83 FR 27628 - Gazelle A. Craig, D.O.; Decision and Order

DEPARTMENT OF JUSTICE
Drug Enforcement Administration

Federal Register Volume 83, Issue 114 (June 13, 2018)

[Federal Register Volume 83, Number 114 (Wednesday, June 13, 2018)]
[Notices]
[Pages 27628-27632]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-12686]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Gazelle A. Craig, D.O.; Decision and Order

    On September 20, 2017, the Acting Assistant Administrator, 
Diversion Control Division, Drug Enforcement Administration 
(hereinafter, DEA or Government), issued an Order to Show Cause to 
Gazelle A. Craig, D.O. (hereinafter, Respondent), of Houston, Texas. GX 
2 (Order to Show Cause). The Show Cause Order proposed the revocation 
of Respondent's Certificate of Registration on the ground that she does 
``not have authority to handle controlled substances in the State of 
Texas, the [S]tate in which . . . [she is] registered with the DEA.'' 
Id. at 1 (citing 21 U.S.C. 823(f) and 824(a)(3)).
    As to the Agency's jurisdiction, the Show Cause Order alleged that 
Respondent holds DEA Certificate of Registration No. FC1384306, which 
authorizes her to dispense controlled substances in schedules II 
through V as a practitioner, at the registered address of Gulfton 
Community Health Center, 6306 Gulfton St., Suite 101, Houston, Texas 
77081. Id. The Show Cause Order alleged that this registration expires 
on August 31, 2018. Id.
    As the substantive ground for the proceeding, the Show Cause Order 
alleged that Respondent is ``without authority to handle controlled 
substances in the State of Texas, the [S]tate in which . . . [she is] 
registered . . . with the DEA.'' Id. It further alleged that, on July 
28, 2017, the Texas Medical Board temporarily suspended Respondent's 
medical license and that the Texas Medical Board order remains in 
effect. Id. The Show Cause Order asserted that Respondent is ``required 
to possess authority from a [S]tate in order to obtain or retain a DEA 
Registration. . . . [and c]onsequently, the DEA must revoke . . . [her 
registration] based upon [her] lack of authority to handle controlled 
substances in the State of Texas.'' Id. at 1-2.
    The Show Cause Order notified Respondent of her right to request a 
hearing on the allegations or to submit a written statement while 
waiving her right to a hearing, the procedures for electing each 
option, and the consequences for failing to elect either option. Id. at 
2 (citing 21 CFR 1301.43). The Show Cause Order also notified 
Respondent of the opportunity to submit a Corrective Action Plan. Id. 
at 2-3 (citing 21 U.S.C. 824(c)(2)(C)).

[[Page 27629]]

