[Federal Register Volume 69, Number 193 (Wednesday, October 6, 2004)]
[Notices]
[Pages 59956-59960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22422]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 02-10]


Kathy A. Morall, M.D.; Revocation of Registration

I. Background

    On September 28, 2001, the Deputy Assistant Administrator, Office 
of Diversion Control, Drug Enforcement Administration issued an Order 
to Show Cause to Kathy A. Morall, M.D., (Respondent), proposing to 
revoke her DEA Certificate of Registration. The Basis for the Order to 
Show Cause was that Respondent's registration would be inconsistent 
with the public interest as that term is used 21 U.S.C. 823(f). More 
specifically, the OTSC alleged that in November 1998, DEA was alerted 
that Respondent had ordered large amounts of phentermine and Meridia 
(Schedule IV controlled substances) for delivery to her home address. 
DEA notified the Respondent that she could not have controlled 
substances delivered to her home because she was registered elsewhere. 
Respondent then asked for a change of address on her registration.
    In December 1998, DEA investigators conducted an inspection of 
Respondent's registered location--her home. When the investigators 
arrived and asked Respondent where she kept the controlled substances, 
she initially denied having any controlled substances at home. When the 
investigators asked her about the whereabouts of the phentermine and 
Meridia that she had recently ordered, she admitted that the drugs were 
in her home. When shown the location of the drugs, the investigators 
noted that the drugs were in a box in a closet, and were not stored in 
a securely locked, substantially constructed cabinet, as required.
    When the investigators asked for the Respondent's dispensing 
records, she said that they were in her former office in Denver. She 
agreed to send them to the investigators, but later changed her mind, 
explaining that she wanted to talk to an attorney first. When finally 
received, the dispensing records were incomplete. The Respondent failed 
to provide any records of inventories, theft/loss reports or drug 
destruction reports.
    On January 5, 1999, during the execution of an administration 
inspection warrant, the Respondent admitted that her record keeping was 
inadequate and that she had failed to maintain any inventories of 
controlled substances. She also admitted that the dispensing records 
that she provided had been created from memory. The Respondent was also 
unable to provide patient charts, because she had been evicted from her 
offices and no longer had access.
    During the inspection, the investigators found two phentermine 
vials, one empty and one partially full. Both were issued in the name 
of a purported patient. The Respondent told the investigators that the 
drugs were prescribed for her uncle. The Respondent's husband told the 
investigators, however, that the ``uncle'' was really just a friend of 
the family.
    Accountability audits of the Respondent's handling of phentermine 
and Meridia form 1997 to 1999 showed various overages and/or underages 
of the drugs. The investigators also learned that Respondent had filed 
a report with the police concerning the theft from her offices of 
controlled substances, but she had not notified DEA, as required by 
regulation.
    The Respondent requested a hearing on the issues raised in the 
Order to Show Cause and the matter was placed on the docket of 
Administrative Law Judge Mary Ellen Bittner (the ALJ). Following 
prehearing procedures, testimony was presented before the ALJ on June 
19 and 20, 2002, in Arlington, Virginia. The Government presented 
testimony from one witness and had admitted several exhibits into 
evidence. In addition to her own testimony, the Respondent presented 
two witnesses and also had several exhibits admitted into evidence. 
After the hearing, both parties submitted Proposed Findings of Fact, 
Conclusions of Law and Argument.
    On July 24, 2003, the ALJ certified and transmitted the record to 
the Acting Administrator of DEA. The record included, among other 
things, the Opinion and Recommended Rulings, Findings of Fact, 
Conclusions of Law and Decision of the Administrative Law Judge, the 
findings of fact and conclusions of law proposed by all parties, all of 
the exhibits and affidavits, and the transcript of the hearing 
sessions. In her opinion, the ALJ recommended that Respondent's DEA 
registration not be revoked.

