[Federal Register Volume 69, Number 228 (Monday, November 29, 2004)]
[Notices]
[Pages 69402-69407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26310]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 02-40]


Dan E. Hale, D.O., Denial of Registration

    On March 21, 2002, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Dan E. Hale, D.O. (Respondent) notifying 
Respondent of an opportunity to show cause as to why DEA should not 
deny his application for a DEA Certificate of Registration as a 
practitioner pursuant to 21 U.S.C. 824(a)(1) and (a)(5) and on grounds 
that his registration would be inconsistent with the public interest as 
that term is used in 21 U.S.C. 823(f).
    The Order to Show Cause alleged in sum that on March 21, 1995, 
Respondent had been convicted by a jury in United States District 
Court, Eastern District of Kentucky, of 21 felony counts related to 
wrongful billing under Medicaid, Medicare and TennCare programs from 
1980 to 1993. On June 20, 1995, Respondent surrendered his DEA 
Certificate of Registration AH7753709 and was subsequently sentenced to 
a total of 57 months confinement, followed by two years of supervised 
release.
    It was also alleged that on March 18, 1994, the Tennessee 
Department of Health, Board of Osteopathic Medicine (Board), issued a 
Notice of Charges alleging, among other things, that Respondent 
improperly allowed a physician assistant to dispense and prescribe 
controlled substances without supervision and that in several instances 
Respondent and the physician assistant, dispensed and prescribed 
controlled substances in violation of established treatment protocols. 
On November 8, 1995, he entered into an Agreed Order with the Board, 
whereby the Board ordered that he surrender his osteopathic medical 
license and in the event his conviction was upheld on appeal, his 
license would be automatically revoked. After the conviction was 
affirmed by the Sixth Circuit Court of Appeal on January 28, 1997, the 
Board revoked Respondent's medical license. That license was 
subsequently reinstated on May 25, 2001.
    It was further alleged that on January 26, 1996, as a result of 
Respondent's convictions, the United States Department of Health and 
Human Services notified him that he was mandatorily excluded from the 
Medicare program pursuant to 42 U.S.C. 1320a-7(a).
    Finally, it was alleged that on June 18, 2001, Respondent 
materially falsified an application for DEA registration by failing to 
disclose the voluntary surrender of his previous DEA registration and 
the revocation of his State osteopathic medical license.
    Respondent requested a hearing on the issues raised by the Order to 
Show Cause and following pre-hearing procedures, a hearing was held in 
Arlington, Virginia, on January 7 and 8, 2003. At the hearing, both 
parties called witnesses to testify and introduced documentary 
evidence. After the hearing, both parties submitted written proposed 
findings of fact, conclusions of law, and argument.
    On November 26, 2003, Presiding Administrative Law Judge Mary Ellen 
Bittner (Judge Bittner) issued her Opinion and Recommended Ruling, 
Findings of Fact, Conclusions of Law and Decision of the Administrative 
Law Judge (Opinion and Recommended Ruling) in which she concluded that 
grounds existed to deny Respondent's application for DEA registration 
and recommended the application be denied. On January 14, 2004, 
Respondent filed exceptions to Judge Bittner's Opinion and Recommended 
Ruling and on January 15, 2004, Judge Bittner transmitted the record of 
these proceedings to the then-Acting Deputy Administrator of DEA.
    By his counsel's letter dated March 22, 2004, Respondent asked the 
Deputy Administrator to consider the impact of recent changes 
implemented by the State of Tennessee, Bureau of TennCare. Counsel for 
the Government had no objection and the submission has been considered 
as a part of the administrative record.
    The Deputy Administrator has considered the record in its entirety, 
and pursuant to 21 CFR 1316.67, hereby issues her final order based 
upon findings of fact and conclusions of law as hereinafter set forth. 
As set forth below, the Deputy Administrator adopts in whole, the 
recommended findings of

