81 FR 64940 - Richard J. Settles, D.O.; Decision and Order

DEPARTMENT OF JUSTICE
Drug Enforcement Administration

Federal Register Volume 81, Issue 183 (September 21, 2016)

Page Range		64940-64949
FR Document		2016-22680

Federal Register, Volume 81 Issue 183 (Wednesday, September 21, 2016)

[Federal Register Volume 81, Number 183 (Wednesday, September 21, 2016)]
[Notices]
[Pages 64940-64949]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-22680]

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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

Richard J. Settles, D.O.; Decision and Order

On September 9, 2015, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration, issued an Order to
Show Cause to Richard J. Settles, D.O. (hereinafter, Respondent), of
Grand Junction, Colorado. The Show Cause Order proposed the revocation
of Respondent's DEA Certificate of Registration FS3717975, pursuant to
which he is authorized to dispense controlled substances in schedules
II through V, as a practitioner, at the registered address of 715
Horizon Drive, Suite 200, Grand Junction, Colorado. GX 2, at 1 (citing
21 U.S.C. 824(a)(1) and (4)). The Show Cause Order also proposed the
denial of any pending application to renew or modify Respondent's
registration, on the ground that his ``continued registration is
inconsistent with the public interest.'' Id.
As grounds for the proposed actions, the Government alleged that
Respondent had materially falsified his March 4, 2013 application for
registration. Id. at 2 (21 U.S.C. 824(a)(1)). The Order also alleged
that he had issued prescriptions for controlled substances without
authority to do so under both Arizona and Federal law. Id. at 3 (citing
21 U.S.C. 824(a)(4)).
With respect to the material falsification allegation, the
Government alleged that on March 4, 2013, Respondent applied for a DEA
registration at a location in Chattanooga, Tennessee. Id. at 1. The
Government alleged that Respondent provided a ``yes'' answer to the
application question: ``Has the applicant ever surrendered (for cause)
or had a state professional license or controlled substances
registration revoked, suspended, restricted, or placed on probation, or
is any such action pending?'' and that ``[i]n furtherance of [his]
answer,'' Respondent explained that on July 17, 2012, ``the Arizona
Board of Osteopathic Examiners placed my license on a 5 year
probation,'' and that as a result, ``I voluntarily surrendered my
Arizona license and DEA registration as I knew I was moving to
Tennessee in the next few months.'' Id. at 1-2.
The Government then alleged that Respondent's answer was materially
false because he was ``aware of at least two . . . other state
professional license actions'' when he submitted the application and
failed to disclose them. Id. at 2. The Government alleged that these
actions included a November 17, 2012 Interim Consent Order issued by
the Arizona Board, which restricted Respondent's license to practice
osteopathic medicine pending the Board's investigation into whether he
violated its July 17, 2012 Order by prescribing controlled substances
as his authority to do so had been restricted by that Order. Id. As for
the second Board action, the Government alleged that on February 6,
2013, Respondent entered into a Stipulation and Order with the Utah
Division of Occupational and Professional Licensing, in which he
admitted that he had falsified a May 4, 2012 application for licensure
in that State, because he failed to disclose that he was then under
investigation by the Arizona Board, and that he had surrendered his
Utah license to practice as an osteopath. Id. at 2-3 (citing 21 U.S.C.
824(a)(1), 823(f), 843(a)(4)(A)).
As for the prescribing allegations, the Government alleged that
pursuant to the July 17, 2012 Arizona Board Order, Respondent was
restricted from prescribing schedule I through IV controlled
substances. Id. at 3. The Order alleged that the Board subsequently
found that after the effective date of the Order, Respondent became the
medical director of a hospice program and prescribed controlled
substances to 10 of the program's patients. Id. The Order then alleged
that ``[p]rescribing controlled substances without appropriate
authority is contrary to Federal law.'' Id. at 3 (citations omitted).
Next, the Order alleged that on May 7, 2014, one day before the
Tennessee State Board of Osteopathic Examination issued a Consent Order
which indefinitely suspended his Tennessee license, Respondent applied
to modify his registered address from Tennessee to an address in
Dolores, Colorado. Id. at 4. The Order alleged that Respondent made
several additional requests to modify his registered address,
concluding with his February 18, 2015 request to change his address to
a location in Grand Junction, Colorado and that the Agency approved
this request on March 17, 2015. Id.
The Order then alleged that prior to the Agency's approval of his
modification request, Respondent issued controlled substance
prescriptions in Colorado, ``in violation of 21 U.S.C. 810(10),\1\
822(e), and 841(a)(1).'' Id. at 4 (citing, inter alia, 21 CFR
1301.12(a), 1301.13(a)). Specifically, the Order alleged that ``from
July 2014 through February 2015, [Respondent] issued over 250
prescriptions when [he] lacked the requisite federal authority to issue
prescriptions in Colorado.'' Id. The Order then set forth multiple
instances of such prescriptions. Id. at 5-6. The Order further alleged
that Respondent ``issued multiple prescriptions to patients within a
thirty-day window, amounting to prescriptions for large dosages of
highly abused controlled substances'' and set forth a dozen patients to
whom he issued the prescriptions. Id. at 6-7.
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\1\ There is no such provision in the CSA.
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On September 14, 2015, the Show Cause Order, which also notified
Respondent of his right to request a hearing on the allegations or to
submit a written statement in lieu of a hearing, the procedure for
electing either option, and the consequence for failing to elect either
option, was served on Respondent by certified mail, return receipt
requested. GX 4, at 1. Thereafter, on October 14, 2015, Respondent,
through his attorney, filed a document entitled ``Waiver of Hearing,
Statement of Position on the Facts and Law'' (hereinafter ``Position
Statement'') with the Office of Administrative Law Judges. See 21 CFR
1301.43(c); GX 5. Therein, Respondent acknowledged service of the Order
to Show Cause on September 14, 2015, see GX 5 at 5, and explained he
was waiving his right to a hearing and filing his ``Statement of
Position on the Facts and Law regarding the matters alleged in the
Order to Show Cause.'' GX 5, at 2.
On February 29, 2016, the Government forwarded its Request for
Final Agency action, the Investigative Record, and Respondent's
Position Statement. Subsequently, on March 21, 2016, the Government
filed an Addendum to its Request for Final Agency Action (hereinafter,
First

[[Page 64941]]

Addendum). Therein, the Government notified my Office that Respondent
did not file his renewal application until February 2, 2106,\2\ which
was less than 45 days before the expiration date of his registration
(Feb. 29, 2016). Noting that under an agency regulation, ```a
registrant, who has been served with an Order to Show Cause, [must]
file his renewal application at least 45 days before the expiration of
his registration, in order for it to continue in effect past its
expiration date and pending the issuance of a final order,''' and that
Respondent had filed his renewal application less than 45 days prior to
the expiration of his registration, the Government argued that
Respondent's registration had expired and thus, ``the issue to be
considered . . . is whether DEA should grant [his] application . . .
not whether DEA should revoke Respondent's registration.'' Id. at 1
(quoting Paul Weir Battershell, 76 FR 44359, 44361 (2011) (quoting 21
CFR 1301.36(i))).
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\2\ On the date the Show Cause Order was issued, Respondent was
registered as a practitioner to handle controlled substances in
schedules II-V under DEA Registration FS3717975 at the registered
address of La Junta Clinic, 715 Horizon Drive, Suite 200, Grand
Junction, Colorado; this registration, which was issued on March 5,
2013, was due to expire by its terms on February 29, 2016. GX 1.
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On April 28, 2016 the Government filed a second Addendum to its
Request for Final Agency Action (hereinafter, Second Addendum).
Therein, the Government advised that ``the Medical Board of Colorado
issued an Order of Suspension which suspended Applicant's Colorado
medical license, effective Friday, April 22, 2016''; the Government
provided a copy of the Board's Order.\3\ Id. at 1; see also Attachment
(GX 27), at 1-2. The Board's Order has been made a part of the
Investigative Record in this proceeding.
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\3\ The Government certified that a copy of both Addendums was
served on Respondent's counsel. First Addendum, at 3; Second
Addendum at 2.
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Respondent's Position Statement

Respondent's Position Statement raises various contentions which
warrant discussion prior to my determination of the material facts in
this matter. As a preliminary matter, Respondent asserts that ``in
waiving his right to participate in the hearing[,] [he] did not and
does not waive any rights other than his right to a hearing'' and that
``there is no authority in the regulations of the Agency to waive any
other rights pertaining to the adjudication of this matter.'' GX 5, at
1.
Among other things, Respondent contends that the Administrative Law
Judge is required, ``upon receipt of a waiver of hearing and statement
on the matters of fact and law to determine if the statement is
admissible, and if so make the statement part of the record.'' Id. at 3
(citing 21 CFR 1316.49). Respondent then argues that he ``is entitled
to have the ALJ certify the record in this proceeding to the
Administrator,'' that ``the ALJ's jurisdiction . . . does not terminate
until after he certifies the record,'' that ``a termination of the
proceedings that permits the Government's counsel to determine what
constitutes the record is a clear violation of this regulation,'' and
that ``[t]he ALJ's role and authority is not altered by the waiver of a
hearing.'' Id. at 4 (citing 21 CFR 1316.52).
Respondent is mistaken. Under the Agency's rules, absent the filing
of a request for a hearing on an Order to Show Cause, the Office of
Administrative Law Judges does not acquire jurisdiction over the
matter. Here, Respondent did not file a request for a hearing, and
indeed, explicitly waived his right to a hearing. Accordingly, no
Administrative Law Judge was designated as a presiding officer and
because no hearing was held, there was no record to be certified by a
member of the Office of Administrative Law Judges.
Thus, the Government, while it was required to submit Respondent's
Position Statement with its filing, was otherwise entitled to determine
what evidence it would submit to my Office in support of its Request
for Final Agency action. Moreover, the Government has represented to me
that it provided to Respondent a copy of its Request for Final Agency
Action, the Exhibits, the Addendums, and the Attachment to the Second
Addendum. Accordingly, as the Government has provided Respondent with
all of its filings, Respondent cannot claim that it has been stripped
``of its status as a party to the proceeding.'' \4\ Id. For the same
reason, I reject Respondent's assertion that a ``quagmire . . . would
ensue if the proceedings were cancelled in their entirety \5\ and
Government Counsel were permitted to seek a final order by presenting
DEA's case directly to the Administrator in ex parte communications.''
Id. at 5.
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\4\ As support for this contention, Respondent quotes 20 CFR
404.929, a regulation applicable to certain hearings conducted by
ALJs on behalf of the Social Security Administration. See GX 5, at
4. This provision has no relevance to this proceeding.
\5\ Respondent offers no explanation as to what further rights
he believes he is entitled to, given that he has waived his right to
a hearing and has filed his Position Statement. Nor does he explain
what he believes remains of the proceeding other than the
Government's submission of its Request for Final Agency Action and
its evidence and my issuance of this Decision and Order.
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Respondent further argues that under 21 CFR 1301.43(c), I ``may not
terminate the proceeding and issue [my] final order unless `all persons
entitled to a hearing or to participate in a hearing waive . . . their
opportunity for the hearing or to participate in the hearing.'' Id.
(quoting 21 CFR 1301.43(e)) \6\ (emphasis in Respondent's Position
Statement). Respondent then argues that ``DEA is entitled to
participate in the hearing and . . . has counsel of record representing
it,'' but ``has not waived its opportunity to participate in the
hearing.'' Id. at 4. Respondent thus contends that ``canceling the
hearing and allowing the Administrator to issue [his] final order is
not authorized.'' Id.
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\6\ The correct regulation is 21 CFR 1301.43(e).
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Once again, Respondent is mistaken. Notwithstanding that an agency
regulation applicable to hearings (21 CFR 1316.42(e)) defines the
``[t]he term person [to] include[] an individual, corporation,
government or governmental subdivision or agency,'' when the Government
initiates an Order to Show Cause proceeding, it is not a ``person
entitled to a hearing'' within the meaning of 21 CFR 1301.43.\7\
Indeed, this language is fairly read as encompassing only the recipient
of the Show Cause Order.
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\7\ Words take their meaning from the context in which they are
used, and in this regard the language of 21 CFR 1301.43(a) is
probative. It states: ``Any person entitled to a hearing pursuant to
Sec. 1301.32 or Sec. Sec. 1301.34-1301.36 and desiring a hearing
shall, within 30 days after the date of receipt of the order to show
cause . . . file with the Administrator a written request for a
hearing in the form prescribed in Sec. 1316.47 of this chapter.''
The reference provisions apply to applicants for registration whose
applications the Agency is proposing to deny, and the holders of
registrations whose registrations the Agency is proposing to revoke.
As the provision applicable to Respondent states: ``[b]efore
revoking or suspending any registration, the Administrator shall
issue an order to show cause pursuant to Sec. 1301.37 and, if
requested by the registrant, shall hold a hearing pursuant to Sec.
1301.41.'' 21 CFR 1301.36(d) (emphasis added). Here, however,
Respondent did not request a hearing but rather chose to submit a
position statement in lieu thereof.
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For the same reason, i.e., because it initiated the proceeding,
when the Government initiates an Order to Show Cause proceeding, it is
not a ``person entitled to participate in a hearing pursuant to Sec.
1301.34 or Sec. 1301.35(b).'' 21 CFR 1301.43(b). With respect to Sec.
1301.34, this provision applies to only a narrow category of cases
which are not initiated by the Government--specifically, where an
applicant seeks registration to import schedule I or II controlled
substances. Under this provision, the Agency is required to give notice
to registered manufacturers as

[[Page 64942]]

well as other applicants for registration to manufacturer the same
basic substance, and upon request of such manufacturer or applicant,
the Agency ``shall hold a hearing on the application.'' 21 CFR
1301.34(a). While Government does not initiate the proceeding, it may
intervene in the proceeding as a ``person entitled to participate in a
hearing.'' 21 CFR 1301.43(b). See also e.g., Chattem Chemicals, Inc.,
71 FR 9834, 9834 (2006), pet. for rev. denied sub nom. Penick Corp,
Inc., v. DEA, 491 F.3d 483, 493 (D.C. Cir. 2007); Penick Corp., Inc.,
68 FR 6947, 6947 (2003), pet. for rev. denied sub nom. Noramco, Inc.,
v. DEA, 375 F.3d 1148, 1159 (D.C. Cir. 2004). Indeed, this is the only
circumstance in which the Government can be fairly described as a
``person entitled to participate in a hearing.'' \8\
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\8\ 21 CFR 1301.43(b) also refers to the provisions of
1301.35(b), which allow for registered bulk manufacturers of a basic
substance in schedule I or II (as well as applicants for
registration to manufacture the basis substance) to ``participate in
a hearing'' when the Government has issued a Show Cause Order
proposing the denial of an application for registration ``to
manufacture in bulk'' the same basic class and the applicant has
requested a hearing. Here too, the Government is not a ``person
entitled to participate in a hearing.'' Rather, it is initiator of
the proceeding.
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Thus, with respect to this proceeding, the Government is neither a
``person[] entitled to a hearing or to participate in a hearing,'' 21
CFR 1301.43(e), and the only person whose waiver matters for the
purpose of cancelling the hearing is Respondent. Because Respondent has
waived his right to a hearing, I am authorized to issue this ``final
order . . . without a hearing.'' \9\ Id.
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\9\ The Agency's longstanding and consistent practice is that
where a party waives its right to a hearing, the Government is
entitled to present its evidence directly to the Administrator, who
is the ultimate factfinder. See, e.g., Cf. Reckitt & Colman, Ltd. v.
Administrator, 788 F.2d 22, 26 (quoting 5 U.S.C. 557(b) (``On appeal
from or review of the initial decision, the agency has all the
powers which it would have in making the initial decision . . .
.'')). This practice has been followed in hundreds of cases over the
years.
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Having reviewed the entire record, including Respondent's Statement
of Position, I make the following factual findings.