II. Final Order

    The Deputy Administrator does not adopt the Opinion and Recommended 
Ruling, Findings of Fact, Conclusions of Law, and Decision of the 
Administrative Law Judge. The Deputy Administrator has carefully 
reviewed the entire record in this matter, as defined above, and hereby 
issues this final rule and final order prescribed by 21 CFR 1316.67 and 
21 CFR 1301.46, based upon the following findings of fact and 
conclusions of law.

A. Findings of Fact

    On July 9, 1997, the Respondent was assigned DEA Certificate of 
Registration number BM5412868, in Schedules II through V. The 
registration was issued to the Respondent at 128 Steele Street, Suite 
200, Denver, Colorado (the Denver clinic). That registered location was 
known as the Life-Plan Weight Loss Center and was affiliated with the 
Holland Center for Family Health, and Arizona professional corporation. 
The Life-Plan Weight Loss Center was owned by Joshua Holland, M.D., and 
Arizona based medical practitioner, who was also registered with DEA in 
the State of Arizona. Dr. Holland had previously operated a successful 
weight loss clinic in Arizona and he sought to open a similar clinic in 
the Denver area. To that end, he placed an advertisement in a 
newspaper, seeking a physician to run the Denver clinic. The Respondent 
was ultimately hired for the position. As the only physician at the 
Denver clinic, the Respondent was responsible for ordering controlled 
substances under her DEA registration number.

[[Page 59957]]

