[Federal Register Volume 61, Number 57 (Friday, March 22, 1996)]
[Notices]
[Pages 11867-11871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6979]



-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 94-42]


William P. Jerome, M.D.; Grant of Restricted Registration

    On March 29, 1994, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to William P. Jerome, M.D., (Respondent) of 
Davenport, Iowa, notifying him of an opportunity to show cause as to 
why DEA should not deny his application for registration as a 
practitioner under 21 U.S.C. 823(f), as being inconsistent with the 
public interest. Specifically, the Order to Show Cause alleged in 
substance that the Respondent (1) between December 1988 and February 
1990, prescribed and dispensed controlled substances to individuals in 
exchange for money, cocaine and/or sexual favors; (2) allowed an 
individual to grow marijuana on his property; (3) falsified the names 
of individuals on prescriptions that he issued for controlled 
substances; (4) on February 7 and 8, 1990, dispensed 316 dosage units 
of controlled substances to an undercover officer for no legitimate 
medical reason; (5) on February 22, 1990, was indicted in the U.S. 
District Court for the Southern District of Iowa on nine felony counts 
related to the unlawful distribution and prescription of controlled 
substances; (6) pled guilty on April 26, 1990, to one count of 
conspiracy to distribute controlled substances, and as a condition of 
the plea agreement, voluntarily surrendered his DEA registration, was 
sentenced to twelve months imprisonment with a five year term of 
supervised release probation, and fined $15,000.00; and (7) on November 
29, 1990, as a result of the criminal conviction, the Iowa Board of 
Medical Examiners (Medical Board) revoked his medical license, which 
was subsequently reinstated on October 13, 1992, subject to certain 
terms and conditions.
    On April 21, 1994, the Respondent, through counsel, filed a timely 
request for a hearing, and following prehearing procedures, a hearing 
was held in Des Moines, Iowa, on February 8 and 9, 1995, before 
Administrative Law Judge Mary Ellen Bittner. At the hearing, both 
parties called witnesses to testify and introduced documentary 
evidence, and after the hearing, counsel for both sides submitted 
proposed findings of fact, conclusions of law and argument. On August 
22, 1995, Judge Bittner issued her Opinion and Recommended Ruling, 
recommending that the Respondent's application be granted with 
specified restrictions. Neither party filed exceptions to her decision, 
and on September 25, 1995, Judge Bittner transmitted the record of 
these proceedings to the Deputy Administrator.
    The Deputy Administrator has considered the record in its entirety, 
and pursuant to 21 CFR 1316.67, hereby issues his final order based 
upon findings of fact and conclusions of law as hereinafter set forth. 
The Deputy Administrator adopts, in full, the Opinion and Recommended 
Ruling, Findings of Fact, Conclusions of Law and Decision of the 
Administrative Law Judge, and his adoption is in no manner diminished 
by any recitation of facts, issues and conclusions herein, or of any 
failure to mention a matter of fact or law.
    The Deputy Administrator finds that in November of 1989, a DEA 
diversion investigator (Investigator) received information from a 
special agent of the Iowa Division of Narcotics Enforcement (Special 
Agent) that the Respondent gave prescription drugs and prescriptions 
written under fictitious names to a Ms. M. in exchange for sexual 
favors. On January 16, 1990, the Investigator interviewed Ms. M., and 
she stated that she had received controlled substance samples and 
prescriptions from the Respondent in exchange for sexual favors, that 
the Respondent had written prescriptions for her, using about twenty 
names other than her own, and that she had taken the prescriptions to a 
number of different pharmacies to be filled. The Investigator testified 
before Judge Bittner, stating that Ms. M. also had provided the name of 
another individual (Mr. S.) who had received prescriptions from the 
Respondent for controlled substances intended for her use, and that 
this individual had filled the prescriptions and had given the 
substances to her in exchange for sexual favors, all with the 
Respondent's knowledge. Further, Ms. M. provided the name of an 
individual (Mr. D.) who had supplied cocaine to the Respondent. Ms. M. 
also told the Investigator that the respondent had provided her with 
cocaine, and that she had witnessed him use cocaine.
    Ms. M. testified before a grand jury the same day that the 
Investigator