FINDINGS OF FACT

Jurisdictional Facts

Respondent, a doctor of osteopathic medicine, previously held DEA
Certificate of Registration FS3717975, pursuant to which he was
authorized to dispense controlled substances in schedules II-V, at the
address of La Junta Clinic, 1012 Belmont Ave., La Junta, Colorado. GX
1. This registration was issued on March 5, 2013, after Respondent
submitted the application which is the subject of the material
falsification allegations. On February 2, 2016, Respondent submitted an
application to renew this registration. First Addendum, at 1. However,
because Respondent had previously been served with the Show Cause
Order, in order for his registration to remain valid pending this
proceeding, he was required to submit his application at least 45 days
before the date on which the registration was due to expire. 21 CFR
1301.36(i). Accordingly, I find that Respondent's registration expired
on February 29, 2016. I further find, however, that Respondent's
application remains pending in this proceeding.\10\
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\10\ Respondent previously held DEA Certificate of Registration
BS3176105. GX 7, at 3. Pursuant to this registration, Respondent was
authorized to dispense controlled substances in schedules II through
V, at the registered location of 10752 North 89th Place, Suite 218,
Scottsdale, Arizona 85620. GX 9, at 1. However, on July 30, 2012,
Respondent surrendered this registration ``[i]n view of [his]
alleged failure to comply with the Federal requirements pertaining
to controlled substances, and as an indication of my good faith in
desiring to remedy any incorrect or unlawful practice on [his]
part.'' Id. This registration was retired the following day. GX 7,
at 3.
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The Arizona and Utah Investigations of Respondent

On April 29, 2010, the mother of Respondent's patient K.K. made a
complaint to the Arizona Board of Osteopathic Examiners alleging that
K.K. was a heroin addict and that Respondent was prescribing drugs and
quantities that ``were inappropriate [given] K.K.'s history with
substance abuse.'' GX 8, at 2. The same day, the Board notified
Respondent that it was initiating an investigation. Id. at 1.
Thereafter, Respondent was invited to attend an investigative
hearing which was conducted on September 24, 2011; the hearing was
continued to allow the Board to obtain additional information and
conduct ``a chart review of thirty (30) patients.'' Id. The Board also
ordered Respondent to undergo a psychological evaluation and requested
that he provide additional documentation to it. Id.
On April 10, 2012, the Board notified Respondent ``that the
Investigative Hearing would continue on May 19, 2012.'' Id. On that
date, the Board conducted the hearing with Respondent present and
represented by counsel. Id. Thereafter, the Board issued a decision and
order which made factual findings and legal conclusions regarding
Respondent's prescribing to K.K. as well as its chart review.
With respect to K.K., the Board found that she was Respondent's
patient ``from March 2005 through March 2010, with a lapse in care from
February 2006 to early 2009.'' Id. at 2. The Board found that at K.K.'s
second visit, Respondent prescribed Percocet to her in quantities
ranging from 120 to 180 dosage units each month as well as 90 Xanax and
30 Ambien each month. Id. The Board further found that ``Respondent
failed to obtain prior medical records or to perform a workup on K.K.
and no consultations were ordered.'' Id. It also found that ``[t]he
majority of K.K.'s medications were obtained through Respondent's
office'' and that he ``did not enter into a medication contract with
[her] until May 5, 2010 for Suboxone.'' Id.
Continuing, the Board found that K.K. ``returned to Respondent . .
. in 2009 and . . . was started on'' 90 Percocet and 90 Soma, and that
``[i]n October 2009, K.K. overdosed and was taken to the hospital.''
Id. The Board found that ``Respondent continued'' to provided K.K. with
prescriptions each month for 120 dosage units of Percocet, 90 Xanax,
and 30 Ambien until March 2010, when he increased her Percocet
prescription to 180 du per month. Id. According to the Board, K.K.
overdosed again on March 17, 2010 as well as on April 11, 2010. Id. at
2-3.
With respect to the chart review, the Board found that ``Respondent
prescribed controlled substances to chronic pain patients'' and that
``[p]harmacy inquiries and drug screens were ignored in patients that
were clearly diverting.'' Id. at 3. The Board further found that
``Respondent deviated from the standard of care by failing to'':

(1) ``stop prescribing controlled substances for patients that
had overdosed'';
(2) ``recognize drug seeking behavior in patients'';
(3) ``request prior medical records'';
(4) ``obtain appropriate laboratory testing'';
(5) ``conduct a physical exam in at least one patient'';
(6) ``obtain consultations''; and
(7) ``follow the directions of specialist [sic] or
recommendations when consultations were obtained.''

Id.
The Board thus found that ``Respondent practice[d] medicine in a
manner that harmed or had potential to harm patients and fell below the
community standard . . . and . . . this conduct endangered a patient or
the public's health.'' Id. And the Board concluded that Respondent
engaged in unprofessional conduct by `` `[e]ngaging in the practice of
medicine in a manner that harms or may harm a patient or that the board
determines falls below the community,' '' as well as that he engaged in
`` `[a]ny conduct or practice

[[Page 64943]]

that endangers the public's health or may reasonably be expected to do
so.''' Id. at 4 (quoting Ariz. Rev. Stat. Sec. Sec. 32-1854(6) &
(38)).
Based on the above, the Board censured Respondent and
``restricted'' him ``from prescribing or recommending Schedule I, II,
III or IV controlled substances for a period of two years . . . from''
the Order's effective date. The Board also restricted him from
practicing pain management, imposed a civil penalty of $1,000 and
placed him on probation for a period of five years, the terms of which
included that he ``obey all federal, state and local laws, and rules
governing the practice of medicine in the State of Arizona.'' Id. The
Order became effective on July 17, 2012. GX 10, at 3.
As found above, on July 30, 2012, Respondent voluntarily
surrendered his then DEA registration (BS3176105). Thereafter, on
October 12, 2012, the Board received information form anonymous sources
that Respondent ``may be prescribing controlled substances.'' GX 16, at
1. In response, the Board queried the Board of Pharmacy's Controlled
Substances Prescription Monitoring Program ``for all controlled
substances written or ordered by [Respondent] from June 11, 2012
through October 15, 2012.'' Id. The query showed that between July 17,
2012 and October 15, 2012, Respondent had issued 99 prescriptions for
schedule II drugs, 23 prescriptions for schedule III drugs, and 70
prescriptions for schedule IV drugs. Id. at 1-2. The Board identified
one patient Respondent saw at his office who received a prescription
for temazepam on August 21, 2012, and 11 patients at hospices in Tuscon
and Mesa to whom he either prescribed or ordered the dispensing of
controlled substances, which included morphine, hydromorphone,
oxycodone, lorazepam and temazepam. Id. at 2-6. Moreover, Respondent
issued 17 controlled substance prescriptions or orders for the
dispensing of controlled substances for 12 patients after he
surrendered his DEA registration. Id.
On November 9, 2012, Respondent was interviewed by the Board and
admitted ``that he had signed prescriptions for Schedule I, II, III or
IV controlled substances after the Effective Date'' of the Order. GX
10, at 4. Respondent denied having ``written prescriptions for patients
in his private practice'' and ``stated that he had only written or
authorized prescriptions in his capacity as the . . . medical director
for various hospice locations.'' \11\ Id.
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\11\ Under the probationary terms of the July 17, 2012 Order,
Respondent was required to hire a practice monitor. GX 10, at 4.
During the November 9 interview, ``Respondent stated that he did not
hire a practice monitor because he was not actively practicing in
Arizona.'' Id.
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On November 16, 2012, Respondent entered into an Interim Consent
Agreement which the Board approved the following day. Id. at 2, 5.
Respondent admitted to the findings of fact contained therein,
including that he had prescribed or ordered controlled substances after
the July 17, 2012 Order became effective, as well as the legal
conclusion that he had engaged in unprofessional conduct by
``[v]iolating a formal order, probation or a stipulation issued by the
board.'' Id. at 1, 4. The Board then ordered that Respondent be
``restricted from practicing medicine until the investigation'' was
completed and ``he appear[ed] before the Board . . . for resolution''
of the matter. Id. at 4.
On May 12, 2014, Respondent entered into a Consent Agreement and
Order for Voluntary Surrender of Licensee. GX 12, at 1, 5. Therein,
Respondent waived his right to a hearing before the Board. Id. at 2.
The Board found, inter alia, that on August 1, 2012, Respondent had
``entered into an Independent Contractor Agreement with Hospice Family
Care, Inc.[,] to continue to serve as its Executive Medical Director of
Hospice'' and that he had ``signed prescriptions for controlled
substances for ten patients ``after the effective date of the [July 17,
2012] Board Order.'' Id. at 3.
While the Arizona Board's investigation was ongoing, Respondent was
also the subject of disciplinary proceedings brought by the Utah
Division of Occupational and Professional Licensing against his
licenses to practice osteopathy and prescribe controlled substances in
that State. GX 11, at 1. On February 4, 2013, Respondent entered into a
Stipulation and Order with the State in which he admitted that on May
4, 2012, he had submitted an application for licensure as an osteopath
and represented on the application ``that he was not currently under
investigation by any licensing agency, even though [he] knew he was
currently under investigation in Arizona.'' Id. at 3. Respondent
admitted that his conduct constituted both ``unprofessional conduct as
defined in Utah Code Ann. Sec. 58-1-501(2)(a) and unlawful conduct as
defined in Utah Code Ann. Sec. 58-1-501(e).'' Id. Respondent agreed to
surrender his licenses to practice as an osteopath and to administer
and prescribe controlled substances and to not reapply for such
licenses for a period of five years. Id. On February 6, 2013, the
Division approved the Order. Id. at 6.

Respondent's March 2013 DEA Application, the Tennessee Board Action,
and His Subsequent Address Changes

On March 4, 2013, Respondent applied for a new DEA registration at
an address in Chattanooga, Tennessee. GX 6, at 2. On the application,
Respondent was required to answer four liability questions. With
respect to Question Two, which asked, inter alia, whether Respondent
had ever surrendered (for cause) his DEA registration, Respondent
answered ``yes.'' GX 7, at 2. After listing the incident date as ``7/
17/2012'' and the incident location as ``Scottsdale, AZ,'' Respondent
explained the nature of the incident as follows: ``AN ADDICTION PATIENT
OF MINE ESCALATED THE USE OF HER MEDICATIONS AND ENDED UP IN THE ER.
SHE WAS DISCHARGED FROM THE ER UNHARMED BUT HER MOTHER COMPLAINED TO
THE ARIZONA OSTEOPATHIC BOARD OF EXAMINERS. THEY PLACED MY LICENSE ON
SUSPENSION.'' Id. As for the ``incident result,'' Respondent explained:
``I VOLUNTARILY SURRENDERED MY ARIZONA MEDICAL LICENSE AND DEA
REGISTRATION AS I NEW [sic] THAT I WAS MOVING TO TENNESSEE IN THE NEAR
FUTURE.'' Id.
As for Question Three, it asked: ``Has the applicant ever
surrendered (for cause) or had a state professional license or
controlled substance registration revoked, suspended, denied,
restricted, or placed on probation, or is any such action pending?''
Id. Respondent again answered ``Yes'' and listed the same incident date
and location as he did in his previous answer. Id. As for the nature of
the incident, Respondent explained: ``THE ARIZONA BOARD . . . PLACED MY
LICENSE ON A 5 YEAR PROBATION.'' Id. He then explained the incident
result as: ``I VOLUNTARILY SURRENDERED MY ARIZONA LICENSE AND DEA
REGISTRATION AS I KNEW I WAS MOVING TO TENNESSE IN THE NEXT FEW
MONTHS.'' Id. at 3.
Respondent did not disclose on the application the November 16,
2012 Interim Consent Agreement with the Arizona Board. See id. He also
did not disclose the February 6, 2013 Stipulation and Order with the
State of Utah. Id.
As found above, the next day, Respondent was issued a new
registration which authorized him to dispense controlled substances in
schedules II through V, at a location in

[[Page 64944]]

Chattanooga, Tennessee; this registration did not expire until February
29, 2016. Shortly thereafter, Respondent sought to change his
registered address to a location in Hixson, Tennessee, which the Agency
approved on April 3, 2013. GX 6, at 5.
However, on March 17, 2014, Respondent entered into a Consent Order
with the Tennessee Board of Osteopathic Examination. GX 13, at 7. The
Order was based on the July 17, 2012 and November 17, 2012 Arizona
Orders, as well as the Utah Stipulation and Order. GX 13, at 3-4.
Respondent agreed that the ``disciplinary actions in Utah and Arizona .
. . constitute [sic] unprofessional conduct'' in that they involved
``[u]nprofessional, dishonorable or unethical conduct'' which, while it
occurred in other States, was also grounds for discipline in Tennessee.
Id. (citing Tenn. Code Ann. Sec. Sec. 63-9-111(b)(1) & (b)(21)).
Respondent further agreed to the indefinite suspension of his Tennessee
license. Id. at 4. On May 7, 2014, the Board approved the Order. Id. at
6.
According to Respondent, in July 2014, he moved to Grand Junction,
Colorado, where he was also licensed, and began working for Dr. Rebecca
Tolby, and worked for her for 11 months. GX 5, at 11 (Resp. Position
Statement). On some date which is not clear on the record,\12\
Respondent sought to modify his registered location to an address in
Colorado; however, the modification was not approved until April 6,
2015. GX 6, at 6 (Diversion Investigator's (DI) Declaration); see also
GX 7, at 1 (Certification of Registration History).
---------------------------------------------------------------------------

\12\ In an affidavit attached to his Position Statement,
Respondent asserted that ``[w]hen I moved to Colorado in 2014, I
applied to modify my DEA registration to my Colorado address.'' GX
5, at 13. Respondent did not, however, specify the date on which he
applied for the modification. Id.
---------------------------------------------------------------------------

In her Declaration, the DI stated that on December 1, 2014, she
phoned ``Respondent regarding his lack of authority to write
prescriptions in the State of Colorado'' and offered him ``the
opportunity to surrender [his] DEA registration.'' GX 6, at 6.
According to the DI, ``[t]hat same evening . . . Respondent attempted
to modify his registered address again from Tennessee to New Mexico.''
\13\ Id. However, Respondent subsequently changed his modification
request ``back to Colorado.'' \14\ Id.
---------------------------------------------------------------------------

\13\ Respondent also obtained an osteopathic medicine license in
New Mexico in May 2012; he provided the Agency with a contact
address in Albuquerque from December 2014 through February 2015, but
there is no indication in the record that he practiced in New
Mexico. Respondent admits that the New Mexico Board of Osteopathic
Medical Examiners (NMBOME) had opened an investigation into his
license but that his license had been renewed on August 19, 2015. GX
5 at 12. However, the NMBOME Web site states that Respondent's
Pharmacy license expired on March 1, 2016, and that his osteopathic
license expired on July 1, 2016. See http://verification.rld.state.nm.us/Details.aspx?agency_id=l&license_id=625477.
\14\ On September 14, 2015 (the same date the Show Cause Order
was served), Respondent's registered address was changed to the La
Junta Clinic, 1012 Belmont Avenue, in La Junta, Colorado. GX 7, at
1.
---------------------------------------------------------------------------

The DI's Investigation of Respondent's Controlled Substance Prescribing
in Colorado

On April 30, 2015, the DI served a Notice of Inspection on five
pharmacies located in Grand Junction, Colorado seeking to obtain copies
of the prescriptions written by Respondent and dispensing reports
showing the prescriptions he had written ``from approximately July 2014
through February 2015.'' GX 6, at 7-8. Upon reviewing the records, the
DI prepared a list by month of 89 controlled substance prescriptions
(some of which provided for refills) Respondent issued from July 29,
2014 through December 1, 2014 while practicing in Grand Junction,
Colorado, id. at 7-10; copies of the prescriptions were submitted for
the record.\15\ See GXs 14, 15, 20, 21, 22, 23, 24, 25. Moreover, the
dispensing reports obtained from two of the pharmacies showed that
Respondent issued additional controlled substance prescriptions even
after December 1, 2014, the date on which he was told by the DI that he
was not authorized to issue such prescriptions in Colorado. See GX 22,
at 7 (report obtained from Palisade Pharmacy of Palisade, Colorado
showing prescriptions for Tramadol issued to M.B. on Dec. 18, 2014
(filled on Dec. 29, 2014) and on January 26, 2015 (filled that day));
GX 25, at 7 (report obtained from Walgreens of Clifton, Colorado
showing prescription for clonazepam issued to A.O. on Mar. 2, 2015 and
dispensed by pharmacy on Mar. 3, 2015).
---------------------------------------------------------------------------

\15\ As discussed above, the Government also alleged that
Respondent ``issued multiple prescriptions to patients within a
thirty-day window, amounting to prescriptions for large dosages of
highly-abused controlled substances.'' GX 2, at 6. As support for
the allegation, the DI listed 11 patients who received additional
prescriptions within 30 days of having received prescriptions from
Respondent. GX 6, at 10-11. While Respondent violated federal law
when he issued the prescriptions because he was not registered in
Colorado, the Government did not allege that any of these
prescriptions lacked a legitimate medical purpose and thus violated
21 CFR 1306.04(a) or a similar provision under Colorado law. Beyond
that, in some instances the prescriptions were issued 28 days after
the previous prescriptions, which hardly suggests that patients were
seeking refills that were too early. While in other instances, the
time between the prescriptions was only two or three weeks, the
Government did not address why, given the dosing instruction, the
refill was too early. I thus reject the allegation.
---------------------------------------------------------------------------

The Colorado Board Proceeding

On April 22, 2016, the Colorado Medical Board suspended
Respondent's license to practice medicine pending proceedings for
suspension or revocation. The suspension was based on the Board's
finding that there is ``reasonable grounds to believe that Respondent
was guilty of a deliberate and willful violation of the Medical
Practice Act'' in that he ``authorized prescriptions for controlled
substances for at least four patients . . . using another physician's
DEA registration'' when he did not have an active DEA registration
number. April 2016 Addendum to Government's RFAA, GX 27. As of the date
of this Decision and Order, Respondent's Colorado license remains
suspended. See https://www.colorado.gov/dora/licensing/Lookup/Licensedlookup.aspx (visited September 13, 2016).