    The Respondent's business arrangement with Dr. Holland dissolved 
sometime during November 1997 based upon financial differences between 
the two. Sometime after November 1997, the Respondent left the employ 
of Dr. Holland and relocated from Suite 200 to Suite 202 of the 128 
Steele Street location, where she intended to maintain her own clinic 
under the name Total Health Care Systems.
    At the hearing, a DEA Diversion Investigator (DI) testified about 
the instigation of the investigation of the Respondent. She introduced 
a swore statement from a registration technician (RT) at DEA's Denver 
Division. In the statement, the RT stated that on November 12, 1998, 
she received a voice mail message from the Respondent. In the message, 
the Respondent stated that she needed to obtain the controlled 
substance phentermine as soon as possible. Before returning the 
Respondent's call, the RT was instructed by her supervisor to return a 
previous call from a representative of Horizon Wholesale (Horizon) 
concerning a request by the Respondent to have controlled substances 
delivered to an unregistered address.
    On the same day, the RT placed a call to Horizon. The Horizon 
representative expressed concern that when the Respondent placed an 
order for controlled substances, the return telephone number that she 
gave was for an answering service. He expressed further concern that 
Horizon could not obtain a business telephone number for the 
Respondent. The RT instructed the Horizon representative not to ship 
controlled substances to the Respondent at an address different from 
her registered address. The RT also requested the telephone number to 
the answering service that was provided by the Respondent.
    After a number of attempts, the RT was able to get in touch with 
the Respondent. The Respondent informed the RT that she needed to order 
drugs so that they could be shipped to her home address. When asked 
whether she was storing controlled substances at her home, the 
Respondent replied in the affirmative and told the RT that she had a 
safe at the location to store the controlled substances. The DI also 
testified that the Respondent also informed another DEA employee that 
she had a safe at her home.
    The RT informed the Respondent that she was not allowed to store 
controlled substances at her home for the sake of convenience, and 
could only store controlled substances at a registered location. The 
Respondent further added that she did not store or dispense controlled 
substances from the Steele Street location.
    Following discussions on the proper manner to modify a DEA 
registration, the Respondent faxed to the DEA Denver office a request 
to modify her registration to reflect her home address, 8285 South 
Marion Way, Littleton, Colorado (the South Marion Way location). The 
Respondent's request to have controlled substances delivered to her 
home triggered DEA's investigation.
    Following the modification of the Respondent's DEA registration, 
the DEA investigators received information from Horizon that the 
Respondent ordered approximately 3000 dosage units of phentermine and 
200 dosage units of Meridia to be delivered to the Respondent's home. 
In the interest of assessing the security of the ordered drugs, and to 
seek accountability and justification for their use, DEA investigators 
went to the Respondent's home on December 1, 1998.
    When they arrived at the Respondent's home, the DEA investigators 
asked to review records of the Respondent's handling of controlled 
substances. Specifically, the investigators requested dispensing 
records, records of theft or losses, records of drug destructions or 
any disposals of controlled substances. The Respondent did not provide 
any of the requested records, including inventories. The Respondent 
informed the investigators that all of her records were still at her 
Steele Street office location. The Respondent further stated that she 
was in the process of moving her practice from the Steele Street 
location to her home address. When asked if she was seeing patients at 
her home location, the Respondent answered in the negative.
    The investigators then asked to see the controlled substances that 
were ordered by the Respondent. She told the investigators that the 
controlled substances were at the Steele Street location. When reminded 
that controlled substances were to be stored at a registered premise, 
the Respondent changed her story, claiming that she was not in 
possession of any controlled substances at any location. When the 
investigators asked about the 3,000 dosage units of controlled 
substances that were shipped to her home by Horizon, the Respondent 
finally admitted that the controlled substances ere in her home, and 
retrieved them out of an open box in a closet.
    The box was small and made of cardboard. In addition to the bottles 
of pills, it contained trash, cotton, candy wrappers and loose pills. 
The Respondent informed the investigators that the loose pills came 
from a previous shipment. Approximately half of the controlled 
substances that Respondent had ordered were gone, and some of the 
bottles of phentermine were opened. There were also empty bottles of 
Meridia in the box. Investigators then asked to see the Respondent's 
safe. Although she had told RT that she had a safe in her home, she 
admitted that she did not have one, but intended to get one.
    The Respondent told the investigators that she dispensed the 
missing drugs to her patients but that she had not seen any patients in 
the previous few weeks. The Respondent then admitted that she had not 
any patients in here home at all, but had dispensed the medications by 
mailing them to patients. The Respondent also informed investigators 
that her husband and son had access to various areas of the house. The 
DI testified that the controlled substances were not stored or secured 
as required by DEA laws and regulations.
    The investigators had a discussion with the Respondent about the 
need for maintaining proper records, and the Respondent agreed that any 
controlled substance records remaining at the Steele Street location 
were to be transferred to the new registered location. The 
investigators then conducted a physical count of controlled substances 
on hand. According to physical count, there were 735 15mg. phentermine 
tablets and 785 30mg. phentermine tablets.
    With respect to controlled substance records that were not 
provided, arrangements were made with the Respondent to provide the 
requested records the following day. The DI further requested that the 
Respondent provide records dating back two years. On December 2, 1998, 
the mail message from the Respondent saying that she had the requested 
records and that they were in the mail. However, on December 4, the DI 
received a second voice mail from the Respondent in which the 
Respondent stated that she wished to consult with an attorney before 
turning over the records.
    The Respondent eventually sent what she called controlled substance 
records to DEA on December 21, 1998. Although DEA requested records 
dating back two years, the Respondent only provided records dating back 
two months, and only covering the shipments from Horizon. The 
investigators found that some of the records sent by Respondent 
appeared to have been ``manufactured.''For example, they found that 
receipt date of the drugs was incorrect and that the dates of 
dispensation were in chronological

[[Page 59958]]

