[Federal Register Volume 74, Number 44 (Monday, March 9, 2009)]
[Notices]
[Pages 10083-10095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-4903]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 06-28]


Joseph Gaudio, M.D.; Suspension of Registration

    On September 16, 2005, the Deputy Assistant Administrator, Office 
of Diversion Control, Drug Enforcement Administration, issued an Order 
to Show Cause to Joseph Gaudio, M.D. (Respondent) of Alpine, New 
Jersey. The Show Cause Order sought the revocation of Respondent's DEA 
Certificate of Registration, which authorizes him to handle controlled 
substances as a practitioner, and the denial of any pending 
applications to renew or modify his registration, on the ground that he 
had committed acts which rendered his continued registration 
``inconsistent with the public interest.'' Show Cause Order at 1 
(citing 21 U.S.C. 823(f) & 824(a)(4)).
    The Show Cause Order alleged that Respondent had issued 
prescriptions for controlled substances which lacked a legitimate 
medical purpose, and that in doing so, he had acted outside of the 
usual course of professional practice. Id. at 1 & 6. The Show Cause 
Order specifically alleged that Respondent had ``prescrib[ed] 
controlled substances to Internet customers despite never establishing 
a genuine doctor-patient relationship with the Internet customer.'' Id. 
at 5. Relatedly, the Show Cause Order alleged that Respondent ``did not 
see customers, had no prior doctor-patient relationships with the 
Internet customers, did not conduct physical exams, * * * did [not] 
create or maintain patient records,'' and that ``[t]he only information 
usually reviewed prior to issuing drug orders was the customer's online 
questionnaire.'' Id. at 6.
    The Show Cause Order also alleged that ``[a] review of 
prescriptions filled by [Carrington Healthcare System/Infiniti Services 
Group] revealed that [Respondent] ha[d] issued drug orders for 
controlled substances to Internet customers throughout the United 
States, including Georgia, Texas, Pennsylvania, Alabama, Louisiana, and 
Kentucky.'' Id. The Show Cause Order further alleged that ``[a] review 
of prescriptions filled by [Carrington/Infiniti] for the period October 
13, 2004 to January 21, 2005, revealed that [Respondent] ha[d] issued 
16 drug orders to Internet customers in at least nine different 
states.'' Id.
    On October 21, 2005, Respondent, through his counsel, requested a 
hearing on the allegations. The matter was assigned to Administrative 
Law Judge (ALJ) Gail Randall, who conducted a hearing on May 2-5, 2006, 
in New York, NY. At the hearing, both parties put on testimony and 
introduced documentary evidence. Thereafter, both parties submitted 
briefs containing their proposed findings of fact, conclusions of law, 
and arguments.
    On November 2, 2007, the ALJ issued her recommended decision. In 
her decision, the ALJ concluded that ``[t]he Government has clearly 
demonstrated that the Respondent's Internet practice and his resulting 
issuance of controlled substance prescriptions * * * violated the 
Controlled Substances Act.'' ALJ at 43. Applying the totality of the 
circumstances test, the ALJ concluded, however, that the revocation of 
Respondent's registration was not warranted. Id. at 43-44.
    The ALJ specifically noted that ``Respondent's conduct encompassed 
a one year period,'' that Respondent had ``voluntarily cease[d]'' his 
conduct, but that he had not done so until three months after he was 
served with the Show Cause Order. Id. at 43. While the ALJ deemed 
Respondent's cessation of his conduct as ``commendable because of its 
voluntary nature,'' she further explained that he ``demonstrated a lack 
of sound judgment'' in ``continuing to'' prescribe after being served 
with the Show Cause Order. Id. at 44. The ALJ also found of concern 
``Respondent's failure to be totally truthful during his testimony.'' 
Id.
    The ALJ reasoned, however, that Respondent was ``a very educated, 
dedicated and talented physician practicing in a sometimes difficult 
specialty, pain management,'' and that the revocation of his 
registration would render him ``being unable to handle controlled 
substances'' in his specialty. Id. Because the record demonstrated that 
Respondent had practiced medicine for eleven years, and that ``the only 
instances of [his] improper handling of controlled substances were 
related to his'' Internet prescribing, the ALJ recommended that 
Respondent's registration be continued subject to the condition that he 
``not engage in any activity involving prescribing controlled 
substances and the Internet.'' Id.
    Having considered the entire record in this matter, I hereby issued 
this Decision and Final Order. I adopt the ALJ's conclusions that 
Respondent violated both the Controlled Substances Act (CSA) and 
various state standards of medical practice in issuing prescriptions to 
persons who ordered drugs through an Internet site. For reasons 
explained below, I reject the ALJ's recommended sanction as 
inconsistent with agency precedent and will order the suspension of 
Respondent's registration for a period of one year. I make the 
following findings.

