graham, however, are not well aligned to those present in Cove, Inc.'s application. In Graham, the registrant told the DEA he intended to enter into a wholesale business arrangement with Snodell, with whom he was co- owner of a wholesale business outlet. Thus, unlike the business plan presented by Ms. Abalihi, the registrant in Graham was economically tied to the third party. When it surfaced that Snodell had illegally sold pseudoephedrine a year earlier, and when it became clear that under Graham's business plan Snodell would be responsible for referring List I chemical orders to Graham, this nexus served as a basis for denying Graham's application. In the case presently before the Administrator, on the other hand, Ms. Abalihi presented a business plan that expressly removed Mr. Abalihi from all phases of the proposed pharmacy's operation. The evidence establishes that Mr. Abalihi would not directly participate as an officer or owner of Cove, Inc. While it might be reasonable to be skeptical about the efficacy (or even the existence) of such a line between spouses, the evidence now in the record does not permit me to recognize the kind of nexus that existed in Graham. The Government correctly notes in its brief that Ms. Abalihi has not indicated she would prohibit her husband from working in the pharmacy.\171\ Ms. Abalihi's statement that she would keep her husband ``apart from ownership and management'' of the pharmacy, however, effectively distinguishes this case from Graham.\172\ Equally important, having considered the affidavit of Mr. Abalihi, and having considered the testimony from both Mr. and Mr. Abalihi, I find sufficient credible and unrebutted evidence to conclude Mr. Abalihi does not intend to perform a significant role in the operation of Allwell Pharmacy. --------------------------------------------------------------------------- \171\ Government's Proposed Findings of Fact, Conclusions of Law, and Argument in Response to ``Respondent's Brief,'' at 10. \172\ Id. quoting Affidavit of Ms. Abalihi, attached as Exhibit E to Respondent's Brief, ALJ Exhibit 6. --------------------------------------------------------------------------- I fully appreciate the Government's concern regarding the events involving Mr. Abalihi during his very short tenure at Moon Lake Pharmacy. I note the skepticism expressed by the investigators, as they recalled the nature of Moon Lake's Internet-based operation. I share their sense that anyone in Mr. Abalihi's position would have had reason to question the legitimacy of the operation, and I share their sense of incredulity that Mr. Abalihi would have failed to recognize the illegal nature of what was going on at Moon Lake, even though his stay there was brief. The Respondent, however, correctly notes that Mr. Abalihi was not charged with any misconduct arising out of his service at Moon Lake. Mr. Abalihi may have unwisely told the DEA investigators that Moon Lake's operations were legal, but I cannot conclude from that piece of evidence that Mr. Abalihi was knowingly advancing Moon Lake's criminal enterprise when the DEA arrived. Unlike the acknowledged misconduct by Graham's business partner (leading to the partner surrendering his DEA Certificate), here the most we can say for certain is that Mr. Abalihi was the pharmacist who was present when the DEA agents arrived at Moon Lake and brought its operations to an end. While it is true that the parties have stipulated that Mr. Abalihi dispensed controlled substances based on unlawful Internet prescriptions during his short tenure at Moon Lake, Mr. Abalihi's record since then is unblemished and his plan to avoid direct involvement with Allwell and Cove, Inc. adequately attenuates the link between him and the proposed pharmacy. Having said that, I must note that a core theme presented in support of the Respondent's application has not been established as fact. In its post-hearing brief, the Respondent states that ``[o]nce the decision had been made by the DEA that Mr. Abalihi was banned for the rest of his life from ever having an ownership stake in a pharmacy with a DEA registration, the DEA then set a course of blocking anyone relating to Mr. Abalihi from obtaining a DEA registration.'' \173\ This record does not support the premise that Mr. Abalihi has been ``banned for the rest of his life'' from anything. --------------------------------------------------------------------------- \173\ Respondent's Post-Hearing Brief, at 11. --------------------------------------------------------------------------- The record fails to establish why Mr. Abalihi withdrew his request for a DEA Certificate, other than to indicate the action was based on the advice of his attorney. The factual claims on this point appearing in the Order to Show Cause have been supported by substantial evidence, and include the parties' stipulation that Mr. Abalihi improperly dispensed controlled substances while working at Moon Lake Pharmacy. The DEA has in the past recognized the need to evaluate the circumstances that may arise when a husband and wife are involved in a new application for a retail-pharmacy DEA Certificate and when there has been a prior adverse DEA action involving one of the spouses involving another pharmacy.\174\ The facts alleged in the Order to Show Cause warranted this measure of scrutiny, but the facts shown here do not establish the kind of ties that link Mr. Abalihi's past brief involvement with Moon Lake's illegal operation to the operation proposed by the Respondent here. --------------------------------------------------------------------------- \174\ See, e.g., DePietro's Pharmacy, 56 FR 31675-02 (July 11, 1991). --------------------------------------------------------------------------- I reject in its entirety, however, the Respondent's assertion that the DEA's ``real motivation'' in challenging Cove, Inc.'s application, was ``Mr. Abalihi's brief employment at Moon Lake Pharmacy.'' \175\ The assertion is based on an unproved premise that Mr. Abalihi has been unfairly ``blacklisted'' by the DEA, based on what he said and did on the day DEA agents visited Moon Lake Pharmacy.\176\ The evidence before me does not establish that Mr. Abalihi is the subject of any bar to obtaining a DEA Certificate of Registration. Instead, the record indicates that Mr. Abalihi's former lawyer met with the DEA while he sought to start his own pharmacy, and was persuaded during that meeting to advise Mr. Abalihi to withdraw his application. --------------------------------------------------------------------------- \175\ Id. at 14. \176\ Id. --------------------------------------------------------------------------- We do not know what was presented to this lawyer during her visits with the DEA, nor do we have the benefit of any documentary evidence supporting her reputed claim that the DEA has deemed Mr. Abalihi ineligible for a Certificate of Registration. We do not, indeed, have documentary evidence that the lawyer said or [[Page 29052]] did anything that would justify Mr. Abalihi's decision to withdraw his 2007 application. In short, Mr. Abalihi's conclusion that he had been ``blacklisted'' has not been supported by competent evidence. Instead, I have been told that Mr. Abalihi deferred to his lawyer, electing not to speak with the DEA directly, and apparently withdrew his application solely at his lawyer's suggestion. This does not constitute evidence proving ``unfair blacklisting,'' as alleged by the Respondent.\177\ --------------------------------------------------------------------------- \177\ Id. --------------------------------------------------------------------------- I find insufficient evidence to conclude that Mr. Abalihi's relationship with Cove, Inc., through his marriage to Ms. Abalihi, gives rise to a public threat under Factor Two, although Factor Two does serve as a basis for denying this application, given the absence of sufficient relevant experience by Ms. Abalihi, for the reasons set forth above. Factor Five Independent of concerns addressed under Factor Two, the evidence also forces the conclusion that conduct attributed to both Ms. Taylor and Ms. Abalihi would threaten the public health and safety, warranting a denial of the application under Factor Five. Here the evidence establishes that Ms. Taylor misled the DEA investigators when she was asked about arrangements to have a pharmacist present when Allwell began its operations. I find there is competent and credible evidence that when asked who would be working at Allwell initially, Ms. Taylor told the investigators the initial pharmacist would be her coworker, Ms. Mustafa. This was not true, and constitutes a material misrepresentation in the application process. Ms. Taylor elected not to testify (indeed there is no evidence suggesting the Respondent requested her to do so), and nothing in her affidavit \178\ compels a more benign interpretation of her conduct. --------------------------------------------------------------------------- \178\ Respondent's Exhibit G, Affidavit of Jacinta Taylor. --------------------------------------------------------------------------- Further, when the investigators requested contact information from Ms. Abalihi so they could confirm Ms. Mustafa's role, Ms. Abalihi compounded the misrepresentation and offered to get the requested information, rather than disclose that she knew nothing about Ms. Mustafa's role with the pharmacy. If Ms. Abalihi intended on using contract pharmacists at the start of Allwell's operation, she had an affirmative duty to say so when DEA investigators asked her about the role Ms. Mustafa was to play. By her silence, and by promising to provide contact information for Ms. Mustafa, Ms. Abalihi misled the investigators. Making a material misrepresentation in the course of an investigation into the operation of the proposed pharmacy creates a risk of harm to the public health and safety. The operation of a pharmacy is a highly regulated enterprise, requiring advanced skill and technical expertise unique to the profession. Lying about who would be present with that skill and expertise casts doubt on the ability of both Ms. Abalihi and Ms. Taylor to protect the public, and suggests they will instead act only in their own self-interest. Upon such evidence, the Government has established by at least preponderance that issuing a Certificate of Registration to the Respondent would be inconsistent with the public interest, under Factor Five. Where the Government has made out its prima facie case, the burden shifts to the Respondent to show why its continued registration would be consistent with the public interest.\179\ Having considered the record as a whole and in particular the claims appearing in the Respondent's post-hearing brief, I find no substantial evidence in rebuttal of the Government's case. Ms. Abalihi continues to take the position that she is fully qualified to operate a pharmacy, based on her experience as a Registered Nurse; and continues to seek a Certificate of Registration to dispense controlled substances out of a retail pharmacy that has no pharmacist on staff. --------------------------------------------------------------------------- \179\ See Theodore Neujahr, D.V.M. 65 FR 5680-01, 5682 (February 4, 2000) and Service Pharmacy, Inc., 61 FR 10791-01, 10795 (March 15, 1996). --------------------------------------------------------------------------- Findings of Fact 1. On March 3, 2011 and acting on behalf of Cove, Inc., Ogechi E. Abalihi submitted a new application for a DEA retail-pharmacy Certificate of Registration, to operate a pharmacy under the name of Allwell Pharmacy, to be located at 1947 West Dr. Martin Luther King, Jr. Boulevard, Tampa, Florida 33609. This pharmacy is not open for business and has never operated as a business, although it has been issued a community pharmacy license by the state of Florida. 2. Cove, Inc. is owned by its 90 percent shareholder and sole officer, Ogechi E. Abalihi, and its ten percent shareholder, Jacinta Taylor. 3. Ms. Abalihi has no experience working in, managing, or owning a pharmacy; has no direct knowledge of DEA controlled substance regulations; has extensive experience as a Registered Nurse; has worked with controlled substances but only in the context of her service as a Registered Nurse; and has proposed a business plan for Allwell Pharmacy that requires the presence of a pharmacist throughout the pharmacy's operating hours, which were 9:00 a.m. to 6:00 p.m. Mondays through Fridays, and from 9:00 a.m. to 1:00 p.m. on Saturdays. 4. Although the Applicant's business plan called for DEA controlled substance regulations to be implemented by a registered pharmacist on duty throughout the pharmacy's operational hours, there was no provision for having a registered pharmacist present during the initial phase of the pharmacy's operation. Instead, the plan called for Ms. Abalihi to operate the pharmacy until it became profitable, at which time Ms. Taylor planned on quitting her full- time job at another pharmacy and becoming an employee at Allwell Pharmacy. Under this plan, until Ms. Taylor actually began working at Allwell Pharmacy, there would be no one with the experience, knowledge, and training needed to ensure compliance with DEA regulations. 5. During the application process and during interviews with DEA Diversion Investigators, both Ms. Abalihi and Ms. Taylor acknowledged the need to have a registered pharmacist present whenever the pharmacy was open. Both Ms. Abalihi and Ms. Taylor misled the Investigators by falsely representing that when it opened, Allwell Pharmacy's staff would include Dalya Mustafa, who is a registered pharmacist and was Ms. Taylor's co-worker. The evidence establishes that there would be no pharmacist present when Allwell Pharmacy began its operations, under the business plan created by Ms. Abalihi. 6. Without the active participation of Ms. Taylor or another person experienced in applying DEA regulations, Cove, Inc. lacked the experience required for its application to be consistent with the public interest. 7. The 90 percent owner of Cove, Inc., Ogechi E. Abalihi is married to a registered pharmacist, Alfred Abalihi. Mr. Abalihi is not an officer, shareholder, or employee of either Cove, Inc., or Allwell Pharmacy. There is insufficient evidence establishing that he would have any direct involvement with either Cove, Inc., or Allwell Pharmacy, just as there is insufficient evidence establishing that he would abstain from such involvement, should the pharmacy become operational. 8. Mr. Abalihi was a pharmacist employed in 2007 by HealthCare Consultants. In the course of his employment at HealthCare Consultants, Mr. Abalihi was directed to provide services as a registered pharmacist at Moon Lake Pharmacy. While providing services as a temporary worker through HealthCare Consultants at Moon Lake Pharmacy, Mr. Abalihi dispensed controlled substances based on unlawful Internet prescriptions prior to Moon Lake Pharmacy surrendering its DEA registration on December 17, 2007. Conclusions of Law 1. When it proposes to deny a new application for a retail- pharmacy DEA Certificate of Registration, the Government is required to establish by at least a preponderance of the evidence that the pharmacy's initial registration is inconsistent with the public interest. 21 U.S.C. 823(f); 21 CFR 1301.44(d). 2. Five factors must be considered when determining the public interest in this case: (1) The recommendation of the appropriate state licensing board or professional disciplinary authority. (2) The applicant's experience in dispensing, or conducting research with respect to controlled substances. (3) The applicant'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). 3. In order to establish a basis for denying a new application for a retail-pharmacy Certificate of Registration based on the provisions of 21 U.S.C. 823(f)(2) (Factor Two), the Government must present evidence establishing, by at least a preponderance, that [[Page 29053]] the experience of the applicant in dispensing controlled substances is of such character and quality that registration is not in the public interest. This requires evidence of both the qualitative manner and quantitative volume of the applicant's experience. Where evidence of the applicant's experience, as expressed through its employees and officers, establishes that the business plan provides for the active daily involvement of no one having experience applying DEA controlled substance diversion regulations in a retail pharmacy setting, and provides only for the involvement of an employee familiar with the regulations applicable to Registered Nurses whose duties include dispensing medication, in such an application there is sufficient evidence proving, by at least a preponderance, that granting such an application would be inconsistent with the public interest. 4. When proposing to deny a retail-pharmacy application under Factor Two based on the prior association and dispensing history of a third party, the Government must demonstrate that the third party's past negative experience in dispensing controlled substances warrants a finding that his or her association with the applicant would be inconsistent with the public interest. Where, as here, the third party is the husband of the applicant's majority shareholder but has no clearly demonstrated role in either the corporation (as a shareholder or an officer), or in the retail pharmacy (as an employee or manager), and where there is insufficient evidence demonstrating the third party's past negative experience will have any impact on the operation of the retail pharmacy, the Government has not met its burden of proving a basis to deny the application under Factor Two. 5. In order to establish a basis for denying a new application for a retail-pharmacy Certificate of Registration based on the provisions of 21 U.S.C. 823 (f)(5) (Factor Five), the Government must present evidence establishing, by at least a preponderance, other conduct (i.e., conduct not covered within the scope of Factors One through Four) which may threaten the public health and safety. Where, as here, the evidence establishes that when called upon by DEA investigators to identify the person or persons who would be familiar with DEA diversion control regulations and would be present at the retail pharmacy to ensure compliance with those regulations, the applicant's sole officer and both of its two shareholders made material misrepresentations about having such person or persons present, there is substantial evidence of conduct that may threaten the public health and safety. In such an application there is sufficient evidence proving, by at least a preponderance, that granting such an application would be inconsistent with the public interest. 6. Upon such evidence, the Government has met its burden and has made a prima facie case in support of the proposed order denying the Respondent's application for a retail-pharmacy Certificate of Registration. 7. Upon a review of the record as a whole, including all claims made in the Respondent's post-hearing brief, there is insufficient evidence of remediation. Accordingly, the Government has established cause to deny this application. Recommendation As the Government has established its prima facie case by at least a preponderance of the evidence, the Respondent's application for a retail-pharmacy DEA Certificate of Registration should be DENIED. Dated: April 23, 2013. Christopher B. McNeil, Administrative Law Judge. [FR Doc. 2015-12131 Filed 5-19-15; 8:45 am] BILLING CODE 4410-09-P
![Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices 29037
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
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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.