order up until December 11, 1998, when the next entry reflected a date 
of December 3, 1998. In addition, the totals of the drugs on the date 
of the December 1, 1998, inventory did not match the records provided 
by the Respondent on December 21. Again, the Respondent failed to 
provide an initial inventory, and her controlled substance records were 
incomplete and inaccurate.
    Upon receipt and inspection of the copied records received from the 
Respondent, the DI called the Respondent and requested original 
records. When the Respondent did not respond to the request, the DI 
applied for an administrative inspection warrant to inspect the 
Respondent's new registered location. The DI sought the inspection 
warrant in order to verify the correctness of inventories, records, 
reports and other documents required to be kept under the CSA.
    On January 5, 1999, the DEA investigators returned to the 
Respondent's registered location to execute the administrative 
inspection warrant. The investigators found that Respondent's records 
were intermingled; patient sheets were found among personal papers, 
financial data, and the like. The investigators also found a yellow 
notepad where Respondent had apparently attempted to reconcile the 
quantities of drugs given to patients.
    The investigators also found loose pieces of paper entitled 
``Medication Accountability'' in a desk, and in a box in the closet. 
These records were not part of the patient charts. The investigators 
also collected 15 patient charts for inspection. Two of the charts had 
no information in them. In many of the other charts, the last entry for 
the patients was either September or October 1997. In addition, these 
records were not of patients who purportedly received dispensations 
over the previous two months.
    The investigators also found a prescription bottle for phentermine 
for Carl Ousley, which listed the Respondent as the prescribing 
physician. When the investigators asked the identity of Mr. Ousley, the 
Respondent said he was her uncle. The Respondent's husband, however, 
stated that Mr. Ousley was only a friend.
    In the garage of the Respondent's home, the investigators found an 
empty bulk manufacturer's bottle of 100-count tablets of phentermine. 
Although the investigators attempted to obtain from the Respondent the 
name of the supplier of the drugs, they were never able to determine 
its origins. The Respondent could not even provide the names of 
wholesalers from whom she purchased controlled substances. Although the 
Respondent informed the investigators that she had dispensed these 
medications to patients, she could not provide documentation to support 
this claim. There were no original receipts for drug purchases and the 
Respondent did not know where they could be located.
    The DEA investigators found prescription vials for various 
controlled substances in different parts of the Respondent's home. 
Investigators also inspected a filing cabinet in which controlled 
substances were stored. The cabinet was not locked and it contained two 
empty bottles of Meridia and three opened bottles of phentermine. The 
investigators also found an empty prescription vial in the master 
bedroom closet. The investigators could not determine the identity of 
the drug, the patient or the prescriber because the label had been 
peeled off.
    DEA investigators asked the Respondent if she personally used 
phentermine. The Respondent acknowledged that she had been given a 
prescription from her previous business partner, Dr. Holland, and had 
taken the drug during the previous holiday. The Respondent further 
stated that she didn't have any more pills from that prescription, but 
doubted that Dr. Holland would vouch for the prescription because of 
the bad breakup of their business arrangement. The Respondent further 
denied any personal use of any phentermine from bottles and vials found 
around her home.
    The DEA investigators also discussed with the Respondent the last 
time she dispensed controlled substances from her new registered 
locations. The Respondent informed investigators that she had not 
dispensed from that location since December 1, 1998. The Respondent 
also informed investigators that they were free to inspect the Steele 
Street location because that was where the remainder of her dispensing 
records were maintained.
    The Respondent was asked about inconsistencies in the records that 
she had previously mailed to DEA. When asked how she planned to 
reconcile these inconsistencies, the Respondent stated that she could 
do it from memory. As noted above, during the January 5 inspection, the 
Respondent informed DEA investigators that she had not dispensed 
controlled substances from her new registered location since December 
1, 1998. However, the results of the physical count performed during 
that inspection revealed different totals: for example, the December 1, 
1998, physical count for phentermine 735 tables; on January 5, 1999, 
the physical count was 542. The physical count for December 1 should 
have matched that for January 5.
    The investigators further noted that when comparing the records 
mailed by the Respondent to those seized by investigators on January 5, 
the records did not match as well. For example, the mailed records for 
phentermine 30mg. showed one full bottle of 1,000 tablets and one 
partial bottle of 220, for a balance of 1,220 on hand. However, the 
physical count that day was 735 tablets.
    Following the January 5 inspection, DEA performed two 
accountability audits of controlled substances handled by the 
Respondent. The first audit period chosen was from November 1, 1998 to 
December 1, 1998, and covered the drugs phentermine (30mg. and 15mg.) 
and Meridia (15mg. and 10mg.). The audit resulted in a shortage of 740 
dosage units of phentermine products. DEA investigators performed a 
second accountability audit, covering the period of November 1, 1998 to 
January 5, 1999. The audit for that time period reflected shortages and 
overages of phentermine products.
    The investigators had ongoing discussions with the Respondent to 
inspect the Steele Street location, in order to acquire the remaining 
dispensing records that Respondent said were there, and reconcile the 
discrepancies found in DEA's audits. However, the Respondent failed to 
inform the DEA investigators that she had been evicted from that 
location. Some time in January 1999, the building manager of the Steele 
Street location informed DEA that Respondent had been evicted for 
``nonpayment.'' Despite the Respondent's assurances that she was 
agreeable to a meeting at that location, she never actually agreed to a 
meeting there on a set date.
    In light of the Respondent's refusal to cooperate with the 
investigators, they applied for a search warrant for the Steele Street 
location (Suite 202). The warrant was executed on May 6, 1999. During 
the inspection of Suite 202, the investigators took photos of the 
premises. Various controlled substances were found at that location as 
well as miscellaneous records.
    The investigators generated an inventory of controlled substances 
found in Suite 202. These drugs were found on a cart, which had been 
secured by the building manager. The cart had no locking mechanism, and 
the drugs in the cart were not secured in any fashion when found by the 
building manager. The Investigators also determined that these 
controlled substances were ordered under the Respondent's DEA 
registration number from Quality Care

