[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Notices]
[Pages 35705-35710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9706]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 02-47]


John H. Kennnedy, M.D.; Denial of Application; Introduction and 
Procedural History

    On May 31, 2002, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to John H. Kennedy, M.D. (Respondent). The Show 
Cause Order proposed to deny Respondent's pending application for a 
registration as a practitioner on the grounds that Respondent had been 
convicted of a drug-related felony, see 21 U.S.C. 823(f)(3) & 
824(a)(2), and had committed other acts such as to render his 
registration inconsistent with the public interest. See id. Sec.  
824(a)(4).
    The Show Cause Order specifically alleged that on September 14, 
1999, Respondent was indicted in the United States District Court for 
the Eastern District of Tennessee on five counts alleging the unlawful 
distribution of a controlled substance, see id. Sec.  841(a)(1),\1\ and 
one count alleging the unlawful possession of marijuana. See id. Sec.  
844. The Order alleged that on March 6, 2000, Respondent pled guilty to 
one count of the unlawful distribution of diazepam, in violation of 21 
U.S.C. 841(b)(1)(D), and one count of possession of marijuana, in 
violation of 21 U.S.C. 844. The Order further alleged that on June 19, 
2000, the District Court accepted Respondent's guilty pleas and 
sentenced him to twelve months of home detention and five years of 
probation. The terms of the probation prohibited Respondent from 
employment as a physician and from dispensing prescription drugs 
without the permission of his probation officer.
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    \1\ Three of the counts alleged the unlawful distribution of 
dihyrdocodeine; two of the counts alleged the unlawful distribution 
of diazepam.
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    While the Federal criminal case was ongoing, Respondent was also 
the subject of state administrative proceedings. On May 9, 2000, 
Respondent entered into a consent order with the Tennessee Board of 
Medical Examiners (Board) which revoked his state medical license. The 
Board found that Respondent had committed unprofessional, dishonorable 
and unethical conduct. The Board also found that Respondent had 
dispensed, prescribed or otherwise distributed controlled substances in 
violation of state or Federal law. On June 15, 2000, Respondent also 
voluntarily surrendered his DEA Registration, No. AK7140736.
    Thereafter, Respondent reapplied for his state medical license. On 
July 31, 2001, the Board approved his application.
    On August 16, 2001, Respondent applied for a new DEA practitioner's 
registration to handle controlled substances in Schedules II through V. 
Following an investigation, DEA denied the application and issued the 
Show Cause Order.
    Respondent requested a hearing. The matter was assigned to 
Administrative Law Judge (ALJ) Mary Ellen Bittner, who conducted a 
hearing in Chattanooga, Tennessee on April 1 and 2, 2003. At the 
hearing, both the Government and Respondent called witnesses and 
introduced documentary evidence. Both parties filed post-hearing 
briefs. Respondent also filed a letter forwarding the Tennessee Board 
of Medical Examiners' Order of Compliance, which restored his state 
license to unencumbered status.
    On April 13, 2005, the ALJ submitted her decision. The ALJ 
concluded that the Government had shown by a preponderance of the 
evidence that granting Respondent's application for registration would 
be inconsistent with the public interest. See ALJ at 18. The ALJ thus 
recommended that Respondent's application be denied. See id. Neither 
party filed exceptions.
    Having considered the record as a whole, I hereby issue this 
decision and final order adopting the ALJ's findings of fact and 
conclusions of law except as expressly noted herein. For the reasons 
set forth below, I concur with the ALJ's conclusion that granting 
Respondent's application for a registration would be inconsistent with 
the public interest. I therefore adopt the ALJ's recommendation that 
Respondent's pending application be denied.