[[Page 69403]]

fact and conclusions of law of the Administrative Law Judge. Her 
adoption is in no manner diminished by any recitation of facts, issues, 
or conclusions herein, or of any failure to mention a matter of fact or 
law.
    The record before the Deputy Administrator sows that on October 7, 
1977, Respondent, an osteopathic physician, was issued DEA Certificate 
of Registration AH7753707, as a practitioner. At that time, Respondent 
had recently opened a practice in Morristown, Tennessee, had two 
employees and shared office space with another physician, Doctor L., at 
the Boulevard Center clinic. Respondent later purchased Doctor L.'s 
practice, hired him as an employee and began to expand operations. By 
the early 1990's, Respondent had over 100 employees and his clinic was 
seeing between 225 to 250 patients per day.
    Around 1989, Respondent opened a second clinic in Bean Station, 
Tennessee, about eleven miles from Morristown. It was primarily staffed 
by Mr. Dean B., a physician assistant. Respondent later added a 
pharmacy and dental office to his Bean Station operations. Respondent 
testified that he never intended to go to the Bean Station clinic on a 
daily basis to see patients and it was overseen by the Rural Health 
Consortium, a government agency which oversees clinics run by physician 
assistants. He testified that he had consulted with attorneys who 
advised him it was permissible for Mr. B., to staff the Bean Station 
clinic.
    From about 1991 to 1994, respondent made four trips to Benin, 
Africa, where he and his team provided humanitarian medical assistance 
to hundreds of patients every day. During an early 1991 trip, he asked 
Dr. L. to cover for him at Bean Station. While Dr. L. discussed 
patients with Mr. B., he did not sign medical charts and Respondent 
signed them upon his return. Respondent testified he thought it did not 
make any difference whether he or Dr. L. signed the charts and that 
based on his review of those charts, all controlled substances 
prescribed at the clinic were appropriate.
    On March 18, 1994, the Tennessee Division of Health Related Boards, 
Department of Health (Department of Health), issued a Notice of Charges 
against Respondent. It alleged, in sum, that: Respondent had been 
improperly using physician assistants to supervise his clinics since at 
least 1985, even though State legislation authorizing osteopathic 
physicians to utilize and supervise physician assistants was not 
enacted until 1992 and it had no retroactive effect; that he allowed 
his physician assistants to see, treat and diagnose conditions in new 
patients and previously undiagnosed conditions in regular patients; 
that the allowed Mr. B. to improperly see patients and render treatment 
that was inappropriate for the diagnosed conditions; allowed Mr. B. to 
provide treatment and medications that were inconsistent with written 
protocols and allowed him to diagnose conditions outside the scope of 
those protocols without first consulting Respondent; that between 
January 1991 until April 1992, he continuously improperly dispensed or 
prescribed controlled substances to numerous patients without adequate 
attempts to diagnose their need for the controlled substances or 
attempt alternative methods of therapy; and allowed his patients to 
refer to Mr. B. as ``doctor.''
    While Respondent was afforded a right to a hearing on the 
allegations, on November 8, 1995, through counsel, he entered into an 
Agreed Order with the Tennessee Board of Osteopathic Examination 
(Tennessee Board). However, the Agreed Order did not specifically 
address the allegations in the Notice of Charges but was, instead, 
based on Respondent's felony convictions of March 21, 1995.
    At the DEA hearing, Respondent contested the allegations in the 