    According to the Declaration of a DEA Diversion Investigator 
(hereinafter, DI), on September 20, 2017, he mailed the Show Cause 
Order to Respondent's ``residential address . . . where . . . [he] had 
previously interacted with . . . [her] in conjunction with a search 
warrant.'' GX 3, at 1-2 (DI Declaration, Dec. 5, 2017). Attached to his 
Declaration was a ``copy of the return receipt [card] showing that the 
certified mail . . . was delivered on October 3, 2017.'' Id. at 2. 
However, the return receipt card was signed by someone other than 
Respondent.\1\ GX 3, Attachment D, at 1.
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    \1\ In proceedings before the Administrative Law Judge, the 
Government submitted evidence that it also mailed the Show Cause 
Order by regular first class mail to Respondent's registered address 
on September 20, 2017 and that this mailing was not returned as 
undeliverable. GX 6, at 2.
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    On November 21, 2017, the Office of Administrative Law Judges 
(OALJ) received a Request for Hearing from an attorney representing 
Respondent.\2\ GX 4, at 1. Therein, Respondent admitted that her 
``license to practice medicine in the [S]tate of Texas is suspended,'' 
but represented that ``she maintains an active and unrestricted license 
to practice medicine in the State of New York.'' Id. at 1. Respondent 
also represented that, ``[o]n or about September 2017, [she] modified 
her practice address'' from Houston, Texas to New York, NY, and that 
she ``has modified her registration to reflect her practice address as 
the address indicated above to the State of New York.'' Id. Respondent 
further stated that prior to modifying her practice address to her 
Houston location, she practiced at the New York address she referenced 
in her Request. Id. Under the heading of ``CORRECTIVE ACTION PLAN,'' 
the Hearing Request stated that Respondent ``submits this modification 
of her practice address as a corrective action plan to the continuation 
of her DEA controlled substance registration.'' Id.
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    \2\ While the hearing request was dated November 15, 2017, under 
DEA's regulation, ``[d]ocuments shall be dated and deemed filed upon 
receipt by the Hearing Clerk.'' 21 CFR 1316.45. The Show Cause Order 
also notified Respondent that ``[m]atters are deemed filed upon 
receipt by the Hearing Clerk.'' GX 2, at 2.
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    Upon receipt of Respondent's Hearing Request, the matter was 
assigned to Administrative Law Judge (ALJ) Charles Wm. Dorman, who 
issued an order captioned as ``Briefing Schedule for Lack of State 
Authority Allegations.'' GX 6, at 1. In this order, the ALJ noted the 
respective dates of the Show Cause Order and the receipt of the Hearing 
Request and further directed the Government to ``submit evidence of the 
date of service of the'' Show Cause Order ``by December 5, 2017.'' Id. 
The ALJ also ordered that if the Government moved to terminate the 
proceeding, it must file its motion ``by the same date'' and that 
Respondent's response was due ``by 2:00 p.m. Eastern Standard Time . . 
. on December 12, 2017.'' Id.
    According to the ALJ's Termination Order (Dec. 14, 2017), on 
December 5, 2017, ``[t]he Government timely filed'' its Termination 
Request wherein ``it argued that . . . Respondent filed her Hearing 
Request more than 30 days after the date of service of the'' Show Cause 
Order. Id. The ALJ further noted that, ``[as] of the date of'' his 
Termination Order, ``Respondent had not filed a response to the 
Government's Termination Request.'' Id. at 2.
    As grounds for finding waiver, the ALJ noted that ``[a]lthough 
there is no evidence of when the Respondent received the'' Show Cause 
Order that was sent by regular mail to her registered location, ``the 
fact that [it] was not returned as undeliverable establishes the 
presumption of receipt.'' Id. (citing Net Wholesale, 70 FR 24626 
(2005)). The ALJ then noted that ``given that it was mailed on 
September 20, [2017,] it is highly likely that it was delivered before 
October 15, 2017.'' Id. at 2. The ALJ further noted, that 
``[n]otwithstanding this uncertainty, there is evidence that the 
Respondent received the [Show Cause Order] at her residential address 
on October 3, 2017.'' Id. The ALJ explained that, ``[b]ased on this 
date, the Hearing Request should have been filed by November 3, 2017, 
in order to be timely,'' but ``[t]he Hearing Request . . . was not 
received by the OALJ, and therefore not filed, until November 21, 
2017.'' Id. The ALJ thus found that ``Respondent's hearing Request was 
filed more than 30 days after the [Show Cause Order] was served.'' Id.
    The ALJ then noted that ``[f]ailing to show good cause for an 
untimely hearing request constitutes a waiver of the right to a 
hearing.'' Id. (citing Shannon L. Gallentine, 76 FR 45864, 45864 
(2011); Gilbert E. Johnson, 75 FR 65663, 65663-64 (2010)). Because 
Respondent did not file a response to the Government's Termination 
Request, the ALJ found that Respondent failed to show good cause to 
excuse the untimely filing of her Hearing Request and had waived her 
right to a hearing. Id. The ALJ thus granted the Government's motion 
and terminated the proceedings before his Office. Id.
    On December 22, 2017, the Government filed its Request for Final 
Agency (RFAA) along with an investigative record in support of its 
proposed action. RFAA, at 6. Therein, the Government seeks revocation 
of Respondent's Certificate of Registration on the ground that she is 
registered in the State of Texas, where she no longer has authority to 
dispense controlled substances. Id. at 4-6. While the Government 
further notes that Respondent attempted to change the address of her 
registration to a location in New York State, it argues that her 
``attempt to change addresses . . . was made only after being served 
with the [Show Cause Order and] should not serve as a basis to prevent 
revocation of her'' Registration. Id. at 4. The Government further 
argues that ``pursuant to 21 CFR 1301.51(c), this attempted 
modification is to be treated as an application for a registration.'' 
Id.
    Having considered the record in its entirety, I grant the 
Government's Request to revoke Respondent's Certificate of 
Registration. While I agree with the Government that Respondent's 
attempt to modify her registered location to an address in the State of 
New York is to be treated as a new application, I find that this 
application remains pending before the Agency. I also conclude that 
because the Government seeks revocation of her existing registration 
solely on the basis that Respondent lacks authority to dispense 
controlled substances in Texas, her application for registration in New 
York must be the subject of separate proceedings.