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some two years later.2 While neither the pharmacy, she stated that Ms. Jacinta Mustafa,’’ Mrs. Abalihi answered that
Controlled Substances Act (CSA), nor Taylor would do so. Tr. 34. Taylor ‘‘did not say she would be
the Agency’s regulations, prohibits a Subsequently, the DIs interviewed Ms. relying on Ms. Mustafa, no. She said the
pharmacy, which is owned by a non- Taylor, who is a licensed pharmacist name came to her when this question
pharmacist, from holding a DEA (and the owner of ten percent of was thrown to her. She wasn’t expecting
registration, the holder of the Respondent) and who stated that she it, but the name came to her.’’ Id. at 161.
registration is ultimately accountable for would be the pharmacist-in-charge at Notwithstanding her assertion that
ensuring compliance by its pharmacists Respondent. Id. at 38. Ms. Taylor also she was caught flatfooted, Ms. Taylor’s
with the requirements of the CSA and told the DIs that she would order the affidavit, as well as Ms. Abalihi’s
the Agency’s regulations. See United controlled substances and that the testimony, establishes that Taylor had
States v. Southern Union Co., 630 F.3d pharmacy would be open from nine to no basis in fact for her statement to the
17, 31 (1st Cir. 2010), rev’d on other six on weekdays and nine to one on Investigators that Ms. Mustafa would be
grounds, 132 S.Ct. 2344 (2012) (quoted Saturday. Id. at 38–39. Respondent’s pharmacist-in-charge until
in Holiday CVS, L.L.C., d/b/a CVS/ However, during the interview, Ms. Ms. Taylor decided to start working
Pharmacy Nos. 219 and 5195, 77 FR Taylor told the DIs that she had a full there. Accordingly, Ms. Taylor’s
62315, 62317 (2012) (‘‘[T]hose who time position at a Sweetbay Pharmacy statement was false. Moreover, her
manage companies in highly regulated in Tampa, and worked between the statement was materially false in that it
industries are not unsophisticated. . . . hours of ten to eight. Id. at 39. A DI had the capacity to influence the
It is part of [a company’s] business to further testified that according to the Agency’s decision to grant Respondent’s
keep abreast of government State Pharmacy Board, Ms. Taylor was application, because of the obvious need
regulation.’’)). not listed as Respondent’s supervising to determine whether those who will
It is indisputable that absent pharmacist. Id. When the DI asked Ms. actually engage in dispensing activities
knowledge of the CSA and the Agency’s Taylor ‘‘about that,’’ she replied that on behalf of a proposed pharmacy
regulations, a registrant cannot properly ‘‘she would leave Sweetbay if and when registrant, hold the necessary state
supervise its pharmacists to protect [Respondent] started to make money.’’ license and have not previously violated
against the diversion of controlled Id. at 40. federal or state laws related to
substances.3 Thus, Mrs. Abalihi’s The DIs then asked Ms. Taylor who controlled substances. See 21 U.S.C.
admitted lack of knowledge of these would be Respondent’s pharmacist-in- 823(f)(2) & (4) (directing Agency to
requirements provides reason alone to charge given her full time position at consider the applicant’s experience in
conclude that granting Respondent’s Sweetbay and intent to continue dispensing controlled substances and
application ‘‘would be inconsistent with working there until Respondent became compliance with applicable laws related
profitable; Ms. Taylor identified a Ms. to controlled substances); see also 21
the public interest.’’ 21 U.S.C. 823(f).
Mustafa, a co-worker at Sweetbay. Id. CFR 1301.76(a) (‘‘The registrant shall
I further adopt the ALJ’s conclusion
However, when the DIs told Ms. Taylor not employ, as an agent or employee
that the evidence with respect to factor
that they wanted to talk to Ms. Mustafa, who has access to controlled substances,
five—such other conduct which may
Ms. Taylor stated that she did not think any person who has been convicted of
threaten public health and safety—
that Ms. Mustafa would want to be a felony offense relating to controlled
supports the denial of Respondent’s
interviewed and added, ‘‘[w]ell, perhaps substances or who, at any time, had an
application. More specifically, the ALJ
she won’t work there.’’ Id. at 41. application for registration with the
found that both Mrs. Abalihi and Ms.
Subsequently, one of the DIs called Mrs. DEA denied, had a DEA registration
Taylor, who purportedly was to be
Abalihi and ‘‘asked her to put [him] in revoked or has surrendered a DEA
Respondent’s pharmacist-in-charge, touch with Ms. Mustafa.’’ Id. at 42. registration for cause.’’).
made materially false statements to the While Mrs. Abalihi stated that she I do not, however, adopt the ALJ’s
Investigators when they were would contact Ms. Mustafa and either legal conclusion that Mrs. Abalihi made
questioned regarding who would act as get her phone number for the DI ‘‘or a material misrepresentation when she
Respondent’s pharmacist. However, have her call’’ him, he never received a subsequently agreed to provide Ms.
upon review of the record, including the call from Ms. Mustafa. Id. Mustafa’s contact information rather
pleadings, I adopt the ALJ’s conclusion Ms. Taylor did not testify at the than disclose that she knew nothing
only with respect to Ms. Taylor. hearing. However, in an affidavit, Ms. about Ms. Mustafa’s role with the
The evidence showed that when DEA Taylor stated that she ‘‘was caught ‘flat pharmacy. R.D. at 32. In support of his
Diversion Investigators (DI or DIs) asked footed’ ’’ by the question and ‘‘thought’’ reasoning, the ALJ explained that ‘‘[i]f
Mrs. Abalihi who would manage the that Ms. Mustafa, ‘‘another pharmacist Ms. Abalihi intended on using contract
2 While Ms. Abalihi testified that she was not told
who worked at Sweetbay, . . . might be pharmacists at the start of Allwell’s
prior to her interview with the DIs that ‘‘she needed
willing to serve such role.’’ RX 7, at 2. operation, she had an affirmative duty
to study anything,’’ Tr. 136, the Show Cause Order Ms. Taylor further acknowledged that at to say so when DEA investigators asked
clearly provided notice that her lack of knowledge the time of the interview, she ‘‘had not her about the role Ms. Mustafa was to
of DEA regulations was at issue. made formal arrangements for [a] play. By her silence, and by promising
3 Pharmacies which handle controlled substances
replacement and had not yet asked Ms. to provide contact information for Ms.
are subject to extensive recordkeeping and security
requirements. See 21 CFR 1301.75–1301.76
Mustafa whether she would be willing Mustafa, Ms. Abalihi misled the
(security requirements); id. §§ 1304.03–1304.06; to fulfill such role, but thought that Ms. investigators.’’ Id.
1304.21–1304.22 (recordkeeping and reporting Mustafa would be so willing.’’ Id. It may be that Ms. Abalihi misled the
requirements). In addition, as the ALJ explained,
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Moreover, in her testimony, Ms. Abalihi investigators, but the record is far from
their pharmacists are charged with the
responsibility of dispensing only those
stated that she did not know Ms. clear on this point. More specifically,
prescriptions which are ‘‘issued for a legitimate Mustafa, that she had never spoken with while the record establishes that the DI
medical purpose by an individual practitioner her, and that there was ‘‘no plan’’ to called Ms. Abalihi and asked her about
acting in the usual course of his professional have her work at Respondent. Tr. 138– getting contact information for Ms.
practice.’’ 21 CFR 1306.04(a). See also generally 21
CFR part 1306 (setting forth various other
39. And when asked by the ALJ whether Mustafa, the record does not establish
requirements pertaining to prescriptions and the in March 2011, Ms. Taylor had told her that the Investigator ever specifically
dispensing of controlled substances by pharmacies). ‘‘that she would be relying on Ms. ‘‘asked her about the role Ms. Mustafa
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was to play.’’ Most significantly, the that ‘‘[t]his dispensing occurred while compounding equipment, a fax
Government never alleged in either the he was a pharmacist at a pharmacy that machine, a scale, the counter, [and]
Show Cause Order or its pre-hearing surrendered its DEA registration in little else.’’ Id.
statements that Ms. Abalihi made a December 2007 because of these illicit The DI identified one Vivian Alberto
materially false statement or materially dispensing practices.’’ ALJ Ex. 1, at 1. as the owner of the pharmacy. Id. at 78.
misled the DIs when she promised to get The Show Cause Order further alleged However, Ms. Alberto was not a
Ms. Mustafa’s contact information. Nor that Mrs. Abalihi’s husband told the licensed pharmacist. Id. Indeed, the
did the Government make any such Agency’s Investigators ‘‘that these only pharmacist the Investigators
argument in its post-hearing brief.4 dispensing practices were lawful and encountered at Moon Lake was Mr.
Accordingly, because the Government that he intended to apply for a DEA Alfred Abalihi. Id. at 80. According to
never provided notice in the charging registration to open his own retail the DI, he and his partner approached
documents that it intended to litigate pharmacy.’’ Id. at 1–2. Mr. Abalihi and stated that they had
the issue and makes no claim that the The parties stipulated that Mrs. found ‘‘hundreds of prescriptions being
issue was litigated by consent, I reject Abilihi’s husband, Alfred Abilihi ‘‘is a filled for people that have no contact
the ALJ’s conclusion that Mrs. Abalihi registered pharmacist, [and] was a with two physicians, one in Virginia
materially misled the Investigators.5 See pharmacist at Moon Lake pharmacy [and] one in New York.’’ Id. at 84. After
Kenneth Harold Bull, 78 FR 62666, who dispensed controlled substances telling Mr. Abalihi that he was ‘‘creating
62674 (2013); CBS Wholesale based on unlawful internet these labels, [and] you know what’s
Distributors, 74 FR 36746, 36749–50 prescriptions prior to Moon Lake going on,’’ the DI asked him if he
(2009). That being said, the material Pharmacy surrendering its DEA thought ‘‘it’s legal that the patients are
misrepresentation of Ms. Taylor, who registration on December 17th, 2007.’’ far removed from the doctors with no
owned ten percent of Respondent and Tr. 11–12. The evidence shows that on contact and they’re getting
who was designated by Respondent’s November 29, 2007, a DEA Investigator [h]ydrocodone.’’ Id. at 85. Mr. Abalihi
majority owner as its pharmacist-in- received an anonymous phone call from replied that he did not see a problem
charge, is properly charged to a pharmacist who had worked at Moon with filling the prescriptions and that
Respondent and supports the denial of Lake for one day, GX 6C, at 1; the ‘‘it was legal and . . . ethical to do so.’’
its application under factor five. pharmacist alleged that ‘‘the pharmacy Id. at 80. The DI further testified that
Moreover, even as of the date of the was engaging in internet drug trafficking while interviewing Mr. Abalihi, the
hearing, the Agency still does not know of [h]ydrocodone.’’ Tr. 74. Accordingly, latter stated that ‘‘he would like to open
who will be Respondent’s pharmacist- on December 7, two DIs went to the up his own pharmacy.’’ Id. at 81.6
in-charge. Beyond Ms. Taylor’s pharmacy, which was located in New Mr. Abalihi testified that he worked
statement that she did not intend to Port Richey, and ‘‘after several minutes
for Moon Lake for only ‘‘a few days,’’
leave her job at Sweetbay Pharmacy of examination . . . found that the
before the Investigators showed up and
until Respondent is profitable, the pharmacy was solely engaged in
that he had obtained the job through a
evidence further showed that at the time internet drug trafficking of
temporary staffing agency. Tr. 98–99. He
of the hearing, Ms. Taylor had left the [h]ydrocodone and some [s]chedule IV
further maintained that he did not know
Tampa area and was working at a drugs such as Xanax and Valium,’’ in
that Ms. Alberto was the owner because
pharmacy in Orlando. RX E; Tr. 156–57. violation of 21 CFR 1306.04(a). Id. at 75.
The DI further testified that after ‘‘a ‘‘she speaks only Spanish’’ and he does
Moreover, Ms. Taylor did not testify at not. Id. at 102. He then claimed that
few minutes of investigation,’’ he and
the hearing. Because Respondent has prior to the Investigators’ inspection of
another DI ‘‘discovered that there were
failed to provide material information as two physicians,’’ one located in Virginia Moon Lake, no one at the pharmacy had
to who will be its pharmacist-in-charge and one located in New York City, ‘‘who explained how the prescriptions arrived
and oversee the dispensing of the had sent . . . hundreds of prescriptions there and that he had ‘‘no’’ idea how the
controlled substances and compliance for [h]ydrocodone to Moon Lake patients obtained the prescriptions and
with the Agency’s various regulations, I Pharmacy for filling’’ and that the that a Web site was used as part of the
hold that the Agency had demonstrated purported patients were located prescribing process. Id. at 102–03. And
that granting its application ‘‘would be ‘‘throughout the 50 states of the United when asked whether he had any
inconsistent with the public interest.’’ States.’’ Id. at 77–78. The DI further recollection that there was anything
21 U.S.C. 823(f). explained that ‘‘there was no contact wrong with the prescriptions he filled
* * * * * between the patients and the so-called for Moon Lake, Mr. Abalihi answered:
In the Show Cause Order, the physicians’’ and ‘‘[e]verything was ‘‘No, I can’t recollect.’’ Id. at 103–04.
Government also alleged as a basis for based on the submission of a credit card In his testimony, Mr. Abalihi denied
denial of the application that ‘‘Mrs. number,’’ with the ‘‘payment of several telling the Investigators that what he
Abalihi’s husband participated in [the] hundred dollars to a company that used was doing was legal, as well as that he
unlawful dispensing of controlled [Moon Lake] to fill the prescriptions’’ intended to open his own pharmacy. Id.
substances that were prescribed over the and that ‘‘Moon Lake . . . was getting at 104. He also claimed that the DIs
Internet by physicians who did not $75 per filled [h]ydrocodone ‘‘didn’t even tell me why they were
personally examine the patients’’ and prescription.’’ Id. at 78. there,’’ although he also asserted that
According to the DI, the pharmacy they told him that ‘‘we didn’t come here
4 For the same reason, I need not decide whether,
was not open to the public and it ‘‘was for you. If the pharmacy manager did
even assuming that Ms. Abalihi lacked the intent what we told him to do the last time we
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extremely small, it looked like 600
to deceive when she told the Investigators that she
would obtain Ms. Mustafa’s contact information, square feet’’ with ‘‘no seating area for came we wouldn’t have been here.’’ Id.
she had a duty to correct any erroneous information walk-ins.’’ Id. at 79. Also, ‘‘[t]here was
she provided the Investigators upon being told by no over-the-counter merchandise’’ and 6 Six days later, Ms. Alberto voluntarily
Ms. Taylor that there was no plan for Ms. Mustafa ‘‘no merchandise . . . other than the surrendered Moon Lake’s DEA registration. Tr. 82.
to work at Respondent. As the DI explained, he requested that Ms. Alberto
5 I reject ALJ Finding of Fact number 5 and controlled substances.’’ Id. Continuing, surrender Moon Lakes’ registration ‘‘because
Conclusion of Law number 5 only to the extent they the DI explained that ‘‘[t]here was everything [Ms. Alberto] was doing was criminal.’’
are based on the statements of Ms. Abalihi. essentially nothing except the Tr. 83.