Notice of Charges. He testified, in sum, that he was appropriately 
vigilant in prescribing controlled substances and in supervising Mr. B. 
Respondent's son, an attorney and medical student who worked in the 
clinic, testified Respondent saw Mr. B. each morning and they talked on 
the phone eight to ten times a day. The son further testified that 
during 1992 and 1993, the Bean Street clinic saw an average of 45 to 55 
patients per day and, while not every patient was a subject of 
discussion between Respondent and Mr. B., Respondent would review all 
patient notes and ask questions.
    Dr. Maurice R., an osteopath who had known Respondent for 26 years, 
testified on Respondent's behalf. He had worked in Respondent's clinic 
briefly as part of his training and considered Respondent his mentor. 
He testified he never saw Respondent over-prescribe controlled 
substances and described the difficulties facing doctors in East 
Tennessee in determining patients' legitimate needs for controlled 
substances. He described Respondent as providing care to a medically 
underserved community by accepting Medicaid patients.
    With regard to the allegations in the Notice of Charges, Dr. R. 
testified in order to determine whether the standard of care was met 
with regard to any patient, it would be necessary to review the 
patient's charts, which were unavailable. However, from what was 
contained in the Notice of Charges, he saw no deviation from the 
standard of care. With regard to the allegation that Respondent 
utilized a physician's assistant prior to enactment of legislation 
permitting such a practice, Dr. R. testified that the Tennessee 
Legislature frequently forgot to include physicians with Doctor of 
Osteopathy degrees in legislation addressing physicians with Medical 
Doctor degrees.
    A pharmacist who worked at the pharmacy next door to Respondent's 
Morristown office testified that from 1985 to 1995, prescriptions 
issued by Respondent made up about thirty percent of the pharmacy's 
prescription business. He further testified Respondent did not issue 
prescriptions for controlled substances in greater proportions than 
other area physicians or issue prescriptions for abnormal quantities of 
drug. The pharmacist had also accompanied Respondent on a humanitarian 
trip to Benin and described the good work they performed. The 
pharmacy's owner, who co-owned the building with Respondent, testified 
Respondent issued the ``vast majority'' of prescriptions filled at the 
pharmacy and that he prescribed drugs in Schedules III, IV and V, but 
rarely those in Schedule II.
    On November 17, 1994, Respondent was indicated in the United States 
District Court for the Eastern District of Kentucky on 21 felony counts 
of racketeering, conspiracy to engage in racketeering, insurance fraud, 
and Medicare and Medicaid fraud. A 22nd count contained forfeiture 
allegations.
    The indictment alleged, in substance, that Respondent and his 
associates ordered and performed diagnostic tests on patients that were 
unnecessary, but for which medical insurers would pay; personnel 
working for Respondent put computer-generated medical histories in 
patient charts to justify diagnostic tests; providers at Respondent's 
clinic treated Medicare and Medicaid patients differently from others 
by, for example, requiring them to come to the clinic in person to 
obtain prescription refills, thus affording the clinic more 
opportunities to run reimbursable tests; although some Medicaid 
patients abused addictive medications, providers repeatedly gave such 
medications to those patients because the patients were a good source 
of business and did not object to being given numerous diagnostic tests 
as long as they received the drugs they wanted; that Respondent and Dr. 
L. had admitted to hospital personnel that certain individuals were