The Waiver Finding

    As discussed above, the ALJ found that ``there is evidence that the 
Respondent received the [Show Cause Order] at her residential address 
on October 3, 2017,'' and ``[b]ased on this date, the Hearing Request 
should have been filed by November 3, 2017, in order to be timely.'' GX 
6, at 2 (citing 21 CFR 1301.43(a)). The ALJ also found that 
Respondent's Hearing Request was untimely based on the fact that it was 
not received by his Office until November 21, 2017. Id. Notwithstanding 
that the return receipt card is signed by someone other than Respondent 
and that under the Agency's regulations, the timeliness of a hearing 
request is based on the request being filed ``within 30 days after the 
date of receipt of the order to show cause,'' 21 CFR 1301.43(a), I 
agree with each of the ALJ's findings.
    While DEA has not specifically addressed the issue of when the 
clock starts to run for purposes of assessing the timeliness of a 
hearing request where someone other than the subject of a Show Cause 
Order signs the return receipt card, the federal courts have long 
recognized that ``a `strong

[[Page 27630]]

presumption' of receipt applies when notice is sent by certified mail, 
because it creates actual evidence of delivery in the form of a 
receipt.'' Lupyan v. Corinthian Colleges Inc., 761 F.3d 14 (3d Cir. 
2014) (quoting Santana Gonzales v. Att'y Gen., 506 F.3d 274, 279 (3d 
Cir. 2007). To similar effect, the Fifth Circuit has explained that 
``[p]roof that a letter properly directed was placed in a U.S. post 
office mail receptacle creates a presumption that it reached its 
destination in the usual time and was actually received by the person 
to whom it was addressed.'' Beck v. Somerset Technologies, Inc., 882 
F.2d 993, 996 (5th Cir. 1989). As the Fifth Circuit further explained 
in discussing the evidence of delivery in Beck:

    The record contains a copy of the properly addressed letter, a 
certified mail receipt and signed return post cards. Accordingly, we 
hold there was sufficient evidence to create a presumption that the 
letter was received . . . in the due course of the mail. Thus, the 
burden of producing evidence of non-delivery shifted to Beck.

Id.