Findings

    Respondent is a medical doctor who is board certified in both 
anesthesiology and pain management and is licensed to practice medicine 
in the States of New York and New Jersey. Tr. 488. Respondent is also 
the holder of a DEA Certificate of Registration, which authorizes him 
to dispense controlled substances in schedules II through V as a 
practitioner. GX 1, at 2. While the expiration date of Respondent's 
registration was September 30, 2006, Respondent submitted a renewal 
application on August 4, 2006. See Reply to Respondent's Status Report, 
at 1. I therefore find that Respondent's prior registration has 
remained in effect pending the issuance of this Final Order and that 
Respondent also has an application pending before the Agency. See 5 
U.S.C. 558(c).
    Respondent attended medical school at The Autonomous University of 
Guadalajara, and the New York Medical College. RX 1, at 2. 
Subsequently, Respondent did his residency in anesthesiology at St. 
Luke's/Roosevelt Hospital, an institution which is affiliated with the 
Columbia University College of Physicians and Surgeons, where he 
received an award given to the Outstanding Graduate Resident in 
Anesthesiology. Id. Respondent also did a fellowship in Pain Management 
at the Memorial Sloan Kettering Cancer Center, where he was elected 
Chief Fellow. Id. at 1.
    Upon completion of his fellowship, Respondent joined New Jersey 
Anesthesia Associates (NJAA), a group of physicians which provides 
anesthesia services at St. Barnabas Medical Center. Tr. 345-47. 
Respondent is a partner in NJAA. Id. at 347. In addition to providing 
anesthesia, Respondent also treats both acute and chronic pain 
patients. Id. at 555-56. Respondent is also an attending physician and 
clinical professor at St. Barnabas, where he trains residents in 
anesthesia. Id. at 360.
    Respondent came to the attention of the Agency during its 
investigation of a

[[Page 10084]]