Findings of Fact

    Respondent graduated from the University of Tennessee in 1963. 
Before entering the University of Louisville School of Medicine, 
Respondent served in the U.S. Navy and also was a sales representative 
for the Upjohn Company for a period of seven years.
    In 1975, Respondent graduated from medical school and served a one-
year internship at Erlanger Hospital in Chattanooga, Tennessee. 
Following his internship, Respondent entered into a family practice, 
sharing office space with another physician for a period of seven 
years. In 1983, Respondent moved his practice to North Park Hospital in 
Chattanooga and maintained that practice as of the date of the hearing.
    Sometime in 1997, the Hamilton County Sheriff's Office received 
information from an informant implicating a Ms. Beth Harvey in the 
unlawful sale of Valium (Diazepam), a Schedule IV controlled substance. 
Mr. Jeffrey Parton, a detective with the Hamilton County Narcotics 
Division, conducted several interviews of Ms. Harvey. Ms. Harvey told 
Detective Parton that she had become a patient of Respondent based on 
the advice of friends who had told her that he was a good doctor to see 
to obtain diet drugs. Ms. Harvey also told Detective Parton that 
Respondent would provide her with pain medication without conducting a 
physical exam and that she could buy hydrocodone samples from him. Tr. 
32-33.
    Sometime between October 28 and November 10, 1997, the Narcotics 
Division executed a search warrant at Harvey's residence. During the 
search, the police found a 1000-count bottle of Valium. Most of the 
pills were missing. Harvey returned to her residence during the search 
and was questioned by the police about the Valium's source. Harvey told 
the police that she had obtained the drugs from Respondent on October 
28th, and that she was to sell it on the street and return a portion of 
the profits to him.
    Thereafter, Harvey agreed to cooperate with the police in their 
investigation of Respondent. Between

[[Page 35706]]

November 10, 1997, and January 8, 1998, Harvey visited Respondent's 
office on five occasions; Harvey also had a phone conversation with 
Respondent on December 2, 1997. During these events, Harvey wore a wire 
to record the conversations. While the wire did not work during the 
November 10, 1997 visit, and the tape of the December 18, 1997 visit 
was lost, the other conversations were recorded and transcribed. While 
Harvey did not testify at the hearing, the transcripts were admitted 
into evidence. Following each episode, the police also debriefed 
Harvey.