[[Page 11868]]
interviewed her, and the grand jury testimony basically corroborated 
the information she had provided to the Investigator. Ms. M. also 
testified that she was a drug addict and had used cocaine and narcotic 
pain medication.
    The Investigator testified that, at the end of January and the 
beginning of February of 1990, she, another DEA diversion investigator, 
and an investigator from the Iowa Board of Pharmacy Examiners, had 
conducted a survey of approximately 15 to 20 area pharmacies to obtain 
prescriptions issued by the Respondent. The prescription survey showed 
that (1) between March 11 and September 28, 1989, Ms. M. had received 
16 prescriptions totaling 450 dosage units of drugs containing 
propoxyphene, a Schedule IV controlled substance, which she had filled 
at nine different pharmacies; (2) between November 1, 1988, and April 
14, 1989, the Respondent had issued Mr. S. 15 prescriptions totaling 
500 dosage units of drugs containing propoxyphene, which Mr. S. had 
filled at three different pharmacies; (3) on December 3, 1988, and May 
19, 1989, the Respondent had issued prescriptions to Mr. D. for 30 
Ativan, a brand name for a drug containing lorazepam, a Schedule IV 
controlled substance, and for 30 Percocet, a brand name for a drug 
containing oxycodone, a Schedule II controlled substance; and (4) on 
February 15, 1989, the Respondent had issued a prescription for 20 
Darvocet-N, a brand name for a drug containing propoxyphene, to Ms. 
M.'s husband, in the name of ``Mike Barnes.'' However, the Investigator 
also testified that these prescriptions probably constituted no more 
than five percent of the Respondent's total number of prescriptions 
reviewed. The survey also showed that Ms. M. had received numerous 
prescriptions for controlled substances in false names between March of 
1989 and September of 1989.
    In February of 1990, the Special Agent arranged a controlled 
substance buy from the Respondent, and the Respondent, seeking cocaine, 
provided the Special Agent, among other substances, 60 Xanax .5 mg. 
tablets, 30 Xanax 1 mg. tablets, and 39 Vicodin tablets. Vicodin is a 
brand name product containing hydrocodone and is listed in Schedule 
III, and Xanax is a brand name drug containing the Schedule IV 
substance alprazolam. The Special Agent gave the Respondent $300.00 in 
cash and promised to bring cocaine the next day. The Special Agent also 
testified before Judge Bittner that during this transaction the 
Respondent was intoxicated.
    The next evening the Special Agent again met with the Respondent, 
and prior to the meeting he had agreed to provide the Respondent with 
cocaine in return for double the quantity of pharmaceutical controlled 
substances he had received the previous night. According to the Special 
Agent's testimony, the Respondent appeared completely sober, and he 
tried to return the $300.00 received from the Special Agent the 
previous night, but the Special Agent told him to keep the money. The 
Special Agent asked the Respondent if he could obtain Percodan or 
Dilantin, but the Respondent had refused, stating that acquiring 
Schedule II drugs would be too difficult to make the effort worthwhile. 
Dilantin is not a controlled substance, but Percodan contains 
oxycodone, a Schedule II controlled substance. Ultimately, the 
Respondent gave the Special Agent three envelopes, each containing 25 
Vicodin, and he again asked for the cocaine. However, he was then 
arrested.
    After his arrest, the Investigator interviewed the Respondent, who 
stated that he thought controlled substance samples were his to use as 
he pleased and that he was not required to keep any records of them. 
The Respondent also told the Investigator that he had given away drugs, 
but that he had not sold them. He also admitted that on two occasions 
he had traded controlled substance samples for cocaine. With the 
Respondent's consent, the Investigator searched his office, where she 
found patient records for Ms. M. and Mr. S., but not for Mr. D.
    Subsequently, in February of 1990, the Investigator interviewed Mr. 
D., who stated that the Respondent had obtained cocaine from him once 
or twice a month, that the Respondent sometimes had provided him with 
unused syringes, and that he had grown marijuana on the Respondent's 
property. Further, Mr. D. testified before the grand jury on February 
20, 1990, stating that for approximately two years beginning in October 
of 1987, he had provided at least one and three-quarters grams of 
cocaine per week to the Respondent, and that the Respondent never had 
written him prescriptions for controlled substances. Rather, the 
Respondent had traded controlled substances such as Xanax, Valium 
Librium, Vicodin, or Lortab, for the cocaine. Mr. D. also testified 
that he had grown marijuana on the Respondent's property with his 
knowledge and consent.
    On February 22, 1990, an indictment against the Respondent was 
filed in the United States District Court for the Southern District of 
Iowa, and on April 26, 1990, the Respondent entered into a plea 
agreement, specifying that he would plead guilty to one count of 
conspiracy to distribute controlled substances in violation of 21 
U.S.C. 846, and that he would surrender his DEA registration. In 
exchange, the government agreed to dismiss the other counts, to include 
six counts of unlawful distribution of controlled substances, and one 
count of unlawful prescribing. On July 31, 1990, the court accepted the 
Respondent's guilty plea and sentenced him to twelve months 
incarceration to be followed by five years supervised probation, to 
include a program of testing and treatment for drug and alcohol abuse, 
and a fine of $15,000.00.
    On September 13, 1990, the Medical Board filed a complaint, seeking 
action against the Respondent's medical license based on his felony 
conviction ``for a crime related to his profession.'' On December 31, 
1990, the Medical Board issued an Order revoking the Respondent's 
license to practice medicine.
    Testifying before Judge Bittner, the Respondent denied ever trading 
prescriptions for sexual favors, and stated that he had terminated his 
client and prostitute relationship with Ms. M. after she had discovered 
that he was a physician. The Respondent also asserted that he had 
issued some prescriptions to Ms. M. in an attempt to help her, and that 
other call-in prescriptions were written in different names, but that 
he had assumed he had patients with those names, or that when he was 
covering for other physicians, that they had patients with those names. 
He testified that ``[s]ome of those prescriptions I wrote under duress, 
with the threats of extortion, under the circumstances of my 
addiction.'' However, the Respondent also testified that he had 
falsified prescriptions for Ms. M. ``[o]n one or two occasions * * * at 
her request.'' He also stated that Ms. M. had continued to demand drugs 
from him, that she had called him at night, and that she had demanded 
money and had threatened to expose him to his family and the medical 
community. The Respondent testified that in May or June of 1989, he 
told Ms. M. that he would no longer see or speak with her.
    The Respondent also testified about the undercover operation, 
stating, ``I was a desperate man trying to score my fix, and I was 
desperately trying to negotiate a deal. And at the time I would have 
done whatever it took to get it.'' The Respondent also stated that he 
did not use marijuana, that he had nothing to do with the marijuana 
grown on his property, that when he found out about it, he ``repeatedly 
asked that it be