large criminal conspiracy which was run by Johar Saran, and which used 
the Internet to unlawfully distribute controlled substances. Id. at 
156-159; see also GX 16 (Indictment, United States v. Saran, et al., 
No. 305-CR-0240P (N.D. Tex. 2005). As part of the investigation, DEA 
Investigators conducted trash runs at the premises of Carrington Health 
Care System, an entity owned by Saran which was located at 301 E. 
Stephens, Suite 100, Arlington, Texas. Tr. 159, 185. During the trash 
runs, investigators found various documents including ``Drug 
Prescription'' sheets and copies of some prescription labels which are 
placed on pill vials. See GXs 17-29.
    The ``Drug Prescription'' sheets listed a patient's name, address, 
birth date, age, sex, phone number, medication history, and allergies. 
See GXs 17-24. In the block titled ``Physician,'' the sheets listed 
Respondent's name, address, phone numbers, and DEA number. Id. In the 
block titled ``Rx,'' the sheets gave the date, drug name (which in each 
instance was a schedule III controlled substance containing 
hydrocodone), quantity, number of refills, instructions for taking the 
drug, instructions to the pharmacist as to whether substitution was 
permitted or the drug was to be dispensed as written, and bore the 
electronic signature of Respondent. See id. In a block entitled 
``Pharmacy Services Use Only,'' each of the sheets listed a number, as 
well as the date and time of a consultation, and included the notation 
``LBRTY.'' Id. \1\ Finally, each of the sheets included shipping 
information. Id.
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    \1\ At the top of all but one of the sheets was the notation: 
``From: Dr. Joseph Gaudio, M.D.,'' and a date and time which was 
typically only a short period after the date and time listed for the 
consultation. See GXs 17, 18, 20, 21, 22, 23.
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    The prescription labels listed ``Triphasic Pharmacy,'' with an 
address of ``301 E. Stephens St. Ste 100'' in Arlington as the 
dispensing pharmacy. GXs 25-31. The labels also listed the patient's 
name, the drug, a date, the quantity dispensed, a prescription number, 
instructions for taking the drug, number of refills, and a physician's 
name. Id. Respondent was listed as the prescribing physician on eight 
of the prescription labels, each of which indicated that the customer 
had received a schedule III controlled substance containing 
hydrocodone. See id.
    Several months later, Respondent was served with the Show Cause 
Order. Tr. 51-52. When asked by a DI whether he had prescribed over the 
Internet, Respondent admitted that ``he had a contract with a company 
called Liberty Med,'' that ``he reviewed on-line patient applications 
of Liberty Med,'' and that he ``was paid $20 per on-line patient 
consultation.'' Id. at 52. Respondent also told the DI that he reviewed 
MRIs and X-rays. When asked if he maintained patient records, 
Respondent told the DI that Liberty Med ``kept them.'' Id. at 53.
    In his testimony, Respondent explained that in October 2004, one of 
his partners in NJAA introduced him to Liberty Medical and Mr. Craig 
Boswell, whose mother ran the company. Tr. 371-72. Respondent's partner 
told him that ``he understood [that Liberty] was a legitimate company 
that practices Internet-based medicine and that I might be interested 
in talking to Craig Boswell concerning possibly doing work for them.'' 
Id. at 371.
    Respondent met with Boswell, who told him that the company ``was 
not one of these companies opening and shutting in a week or month, 
[that it] was a legitimate company, [and that] they wanted to set up 
consultation services doing this internet website.'' Id. at 373. 
Boswell further advised Respondent that Liberty ``deal[t] with patients 
who have medical records, who have been seen by other physicians, who 
have radiological evidence of pain.'' Id. Boswell also told Respondent 
that Liberty would carefully screen the patients, that ``they would 
make sure that the patient wasn't sourcing meds from another 
facility,'' and that ``they would also obtain'' the address and phone 
number of the patient's primary physician ``so that we could call them 
if there is any question as to whether'' the person was ``a legitimate 
patient.'' Id. at 374.
    Boswell subsequently asked Respondent if he would perform on-line 
consultations for Liberty. Id. The consultations were to involve 
``interview[ing] the patients'' and ``mak[ing] a recommendation'' to 
prescribe drugs based ``on all the information.'' Id.
    In his testimony, Respondent maintained that he asked Boswell 
whether this was permissible. Id. at 375. Respondent stated that 
Boswell ``assured [him] that everything was legitimate,'' that Boswell 
told him that ``he was in the Armed Forces,'' and that ``he had two men 
in his squad [who] were in the DEA and [that] he constantly bounced 
questions off of them * * * always to make sure that he was within the 
limits of the law.'' Id. Boswell also told Respondent that ``there were 
certain states that did not allow internet prescribing'' and that 
persons from these states would be excluded. Id. at 376.
    Respondent did not, however, seek legal advice regarding the 
lawfulness of Boswell's proposal. Id. at 375. Moreover, even though he 
understood that he would be prescribing to patients throughout the 
country, he did not undertake any inquiry on his own into the laws of 
any State pertaining to the propriety of the proposed activity. Id. at 
512. Instead, he concluded that Liberty was engaged in legitimate 
activity because Boswell had been referred to him by his partner and 
Boswell was ``concerned about making sure that everything was done 
correctly,'' id. at 375, and had told him that ``he had reviewed all 
the laws pertaining to this.'' Id. at 512.\2\
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    \2\ Respondent also maintained that ``to find out more'' he had 
talked with another physician who performed online consultations for 
Liberty. Id. at 509. Respondent did not, however, testify as to the 
specifics of this conversation. Id. Respondent did not meet any of 
the medical professionals who worked for Liberty and did not know 
where the business was located. Id.
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    In November 2004, Respondent entered into a written contract with 
Liberty; Respondent performed online consultations and prescribings for 
it from approximately December 2004 through December 2005. Id. at 507. 
Respondent was paid $20 per consultation and received the same fee 
regardless of whether he prescribed a drug.\3\ Id. at 382-83, 508, 601. 
Respondent did consultations for Liberty five days a week, and did so 
every week between December 2004 and December 2005, except for three 
weeks during which he took vacation. Id. at 516. Respondent performed 
twenty to fifty consultations a week; he also testified that while he 
was ``not exactly sure,'' he issued twenty to thirty prescriptions a 
week. Id. The record is, however, unclear as to how many of the 
prescriptions were for controlled substances. Id. at 568.\4\ According 
to