Respondent's Position Statement

In support of his Position Statement, Respondent provided an
affidavit. Therein, Respondent states that he ``take[s] full
responsibility for my actions that resulted in the probation and
ultimate surrender of my Arizona license'' and that he since ``learned
a great deal on the proper prescribing of controlled substances.'' GX
5, at 11. He further asserts that ``I did not fully understand the
scope of my initial restriction, which caused me to inadvertently
violate that restriction.'' Id.
Respondent further asserts that ``[s]ince 2012, [he] ha[s] taken a
number of steps to ensure that my prescribing practices are compliant
with federal and state law'' and that in ``the past year,'' he has
``been a member of the Colorado Consortium for Prescription Drug Abuse
Prevention'' and that ``[t]he program is helpful to keep abreast of the
latest trends on opioid abuse and strategies for prevention.'' Id. at
11-12. He further states that in 2014, he attended lectures during a
medical convention on the ``Tennessee Substance Abuse Epidemic'' and
``Office Based Opioid Withdrawal.'' Id. at 12.
In his affidavit, Respondent states that ``I have had some
challenges with my state medical licenses, all of which arise from the
suspension of my Arizona license.'' Id. He then maintains that ``I have
tried to be as transparent as possible in communicating these issues to
the various state medical boards and the local DEA offices that have
conducted pre-registration investigations.'' Id. at 13.

[[Page 64945]]

As for his conduct in issuing controlled substance prescriptions in
Colorado when he was not registered in the State, Respondent states
that he ``was unaware when I moved to Colorado that I was not able to
prescribe controlled substances until the DEA actually approved the
modification of my . . . registration to my new address.'' Id.
Respondent states that he thought that he could prescribe controlled
substances in Colorado ``so long as I had submitted my request for a
modification.'' Id. Respondent then states that he ``take[s] full
responsibility'' for this misconduct which was based on his
``misunderstanding of the law and not on any intentional effort to
circumvent the'' CSA. Id. at 14.
According to Respondent, ``[a]s soon as I understood my mistake, I
immediately stopped prescribing controlled substances.'' Id. However,
as found above, the reports of Respondent's dispensings that were
provided by the Palisade Pharmacy and Walgreens show that Respondent
issued additional prescriptions after the DI told him on December 1,
2014 that he lacked authority to write prescriptions in Colorado.\16\ I
thus find that Respondent's statement is false.
---------------------------------------------------------------------------

\16\ While Respondent offered an extensive explanation of his
practice, at least as it existed prior to the Colorado Board's
suspension of his medical license, which involved working in rural
Colorado, the Agency has made clear that it does not consider so-
called community impact evidence relevant in making the public
interest determination in the case of prescribing practitioners. See
Linda Sue Cheek, 76 FR 66972, 66972-73 (2011); Gregory Owen, 74 FR
36751, 36756-57 (2009).
---------------------------------------------------------------------------

Respondent further states that he ``understand[s] that the
allegations in the . . . Order to Show Cause are very serious and that
compliance with the DEA's regulations on prescribing controlled
substances is crucial to prevent . . . diversion and abuse of
controlled substances.'' Id. at 17. Notably, Respondent did not address
the allegation that he materially falsified his March 4, 2013
application for a DEA registration. See generally id. at 10-17.

DISCUSSION

Pursuant to section 303(f) of the Controlled Substances Act,
``[t]he Attorney General shall register practitioners . . . to dispense
. . . controlled substances . . . if the applicant is authorized to
dispense controlled substances under the laws of the State in which he
practices.'' 21 U.S.C. 823(f). Section 303(f) further provides that an
application for a practitioner's registration may be denied upon a
determination ``that the issuance of such registration . . . would be
inconsistent with the public interest.'' Id. In making the public
interest determination, the CSA requires the consideration of the
following factors:

(1) The recommendation of the appropriate State licensing board
or professional disciplinary authority.
(2) The Applicant's experience in dispensing . . . 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.

Id.
``These factors are . . . considered in the disjunctive.'' Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or
a combination of factors, and may give each factor the weight [I]
deem[] appropriate in determining whether . . . an application for
registration [should be] denied.'' Id. Moreover, while I am required to
consider each of the factors, I ``need not make explicit findings as to
each one.'' MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011) (quoting
Volkman, 567 F.3d 215, 222 (6th Cir. 2009) (quoting Hoxie, 419 F.3d
477, 482 (6th Cir. 2005))).\17\
---------------------------------------------------------------------------

\17\ ``In short, this is not a contest in which score is kept;
the Agency is not required to mechanically count up the factors and
determine how many favor the Government and how many favor the
registrant. Rather, it is an inquiry which focuses on protecting the
public interest; what matters is the seriousness of the registrant's
misconduct.'' Jayam Krishna-Iyer, 74 FR 459, 462 (2009).
---------------------------------------------------------------------------

Pursuant to section 304(a)(1), the Attorney General is also
authorized to suspend or revoke a registration ``upon a finding that
the registrant . . . has materially falsified any application filed
pursuant to or required by this subchapter.'' 21 U.S.C. Sec.
824(a)(1). It is well established that the various grounds for
revocation or suspension of an existing registration that Congress
enumerated in section 304(a), 21 U.S.C. Sec. 824(a), are also properly
considered in deciding whether to grant or deny an application under
section 303. See The Lawsons, Inc., 72 FR 74334, 74337 (2007); Anthony
D. Funches, 64 FR 14267, 14268 (1999); Alan R. Schankman, 63 FR 45260
(1998); Kuen H. Chen, 58 FR 65401, 65402 (1993).
Thus, the allegation that Respondent materially falsified his
application is properly considered in this proceeding. See Samuel S.
Jackson, 72 FR 23848, 23852 (2007). Moreover, just as materially
falsifying an application provides a basis for revoking an existing
registration without proof of any other misconduct, see 21 U.S.C.
824(a)(1), it also provides an independent and adequate ground for
denying an application. The Lawsons, 72 FR at 74338; cf. Bobby Watts,
M.D., 58 FR 46995 (1993); Shannon L. Gallentine, 76 FR 45864, 45866
(2011).
In this matter, I conclude that there are three independent grounds
for denying Respondent's pending application. First, he materially
falsified his March 4, 2013 application. Second, by prescribing
controlled substances in both Arizona and Colorado when he was not
legally authorized to issue such prescriptions in the respective State,
he violated the CSA and DEA regulations and thus has committed acts
which render his registration ``inconsistent with the public
interest.'' 21 U.S.C. Sec. 823(f). Third, as a result of the Colorado
Board's suspension of his osteopathic license, he lacks authority under
state law to dispense controlled substances in the State in which he
now seeks registration. See id; see also id. Sec. 802(21).

The Material Falsification Allegation

As found above, the evidence shows that when Respondent submitted
his application for a registration on or about March 5, 2013, he
answered ``Yes'' to two liability questions.\18\ GX 7, at 2. Question
Three asked: ``Has the applicant ever surrendered for cause or had a
state professional license or controlled substance registration
revoked, suspended, denied, restricted, or placed on probation, or is
any such action pending?'' Respondent checked the ``yes'' box and
provided the following information:
---------------------------------------------------------------------------

\18\ The second question asked Respondent, inter alia, whether
he had ever surrendered his DEA registration for cause. The
Government does not allege that Respondent materially falsified his
application in answering this question.

Incident Date: 07/17/2012. Incident Location: Scottsdale, AZ.
Incident Nature: The Arizona Board of Osteopathic Examiners placed
my license on a 5 year probation. Incident Result: I voluntarily
surrendered my Arizona license and DEA registration as I knew I was
---------------------------------------------------------------------------
moving to Tennessee in the next few months.

Id.
The Government alleges that Respondent's answer was materially
false because Respondent failed to disclose the November 2012 Interim
Consent Agreement he entered into with the Arizona Board and the
February 2013 Stipulation and Order he entered into with the Utah
Division of Occupational and Professional Licensing. Request for Final
Agency Action, at 11-13. I agree with the Government that Respondent
materially

[[Page 64946]]

falsified his application, but only with respect to his failure to
disclose the November 2012 Interim Consent Agreement with Arizona.
The Supreme Court has held that ``the most common formulation'' of
the concept of materiality is that ``a concealment or misrepresentation
is material if it `has a natural tendency to influence, or was capable
of influencing, the decision of' the decisionmaking body to which it
was addressed.'' Kungys v. United States, 485 U.S. 759, 770 (1988)
(quoting Weinstock v. United States, 231 F.2d 699, 701 (D.C. Cir. 1956)
(other citation omitted)) (quoted in Samuel S. Jackson, 72 FR 23848,
23852 (2007)); see also United States v. Wells, 519 U.S. 482, 489
(1997) (quoting Kungys, 485 U.S. at 770); Arthur H. Bell, 80 FR 50035,
50038 (2015). The Court has further explained that ``[i]t has never
been the test of materiality that the misrepresentation or concealment
would more likely than not have produced an erroneous decision, or even
that it would more likely than not have triggered an investigation.''
Kungys, 485 U.S. at 771 (emphasis added). Rather, the test is ``whether
the misrepresentation or concealment was predictably capable of
affecting, i.e., had a natural tendency to affect, the official
decision.'' Id. `` `[T]he ultimate finding of materiality turns on an
interpretation of substantive law,' '' id. at 772 (int. quotations and
other citation omitted), and must be shown ``by evidence that is clear,
unequivocal, and convincing.'' Id.
Respondent's failure to disclose the Arizona Interim Consent
Agreement clearly meets the standard of materiality. As found above,
the Consent Agreement was based on the Board's findings that even after
the Board had restricted him from prescribing controlled substances,
Respondent continued to dispense controlled substances in that State
and did so for nearly three months after the effective date of the
Board's Order by either issuing prescriptions or ordering the
dispensing of controlled substances. As the evidence shows, Respondent
dispensed 99 prescriptions/orders for schedule II drugs, 23
prescriptions for schedule III drugs, and 70 prescriptions for schedule
IV drugs after the effective date of the Board's Order and when he no
longer held authority under state law and DEA regulations. See 21 CFR
1306.03(a) (requiring for a legal prescription that an individual
practitioner be ``[a]uthorized to prescribe controlled substances by
the jurisdiction in which he is licensed to practice his profession and
. . . [e]ither registered or exempted from registration'').
Moreover, Respondent issued multiple prescriptions or ordered the
dispensing of controlled substances even after he surrendered his DEA
registration on July 30, 2012.\19\ See 21 U.S.C. 843(a)(3) (``It shall
be unlawful for any person knowingly or intentionally . . . to use in
the course of the . . . dispensing of a controlled substance, a
registration number which is fictitious, revoked, suspended, expired,
or issued to another person[.]''); id. Sec. 822(a)(2) (``Every person
who dispenses . . . any controlled substance, shall obtain from the
Attorney General a registration . . . .''); see also 21 CFR 1306.03(a).
---------------------------------------------------------------------------

\19\ While Respondent's loss of his state authority rendered his
subsequent issuance of the prescriptions and orders unlawful under
the CSA even without his having formally surrendered his DEA
registration, Respondent's continued dispensing of controlled
substances after he surrendered his registration begs the question
of what consequences he believed were attendant to the surrender of
his DEA registration. However, in his Position Statement, Respondent
does not address the question.
---------------------------------------------------------------------------

In determining whether the granting of an application is consistent
with the public interest, the Agency is required to consider both
``[t]he Applicant's experience in dispensing . . . controlled
substances'' and ``compliance with applicable State [and] Federal . . .
laws relating to controlled substances.'' 21 U.S.C. 823(f)(2) & (4).
Thus, while Respondent disclosed the July 2012 Arizona Board Order on
his application, his failure to disclose the November 2012 Order was
clearly ``capable of affecting'' the Agency decision to grant his
application because the Order was based on the additional misconduct he
committed with respect to the dispensing of controlled substances when
he no longer held authority under the CSA and Arizona law. Kungys, 485
U.S. at 771.\20\
---------------------------------------------------------------------------

\20\ Given this finding, I need not decide whether Respondent's
failure to disclose the Utah Stipulation and Order was material to
the Agency's determination as to whether to grant his application
for registration in Tennessee.
---------------------------------------------------------------------------

As noted above, in his affidavit, Respondent did not address his
material falsification of the 2013 application. However, in his
Position Statement, he admits (through his counsel) that he ``did not
provide a complete answer to the liability question,'' but then
contends that ``there was never intent . . . to withhold information
from DEA, to be untruthful, and/or to omit relevant information to
influence DEA's decision.'' GX 5, at 4-5.
However, the statement made by Respondent's counsel is not
evidence, see INS v. Phinpathya, 464 U.S. 183, 186 n.6 (1984), and I
conclude that Respondent submitted his 2013 DEA application with
fraudulent intent. As explained above, the November 2012 Order, which
was issued only three plus months before he submitted his application,
establishes that Respondent had engaged in additional misconduct and
disobeyed the Board's earlier Order as well as issued prescriptions
after he surrendered his DEA registration. So too, Respondent's failure
to disclose the Arizona investigation on his Utah application is
probative evidence of his intent or lack of mistake in failing to
disclose the November 2012 Arizona order on his DEA application. See
Arthur H. Bell, 80 FR 50035, 50038 (2015); cf. Fed. R. Evid. R.
404(b)(2). Accordingly, I conclude that Respondent materially falsified
his March 4, 2013 application for a DEA registration in Tennessee. This
conclusion provides reason alone to deny his pending application.