    To be sure, this rule `` `is not a conclusive presumption of law.' 
'' Lupyan, 761 F.3d at 319 (quoting Rosenthal v. Walker, 111 U.S. 185, 
193 (1884)). ``Rather, it is a rebuttable `inference of fact. ''' Id.; 
see also Beck, 882 F.2d at 996; \3\ Cf. Morgan v. Potter, 489 F.3d 195, 
197 n.1 (5th Cir. 2005) (noting that while ``the presumption can 
certainly be overcome,'' plaintiff provided no evidence to establish 
the date she claimed to have received right to sue letter and ``never 
made such a claim or presented such evidence to the district court'').
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    \3\ In Vincent G. Colosimo, an applicant for registration was 
issued a Show Cause Order which was served by Certified Mail 
addressed to his proposed registered location. 79 FR 20911, 20912 
(2014). The applicant filed a hearing request which was received by 
the OALJ one day late and therefore deemed untimely by the ALJ, who 
ordered the parties to address whether there was good cause to 
excuse the late filing. Id.
     Thereafter, the Government argued that the respondent's Hearing 
Request was untimely and that he had not shown good cause. Id. The 
respondent filed a statement wherein he asserted that the mailing 
containing the Show Cause Order had been signed for by another 
person at his office, that because it appeared to be of a legal 
nature, the mailing was sent to his employer's administrative 
office, and that he had only received it shortly before the due date 
of his hearing request. Id.; see also Vincent G. Colosimo, ALJ 
Termination Order, at 4. The ALJ nonetheless terminated the 
proceeding finding that the respondent had failed to show good cause 
for the untimely filing of his hearing request. Colosimo, 79 FR at 
20912.
     The Government then submitted a Request for Final Agency 
Action. Id. On review, the Administrator vacated the ALJ's 
termination order and rejected the Government's Request for Final 
Agency Action. The Administrator explained that while the respondent 
had not supported by affidavit the various factual assertions he had 
made in response to the ALJ's order directing the parties to address 
the timeliness of the hearing request, she further ``held that if 
those assertions were supported, [respondent would] demonstrate good 
cause.'' Id. Of note, the Agency did not hold that the date of 
receipt commenced on the date on which the respondent actually 
received the Show Cause Order rather than the date on which the 
certified mail was received at the respondent's proposed 
registration location. Id.
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    In this matter, while the ALJ provided Respondent with the 
opportunity to respond to the Government's Termination Request, she has 
entirely failed to respond, let alone provide evidence to rebut the 
presumption that she received the Show Cause Order on the date the 
mailing was signed for. Because I find that the mailing was properly 
addressed to Respondent's residence and delivered on October 3, 2017, 
and Respondent produced no evidence to rebut the presumption that she 
received the mailing on this date, I find that Respondent received the 
Show Cause Order on October 3, 2017. I further find that more than 30 
days have since passed since the date of service of the Show Cause 
Order, and that Respondent has waived both her right to a hearing as 
well as her right to submit a written statement of position on the 
matters of fact and law asserted in the Show Cause Order while waiving 
her right to a hearing. 21 CFR 1301.43(a), (c), (d).\4\ I make the 
following additional finding of fact.
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    \4\ I also agree with the ALJ's finding that Respondent has 
failed to show good cause to excuse the untimely filing of her 
Hearing Request and has therefore waived her right to a hearing for 
this reason as well.
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Findings of Fact

Respondent's DEA Registration

    Respondent is the holder of DEA Certificate of Registration No. 
FC1384306, pursuant to which she is authorized to dispense controlled 
substances in schedules II through V as a practitioner, at the 
registered address of Gulfton Community Health Center, 6306 Gulfton 
St., Suite 101, Houston, TX 77081. GX 1. This registration does not 
expire until August 31, 2018. Id.
    According to the Acting Unit Chief of the Agency's Registration and 
Program Support Section, on three different occasions following service 
of the Show Cause Order, Respondent attempted to change her registered 
location from the above address to an address in New York, NY. GX 5. 
According to the Acting Unit Chief, Respondent was unable to change her 
registered location and remains registered at the Houston, Texas 
location. Id. I further find, however, that Respondent's attempts to 
modify her registered location are deemed applications for a new 
registration in the State of New York. 21 CFR 1301.51(c) (``The request 
for modification shall be handled in the same manner as an application 
for registration.'').

The Status of Respondent's Texas License

    On July 28, 2017, a Disciplinary Panel of the Texas Medical Board 
entered an Order of Temporary Suspension (hereinafter, Board's Order) 
of Respondent's Texas Medical License. GX 3, at Attachment A. The 
Board's Order ``remain[s] in effect until it is superseded by a 
subsequent Order of the Texas Medical Board.'' Id. at 5.
    The Board's Order was based on fact findings related to 
Respondent's operation of an unregistered pain management clinic. Id. 
at 2. These findings included that, on August 31, 2016, the Board filed 
a Complaint with the Texas Office of Administrative Hearings alleging 
that Respondent and her prescriptive delegates ``prescribed controlled 
medications to ten patients in a manner inconsistent with public health 
[and] welfare, failed to meet the standard of care in the care and 
treatment of the patients, . . . failed to keep adequate medical 
records for the patients,'' and ``failed to supervise her prescriptive 
delegates adequately.'' Id. The Board's Order also found that the 
Board's expert had reviewed ten patient cases and concluded that 
``Respondent's prescriptions for controlled substances were not 
provided for a legitimate medical purpose.'' Id.
    Next, the Board's Order found that, on July 6, 2017, Respondent was 
indicted in the United District Court for the Southern District of 
Texas on felony charges of conspiracy to distribute and dispense 
controlled substances unlawfully, as well as aiding and abetting the 
unlawful distribution and dispensing of controlled substances at her 
pain clinic. Id. The Board's Order also found that following her 
arrest, Respondent signed an Order Setting Conditions of Release, which 
``restricts [her] from employment in a pain management clinic[ ] [and] 
from writing prescriptions for any schedule II or IV drug, and from 
writing prescriptions for any opioid in schedule II.'' Id. Based on a 
Prescriber Activity Report obtained from the State's Prescription 
Monitoring Program, the Board's Order found that since her release from 
custody on July 10, 2017, ``eight prescriptions for schedule IV 
controlled substances (Carisoprodol and Alprazolam) and 21 
prescriptions for Promethazine/Codeine syrup were issued under her DEA 
registration number.'' Id. at 3. Based on the Prescriber Activity 
Report, the Board's Order also found that from

