On December 5, 2022, the Drug Enforcement Administration (DEA or Government) issued an Order to Show Cause (OSC) to Arash M. Padidar, M.D. (Applicant) of San Jose, California. OSC, at 1, 3. The OSC proposed the denial of Applicant's application for a DEA Certificate of Registration (COR or registration), Control No. W22106685C, alleging that Applicant materially falsified his application for registration. Id. at 1 (citing 21 U.S.C. 824(a)(1)).

A hearing was held before DEA Administrative Law Judge Teresa A. Wallbaum (the ALJ), who on May 24, 2023, issued her Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision (RD). The RD recommended denial of Applicant's application for registration. RD, at 26. Applicant did not file exceptions to the RD. Having reviewed the entire record, the Agency adopts and hereby incorporates by reference the entirety of the ALJ's rulings, credibility findings,^[1] findings of fact, conclusions of law, sanctions analysis, and recommended sanction as found in the RD and as summarized herein.

I. Findings of Fact

Search of Applicant's Residence and Surrender of Applicant's Previous COR

On October 7, 2020, at approximately 7:00 a.m., DEA and local law enforcement executed a search of Applicant's residence based on a criminal search warrant.^[2] RD, at 8; Tr. ( printed page 54062) 30, 93, 145.^[3] According to Applicant, law enforcement entered the house, handcuffed both Applicant, who was unclothed, and his wife, and took Applicant downstairs to the kitchen. RD, at 8; Tr. 148-49, 152. According to Applicant, he remained in the kitchen with an unarmed Diversion Program Manager (DPM), mostly alone, until 1:00 p.m. RD, at 9; Tr. 150-52. Applicant testified that the DPM showed him the search warrant while other law enforcement officers began searching the house. RD, at 9; Tr. 155.

Testifying for the Government, the Diversion Investigator (DI) recalled that she waited in her car when law enforcement first entered the house but that she entered and began participating in the search at around 7:20. RD, at 9, 18; Tr. 30-31, 66-67, 75-78.^[4] Sometime between 1:00 p.m. and 2:00 p.m., DEA personnel spoke with Applicant in the living room; there were five DEA personnel present, including the DI, a second Diversion Investigator (DI2), a Group Supervisor (GS), the DPM, and a Task Force Officer (TFO). RD, at 10; Tr. 31-32, 61, 88, 151-53, 156, 165. DI2 and the TFO conducted the interview of Applicant. RD, at 10; Tr. 32-33, 162. According to the DI, DI2 presented Applicant with a Form DEA-104, which is titled “SURRENDER FOR CAUSE OF DEA CERTIFICATE OF REGISTRATION,” (emphasis in original) and allows registrants to surrender their DEA registration for cause and immediately terminates their registration. RD, at 10-11; Tr. 34, 36; Government Exhibit (GX) 2, at 1.^[5] Applicant had been given his Miranda rights and was not in handcuffs during the interview. RD, at 11; Tr. 81, 98-99, 162-63, 170, 194. The DI testified that it appeared to her that Applicant “read the form a little bit and then eventually signed the form”; she did not recall Applicant asking any questions or refusing to sign the form, nor did she recall DI2 explaining the word “cause” to Applicant. RD, at 11; Tr. 35, 38, 69, 78, 80, 82, 85, 100. According to Applicant, he was told repeatedly that the surrender was voluntary and he “could apply again.” RD, at 10 n.8; Tr. 164. According to Applicant, he had the opportunity to read the form but did not do so, though he confirmed looking over the form “quickly”; Applicant testified, “all I remember it was such a blur because my hands were shaking. I looked where my signature area [was]. I signed it and they asked me to date it.” RD, at 11; Tr. 163-165, 262. Nonetheless, Applicant acknowledged that he did sign the form and did not challenge the surrender of his registration as being under duress. RD, at 10 n.8; Tr. 161, 258, 261. DEA did not leave Applicant a copy of the Form DEA-104 (consistent with DEA practice) nor did DEA explain the meaning of “for cause” to Applicant. RD, at 11; Tr. 42, 69-70, 83, 85, 164. According to the DI, at the end of the interview, the DPM and DI2 both provided their business cards to Applicant, and then the DI and the others moved on to execute the search warrant at Applicant's clinic. RD, at 11; Tr. 41-42.^[6]