1. Harvey's Undercover Activities

A. The November 10, 1997 Visit
    According to Detective Parton, Harvey visited Respondent's office 
on November 10, 1997. Harvey paid Respondent $100, which she 
represented to him as his share of the profits from the Valium sales. 
Harvey also paid Respondent $40 for a sample bottle of Lortab and two 
sample boxes of Vicoprofen. Both of these drugs contain Hydrocodone, a 
Schedule III controlled substance. Parton testified that Harvey told 
him during the debriefing that Respondent did not perform a physical 
examination. Moreover, Harvey's patient record, which was also admitted 
into evidence, contains no indication that Respondent dispensed the 
Lortab and Vicoprofen to her on this date. Gov. Exh. 17. On cross-
examination, Respondent claimed that he had given the drugs to Harvey 
because of her complaints about headaches, but no such diagnosis was 
recorded on the progress notes. Id.
B. The November 19, 1997 Visit
    During this visit, Harvey told Respondent that she had sold 150 
Valium pills and paid him an additional $ 100 as purported profits from 
the sales.\2\ Harvey then told Respondent that she needed more pills 
because she did not want her husband to discover that some of the 
Valium was missing. Respondent, after telling Harvey that ``I don't 
want to get in deeper, you know,'' Gov. Exh. 3a at 12, then agreed to 
order another bottle of Valium and advised Harvey that it would take 
about a week for the drugs to be delivered. Respondent also gave Harvey 
42 Lortab tablets. Respondent did not perform a physical exam and there 
was no therapeutic purpose for the dispensing. Furthermore, Harvey's 
progress notes contain no record of the visit.
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    \2\ The ALJ found that Harvey paid Respondent $150 during the 
November 19, 1997 visit. See ALJ at 5. The transcript of the 
conversation between Harvey and Respondent indicates that Harvey 
only counted out money up to the amount of $100. See Gov. Exh. 3a at 
12. While I therefore make my own finding, it is immaterial to the 
disposition of this proceeding whether the amount was $100 or $150.
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C. The December 2, 1997 Phone Conversation
    During this conversation, Harvey asked Respondent whether the 
Valium had arrived. Respondent told her that it had not, but that she 
could pick it up at his office the following Tuesday, December 9, 1997.
D. The December 9, 1997 Visit
    During this visit, Respondent gave Harvey a sealed 1,000 count 
bottle of diazepam, a size which manufacturers use to send the drug to 
pharmacies. Harvey also paid Respondent $100, which she represented to 
him as his share of the profits from the Valium sales. During the 
conversation, Harvey told Respondent that she had sold one hundred 
more. Respondent then asked Harvey if ``nothing else has come out'' of 
her husband. Gov. Exh.3(C), at 32. Harvey answered ``No,'' but then 
added that she was ``hoping [that] he ain't going to say nothing about 
me digging in it.'' Id. After counting out Respondent's share of the 
profits, Harvey told him that she probably had more sold, and then 
asked ``do you want me to take all of these to replace'' the missing 
drugs? Id. Respondent answered: ``No, no, sell them. Hell, medicine is 
to sell not to take.'' Id. Respondent then instructed Harvey: ``[D]on't 
let anybody know where any of this stuff is coming from.'' Id. at 33.
    Harvey then asked Respondent whether he had any pain pills. 
Respondent told her he had only four pain pills, but that he had 1,000 
Xanax. Respondent then asked Harvey if she knew ``anybody that takes 
Xanax?'' Id. at 34. While Harvey offered to sell them for Respondent, 
Respondent replied that he didn't want her with ``two bottles, two 
thousand'' pills. Id. He then asked Harvey to ``[l]ine me up somebody 
that can do it.'' Id. at 35. Harvey agreed to do so.
E. The December 18, 1997 Visit
    On this date, Harvey returned to Respondent's office and paid him 
$130, which she again represented as being his share of the profits on 
the Valium sales. Respondent gave Harvey twelve Zydone, a drug which 
also contains hydrocodone. Harvey did not request the drug, and told 
Detective Parton that Respondent did not perform a physical exam. 
Respondent made no record of the visit on Harvey's progress notes.\3\ 
See Gov. Exh. 14.
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    \3\ The progress notes do, however, contain a record of a visit 
on December 22, 1997, which shows a dispensing of 30 Lortab tablets.
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F. The January 8, 1998 Visit
    On this date, Harvey returned to Respondent's office. Harvey 
attempted to pay Respondent $100, which she again represented as his 
share of the proceeds from the Valium sales. At first, Respondent 
refused the money as he had apparently received a tip about Harvey. Tr. 
276. Respondent then asked Harvey whether she had recently called in a 
prescription for a cough syrup containing hydrocodone to a local 
pharmacy. Harvey denied doing so, asking Respondent ``why would I call 
prescriptions in when I can, hell, you give me everything I want?'' 
Gov. Exh. 3(E) at 5. Respondent then stated: ``That's what I thought 
too. But you know that through the years, you know, everything you ever 
needed or wanted, I've tried to take care of you.'' Id. Respondent 
eventually accepted $100 from Harvey.

2. The Searches

    Shortly after Harvey's visit, Detective Parton and other officers 
from the Hamilton County Sheriff's Office, executed a search warrant at 
both Respondent's home and office. Mr. Pink Anderson, a DEA Diversion 
Investigator (DI), assisted with the office search.
    At the office, the authorities seized samples of legal controlled 
substances, marijuana, two empty bottles of Quaalude 300 (a drug which 
was rescheduled to Schedule I effective August 27, 1984, see 49 FR 
33870 (1984)), one bottle which contained two Quaalude 300 pills, a 
1000 count bottle of alprazolam (Xanax) which contained 958 pills, a 
cocaine kit consisting of a mirror, razor blades and straw, two 
receipts from Access Drugs (a local drug distributor), various patient 
files, and $100, which was in the same denominations as the cash that 
Harvey had earlier given Respondent.
    At Respondent's home, the authorities seized 60 grams of marijuana, 
a bottle containing marijuana seeds, one hand-rolled marijuana 
cigarette, several remnants of marijuana cigarettes, and assorted 
marijuana paraphernalia including a metal tray, a bong, two pipes with 
residue, rolling papers, and a briefcase which held similar items. The 
authorities also seized a bottle containing 21 Quaalude 300 pills, a 
bottle containing 52 Quaalude 300 pills, seven empty Quaalude 300 
bottles and one empty Quaalude 150 bottle. Also