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at 100–01.7 Yet, the evidence establishes did not have an ownership interest in keep her husband ‘apart from ownership
that the DIs encountered Mr. Abalihi on Respondent and was neither a director and management’ of the pharmacy.’’ Id.
their first visit to Moon Lake Pharmacy. nor officer of it, Mr. Abalihi further The ALJ further reasoned that ‘‘having
GX 6C, at 2 (¶ 4). asserted he does not ‘‘have any hand in considered the affidavit of Mr. Abalihi,9
On cross-examination, Mr. Abalihi running’’ the pharmacy. Id. at 123. and having considered the testimony
repeatedly maintained that he could not Likewise, Mrs. Abalihi asserted that from both Mr. and Mr. [sic] Abilihi, I
remember if he had dispensed she did not make her husband a co- find sufficient credible and unrebutted
prescriptions for hydrocodone or if owner of Respondent because he ‘‘had evidence to conclude Mr. Abalihi does
hydrocodone was the main drug that tried in the past’’ to ‘‘open a pharmacy’’ not intend to perform a significant role
was being dispensed at Moon Lake. Id. and was told by his counsel to withdraw in the operation of’’ Respondent. Id.
at 110–11. Indeed, Abalihi maintained his DEA application. Tr. 133. She As for Mr. Abalihi’s involvement at
that he could not recall having looked further asserted that DEA has Moon Lake Pharmacy, the ALJ noted
at any of the prescriptions he filled, did ‘‘blacklisted’’ her husband. Id. Mrs. that he shared the same sense as the DIs
not know the size of the pharmacy, and Abalihi offered no testimony that her ‘‘that anyone in Mr. Abalihi’s position
could not recall whether Moon Lake husband would not work at the would have had reason to question the
was ‘‘set up as a typical retail pharmacy. legitimacy of the operation’’ as well as
pharmacy’’ and was ‘‘selling other According to Respondent’s Exhibit C, the DIs’ ‘‘sense of incredulity that Mr.
merchandise.’’ Id. at 112. He also which is a License Verification printout Abalihi would have failed to recognize
maintained that he did not discuss with from the Florida Department of Health, the illegal nature of what was going on
anybody ‘‘how they operate[d]’’ and that Mr. Abalihi has a clear and active at Moon Lake, even though his stay
‘‘[t]he only thing is that prescriptions pharmacist license in the State of there was brief.’’ Id. at 29–30. After
were filled and brought to me to check, Florida, and has not been subject to noting that Mr. Abalihi ‘‘was not
and I checked.’’ Id.8 Moreover, when discipline or a public complaint. RX C, charged with any misconduct arising
asked if he ‘‘knew [that] what was going at 1. Yet the License Verification out of his service at Moon Lake,’’ the
on at Moon Lake Pharmacy; that the printout also lists Mr. Abalihi’s address ALJ explained that while ‘‘Mr. Abalihi
operation was illegal with what they of record as 1947 W. Dr. Martin Luther may have unwisely told the DEA
were doing with hydrocodone,’’ Mr. King Jr. Blvd. in Tampa, Florida. Id. investigators that Moon Lake’s
Abalihi answered: ‘‘I didn’t say, sir.’’ Id. This is the same address as Respondent. operations were legal . . . I cannot
at 120. See RX B. Moreover, the License conclude from that piece of evidence
Mr. Abalihi also testified that he had Verification printout does not list any that [he] was knowingly advancing
tried to subsequently open his own secondary locations for Mr. Abalihi. Id. Moon Lake’s criminal enterprise when
pharmacy, but had withdrawn his at 2. the DEA arrived.’’ Id. at 30.
application for a DEA registration after The ALJ rejected the Government’s Notwithstanding ‘‘that the parties . . .
his then-attorney advised him that DEA contention that Respondent’s stipulated that Mr. Abalihi dispensed
intended to deny his application. Id. at application should be denied because controlled substances based on
106. Moreover, Mr. Abalihi testified that Mr. Abalihi’s ‘‘past negative history’’ in unlawful Internet prescriptions during
he does not intend to work or otherwise dispensing controlled substances ‘‘has a his short tenure at Moon Lake,’’ the ALJ
operate Respondent and that he ‘‘just clear nexus’’ to his wife’s application. explained that ‘‘the most we can say for
wanted . . . to advise my wife how to R.D. at 28–30 (citing Govt’s Proposed certain is that Mr. Abalihi was the
do things,’’ and he ‘‘would have loved Findings of Fact, Conclusions of Law, pharmacist who was present when the
to work there, but the DEA wouldn’t and Argument in Respondent to DEA agents arrived at Moon Lake and
allow me to.’’ Id. at 108. He further Respondent’s Brief, at 10 (citing brought its operation to an end.’’ Id.
maintained that during the week, he Matthew D. Graham, 67 FR 10229 And noting that Mr. Abalihi’s record
works full time as a pharmacist at a (2002)). The ALJ rejected the ‘‘since then is unblemished,’’ the ALJ
Miami area pharmacy, and comes home Government’s argument, noting that in reasoned that ‘‘his plan to avoid direct
to Tampa on the weekends. Id. at 109. Graham, the Agency had denied the involvement with [Respondent]
Mr. Abalihi acknowledged that his application based on the misconduct of adequately attenuates the link between
wife had filed her application after he the applicant’s business partner, who him and the proposed pharmacy.’’ Id.
had withdrawn his application. Id. at had previously surrendered a DEA I reject the ALJ’s conclusion that Mr.
122. When asked if he had advised his registration for distributing large Abalihi was not knowingly advancing
wife regarding her application, he quantities of list I chemicals while Moon Lake’s criminal enterprise when
answered: ‘‘I’m her husband. I knew she having reasonable cause to believe they DEA arrived. Indeed, this conclusion is
was going to apply to open a would be used to manufacture a irreconcilable with the ALJ’s finding
pharmacy.’’ Id. After testifying that he controlled substance. See id. at 29. that there is ‘‘sufficient credible
The ALJ thus reasoned that Graham evidence to conclude Mr. Abalihi was
7 It is undisputed that Mr. Abalihi was never was distinguishable because ‘‘unlike the aware that the practices 10 in this
subjected to discipline by the Florida Board of business plan presented by Ms. Abalihi, pharmacy were illegal.’’ R.D. at 28.
Pharmacy.
8 When asked on cross-examination, whether as a
the registrant in Graham was Moreover, as the ALJ found, the
Florida-based pharmacist, he would not fill a economically tied to the third party’’ but evidence shows that Mr. Abalihi
prescription issued by a New York doctor for a ‘‘Ms. Abalihi presented a business plan committed criminal conduct by
patient who lives in Georgia, Mr. Abalihi answered: that expressly removed Mr. Abalihi knowingly dispensing controlled
It depends. If I see a prescription—and I call the
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from all phases of the proposed substance prescriptions which were
doctor and verify that that prescription came there.
I don’t know if the doctor has met the patient. The pharmacy’s operation’’ and he ‘‘would issued outside of the usual course of
onus lies on the doctor to make sure that he sees not directly participate as an officer or
his patient, and my own is to make sure that the owner of’’ Respondent. Id. While noting 9 Having reviewed Mr. Abalihi’s affidavit, I am at
prescription is authentic. that Ms. Abalihi offered no testimony a loss as to what statement it contained that the ALJ
Tr. 114. However, Mr. Abalihi then testified that found so persuasive on this issue.
he did not recall that he ever called and asked a
that ‘‘she would prohibit her husband 10 While I agree with the ALJ’s finding, I do not
physician if he/she had contact with the patient from working in the pharmacy,’’ the ALJ rely on the DI’s assertion that the pharmacy’s
when he worked at Moon Lake. Id. at 114–15. credited her statement ‘‘that she would compounding activities were illegal.
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professional practice and lacked a As held in numerous Agency reasonable pharmacist would have
legitimate medical purpose. See 21 decisions, under the Controlled reached this conclusion, and in any
U.S.C. 841(a)(1); 21 CFR 1306.04(a). Substances Act, ‘‘it is fundamental that event, Mr. Abalihi went back to the
Here, in addition to the stipulation a practitioner must establish a bonafide pharmacy a second day.12
that Mr. Abalihi dispensed controlled doctor-patient relationship in order to In short, the evidence shows that Mr.
substances based on unlawful internet act ‘in the usual course of . . . Abalihi violated his corresponding
prescriptions, a DI testified that upon professional practice’ and to issue a responsibility and the CSA by filling
arriving at the pharmacy and reviewing prescription for a ‘legitimate medical prescriptions which lacked a legitimate
the prescriptions, he found that the purpose.’ ’’ See, e.g., David A. Ruben,
medical purpose and were issued
prescriptions were solely for M.D., 78 FR 38363, 38380 (2013) (citing
outside of the usual course of
hydrocodone, a schedule III controlled United States v. Moore, 423 U.S. 122,
substance, and drugs such as Xanax and professional practice. Id.; see also 21
142–43 (1975); other citations omitted).
Valium, which are schedule IV U.S.C. 841(a)(1). Moreover, Mr.
So too, DEA has held that a physician
benzodiazepines. Tr. 75. Most Abalihi’s testimony makes clear that he
who engages in the unauthorized
significantly, the evidence showed that still does not understand the scope of
practice of medicine, such as by
the Investigators found that hundreds of his obligations in dispensing controlled
prescribing controlled substances to
prescriptions were being filled that had substances. As found above, when asked
patients who reside in a State where he/
been written for controlled substances if he would not fill a prescription
she is not licensed to practice, acts
by two physicians, one of whom was outside of the usual course of written by a New York physician for a
located in Virginia and the other New professional practice and therefore patient who lives in Georgia, he
York, and that the patients were located violates the CSA for this reason as well. testified, in essence, that if he called the
throughout the fifty States of the U.S. Id. United Prescription Services, 72 FR doctor and the doctor verified the
at 77–78; 84. Moreover, the pharmacy 50397, 50407 (2007) (‘‘A controlled- prescription, he wouldn’t ‘‘know if the
did not have an area for walk-in substance prescription issued by a doctor ha[d] met the patient’’ and that
patients, had no over-the-counter physician who lacks the license ‘‘[t]he onus lies on the doctor to make
merchandise, and indeed, sold no necessary to practice medicine within a sure that he sees his patient.’’ Tr. 114.
merchandise other than controlled State is therefore unlawful under the Not only did Mr. Abalihi offer no
substances. Id. at 79. CSA.’’). As the Supreme Court has testimony that he had called either of
Under 21 CFR 1306.04(a), ‘‘[a] explained: ‘‘In the case of a physician, the doctors whose prescriptions he
prescription for a controlled substance [the CSA] contemplates that he is filled while at Moon Lake, his
. . . must be issued for a legitimate authorized by the State to practice understanding of the scope of his
medical purpose by an individual medicine and to dispense drugs in obligations under federal law has been
practitioner acting in the usual course of connection with his professional repeatedly rejected by both this Agency
. . . professional practice.’’ Moreover, practice.’’ Moore, 423 U.S. at 140–41 and multiple United States Courts of
while ‘‘[t]he responsibility for the (emphasis added). Appeal. As the Fifth Circuit has
proper prescribing and dispensing of Thus, I reject the ALJ’s portrayal of explained, ‘‘[v]erification by the issuing
controlled substances is upon the Mr. Abalihi as a hapless bystander who practitioner on request of the
prescribing practitioner . . . a was in the wrong place at the wrong pharmacist is evidence that the
corresponding responsibility rests with time when the DIs arrived at Moon pharmacist lacks knowledge that the
the pharmacist who fills the Lake. To the contrary, as the ALJ found, prescription was issued outside the
prescription.’’ Id. Accordingly, ‘‘[a]n there was ‘‘sufficient credible evidence scope of professional practice. But it is
order purporting to be a prescription to conclude [that he] was aware that the not an insurance policy against a fact-
issued not in the usual course of practices in this pharmacy were illegal.’’ finder’s concluding that the pharmacist
professional treatment . . . is not a R.D. at 28. Indeed, the respective had the requisite knowledge despite a
prescription within the meaning and locations of the two prescribing purported but false verification.’’ United
intent of [21 U.S.C. 829] and the person physicians and the patients, who were States v. Hayes, 595 F.2d 258, 261 (5th
knowingly filling such a purported located through the country, made it Cir. 1979). Thus, simply calling a
prescription . . . shall be subject to the clear to Mr. Abilihi that the physician to verify a prescription is not
penalties provided for violations of the prescriptions lacked a legitimate enough because a pharmacist has ‘‘the
provisions of law relating to controlled medical purpose and were issued responsibility not to fill an order that
substances.’’ Id.11 outside of the usual course of purports to be a prescription but is not
professional practice. 21 CFR a prescription within the meaning of the
11 Well before Mr. Abalihi filled prescriptions for
1306.04(a). Moreover, even if it was not statute because he knows [or has reason
Moon Lake, several federal appeals courts had
upheld the convictions of pharmacists under 21 immediately apparent to Mr. Abalihi to know] that the issuing practitioner
U.S.C. 841(a)(1) for filling prescriptions which were that he was aiding and abetting a issued it outside the scope of medical
issued over the internet by physicians, who did not criminal enterprise, surely at some point practice.’’ Id. (quoted in East Main
practice in the same State where the patients during his first day at Moon Lake a
resided, and who did not physically examine the Street Pharmacy, 75 FR 66149, 66164
patients, because the physician did not establish a (2010)); see also United States v. Henry,
legitimate doctor-patient relationship with the 50407–09 (2007); Trinity Health Care Corp., d/b/a 727 F.2d 1373, 1379 (5th Cir. 1984);
patient. See United States v. Nelson, 383 F.3d 1227, Oviedo Discount Pharmacy, 72 FR 30849, 30855
(2007); EZRX, LLC, 69 FR 63178, 63181 (2004); see
Medic-Aid Pharmacy, 55 FR 30043,
1231–32 (10th Cir. 2004); United States v. Fuchs,
467 F.3d 889, 899–900 (5th Cir. 2006). So too, DEA also William R. Lockridge, M.D., 71 FR 77791
mstockstill on DSK4VPTVN1PROD with NOTICES
had issued numerous decisions holding that both (2006); Marvin L. Gibbs, Jr., M.D., 69 FR 11658 12 The ALJ ‘‘note[d] that Mr. Abalihi was not
the act of prescribing over the internet, as well as (2004); Rick Joe Nelson, M.D., 66 FR 30752 (2001). charged with any misconduct arising out of his
the act of dispensing a prescription issued over the Moreover, in 2001, DEA issued a Guidance service at Moon Lake.’’ R.D. at 30. As has been
internet, by a physician who has either engaged in Document warning of the potential illegality of repeatedly explained, this is totally irrelevant
the unlicensed practice of medicine or failed to dispensing controlled substances based on because there are any number of reasons why
establish a legitimate doctor-patient relationship, prescriptions which were obtained through the neither a prosecutor nor a state licensing body may
violates 21 CFR 1306.04(a) and constitutes an internet and telephone consultations. DEA, bring charges. See Robert L. Dougherty, M.D., 76 FR
unlawful distribution under 21 U.S.C. 841(a)(1). See Dispensing and Purchasing Controlled Substances 16823, 16833n.13 (2013). Rather, what matters is
United Prescription Services, Inc., 72 FR 50397, over the Internet, 66 FR 21181, 21182–83 (2001). his underlying misconduct.