[[Page 59959]]

Pharmaceuticals, a controlled substance distributor. The investigators 
found that these drugs had expired. They were counted, treated as 
abandoned, and put aside for destruction. These drug products were 
identified as phentermine 30mg. in various quantities and number of 
containers.
    Copies of ``Dispense-Quick-Log'' sheets (labels) had been provided 
with vials of drugs from Quality Care Pharmaceuticals. The labels did 
not meet DEA record keeping requirements because they did not list 
which drug was dispensed or the quantity dispensed. These log sheets 
were found tossed in miscellaneous boxes throughout the office.
    The DEA investigators also seized patient files from Suite 202. The 
investigators tried but failed to find current dispensing records of 
what drugs the Respondent had purchased from Horizon. An example in 
this regard was the patient record for patient S.S. The patient file 
did not contain dispensing information for controlled substances, i.e., 
quantities, etc. The other patient files seized were fairly 
representative of the record keeping in all of the files, in that the 
last entries in the files were dates in 1997 and early 1998.
    Following the execution of the search warrant, further 
accountability audits were conducted. These audits covered the period 
of November 25, 1997 and January 5, 1999, and again, the controlled 
substances audited were phentermine (30mg. and 15 mg.) and Meridia (5, 
10 and 15mg.). [Id.] The revised audits were designed to include 
information obtained from the inspection of the Steele Street location, 
the Respondent's new registered location, and information obtained from 
a second drug supplier, Quality Care Pharmaceuticals. These audits were 
also conducted to give the Respondent credit for the miscellaneous 
papers, receipts, and dispensation notes, even though these items did 
not meet DEA record keeping requirements.
    The results of DEA's initial audit (excluding records that were not 
maintained pursuant to DEA requirements) revealed that the Respondent 
was unable to account for 11,148 dosage units of controlled substances. 
Through the use of the records that the Respondent supplied, DEA found 
that Respondent was unable to account for 7,154 dosage units of 
controlled substances.
    DEA's investigation also revealed that Respondent did not maintain 
a record of the transfer of controlled substances. In a call to Quality 
Care Pharmaceuticals, DEA investigators learned that quantities of 
Redux and Pondimin (both Schedule IV controlled substances) were 
transferred from Respondent's Steele Street office to Quality Care. The 
Respondent had previously told investigators that she had not destroyed 
or returned any drugs.

B. Conclusions of Law

    Pursuant to 21 U.S.C. 823(f) and section 824(a)(4) the Deputy 
Administrator of the Drug Enforcement Administration may revoke a DEA 
Certificate of Registration if she determines that the continued 
registration of the registrant would be inconsistent with the public 
interest. Pursuant to 21 U.S.C. 823(f), in determining the public 
interest, the following factors will be considered:

    (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 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.