[[Page 35707]]

seized were samples of Norco, a hydrocodone-based product, 13 empty 
bottles of pharmaceutical-grade cocaine hydrochloride, and one empty 
bottle that had contained tetrahydrocannabinol (THC). Respondent's home 
was not a registered location.
    According to DI Anderson, the only records discovered during the 
search of Respondent's office were the two receipts from Access Drugs. 
With this exception, Respondent had no records of inventories, receipts 
or the distribution of controlled substances. DI Anderson testified 
that although Respondent was not charged, he also violated 21 U.S.C. 
843(a)(4)(a), because he failed to keep, make or maintain required 
records. See Tr. 217. Respondent testified that he had not known that 
he was required to keep receipts and that he had told his office staff 
that they didn't need to save them.
    DI Anderson also conducted the investigation of Respondent's 
application for a new DEA registration. As part of the investigation, 
DI Anderson interviewed Respondent regarding his guilty pleas in the 
Federal criminal proceeding. Respondent told Anderson that he had pled 
guilty because a government witness was going to give false testimony 
against him. Tr. 231.

Respondent's Testimony

A. Respondent's Prior Use of Controlled Substances
    Respondent testified at the hearing. Respondent stated that he had 
smoked marijuana occasionally while attending college and medical 
school and admitted to further use during his initial years as a 
physician from 1976 to 1979. Respondent claimed that he ``rarely'' 
purchased marijuana and that most of the marijuana was donated to him. 
Tr. 439. When questioned as to how patients had become aware that 
Respondent would accept these ``donations,'' Respondent testified that 
his patients ``bring wild parsley. They bring a dozen * * * brown eggs. 
They bring apples. I have patients that will bring apple pies, pecan 
pies.'' Id. at 468. Respondent denied that his patients gave him 
marijuana as payment and testified that they were ``[j]ust grateful 
patients in various ways.'' Id. Respondent further testified that he 
had stopped using marijuana in 1979, but that he had continued to 
accept marijuana donations from his patients, which he then gave to his 
oldest daughter. Id. at 472-473.
    Respondent also testified that he took Quaaludes from 1977 to 1979 
as a prescribed treatment for insomnia. Respondent testified that he 
took all of the Quaaludes that were prescribed to him and denied 
sharing them with other patients. Id. at 437-38. As for the Quaaludes 
seized during the search, Respondent testified that they had ``expired 
by [1986 or 1987], and have been in that bag since that time. I can 
assure you that I didn't know they were in there or they would have 
been put to use.'' Id. at 279.
    Initially, Respondent denied using cocaine during the 1976-1983 
time period. Id. at 437. Later, on cross-examination, Respondent 
admitted to having used cocaine ``[o]n one or two rare occasions'' 
during the 1976-1983 time period, and then testified to having used 
cocaine a ``[h]alf a dozen'' times during the period.Id. at 475. 
Respondent subsequently testified that the empty bottles of cocaine 
hydrochloride that were seized in the search were provided to him by 
several pharmacies and that he kept them because he collects old 
medical supplies. Id. at 513. Relatedly, Respondent similarly claimed 
that some of the Quaaludes ``was a relic of old-timey medicine,'' which 
``was given to me by a pharmacist'' for his bottle collection. Id. at 
515-18.
    The Government then turned to the 1983 to 2000 time period, during 
which Respondent maintained his practice at North Park Hospital. Here 
again, Respondent initially denied using controlled substances. Id. at 
478. Respondent, however, then admitted to marijuana use ``[o]n rare 
occasions. Off duty. Out of town.'' Id. Respondent testified that he 
received the marijuana from patients and friends. Id. at 481. The ALJ 
further found that Respondent had smoked marijuana with his office 
staff one afternoon after work. As for the marijuana seized during the 
search of Respondent's office and residence, Respondent testified that 
it was ``[f]or occasional personal use when very tired and needing to 
relax.'' Id. at 343.
B. The Criminal Investigation and Guilty Plea
    On direct examination, Respondent testified that he had never 
illegally given controlled substances to any of the persons referenced 
in the search warrant affidavit, which had listed Beth Harvey. Id. at 
263. He further testified on direct that he only prescribed controlled 
substances for legitimate medical reasons and this was reflected in 
patient records. Id. at 263-64. He further asserted that Harvey had 
sought treatment for ``frequent headaches and anxiety attacks,'' id. at 