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30044 (1990); Frank J. Bertolino, 55 FR he can look behind a corporate façade in the store, she is not a trained
4729, 4730 (1990). to determine who makes the decisions pharmacist and relies on the advice of
Nor—notwithstanding that it is concerning the controlled substance the managing pharmacists at both stores.
couched as being based on credibility business of a pharmacy,’’ the Agency In light of [the convicted pharmacist’s]
findings—do I find persuasive the ALJ’s revoked the pharmacy’s registration, past activities, the Acting Administrator
conclusion that the link between Mr. holding that while the pharmacy was cannot conclude that he will not
Abalihi and Respondent is adequately now owned by the children of the attempt to exert some form of control
attenuated because Mrs. Abalihi has former owner, neither child was a over one or both of the pharmacies.’’ Id.
kept her husband ‘‘apart from [the] pharmacist, and the former owner Here, the totality of the circumstances
ownership and management of’’ ‘‘continues to exert influence or control leads me to reject the ALJ’s conclusion
Respondent and Mr. Abalihi ‘‘plan[s] to over [the pharmacy] through the family- that the link between Mr. Abalihi and
avoid direct involvement with’’ the held corporation.’’ Id. Respondent is too attenuated to support
pharmacy. R.D. at 29–30. While Graham Moreover, in Unarex of Plymouth (in addition to the other bases set forth
is undoubtedly distinguishable from Road, d/b/a Motor City Prescription and above) the denial of the latter’s
this case, it does not reflect the limits of Unarex of Dearborn, d/b/a/Motor City application.15 Notably, Mrs. Abalihi
the Agency’s authority to deny an Prescription Center, 50 FR 6077 (1985), submitted the application only after Mr.
application or revoke an existing two pharmacists, who had been Abalihi was informed (by his attorney)
registration based on the misconduct of convicted of CSA violations (conspiracy that the local DEA field office intended
a third party, particularly where that and unlawful distribution), had to deny his application and he
third party is a family relation of the transferred both their ownership withdrew it.16
applicant’s principal. Indeed, in interests and their respective office or Indeed, Mrs. Abalihi admitted that the
numerous cases—none of which are directorship to their spouses. Noting reason she did not make her husband a
discussed in the Recommended that both pharmacists ‘‘share[d] co-owner was because of his prior failed
Decision—the Agency has either indirectly in the profits of’’ the two attempt to obtain a DEA registration. Tr.
revoked existing registrations or denied pharmacies, the Agency revoked the 133. So too, while Mr. Alabihi was not
applications of pharmacies based on the registration of both pharmacies, holding made a shareholder of Respondent, he is
closeness of the relationship between a that ‘‘[i]t is appropriate that both married to Respondent’s principal
person who diverted controlled registrations be revoked in light of this owner and would thus share, at least
substances or committed other serious continued benefit’’ received by the indirectly, in any of Respondent’s
CSA violations and another party who pharmacists.13 Id. at 6079. profits. See Unarex, 50 FR at 6079. Mr.
is either the applicant or new owner of Lawsons & Sons Pharmacy and Abalihi would thus have a strong
a pharmacy. Fenwick Pharmacy, 48 FR 16140 (1983), economic incentive to exercise
Accordingly, the Agency has held that involved two pharmacies whose influence over Respondent’s
it ‘‘may look to who exerts influence pharmacist was convicted of unlawfully operation.17 See id.
over the registrant’’ in determining distributing controlled substances. At
whether to deny an application or the time of the proceeding, the 15 The ALJ ‘‘question[ed] whether there is a
revoke a registration. See, e.g., City Drug pharmacist’s wife owned 100 percent of sufficient link established between Mr. Abalihi’s
Co., 64 FR 59212, 59214 (1999). As the one of the pharmacies and fifty percent past work at Moon Lake Pharmacy and Cove, Inc.’s
Agency explained in City Drug: of the other.14 Therein, the registrants proposal to operate’’ Respondent. R.D. at 28; see
also id. at 31 (‘‘[T]he facts shown here do not
‘‘sometimes the bonds linking the provided an affidavit from the establish the kind of ties that link Mr. Abalihi’s past
former owner to the new owner are too pharmacist’s wife ‘‘stat[ing] that she is brief involvement with Moon Lake’s illegal
close to ensure that the former owner an active and knowledgeable officer of operation to the operation proposed by the
will have no influence over the each of the corporations and has come Respondent here.’’).
operation of the pharmacy.’’ Id. (citing To the extent the ALJ was suggesting that to the
to understand the operation of the deny the application on this basis, the Government
Monk’s Pharmacy, 52 FR 8988, 8989 pharmacies,’’ and that ‘‘she ha[d] great must show that Mrs. Abalihi intended to operate
(1987) and Carriage Apothecary, Inc., 52 trust in the two pharmacists she ha[d] Respondent as a pharmacy which filled
FR 27599, 27599 (1987)). hired to run these pharmacies and that prescriptions obtained by soliciting customers over
In Monk’s Pharmacy, the Agency her husband has withdrawn from [his] the internet and which were issued by physicians
denied an application of a pharmacy, who did not establish a valid doctor-patient
involvement in the pharmacies’’; the relationship with the customers, the Government
noting that the former owner, who had registrants also provided an affidavit was not required to make such a showing. Rather,
been convicted of a felony relating to from one of the registrant’s managing it was only required to show that Mr. Abalihi had
controlled substances, had transferred pharmacists stating that he understood committed violations of the CSA and that there was
ownership to his children and to a reason to believe that he would exert influence or
that the convicted pharmacist’s wife control over Respondent’s operation.
third-party, who was a registered would ‘‘discourage’’ her husband ‘‘from 16 While the Abalihis maintain that they have
pharmacist. 52 FR at 8988. The Agency entering the store’’ upon his release been ‘‘blacklisted’’ by DEA, Tr. 98 & 133; instead
denied the application, noting ‘‘that the from incarceration. Id. at 16141. The of withdrawing his application, Mr. Abalihi could
bonds linking the convicted [former have challenged the proposed denial of his
Agency nonetheless rejected the application and would have been entitled to a
pharmacy owner] with his children and registrants’ evidence and revoked both hearing. See 21 U.S.C. 824(c). At that hearing, he
the subject pharmacy are too close to registrations, holding that while the could have challenged the Government’s evidence
permit a reasonable certainty that he convicted pharmacist’s wife ‘‘has as well as put forward evidence relevant to the
will have no authoritative voice in its issue of whether his registration would be
always had some administrative duties consistent with the public interest. See id. § 823(f).
mstockstill on DSK4VPTVN1PROD with NOTICES
operation.’’ Id. at 8989. 17 While in Graham, there clearly was a business
So too, in Carriage Apothecary, the 13 While the Administrator noted that one of the
arrangement between the applicant and his partner
pharmacy’s owner, who had committed pharmacists continued to work in one of the stores, (who had diverted list I chemicals), consistent with
recordkeeping violations, had and thus declined to believe that this pharmacist the cases discussed above, I reject the ALJ’s
transferred the stock of the corporation ‘‘no longer exerts influence over the operation’’ of reasoning that Graham is distinguishable on ground
the pharmacy, no such evidence was presented as that ‘‘unlike the business plan presented by Ms.
which owned the pharmacy to his to the second store. 50 FR at 6079. Abalihi, the registrant in Graham was economically
children. 52 FR at 27599. Noting that 14 The Agency’s decision does not state who tied to the third party.’’ R.D. at 29. Contrary to the
‘‘[t]he Administrator has long held that owned the other fifty percent of this pharmacy. ALJ’s understanding, the Abalihi’s marriage
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Moreover, notwithstanding that Mr. pharmacist-in-charge.19 The evidence RECOMMENDED RULINGS, FINDINGS OF
Abalihi was not made a shareholder or thus suggests that the plan all along was FACT, CONCLUSIONS OF LAW, AND
officer, Mrs. Abalihi offered no for Mr. Abalihi to be Respondent’s DECISION OF THE ADMINISTRATIVE
testimony that he would not work at the pharmacist-in-charge. LAW JUDGE
pharmacy. R.D. at 29. Indeed, Accordingly, based on the record as a Nature of the Proceeding
Respondent’s own evidence shows that whole, I reject the ALJ’s conclusion that Christopher B. McNeil, Administrative
Mr. Abalihi listed Respondent as his the links between the applicant and Mr. Law Judge. On March 3, 2011, Ogechi E.
address of record for his pharmacist Abalihi are sufficiently attenuated to Abalihi submitted a request on behalf of
license with the Florida Department of conclude that he will exercise no Cove, Inc., seeking a new retail pharmacy
Health.18 RX C. Thus, while Mr. Abalihi DEA Certificate of Registration, allowing it to
influence or control over Respondent.20
claimed that he had no intention of dispense controlled substances through a
I further conclude that the record business that would be known as Allwell
working at Respondent, he offered no supports a finding that Mrs. Abalihi Pharmacy in Tampa, Florida. On July 26,
explanation for the inconsistency submitted the application as part of a 2011, finding cause to believe this
between his testimony and his action in ruse to obtain a registration after her registration would be inconsistent with the
listing Respondent as his address of husband withdrew his application. This public interest, the Drug Enforcement
record. Moreover, given Mr. Abalihi’s finding provides additional reason to Administrator, through the Deputy Assistant
claim, it is strange that he signed the reject the application.21 Administrator, issued an order to show cause
return receipt card, manifesting service why the Administrator should not deny the
of the Show Cause Order, which was ORDER application. In response, on August 22, 2011,
mailed to Respondent at its physical the Respondent requested an extension of the
Pursuant to the authority vested in me time permitted to file a response, which was
location of 1947 W. Dr. Martin Luther by 21 U.S.C. 823(f), as well as 28 CFR granted by DEA Administrative Law Judge
King Blvd. See GX 1, at 2. Thus, while 0.100(b), I order that the application of Timothy J. Wing. Judge Wing thereafter
the ALJ found credible Mr. Abalihi’s Cove, Incorporated, doing business as received what he found to be a waiver of
testimony that he did not intend to work Allwell Pharmacy, for a DEA Certificate Cove, Inc.’s right to a hearing on the matter
at Respondent, the ALJ never reconciled of Registration as a retail pharmacy, be, and terminated the administrative review
his finding with this evidence. and it hereby is, denied. This order is Cove had requested.
Finally, Ms. Taylor, who Mrs. Abalihi In her review of the record, the
effective immediately. Administrator concluded there were factual
represented as being Respondent’s Dated: May 11, 2015. disputes that warranted further development
pharmacist-in-charge, told the DIs that and remanded the matter to the Office of
Michele M. Leonhart,
she did not intend to leave her then- Administrative Law Judges, with instructions
position at Sweetbay Pharmacy until Administrator.
to permit the parties to present evidence at
Respondent was profitable. Moreover, Brian Bayly, Esq., for the Government a hearing to be conducted in Tampa, Florida.
when questioned as to who would be Daniel G. Musca, Esq., and Brian C. Chase, At this point, Judge Wing was no longer with
Esq., for the Respondent the DEA Office of Administrative Law
the pharmacist during the interim
period, Ms. Taylor gave the name of a Judges, so Administrative Law Judge Gail
person she had never asked. Ms. Taylor,
19 Notwithstanding that many of the Agency cases Randall issued an order for prehearing
have involved pharmacies whose prior owners were statements. On December 3, 2012, prior to the
who has since taken a position in convicted of criminal offenses, a criminal submission of prehearing statements, Chief
Orlando, did not testify in the conviction of either the pharmacy or its pharmacist/ Administrative Law Judge John J. Mulrooney
proceeding, and while she did submit owner is not required to sustain the denial of an
application or the revocation of a registration. For
II reassigned the case from ALJ Randall to the
an affidavit, the affidavit contains no example, in Carriage Apothecary, the pharmacy and undersigned, and I presided over an
statement that she still intends to pharmacist were not convicted of any offense but evidentiary hearing conducted in Tampa,
become Respondent’s pharmacist-in- agreed to pay a civil penalty. 52 FR at 27599. Florida, on February 13, 2013.
charge. Indeed, Mrs. Abalihi still has 20 I therefore reject the ALJ’s finding of fact
Issue
not disclosed who will be Respondent’s number seven. See R.D. at 34. I also reject the ALJ’s
conclusion of law number four. See id. at 35–36. The general issue to be adjudicated by the
21 In one of Respondent’s filings, it asserts that its Administrator, with the assistance of this
establishes that Mr. and Mrs. Abalihi are case is ‘‘most analogous’’ to the Agency’s decision recommended decision, is whether the
economically tied. Cf. Califano v. Jobst, 434 U.S. 47, in Terese, Inc., D/B/A Peach Orchard Drugs, 76 FR record as a whole establishes, by substantial
54 (1977) (‘‘Both tradition and common experience 46843 (2011). It’s not. In Terese, the Government
support the conclusion that marriage is an event
evidence, that Cove, Inc.’s application for a
sought the revocation of the registration of a
which normally marks an important change in pharmacy, which was owned by the wife of a
Certificate of Registration with the DEA
economic status.’’); Women Involved in Farm pharmacist, who along with his pharmacy, had should be denied as inconsistent with the
Economics v. USDA, 876 F.2d 994, 1005 (D.C. Cir. been convicted of health care fraud and required to public interest, as that term is used in 21
1989) (noting with approval the assumption that surrender his DEA registration as part of his U.S.C. § 823(f).
‘‘whatever their roles, married men and women sentence. While the Government argued that the The issue arose after DEA investigators
constitute one economic unit’’). pharmacy was simply the alter ego of a previous completed an evaluation of the evidence
While I conclude that Mrs. Abalihi submitted the pharmacy, which had been subject to mandatory supporting Cove, Inc.’s application. In this
pending application as part of a ruse by the exclusion from federal health care programs by evaluation, investigators learned that the 90
Abalihis to obtain a registration after Mr. Abalihi virtue of its conviction, see 21 U.S.C. 824(a)(5) and
withdrew his application, and that the Abalihis 42 U.S.C. 1320a–7(a), I noted that the respondent
percent owner of Cove, Inc., Ogechi Abalihi,
planned all along for Mr. Abalihi to be was not subject to mandatory exclusion but rather R.N., had no experience as a pharmacist and
Respondent’s pharmacist-in-charge, contrary to the only permissive exclusion, and that Congress had limited knowledge about DEA regulations
ALJ’s understanding, the Agency’s case law does not granted the Agency authority to revoke a pertaining to the retail distribution of
not require that the Government prove that Mr. registration on the latter basis. 76 FR at 46846–48. controlled substances. Investigators also
Abalihi ‘‘intend[ed] to perform a significant role in While the Government also alleged that the found that the ten percent owner of Cove,
mstockstill on DSK4VPTVN1PROD with NOTICES
the operation of’’ Respondent. R.D. at 29. former pharmacy and its pharmacist had diverted Inc., pharmacist Jacinta Taylor, was not
18 Mr. Abalihi also testified that he was working controlled substances, I rejected the allegation for planning on being present at the pharmacy
full time at a pharmacy in Miami. Tr. 109. Yet he lack of substantial evidence. Id. at 46846 & n.9. until after it became profitable. The
did not list this pharmacy as either his address of However, I also explained that ‘‘had the evidence
record or as a secondary location with the Florida established that [the owner’s husband or the former
investigators noted that Ms. Taylor gave them
Department of Health, see RX C, and I find it pharmacy had] violated the CSA or state controlled conflicting information regarding who would
implausible that he would continue working full substance laws, the Agency case law on piercing the serve as Allwell’s pharmacist up to the time
time in Miami if Respondent obtained a registration corporate veil would authorize the revocation of when Ms. Taylor would participate in the
given the expense of hiring a pharmacist. [the] [r]espondent’s registration.’’ Id. operation of the pharmacy. Investigators also
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him the interim pharmacist in charge would Consultants, all without incident or result, the pharmacist preferred to fill
be a coworker of hers, Dalya Mustafa.30 disciplinary action. controlled substance prescriptions only for
When he learned that Ms. Taylor intended Investigator Boggess testified that at the those individuals who could prove they lived
to use Ms. Mustafa as the interim pharmacist conclusion of the investigation into Cove, in the neighborhood and who were his
in charge of the applicant pharmacy, Inc.’s application for DEA registration, DEA’s established customers.51
Investigator Boggess told Ms. Taylor he Diversion Group Supervisor, Roberta Investigator Boggess described making
would need to interview Ms. Mustafa, given Goralczyk determined that the application similar trips to and receiving similar input
the significant role Ms. Mustafa would be should be denied.38 He said he then spoke to from four other nearby pharmacies, including
playing with the new pharmacy.31 According both Ms. Abalihi and Ms. Taylor, and learned Hillsborough River Compounding Pharmacy,
to Investigator Boggess, at this point in the that Ms. Taylor wished to withdraw the run by Mr. Uba, Care Plus Pharmacy run by
interview Ms. Taylor ‘‘stuttered and said, application but that Ms. Abalihi would not Mr. Bakari, CVS Pharmacy, run by Mr.