[[Page 11869]]
removed,'' and that ultimately it was removed.
    A United States Probation Officer (Officer) testified that, 
following the Respondent's incarceration, he was placed on supervised 
release on August 5, 1991, for a term of five years. The Officer 
testified that she had been the Respondent's probation officer since 
December of 1991, and she was responsible for monitoring his compliance 
with the terms of his supervised release. She stated that the 
Respondent had accomplished everything she asked of him, had arrived 
promptly for meetings with her, and submitted required monthly reports 
in a timely manner, and ``has done his best to comply with all the 
conditions.'' The Officer also testified that the Respondent was 
eligible for early parole and that, conditioned upon the Respondent's 
paying his fine, she planned to recommend early termination to the 
court.
    On March 9, 1992, the Respondent petitioned the Medical Board for 
reinstatement of his Iowa medical license. On August 19, 1992, the 
Medical Board held a hearing on that petition, and on October 13, 1992, 
the Medical Board issued an Order adopting the recommendation of a 
panel and reinstating the Respondent's license, subject to a five-year 
probation. The terms of probation included, among other things, that 
the Respondent (1) abstain from the use of alcohol and illicit drugs, 
(2) obtain psychiatric counseling and attend meetings of Alcoholics 
Anonymous or a similar organization twice weekly, (3) submit quarterly 
reports of his controlled substance prescriptions to the Medical Board, 
and (4) associate with at least one other physician in his practice. A 
Medical Board Investigator testified that he was responsible for 
monitoring the Respondent on behalf of the Medical Board, and that to 
the best of his knowledge, the Respondent was in complete compliance 
with the terms of his probation.
    By letter dated November 19, 1992, the Respondent's eligibility to 
participate in Medicare was reinstated. On February 22, 1993, the 
Respondent applied for a DEA Certificate of Registration as a 
practitioner, disclosing information about his prior conviction and 
subsequent surrender of his prior DEA registration. Also, by letter 
dated September 22, 1993, the Iowa Board of Pharmacy Examiners notified 
counsel for the Respondent that the Respondent's application for a 
state controlled substance registration was approved.
    The Program Manager of the Start InPatient Program for the Center 
for Alcohol and Drug Services (Center) in Davenport, testified that the 
Respondent had been evaluated at the Center in July of 1991, and that a 
treatment program had been established for him. The Program Manager 
testified that the Respondent had undergone urinalysis examinations at 
frequencies ranging from once to six times per month between August of 
1991 and June of 1993, and that none of the tests were positive. 
Beginning again in September of 1994, through January of 1995, the 
Respondent was tested from one to three times per month, with no 
adverse test results. The Program Manager also stated that, had the 
Respondent been using cocaine, these urinalysis tests would have 
detected it.
    The Program Manager also testified that he had been in both 
individual and group counseling sessions with the Respondent from 1991 
until 1993, and that the Respondent had expressed remorse about the 
effects of his chemical abuse on his family, other physicians in the 
area, and about the loss of his medical practice. The Program Manager 
also stated that he believed that:

    [A]t this point in time * * * Mr. Jerome has successfully 
completed the process that's been required in terms of treatment for 
rehabilitation for his chemical dependency. I think that he has 
worked under some supervision of numerous qualified other physicians 
who have maintained contact with him on a regular basis. My 
understanding is that he has contact in terms of support units with 
other physicians who are recovering in Iowa, * * *. I think that Mr. 
Jerome has gained enough skills during treatment and recovery to be 
able to seek help if he has urges, * * *. Those are specifically 
what he's been trained to react to in different fashion than he has 
in the past.

    A psychiatrist (Psychiatrist), testified that he had known the 
Respondent since 1980, and that in November of 1989, the Respondent 
became his patient. He testified that, as of the date of the hearing 
before Judge Bittner, he saw the Respondent monthly, that the 
Respondent had shown remorse for his actions, and that he has had to 
deal with the consequences of his misconduct. The Psychiatrist 
testified that the Respondent had become more mature and better able to 
see how his behavior affected others.
    The Psychiatrist further testified that there was a shortage of 
internists in Davenport, and that the Respondent's lack of a DEA 
registration hampered his ability to treat his patients. He also stated 
that the Respondent was a competent physician, and that he would not 
hesitate to refer a patient to the Respondent for treatment.
    The Respondent testified before Judge Bittner concerning his 
personal rehabilitation, stating that, while he was in prison, he 
thought about the people he had hurt, including his patients, his 
friends, his family, and himself. Also while he was incarcerated, the 
Respondent enrolled in a chemical dependency program and ``learned 
through treatment that about all I can do is try to make my amends to 
the people that I have hurt, to do the best job I can to move forward, 
and to make sure it doesn't happen again.'' The Respondent stated that 
he felt tremendous regret for his past actions, and that as of the 
hearing, he felt that he was a ``more caring, []calm[er], a little more 
rational individual who doesn't use drugs or alcohol.''
    The Respondent testified that after he was transferred to a halfway 
house, he continued outpatient treatment, with individual counseling 
sessions once or twice per week, that he also attended Narcotics 
Anonymous and Alcoholics Anonymous meetings twice per week, and that in 
June of 1991, he was transferred to a work release program in 
Davenport, where he resumed seeing a psychiatrist he had seen there 
prior to his arrest. According to the Respondent, he has learned how to 
prevent relapse, has continued to regularly attend twelve-step 
meetings, and has developed some insight into his own behavior. The 
Respondent also testified that he did not want to put either himself or 
his family ``through this again.''
    The Director of the Iowa Department of Public Health (Director) 
testified that studies have indicated that the Iowa Medical Board is 
the second strictest in the United States in terms of penalties imposed 
on physicians who have been disciplined. He also testified that he was 
familiar with the disciplinary proceedings involving the Respondent, 
and that to the best of his knowledge, the Respondent had satisfied the 
conditions imposed upon him. The Director also testified that he 
believed that reinstatement of the Respondent's DEA registration would 
be in the public interest, for the Medical Board had also considered 
the best interest of the public, as well as the Respondent's 
professional credentials and compliance with the requirements it 
imposed, in deciding to restore his license to practice medicine.
    The Respondent also offered into evidence letters from various 
physicians, one of whom was a patient of his, attesting to the 
Respondent's expertise, compassion, and concern for