270, and that he had prescribed hydrocodone products to treat her 
headaches.\4\ Id. at 501; 535. Respondent denied that he had sold 
hydrocodone to Harvey and asserted that the money he had received from 
her was payment for the services he provided in treating her. Id. at 
502-03.
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    \4\ The record indicates that Respondent also gave Harvey 
hormone replacement shots. Tr. at 271. It is undisputed that the 
shots were given for a legitimate medical reason.
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    Respondent further denied that he entered into the arrangement with 
Harvey to sell diazepam and receive a share of the profits. Id. at 504-
05. Instead, he asserted that the scheme was just ``Beth Harvey 
talking.'' Id. at 505. While Respondent admitted that on October 28, 
1997, he had given Harvey a one-thousand count Valium bottle, which 
then contained ``about 250 or 300 out of date diazepam'' pills, he 
maintained that he did so ``for her to use for her anxiety and 
nerves.'' Id. at 530.\5\ Respondent further testified that he was 
unaware that Harvey was selling the Valium until the police searched 
his office on January 8, 1998. Id. at 541. When specifically asked by 
the Government whether Harvey ``all along was telling you that she was 
reselling the drugs,'' Respondent answered: ``No, it's not a fact. At 
that point, I should have known that that was the case, but I didn't.'' 
Id. at 542.
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    \5\ The ALJ also found that ``Respondent denied providing Lortab 
to Beth Harvey, instead testifying that she `helped herself in my 
drawer before I started locking it up.' '' ALJ at 11 (quoting Tr. at 
506). The cited testimony, however, refers to whether Respondent 
provided Lortab to one of his employees, Sherry Millard. I thus do 
not accept this finding.
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    With respect to his guilty plea, Respondent testified that he was 
``a hundred percent guilty.'' Id. at 273. Respondent acknowledged, 
however, his statement to DI Anderson that he had pled guilty because 
he expected ``false testimony against me,'' and that he feared that he 
could have been sent to prison. Id. at 342. Respondent then testified 
that he was not attempting to deny his guilt.
    Respondent further testified that following his arrest, he had not 
used marijuana. Moreover, Respondent had entered into a program run by 
the Tennessee Medical Foundation that helps physicians address drug and 
alcohol dependency. Respondent has also been subjected to random drug 
tests and passed each one. He has also attended 200 hours of continuing 
medical education and a three-day course at Vanderbilt University on 
the prescribing and record keeping of controlled substances.

[[Page 35708]]

Respondent's Character Evidence

    At the hearing, Respondent produced four character witnesses. The 
first, Stan Lanzo, was a former state prosecutor who had known 
Respondent for twenty-five years. Mr. Lanzo acknowledged, however, that 
Respondent was ``[n]ot a real close friend,'' id. at 366, that he 
probably had ``said ten words to him in the last five years,'' id. at 
373, and was not aware of Respondent's illegal conduct prior to his 
guilty plea. Id. at 375-76.
    Larry Young, another former state prosecutor also testified for 
Respondent. Mr. Young testified that he and Respondent ``were casual 
friends,'' id. at 430, and that he was unaware of the specific facts 
pertaining to Respondent's illegal distribution and his self-abuse of 
controlled substances. Id. at 430-31.
    Walter Puckett, M.D., testified that he had known Respondent from 
the time when the latter worked as a pharmaceutical sales 
representative and had encouraged Respondent to go to medical school. 
Dr. Puckett further testified that he had not maintained a social 
relationship with Respondent and did not know the specifics of 
Respondent's guilty plea.
    Timothy Davis, M.D., the regional area monitoring physician for the 
Tennessee Medical Foundation, also testified on Respondent's behalf. 
Dr. Davis testified that Respondent had entered into a contract to 
attend weekly support group meetings, that he attended eighty-five 
percent of the meetings, and that Respondent informed him when he could 
not make a meeting. On cross-examination, Dr. Davis testified that he 
did not ``have any particular knowledge of the [criminal] offenses,'' 
id. at 459, and that Respondent had not brought up the subject of his 
illegal distribution of controlled substances at the support group 
meetings. Id. at 462.\6\
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    \6\ Respondent also submitted numerous letters of support from 
patients.
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Discussion