The Public Interest Factors

In its Request for Final Agency Action as initially submitted, the
Government argues that Factors Two, Four and Five support the denial of
Respondent's application.\21\ Govt. Request at 14-17. I

[[Page 64947]]

agree that the evidence with respect to Factor Two and Four establishes
a prima facie case to deny Respondent's application. And having
reviewed Respondent's Position Statement, I hold that he has failed to
present sufficient evidence to rebut the conclusion that his
``registration would be inconsistent with the public interest.'' 21
U.S.C. Sec. 823(f).
---------------------------------------------------------------------------

\21\ In the Request for Final Agency Action, the Government
argued that Factor One--The Recommendation of the Appropriate State
Licensing Board--``neither weighs in favor nor weighs against the
[denial] of Respondent's'' application for registration.'' Req. for
Final Agency Action, at 14.
While Respondent held a Colorado license on the date the
Government submitted its Request for Final Agency Action, the Board
subsequently suspended his license to practice medicine on the
ground that he authorized controlled substance prescriptions ``using
another physician's DEA registration'' after his DEA registration
expired. GX 27, at 1. While Respondent apparently has not had a
hearing on these allegations, the fact remains that he does not
currently possess authority to dispense controlled substances in
Colorado, the State in which he is seeking registration.
DEA has long held that the possession of state authority to
dispense controlled substances in the State in which a practitioner
engages in professional practice is a prerequisite for obtaining a
DEA registration in that State. See Frederick Marsh Blanton, 43 FR
27616, 27617 (1978) (``State authorization to dispense or otherwise
handle controlled substances is a prerequisite to the issuance and
maintenance of a Federal controlled substances registration.''); see
also 21 U.S.C. Sec. 802(21) (defining ``[t]he term `practitioner'
[to] mean[] a physician . . . or other person licensed, registered,
or otherwise permitted, by the United States or the jurisdiction in
which he practices to . . . dispense . . . a controlled substance in
the course of professional practice.''); id. Sec. 823(f) (``The
Attorney General shall register practitioners . . . to dispense . .
. controlled substances . . . if the applicant is authorized to
dispense . . . controlled substances under the laws of the State in
which he practices.''); United States v. Moore, 423 U.S. 122, 140-41
(1975) (``In the case of a physician, this scheme contemplates that
he is authorized by the State to practice medicine and to dispense
drugs in connection with his professional practice.''). The Agency
has further held that this rule applies even where a practitioner's
state authority has been summarily suspended and the State has yet
to provide him/her with a hearing to challenge the State's action.
See Bourne Pharmacy, 72 FR 18273, 18274 (2007).
Because Respondent's Colorado medical license has been
suspended, he is no longer currently authorized to dispense
controlled substances in Colorado, the State in which he seeks
registration. Thus, he no longer meets the CSA's requirement that he
be authorized to dispense controlled substances in the State where
he is registered. This conclusion provides a further reason to deny
his application.
---------------------------------------------------------------------------

Factors Two and Four--the Applicant's Experience in Dispensing
Controlled Substances and Compliance With State and Federal Laws
Related to Controlled Substances

The Government contends that the various Arizona Board Orders
establish that Respondent's experience in dispensing controlled
substances and his compliance with state and federal laws related to
controlled substances support the denial of his application and that
the Board's factual findings and legal conclusions are entitled to
preclusive effect in this proceeding. Req. for Final Agency Action, at
14-15. I agree in part.
Based on its findings that Respondent deviated from the standard of
care in his treatment of K.K. as well as at least 30 patients, to
include prescribing excessive controlled substances to chronic pain
patients, and that he ignored pharmacy inquiries and drug screenings in
patients who were clearly diverting, the Board restricted him from
prescribing or recommending controlled substances for two years.\22\
Id. at 4. Nonetheless, after the effective date of the Order,
Respondent continued to issue controlled substance prescriptions as
well order the administration of controlled substances to hospice
patients. These prescriptions and orders violated the CSA and DEA
regulations because he lacked the requisite state authority to dispense
controlled substances. 21 CFR 1306.03(a). See also Ariz. Rev. Stat.
Sec. 32-1854 (25). Moreover, Respondent issued at least 17 of these
prescriptions and orders for administration even after he surrendered
his registration. 21 U.S.C. 841(a)(1), 843(a)(3), 822(a)(2). Thus, by
itself, Respondent's unauthorized dispensing of controlled substances
while practicing in Arizona establishes that his registration would be
``inconsistent with the public interest.'' 21 U.S.C. 823(f).
---------------------------------------------------------------------------

\22\ While the Government argues that the Board's findings
establish that Respondent ``failed to comply with state law by
deviating from the standard of care in issuing prescriptions for
controlled substances,'' the Arizona Board did not find that he
engaged in ``[p]rescribing, dispensing, or administering controlled
substances . . . for other than therapeutic purposes.'' See Ariz.
Rev. Stat. Sec. 32-1854. In short, neither of the provisions the
Board found Respondent to have violated make specific reference to
controlled substances but are provisions generally applicable to all
osteopathic physicians. As such, while Respondent's conduct involved
controlled substances, the provisions he violated are not laws
related to controlled substances.
Notwithstanding that the Board did not find that he prescribed
``for other than therapeutic purposes,'' the Board's findings and
conclusions might well have supported an adverse finding under
Factor Two because ``DEA's authority to [deny an application] is not
limited to those instances in which a practitioner intentionally
diverts,'' and ``[a] practitioner who ignores the warning signs that
[his] patients are either personally abusing or diverting controlled
substances commits `acts inconsistent with the public interest,' 21
U.S.C. 824(a)(4), even if [he] is merely gullible or na[iuml]ve.''
Jayam Krishna-Iyer, 74 FR 459, 461 n.3 (2009) (citing Paul J.
Caragine, Jr., 63 FR 51592 (1998)). As Caragine explained, even
``[c]areless or negligent handling of controlled substances creates
the opportunity for diversion and [can] justify revocation or
denial'' of an application. 63 FR at 51601. The Government did not,
however, raise this theory in the Show Cause Order.
---------------------------------------------------------------------------

Moreover, there is additional evidence of prescribing violations
that supports this conclusion. As found above, upon moving to Colorado,
Respondent proceeded to issue numerous controlled substance
prescriptions without being registered in that State.
Under DEA's regulation, where a registrant seeks to change his
registered location, the registrant must apply to modify his
registration, 21 CFR Sec. 1301.51(a), and this regulation clearly
states that a ``request for modification shall be handled in the same
manner as an application for registration.'' Id. Sec. 1301.51(c).
Moreover, under 21 CFR 1301.13(a), ``[n]o person required to be
registered shall engage in any activity for which registration is
required until the application for registration is granted and a
Certificate of Registration is issued by the Administrator to such
person.'' Id.; see also Anthony E. Wicks, 78 FR 62676, 62678 (2013).
Thus, a registrant may ``not engage in any activity for which
registration is required until the application . . . is granted and a .
. . [r]egistration is issued.'' 21 CFR 1301.13(a). See also Mark Koch
79 FR 18714 (2014).
Here, the evidence shows that between July 29, 2014 and December 1,
2014, Respondent issued 89 prescriptions for controlled substances
while practicing in Grand Junction, Colorado, when he did not hold a
DEA registration in the State and was therefore not authorized to
dispense controlled substances in the State. 21 U.S.C. 822(e) (``A
separate registration shall be required at each principal place of
business or professional practice where the applicant . . . dispenses
controlled substances. . . .''); 21 CFR 1301.12. Moreover, while
Respondent claims that he was unaware that he could not issue
controlled substance prescriptions until the Agency approved his
modification request and that he stopped after he was told by the DI
that he could not write prescriptions until his request was approved,
the evidence shows that he issued further controlled substance
prescriptions after he was told by the DI that he lacked authority to
do so in Colorado.
Accordingly, I conclude that Respondent violated the CSA and DEA
regulations when he prescribed controlled substances in Colorado before
April 6, 2015. These findings, particularly when considered in light of
the extent of the Applicant's prescribing violations in Arizona,
support the conclusion that granting Applicant's application ``would be
inconsistent with the public interest.'' 21 U.S.C. 823(f).\23\
---------------------------------------------------------------------------

\23\ As for Factor Three, there is no evidence that Applicant
has been convicted of an offense ``relating to the manufacture,
distribution or dispensing of controlled substances.'' 21 U.S.C.
823(f)(3). There are, however, a number of reasons why a person who
has engaged in misconduct may never have been convicted of an
offense under this factor, let alone prosecuted for one. Dewey C.
MacKay, 75 FR 49956, 49973 (2010), pet. for rev. denied MacKay v.
DEA, 664 F.3d 808 (10th Cir. 2011). The Agency has therefore held
that ``the absence of such a conviction is of considerably less
consequence in the public interest inquiry'' and is therefore not
dispositive. Id.
As for the Government's arguments with respect to Factor Five,
I consider its contentions in my discussion of the appropriate
sanction.
---------------------------------------------------------------------------

SANCTION

Where, as here, the Government has established grounds to deny an
application, Respondent must then ``present[ ] sufficient mitigating
evidence'' to show why he can be entrusted with a new registration.
Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R. Miller, 53
FR 21931, 21932 (1988)). `` `Moreover, because `past performance is the
best predictor of future performance,' ALRA Labs, Inc. v. DEA, 54 F.3d
450, 452 (7th Cir. 1995), [DEA] has repeatedly held that where [an
applicant] has committed acts inconsistent with the public interest,
the [applicant] must accept responsibility for [his] actions and
demonstrate that [he] will not engage in

[[Page 64948]]

future misconduct.'' Jayam Krishna-Iyer, 74 FR 459, 463 (2009) (citing
Medicine Shoppe, 73 FR 364, 387(2008)); see also Jackson, 72 FR at
23853; John H. Kennedy, 71 FR 35705, 35709 (2006); Cuong Tron Tran, 63
FR 64280, 64283 (1998); Prince George Daniels, 60 FR 62884, 62887
(1995).\24\
---------------------------------------------------------------------------

\24\ This rule also applies to other grounds that support the
denial of an application, such as where the Government has proven
that an applicant materially falsified his application. See Jackson,
72 FR, at 23853.
---------------------------------------------------------------------------

So too, an Applicant's candor during the course of an investigation
and subsequent proceeding is an important factor to be considered in
determining whether he has accepted responsibility for the proven
misconduct as well as the appropriate disposition of the matter. See
Robert F. Hunt, 75 FR 49995, 50004 (2010); Jeri Hassman, 75 FR 8194,
8236 (2010); see also Hoxie v. DEA, 419 F.3d 477, 483 (6th Cir. 2005)
(``Candor during DEA investigations, regardless of the severity of the
violations alleged, is considered by the DEA to be an important factor
when assessing whether a physician's registration is consistent with
the public interest.'').
While an applicant must accept responsibility for his misconduct
and demonstrate that he will not engage in future misconduct in order
to establish that its registration is consistent with the public
interest, DEA has repeatedly held that these are not the only factors
that are relevant in determining the appropriate disposition of the
matter. See, e.g., Joseph Gaudio, 74 FR 10083, 10094 (2009); Southwood
Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007). Obviously, the
egregiousness and extent of an applicant's misconduct are significant
factors in determining the appropriate sanction. See Jacobo Dreszer, 76
FR 19386, 19387-88 (2011) (explaining that a respondent can ``argue
that even though the Government has made out a prima facie case, his
conduct was not so egregious as to warrant revocation''); Paul H.
Volkman, 73 FR 30630, 30644 (2008); see also Paul Weir Battershell, 76
FR 44359, 44369 (2011) (imposing six-month suspension, noting that the
evidence was not limited to security and recordkeeping violations found
at first inspection and ``manifested a disturbing pattern of
indifference on the part of [r]espondent to his obligations as a
registrant''); Gregory D. Owens, 74 FR 36751, 36757 n.22 (2009).
So too, the Agency can consider the need to deter similar acts,
both with respect to the respondent in a particular case and the
community of registrants. See Gaudio, 74 FR at 10095 (quoting
Southwood, 71 FR at 36503). Cf. McCarthy v. SEC, 406 F.3d 179, 188-89
(2d Cir. 2005) (upholding SEC's express adoption of ``deterrence, both
specific and general, as a component in analyzing the remedial efficacy
of sanctions'').
Having reviewed Respondent's Position Statement, I conclude that he
has failed to produce sufficient evidence to show why he should be
entrusted with a new registration. With respect to his acceptance of
responsibility, Respondent states only that he ``accepts full
responsibility for his actions that lead [sic] to the sanctions imposed
by Arizona'' and ``regrets and acknowledges that he prescribed
controlled substances in Colorado while his modification request was
pending.'' GX 5, at 7-8. Putting aside that the credibility of
Respondent's statement cannot be tested through cross-examination
because Respondent waived his right to a hearing, it is notable that
Respondent does not acknowledge that he materially falsified his March
2013 application for registration in Tennessee. Respondent's failure to
acknowledge his misconduct in this regard is fatal to his application.
Moreover, even with respect to his misconduct in prescribing
controlled substances in Colorado, I conclude that Respondent has not
adequately acknowledged his misconduct. Even putting aside that
ignorance of the law is no excuse, Respondent's statement regarding his
actions is less than forthcoming. As found above, Respondent asserted
that ``[a]s soon as I understood my mistake, I immediately stopped
prescribing controlled substances.'' Yet the evidence shows that on
December 1, 2014, the DI phoned him and told him that he lacked
authority to issue controlled substance prescriptions in Colorado.
While this should have been the point at which he ``understood [his]
mistake'' and ``immediately stopped prescribing,'' the evidence shows
that Respondent issued additional controlled substance prescriptions
thereafter. In short, Respondent's assertion is clearly false and I
therefore also find that he has not accepted responsibility for his
prescribing in Colorado when he lacked a DEA registration.
Likewise, while Respondent contends that he prescribed controlled
substances in violation of the first Arizona order because he ``did not
fully understand the scope of my initial restriction, which caused
[him] to inadvertently violate that restriction,'' having reviewed that
Order, I conclude that it was more than clear. See GX 8, at 4 (``IT IS
HEREBY FURTHER ORDERED that [Respondent], holder of osteopathic medical
License number 2686 is restricted from prescribing or recommending
Schedule I, II, III, or IV controlled substances for a period of two
(2) years from the effective date of this Order.''). Indeed, if
Respondent did not fully understand the scope of the restriction, he
had five weeks to contact the Board and clarify his understanding
before the Order went into effect. Nor is Respondent's explanation
credible given that he continued prescribing and issuing dispensing
orders even after he surrendered his DEA registration. I thus conclude
that Respondent has not credibly acknowledged his misconduct.
I also conclude that the record as a whole establishes that
Respondent's misconduct was egregious given his material falsification
of his March 2013 DEA application, his prescribing of controlled
substances after the Arizona Board's Order became effective, and his
continued prescribing in Arizona after he surrendered his DEA
registration. As for his prescribing in Colorado, even were I to accept
his excuse that he mistakenly believed that he could prescribe once he
submitted his request for modification, his issuance of prescriptions
after he was told by the DI that he lacked authority to write
prescriptions in the State renders this misconduct egregious as well.
Accordingly, I find that Respondent's misconduct warrants denial of
his application for this reason as well. So too, I find that the
Agency's interest in deterring similar misconduct by other applicants
who may contemplate materially falsifying their applications, as well
as by other registrants who may choose to ignore agency regulations and
prescribe when they lack authority to do so, supports the denial of his
application.
Of further note, as explained in my discussion of Factor One,
subsequent to the issuance of the Show Cause Order and Respondent's
submission of his Position Statement, the Colorado Medical Board
suspended his medical license and his license remains suspended as of
the date of this Order. As a consequence, Respondent no longer holds
authority under state law to dispense controlled substances in the
State where he is currently registered and thus no longer meets the
statutory prerequisite for obtaining and maintaining his registration.
See Frederick Marsh Blanton, 43 FR 27616, 27617 (1978) (``State
authorization to dispense or otherwise handle controlled substances is
a prerequisite to the issuance and maintenance of a Federal controlled
substances registration.''); see also 21 U.S.C. 823(f) (``The Attorney
General shall register practitioners . . .

[[Page 64949]]

if the applicant is authorized to dispense . . . controlled substances
under the laws of the State in which he practices.''); 21 U.S.C.
802(21) (``[t]he term `practitioner' means a physician . . . licensed,
registered, or otherwise permitted, by . . . the jurisdiction in which
he practices . . . to distribute, dispense, [or] administer . . . a
controlled substance in the course of professional practice'').\25\
---------------------------------------------------------------------------

\25\ See also Rezik A. Saqer, 81 FR 22122, 22125-27 (2016);
Sheran Arden Yeates, 71 FR 39130, 39131 (2006); Dominick A. Ricci,
58 FR 51104, 51105 (1993); Bobby Watts, 53 FR 11919, 11920 (1988).
---------------------------------------------------------------------------

While the Show Cause Order did not assert this as a ground for
denial of his application (because it occurred subsequent to the
issuance of the Order), the Government did serve a copy of its Addendum
which presented this development to me, on Respondent. In response to
this filing, Respondent has raised no objection.\26\ In any event,
there are two other independent and legally sufficient bases to deny
his application. Accordingly, I will deny his application.
---------------------------------------------------------------------------

\26\ DEA has previously held that ``[t]he rules governing DEA
hearings do not require the formality of amending a show cause order
to comply with the evidence. The Government's failure to file an
amended Show Cause Order alleging that Respondent's state CDS
license has expired does not render the proceeding fundamentally
unfair.'' Roy E. Berkowitz, 74 FR 36758, 36759-60 (2009); see also
Hatem M. Ataya, 81 FR 8221, 8245 (2016) (collecting cases).
---------------------------------------------------------------------------

ORDER

Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28
CFR 0.100(b), I order that the application of Richard J. Settles, for a
DEA Certificate of Registration as a practitioner be, and it hereby is,
denied. This Order is effective immediately.