‘Well, perhaps [Ms. Mustafa] won’t work drop the request for the DEA Certificate.39 Alicea, and Walgreens Pharmacy, run by Mr.
there.’’’ 32 At the conclusion of this Investigator Boggess told Ms. Taylor, Luu. In these interviews, Investigator Boggess
interview, Investigator Boggess called Ms. however, that as she was not the actual learned that the nearby hospital did not
Abalihi and asked if she would provide applicant, she could not withdraw the generate many prescriptions for controlled
contact information so that he could call Ms. application.40 He said that after this substances.52 He also learned that while
Mustafa and confirm the role she would be discussion, both Ms. Taylor and Ms. Abalihi some of those he interviewed felt there was
playing in the proposed pharmacy.33 spoke with him at the end of March, 2011 a high demand for oxycodone, not all found
According to Investigator Boggess, Ms. and asked for a list of the DEA’s objections, there to be a shortage.53 Mr. Alicea reported
Abalihi talked with Investigator Boggess on indicating that they both wished to have the attempts by drug seeking customers to seek
either the 30th or 31st of March 2011, and application go forward.41 out oxycodone and to attempt to learn the
told him she would contact Ms. Mustafa and Investigator Boggess testified that as of price charged for the drug, prompting Mr.
either have her call him or provide him with January 2013, when he last drove past Alicea to refuse to fill prescriptions for more
her phone number. Investigator Boggess said Allwell’s proposed location, the pharmacy than 100 dosage units of the drug, and to post
that despite this, Ms. Mustafa never had not opened.42 He added that five other a sign in the pharmacy stating ‘‘No
contacted him and he heard nothing further pharmacies were operating within a few Oxycodone,’’ in large print on an 8 by 11
from Ms. Abalihi regarding Ms. Mustafa.34 hundred yards of the proposed location, all sheet of paper at the pharmacy counter.54 At
In addition to inquiring of Ms. Abalihi how in close proximity to St. Joseph’s Hospital.43 the Walgreens Pharmacy, Mr. Luu reported
Cove, Inc. would ensure compliance with He said he recently visited these pharmacies, there was a high demand for oxycodone, and
DEA controlled substance regulations, and confirmed they all held DEA Certificates that he would not fill prescriptions for
Investigator Boggess said he and Investigator allowing them to dispense controlled Schedule II medications.55
Wald were also concerned about the role substances.44 Through this testimony, When asked on cross examination why he
Alfred Abalihi—Ms. Abalihi’s husband— Investigator Boggess established there is an waited until 2013 to conduct these
would play in the new pharmacy. Here, both ongoing concern by pharmacists regarding interviews with the nearby pharmacies,
Investigator Wald and Investigator Boggess the proliferation of pain medication Investigator Boggess agreed that ‘‘the two-
described an investigation their office prescriptions, particularly regarding year delay is a good question, period, for this
conducted four years earlier, involving Moon OxyContin 15 and 30 mg. tablets.45 On cross whole process,’’ but that he was working
Lake Pharmacy. According to Investigator examination, Investigator Boggess confirmed with 30 other applications at the time and the
Boggess, during the initial interview on that it is common for health care interviews were done when he ‘‘finally got
March 22, 2011 Investigator Wald told Ms. professionals and pharmacies to cluster around to [them]’’.56 He added, however, that
Abalihi that he had conducted an inspection around a hospital.46 He also confirmed that there is no regulation that requires his office
of Moon Lake Pharmacy back in 2007, and there is no evidence to suggest St. Joseph’s to avoid saturation of a market when
that during this inspection Mr. Abalihi was Hospital is a ‘‘pill mill hospital,’’ nor did he evaluating an application for a pharmacy.57
the pharmacist on duty.35 Investigator believe there was evidence to suggest any of He specifically denied any practice of
Boggess said that the inspection of Moon the pharmacies constituted problems for the denying an application based on over-
Lake had been prompted by information DEA with respect to their dispensation saturation in the Tampa Bay area.58
indicating it was illegally distributing practices.47 DEA Diversion Investigator Ira Wald also
controlled substances over the Internet.36 During his visit to David’s Pharmacy on testified. He stated he has been a Division
Investigator Boggess said that during the January 18, 2013, Investigator Boggess Investigator for 38 years, having been hired
inspection of Moon Lake, Mr. Abalihi told observed a sign on the divider between the in 1975 and having completed several
Investigator Wald that, while he knew pharmacy and the patients indicating that the months of initial training in DEA auditing
nothing about the owner or operator of the pharmacy would not dispense oxycodone 15 techniques, legal procedure, and
pharmacy and was only working on a short- or 30 mg. tablets.48 He said he spoke with the investigative techniques, with periodic
term contractual basis through his employer, owner, pharmacist David Cataya, and to Mr. refresher courses.59 Mr. Wald stated that
HealthCare Consultants, he believed there Cataya’s wife, Carmen, about concerns the from this course of study, and based on his
was nothing illegal about what Moon Lake pharmacist had regarding the dispensing of experience in investigating the application of
was doing and added that ‘‘he himself . . . controlled substances in this neighborhood.49 pharmacies seeking DEA certification, he is
wouldn’t mind opening a pharmacy’’ of his He learned the pharmacist saw the trend for familiar with the Code of Federal Regulations
own.37 oxycodone had gone down, but that demand pertaining to the distribution and dispensing
The record reflects that Moon Lake for hydromorphone (Dilaudid) had gone up of controlled substances.60
surrendered its DEA Certificate of such that it was now the drug of choice of With respect to his concerns about the role
Registration shortly after this inspection, drug seekers in their neighborhood.50 As a Mr. Abalihi might play in the operation of
based on the investigators’ charge that the Allwell Pharmacy, Investigator Wald testified
operation was illegal. The record also shows 38 Id. at 43. that in 2007, after receiving an anonymous
that Mr. Abalihi was then dispatched to serve 39 Id. call about Moon Lake Pharmacy, he visited
as a temporary pharmacist at numerous other 40 Id. at 44.
locations, as an employee of HealthCare 41 Id. 51 Id. at 50.
42 Id. at 45. 52 Id. at 49, 51.
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30 Id. 43 Id. 53 Id. at 51–55.
31 Id. at 41. 44 Id. at 45–46. 54 Id. at 56.
32 Id. 45 Id. at 47–59. 55 Id. at 59.
33 Id. at 41. 46 Id. at 65. 56 Id. at 68.
34 Id. at 42. 47 Id. at 66–67. 57 Id. at 69.
35 Id. at 35. 48 Id. at 47. 58 Id. at 70.
36 Id. at 35. 49 Id. at 48. 59 Id. at 72–3.
37 Id. 50 Id. 60 Id. at 73–4.
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the pharmacy at its location in New Port that Mr. Abalihi was a pharmacist at Moon the legalities of prescribing controlled
Richey, Florida.61 Investigator Wald said that Lake who dispensed controlled substances substances in Florida.80
after determining that the pharmacy was based on unlawful Internet prescriptions.72 After moving from Nigeria to New York in
engaged in Internet trafficking of The parties also have stipulated that Mr. 1992, Ms. Abalihi worked with the Health
hydrocodone, Xanax, and Valium, and after Abalihi was never an owner, officer, and Hospitals Corporation in Harlem
determining there were violations of pharmacist-in-charge, or prescription Hospital for about ten years: 81 ‘‘As a
compounding regulations, Investigator Wald department manager of Moon Lake Registered Nurse, I worked in orthopedics,
questioned the pharmacist present at the time Pharmacy.73 massage, I did a little bit of psychiatric
of this visit—Alfred C. Abalihi, who is Ms. Regarding the initial investigation into nursing, I worked in [the] intensive care
Abalihi’s husband.62 Cove, Inc.’s application for a DEA Certificate unit.’’ 82 Ms. Abalihi said she had the
According to Investigator Wald, the of Registration for Allwell Pharmacy, knowledge and education associated with the
pharmacy was small—about 600 square feet Investigator Wald confirmed the testimony of professional standards of service as a
in size—and it did not appear it was open to Investigator Boggess regarding standard Registered Nurse, including knowledge of
the public, but was instead a compounding procedures in these investigations. He said it medication inventorying, dispensing, and
site.63 Investigator Wald said the is normal for his office to quiz new DEA safekeeping.83
compounding room had thousands of applications on their familiarity with DEA Ms. Abalihi said she moved to Tampa in
hydrocodone capsules in a transparent two- regulations.74 Further, he said his office 2001, working both at the Veterans
gallon jug, along with 100 grams of pure requires the applicants to meet with the Administration Hospital there and operating
hydrocodone powder.64 According to investigators, to describe their operations, a group home, between 2007 and 2010, as the
Investigator Wald, this type of storage was a their backgrounds, and their professional home’s Director of Nursing.84 She said in this
violation because ‘‘compounding by expertise in operating a pharmacy—this capacity she was involved with patients who
definition requires that the compounder, the had prescriptions for controlled substances,
because of the ‘‘many criminal violations
pharmacist, make up the prescription[s] one so she was responsible for inventory,
coming from retail pharmacies.’’ 75
at a time pursuant to need, not thousands dispensing, and safe handling of the drugs.85
Investigator Wald confirmed the salient
beforehand pursuant to projected sales She currently works as a Registered Nurse at
points addressed by Investigator Boggess. He
possibilities.’’ 65 According to Investigator the Veterans Administration Hospital, in the
Wald, when questioned about this operation, recalled that during the initial interviews hospital’s critical care unit.86 She described
Mr. Abalihi stated he ‘‘saw no problem with with Ms. Abalihi and Ms. Taylor, he and this as full-time work in the intensive care
it,’’ and stated ‘‘it was legal and proper, Investigator Boggess asked about the unit, the cardiac unit, and the surgical unit,
ethical to do so’’.66 Mr. Abalihi added that ownership of Cove, Inc., and about Ms. where she is required to make sure
‘‘he would like to open up his own Abalihi’s training, education, and experience prescription doses are correct, and has to
pharmacy.’’ 67 with pharmacies in the past, and about how understand medication side effects, ‘‘how it’s
When asked during cross examination much of her attention she was going to going to impact my patient, and how much
about Moon Lake’s compounding methods, devote to the pharmacy.76 The record reflects this patient can get at a particular time.
Investigator Wald stated he did not know if that under her proposed business plan, Ms. Basically, standard nursing procedures for
compounding in advance based on Abalihi would operate the retail pharmacy dispensing [and] safety [ ] of controlled
anticipated need was permitted under herself, along with a co-owner who is a substances.’’ 87
Florida law, but knew that federal law registered pharmacist and who would be Ms. Abalihi testified that through her work
forbids advanced compounding absent responsible for dispensing controlled as a nurse and through her formal education,
registration as a manufacturer.68 Investigator substances. He also confirmed Investigator she has been trained in dispensing controlled
Wald also acknowledged that upon his initial Boggess’s observation that St. Joseph’s substances: ‘‘I inventory controlled
visit to Moon Lake Pharmacy, he did not see Hospital, which is near the location of the substances as a Registered Nurse, and I have
Mr. Abalihi actually compounding drugs, proposed Allwell Pharmacy, is not currently knowledge of safekeeping processes with
and from his review of the pharmacy records regarded as a ‘‘pill mill,’’ and that while it relationship to [the] nursing profession.’’ 88
he did not see Mr. Abalihi listed as either the does generate prescriptions for controlled This experience, she said, includes
prescription department manager or as an substances, it does not dispense them— ‘‘knowledge of inventory, safety of controlled
officer or director of the pharmacy.69 patients who are treated at the hospital but drugs [,] and dispensing.’’ 89 She said she has
Investigator Wald explained that after who are not actually admitted to the hospital held a nursing license from New York for
meeting with Mr. Abalihi at Moon Lake will, for the most part, fill their prescriptions over ten years, and has held her Florida
Pharmacy he arranged to meet with the off-site.77 license since 2001, and has never been
pharmacy’s owner, Vivian Alberto.70 During disciplined by any governmental entity nor
Testimony in Support of the Application
this meeting and a meeting that followed convicted of any crime.90
shortly thereafter, Investigator Wald Testifying in support of Cove, Inc.’s Ms. Abalihi said she applied for a DEA
requested and received the surrender of the application, Ogechi E. Abalihi stated that she Certificate of Registration in early 2011 so
pharmacy’s DEA registration, putting the has a diploma of Nursing from Lagos that Cove, Inc. could operate Allwell
pharmacy out of business ‘‘because University Teaching Hospital as well as a Pharmacy.91 She acknowledged she never
everything [Ms. Alberto] was doing was diploma in Midwifery from University has owned a retail pharmacy, has never
criminal.’’ 71 College Hospital. Ms. Abalihi obtained both worked in a pharmacy, and is not a licensed
Moon Lake Pharmacy surrendered its degrees in Nigeria, where she worked pharmacist, and as such she would not be
former DEA registration number, between 1988 and 1992 as a Registered dispensing controlled substances.92 She said
FM0523870, on or about December 17, 2007, Nurse.78 In addition, Ms. Abalihi has a the plan was to operate a standard retail
because the pharmacy dispensed controlled Bachelor’s Degree from City College New community pharmacy with a co-owner who
substances based on illegal Internet York, and in 2012 earned a Master’s Degree
prescriptions. The parties have stipulated in Nursing from the University of South 80 Id. at 128.
Florida.79 She explained that courses in the 81 Id. at 126–7.
61 Id. at 75. Master’s program included pharmacology 82 Id. at 127.
62 Id. at 79. and advanced pharmacology, which covered 83 Id.
63 Id. 84 Id.
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64 Id. at 76. 72 Id. at 11–12. 85 Id. at 127–28.
65 Id. 73 Id. 86 Id. at 125, 128.
66 Id. at 80. 74 Id. at 89. 87 Id. at 133.
67 Id. at 81. 75 Id. at 89. 88 Id. at 125.
68 Id. at 86. 76 Id. at 91. 89 Id. at 126.
69 Id. at 88. 77 Id. at 92, 95. 90 Id. at 140.
70 Id. at 82. 78 Id. at 125–6. 91 Id. at 129.
71 Id. at 83. 79 Id. at 125. 92 Id. at 141, 143.
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was a pharmacist, and to serve as a supplier the record-keeping requirements for regarding the purported plan to use Ms.
of drugs to assisted living facilities.93 She controlled substances for a retail pharmacy,’’ Mustafa when Allwell began its operation.
explained that she had recently operated a she did not answer the question directly, but When pressed to explain this, Ms. Abalihi
group home, which she stated is ‘‘kind of stated only ‘‘[a]gain, like I said, in terms of denied knowing Ms. Mustafa, denied ever
assisted living,’’ and believed she could serve controlled substances my experience is with speaking to Ms. Mustafa, and denied that Ms.
this kind of population.94 She said she had nursing.’’ 104 When asked about controlled Taylor said she would be relying on Ms.
no trouble obtaining a Florida state license to substance regulations concerning biannual Mustafa. According to Ms. Abalihi, ‘‘[Ms.
operate the pharmacy, and applied for a DEA inventories, or concerning the different Taylor] did not say she would be relying on
Certificate of Registration shortly after physical security requirements applicable to Ms. Mustafa, no. She said the name came to
obtaining a state license.95 Schedule II controlled substances (in contrast her when this question was thrown to her.