    The Controlled Substances Act provides that an application for a 
practitioner's registration may be denied upon a determination ``that 
the issuance of such registration would be inconsistent with the public 
interest.'' 21 U.S.C. 823(f). In making the public interest 
determination, the Act requires the consideration of the following 
factors:
    (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 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 and 
safety. Id.
    ``[T]hese factors are * * * considered in the disjunctive.'' Robert 
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or 
combination of factors, and may give each factor the weight [I] deem[] 
appropriate in determining whether * * * an application for 
registration [should be] denied.'' Id. In this matter, I have carefully 
considered Respondent's evidence concerning his rehabilitation. But as 
explained below, having reviewed the evidence I reach the same 
conclusion the ALJ did--that Respondent still does not accept 
responsibility for his criminal conduct and cannot be entrusted to 
properly comply with the requirements of Federal law.

Factor One--The Recommendation of the State Licensing Board

    I acknowledge that the Tennessee Board of Medical Examiners has 
restored Respondent's state license to unencumbered status. It is well 
established, however, that a ``state license is a necessary, but not 
sufficient condition for registration,'' and thus this factor is not 
dispositive. Id. Indeed, in light of the evidence adduced at the 
hearing, and in particular Respondent's disingenuous testimony on 
several issues (which will be discussed below), I decline to give this 
factor any weight at all.

Factor Two--Respondent's Experience in Handling Controlled Substances

    Respondent's experience in handling controlled substances can only 
be described as abysmal. Among other things, the record shows that 
Respondent illegally possessed both marijuana and Quaaludes 
(methaqualone), two Schedule I controlled substances. Even were I to 
give Respondent the benefit of the doubt and find that he had obtained 
some of the Quaaludes pursuant to a lawful prescription, the drugs had 
been banned in 1984, more than thirteen years earlier. Moreover, were I 
to credit Respondent's explanation that he had accepted some of the 
Quaaludes for his bottle collection--an assertion about which the ALJ 
made no credibility finding--Respondent still violated federal law. One 
would think that at some point contemporaneous with DEA's rescheduling 
of the drug--preferably no later than the date by which all stocks were 
required to be surrendered, see 49 FR 33870 (1984)--Respondent would 
have properly disposed of these drugs, which were then determined to 
have no legitimate medical use.
    The record further indicates that Respondent provided controlled 
substances to Harvey for no legitimate medical purpose on multiple 
occasions. Respondent distributed large amounts of diazepam, a Schedule 
IV controlled substance, to Harvey on two occasions. On the first, 
October 28, 1997, Respondent gave Harvey 250 to 300 diazepam pills. 
While Respondent testified that this distribution was ``for her to use 
for her anxiety and nerves,'' the ALJ did not make a credibility 
finding regarding this testimony. Based on the fact that Respondent 
made no record of the dispensing, the testimony of Detective Parton 
that Harvey told him that she was to sell the drugs and return a 
portion of the profits to Respondent, and Respondent's acceptance of 
several cash payments from Harvey as his share of the profits, I 
conclude that there was no legitimate medical reason for the dispensing 
and that Respondent's testimony was a fabrication.
    On the second occasion, December 9, 1997, Respondent gave Harvey a 
sealed 1,000 count bottle of diazepam, with the intent that Harvey sell 
the drugs and return a share of the profits to him. Respondent pled 
guilty to this count of the indictment and admitted in his post-hearing 
brief that there was ``no legitimate medical purpose'' for the 
dispensing. Respondent's Proposed Findings, at 23.
    Respondent also provided Harvey with Lortab, Vicoprofen, and 
Zydone, products which contain Hydrocodone, a Schedule III controlled 
substance on three separate dates (November 10, November 19, and 
December 18, 1997). While Respondent testified that he did so to treat 
Harvey's headaches, the progress notes again contain no indication of 
either a diagnosis or dispensing on any of these dates. Indeed, the 
progress notes do not even indicate that Harvey saw Respondent on these 
dates. Moreover, the evidence indicates that on at least one occasion, 
the November 10, 1997 visit, Harvey paid Respondent for the drug. I 
thus conclude that there was no legitimate medical reason for each of 
these dispensings.
    Finally, I note that Respondent committed numerous other violations 
of the CSA. The record establishes that Respondent failed to keep 
records of the receipt and dispensing of controlled