Dated: September 13, 2016.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2016-22680 Filed 9-20-16; 8:45 am]
BILLING CODE 4410-09-P

64940 Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices

Order question: ‘‘Has the applicant ever his registered address from Tennessee to
Pursuant to the authority vested in me surrendered (for cause) or had a state an address in Dolores, Colorado. Id. at
by 21 U.S.C. § 824(a), as well as 28 CFR professional license or controlled 4. The Order alleged that Respondent
0.100(b), I order that DEA Certificate of substances registration revoked, made several additional requests to
Registration AS3236406, issued to suspended, restricted, or placed on modify his registered address,
Charles Szyman, D.O., be, and it hereby probation, or is any such action concluding with his February 18, 2015
is, revoked. This Order is effective pending?’’ and that ‘‘[i]n furtherance of request to change his address to a
[his] answer,’’ Respondent explained location in Grand Junction, Colorado
immediately.4
that on July 17, 2012, ‘‘the Arizona and that the Agency approved this
Dated: September 13, 2016. Board of Osteopathic Examiners placed request on March 17, 2015. Id.
Chuck Rosenberg, my license on a 5 year probation,’’ and The Order then alleged that prior to
Acting Administrator. that as a result, ‘‘I voluntarily the Agency’s approval of his
[FR Doc. 2016–22677 Filed 9–20–16; 8:45 am] surrendered my Arizona license and modification request, Respondent
BILLING CODE 4410–09–P DEA registration as I knew I was moving issued controlled substance
to Tennessee in the next few months.’’ prescriptions in Colorado, ‘‘in violation
Id. at 1–2. of 21 U.S.C. 810(10),1 822(e), and
DEPARTMENT OF JUSTICE The Government then alleged that 841(a)(1).’’ Id. at 4 (citing, inter alia, 21
Respondent’s answer was materially CFR 1301.12(a), 1301.13(a)).
Drug Enforcement Administration false because he was ‘‘aware of at least Specifically, the Order alleged that
two . . . other state professional license ‘‘from July 2014 through February 2015,
Richard J. Settles, D.O.; Decision and actions’’ when he submitted the [Respondent] issued over 250
Order application and failed to disclose them. prescriptions when [he] lacked the
On September 9, 2015, the Deputy Id. at 2. The Government alleged that requisite federal authority to issue
Assistant Administrator, Office of these actions included a November 17, prescriptions in Colorado.’’ Id. The
Diversion Control, Drug Enforcement 2012 Interim Consent Order issued by Order then set forth multiple instances
Administration, issued an Order to the Arizona Board, which restricted of such prescriptions. Id. at 5–6. The
Show Cause to Richard J. Settles, D.O. Respondent’s license to practice Order further alleged that Respondent
(hereinafter, Respondent), of Grand osteopathic medicine pending the ‘‘issued multiple prescriptions to
Junction, Colorado. The Show Cause Board’s investigation into whether he patients within a thirty-day window,
violated its July 17, 2012 Order by amounting to prescriptions for large
Order proposed the revocation of
prescribing controlled substances as his dosages of highly abused controlled
Respondent’s DEA Certificate of
authority to do so had been restricted by substances’’ and set forth a dozen
Registration FS3717975, pursuant to
that Order. Id. As for the second Board patients to whom he issued the
which he is authorized to dispense
action, the Government alleged that on prescriptions. Id. at 6–7.
controlled substances in schedules II On September 14, 2015, the Show
February 6, 2013, Respondent entered
through V, as a practitioner, at the Cause Order, which also notified
into a Stipulation and Order with the
registered address of 715 Horizon Drive, Respondent of his right to request a
Utah Division of Occupational and
Suite 200, Grand Junction, Colorado. GX hearing on the allegations or to submit
Professional Licensing, in which he
2, at 1 (citing 21 U.S.C. 824(a)(1) and a written statement in lieu of a hearing,
admitted that he had falsified a May 4,
(4)). The Show Cause Order also 2012 application for licensure in that the procedure for electing either option,
proposed the denial of any pending State, because he failed to disclose that and the consequence for failing to elect
application to renew or modify he was then under investigation by the either option, was served on
Respondent’s registration, on the ground Arizona Board, and that he had Respondent by certified mail, return
that his ‘‘continued registration is surrendered his Utah license to practice receipt requested. GX 4, at 1. Thereafter,
inconsistent with the public interest.’’ as an osteopath. Id. at 2–3 (citing 21 on October 14, 2015, Respondent,
Id. U.S.C. 824(a)(1), 823(f), 843(a)(4)(A)). through his attorney, filed a document
As grounds for the proposed actions, As for the prescribing allegations, the entitled ‘‘Waiver of Hearing, Statement
the Government alleged that Government alleged that pursuant to the of Position on the Facts and Law’’
Respondent had materially falsified his July 17, 2012 Arizona Board Order, (hereinafter ‘‘Position Statement’’) with
March 4, 2013 application for Respondent was restricted from the Office of Administrative Law Judges.
registration. Id. at 2 (21 U.S.C. prescribing schedule I through IV See 21 CFR 1301.43(c); GX 5. Therein,
824(a)(1)). The Order also alleged that controlled substances. Id. at 3. The Respondent acknowledged service of
he had issued prescriptions for Order alleged that the Board the Order to Show Cause on September
controlled substances without authority subsequently found that after the 14, 2015, see GX 5 at 5, and explained
to do so under both Arizona and Federal effective date of the Order, Respondent he was waiving his right to a hearing
law. Id. at 3 (citing 21 U.S.C. 824(a)(4)). became the medical director of a and filing his ‘‘Statement of Position on
With respect to the material hospice program and prescribed the Facts and Law regarding the matters
falsification allegation, the Government controlled substances to 10 of the alleged in the Order to Show Cause.’’
alleged that on March 4, 2013, program’s patients. Id. The Order then GX 5, at 2.
Respondent applied for a DEA alleged that ‘‘[p]rescribing controlled On February 29, 2016, the
registration at a location in Chattanooga, substances without appropriate Government forwarded its Request for
Tennessee. Id. at 1. The Government authority is contrary to Federal law.’’ Id. Final Agency action, the Investigative
mstockstill on DSK3G9T082PROD with NOTICES

alleged that Respondent provided a at 3 (citations omitted). Record, and Respondent’s Position
‘‘yes’’ answer to the application Next, the Order alleged that on May Statement. Subsequently, on March 21,
7, 2014, one day before the Tennessee 2016, the Government filed an
4 For the same reasons which led the Wisconsin
State Board of Osteopathic Examination Addendum to its Request for Final
Board to summarily suspend Respondent’s
osteopathic license, see supra note 2, I find that the
issued a Consent Order which Agency Action (hereinafter, First
public interest necessitates that this Order be indefinitely suspended his Tennessee
effective immediately. 21 CFR 1316.67. license, Respondent applied to modify 1 There is no such provision in the CSA.

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64942 Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices

well as other applicants for registration which is the subject of the material a lapse in care from February 2006 to
to manufacturer the same basic falsification allegations. On February 2, early 2009.’’ Id. at 2. The Board found
substance, and upon request of such 2016, Respondent submitted an that at K.K.’s second visit, Respondent
manufacturer or applicant, the Agency application to renew this registration. prescribed Percocet to her in quantities
‘‘shall hold a hearing on the First Addendum, at 1. However, because ranging from 120 to 180 dosage units
application.’’ 21 CFR 1301.34(a). While Respondent had previously been served each month as well as 90 Xanax and 30
Government does not initiate the with the Show Cause Order, in order for Ambien each month. Id. The Board
proceeding, it may intervene in the his registration to remain valid pending further found that ‘‘Respondent failed to
proceeding as a ‘‘person entitled to this proceeding, he was required to obtain prior medical records or to
participate in a hearing.’’ 21 CFR submit his application at least 45 days perform a workup on K.K. and no
1301.43(b). See also e.g., Chattem before the date on which the registration consultations were ordered.’’ Id. It also
Chemicals, Inc., 71 FR 9834, 9834 was due to expire. 21 CFR 1301.36(i). found that ‘‘[t]he majority of K.K.’s
(2006), pet. for rev. denied sub nom. Accordingly, I find that Respondent’s medications were obtained through
Penick Corp, Inc., v. DEA, 491 F.3d 483, registration expired on February 29, Respondent’s office’’ and that he ‘‘did
493 (D.C. Cir. 2007); Penick Corp., Inc., 2016. I further find, however, that not enter into a medication contract
68 FR 6947, 6947 (2003), pet. for rev. Respondent’s application remains with [her] until May 5, 2010 for
denied sub nom. Noramco, Inc., v. DEA, pending in this proceeding.10 Suboxone.’’ Id.
375 F.3d 1148, 1159 (D.C. Cir. 2004). Continuing, the Board found that K.K.
Indeed, this is the only circumstance in The Arizona and Utah Investigations of ‘‘returned to Respondent . . . in 2009
which the Government can be fairly Respondent and . . . was started on’’ 90 Percocet
described as a ‘‘person entitled to On April 29, 2010, the mother of and 90 Soma, and that ‘‘[i]n October
participate in a hearing.’’ 8 Respondent’s patient K.K. made a 2009, K.K. overdosed and was taken to
Thus, with respect to this proceeding, complaint to the Arizona Board of the hospital.’’ Id. The Board found that
the Government is neither a ‘‘person[] Osteopathic Examiners alleging that ‘‘Respondent continued’’ to provided
entitled to a hearing or to participate in K.K. was a heroin addict and that K.K. with prescriptions each month for
a hearing,’’ 21 CFR 1301.43(e), and the Respondent was prescribing drugs and 120 dosage units of Percocet, 90 Xanax,
only person whose waiver matters for quantities that ‘‘were inappropriate and 30 Ambien until March 2010, when
the purpose of cancelling the hearing is [given] K.K.’s history with substance he increased her Percocet prescription
Respondent. Because Respondent has abuse.’’ GX 8, at 2. The same day, the to 180 du per month. Id. According to
waived his right to a hearing, I am Board notified Respondent that it was the Board, K.K. overdosed again on
authorized to issue this ‘‘final order . . . initiating an investigation. Id. at 1. March 17, 2010 as well as on April 11,
without a hearing.’’ 9 Id. Thereafter, Respondent was invited to 2010. Id. at 2–3.
Having reviewed the entire record, attend an investigative hearing which With respect to the chart review, the
including Respondent’s Statement of was conducted on September 24, 2011; Board found that ‘‘Respondent
Position, I make the following factual the hearing was continued to allow the prescribed controlled substances to
findings. Board to obtain additional information chronic pain patients’’ and that
FINDINGS OF FACT and conduct ‘‘a chart review of thirty ‘‘[p]harmacy inquiries and drug screens
(30) patients.’’ Id. The Board also were ignored in patients that were
Jurisdictional Facts ordered Respondent to undergo a clearly diverting.’’ Id. at 3. The Board
Respondent, a doctor of osteopathic psychological evaluation and requested further found that ‘‘Respondent
medicine, previously held DEA that he provide additional deviated from the standard of care by
Certificate of Registration FS3717975, documentation to it. Id. failing to’’:
pursuant to which he was authorized to On April 10, 2012, the Board notified (1) ‘‘stop prescribing controlled substances
dispense controlled substances in Respondent ‘‘that the Investigative for patients that had overdosed’’;
schedules II–V, at the address of La Hearing would continue on May 19, (2) ‘‘recognize drug seeking behavior in
Junta Clinic, 1012 Belmont Ave., La 2012.’’ Id. On that date, the Board patients’’;
Junta, Colorado. GX 1. This registration conducted the hearing with Respondent (3) ‘‘request prior medical records’’;
was issued on March 5, 2013, after present and represented by counsel. Id. (4) ‘‘obtain appropriate laboratory testing’’;
Respondent submitted the application (5) ‘‘conduct a physical exam in at least
Thereafter, the Board issued a decision
one patient’’;
and order which made factual findings (6) ‘‘obtain consultations’’; and
8 21 CFR 1301.43(b) also refers to the provisions
and legal conclusions regarding (7) ‘‘follow the directions of specialist [sic]
of 1301.35(b), which allow for registered bulk
manufacturers of a basic substance in schedule I or Respondent’s prescribing to K.K. as well or recommendations when consultations
II (as well as applicants for registration to as its chart review. were obtained.’’
manufacture the basis substance) to ‘‘participate in With respect to K.K., the Board found Id.
a hearing’’ when the Government has issued a Show that she was Respondent’s patient ‘‘from
Cause Order proposing the denial of an application The Board thus found that
for registration ‘‘to manufacture in bulk’’ the same March 2005 through March 2010, with ‘‘Respondent practice[d] medicine in a
basic class and the applicant has requested a manner that harmed or had potential to
hearing. Here too, the Government is not a ‘‘person 10 Respondent previously held DEA Certificate of

entitled to participate in a hearing.’’ Rather, it is Registration BS3176105. GX 7, at 3. Pursuant to this
harm patients and fell below the
initiator of the proceeding. registration, Respondent was authorized to dispense community standard . . . and . . . this
9 The Agency’s longstanding and consistent controlled substances in schedules II through V, at conduct endangered a patient or the
practice is that where a party waives its right to a the registered location of 10752 North 89th Place, public’s health.’’ Id. And the Board
mstockstill on DSK3G9T082PROD with NOTICES

hearing, the Government is entitled to present its Suite 218, Scottsdale, Arizona 85620. GX 9, at 1.
evidence directly to the Administrator, who is the However, on July 30, 2012, Respondent surrendered
concluded that Respondent engaged in
ultimate factfinder. See, e.g., Cf. Reckitt & Colman, this registration ‘‘[i]n view of [his] alleged failure to unprofessional conduct by ‘‘ ‘[e]ngaging
Ltd. v. Administrator, 788 F.2d 22, 26 (quoting 5 comply with the Federal requirements pertaining to in the practice of medicine in a manner
U.S.C. 557(b) (‘‘On appeal from or review of the controlled substances, and as an indication of my that harms or may harm a patient or that
initial decision, the agency has all the powers good faith in desiring to remedy any incorrect or
which it would have in making the initial decision unlawful practice on [his] part.’’ Id. This
the board determines falls below the
. . . .’’)). This practice has been followed in registration was retired the following day. GX 7, at community,’ ’’ as well as that he
hundreds of cases over the years. 3. engaged in ‘‘ ‘[a]ny conduct or practice