[[Page 11870]]
his patients. The Respondent also submitted letters from physicians to 
United States Senator Charles E. Grassley, seeking his support for the 
Respondent's application, and letters to the Medical Board from various 
patients, colleagues, and friends, all supporting reinstatement of the 
Respondent's medical license. Also, the Respondent submitted letters 
written to the Administrator of DEA from Governor Branstad of Iowa, and 
from United States Representative James A. Leach of Iowa.
    It is undisputed that the United States Department of Health and 
Human Services has designated Scott County, Iowa, which includes 
Davenport, as an area with a shortage of primary care physicians 
willing and able to treat Medicaid patients. The Respondent testified 
that as of the date of the hearing, he was practicing in a clinic in 
the inner city of Davenport, and that his patients were older, sicker, 
had less access to medical care, and were more likely to be on Medicaid 
than those he treated prior to the revocation of his medical license. 
The Respondent stated that he believed that granting his application 
for a DEA registration would be in the public interest, because he felt 
that the lack of authority to handle controlled substances severely 
handicapped his ability to treat his patients. Without such a 
registration, he had had great difficulty obtaining either hospital 
staff privileges or professional liability insurance, and he was 
ineligible to participate in several managed care plans, In addition, 
the Respondent testified that he had been offered a position as 
assistant director for the Center of Alcohol and Drug Services, but 
that the offer was contingent on having a DEA registration.
    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny an 
application for a DEA Certificate of Registration, if he determines 
that registration would be inconsistent with the public interest. 
Section 823(f) requires that the following factors be considered:
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health or 
safety.