According to Ms. Abalihi, she and Jacinta with those applicable to Schedules III She wasn’t expecting it, but the name came
Taylor own Cove, Inc., with Ms. Taylor through V), Ms. Abalihi again would not to her.’’ 113 When asked, however, whether
owning ten percent and Ms. Abalihi owning answer the questions, but said questions and there was a plan in effect to actually have Ms.
90 percent. Ms. Abalihi is the sole officer and issues like these would have to be addressed Mustafa work at the pharmacy, Ms. Abalihi
director.96 Ms. Taylor is a pharmacist by a pharmacist working at Allwell.105 When said ‘‘not exactly. Jacinta Taylor mentioned
licensed in Florida. Ms. Abalihi met Ms. asked what percentage of prescriptions she her after—you know, after her interview with
Taylor socially, as both have children in the anticipated would be for controlled the DEA she mentioned her to me as a
autism spectrum and met each other while substances, Ms. Abalihi responded by saying possibility of coverage for her. And I know
taking their children to autism therapy.97 that if anyone could answer that question, it very well that you can actually get coverage.
Ms. Abalihi testified that when she was would be the pharmacy manager, not And I know very well that you can actually
invited to the DEA to discuss her application, get coverage.’’ 114
herself.106
Investigator Wald referred to her husband, I am thus presented with two significantly
Ms. Abalihi described the arrangement she
and told her ‘‘there were issues’’ with a different versions of what was said when
entered into with the prospective pharmacist,
pharmacy he had worked at.98 Ms. Abalihi Diversion Investigators Boggess and Wald
Ms. Taylor. She agreed, during cross
said she told Investigator Wald ‘‘[w]ell, I questioned Ms. Abalihi and Ms. Taylor. The
examination, that Allwell would have to
don’t know about that. I’m just doing this on Diversion Investigators testified that Ms.
my own.’’ 99 She testified that she told the completely rely on the pharmacist working Taylor indicated she would leave her job at
investigators that Mr. Abalihi would not have there in order to ensure compliance with Sweetwater and join the operation of Allwell
anything to do with Allwell Pharmacy, and DEA controlled substances regulations.107 only when it started to become profitable—
that she was ‘‘engaging the services of Jacinta Ms. Abalihi testified that the business plan not at its inception. Both investigators
Taylor, who is a licensed pharmacist, to be for Allwell was to have it open and testified that Ms. Taylor initially told them
the one—the pharmacy manager or the operational from 9:00 a.m. until 6:00 p.m. she would have a coworker, Ms. Mustafa,
prescriptions department manager, Monday through Friday, and from 9:00 a.m. serve as the pharmacy’s pharmacist between
whichever one is being referred to.’’ 100 She to 1 p.m. on Saturdays, with the pharmacy the time it began its operation and the time
told the investigators that Mr. Abalihi had closed on Sundays.108 She acknowledged when Ms. Taylor joined the store as its
been ‘‘blacklisted’’ from owning or operating that when they were interviewed by the DEA pharmacist. Investigator Boggess testified that
a pharmacy.101 investigators, Ms. Taylor was working at in furtherance of this representation, Ms.
Ms. Abalihi said that at the conclusion of Sweetbay as a pharmacist, but stated that Ms. Abalihi committed to providing him with
the interview, Investigator Boggess asked Taylor would come to work at Allwell as Ms. Mustafa’s contact information—a
when she planned to open the pharmacy, and soon as Ms. Abalihi got the required commitment Ms. Abalihi now denies ever
offered to provide whatever help she needed, license.109 making.
leaving her assured that she ‘‘had a good Ms. Abalihi acknowledged that presently, Because the two Diversion Investigators’
interview.’’ 102 She added, however, that she Ms. Taylor works full time as a pharmacist testimony is internally consistent, is
was never told that she needed to study in Orlando, having moved from Tampa consistent with the evidence as a whole, is
anything about regulations pertaining to the sometime after this application was filed.110 consistent with a common sense
DEA, so ‘‘whatever questions they asked me, When asked whether she knew if Ms. Taylor understanding of the events being described,
I answer[ed] to the best of my knowledge. was planning on moving back to Tampa if and does not appear to be tainted with bias
The ones I could not answer I refer[red] them Cove, Inc. gets the Certificate it seeks for or a motivation to prevaricate, and because
to my prescription manager, you know those Allwell, Ms. Abalihi stated ‘‘We can’t say for I do not find other indicia of unreliability, I
things that I knew I didn’t know anything sure until this whole thing is over. I mean I give substantial weight to the statements of
about, for her to answer [.]’’ 103 don’t expect her to, you know, just not do Investigators Boggess and Wald regarding
By her own account, Ms. Abalihi something with her life with this whole this exchange.
recognized that she lacked the experience thing—I mean this whole thing has to be over Further, because I find Ms. Abalihi’s
needed to operate a pharmacy if the for her to—that is my perception, for her to testimony to be internally contradictory,
pharmacy dispensed controlled substances. make a decision what she wants to do.’’ 111 inconsistent with the evidence as a whole,
Recognizing this limitation, Ms. Abalihi She added that despite what Ms. Taylor told and inconsistent with that of Ms. Taylor’s
testified that she would address this by Investigator Boggess about the plan to use statements to the investigators and her
engaging the services of a registered Ms. Mustafa as a second pharmacist, Ms. averments in the affidavit introduced as
pharmacist to assist in the daily operation of Abalihi did not know Ms. Mustafa, had never evidence, and because I find Ms. Abalihi and
the store. Ms. Abalihi said her familiarity and met her, and had never spoken with her.112 Ms. Taylor both had a financial interest in
experience with controlled substances is She offered no explanation for telling the claiming that Allwell would have a registered
based wholly on ‘‘nursing professional DEA investigators that she would either pharmacist on duty in order to obtain a DEA
standards’’. When asked on cross- provide them with Ms. Mustafa’s contact Certificate (even if that was not going to be
examination whether she was ‘‘familiar with information or have Ms. Mustafa contact the case), I do not give substantial weight to
them—actions which indicate that she was Ms. Abalihi’s claim that she never committed
93 Id. at 129. complicit in Ms. Taylor’s prevarication to giving the investigators contact
94 Id. at 130. information for Ms. Mustafa. From this
95 Id. at 130–31. 104 Id. at 144. contradictory account, I find Ms. Abalihi
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96 Id. at 131. 105 Id. at 144, 146. compounded the falsehood Ms. Taylor
97 Id. at 131, 133. 106 Id. at 146. initiated, by failing to disclose the true lack
98 Id. at 134. 107 Id. of involvement of Ms. Mustafa in the planned
99 Id. 108 Id. at 156. operation of Allwell Pharmacy; and I find
100 Id. at 135. 109 Id. at 137. that Ms. Taylor falsely stated to the
101 Id. 110 Id. at 157.
102 Id. 111 Id. 113 Id. at 138, 161.
103 Id. at 136. 112 Id. at 138. 114 Id. at 139.
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investigators that Ms. Mustafa would play a assignment.124 According to Mr. Abalihi, operate My Master’s Pharmacy, electing
role in the pharmacy when it began its when he asked Investigator Wald whether he instead to have his attorney meet with those
operations. was in any kind of trouble, Investigator Wald agents.137 He said he actually tried to operate
During her testimony, Ms. Abalihi told him ‘‘No, we didn’t come here for you. My Master’s Pharmacy without a DEA
attempted to minimize the significance of the If the pharmacy manager did what we told Certificate of Registration, but found that
role Ms. Taylor or Ms. Mustafa would play him to do the last time we came, we wouldn’t drug wholesalers would not supply drugs
in the initial stage of Allwell’s operation. Ms. have been here. So it’s not about you.’’ 125 without that Certificate. Further, Mr. Abalihi
Abalihi said that there are agencies (like the Mr. Abalihi testified that before working at realized that if he was unable to dispense
one employing her husband) that can cover Moon Lake Pharmacy, he knew nothing controlled substances his customers would
pharmacies, ‘‘so out of the issue of Mustafa about how that pharmacy received its ‘‘quickly go to the other pharmacies that have
as a coverage, a substitute, I don’t think it prescriptions—and did not know there was a controlled [substances] license, leaving me
was an issue for running that pharmacy.’’ 115 an Internet Web site used as part of the to lose in business.’’ 138
There is, however, no evidence that Ms. prescribing process.126 When asked whether he intends to work at
Abalihi told the DEA investigators that she Prior to the hearing, the parties stipulated or otherwise operate Allwell Pharmacy once
intended to start Allwell’s operation using that Mr. Abalihi ‘‘dispensed controlled it opens for business, Mr. Abalihi responded
temporary agency pharmacists, like the one substances based on unlawful Internet ‘‘No. I just wanted to stay as—to advise my
employing her husband. She recognized, prescriptions’’ while working at Moon Lake wife how to do things. But I would have
however, that DEA certification was essential Pharmacy.127 During the hearing, however, loved to work there, but the DEA wouldn’t
to her business plan. She testified that Mr. Abalihi said he now could not recall any allow me to.’’ 139 When asked on cross-
without the DEA Certificate she could not specific prescriptions he filled during the few examination whether he gave advice to his
find suppliers or insurers that would work days that he was working at Moon Lake, and wife about having her own application for a
with the pharmacy.116 had no recollection of there being anything DEA pharmacy, Mr. Abalihi did not answer
Ms. Abalihi’s husband, Alfred Abalihi, also wrong with any of the prescriptions he filled directly, but instead responded ‘‘I’m her
testified in support of Cove, Inc.’s there.128 He said he knew Moon Lake was husband. I knew she was going to apply to
application. Mr. Abalihi stated that while he compounding hydrocodone into dosage open a pharmacy.’’ 140
would not be part of the business operation, units, but said the compounding was done After hearing her husband’s testimony, Ms.
he did have experience in the operation of a when he was not present.129 He denied, Abalihi was asked, on cross examination,
pharmacy.117 He holds a license to practice however, ever telling Investigator Wald that ‘‘what is your understanding why [the] DEA
as a pharmacist in Florida, based on an what he was doing was legal, saying ‘‘I never ‘blacklisted’ Mr. Abalihi’’, Ms. Abalihi said
accredited Bachelor of Pharmacy degree from made any statement like that.’’ 130 Mr. she cannot answer the question, nor could
the University of Ife [now Obafemi Awolowo Abalihi said he worked with two other she answer the Government’s question
University], in Nigeria.118 He has held the people at Moon Lake—a husband and wife— whether it is her belief that her husband
Florida license since 2003, and has never both of whom ‘‘ran away’’ and escaped from violated any DEA laws.141 When she was
been subject to discipline by any the pharmacy when the DEA investigators asked, however, why her husband withdrew
governmental entity with respect to that arrived.131 Mr. Abalihi added that his his application for a DEA Certificate on
license, nor has he ever been charged with assignment at Moon Lake was to end on the behalf of My Master’s Pharmacy, she stated
or convicted of any crime by any day the DEA investigators visited the the only reason for doing that was the advice
governmental entity.119 pharmacy, so he did not return, and that he given by counsel.142 When asked whether
Mr. Abalihi said he was aware that his wife has never been disciplined by the Florida either Investigator Wald or Investigator
was attempting to secure a DEA Certificate of Board of Pharmacy for his work at Moon Boggess told her that her husband had been
Registration that would permit Cove, Inc. to Lake.132 blacklisted, Ms. Abalihi stated ‘‘[t]hey didn’t
operate the Allwell Pharmacy but said he Mr. Abalihi testified that after this tell me that.’’ 143
was never made an owner of that experience, he attempted to open his own
corporation. According to Mr. Abalihi, ‘‘[t]o pharmacy through Masters Worldwide Analysis
my understanding I’ve been made to believe Ventures, doing business as My Master’s The Administrator is being asked to grant
that [the] DEA have [sic] blacklisted me Pharmacy.133 He said that his business plan a Certificate of Registration that would
based on the temporary work I did at Moon was to operate a community pharmacy and permit Cove, Inc., to dispense controlled
Lake Pharmacy in 2007.’’ 120 to dispense drugs in some assisted living substances through a pharmacy to be known
Mr. Abalihi explained that he did not facilities, apparently pursuing a business as Allwell Pharmacy. When presented with
know much about Moon Lake’s operation plan similar to the one described by his wife such an application, the Administrator is
and was working there under contract as with respect to the operation of Allwell guided by provisions in the United States
assigned by his employer, HealthCare Pharmacy.134 He said he would have no Code mandating that she determine whether
Consultants.121 He said he worked at Moon arrangements with any pain clinics, adding granting such a Certificate ‘‘would be
Lake only a few days and that this was one that he did not even know any such inconsistent with the public interest.’’ 144 In
of many assignments he had been dispatched clinics.135 determining the public interest, the following
to as an employee of HealthCare Mr. Abalihi said he ended this venture at factors shall be considered:
Consultants.122 He said he never interviewed the advice of an attorney, ‘‘based on the fact (1) The recommendation of the appropriate
for the job at Moon Lake, knew nothing about that DEA has told [his lawyer] that they have State licensing board or professional
who owned the pharmacy, and never spoke made up their mind to deny me the disciplinary authority.
with anyone at the pharmacy before starting license.’’ 136 He said he personally never (2) The applicant’s experience in
his work there—adding that the owner spoke to or met with DEA representatives dispensing, or conducting research with
worked there as a technician, but spoke only when attempting to secure a Certificate to respect to controlled substances.
Spanish, which Mr. Abalihi said he neither (3) The applicant’s conviction record under
speaks nor understands.123 124 Id. at 100. Federal or State laws relating to the
Mr. Abalihi said that the DEA agents 125 Id. manufacture, distribution, or dispensing of
visited Moon Lake on the last day on this 126 Id. at 103. controlled substances.
127 Id. at 11–12.
115 Id. at 139. 128 Id. at 103.
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137 Id. at 121.