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Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices 64943

that endangers the public’s health or On November 16, 2012, Respondent February 6, 2013, the Division approved
may reasonably be expected to do so.’’’ entered into an Interim Consent the Order. Id. at 6.
Id. at 4 (quoting Ariz. Rev. Stat. §§ 32– Agreement which the Board approved
Respondent’s March 2013 DEA
1854(6) & (38)). the following day. Id. at 2, 5.
Based on the above, the Board Application, the Tennessee Board
Respondent admitted to the findings of Action, and His Subsequent Address
censured Respondent and ‘‘restricted’’ fact contained therein, including that he
him ‘‘from prescribing or recommending Changes
had prescribed or ordered controlled
Schedule I, II, III or IV controlled substances after the July 17, 2012 Order On March 4, 2013, Respondent
substances for a period of two years . . . became effective, as well as the legal applied for a new DEA registration at an
from’’ the Order’s effective date. The conclusion that he had engaged in address in Chattanooga, Tennessee. GX
Board also restricted him from unprofessional conduct by ‘‘[v]iolating a 6, at 2. On the application, Respondent
practicing pain management, imposed a formal order, probation or a stipulation was required to answer four liability
civil penalty of $1,000 and placed him issued by the board.’’ Id. at 1, 4. The questions. With respect to Question
on probation for a period of five years, Board then ordered that Respondent be Two, which asked, inter alia, whether
the terms of which included that he ‘‘restricted from practicing medicine Respondent had ever surrendered (for
‘‘obey all federal, state and local laws, until the investigation’’ was completed cause) his DEA registration, Respondent
and rules governing the practice of and ‘‘he appear[ed] before the Board answered ‘‘yes.’’ GX 7, at 2. After listing
medicine in the State of Arizona.’’ Id. . . . for resolution’’ of the matter. Id. at the incident date as ‘‘7/17/2012’’ and
The Order became effective on July 17, 4. the incident location as ‘‘Scottsdale,
2012. GX 10, at 3. On May 12, 2014, Respondent entered AZ,’’ Respondent explained the nature
As found above, on July 30, 2012, into a Consent Agreement and Order for of the incident as follows: ‘‘AN
Respondent voluntarily surrendered his Voluntary Surrender of Licensee. GX 12, ADDICTION PATIENT OF MINE
then DEA registration (BS3176105). at 1, 5. Therein, Respondent waived his ESCALATED THE USE OF HER
Thereafter, on October 12, 2012, the right to a hearing before the Board. Id. MEDICATIONS AND ENDED UP IN
Board received information form at 2. The Board found, inter alia, that on THE ER. SHE WAS DISCHARGED
anonymous sources that Respondent August 1, 2012, Respondent had FROM THE ER UNHARMED BUT HER
‘‘may be prescribing controlled ‘‘entered into an Independent MOTHER COMPLAINED TO THE
substances.’’ GX 16, at 1. In response, Contractor Agreement with Hospice ARIZONA OSTEOPATHIC BOARD OF
the Board queried the Board of Family Care, Inc.[,] to continue to serve EXAMINERS. THEY PLACED MY
Pharmacy’s Controlled Substances as its Executive Medical Director of LICENSE ON SUSPENSION.’’ Id. As for
Prescription Monitoring Program ‘‘for Hospice’’ and that he had ‘‘signed the ‘‘incident result,’’ Respondent
all controlled substances written or prescriptions for controlled substances explained: ‘‘I VOLUNTARILY
ordered by [Respondent] from June 11, for ten patients ‘‘after the effective date SURRENDERED MY ARIZONA
2012 through October 15, 2012.’’ Id. The of the [July 17, 2012] Board Order.’’ Id. MEDICAL LICENSE AND DEA
query showed that between July 17, at 3. REGISTRATION AS I NEW [sic] THAT
2012 and October 15, 2012, Respondent While the Arizona Board’s I WAS MOVING TO TENNESSEE IN
had issued 99 prescriptions for schedule investigation was ongoing, Respondent THE NEAR FUTURE.’’ Id.
II drugs, 23 prescriptions for schedule As for Question Three, it asked: ‘‘Has
was also the subject of disciplinary
III drugs, and 70 prescriptions for the applicant ever surrendered (for
proceedings brought by the Utah
schedule IV drugs. Id. at 1–2. The Board cause) or had a state professional license
Division of Occupational and
identified one patient Respondent saw or controlled substance registration
Professional Licensing against his
at his office who received a prescription revoked, suspended, denied, restricted,
licenses to practice osteopathy and
for temazepam on August 21, 2012, and or placed on probation, or is any such
prescribe controlled substances in that
11 patients at hospices in Tuscon and action pending?’’ Id. Respondent again
State. GX 11, at 1. On February 4, 2013,
Mesa to whom he either prescribed or answered ‘‘Yes’’ and listed the same
Respondent entered into a Stipulation
ordered the dispensing of controlled incident date and location as he did in
and Order with the State in which he
substances, which included morphine, his previous answer. Id. As for the
admitted that on May 4, 2012, he had
hydromorphone, oxycodone, lorazepam nature of the incident, Respondent
submitted an application for licensure
and temazepam. Id. at 2–6. Moreover, explained: ‘‘THE ARIZONA BOARD
as an osteopath and represented on the
Respondent issued 17 controlled . . . PLACED MY LICENSE ON A 5
application ‘‘that he was not currently
substance prescriptions or orders for the YEAR PROBATION.’’ Id. He then
under investigation by any licensing
dispensing of controlled substances for explained the incident result as: ‘‘I
agency, even though [he] knew he was
12 patients after he surrendered his DEA VOLUNTARILY SURRENDERED MY
currently under investigation in
registration. Id. ARIZONA LICENSE AND DEA
Arizona.’’ Id. at 3. Respondent admitted
On November 9, 2012, Respondent REGISTRATION AS I KNEW I WAS
that his conduct constituted both
was interviewed by the Board and MOVING TO TENNESSE IN THE NEXT
‘‘unprofessional conduct as defined in
admitted ‘‘that he had signed FEW MONTHS.’’ Id. at 3.
Utah Code Ann. § 58–1–501(2)(a) and Respondent did not disclose on the
prescriptions for Schedule I, II, III or IV unlawful conduct as defined in Utah
controlled substances after the Effective application the November 16, 2012
Code Ann. § 58–1–501(e).’’ Id. Interim Consent Agreement with the
Date’’ of the Order. GX 10, at 4. Respondent agreed to surrender his
Respondent denied having ‘‘written Arizona Board. See id. He also did not
licenses to practice as an osteopath and disclose the February 6, 2013
mstockstill on DSK3G9T082PROD with NOTICES

prescriptions for patients in his private to administer and prescribe controlled
practice’’ and ‘‘stated that he had only Stipulation and Order with the State of
substances and to not reapply for such Utah. Id.
written or authorized prescriptions in licenses for a period of five years. Id. On
his capacity as the . . . medical director As found above, the next day,
for various hospice locations.’’ 11 Id. Respondent was issued a new
practice monitor. GX 10, at 4. During the November
9 interview, ‘‘Respondent stated that he did not hire
registration which authorized him to
11 Under the probationary terms of the July 17, a practice monitor because he was not actively dispense controlled substances in
2012 Order, Respondent was required to hire a practicing in Arizona.’’ Id. schedules II through V, at a location in

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64944 Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices

Chattanooga, Tennessee; this Respondent subsequently changed his 2, 2015 and dispensed by pharmacy on
registration did not expire until modification request ‘‘back to Mar. 3, 2015).
February 29, 2016. Shortly thereafter, Colorado.’’ 14 Id.
The Colorado Board Proceeding
Respondent sought to change his
The DI’s Investigation of Respondent’s On April 22, 2016, the Colorado
registered address to a location in
Controlled Substance Prescribing in Medical Board suspended Respondent’s
Hixson, Tennessee, which the Agency
Colorado license to practice medicine pending
approved on April 3, 2013. GX 6, at 5.
However, on March 17, 2014, On April 30, 2015, the DI served a proceedings for suspension or
Respondent entered into a Consent Notice of Inspection on five pharmacies revocation. The suspension was based
Order with the Tennessee Board of located in Grand Junction, Colorado on the Board’s finding that there is
Osteopathic Examination. GX 13, at 7. seeking to obtain copies of the ‘‘reasonable grounds to believe that
The Order was based on the July 17, prescriptions written by Respondent Respondent was guilty of a deliberate
2012 and November 17, 2012 Arizona and dispensing reports showing the and willful violation of the Medical
Orders, as well as the Utah Stipulation prescriptions he had written ‘‘from Practice Act’’ in that he ‘‘authorized
and Order. GX 13, at 3–4. Respondent approximately July 2014 through prescriptions for controlled substances
agreed that the ‘‘disciplinary actions in February 2015.’’ GX 6, at 7–8. Upon for at least four patients . . . using
Utah and Arizona . . . constitute [sic] reviewing the records, the DI prepared another physician’s DEA registration’’
unprofessional conduct’’ in that they a list by month of 89 controlled when he did not have an active DEA
involved ‘‘[u]nprofessional, substance prescriptions (some of which registration number. April 2016
dishonorable or unethical conduct’’ provided for refills) Respondent issued Addendum to Government’s RFAA, GX
which, while it occurred in other States, from July 29, 2014 through December 1, 27. As of the date of this Decision and
was also grounds for discipline in 2014 while practicing in Grand Order, Respondent’s Colorado license
Tennessee. Id. (citing Tenn. Code Ann. Junction, Colorado, id. at 7–10; copies of remains suspended. See https://www.
§§ 63–9–111(b)(1) & (b)(21)). the prescriptions were submitted for the colorado.gov/dora/licensing/Lookup/
Respondent further agreed to the record.15 See GXs 14, 15, 20, 21, 22, 23, Licensedlookup.aspx (visited September
indefinite suspension of his Tennessee 24, 25. Moreover, the dispensing reports 13, 2016).
license. Id. at 4. On May 7, 2014, the obtained from two of the pharmacies
Respondent’s Position Statement
Board approved the Order. Id. at 6. showed that Respondent issued
According to Respondent, in July additional controlled substance In support of his Position Statement,
2014, he moved to Grand Junction, prescriptions even after December 1, Respondent provided an affidavit.
Colorado, where he was also licensed, 2014, the date on which he was told by Therein, Respondent states that he
and began working for Dr. Rebecca the DI that he was not authorized to ‘‘take[s] full responsibility for my
Tolby, and worked for her for 11 issue such prescriptions in Colorado. actions that resulted in the probation
months. GX 5, at 11 (Resp. Position See GX 22, at 7 (report obtained from and ultimate surrender of my Arizona
Statement). On some date which is not Palisade Pharmacy of Palisade, Colorado license’’ and that he since ‘‘learned a
clear on the record,12 Respondent showing prescriptions for Tramadol great deal on the proper prescribing of
sought to modify his registered location issued to M.B. on Dec. 18, 2014 (filled controlled substances.’’ GX 5, at 11. He
to an address in Colorado; however, the on Dec. 29, 2014) and on January 26, further asserts that ‘‘I did not fully
modification was not approved until 2015 (filled that day)); GX 25, at 7 understand the scope of my initial
April 6, 2015. GX 6, at 6 (Diversion (report obtained from Walgreens of restriction, which caused me to
Investigator’s (DI) Declaration); see also Clifton, Colorado showing prescription inadvertently violate that restriction.’’
GX 7, at 1 (Certification of Registration for clonazepam issued to A.O. on Mar. Id.
History). Respondent further asserts that
In her Declaration, the DI stated that Respondent’s Pharmacy license expired on March ‘‘[s]ince 2012, [he] ha[s] taken a number
on December 1, 2014, she phoned 1, 2016, and that his osteopathic license expired on of steps to ensure that my prescribing
July 1, 2016. See http://verification.rld.state.nm.us/ practices are compliant with federal and
‘‘Respondent regarding his lack of Details.aspx?agency_id=l&license_id=625477.
authority to write prescriptions in the 14 On September 14, 2015 (the same date the state law’’ and that in ‘‘the past year,’’
State of Colorado’’ and offered him ‘‘the Show Cause Order was served), Respondent’s he has ‘‘been a member of the Colorado
opportunity to surrender [his] DEA registered address was changed to the La Junta Consortium for Prescription Drug Abuse
Clinic, 1012 Belmont Avenue, in La Junta, Prevention’’ and that ‘‘[t]he program is
registration.’’ GX 6, at 6. According to Colorado. GX 7, at 1.
the DI, ‘‘[t]hat same evening . . . 15 As discussed above, the Government also helpful to keep abreast of the latest
Respondent attempted to modify his alleged that Respondent ‘‘issued multiple trends on opioid abuse and strategies for
registered address again from Tennessee prescriptions to patients within a thirty-day prevention.’’ Id. at 11–12. He further
window, amounting to prescriptions for large states that in 2014, he attended lectures
to New Mexico.’’ 13 Id. However, dosages of highly-abused controlled substances.’’
GX 2, at 6. As support for the allegation, the DI during a medical convention on the
12 In an affidavit attached to his Position
listed 11 patients who received additional ‘‘Tennessee Substance Abuse Epidemic’’
Statement, Respondent asserted that ‘‘[w]hen I prescriptions within 30 days of having received and ‘‘Office Based Opioid Withdrawal.’’
moved to Colorado in 2014, I applied to modify my prescriptions from Respondent. GX 6, at 10–11.
DEA registration to my Colorado address.’’ GX 5, at
Id. at 12.
While Respondent violated federal law when he
13. Respondent did not, however, specify the date issued the prescriptions because he was not
In his affidavit, Respondent states that
on which he applied for the modification. Id. registered in Colorado, the Government did not ‘‘I have had some challenges with my
13 Respondent also obtained an osteopathic allege that any of these prescriptions lacked a state medical licenses, all of which arise
medicine license in New Mexico in May 2012; he legitimate medical purpose and thus violated 21 from the suspension of my Arizona
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provided the Agency with a contact address in CFR 1306.04(a) or a similar provision under
Albuquerque from December 2014 through Colorado law. Beyond that, in some instances the
license.’’ Id. He then maintains that ‘‘I
February 2015, but there is no indication in the prescriptions were issued 28 days after the previous have tried to be as transparent as
record that he practiced in New Mexico. prescriptions, which hardly suggests that patients possible in communicating these issues
Respondent admits that the New Mexico Board of were seeking refills that were too early. While in to the various state medical boards and
Osteopathic Medical Examiners (NMBOME) had other instances, the time between the prescriptions
opened an investigation into his license but that his was only two or three weeks, the Government did
the local DEA offices that have
license had been renewed on August 19, 2015. GX not address why, given the dosing instruction, the conducted pre-registration
5 at 12. However, the NMBOME Web site states that refill was too early. I thus reject the allegation. investigations.’’ Id. at 13.

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Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices 64945