[[Page 69404]]

engaged in an on-going insurance fraud to collect on multiple hospital 
supplemental insurance policies and were rewarded for this assistance 
by receiving payment for medical services and unnecessary diagnostic 
tests; the clinic gave numerous new patients complete 
electrocardiograms, blood tests, and X-ray tests before the patients 
saw a physician and without regard for medical necessity; clinic 
personnel injected patients with certain drugs because there was an 
abundant supply of the drug in the clinic, not because the drug was 
medically necessary; injectable medications were diluted below the 
therapeutic dosages to increase profits; and when Medicaid patients 
were switched to TennCare in January 1994, they were given unnecessary 
comprehensive examinations solely because TennCare would reimburse the 
clinic for these tests.
    On March 21, 1995, a jury found Respondent guilty of all 21 counts. 
On March 21, 1995, Respondent entered into an Agreed Order of 
Forfeiture with the United States. On July 3, 1995, the court sentenced 
Respondent to 57 months of incarceration, followed by two years of 
supervised release and ordered him to comply with the Agreed Order of 
Forfeiture and pay a special assessment of $1,050.00.
    Respondent appealed the judgment to the United States Court of 
Appeals for the Sixth Circuit, which affirmed the convictions on 
January 28, 1997. See, United States v. Hale, No. 95-5915 (6th Cir. 
January 28, 1997). The Court of Appeal described the hospital admission 
aspect of the case as follows:

The fraud worked simply. Participants would buy numerous hospital 
indemnity policies that paid a sum certain in the event of a 
hospital admission. They would then fake injuries, present 
themselves to a ``sympathetic'' doctor, and gain admission to a 
hospital, typically for a soft tissue injury. The participants then 
filed claims for coverage with numerous insurance companies. Id.