Applicant's August 12, 2022 Application

According to Applicant, when he read the application, he “saw certain questions that became very concerning, [ ] especially the same question that we're here for” (referring to Liability Question 2) ^[7] and he tried to obtain a copy of the Form DEA-104 to resolve his concerns. RD, at 12; Tr. 172-73, 200. Applicant testified that he called DEA multiple times to get the form but was never able to reach anyone.^[8] Applicant also tried to find the form online (both before and after completing the application) and found what he thought was an older form with the title “voluntary surrender.” RD, at 12; Tr. 173-74, 176-78. On August 10, 2022, Applicant emailed DI2, who forwarded the email to the DI. RD, at 12; Tr. 45. Applicant's email read: “It has been almost two years since you asked me to surrender my DEA [COR] and c[a]me to my office. I would like to ask if you have concluded your investigation or closed it? Any word you can give me would be appreciated.” RD, at 12; RX 6.^[9] On August 11, 2022, the DI responded ^[10] with the following email: “Please apply for a new DEA Registration. A new registration is required because the previous registration was surrendered and is no longer valid. The application forms can be found at Registration ( usdoj.gov ) under `New Application.' ” RD, at 12-13; Tr. 45, 265; RX 6. Applicant testified that he emailed DEA before filling out his application because he “wanted to clarify, and get copies of what [he] had signed” but he admitted that he did not ask whether his registration had been surrendered for cause nor did he ask for a copy of his signed Form DEA-104. RD, at 13; Tr. 266-67; RX 6.^[11] According to Applicant, he interpreted the DI's reply email as an “invitation” to apply and noted that it only said “surrendered,” not “surrendered for cause.” RD, at 13; Tr. 197, 203; RX 6.

On August 12, 2022, Applicant electronically signed and submitted an application for a new DEA registration through the DEA website. RD, at 13; Tr. 51-53; GX 3.^[12] Liability Question 2 on ( printed page 54063) the application asks: “Has the applicant ever surrendered for cause or had a federal controlled substance registration revoked, suspended, restricted or denied or is any such action pending? ” RD, at 13; Tr. 53; GX 3, at 1. On his application, Applicant answered Liability Question 2 with “N” for “no.” RD, at 13; Tr. 53; GX 3, at 1. Additionally, the bottom of the application reads: “By typing my full name in the space below, I hereby certify the foregoing information furnished on this electronic DEA application is true and correct and understand that this constitutes an electronic signature,” and Applicant's name, as an e-signature, is at the bottom of his application. RD, at 13; Tr. 54; GX 3, at 2.

Here, the ALJ found, and the Agency agrees, that “it is beyond dispute that [Applicant] surrendered his registration for cause and [thus] falsely answered Liability Question 2 on his application for a new COR.” RD, at 14.^[13] Regarding his false answer, Applicant asserted that he did not intentionally submit a false statement and that it was instead a misunderstanding resulting from multiple factors. Tr. 209, 254. According to Applicant, he misunderstood because: (1) DEA did not provide him with a copy of the Form DEA-104 and he could not reach anyone by phone to ask about it so he was going by memory (Tr. 163, 172-73, 194-96, 202, 255-56); (2) he searched on Google and found a form stating that surrender was voluntary (Tr. 173, 177-78, 268-69); (3) he considered voluntary surrender “for cause” to be an oxymoron, problematic, and to not make sense (Tr. 201, 255, 256); (4) his experience from medical disciplinary boards led him to believe that voluntary surrender would not be “for cause” (Tr. 177-178, 201-202, 272-73); ^[14] (5) he thought that DEA would already have the information about his surrender because DEA was the body that he surrendered to (Tr. 204); (6) English is his second language so he sometimes interprets things incorrectly (Tr. 209); and (7) he surrendered his registration under duress after an excessive search and had he obtained advice, he would not have surrendered (Tr. 161, 258, 261). RD, at 6. Applicant asserted that he did not understand that when he surrendered his registration he was surrendering for cause and testified, “[u]ntil [now], I would have still answered it no. But now that I understand what is meant in your world, I would answer very differently.” Id.; Tr. 203, 211.^[15]