    These factors are to be considered in the disjunctive; the Deputy 
Administrator may relay on any one or combination of factors and may 
give each factor the weight she deems appropriate in determining 
whether a registration should be revoked or application for 
registration be denied. See Henry J. Schwarz, Jr., M.D., 54 FR 16,422 
(1989).
    In this case, factors two, four and five are relevant in 
determining whether Respondent's DEA Certificate of Registration should 
be revoked and her pending application for renewal of that registration 
should be denied.
1. Factors Two and Four--Experience in Dispensing Controlled Substances 
and Compliance With Applicable State and Federal Law \1\
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    \1\ Most of the conduct at issue regarding the Respondent's 
experience dispensing controlled substances while not complying with 
DEA recordkeeping requirements also involve and further demonstrate 
Respondent's history of failing to comply with state and federal 
laws concerning controlled substances. Therefore, the Government's 
analysis under 21 U.S.C. Sec.  823(f)(2) and (4) has been combined. 
See Service Pharmacy, Inc., 61 FR 10,791, 10,795 (1996).
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    Factors two and four are also relevant with respect to 
Respondent's: (1) Failure to maintain a record of her return of 
Schedule IV controlled substances to a supplier, as required by 21 CFR 
1307.12; (2) failure to obtain a DEA registration for the South Marion 
location prior to dispensing controlled substances from that location, 
as required by 21 CFR 1301.11 and 1301.12; (3) failure to store 
Schedule IV controlled substances in a securely locked, substantially 
constructed cabinet at her former registered location at 128 Steele 
Street location, Suite 202, as well as the modified registered location 
at South Marion Way, as required by 21 CFR 1301.75(a); (4) failure to 
maintain complete and accurate records with respect to the receipt and 
dispensing of controlled substances, as required by 21 U.S.C. 
827(a)(3), and 21 CFR 1304.03, 1304.04 and 1304.21(a) (these statutory 
provisions are further relevant to Respondent's failure to account for 
between 7,000 to over 11,000 dosage units of Schedule IV controlled 
substances); (5) failure to take an initial inventory of controlled 
substances on hand on the date she engaged in the dispensing of 
controlled substances as required by 21 U.S.C. 827(a)(1) and 21 CFR 
1304.11; and (6) failure to maintain inventories and records of 
controlled substances, either separately from all other records, and in 
a readily retrievable fashion, as required by 21 CFR 1304.04(f)(2) and 
(g).
    Thus, the Respondent committed numerous violations of the 
Controlled Substances Act by failing to adhere to proper record-
keeping. The importance of the DEA system of record-keeping is well 
settled. The purpose of the enactment of the 1970 Uniformed Controlled 
Substances Act (the ``Act'') was to provide a system for the control of 
drug traffic and to prevent the abuse of drugs. The statutory scheme 
envisioned by the Act is one of control through record-keeping. United 
States v. Stidham, 938 F. Supp. 808, 814 (S.D. Ala. 1996). Congress 
sought measures to monitor the drug transactions of registrants, who, 
with authority to dispense drugs, have the greatest access to 
controlled substances, and therefore the greatest opportunity for 
diversion. United States v. Moore, 423 U.S. 122, 135, (1975).
    In some cases, revocation of a DEA registration is an appropriate 
measure for failure to maintain adequate controlled substance records 
and inventories. Compliance with Federal laws and regulations relating 
to the handling, record keeping, reporting, and security of controlled 
substances are essential to assure that adequate control is maintained 
to prevent the diversion of controlled substances from legitimate 
channels. North American Medical, Inc., 53 FR 39,543 (1988). DEA has 
also found grounds for revocation of a DEA