    The Court stated that the issue on appeal was whether Respondent 
knew of the fraud. It concluded he did, relying on testimony from 
Russell R., who had directed many of the scheme's participants, that 
Respondent had advised that patients should ``bend over in pain, use a 
wheelchair, and request pain medication.'' Respondent ``also 
discouraged [Russell R.'s] fondness for staging car accidents because 
they involved police; rather, `a bathtub was a good place to have an 
accident.' '' The court also relied on the testimony of a hospital 
administrator that he had been warned his hospital was being used to 
perpetuate fraud, the he discussed the fraud with Respondent, and 
Respondent indicated he knew about it. Id.
    With respect to overbilling, the court noted testimony that 
Respondent's ``goal was to see as many patients and perform as many 
tests as the government would pay for'' and that Respondent used an egg 
timer to time himself and challenged the staff to increase the number 
of tests they performed. In sum, the court found, ``the testimony at 
trial from former employees, including doctors, nurses, and staff about 
the unnecessary testing and dubious billing was overwhelming.'' Id.
    During the DEA hearing, Respondent testified about the conduct 
leading to his convictions. He testified that several patients came to 
him ``faking injuries'' and ``wanting to be put into the hospital for 
physical therapy,'' and that these patients used supplemental insurance 
to pay for their hospitalization and had bribed one of Respondent's 
insurance clerks to stamp forms for multiple (as many as 25) different 
companies, and would then collect on all of their policies. According 
to Respondent, ``I was guilty of participating in that because I was 
the physician.''
    Respondent testified that ``I know that there were things going on 
that shouldn't be there and I should have taken action to have changed 
it.'' He admitted to the conduct alleged in various counts of the 
indictment, but denied providing addictive medications to patients who 
abused them in return for the patients agreeing to undergo diagnostic 
tests and that he felt they needed the diagnostic tests he ordered for 
them.
    Notwithstanding the allegations in the indictment relating to 
providing drugs to persons who abused them and likewise, 
notwithstanding the jury's verdicts, Respondent also testified at the 
DEA hearing that he had never been charged with any crime relating to 
the unlawful prescribing or dispensing of controlled substances.
    On June 20, 1995, Respondent surrendered his DEA Certificate of 
Registration AH7753709 and signed a DEA form preprinted with language 
that he was surrendering the registration ``[i]n view of my alleged 
failure to comply with the Federal requirements pertaining to 
controlled substances, and as an indication of my good faith in 
desiring to remedy any incorrect or unlawful practices on my part.''
    As previously noted, on November 8, 1995, Respondent entered into 
an Agreed Order with the Tennessee Board. The Agreed Order cited the 
Tennessee Board's policy of disciplining osteopathic physicians 
convicted of felonies and ordered Respondent to surrender his license 
to practice osteopathic medicine in Tennessee. It did not address the 
specific allegations in the Notice of Charges.
    The Agreed Order further stated that if Respondent's conviction was 
upheld on appeal, his license would be automatically revoked and if the 
conviction was reversed, the Tennessee Board would hear the matters in 
the Notice of Charges on their merits.
    Respondent commenced his sentence on July 24, 1995. On January 26, 
1996, the Director, Health Care Administrative Sanctions, U.S. 
Department of Health and Human Services, wrote Respondent advising him 
that because of his felony convictions, he was excluded from 
participating in Federal health care programs, including Medicare and 
Medicaid, for a period of fifteen years.
    Respondent was released from incarceration on May 19, 1998. In 
early 2000, he applied to the Tennessee Board for relicensure. After 
taking and passing a Board ordered national examination, Respondent's 
medical license was reinstated on May 25, 2001.
    On June 18, 2001, Respondent executed the application for DEA 
registration at issue in this matter. The form included several 
standard liability questions asking about prior convictions or adverse 
actions being taken against Federal or State licenses. Question 4(c) 
asked, ``Has the applicant ever been convicted of a crime in connection 
with controlled substances under State or Federal law?'' Question 4(d) 
asked, ``Has the applicant ever surrendered or had a Federal controlled 
substance registration revoked, suspended, restricted or denied?'' 
Question 4(e) asked, ``Has the applicant ever had a State professional 
license or controlled substance registration revoked, suspended, 
restricted, or placed on probation?'' The application further directs 
the applicant to explain any affirmative answers. Respondent answered 
``no'' to all three questions and left the explanation section blank.
    A DEA Diversion Investigator was assigned to investigate the 
application after a routine check of the NADDIS system indicated he had 
surrendered a previous DEA registration. The investigator testified at 
the hearing that Respondent's answer to question 4(d) was false because 
he had surrendered his DEA registration in 1995 and that his answer to 
question 4(e) was also false because he was ordered to surrender his 
State license as a result of his felony conviction and when the 
conviction was affirmed on appeal, the license was automatically 
revoked.