116 Id. at 138. 129 Id. at 111. 138 Id. at 107.
117 Id. at 108. 130 Id. at 104. 139 Id. at 108.
118 Id. at 97. 131 Id. at 118–19. 140 Id. at 122.
119 Id. 132 Id. at 104. 141 Id. at 153.
120 Id. at 98. 133 Id. at 106. 142 Id. at 155.
121 Id. at 99. 134 Id. at 107. 143 Id. at 163.
122 Id. at 100, 102. 135 Id. 144 21 U.S.C.A. § 823 (West), current through
123 Id. at 101, 102. 136 Id. at 106. Public Law 112–283, approved 1–15–13.
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(4) Compliance with applicable State, possession of a valid retail pharmacy license Ms. Abalihi, I find the scope of nursing
Federal, or local laws relating to controlled . . . weighs against a finding that practice does, to some degree, include
substances. Respondent’s registration would be exposure to regulations pertaining to the
(5) Such other conduct which may threaten inconsistent with the public interest.’’ 152 In distribution of controlled substances. Ms.
the public health and safety.145 this case, however, neither party cites to 21 Abalihi competently testified that in the
As correctly noted in the Government’s U.S.C. 823(f)(1). Given the focus on Factors course of her nursing practice, she has had
post-hearing brief, an application denial may Two and Five, it should suffice to note, as occasion to deliver controlled substances to
be based on any one, or any combination, of the ALJ did in the earlier case, that persons in her care. Further, there is
the five factors cited above.146 When ‘[a]lthough not dispositive, Respondent’s evidence that as a nurse, Ms. Abalihi has
exercising authority as an impartial possession of a valid retail pharmacy license been required to account for controlled
adjudicator, the Administrator may properly . . . weighs against a finding that substance inventories, and to guard against
give each factor whatever weight she deems Respondent’s registration would be improper diversion of such inventories.
appropriate in determining whether an inconsistent with the public interest.’’ 153 The scope of this experience, however,
application should be rejected.147 Moreover, In his Order to Show Cause, the Deputy leaves material and significant areas of
the Administrator is ‘‘not required to make Assistant Administrator, Office of Diversion expertise unmet. Pharmacists must conform
findings as to all of the factors[.]’’ 148 The Control, identified two factors as the bases to the corresponding responsibilities
Administrator is not required to discuss each for denying Cove, Inc.’s application. First, he imposed upon them under DEA regulations.
factor in equal detail, or even every factor in referred to Factor Two, noting that Ms. These responsibilities are unique to
any given level of detail.149 The balancing of Abalihi ‘‘had no prior experience with pharmacists, and are not likely to be
the public interest factors ‘‘is not a contest in operating or working at a retail pharmacy and recognized or met by a person whose sole
which score is kept; the Agency is not had no knowledge of DEA regulations function is as a Registered Nurse. DEA
required to mechanically count up the factors pertaining to handling of controlled regulations impose upon pharmacists
and determine how many favor the substances and related security affirmative obligations regarding the
Government and how many favor the requirements.’’ 154 Also under Factor Two, distribution of controlled substances once a
registrant. Rather, it is an inquiry which the Deputy Assistant Administrator charged prescribing source (such as a doctor or
focuses on protecting the public that the role Mr. Abalihi played in the physician’s assistant) issues a prescription.
interest[.]’’ 150 operation of Moon Lake Pharmacy and his Those obligations collectively are referred to
In this case, the Government does not stated intention to obtain his own Certificate as ‘‘corresponding responsibilities,’’ as they
contend there is a history of professional of Registration to operate a pharmacy created impose duties on pharmacies and
discipline by a licensing board, nor did it a risk to the public interest.155 The Order also pharmacists that correspond with those of
offer evidence of a criminal conviction identified Factor Five as a basis for denying treating sources.158 There is no corollary set
pertaining to any party, nor did it allege the application, stating that ‘‘[t]he only of obligations imposed on Registered Nurses
Cove, Inc., or any material party failed to pharmacist that Mrs. Abalihi stated would in the course of their professional duties.
comply with applicable laws relating to work at Allwell Pharmacy gave DEA ‘‘The responsibility for the proper prescribing
controlled substances. Accordingly, Factors investigators evasive and conflicting and dispensing of controlled substances is
One, Three, and Four in 21 U.S.C. 823(f) are information about the pharmacy’s upon the prescribing practitioner, but a
not presented as bases for revoking this operation.’’ 156 corresponding responsibility rests with the
Certificate. In hearings regarding the denial of a pharmacist who fills the prescription.’’ 159
I would note parenthetically that there is proposed DEA Certificate of Registration, Driving this corresponding responsibility is
evidence supporting the Respondent’s ‘‘the Administration shall have the burden of the standard, also found in DEA regulations,
application that neither party directly proving that the requirements for such that a prescription for a controlled substance
addresses. There is undisputed evidence that registration pursuant to section 303 or ‘‘must be issued for a legitimate medical
the Respondent obtained the required license section 1008(c) and (d) of the Act (21 U.S.C. purpose,’’ and that it be prescribed by ‘‘an
from Florida authorities, permitting it to 823 or 958(c) and (d)) are not satisfied.’’ 157 individual practitioner acting in the usual
operate a retail pharmacy in Tampa. In a Accordingly, in order to establish cause to course of his professional practice.’’ 160
recent DEA adjudication, obtaining such a deny Cove, Inc.’s application, the Although the record shows Ms. Abalihi has
license was considered by the Administrator Government must establish by at least a formal education in the fields of basic and
as evidence in support of the application preponderance of the evidence that it would advanced pharmacology, and has experience
under Factor One (‘‘recommendation of the be inconsistent with the public interest to in administering medications including
appropriate State licensing board or grant this application, given the applicant’s controlled substances, the record also shows
professional disciplinary authority’’).151 experience in dispensing controlled that she has no experience in understanding
‘‘Although not dispositive, Respondent’s substances (Factor Two), given Mr. Abalihi’s and applying the corresponding
past history and present association with the
responsibilities imposed on pharmacists who
new pharmacy (Factor Two), and given
145 21 U.S.C.A. § 823, eff. 4/15/2009, current
dispense controlled substances under DEA
through Public Law 112–283, approved 1–15–13. evidence of other conduct which may
regulations. To the contrary—from her
146 Government’s Proposed Findings of Fact, threaten the public health and safety (Factor
testimony and from her business plan, it is
Conclusions of Law, and Argument in Response to Five).
clear Ms. Abalihi disavows having such
‘‘Respondent’s Brief’’ at 3 (citing Richard J.
Factor Two Regarding Experience of Cove, knowledge, electing to defer all questions on
Lanham, M.D., 57 FR 40475–01 (August 27, 1992),
Henry J. Schwartz, Jr., M.D., 54 FR 16442–01 (April Inc., Ms. Abalihi, and Ms. Taylor these regulations to her business partner, Ms.
24, 1989). Also cited is Neveille H. Williams, D.D.S., The evidence establishes that the applicant Taylor.
51 FR 17556 (1986), but the entry at that citation did not have personnel with the requisite Such deference would create a risk of harm
corresponds to the matter of Paul Stepak, M.D., 51 experience in dispensing controlled to the public in this case. Diversion
FR 17556 (May 13, 1986), and is inapposite here.
substances to support its application. Investigator Boggess’s testimony regarding
147 Morall v. DEA, 412 F.3d 165, 173–74 (D.C. Cir.
Considering first the experience attributed to the experiences of local pharmacists, and
2005); JLB, Inc., d/b/a Boyd Drugs, 53 FR 43945– their collective concern about drug-seeking
02, 43947 (October 31, 1988); see also David E. activity involving addictive pain killers like
152 Id. (citing Robert A. Leslie, M.D., 68 FR 15,227,
Trawick, D.D.S., 53 FR 5326–01, 5327 (February 23,
15,230 (March 28, 2003) (state license is a necessary Oxycodone, establishes that there is a clear
1988).
and present danger posed by persons who
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148 Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. but not a sufficient condition for registration, and
2005); see also Morall v. DEA, 412 F.3d 165, 173– therefore, this factor is not dispositive)). present themselves to pharmacies in the area,
74 (D.C. Cir. 2005). 153 Id. hoping to obtain drugs by questionable
149 Trawick v. DEA, 861 F.2d 72, 76 (4th Cir. 154 Order to Show Cause, found in ALJ Exhibit 1,
1988). at 1. 158 See Sun & Lake Pharmacy, 76 FR 24523–02,
150 Jayam Krishna-Iyer, M.D., 74 FR 459–01, 462 155 Id. 24525 (May 2, 2011) (citing 21 CFR 1306.04(a)).
(January 6, 2009). 156 Id. at 2. 159 21 CFR 1306.04(a) (2005), current through
151 See Physicians Pharmacy, L.L.C., 77 FR 47096, 157 21 CFR 1301.44, current through April 4, February 21, 2013.
47104 (August 7, 2012). 2013. 160 Id.
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prescriptions. Nothing in Ms. Abalihi’s would not be present initially, and upon the experience required to operate a pharmacy
training suggests she is familiar with the investigators’ query, Ms. Taylor offered Ms. that dispenses controlled substances. She has
practices of persons who present Mustafa as the person who would provide no experience as a pharmacist, professed no
questionable prescriptions to pharmacists in the requisite experience initially. The knowledge of the standards of care that must
the hope of securing controlled substances evidence establishes that this was a be met by registered pharmacists, and
illegally. falsehood—that in fact Ms. Mustafa never proposed no concrete plan to have a
Further, as a corporate entity, Cove, Inc. agreed to play such a role, and Ms. Taylor pharmacist actually working at the
itself has no history of experience in the came up with the name only because she felt pharmacy, at least until the enterprise was
distribution of controlled substances. Allwell the need to address concerns being raised by established and operational. Upon this
Pharmacy would be this corporation’s first the DEA investigators. Ms. Abalihi tacitly evidence, the Government has established by
and only venture into such activity, and confirmed this false representation and at least preponderance that issuing a
neither of its shareholders has ever operated compounded the problem when she offered Certificate of Registration to the Respondent
a pharmacy before. The evidence calls into to provide the investigators with Ms. would be inconsistent with the public
question whether Ms. Taylor would actually Mustafa’s contact information. Thus, the interest, under Factor Two.
participate in the operation of Allwell evidence establishes that no one having the
Pharmacy, at least at the beginning of requisite knowledge and experience to Factor Two and the Nexus Between Cove,
operations. When this application was operate a pharmacy and to conform to DEA Inc. and Alfred Abalihi
presented to the DEA, Ms. Taylor was diversion control requirements would be The Government also offered evidence
employed at another pharmacy on a full-time present initially. under Factor Two regarding Ms. Abalihi’s
basis, during hours that would have made it I do note the Respondent’s complaint husband, Alfred Abalihi. In the Order to
impossible for her to be present when regarding the practice, attributed to Show Cause, the Deputy Assistant
Allwell was open for business. When asked Investigators Boggess and Wald, of asking Administrator reports that Mr. Abalihi
to describe her intentions in this regard, Ms. applicant’s questions regarding their ‘‘participated in unlawful dispensing of
Taylor told the DEA investigators that she familiarity with DEA diversion control controlled substances’’ while employed at a
planned on working at Allwell only once it regulations.162 After stating that ‘‘there is no pharmacy in 2007.165 The Government
became profitable—not at the very beginning. law or regulation supporting this practice,’’ alleged that Moon Lake Pharmacy had been
Since then, Ms. Taylor has moved to the Respondent avers that ‘‘everyone knows engaged in illegally dispensing controlled
Orlando, and there is no evidence indicating that the DEA does not go around substances based on Internet prescription
she has any plans to return to Tampa any interviewing Walgreens or Wal-Mart activity. The general premise in this part of
time soon. shareholders or management whenever those the charge is that Mr. Abalihi told DEA
I am mindful that Ms. Abalihi now pharmacy chains decide to open up a new investigators in 2007 that he believed the
disputes the DEA investigators’ reports location in the area.’’ 163 I cannot endorse this pharmacy’s operations were legal, and that
regarding when Ms. Taylor would actually conclusion, as it is not supported by any he hoped someday to open his own
begin work. I am persuaded, however, to evidence in the record before me. Further, I pharmacy. Further, in its post-hearing brief,
attribute greater weight to the testimony on am obliged to focus on the application before the Government calls into question Mr.
this point provided by Investigator Boggess me. Here, the 90 percent shareholder and Abalihi’s credibility in his claim that he did
and Investigator Wald, than I attribute to Ms. sole officer of the corporation that proposes not know Moon Lake’s operations were
Abalihi’s version of what was said. It is clear to dispense controlled substances has only illegal. From this, the Government argues
from the record that Ms. Taylor had no clear limited experience handling controlled that Mr. Abalihi’s ‘‘negative controlled
investment in Cove, Inc. nor in Allwell substances, and has never operated a substance experience’’ has a ‘‘clear nexus
Pharmacy. As a minority shareholder with no pharmacy. Ms. Abalihi recognized the with his wife’s present experience’’
proven financial investment in the company, importance of this shortfall, and proposed to warranting a denial of the claim under Factor
Ms. Taylor was in no way obligated to quit fill the gap by taking on a ten percent Two.166
her job at Sweetbay in order to work at shareholder, expecting this person to bring At the outset, I agree with the
Allwell. The record offers no evidence that with her the experience needed to ensure Government’s skepticism regarding Mr.
Ms. Taylor contributed capital or cash in compliance with DEA diversion control Abalihi’s representation that he did not know
exchange for receiving her ten percent shares regulations. That shareholder, however, was Moon Lake’s operations were illegal. It may
in the corporation. already committed to a full-time job that be that current business practices tend to
Further, there is no evidence establishing prevented her from working at the new increase reliance on temporary or contract
any kind of agreement between Cove, Inc. pharmacy. When this gap was raised, the ten employees, including pharmacists; and that
and Ms. Taylor requiring her to provide percent shareholder lied to the DEA such practices increase the likelihood that
professional services. There is, for example, investigators, falsely stating a co-worker, Ms. the pharmacist will be unaware of the true
no evidence that Ms. Taylor faced any Mustafa, would be filling the gap until the nature of the pharmacy’s operation. It is
adverse consequence should she decide not new pharmacy was operational. worth noting that to the extent such a
to end her employment at Sweetbay and Given the evidence before me, I cannot practice exposes the pharmacist to the risk of
begin working at Allwell. Ms. Abalihi’s claim endorse the Respondent’s claim that ‘‘short of working in an illegal shop, the pharmacist is
that Ms. Taylor would quit her job at being licensed as a practicing pharmacist, not excused from his or her responsibility to
Sweetbay in order to accept a position at Mrs. Abalihi has about as much experience act within the law, and must face the
Allwell is not supported by any competent properly handling controlled substances as consequences of maintaining a blind eye to
evidence, and is contradicted by what I find anyone is likely to have.’’ 164 From her own such an obviously illegal operation. Here,
to be credible testimony from the two DEA testimony, it is clear Ms. Abalihi was however, I need not rely on any such
investigators, to the effect that Ms. Taylor unfamiliar with DEA diversion control inference, because I have before me the
was going to take a ‘‘wait and see’’ approach requirements and was unwilling to answer parties’ express stipulation that while at
before lending her expertise to this new any questions regarding the regulatory Moon Lake Mr. Abalihi ‘‘dispensed
enterprise—an approach Ms. Abalihi appears environment in which pharmacies must controlled substances based on unlawful
to have endorsed.161 operate. This was true during the Internet prescriptions [.]’’ 167
This conclusion is buttressed by the investigation into this application, and it was Given the very small office in which this
evidence regarding the role of Dayla Mustafa. also true during the evidentiary hearing.
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compounding and dispensing was occurring,
The need for someone to play the role Thus, even though Ms. Abalihi has continued I find sufficient credible evidence to
attributed to Ms. Mustafa would arise only her professional development by attending conclude Mr. Abalihi was aware that the
upon Ms. Taylor’s absence from Allwell courses that included pharmacology, she
during the initial operation of the new continues to lack the knowledge and 165 Order to Show Cause, at 1.
pharmacy. The evidence establishes that 166 Government’s Proposed Findings of Fact,
based on Ms. Taylor’s admission that she 162 Respondent’s Post-Hearing Brief, at 12. Conclusions of Law, and Argument in Response to
163 Id. ‘‘Respondent’s Brief,’’ at 8.
161 See Tr. at 157. 164 Respondent’s Post-Hearing Brief, at 11. 167 Tr., at 11–12.
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practices in this pharmacy were illegal. registrant in Graham was economically tied at Moon Lake, Mr. Abalihi’s record since
Having said that, however, I cannot conclude to the third party. When it surfaced that then is unblemished and his plan to avoid
that this evidence supports the Government’s Snodell had illegally sold pseudoephedrine a direct involvement with Allwell and Cove,
contention that the circumstances arising year earlier, and when it became clear that Inc. adequately attenuates the link between
from Mr. Abalihi’s work at Moon Lake under Graham’s business plan Snodell would him and the proposed pharmacy.