As for his conduct in issuing of such registration . . . would be misconduct, see 21 U.S.C. 824(a)(1), it
controlled substance prescriptions in inconsistent with the public interest.’’ also provides an independent and
Colorado when he was not registered in Id. In making the public interest adequate ground for denying an
the State, Respondent states that he determination, the CSA requires the application. The Lawsons, 72 FR at
‘‘was unaware when I moved to consideration of the following factors: 74338; cf. Bobby Watts, M.D., 58 FR
Colorado that I was not able to prescribe (1) The recommendation of the appropriate 46995 (1993); Shannon L. Gallentine, 76
controlled substances until the DEA State licensing board or professional FR 45864, 45866 (2011).
actually approved the modification of disciplinary authority. In this matter, I conclude that there
my . . . registration to my new (2) The Applicant’s experience in are three independent grounds for
address.’’ Id. Respondent states that he dispensing . . . controlled substances. denying Respondent’s pending
thought that he could prescribe (3) The Applicant’s conviction record application. First, he materially falsified
controlled substances in Colorado ‘‘so under Federal or State laws relating to the his March 4, 2013 application. Second,
manufacture, distribution, or dispensing of
long as I had submitted my request for by prescribing controlled substances in
controlled substances.
a modification.’’ Id. Respondent then (4) Compliance with applicable State, both Arizona and Colorado when he
states that he ‘‘take[s] full Federal, or local laws relating to controlled was not legally authorized to issue such
responsibility’’ for this misconduct substances. prescriptions in the respective State, he
which was based on his (5) Such other conduct which may threaten violated the CSA and DEA regulations
‘‘misunderstanding of the law and not the public health and safety. and thus has committed acts which
on any intentional effort to circumvent Id. render his registration ‘‘inconsistent
the’’ CSA. Id. at 14. ‘‘These factors are . . . considered in with the public interest.’’ 21 U.S.C.
According to Respondent, ‘‘[a]s soon the disjunctive.’’ Robert A. Leslie, M.D., § 823(f). Third, as a result of the
as I understood my mistake, I 68 FR 15227, 15230 (2003). I ‘‘may rely Colorado Board’s suspension of his
immediately stopped prescribing on any one or a combination of factors, osteopathic license, he lacks authority
controlled substances.’’ Id. However, as and may give each factor the weight [I] under state law to dispense controlled
found above, the reports of deem[] appropriate in determining substances in the State in which he now
Respondent’s dispensings that were whether . . . an application for seeks registration. See id; see also id.
provided by the Palisade Pharmacy and registration [should be] denied.’’ Id. § 802(21).
Walgreens show that Respondent issued Moreover, while I am required to The Material Falsification Allegation
additional prescriptions after the DI told consider each of the factors, I ‘‘need not
him on December 1, 2014 that he lacked make explicit findings as to each one.’’ As found above, the evidence shows
authority to write prescriptions in MacKay v. DEA, 664 F.3d 808, 816 (10th that when Respondent submitted his
Colorado.16 I thus find that Cir. 2011) (quoting Volkman, 567 F.3d application for a registration on or about
Respondent’s statement is false. 215, 222 (6th Cir. 2009) (quoting Hoxie, March 5, 2013, he answered ‘‘Yes’’ to
Respondent further states that he 419 F.3d 477, 482 (6th Cir. 2005))).17 two liability questions.18 GX 7, at 2.
‘‘understand[s] that the allegations in Pursuant to section 304(a)(1), the Question Three asked: ‘‘Has the
the . . . Order to Show Cause are very Attorney General is also authorized to applicant ever surrendered for cause or
serious and that compliance with the suspend or revoke a registration ‘‘upon had a state professional license or
DEA’s regulations on prescribing a finding that the registrant . . . has controlled substance registration
controlled substances is crucial to materially falsified any application filed revoked, suspended, denied, restricted,
prevent . . . diversion and abuse of pursuant to or required by this or placed on probation, or is any such
controlled substances.’’ Id. at 17. subchapter.’’ 21 U.S.C. § 824(a)(1). It is action pending?’’ Respondent checked
Notably, Respondent did not address well established that the various the ‘‘yes’’ box and provided the
the allegation that he materially falsified grounds for revocation or suspension of following information:
his March 4, 2013 application for a DEA an existing registration that Congress Incident Date: 07/17/2012. Incident
registration. See generally id. at 10–17. enumerated in section 304(a), 21 U.S.C. Location: Scottsdale, AZ. Incident Nature:
§ 824(a), are also properly considered in The Arizona Board of Osteopathic Examiners
DISCUSSION placed my license on a 5 year probation.
deciding whether to grant or deny an Incident Result: I voluntarily surrendered my
Pursuant to section 303(f) of the
application under section 303. See The Arizona license and DEA registration as I
Controlled Substances Act, ‘‘[t]he
Lawsons, Inc., 72 FR 74334, 74337 knew I was moving to Tennessee in the next
Attorney General shall register
(2007); Anthony D. Funches, 64 FR few months.
practitioners . . . to dispense . . .
14267, 14268 (1999); Alan R. Id.
controlled substances . . . if the
Schankman, 63 FR 45260 (1998); Kuen The Government alleges that
applicant is authorized to dispense
H. Chen, 58 FR 65401, 65402 (1993). Respondent’s answer was materially
controlled substances under the laws of Thus, the allegation that Respondent
the State in which he practices.’’ 21 false because Respondent failed to
materially falsified his application is disclose the November 2012 Interim
U.S.C. 823(f). Section 303(f) further properly considered in this proceeding.
provides that an application for a Consent Agreement he entered into with
See Samuel S. Jackson, 72 FR 23848, the Arizona Board and the February
practitioner’s registration may be denied 23852 (2007). Moreover, just as
upon a determination ‘‘that the issuance 2013 Stipulation and Order he entered
materially falsifying an application into with the Utah Division of
16 While Respondent offered an extensive
provides a basis for revoking an existing Occupational and Professional
explanation of his practice, at least as it existed registration without proof of any other Licensing. Request for Final Agency
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prior to the Colorado Board’s suspension of his Action, at 11–13. I agree with the
medical license, which involved working in rural 17 ‘‘In short, this is not a contest in which score

Colorado, the Agency has made clear that it does is kept; the Agency is not required to mechanically Government that Respondent materially
not consider so-called community impact evidence count up the factors and determine how many favor
relevant in making the public interest the Government and how many favor the registrant. 18 The second question asked Respondent, inter

determination in the case of prescribing Rather, it is an inquiry which focuses on protecting alia, whether he had ever surrendered his DEA
practitioners. See Linda Sue Cheek, 76 FR 66972, the public interest; what matters is the seriousness registration for cause. The Government does not
66972–73 (2011); Gregory Owen, 74 FR 36751, of the registrant’s misconduct.’’ Jayam Krishna-Iyer, allege that Respondent materially falsified his
36756–57 (2009). 74 FR 459, 462 (2009). application in answering this question.

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64946 Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices

falsified his application, but only with Moreover, Respondent issued application with fraudulent intent. As
respect to his failure to disclose the multiple prescriptions or ordered the explained above, the November 2012
November 2012 Interim Consent dispensing of controlled substances Order, which was issued only three plus
Agreement with Arizona. even after he surrendered his DEA months before he submitted his
The Supreme Court has held that ‘‘the registration on July 30, 2012.19 See 21 application, establishes that Respondent
most common formulation’’ of the U.S.C. 843(a)(3) (‘‘It shall be unlawful had engaged in additional misconduct
concept of materiality is that ‘‘a for any person knowingly or and disobeyed the Board’s earlier Order
concealment or misrepresentation is intentionally . . . to use in the course as well as issued prescriptions after he
material if it ‘has a natural tendency to of the . . . dispensing of a controlled surrendered his DEA registration. So
influence, or was capable of influencing, substance, a registration number which too, Respondent’s failure to disclose the
the decision of’ the decisionmaking is fictitious, revoked, suspended, Arizona investigation on his Utah
body to which it was addressed.’’ expired, or issued to another person[.]’’); application is probative evidence of his
Kungys v. United States, 485 U.S. 759, id. § 822(a)(2) (‘‘Every person who intent or lack of mistake in failing to
770 (1988) (quoting Weinstock v. United dispenses . . . any controlled disclose the November 2012 Arizona
States, 231 F.2d 699, 701 (D.C. Cir. substance, shall obtain from the order on his DEA application. See
1956) (other citation omitted)) (quoted Attorney General a registration . . . .’’); Arthur H. Bell, 80 FR 50035, 50038
in Samuel S. Jackson, 72 FR 23848, see also 21 CFR 1306.03(a). (2015); cf. Fed. R. Evid. R. 404(b)(2).
23852 (2007)); see also United States v. In determining whether the granting Accordingly, I conclude that
Wells, 519 U.S. 482, 489 (1997) (quoting of an application is consistent with the Respondent materially falsified his
Kungys, 485 U.S. at 770); Arthur H. Bell, public interest, the Agency is required March 4, 2013 application for a DEA
80 FR 50035, 50038 (2015). The Court to consider both ‘‘[t]he Applicant’s registration in Tennessee. This
has further explained that ‘‘[i]t has experience in dispensing . . . conclusion provides reason alone to
never been the test of materiality that controlled substances’’ and ‘‘compliance deny his pending application.
the misrepresentation or concealment with applicable State [and] Federal . . .
would more likely than not have laws relating to controlled substances.’’ The Public Interest Factors
produced an erroneous decision, or 21 U.S.C. 823(f)(2) & (4). Thus, while In its Request for Final Agency Action
even that it would more likely than not Respondent disclosed the July 2012 as initially submitted, the Government
have triggered an investigation.’’ Arizona Board Order on his application, argues that Factors Two, Four and Five
Kungys, 485 U.S. at 771 (emphasis his failure to disclose the November support the denial of Respondent’s
added). Rather, the test is ‘‘whether the 2012 Order was clearly ‘‘capable of application.21 Govt. Request at 14–17. I
misrepresentation or concealment was affecting’’ the Agency decision to grant
predictably capable of affecting, i.e., had his application because the Order was 21 In the Request for Final Agency Action, the

a natural tendency to affect, the official based on the additional misconduct he Government argued that Factor One—The
Recommendation of the Appropriate State
decision.’’ Id. ‘‘ ‘[T]he ultimate finding committed with respect to the Licensing Board—‘‘neither weighs in favor nor
of materiality turns on an interpretation dispensing of controlled substances weighs against the [denial] of Respondent’s’’
of substantive law,’ ’’ id. at 772 (int. when he no longer held authority under application for registration.’’ Req. for Final Agency
quotations and other citation omitted), the CSA and Arizona law. Kungys, 485 Action, at 14.
While Respondent held a Colorado license on the
and must be shown ‘‘by evidence that is U.S. at 771.20 date the Government submitted its Request for Final
clear, unequivocal, and convincing.’’ Id. As noted above, in his affidavit, Agency Action, the Board subsequently suspended
Respondent’s failure to disclose the Respondent did not address his material his license to practice medicine on the ground that
Arizona Interim Consent Agreement falsification of the 2013 application. he authorized controlled substance prescriptions
‘‘using another physician’s DEA registration’’ after
clearly meets the standard of However, in his Position Statement, he his DEA registration expired. GX 27, at 1. While
materiality. As found above, the admits (through his counsel) that he Respondent apparently has not had a hearing on
Consent Agreement was based on the ‘‘did not provide a complete answer to these allegations, the fact remains that he does not
Board’s findings that even after the the liability question,’’ but then currently possess authority to dispense controlled
substances in Colorado, the State in which he is
Board had restricted him from contends that ‘‘there was never intent seeking registration.
prescribing controlled substances, . . . to withhold information from DEA, DEA has long held that the possession of state
Respondent continued to dispense to be untruthful, and/or to omit relevant authority to dispense controlled substances in the
controlled substances in that State and information to influence DEA’s State in which a practitioner engages in
did so for nearly three months after the decision.’’ GX 5, at 4–5. professional practice is a prerequisite for obtaining
a DEA registration in that State. See Frederick
effective date of the Board’s Order by However, the statement made by Marsh Blanton, 43 FR 27616, 27617 (1978) (‘‘State
either issuing prescriptions or ordering Respondent’s counsel is not evidence, authorization to dispense or otherwise handle
the dispensing of controlled substances. see INS v. Phinpathya, 464 U.S. 183, controlled substances is a prerequisite to the
As the evidence shows, Respondent 186 n.6 (1984), and I conclude that issuance and maintenance of a Federal controlled
substances registration.’’); see also 21 U.S.C.
dispensed 99 prescriptions/orders for Respondent submitted his 2013 DEA § 802(21) (defining ‘‘[t]he term ‘practitioner’ [to]
schedule II drugs, 23 prescriptions for mean[] a physician . . . or other person licensed,
schedule III drugs, and 70 prescriptions 19 While Respondent’s loss of his state authority registered, or otherwise permitted, by the United
for schedule IV drugs after the effective rendered his subsequent issuance of the States or the jurisdiction in which he practices to
prescriptions and orders unlawful under the CSA . . . dispense . . . a controlled substance in the
date of the Board’s Order and when he even without his having formally surrendered his course of professional practice.’’); id. § 823(f) (‘‘The
no longer held authority under state law DEA registration, Respondent’s continued Attorney General shall register practitioners . . . to
and DEA regulations. See 21 CFR dispensing of controlled substances after he dispense . . . controlled substances . . . if the
1306.03(a) (requiring for a legal surrendered his registration begs the question of applicant is authorized to dispense . . . controlled
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what consequences he believed were attendant to substances under the laws of the State in which he
prescription that an individual the surrender of his DEA registration. However, in practices.’’); United States v. Moore, 423 U.S. 122,
practitioner be ‘‘[a]uthorized to his Position Statement, Respondent does not 140–41 (1975) (‘‘In the case of a physician, this
prescribe controlled substances by the address the question. scheme contemplates that he is authorized by the
20 Given this finding, I need not decide whether State to practice medicine and to dispense drugs in
jurisdiction in which he is licensed to
Respondent’s failure to disclose the Utah connection with his professional practice.’’). The
practice his profession and . . . [e]ither Stipulation and Order was material to the Agency’s Agency has further held that this rule applies even
registered or exempted from determination as to whether to grant his application where a practitioner’s state authority has been
registration’’). for registration in Tennessee. summarily suspended and the State has yet to

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agree that the evidence with respect to Nonetheless, after the effective date of prescriptions for controlled substances
Factor Two and Four establishes a the Order, Respondent continued to while practicing in Grand Junction,
prima facie case to deny Respondent’s issue controlled substance prescriptions Colorado, when he did not hold a DEA
application. And having reviewed as well order the administration of registration in the State and was
Respondent’s Position Statement, I hold controlled substances to hospice therefore not authorized to dispense
that he has failed to present sufficient patients. These prescriptions and orders controlled substances in the State. 21
evidence to rebut the conclusion that violated the CSA and DEA regulations U.S.C. 822(e) (‘‘A separate registration
his ‘‘registration would be inconsistent because he lacked the requisite state shall be required at each principal place
with the public interest.’’ 21 U.S.C. authority to dispense controlled of business or professional practice
§ 823(f). substances. 21 CFR 1306.03(a). See also where the applicant . . . dispenses
Ariz. Rev. Stat. § 32–1854 (25). controlled substances. . . .’’); 21 CFR
Factors Two and Four—the Applicant’s 1301.12. Moreover, while Respondent
Moreover, Respondent issued at least 17
Experience in Dispensing Controlled claims that he was unaware that he
of these prescriptions and orders for
Substances and Compliance With State could not issue controlled substance
administration even after he
and Federal Laws Related to Controlled prescriptions until the Agency approved
surrendered his registration. 21 U.S.C.
Substances his modification request and that he
841(a)(1), 843(a)(3), 822(a)(2). Thus, by
The Government contends that the itself, Respondent’s unauthorized stopped after he was told by the DI that
various Arizona Board Orders establish dispensing of controlled substances he could not write prescriptions until
that Respondent’s experience in while practicing in Arizona establishes his request was approved, the evidence
dispensing controlled substances and that his registration would be shows that he issued further controlled
his compliance with state and federal ‘‘inconsistent with the public interest.’’ substance prescriptions after he was
laws related to controlled substances 21 U.S.C. 823(f). told by the DI that he lacked authority
support the denial of his application Moreover, there is additional to do so in Colorado.
and that the Board’s factual findings and evidence of prescribing violations that Accordingly, I conclude that
legal conclusions are entitled to supports this conclusion. As found Respondent violated the CSA and DEA
preclusive effect in this proceeding. above, upon moving to Colorado, regulations when he prescribed
Req. for Final Agency Action, at 14–15. Respondent proceeded to issue controlled substances in Colorado
I agree in part. numerous controlled substance before April 6, 2015. These findings,
Based on its findings that Respondent prescriptions without being registered particularly when considered in light of
deviated from the standard of care in his in that State. the extent of the Applicant’s prescribing
treatment of K.K. as well as at least 30 Under DEA’s regulation, where a violations in Arizona, support the
patients, to include prescribing registrant seeks to change his registered conclusion that granting Applicant’s
excessive controlled substances to location, the registrant must apply to application ‘‘would be inconsistent with
chronic pain patients, and that he modify his registration, 21 CFR the public interest.’’ 21 U.S.C. 823(f).23
ignored pharmacy inquiries and drug § 1301.51(a), and this regulation clearly SANCTION
screenings in patients who were clearly states that a ‘‘request for modification
diverting, the Board restricted him from Where, as here, the Government has
shall be handled in the same manner as
prescribing or recommending controlled established grounds to deny an
an application for registration.’’ Id.
substances for two years.22 Id. at 4. application, Respondent must then
§ 1301.51(c). Moreover, under 21 CFR
‘‘present[ ] sufficient mitigating
1301.13(a), ‘‘[n]o person required to be
provide him/her with a hearing to challenge the evidence’’ to show why he can be
registered shall engage in any activity
State’s action. See Bourne Pharmacy, 72 FR 18273, entrusted with a new registration.
for which registration is required until
18274 (2007). Samuel S. Jackson, 72 FR 23848, 23853
Because Respondent’s Colorado medical license the application for registration is
(2007) (quoting Leo R. Miller, 53 FR
has been suspended, he is no longer currently granted and a Certificate of Registration
21931, 21932 (1988)). ‘‘ ‘Moreover,
authorized to dispense controlled substances in is issued by the Administrator to such
Colorado, the State in which he seeks registration. because ‘past performance is the best
person.’’ Id.; see also Anthony E. Wicks,
Thus, he no longer meets the CSA’s requirement predictor of future performance,’ ALRA
that he be authorized to dispense controlled 78 FR 62676, 62678 (2013). Thus, a
Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th
substances in the State where he is registered. This registrant may ‘‘not engage in any
Cir. 1995), [DEA] has repeatedly held
conclusion provides a further reason to deny his activity for which registration is
application. that where [an applicant] has committed
required until the application . . . is
22 While the Government argues that the Board’s acts inconsistent with the public
granted and a . . . [r]egistration is
findings establish that Respondent ‘‘failed to interest, the [applicant] must accept
comply with state law by deviating from the issued.’’ 21 CFR 1301.13(a). See also
responsibility for [his] actions and
standard of care in issuing prescriptions for Mark Koch 79 FR 18714 (2014).
controlled substances,’’ the Arizona Board did not demonstrate that [he] will not engage in
Here, the evidence shows that
find that he engaged in ‘‘[p]rescribing, dispensing,
or administering controlled substances . . . for
between July 29, 2014 and December 1, 23 As for Factor Three, there is no evidence that