[[Page 69405]]

    Respondent testified that while his answer to question 4(d) was 
false, he had simply forgotten he had surrendered his previous DEA 
registration and his answer had not been an intentional 
misrepresentation. He attributed the error to stress, anxiety and 
depression he was suffering at the time of the surrender emanating from 
the criminal proceedings and loss of his practice. Respondent's son 
also testified regarding the stress his father had been suffering at 
the time and the possibility that he had genuinely forgotten about 
surrendering the registration when he executed the application.
    With regard to the answer pertaining to revocation of his State 
license, Respondent testified that his then-counsel had signed the 
Agreed Order, as Respondent had begun serving his prison sentence. He 
testified he answered question 4(e) in the negative because he knew he 
had surrendered his license and in his mind, at the time, he thought it 
was ``gone'' and thus not revoked.
    Two months after applying for registration, Respondent called a 
diversion investigator to inquire as to its status. When told he had 
falsified the application, he did not claim he had simply forgotten 
surrendering the prior registration. Instead, he argued with the 
investigator that he had never surrendered his prior registration. 
Respondent testified that when he had made that phone call, he still 
believed he had never surrendered the registration.
    Following Respondent's State relicensure, he was certified as a 
Medical Review Officer and passed examinations for certifications in 
pediatric acute life support and acute cardiac life support. He was 
designated a Civil Surgeon by the United States Immigration and 
Naturalization Service, authorizing him to perform medical examinations 
of aliens seeking permanent residence in the United States.
    A pastor of a local church, whose congregants are mostly Spanish 
speakers from Central and South America, testified in Respondent's 
behalf. He described Respondent's close involvement with the church, 
its humanitarian assistance efforts and missions and Respondent's 
practice of conducting health fairs for congregants where he screened 
and treated them at no charge. He described Respondent as one of the 
few local physicians fluent in Spanish and that with his ability to 
communicate to Spanish speaking patients and his low fees, Respondent's 
contribution to the Latino community was invaluable. When questioned on 
cross-examination as to the reasons for the fraud convictions, the 
pastor attributed them to the size of Respondent's practice and his 
lack of management skills to ``stay on top of the bookkeeping and 
reports that were made.''
    An assistant plant manager for a local poultry plant, whose 
employees are mostly Latino, testified for Respondent. He described how 
the company sends employees covered by workman's compensation to 
Respondent, which is cost effective and where they receive good medical 
treatment. He would like to send employees covered by the company's 
health insurance to Respondent, but the carrier requires that all 
covered physicians be able to prescribe any requisite medications, 
including controlled substances.
    A reverend who was a missionary to Benin submitted a declaration 
describing Respondent and his wife's humanitarian efforts in Africa 
during 1991 through 1994, where they brought medical supplies and 
treated patients on four two-week trips, which were performed at their 
own expense. These activities were further testified to by a Licensed 
Practical Nurse who had worked for Respondent and accompanied him on 
the humanitarian missions.
    In letters of support, a local doctor who had been the chief of the 
family practice service at the local hospital, described Respondent as 
a compassionate, hard working and competent general practitioner whose 
practice fills ``a necessary niche.''
    Respondent's head nurse between 1985 and 1994 testified she was 
aware of the circumstances behind the convictions and that Respondent, 
Mr. B. and Dr. L. had all prescribed narcotics ``in a careful and 
responsible manner'' and that his registration should be granted.
    Respondent testified that he now has a small practice, where his 
wife works as the receptionist and there is only one nurse. He sees 
about 20 patients per day and very few are covered by insurance. He 
testified that he needs a DEA registration in order to be a provider 
for various insurance plans, but that he had little need to prescribe 
controlled substances. However, he did have some patients suffering 
from pain and without registration, he has to send them to a pain 
clinic which is very expensive for the mostly low income patients. He 
further testified that whenever he calls a prescription into a 
pharmacy, he is asked for a DEA registration number, even when it is 
not a prescription for a controlled substance. Because the local 
pharmacy computer systems use DEA registration numbers for tracking 
purposes, whenever he writes any prescription, the pharmacy has to 
override its program in order to fill a prescription issued by 
Respondent.
    Regarding acceptance of responsibility for his misconduct, 
Respondent testified he is not the same person as before and that he 
had made a number of errors in judgment, including turning management 
of his practice over to other people instead of ``keeping my hand on 
the pulse.`` Asked if he took ``full responsibility for the actions, 
your actions, that led to the indictment and conviction,'' Respondent 
replied, ``Absolutely, I mean, * * * it was plain old outright horrible 
mistakes, and I take full responsibility. That's one thing that the 
prison did teach me, is that I can't pass it off on anyone else. It was 
me.''
    Respondent also noted the conviction on his resume, which he 
prepared in 2001. In it he stated: ``I was convicted of insurance 
fraud. I lost my license to practice medicine. I steadfastly assert my 
innocence, but I readily accept responsibility for what happened. The 
crime occurred in my office under my nose and I did not take 
appropriate steps to correct the situation (emphasis added).''
    Respondent also testified that ``I did not have a criminal intent 
to commit a crime, but I did commit a crime. So I'm guilty. I'm guilty 
of committing a crime. I accept full responsibility for it, and I agree 
with the Government and everything that they did to me. I have no bad 
feelings at all about anything that happened to me (emphasis added).''
    He further testified that the had no intent to build his practice 
like he previously had and that if he received a DEA registration, he 
would treat it as a privilege and not abuse it.
    Pursuant to 21 U.S.C. 823(f), the Deputy Administrator may deny any 
pending applications for renewal of DEA registration, if she determines 
that the continued registration would be inconsistent with the public 
interest. Section 823(f) requires that the following factors be 
considered in determining the public interest:
    (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.