Pharmacy establish cause to find Cove, Inc.’s be responsible for referring List I chemical Having said that, I must note that a core
application is inconsistent with the public orders to Graham, this nexus served as a theme presented in support of the
interest. The evidence establishes that Mr. basis for denying Graham’s application. Respondent’s application has not been
Abalihi would not directly participate as an In the case presently before the established as fact. In its post-hearing brief,
officer or owner of Cove, Inc. Thus, I must Administrator, on the other hand, Ms. the Respondent states that ‘‘[o]nce the
question whether there is a sufficient link Abalihi presented a business plan that decision had been made by the DEA that Mr.
established between Mr. Abalihi’s past work expressly removed Mr. Abalihi from all Abalihi was banned for the rest of his life
at Moon Lake Pharmacy and Cove, Inc.’s phases of the proposed pharmacy’s from ever having an ownership stake in a
proposal to operate Allwell Pharmacy. operation. The evidence establishes that Mr. pharmacy with a DEA registration, the DEA
In support of its claim that such a nexus Abalihi would not directly participate as an then set a course of blocking anyone relating
exists and must be recognized, the officer or owner of Cove, Inc. While it might to Mr. Abalihi from obtaining a DEA
Government offers as guidance the decision be reasonable to be skeptical about the registration.’’ 173 This record does not
in In Re Matthew D. Graham.168 As noted in efficacy (or even the existence) of such a line support the premise that Mr. Abalihi has
the Government’s brief, Graham involved the between spouses, the evidence now in the been ‘‘banned for the rest of his life’’ from
application for a List 1 Chemical Registration record does not permit me to recognize the anything.
under 21 U.S.C. 823(h) (and not registration kind of nexus that existed in Graham. The record fails to establish why Mr.
under 21 U.S.C. 823(f)). The DEA challenged The Government correctly notes in its brief Abalihi withdrew his request for a DEA
the application because the applicant’s that Ms. Abalihi has not indicated she would Certificate, other than to indicate the action
business partner had in the past surrendered prohibit her husband from working in the was based on the advice of his attorney. The
a DEA registration after the partner illegally pharmacy.171 Ms. Abalihi’s statement that factual claims on this point appearing in the
sold pseudoephedrine. In the Final Order, she would keep her husband ‘‘apart from Order to Show Cause have been supported by
Graham’s application was denied, in part by ownership and management’’ of the substantial evidence, and include the parties’
applying language similar to language found pharmacy, however, effectively distinguishes stipulation that Mr. Abalihi improperly
in Section 832(f)’s Factor Two, which calls this case from Graham.172 Equally important, dispensed controlled substances while
for the ‘‘public interest’’ inquiry to consider having considered the affidavit of Mr. working at Moon Lake Pharmacy. The DEA
‘‘[a]ny past experience of the applicant in the Abalihi, and having considered the testimony has in the past recognized the need to
manufacture and distribution of from both Mr. and Mr. Abalihi, I find evaluate the circumstances that may arise
chemicals[.]’’ 169 While thus not precisely on sufficient credible and unrebutted evidence when a husband and wife are involved in a
point, the discussion in Graham does to conclude Mr. Abalihi does not intend to new application for a retail-pharmacy DEA
highlight those factors that should be perform a significant role in the operation of Certificate and when there has been a prior
considered when determining whether to Allwell Pharmacy. adverse DEA action involving one of the
deny a registration based on the past I fully appreciate the Government’s spouses involving another pharmacy.174 The
misconduct of a third party. concern regarding the events involving Mr. facts alleged in the Order to Show Cause
The Graham opinion explained: Abalihi during his very short tenure at Moon warranted this measure of scrutiny, but the
Regarding factor four, the applicant’s past Lake Pharmacy. I note the skepticism facts shown here do not establish the kind of
experience in the distribution of chemicals, expressed by the investigators, as they ties that link Mr. Abalihi’s past brief
the DEA investigation revealed that Graham recalled the nature of Moon Lake’s Internet- involvement with Moon Lake’s illegal
has no previous experience related to based operation. I share their sense that operation to the operation proposed by the
handling or distributing listed chemicals. As anyone in Mr. Abalihi’s position would have Respondent here.
set forth previously, however, his business had reason to question the legitimacy of the I reject in its entirety, however, the
partner Snodell surrendered a DEA operation, and I share their sense of Respondent’s assertion that the DEA’s ‘‘real
registration because a DEA and KBI incredulity that Mr. Abalihi would have motivation’’ in challenging Cove, Inc.’s
investigation revealed he was distributing failed to recognize the illegal nature of what application, was ‘‘Mr. Abalihi’s brief
large quantities of List I chemical products was going on at Moon Lake, even though his employment at Moon Lake Pharmacy.’’ 175
having reasonable cause to believe the stay there was brief. The assertion is based on an unproved
chemical would be used to manufacture a The Respondent, however, correctly notes premise that Mr. Abalihi has been unfairly
controlled substance. Graham admitted to that Mr. Abalihi was not charged with any ‘‘blacklisted’’ by the DEA, based on what he
DEA investigators that Snodell was his misconduct arising out of his service at Moon said and did on the day DEA agents visited
source of information concerning the Lake. Mr. Abalihi may have unwisely told Moon Lake Pharmacy.176 The evidence
business of distributing listed chemicals. . . . the DEA investigators that Moon Lake’s before me does not establish that Mr. Abalihi
For the above-stated reasons, the operations were legal, but I cannot conclude is the subject of any bar to obtaining a DEA
Administrator concludes that it would be from that piece of evidence that Mr. Abalihi Certificate of Registration. Instead, the record
inconsistent with the public interest to grant was knowingly advancing Moon Lake’s indicates that Mr. Abalihi’s former lawyer
the application of Graham.170 criminal enterprise when the DEA arrived. met with the DEA while he sought to start
The agency thus may attribute to a Unlike the acknowledged misconduct by his own pharmacy, and was persuaded
registrant the prior misconduct of third party. Graham’s business partner (leading to the during that meeting to advise Mr. Abalihi to
The conditions in Graham, however, are not partner surrendering his DEA Certificate), withdraw his application.
well aligned to those present in Cove, Inc.’s here the most we can say for certain is that We do not know what was presented to
application. In Graham, the registrant told Mr. Abalihi was the pharmacist who was this lawyer during her visits with the DEA,
the DEA he intended to enter into a present when the DEA agents arrived at nor do we have the benefit of any
wholesale business arrangement with Moon Lake and brought its operations to an documentary evidence supporting her
Snodell, with whom he was co-owner of a end. While it is true that the parties have reputed claim that the DEA has deemed Mr.
Abalihi ineligible for a Certificate of
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wholesale business outlet. Thus, unlike the stipulated that Mr. Abalihi dispensed
business plan presented by Ms. Abalihi, the controlled substances based on unlawful Registration. We do not, indeed, have
Internet prescriptions during his short tenure documentary evidence that the lawyer said or
168 Government’s Proposed Findings of Fact,
173 Respondent’s Post-Hearing Brief, at 11.
Conclusions of Law, and Argument in Response to 171 Government’s Proposed Findings of Fact,
‘‘Respondent’s Brief,’’ at 10, citing In re Matthew D. Conclusions of Law, and Argument in Response to 174 See, e.g., DePietro’s Pharmacy, 56 FR 31675–
Graham, 67 FR 10229–01 (March 6, 2002). ‘‘Respondent’s Brief,’’ at 10. 02 (July 11, 1991).
169 Id. at 10230, quoting 21 U.S.C. 823(h)(4). 172 Id. quoting Affidavit of Ms. Abalihi, attached 175 Id. at 14.
170 Id. at 10230. as Exhibit E to Respondent’s Brief, ALJ Exhibit 6. 176 Id.
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![Federal Register / Vol. 80, No. 97 / Wednesday, May 20, 2015 / Notices 29053
the experience of the applicant in dispensing insufficient evidence of remediation. Thereafter, an Administrative Law Judge
controlled substances is of such character Accordingly, the Government has established (ALJ) proceeded to conduct pre-hearing
and quality that registration is not in the cause to deny this application. procedures. ALJ Ex. 3.
public interest. This requires evidence of
both the qualitative manner and quantitative Recommendation In its Supplemental Prehearing
volume of the applicant’s experience. Where As the Government has established its Statement, the Government provided
evidence of the applicant’s experience, as prima facie case by at least a preponderance notice to Respondent that it intended to
expressed through its employees and officers, of the evidence, the Respondent’s application elicit testimony from an Agency
establishes that the business plan provides for a retail-pharmacy DEA Certificate of Diversion Investigator (DI) that
for the active daily involvement of no one Registration should be DENIED. Respondent had ‘‘filled twenty-nine (29)
having experience applying DEA controlled Dated: April 23, 2013. prescriptions for Suboxone that were
substance diversion regulations in a retail
pharmacy setting, and provides only for the Christopher B. McNeil, written by two doctors who did not
involvement of an employee familiar with Administrative Law Judge. possess authority to issue these
the regulations applicable to Registered [FR Doc. 2015–12131 Filed 5–19–15; 8:45 am]
controlled substances,’’ that the
Nurses whose duties include dispensing ‘‘prescriptions were written by Dr.
BILLING CODE 4410–09–P
medication, in such an application there is Aguilar-Amieva and Dr. Cesar I. Vargas-
sufficient evidence proving, by at least a Quinones,’’ and that a review of ‘‘the
preponderance, that granting such an DEA registration database . . . found
application would be inconsistent with the DEPARTMENT OF JUSTICE
that these two physicians were never
public interest.
4. When proposing to deny a retail- Drug Enforcement Administration registered with DEA as data-waived
pharmacy application under Factor Two practitioners, in violation of 21 CFR
[Docket No. 13–31] 1301.28.’’ ALJ Ex. 7, at 3. The
based on the prior association and dispensing
history of a third party, the Government must Farmacia Yani; Decision and Order Government also provided notice that it
demonstrate that the third party’s past intended to question Respondent’s
negative experience in dispensing controlled On April 10, 2013, the Deputy owner ‘‘about the circumstances of the
substances warrants a finding that his or her Assistant Administrator, Office of pharmacy’s prior surrender of its . . .
association with the applicant would be Diversion Control, Drug Enforcement registration, and about her failure to
inconsistent with the public interest. Where,
Administration, issued an Order to note the previous surrender on
as here, the third party is the husband of the
applicant’s majority shareholder but has no Show Cause to Farmacia Yani Respondent’s new application for
clearly demonstrated role in either the (Respondent), of San Sebastian, Puerto registration.’’ Id.
corporation (as a shareholder or an officer), Rico. ALJ Ex. 1. The Show Cause Order On July 16, 2013, the ALJ conducted
or in the retail pharmacy (as an employee or proposed the denial of Respondent’s an evidentiary hearing in Guaynabo,
manager), and where there is insufficient application for a DEA Certificate of Puerto Rico.1 Tr. 27. At the hearing, the
evidence demonstrating the third party’s past Registration as a retail pharmacy, on the
negative experience will have any impact on ground that its registration ‘‘would be 1 On June 18, 2013, the ALJ had conducted the
the operation of the retail pharmacy, the inconsistent with the public interest, as first day of the hearing, during which he reviewed
Government has not met its burden of
that term is defined in 21 U.S.C. 823(f).’’ the parties’ proposed stipulations and admitted
proving a basis to deny the application under several documents into the record, while holding
Factor Two. Id. at 1.
the admission of two Government exhibits in
5. In order to establish a basis for denying The Show Cause Order specifically abeyance. See Tr. 4–14 (June 18, 2013). After
a new application for a retail-pharmacy alleged that on March 27, 2012, Respondent’s counsel objected to the admission of
Certificate of Registration based on the Respondent submitted an application some of the Government’s exhibits because they
provisions of 21 U.S.C. 823 (f)(5) (Factor for a registration as a retail pharmacy, contained prescriptions issued by a doctor whose
prescriptions were not the basis of what it had
Five), the Government must present evidence seeking authority to dispense controlled previously alleged, the Government announced that
establishing, by at least a preponderance, substances in schedules II through V, at it would be filing a supplemental prehearing
other conduct (i.e., conduct not covered a location in San Sebastian, Puerto Rico. statement during which it would ‘‘outline that the
within the scope of Factors One through Government discovered some prescriptions by Dr.
Id. The Order further alleged that
Four) which may threaten the public health Cesar Vargas-Quinones.’’ Id. at 14. After the ALJ
and safety. Where, as here, the evidence Respondent held a registration at the ruled that these exhibits would ‘‘be held in
establishes that when called upon by DEA same location, which it ‘‘had abeyance until after we’ve had the opportunity to
investigators to identify the person or surrendered for cause on December 2, see what the Government sets forth in its
2011,’’ and that a DEA investigation supplemental prehearing statement,’’ the ALJ
persons who would be familiar with DEA explained that the deadline for both parties to file
diversion control regulations and would be found ‘‘that from February 2009 through their supplemental prehearing statements would
present at the retail pharmacy to ensure November 2011, [it] filled ‘‘be simultaneous’’; the ALJ also told Respondent’s
compliance with those regulations, the approximately 218 prescriptions for counsel that ‘‘you really won’t have a chance to
applicant’s sole officer and both of its two controlled substances issued by a reply in your—in your response in the prehearing
shareholders made material statement,’’ but that she would be able ‘‘to object
medical doctor who did not possess a to these exhibits during the hearing itself.’’ Id. at
misrepresentations about having such person
or persons present, there is substantial valid DEA registration, in violation of 15–16. Notably, during the June 18 hearing, the
evidence of conduct that may threaten the Federal law and regulations.’’ Id. (citing Government made no mention of its intent to raise
21 U.S.C. 843(a)(2); 21 CFR 1306.04). the material falsification issue. Moreover, the ALJ
public health and safety. In such an subsequently ordered that the parties file any
application there is sufficient evidence The Government then alleged that supplemental prehearing statements with the Office
proving, by at least a preponderance, that Respondent’s ‘‘violations of Federal law of Administrative Law Judges ‘‘not later than 2:00
granting such an application would be and regulations render granting its p.m. on the 9th of July 2013.’’ Id. at 18–19.
inconsistent with the public interest. The same day, the ALJ also issued an Order
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application for a [registration]
6. Upon such evidence, the Government memorializing these instructions. See Order (June
inconsistent with the public interest.’’ 18, 2013). Therein, the ALJ further instructed that
has met its burden and has made a prima
Id. (citing 21 U.S.C. 823(f) and 824(a)). ‘‘[a]fter this deadline, Prehearing Statements may
facie case in support of the proposed order
denying the Respondent’s application for a On May 10, 2013, Respondent, only be supplemented upon the filing of a motion
through its counsel, requested a hearing for extension of time and after a favorable ruling by
retail-pharmacy Certificate of Registration. me. Any new documents identified in a
7. Upon a review of the record as a whole, on the allegations and the matter was supplemental prehearing statement also need to be
including all claims made in the placed on the docket of the Office of exchanged by the parties no later than July 9,
Respondent’s post-hearing brief, there is Administrative Law Judges. ALJ Ex. 2. 2013.’’ Id. at 4.
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Document Created: 2018-02-21 10:29:50
Document Modified: 2018-02-21 10:29:50
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