other than therapeutic purposes.’’ See Ariz. Rev. 2014, Respondent issued 89 Applicant has been convicted of an offense
Stat. § 32–1854. In short, neither of the provisions ‘‘relating to the manufacture, distribution or
the Board found Respondent to have violated make diverts,’’ and ‘‘[a] practitioner who ignores the dispensing of controlled substances.’’ 21 U.S.C.
specific reference to controlled substances but are warning signs that [his] patients are either 823(f)(3). There are, however, a number of reasons
provisions generally applicable to all osteopathic personally abusing or diverting controlled why a person who has engaged in misconduct may
physicians. As such, while Respondent’s conduct substances commits ‘acts inconsistent with the never have been convicted of an offense under this
involved controlled substances, the provisions he public interest,’ 21 U.S.C. 824(a)(4), even if [he] is factor, let alone prosecuted for one. Dewey C.
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violated are not laws related to controlled merely gullible or naı̈ve.’’ Jayam Krishna-Iyer, 74 MacKay, 75 FR 49956, 49973 (2010), pet. for rev.
substances. FR 459, 461 n.3 (2009) (citing Paul J. Caragine, Jr., denied MacKay v. DEA, 664 F.3d 808 (10th Cir.
Notwithstanding that the Board did not find that 63 FR 51592 (1998)). As Caragine explained, even 2011). The Agency has therefore held that ‘‘the
he prescribed ‘‘for other than therapeutic ‘‘[c]areless or negligent handling of controlled absence of such a conviction is of considerably less
purposes,’’ the Board’s findings and conclusions substances creates the opportunity for diversion consequence in the public interest inquiry’’ and is
might well have supported an adverse finding and [can] justify revocation or denial’’ of an therefore not dispositive. Id.
under Factor Two because ‘‘DEA’s authority to application. 63 FR at 51601. The Government did As for the Government’s arguments with respect
[deny an application] is not limited to those not, however, raise this theory in the Show Cause to Factor Five, I consider its contentions in my
instances in which a practitioner intentionally Order. discussion of the appropriate sanction.

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64948 Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices

future misconduct.’’ Jayam Krishna-Iyer, McCarthy v. SEC, 406 F.3d 179, 188–89 medical License number 2686 is
74 FR 459, 463 (2009) (citing Medicine (2d Cir. 2005) (upholding SEC’s express restricted from prescribing or
Shoppe, 73 FR 364, 387(2008)); see also adoption of ‘‘deterrence, both specific recommending Schedule I, II, III, or IV
Jackson, 72 FR at 23853; John H. and general, as a component in controlled substances for a period of
Kennedy, 71 FR 35705, 35709 (2006); analyzing the remedial efficacy of two (2) years from the effective date of
Cuong Tron Tran, 63 FR 64280, 64283 sanctions’’). this Order.’’). Indeed, if Respondent did
(1998); Prince George Daniels, 60 FR Having reviewed Respondent’s not fully understand the scope of the
62884, 62887 (1995).24 Position Statement, I conclude that he restriction, he had five weeks to contact
So too, an Applicant’s candor during has failed to produce sufficient evidence the Board and clarify his understanding
the course of an investigation and to show why he should be entrusted before the Order went into effect. Nor is
subsequent proceeding is an important with a new registration. With respect to Respondent’s explanation credible given
factor to be considered in determining his acceptance of responsibility, that he continued prescribing and
whether he has accepted responsibility Respondent states only that he ‘‘accepts issuing dispensing orders even after he
for the proven misconduct as well as the full responsibility for his actions that surrendered his DEA registration. I thus
appropriate disposition of the matter. lead [sic] to the sanctions imposed by conclude that Respondent has not
See Robert F. Hunt, 75 FR 49995, 50004 Arizona’’ and ‘‘regrets and credibly acknowledged his misconduct.
(2010); Jeri Hassman, 75 FR 8194, 8236 acknowledges that he prescribed I also conclude that the record as a
(2010); see also Hoxie v. DEA, 419 F.3d controlled substances in Colorado while whole establishes that Respondent’s
477, 483 (6th Cir. 2005) (‘‘Candor during his modification request was pending.’’ misconduct was egregious given his
DEA investigations, regardless of the GX 5, at 7–8. Putting aside that the material falsification of his March 2013
severity of the violations alleged, is credibility of Respondent’s statement DEA application, his prescribing of
considered by the DEA to be an cannot be tested through cross- controlled substances after the Arizona
important factor when assessing examination because Respondent Board’s Order became effective, and his
whether a physician’s registration is waived his right to a hearing, it is continued prescribing in Arizona after
consistent with the public interest.’’). notable that Respondent does not he surrendered his DEA registration. As
While an applicant must accept acknowledge that he materially falsified for his prescribing in Colorado, even
responsibility for his misconduct and his March 2013 application for were I to accept his excuse that he
demonstrate that he will not engage in registration in Tennessee. Respondent’s mistakenly believed that he could
future misconduct in order to establish failure to acknowledge his misconduct prescribe once he submitted his request
that its registration is consistent with in this regard is fatal to his application. for modification, his issuance of
the public interest, DEA has repeatedly Moreover, even with respect to his prescriptions after he was told by the DI
held that these are not the only factors misconduct in prescribing controlled that he lacked authority to write
that are relevant in determining the substances in Colorado, I conclude that prescriptions in the State renders this
appropriate disposition of the matter. Respondent has not adequately misconduct egregious as well.
See, e.g., Joseph Gaudio, 74 FR 10083, acknowledged his misconduct. Even Accordingly, I find that Respondent’s
10094 (2009); Southwood putting aside that ignorance of the law misconduct warrants denial of his
Pharmaceuticals, Inc., 72 FR 36487, is no excuse, Respondent’s statement application for this reason as well. So
36504 (2007). Obviously, the regarding his actions is less than too, I find that the Agency’s interest in
egregiousness and extent of an forthcoming. As found above, deterring similar misconduct by other
applicant’s misconduct are significant Respondent asserted that ‘‘[a]s soon as applicants who may contemplate
factors in determining the appropriate I understood my mistake, I immediately materially falsifying their applications,
sanction. See Jacobo Dreszer, 76 FR stopped prescribing controlled as well as by other registrants who may
19386, 19387–88 (2011) (explaining that substances.’’ Yet the evidence shows choose to ignore agency regulations and
a respondent can ‘‘argue that even that on December 1, 2014, the DI prescribe when they lack authority to do
though the Government has made out a phoned him and told him that he lacked so, supports the denial of his
prima facie case, his conduct was not so authority to issue controlled substance application.
egregious as to warrant revocation’’); prescriptions in Colorado. While this Of further note, as explained in my
Paul H. Volkman, 73 FR 30630, 30644 should have been the point at which he discussion of Factor One, subsequent to
(2008); see also Paul Weir Battershell, ‘‘understood [his] mistake’’ and the issuance of the Show Cause Order
76 FR 44359, 44369 (2011) (imposing ‘‘immediately stopped prescribing,’’ the and Respondent’s submission of his
six-month suspension, noting that the evidence shows that Respondent issued Position Statement, the Colorado
evidence was not limited to security and additional controlled substance Medical Board suspended his medical
recordkeeping violations found at first prescriptions thereafter. In short, license and his license remains
inspection and ‘‘manifested a disturbing Respondent’s assertion is clearly false suspended as of the date of this Order.
pattern of indifference on the part of and I therefore also find that he has not As a consequence, Respondent no
[r]espondent to his obligations as a accepted responsibility for his longer holds authority under state law
registrant’’); Gregory D. Owens, 74 FR prescribing in Colorado when he lacked to dispense controlled substances in the
36751, 36757 n.22 (2009). a DEA registration. State where he is currently registered
So too, the Agency can consider the Likewise, while Respondent contends and thus no longer meets the statutory
need to deter similar acts, both with that he prescribed controlled substances prerequisite for obtaining and
respect to the respondent in a particular in violation of the first Arizona order maintaining his registration. See
case and the community of registrants. because he ‘‘did not fully understand Frederick Marsh Blanton, 43 FR 27616,
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See Gaudio, 74 FR at 10095 (quoting the scope of my initial restriction, 27617 (1978) (‘‘State authorization to
Southwood, 71 FR at 36503). Cf. which caused [him] to inadvertently dispense or otherwise handle controlled
violate that restriction,’’ having substances is a prerequisite to the
24 This rule also applies to other grounds that
reviewed that Order, I conclude that it issuance and maintenance of a Federal
support the denial of an application, such as where was more than clear. See GX 8, at 4 (‘‘IT controlled substances registration.’’); see
the Government has proven that an applicant
materially falsified his application. See Jackson, 72 IS HEREBY FURTHER ORDERED that also 21 U.S.C. 823(f) (‘‘The Attorney
FR, at 23853. [Respondent], holder of osteopathic General shall register practitioners . . .

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Federal Register / Vol. 81, No. 183 / Wednesday, September 21, 2016 / Notices 64949

if the applicant is authorized to accordance with 21 CFR 1301.33(a) on (R.D.).1 Therein, the CALJ found that it
dispense . . . controlled substances or before November 21, 2016. is undisputed that Respondent is
under the laws of the State in which he currently without authority to handle
ADDRESSES: Written comments should
practices.’’); 21 U.S.C. 802(21) (‘‘[t]he controlled substances in New York, the
be sent to: Drug Enforcement
term ‘practitioner’ means a physician State in which he holds DEA
Administration, Attention: DEA Federal
. . . licensed, registered, or otherwise Registration FL2580163. R.D. at 4. The
Register Representative/ODW, 8701
permitted, by . . . the jurisdiction in CALJ thus granted the Government’s
Morrissette Drive, Springfield, Virginia
which he practices . . . to distribute, Motion for Summary Disposition and
22152.
dispense, [or] administer . . . a recommended that I revoke
controlled substance in the course of SUPPLEMENTARY INFORMATION: The Respondent’s registration and deny any
professional practice’’).25 Attorney General has delegated her pending applications.
While the Show Cause Order did not authority under the Controlled
assert this as a ground for denial of his Neither party filed exceptions to the
Substances Act to the Administrator of
application (because it occurred Recommended Decision. Having
the Drug Enforcement Administration
subsequent to the issuance of the (DEA), 28 CFR 0.100(b). Authority to reviewed the record, I adopt the CALJ’s
Order), the Government did serve a exercise all necessary functions with finding that Respondent lacks state
copy of its Addendum which presented respect to the promulgation and authority to handle controlled
this development to me, on Respondent. implementation of 21 CFR part 1301, substances in New York, the State in
In response to this filing, Respondent incident to the registration of which he is registered. ‘‘State
has raised no objection.26 In any event, manufacturers, distributors, dispensers, authorization to dispense or otherwise
there are two other independent and importers, and exporters of controlled handle controlled substances is a
legally sufficient bases to deny his substances (other than final orders in prerequisite to the issuance and
application. Accordingly, I will deny his connection with suspension, denial, or maintenance of a Federal controlled
application. revocation of registration) has been substances registration.’’ Frederick
ORDER redelegated to the Deputy Assistant Marsh Blanton, 43 FR 27616, 27617
Administrator of the DEA Office of (1978). See also Rezik A. Saqer, 81 FR
Pursuant to the authority vested in me
Diversion Control (‘‘Deputy Assistant 22122, 22124–127 (2016). Thus, once
by 21 U.S.C. 823(f) and 28 CFR 0.100(b),
Administrator’’) pursuant to section 7 of the Government establishes that an
I order that the application of Richard
28 CFR part 0, appendix to subpart R. applicant for a practitioner’s registration
J. Settles, for a DEA Certificate of
Registration as a practitioner be, and it In accordance with 21 CFR or a practitioner-registrant does not
hereby is, denied. This Order is effective 1301.33(a), this is notice that on possess state authority, there are no
immediately. December 18, 2015, Nanosyn, Inc., further facts to be considered and
Nanoscale Combinatorial Synthesis, revocation is the mandatory sanction
Dated: September 13, 2016.
3331–B Industrial Drive, Santa Rosa, that must be entered under the
Chuck Rosenberg, California 95403 applied to be registered Controlled Substances Act. Accordingly,
Acting Administrator. as a bulk manufacturer the of following I will also adopt the CALJ’s
[FR Doc. 2016–22680 Filed 9–20–16; 8:45 am] basic classes of controlled substances: recommendation that I revoke
BILLING CODE 4410–09–P Respondent’s registration and deny any
Drug pending application to renew or modify
Controlled substance Schedule
code
his registration.
DEPARTMENT OF JUSTICE
Oxymorphone ........... 9652 ....... II Order
Drug Enforcement Administration Fentanyl .................... 9801 ....... II
[Docket No. DEA–392]
Pursuant to the authority vested in me
The company is a contract by 21 U.S.C. 823(f) and 824(a), as well
Bulk Manufacturer of Controlled manufacturer. At the request of the as 28 CFR 0.100(b), I order that DEA
Substances Application: Nanosyn, Inc. company’s customers, it manufacturers Certificate of Registration FL2580163
derivatives of controlled substances in issued to Kevin L. Lowe, M.D., be, and
ACTION: Notice of application. bulk form. it hereby is, revoked. I further order that
Dated: September 15, 2016. any pending application of Kevin L.
DATES: Registered bulk manufacturers of Lowe, M.D., to renew or modify the
the affected basic classes, and Louis J. Milione,
above registration, be, and it hereby is,
applicants therefore, may file written Deputy Assistant Administrator.
denied. This Order is effective
comments on or objections to the [FR Doc. 2016–22737 Filed 9–20–16; 8:45 am]
issuance of the proposed registration in immediately.2
BILLING CODE 4410–09–P

25 See also Rezik A. Saqer, 81 FR 22122, 22125–

27 (2016); Sheran Arden Yeates, 71 FR 39130,
39131 (2006); Dominick A. Ricci, 58 FR 51104,
DEPARTMENT OF JUSTICE
51105 (1993); Bobby Watts, 53 FR 11919, 11920
(1988). Drug Enforcement Administration
26 DEA has previously held that ‘‘[t]he rules
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governing DEA hearings do not require the Kevin L. Lowe, M.D.; Decision and 1 All citations to the Recommended Decision are
formality of amending a show cause order to to the slip opinion issued by the CALJ.
comply with the evidence. The Government’s Order
2 Based on Respondent’s acknowledgment that he
failure to file an amended Show Cause Order
alleging that Respondent’s state CDS license has On May 18, 2016, Chief has been convicted of conspiring to unlawfully
expired does not render the proceeding distribute controlled substances, see Resp.’s Hrng.
Administrative Law Judge John J.
fundamentally unfair.’’ Roy E. Berkowitz, 74 FR Req., at 1–2, I find that the public interest
36758, 36759–60 (2009); see also Hatem M. Ataya,
Mulrooney, II (CALJ), issued the necessitates that this Order be effective
81 FR 8221, 8245 (2016) (collecting cases). attached Recommended Decision immediately. 21 CFR 1316.67.

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Document Created: 2016-09-21 01:31:32
Document Modified: 2016-09-21 01:31:32

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Dates		07/17/2012. Incident Location: Scottsdale, AZ. Incident Nature: The Arizona Board of Osteopathic Examiners placed my license on a 5 year probation. Incident Result: I voluntarily surrendered my Arizona license and DEA registration as I knew I was
FR Citation		81 FR 64940

81 FR 64940 - Richard J. Settles, D.O.; Decision and Order

DEPARTMENT OF JUSTICEDrug Enforcement Administration

Federal Register Volume 81, Issue 183 (September 21, 2016)

DEPARTMENT OF JUSTICE
Drug Enforcement Administration