[[Page 69406]]

    (5) Such other conduct which may threaten the public health or 
safety.
    The Controlled Substances Act further specifies in 21 U.S.C. 
824(a), that the Deputy Administer may revoke a DEA Certificate of 
Registration if the registrant:
    (1) has materially falsified any application for a DEA 
registration;
    (2) has been convicted of a felony under Federal or State law 
relating to a controlled substance;
    (3) has had his State license or registration suspended, revoked, 
or denied and is no longer authorized to handle controlled substances 
in the State in which he maintains a DEA registration;
    (4) has committed acts that would render his registration 
inconsistent with the public interest as determined pursuant to 21 
U.S.C. 823(f); or
    (5) has been excluded from participation in a program pursuant to 
42 U.S.C. 1320a-7(a).
    As a theshold matter, Judge Bittner noted that although the grounds 
listed under 21 U.S.C. 824(a) pertain to revocation or suspension of a 
registration, ``[t]he agency has consistently held that the 
Administrator may also apply these bases to the denial of a 
registration, since the law would not require an agency to indulge in 
the useless act of granting a license on one day only to withdraw it 
the next.'' See Kuen H. Chen, M.D., 58 FR 65,401, 65, 402 (1993) 
(citing Sterling Drug Co. and Detroit Prescription Wholesaler, Inc., 40 
FR 11918 (1975).
    Further, the factors specified in section 823(f) 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 she 
deems appropriate in determining whether a registration should be 
revoked or an application for registration See Henry J. Schwartz, Jr., 
M.D., 54 FR 16422 (1989).
    The Administrative Law Judge found three grounds to deny Respondent 
registration under section 824(a). First, pursuant to 21 U.S.C. 
824(a)(1), Judge Bittner found he materially falsified his application 
for registration and rejected Respondent's assertions to the contrary, 
primarily on credibility grounds. DEA has previously held that in 
finding that there has been a material falsification of an application, 
it must be determined that the applicant knew or should have known that 
the response given to the liability question was false. See Merlin E. 
Shuck, D.V.M., 69 FR 22566 (2004); James C. LaJavid, D.M.D., 64 FR 
55962 (1999); Martha Hernandez, M.D., 62 FR 61145 (1997).
    The Deputy Administrator agrees with Judge Bittner's finding, made 
after observing Respondent's demeanor, that, ``In the instant case, and 
contrary to Respondent's assertions, I do not find that his 
misstatements were unintentional. Although Respondent did not sign the 
Agreed Order, he did sign the DEA form surrendering his previous 
Certificate of Registration and I do not credit his testimony that he 
did not know he had done so. I therefore find that Respondent 
materially falsified his application for registration and that under 21 
U.S.C. 824(a)(1) this conduct is grounds to deny his application.''
    Respondent was also convicted of a felony relating to controlled 
substances and the Deputy Administrator agrees with Judge Bittner's 
conclusion that Respondent's convictions for mail fraud and 
racketeering were based, in part, on his conduct in providing 
controlled substances to patients who were abusing them, so that those 
patients would acquiesce to unnecessary diagnostic tests. While 
Respondent denied this activity at the hearing, it is a long standing 
principle that facts established by criminal convictions are res 
judicata and cannot be relitigated in a DEA administrative forum. See, 
e.g., Robert A. Leslie, M.D., 64 FR 25908-25910 (1999); Shahid M. 
Siddiqui, M.D., 61 FR 14818 (1996). Respondent's convictions constitute 
grounds for denying the application under 21 U.S.C. 824(a)(2).
    The Deputy Administrator further agrees that Respondent has been 
excluded by the United States Department of Health and Human Services 
from participating in Medicare, Medicaid and Maternal and Child Health 
Services Block Grants to States for Social Services programs for a 
period of fifteen years. This constitutes an independent ground for 
denying the application under 21 U.S.C. 824(a)(5).
    The Deputy Administrator further finds, in agreement with Judge 
Bittner, that under 21 U.S.C. 823(f), granting Respondent's application 
would not be in the public interest.
    As to factor one, the recommendation of the appropriate state 
licensing board or professional disciplinary authority, the Deputy 
Administrator finds that Respondent has regained his license to 
practice osteopathic medicine in Tennessee and this weighs in favor of 
registration. However, as noted by Judge Bittner, inasmuch as State 
licensure is a necessary but not sufficient condition for DEA 
registration, this factor is not determinative. See Edson W. Redard, 
M.D., 65 FR 30616, 30619 (2000); James C. LaJevic, D.M.D., 64 FR 55962, 
55964 (1999).
    As to factor two, the Administrative Law Judge noted that despite 
Respondent's assertions that he always properly handled substances, he 
was convicted of charges that he provided controlled substances to drug 
abusers because those persons were willing to undergo unnecessary 
diagnostic tests if they received the drugs they wanted. Additionally, 
Respondent permitted his physician assistant to provide controlled 
substances to patients prior to the effective date of legislation 
permitting such activity. The Deputy Administrator agrees with Judge 
Bittner that his factor weighs in favor of a finding that Respondent's 
registration would not be in the public interest.
    As to factor four, his compliance with applicable laws relating to 
controlled substances, his unauthorized utilization of a physician 
assistant to provide controlled substances and his provision of 
controlled substances to drug abusing patients so they would submit to 
unnecessary medical tests, violated laws relating to controlled 
substances. The Deputy Administrator also agrees with Judge Bittner 
that this factor weighs against registration.
    As to other conduct that may threaten the public health and safety, 
the Administrative Law Judge found that Respondent's felony convictions 
for racketeering and mail fraud fall within this factor. The Deputy 
Administrator also agrees that the jury in Respondent's criminal case 
found that as a part of the racketeering scheme, Boulevard Center 
patients were given injections of drugs based on the abundance of the 
drug at the clinic, rather than medical necessity and that some 
injectable medications were diluted below their therapeutic dosages. 
The Deputy Administrator agrees that this factor also weighs in favor 
of denying registration.
    The Administrative Law Judge concluded that the record established 
grounds to deny the application for registration. However, as Judge 
Bittner notes in her Opinion and Recommended Ruling, the governing 
statute is discretionary. See Mary Thomson, M.D. 65 FR 75969 (2000). In 
exercising her discretion in determining the appropriate remedy in any 
given case, the Deputy Administrator should consider all the facts and 
circumstances of the case. See Martha Hernandez, M.D., 62 FR 61145 
(1997).
    In recommending against Respondent's application, Judge Bittner 
took particular note that,