These factors are to be considered in the disjunctive; the Deputy 
Administrator may rely on any one or a combination of factors and may 
give each factor the weight he deems appropriate in determining whether 
a registration should be revoked or an application for registration 
denied. See Henry J. Schwarz, Jr., M.D., Docket No. 88-42, 54 FR 16422 
(1989).
    In this case, all five factors are relevant in determining whether 
the Respondent's registration would be inconsistent with the public 
interest. As to factor one, ``recommendation of the appropriate State 
licensing board * * *'', as a result of the Respondent's misconduct 
resulting in a felony conviction, the Medical Board revoked his medical 
license on December 31, 1990. Although his license was reinstated on 
October 13, 1992, it was subject to five-year's probation with 
significant conditions to be met.
    As to factor two, the Respondent's ``experience in dispensing * * * 
controlled substances,'' uncontroverted evidence was presented that, on 
two occasions in February of 1990, the Respondent distributed 
controlled substances to the Special Agent without a legitimate medical 
purpose. The record also contains evidence that the Respondent misused 
samples of controlled substances by trading them for cocaine or by 
improperly giving them away.
    As to factor three, the Respondent's ``conviction record under 
Federal * * * laws relating to the * * * distribution, or dispensing of 
controlled substances,'' and factor four, the Respondent's [c]ompliance 
with applicable State, Federal, or local laws relating to controlled 
substances,'' uncontroverted evidence demonstrated that the Respondent 
was convicted in Federal court of conspiracy to distribute controlled 
substances in violation of 21 U.S.C. 846. Further, the Respondent 
admitted he engaged in the unlawful possession and use of cocaine prior 
to his conviction.
    As to factor five, ``[s]uch other conduct which may threaten the 
public health or safety,'' the Deputy Administrator agrees with Judge 
Bittner's observations regarding the Respondent's testimony concerning 
his writing of prescriptions under duress or as a result of threats of 
extortion linked with his drug addiction, referencing his prior 
relationship with Ms. M. Specifically, Judge Bittner wrote: ``I also 
note, however, that I find disturbing Respondent's contention that he 
issued prescriptions in false names either by mistake or under duress. 
A physician obviously should not issue a controlled substance 
prescription to a patient he is not sure is under his treatment and 
care.'' Such prescribing practices are not consistent with the 
responsibilities inherent in receiving a DEA Certificate of 
Registration. Therefore, the Deputy Administrator agrees with Judge 
Bittner, that the Respondent's past misconduct ``constitutes sufficient 
grounds to deny his application for DEA registration.''
    However, the Respondent has also submitted extensive evidence of 
his rehabilitation. Specifically, the Respondent has demonstrated that 
his ability to participate in Medicare was reinstated on November 19, 
1992, and his application for a state controlled substances 
registration was approved on September 22, 1993. Further, as Judge 
Bittner noted, the record established that at the time the Respondent 
engaged in the misconduct at issue, he was actively addicted to alcohol 
and cocaine. Yet, the record also demonstrates that he has actively 
participated in, and successfully completed, a rehabilitation program 
for his chemical dependency. Although he has submitted to urinalysis 
testing periodically since 1991, all results have been negative.
    As Judge Bittner noted, ``as of the date of the hearing[,] 
Respondent had maintained his sobriety for nearly five years.''
    Also, the Respondent submitted extensive favorable evidence from 
colleagues and patients, attesting to his professional expertise, as 
well as to the community's need for his specialty as a primary care 
physician. Finally, the Respondent testified as to his remorse for his 
past misconduct and his determination that he will not engage in such 
conduct in the future. Although none of his remedial activities 
justifies the grievous nature of his past misconduct, the Deputy 
Administrator agrees with Judge Bittner's conclusion that, ``on balance 
I conclude that the Government has not established by a preponderance 
of the credible evidence that [the] Respondent's registration would be 
inconsistent with the public interest.'' However, also on balance, the 
Deputy Administrator agrees that a registration subject to the 
following conditions would best serve the public's interest:
    (1) The Respondent's controlled substance handling authority shall 
be limited to writing of prescriptions only, and he shall not dispense, 
possess, or store any controlled substance, except that the Respondent 
may administer controlled substances in a hospital, and may possess 
controlled substances which are medically necessary for his own use and 
which he has obtained

[[Page 11871]]
pursuant to a written prescription from another licensed practitioner 
(unless the substance is legitimately obtainable without a 
prescription); and
    (2) the Respondent shall submit, every calendar quarter, a log of 
all controlled substance prescriptions he has written during the 
previous quarter to the Special Agent in Charge of the nearest DEA 
office, or his designee. These restrictions will run for a period of 
three years from the effective date of the Respondent's registration.
    Therefore, the Deputy Administrator finds that the public interest 
is best served by granting the Respondent's application with the above 
conditions. The Respondent submitted extensive evidence demonstrating 
the need for the DEA Certificate of Registration in his current 
practice, as well as evidence of the community's need for a physician 
of his speciality with full prescribing capabilities. Given these 
needs, the Deputy Administrator has determined that the public interest 
will be better served in making this final order effective upon 
publication, rather than thirty days from the date of publication.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
823 and 824, and 28 CFR 0.100(b) and 0.104, hereby orders that the 
application for a DEA Certificate of Registration submitted by William 
P. Jerome, M.D., be, and it hereby is, granted, subject to the above 
conditions. This order is effective upon publication in the Federal 
Register.

    Dated: March 18, 1996.
Stephen H. Greene,
Deputy Administrator.
[FR Doc. 96-6979 Filed 3-21-96; 8:45 am]
BILLING CODE 4410-09-M