[[Page 59960]]

registration in situations involving poor record keeping practices, 
even where no personal use or criminal convictions involving controlled 
substances were determined. RX Returns, Inc., 61 FR 37081 (1996).\2\
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    \2\ While the Deputy Administrator in RX Returns found 
revocation appropriate, the revocation was stayed and a one year 
period of probation was imposed. [Id. at 37,090]
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2. Factor Five--Conduct Which May Threaten the Public Health and Safety
    The Respondent testified at the hearing concerning the reasons for 
her very poor record-keeping. She had no assistance to help with 
record-keeping and during the period at issue, she was going through 
extremely stressful circumstances. She developed a condition involving 
her pituitary gland that lowered her voice, caused her to grow a beard 
and lose hair. She thought that she might have to have brain surgery. 
At the same time, her son had a seizure and was diagnosed with a 
disease related to sickle cell anemia. Several friends died, included 
one suicide. She was very depressed during this period, and as a 
result, her recordkeeping suffered.
    These circumstances may very well partly excuse some of the 
Respondent's record-keeping failures. The Deputy Administrator is 
particularly disturbed, however, by the numerous occasions that the 
Respondent provided false information to DEA investigators and 
repeatedly frustrated their attempts to conduct their investigation. At 
the hearing, the Respondent claimed that she had never meant to mislead 
the investigators and denied making false statements. The Deputy 
Administrator finds, however, that the Respondent has no credibility, 
because it is absolutely clear that she lied to the investigators on 
numerous occasions.
    The Respondent lied about possessing controlled substances at her 
house. She lied about having a safe in her house in which to store 
controlled substances. She lied about treating patients from her home. 
She lied about the true identity of a friend for whom she had written 
prescriptions for controlled substances. She misled the investigators 
about the existence of patient records. She continually maintained that 
she had controlled substance records at her office, when in truth she 
did not. She later admitted that she had tried to create the records 
from memory. The Respondent's refusal to cooperate with DEA 
investigators led DEA to request the issuance of an administrative 
inspection warrant of her South Marion Way location and subsequently, 
the Steele Street location.
    Moreover, the Respondent agreed to assist DEA investigators in 
their inspection of the Steele Street location, without telling them 
that she had been evicted from that location. The Respondent's failure 
to cooperate with the investigators in their efforts to inspect the 
former registered location necessitated the execution of a search 
warrant. The Respondent also made false statements regarding the 
transfer of drugs. Despite her denials the investigators discovered 
that the Respondent had transferred Schedule IV controlled substances 
to Quality Care Pharmaceuticals.
    The circumstances surrounding the Respondent's treatment of 
patients from her home is also troubling. As noted above, the 
Respondent was unable to account for between 7,000 and 11,000 dosage 
units of controlled substances. While the Respondent asserted that the 
controlled substances were legitimately dispensed to patients, she had 
no records to support her assertion. The Respondent's attempts at 
creating controlled substance records could not reconcile the 
shortages. Even the Respondent's own patient records did not bear out 
her assertions that she continued to dispense drugs to patients 
throughout 1998, as many of the records showed entries which ended in 
1997 and early 1998.
    The Deputy Administrator does not necessarily find that these 
controlled substances were diverted. Nevertheless, the lack of proper 
documentation to account for the shortage of large quantities of drugs; 
the Respondent's admission to the use of phentermine; her demonstrated 
lack of candor; empty drug vials around her home of which she was 
unable to account for their origins or disposition, all suggest 
possible drug use on the Respondent's part, or by someone close to her.

III. Conclusion

    The preponderance of evidence demonstrates that the Respondent's 
continued registration would be contrary to the public interest. If the 
Respondent's only failures involved record-keeping, the Deputy 
Administrator might find it appropriate to impose a lesser sanction 
than revocation of the Respondent's DEA registration. The Respondent's 
false and misleading statements, however, cannot be excused. DEA cannot 
maintain the integrity of its regulatory system if its registrants, 
when asked to provide information required by law, provide false 
information. Accordingly, the Deputy Administrator, pursuant to the 
authority vested in her by 21 U.S.C. 823 and 824 and 28 CFR 0.100 and 
0.104, hereby orders that the Respondent's DEA Registration be, and it 
hereby is, revoked, and that any requests for renewal or modification 
be, and hereby are, denied. This order is effective November 5, 2004.

    Dated: September 28, 2004.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 04-22422 Filed 10-5-04; 8:45 am]
BILLING CODE 4410-09-M