II. Discussion

The Administrator is authorized to revoke a registration or deny an application if the registrant/applicant has materially falsified an application for registration. 21 U.S.C. 824(a)(1); Farmacia Yani,80 FR 29053, 29058 (2015) (“[J]ust as materially falsifying an application provides a basis for revoking an existing registration without proof of any other misconduct . . . it also provides an independent and adequate ground for denying an application.”).^[16] Agency decisions have repeatedly held that false responses to the liability questions on an application for registration are material. Kevin J. Dobi, APRN,87 FR 38184, 38184 (2022) (collecting cases).^[17]

Regarding proof of material falsification, Agency precedent has found that the Government must prove an allegation of material falsification “by evidence that is clear, unequivocal, and convincing.” Richard J. Settles, D.O.,81 FR 64940, 64946 (2016) (quoting Kungys v. United States, 485 U.S. 759, 772 (1998)). Agency precedent has also established that the Government need not show that an applicant actually knew that his response to a liability question was false. Rather, it is sufficient that the Government shows that an applicant should have known that his response to a liability question was false. Reyes,83 FR 61680 (citing Samuel S. Jackson, D.D.S.,72 FR 23848, 23852 (2007)). When the Government has made such a showing, i.e., that an applicant should have known that his response to a liability question was false, an applicant's claim that he actually misunderstood a liability question, or otherwise inadvertently provided a false answer to a liability question, is not a defense. Id. (citing Alvin Darby, M.D.,75 FR 26993, 26999 (2010)). Indeed, the applicant bears the responsibility to carefully read the liability questions and to answer them honestly; “[a]llegedly misunderstanding or misinterpreting liability questions does not relieve the applicant of this responsibility.” Zelideh I. Cordova-Velazco, M.D.,83 FR 62902, 62906 (2018) (internal citations omitted).

Here, the ALJ found, and the Agency agrees, that the Government has met its burden of proving by clear, unequivocal, and convincing evidence that Applicant surrendered his previous registration for cause, that Applicant should have known that the surrender was for cause, and thus that Applicant's answer to a liability question (Liability Question 2) was false. RD, at 16; Tr. 40; GX 2, at 1. The ALJ found, and the Agency agrees, that Applicant knew or should have known that his answer was incorrect because the Form DEA-104 that he signed on October 7, 2020, clearly stated in multiple places that he was surrendering his registration for cause and because Applicant surrendered his registration amidst what he knew or should have known, by his own testimony and submitted evidence, was a criminal investigation against him. RD, at 16-18; Tr. 40, 155, 162-63, 170, 194; GX 2, at 1; RX 6.^[18] Regarding any ( printed page 54064) purported confusion on Applicant's part, the ALJ found, and the Agency agrees, that “Applicant had ample opportunity to ask questions and clarify his confusion” but did not do so; moreover, as discussed above, misunderstanding a liability question is not a defense when the Government has established that the applicant knew or should have known that his answer was false.^[19] RD, at 19.^[20]

Having read and analyzed the record, the Agency finds from clear, unequivocal, convincing, and unrebutted evidence that Applicant's application for a new registration, submitted on August 12, 2022, contains a material falsification because Applicant gave a false answer to a liability question when he knew or should have known that his answer was false. Moreover, even if it is true that Applicant's false answer to Liability Question 2 was actually caused by confusion or was otherwise inadvertent, it is inconsequential under the facts of this case, as Applicant failed to take reasonable care to ensure he answered the liability questions honestly. See Reyes, 83 FR 61680. Accordingly, the Agency finds that the Government has established a prima facie case for denial of Applicant's application pursuant to 21 U.S.C. 824(a)(1).