As discussed above, Respondent claims that he has taken ``full 
responsibility'' for the actions that led to his convictions. This 
assertion is, however, belied by the evidence. For example, and as 
also noted above,

[[Page 69407]]

Respondent denied that he engaged in some of the conduct for which 
he was convicted, including providing addictive medications to 
patients who abused them, and also testified that he felt that the 
patients needed the diagnostic examinations he ordered for them. I 
also note that in his resume Respondent ``steadfastly assert[s]'' 
his innocence, and that he testified that although he was guilty, he 
had no ``criminal intent to commit a crime.''

    Based on the record, Judge Bittner could not ``find that Respondent 
recognizes his own misconduct, or that he is yet in a position to 
accept the responsibilities inherent in a DEA registration.'' She 
therefore concluded that granting Respondent's application for DEA 
registration would not be consistent with the public interest and 
recommended that the application be denied. The Deputy Administrator 
agrees.
    Respondent filed exceptions to the Opinion and Recommended Ruling. 
First, he asserted the ruling was arbitrary and capricious in 
comparison to prior decisions in which grants of restricted 
registration were recommended by the Administrative Law Judge and 
approved by the agency. However the facts and circumstances of the five 
cases cited by Respondent are distinguishable from the facts and 
circumstances of this matter. See, Mark Binette, M.D., 64 FR 42977 
(1999); Michael Alan Patterson, M.D., 65 FR 5682; Robert M. Golden, 
M.D., 65 FR 5663; Nick M. Higgins, D.D.S., 54 FR 53388 (1989); Jane W. 
Wuchinich, M.D., 56 FR 4081 (1991).
    As opposed to several cases cited by Respondent, he engaged in his 
criminal misconduct for pecuniary gain, not because he suffered from an 
addiction or dependency which was later demonstrated to have been 
successfully mitigated by rehabilitation, therapy or careful 
monitoring. While neither is desirable, depending on the facts, greed 
can be viewed as a more serious personal motivator for criminal 
activity than addiction or dependency. Respondent's reasons for 
violating the law and risking reputation and his growing livelihood 
also reflect a cavalier attitude toward his responsibilities as a 
physician and DEA registrant.
    As opposed to other cases relied upon by Respondent, he has also 
failed to adequately acknowledge personal responsibility for the 
actions leading to his convictions and lengthy prison sentence. He also 
knowingly made material misrepresentations on his DEA application and 
was excluded from participating in Federal health care programs for 15 
years, both of which are additional independent grounds for denying 
registration.
    Finally, DEA has previously revoked registrants for actions and on 
grounds comparable to Respondent's. See, Johnnie Melvin Turner, M.D., 
67 FR 71203 (2002) (revocation based on exclusion from Medicare program 
after Federal fraud conviction); Stanley Dubin, D.D.S., 61 FR 60727 
(1996) (revocation for exclusion from Federal health programs after 
State fraud conviction).
    In sum, the facts of this matter are unique and the cases cited by 
Respondent simply do not demonstrate that the recommended action is a 
departure from agency practice and policy or was rendered either 
arbitrarily or capriciously.
    Respondent also contends in numerous exceptions that the 
Administrative Law Judge's ruling ``failed to take into account'' or 
``ignores'' or ``disregards'' or ``erroneously discounted'' or ``failed 
to credit'' or ``refused to consider'' or ``placed improper emphasis'' 
on certain evidence in reaching her findings and recommendations. These 
include: Respondent's degree of contrition and acceptance of 
responsibility; the opinions of several witnesses as to Respondent's 
prescribing activities; his monitoring of the physician assistant at 
the secondary clinic; his post-incarceration medical education; his 
value to the local, humanitarian efforts and opinions of charter 
witnesses; his professed intended limited use of the registration were 
it to be granted; the nature of his current and intended medical 
practice; and the adverse impact denying registration will have upon 
Respondent and his practice.
    The Opinion and Recommended Ruling clearly demonstrates that the 
Administrative Law Judge admitted and carefully considered Respondent's 
evidence on all of the foregoing issues. While Respondent would prefer 
Judge Bittner arrived at a different outcome, his objectives are really 
just a re-argument as to the weight which should be assigned certain 
testimony and documentary evidence introduced during the hearing and 
the credibility which the fact finder should give Respondent's 
explanations for his misrepresentations, the extent and sincerity of 
his remorse and his acceptance of personal responsibility. Given the 
record supporting Judge Bittner's conclusions, these arguments are 
insufficient to alter the outcome.
    Finally, in the letter received by the Deputy Administrator after 
the Opinion and Recommended Ruling was transmitted to this office by 
Judge Bittner, Respondent notes recent changes in TennCare Products 
which will have the effect of limiting his ability to prescribe even 
non-controlled substances for TennCare patients, should DEA 
registration be denied. He submits this ``hardship could neither have 
been intended, nor anticipated by Judge Bittner's Report.''
    However, while this particular consequence was not addressed at the 
hearing, when Judge Bittner recommended denial she was well aware of 
the multiple hardships befalling any physician denied DEA registration. 
She was also aware of numerous specific hardships that would impact 
Respondent and practice, were the application denied. Nevertheless, 
these consequences were insufficient for Judge Bittner to warrant 
recommending the application be granted and the Deputy Administrator 
does not consider the additional information on adverse collateral 
consequences sufficient to alter the conclusion that registration would 
not be in the public interest.
    The Deputy Administrator has examined the record and finds that the 
facts and credibility determinations of Judge Bittner are well 
supported by the evidence. Respondent materially falsified his 
application for DEA registration and has been excluded from 
participating in Federal health care programs for fifteen years, both 
of which constitute independent grounds for denying registration. It 
has also been sufficiently established that Respondent's registration 
would not be in the public's interest.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in her by 21 U.S.C. 
823 and 28 CFR 0.100(b), and 0.104, hereby orders the Respondent's 
pending application for registration be, and it hereby is, denied. This 
order is effective December 29, 2004.

    Dated: November 10, 2004.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 04-26310 Filed 11-26-04; 8:45 am]
BILLING CODE 4410-09-M