[[Page 27631]]

April 26, 2016 through July 26, 2017, Respondent issued over 10,300 
prescriptions for Hydrocodone/Acetaminophen 10/325 mg and over 10,400 
prescriptions for Carisoprodol 350 mg. Id. at 2.
    The Board thus found that ``Respondent's continuation in the 
practice of medicine poses a continuing threat to public welfare.'' Id. 
at 3. Based on these findings, the Panel found ``an imminent peril to 
the public health, safety, or welfare that requires immediate effect 
of'' its Order, id., and temporarily suspended Respondent's medical 
license. Id. at 5.
    I take official notice of the online records of the Texas Medical 
Board. See 5 U.S.C. 556(e). According to the Board's records, the 
temporary suspension of Respondent's medical license remains in effect 
as of the date of this Decision and Order.\5\
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    \5\ Under the Administrative Procedure Act, an agency ``may take 
official notice of facts at any stage in a proceeding--even in the 
final decision.'' United States Department of Justice, Attorney 
General's Manual on the Administrative Procedure Act 80 (1947) (Wm. 
W. Gaunt & Sons, Inc., Reprint 1979). Pursuant to 5 U.S.C. 556(e), 
``[w]hen an agency decision rests on official notice of a material 
fact not appearing in the evidence in the record, a party is 
entitled, on timely request, to an opportunity to show the 
contrary.'' Accordingly, Respondent may dispute my finding by filing 
a properly supported motion for reconsideration within 15 calendar 
days of the date of this Order. Any such motion shall be filed with 
the Office of the Administrator and a copy shall be served on the 
Government. In the event Respondent files a motion, the Government 
shall have seven calendar days to file a response.
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Discussion

    Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized 
to suspend or revoke a registration issued under section 823 of the 
Controlled Substances Act (hereinafter, CSA), ``upon a finding that the 
registrant . . . has had . . . [her] State License or registration 
suspended [or] revoked by competent State authority and is no longer 
authorized by State law to engage in the . . . dispensing of controlled 
substances.'' With respect to a practitioner, DEA has also long held 
that the possession of authority to dispense controlled substances 
under the laws of the State in which a practitioner engages in 
professional practice is a fundamental condition for obtaining and 
maintaining a practitioner's registration. See, e.g., James L. Hooper, 
M.D., 76 FR 71371 (2011), pet. for rev. denied, 481 Fed. Appx. 826 (4th 
Cir. 2012); Frederick Marsh Blanton, M.D., 43 FR 27616, 27617 (1978).
    This rule derives from the text of two provisions of the CSA. 
First, Congress defined the term `` `practitioner' [to] mean[ ] a 
physician . . . or other person licensed, registered, or otherwise 
permitted, by . . . the jurisdiction in which [s]he practices . . . , 
to distribute, dispense, . . . [or] administer . . . a controlled 
substance in the course of professional practice.'' 21 U.S.C. 802(21). 
Second, in setting the requirements for obtaining a practitioner's 
registration, Congress directed that ``[t]he Attorney General shall 
register practitioners . . . if the applicant is authorized to dispense 
. . . controlled substances under the laws of the State in which . . . 
[she] practices.'' 21 U.S.C. 823(f). Because Congress has clearly 
mandated that a practitioner possess State authority in order to be 
deemed a practitioner under the CSA, the Agency has held repeatedly 
that revocation of a practitioner's registration is the appropriate 
sanction whenever she is no longer authorized to dispense controlled 
substances under the laws of the State in which she practices. See, 
e.g., Hooper, supra, 76 FR at 71371-72; Sheran Arden Yeates, M.D., 71 
FR 39130, 39131 (2006); Dominick A. Ricci, M.D., 58 FR 51104, 51105 
(1993); Bobby Watts, 53 FR 11919, 11920 (1988); Blanton, supra, 43 FR 
at 27617.
    Under the Texas Controlled Substances Act, a ``practitioner'' 
includes a ``physician'' who is licensed ``to dispense . . . or 
administer a controlled substance in the course of professional 
practice.'' Tex. Controlled Substances Act Sec.  481.002(39)(A). Under 
the Texas Medical Practice Act, a ``physician'' is ``a person licensed 
to practice medicine,'' Tex. Occ. Code Sec.  151.002(a)(12), and 
``practicing medicine'' means the ``diagnosis, treatment, or offer to 
treat a . . . disease . . . by any system or method.'' Id. Sec.  
151.002(a)(13). Moreover, a ``person may not practice medicine in th[e] 
state unless the person holds a license issued under'' the Medical 
Practice Act, id. Sec.  155.001, and ``[a] person commits an offense if 
the person practices medicine in this state in violation of'' the Act. 
Id. Sec.  165.152.(a).
    As found above, Respondent's Texas medical license remains 
temporarily suspended. I therefore find that Respondent is currently 
without authority to dispense controlled substances under the laws of 
Texas, the State in which she is registered with the Agency.
    Moreover, because ``the controlling question'' in a proceeding 
brought under 21 U.S.C. 824(a)(3) is whether the holder of a DEA 
registration ``is currently authorized to handle controlled substances 
in the [S]tate,'' Hooper, 76 FR at 71371 (quoting Anne Lazar Thorn, 62 
FR 12847, 12848 (1997)), the Agency has long held that revocation is 
warranted even where a practitioner has lost his state authority by 
virtue of the State's use of summary process and the State has yet to 
provide a hearing to challenge the suspension. Bourne Pharmacy, 72 FR 
18273, 18274 (2007); Wingfield Drugs, 52 FR 27070, 27071 (1987). Thus, 
it is of no consequence that the Texas Board has employed summary 
process in suspending Respondent's state license. See Judson J. 
Somerville, M.D., 82 FR 21408, 21410 (2017); Rezik A. Saqer, 81 FR 
22122, 22126 (2016). What is consequential is that Registrant is no 
longer currently authorized to dispense controlled substances in Texas, 
the State in which she is registered. See Somerville, 82 FR at 18274; 
Saqer, 81 FR 22126. I will therefore order that her registration be 
revoked.
    While this Order resolves the issue of Respondent's entitlement to 
maintain her DEA registration, as found above, Respondent attempted to 
modify her registered address to a location in the State of New York. 
As the Government acknowledges, these requests for modification are 
treated as new applications for registration. RFAA, at 4; see also 21 
CFR 1301.51(c). The record submitted to my Office provides no 
indication that the Government sought denial of these applications 
(which were submitted subsequent to the service of the Show Cause 
Order) in this proceeding, and in any event, the ground offered by the 
Government for revoking her Texas registration, which rests exclusively 
on the summary suspension of her Texas Medical License, does not 
support denial of her New York applications. Those applications remain 
pending before the Agency and must be the subject of a separate 
proceeding if the Government seeks to deny them.\6\
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    \6\ Because Respondent's Corrective Action Plan is simply to 
modify her registered location to the New York address, I conclude 
that consideration of her plan should be considered by the 
Government in the course of evaluating her New York applications.
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 824(a), as well 
as 28 CFR 0.100(b), I order that DEA Certificate of Registration No. 
FC1384306, issued to Gazelle Craig, M.D., be, and it hereby is, 
revoked. This Order is effective immediately.\7\
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    \7\ Based on the Texas Board's finding that Respondent poses 
``an imminent peril to the public health, safety, or welfare that 
requires immediate effect of'' the suspension order, I find that the 
public interest necessitates that this Order be effective 
immediately. 21 CFR 1316.67.


[[Page 27632]]


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    Dated: June 1, 2018.
Robert W. Patterson,
Acting Administrator.
[FR Doc. 2018-12686 Filed 6-12-18; 8:45 am]
 BILLING CODE 4410-09-P