III. Sanction

Where, as here, the Government has established sufficient grounds to deny Applicant's application, the burden shifts to Applicant to show why he can be entrusted with the responsibility carried by a registration. Garret Howard Smith, M.D.,83 FR 18882, 18910 (2018). When a respondent (Applicant) has committed acts inconsistent with the public interest, he must both accept responsibility and demonstrate that he has undertaken corrective measures. Holiday CVS, L.L.C., dba CVS Pharmacy Nos 219 and 5195,77 FR 62316, 62339 (2012) (internal quotations omitted). Trust is necessarily a fact-dependent determination based on individual circumstances; therefore, the Agency looks at factors such as the acceptance of responsibility, the credibility of that acceptance as it relates to the probability of repeat violations or behavior, the nature of the misconduct that forms the basis for sanction, and the Agency's interest in deterring similar acts. See, e.g.,Robert Wayne Locklear, M.D.,86 FR 33738, 33746 (2021).

In the current matter, the Agency agrees with the ALJ that Applicant failed to unequivocally accept responsibility. RD, at 23. While Applicant said multiple times that he accepted responsibility (Tr. 208-09, 254), “his other testimony made it very clear that he had a series of reasons why he did not, in fact, think he was to blame,” such as that DEA did not give him proper guidance, he surrendered his registration under duress, and his false statement did not matter anyway. RD, at 23; Tr. 161, 172-73, 194-96, 202, 204, 258, 261. As noted by the ALJ, “Agency precedent requires that a respondent [ ] unequivocally accept responsibility for all of his misconduct.” RD, at 22 (citing Jeffrey Stein, M.D.,84 FR 46968, 46972-73 (2019); Mohammed Asgar, M.D.,83 FR 29569, 29572 (2018); Lon F. Alexander,82 FR 49704, 49728 (2017)). Here, Applicant's statements went beyond explaining his actions and were instead “an attempt to shift blame that undermines an unequivocal acceptance of responsibility.” RD, at 23.^[21]

In addition to acceptance of responsibility, the Agency considers both specific and general deterrence when determining an appropriate sanction. Daniel A. Glick, D.D.S.,80 FR 74810. In this case, the Agency agrees with the ALJ that denial of Applicant's application would deter Applicant and the general registrant community from failing to meet their obligations to provide accurate and truthful responses on an application for a DEA registration and to seek clarification when needed prior to submitting an application. Kareem Hubbard, M.D.,87 FR 21156, 21164 (2022); RD, at 25.

As noted by the ALJ, “[m]aking a false statement on the registration application goes `to the heart of the CSA.'” RD, at 24 (quoting Crosby Pharmacy and Wellness,87 FR 21,212, 21,215 (2022)). “[T]he liability questions are critical to the closed system of distribution, as the Agency must rely upon the candor of its applicants and registrants.” Id. (citing The Lawsons, Inc.,72 FR 74334, 74377 (2007); Kuen H. Chen, M.D.,58 FR 65401, 65402 (1993); Bobby Watts, M.D.,58 FR 46995, 46995 (1993)). And even if Applicant's claim that his incident was inadvertent and the result of a misunderstanding was true, “[Applicant's] actions were at the very least negligent and careless”; he had clear reasons to know that he had surrendered his previous registration for cause and had various opportunities-which he did not take—to clarify any lingering confusion that may have remained. RD, at 24-25.

In sum, Applicant has not offered any credible evidence on the record to rebut the Government's case for denial of his application and Applicant has not demonstrated that he can be entrusted with the responsibility of registration. RD, at 26. Accordingly, the Agency will order that Applicant's application for registration be denied.

Order

Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I hereby deny the pending application for a Certificate of Registration, Control Number W22106685C, submitted by Arash M. Padidar, M.D., as well as any other pending application of Arash M. Padidar, M.D., for additional registration in California. This Order is effective July 29, 2024.

Signing Authority

This document of the Drug Enforcement Administration was signed on June 21, 2024, by Administrator Anne Milgram. That document with the original signature and date is maintained by DEA. For administrative purposes only, and in compliance with requirements of the Office of the Federal Register, the undersigned DEA Federal ( printed page 54065) Register Liaison Officer has been authorized to sign and submit the document in electronic format for publication, as an official document of DEA. This administrative process in no way alters the legal effect of this document upon publication in the Federal Register .