[[Page 35709]]

substances, including invoices for the receipt of controlled 
substances, a biennial inventory, and a dispensing log. See 21 CFR part 
1304. Finally, Respondent kept controlled substances at his home, which 
was not a registered location. Id. Sec.  1301.12.
    Respondent testified that he first became aware of the record 
keeping requirements on January 8, 1998, during the search of his 
office. Tr. 488. At that point, Respondent had been a practicing 
physician for more than twenty years. Not only is ignorance of the law 
no excuse, but someone possessing the considerable intelligence 
required to become a physician ought to have some inkling that 
compliance with the CSA involves more than just paying a fee and 
obtaining a registration. Indeed, that the CSA imposes on practitioners 
a variety of recordkeeping, prescribing and security requirements 
should be obvious to every applicant for a registration.
    For all of the reasons set forth above, I find that factor two 
provides substantial support for the conclusion that granting 
Respondent's application would be inconsistent with the public 
interest.

Factor Three--Respondent's Conviction Record Relating to Controlled 
Substances

    The record establishes that Respondent has been convicted of two 
violations of the CSA. Specifically, Respondent plead guilty to the 
unlawful distribution of diazepam, in violation of 21 U.S.C. 
841(b)(1)(D), and the unlawful possession of marijuana, in violation of 
21 U.S.C. 844. This factor thus supports a finding that granting 
Respondent's application would be inconsistent with the public 
interest.

Factor Four--Respondent's Compliance With Applicable State and Federal 
Controlled Substances Laws

    I incorporate the discussion above under factor two with respect to 
Respondent's unlawful activities in distributing controlled substances, 
as well as his failure to maintain required records. He also kept 
controlled substances at his home, a non-registered location. Cf. 21 
CFR 1301.12.
    I also note that Respondent admitted to past use of both marijuana 
and cocaine, and that the police found marijuana during the searches of 
both Respondent's office and home. Furthermore, during the search of 
Respondent's home, the police found marijuana paraphernalia including a 
metal tray, a bong, two pipes with residue, and rolling papers. 
Moreover, during the search of Respondent's office, the police found a 
cocaine kit consisting of a mirror, razorblades, and straw. 
Respondent's possession of drug-related paraphernalia at the time of 
the search suggests that Respondent continued his use of these drugs 
beyond the period which he admitted to. The record thus contains 
substantial evidence establishing numerous instances in which 
Respondent failed to comply with applicable laws. This factor thus 
supports a finding that granting Respondent's application would be 
inconsistent with the public interest.

Factor Five--Other Conduct That May Threaten Public Health and Safety

    Under DEA precedents, an applicant's acceptance of responsibility 
for his prior misconduct is a highly relevant consideration under this 
factor. See Barry H. Brooks, 66 FR 18305, 18309 (2001); Prince George 
Daniels, D.D.S., 60 FR 62884, 62887 (1995); Carmel Ben-Eliezer, M.D., 
58 FR 65400, 65401 (1993). As the ALJ observed, there were a number of 
material inconsistencies in Respondent's testimony regarding his prior 
drug abuse, specifically his use of cocaine. Respondent initially 
denied using cocaine during the 1976 to 1983 period, Tr. at 437, then 
admitted using it on ``one or two rare occasions,'' and then changed 
his story again, acknowledging that he used it a ``half a dozen'' times 
during that period. Id. at 475. While Respondent denied cocaine usage 
following this period, I am perplexed as to why Respondent would have 
in his possession the paraphernalia used to snort cocaine fifteen years 
after he supposedly stopped using the drug, or why he would have 13 
empty bottles of pharmaceutical grade cocaine at his residence. Surely 
one or two empty bottles would have sufficed for his collection.
    Respondent also testified that he obtained marijuana from 
``grateful patients'' as ``donations.'' Id. at 468. It is strange that 
some patients brought Respondent eggs, or apples or pies, while others 
knew enough to bring him marijuana. Indeed, in light of the fact that 
possession of marijuana is a criminal offense, it is odd that a DEA 
registrant would accept such a ``donation,'' even if he did not intend 
to personally use it, but instead, give it to his oldest daughter.
    In concluding that Respondent refuses to accept responsibility for 
his conduct, I find particularly significant his testimony regarding 
the various distributions of controlled substances to Harvey during the 
1997-1998 time period. While Respondent admitted that the December 9, 
1997, distribution of diazepam was a criminal act, he testified that 
the other distributions of diazepam and hydrocodone products were for 
legitimate medical reasons.
    At the outset, I note that this is not simply a matter of ``he 
said, she said.'' Rather, there is substantial corroborating evidence 
that demonstrates that the other distributions were not for legitimate 
medical reasons. As explained above under factor two, the progress 
notes contain no record of the visits during which Respondent provided 
Harvey with hydrocodone products, let alone a diagnosis of Harvey's 
condition or a record of the dispensing.
    As for the Valium, the record shows that Respondent accepted 
substantial cash payments from Harvey, which Harvey represented as 
being his share of the profits from the Valium sales. These payments 
occurred on three separate dates following the October 28, 1997 
distribution of Valium and before Harvey left the office on December 9, 
1997, with a new supply. While Harvey's wire did not work on the first 
date (November 10), it did work during the second (November 19), and 
third (December 9) visits.
    According to the transcripts, during the November 19th visit, 
Respondent told Harvey ``I don't want to get in deeper, you know,'' and 
then agreed to order the second bottle of Valium. Gov. Exh. 3a at 12. 
During the December 9th visit, Respondent stated: ``No, no, sell them. 
Hell, medicine is to sell not to take.'' Gov. Exh. 3(C) at 33. He then 
told Harvey: ``[D]on't let anybody know where any of this stuff is 
coming from.'' Id. And later in the conversation, Respondent told 
Harvey that he had 1,000 Xanax and asked her to ``[l]ine me up somebody 
that can [sell] it.'' Id. at 35. These are not the conversations that 
occur in the normal course of doctor-patient relations. Rather, they 
are the words of a drug dealer.
    I thus concur with the ALJ's conclusion that Respondent's 
assertions that he provided the various drugs for legitimate medical 
reasons are disingenuous. I also agree with the ALJ's conclusion that 
Respondent refuses to accept responsibility for his misconduct. I 
further find that Respondent's refusal to accept responsibility greatly 
outweighs his efforts at rehabilitation. Therefore, I conclude that 
factor five supports a finding that granting Respondent's application 
would threaten public health and safety. See 21 U.S.C. 823(f)(5). 
Having considered all of the statutory factors, I concluded that 
Respondent cannot be entrusted with a DEA registration.

[[Page 35710]]

Order

    Accordingly, pursuant to the authority vested in me by 21 U.S.C. 
823(f) and 28 CFR 0.100(b) and 0.104(b), I hereby order that 
Respondent's application for a DEA Certificate of Registration be, and 
it hereby is, denied. This order is effective July 21, 2006.

    Dated: June 12, 2006.
Michele M. Leonhart,
Deputy Administrator.
 [FR Doc. E6-9706 Filed 6-20-06; 8:45 am]
BILLING CODE 4410-09-P