[[Page 10085]]

Respondent, he prescribed hydrocodone, Vicodin (a schedule III 
controlled substance which contains hydrocodone), and oxycodone, a 
schedule II controlled substance. Id. at 547. See Physicians' Desk 
Reference 526 (59th ed. 2005); see also 21 CFR 1308.12(b)(1) & 
1308.13(e).
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    \3\ Respondent maintained that his compensation from Liberty was 
only ``a very small part of [his] income'' and that ``it was more of 
my interest in telemedicine that drove me to do it.'' Tr. 383. 
Respondent testified that he was involved in a start-up company, 
Technology Integrated for Medical Application (TIMA), which 
conducted academic research with major institutions, and that TIMA 
was developing systems to engage in medical monitoring of people 
from remote locations. Id. at 505. Respondent explained that ``[w]e 
can speculate that some day we'll be able to diagnose patients from 
a distance where you can have a doctor in a remote location who 
doesn't have the expertise in a certain area that can receive 
expertise from * * * physicians in another area based on giving real 
time information back to those physicians.'' Id. at 506.
    \4\ Respondent testified that he prescribed both narcotics and 
non-narcotics and that the estimated number of prescriptions 
referred to ``all in total.'' Tr. 568. Notably, the Government 
introduced no evidence showing the number of controlled-substance 
prescriptions he issued during the course of his contract with 
Liberty; nor did it introduce evidence showing the number of 
controlled prescription he issued during a defined period of time.
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    Liberty gave Respondent a user name and password, which he used to 
access PSDOCTOR, a Web-based software program which listed his 
appointments; according to Respondent, he ``would call the patient and 
obtain a detailed history.'' Id. at 377. Respondent testified that 
through PSDOCTOR, he could retrieve patient records including a 
patient's history (including the patient's complaint, what drugs the 
patient was taking, what surgeries the patient had undergone, and the 
patient's name and address), charts, and exams including radiological 
reports. Id. at 377-78. Respondent also testified that ``sometimes [the 
patients] would * * * also submit physical exams.'' \5\ Id. at 378.
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    \5\ Respondent testified that ``on the average,'' the physical 
exam had to be no more than ``approximately six months'' old, but 
that ``sometimes we required records more recent than six months and 
sometimes patient[s] could have records up to eight months [old] or 
more.'' Tr. 571. Respondent maintained, however, that in each 
instance, he would have a conversation with a patient before 
prescribing and that this provided ``an independent basis'' to 
determine whether the patient's symptoms were continuing.'' Id. at 
572.
    Moreover, the ``Consent for Treatment'' forms that are in 
several patient files indicate that a patient could receive the 
``first prescription with an agreement that I will fax my medical 
records and a photo ID * * * within 27 days and before my next 
prescription is due for refill.'' RX 11, at G0156 (signed on ``12/8/
04''); RX 10, at G0151 (signed on ``12/5/05''). This suggests that 
in some instances, Respondent may have issued prescriptions without 
even reviewing a patient's records.
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    Respondent maintained that he would ``call the patients because 
[he] want[ed] to actually talk to the patients before [he] made any 
decisions on the patient,'' that ``[t]he history was very important,'' 
id. at 378-79, and that the calls would last an average of twenty 
minutes. Id. at 615. He also testified that he performed a telephonic 
consultation with every patient he prescribed to. Id. at 614-15.
    Relatedly, Respondent maintained that based on his experience as a 
pain doctor, he could ``get a sense of whether the patient was telling 
me the truth because certain pains in certain areas elicit certain 
responses.'' Id. at 379. He also testified that most patients did not 
``have the savvy'' to dupe him and that ``sometimes [he] would lead 
patients down the wrong path to see if they were telling the truth * * 
* because there are a lot of drug seekers out there.'' Id. at 381-82. 
He also stated that if a patient told him something that did not match 
what was in their medical record, ``we would either call their primary 
doctor'' or ``deny them.'' Id. at 382. Respondent also testified that 
he ``denied a lot of patients and some of the records will show that.'' 
Id.
    The ALJ found that some of Respondent's testimony was contradicted 
in several material respects by other evidence. See ALJ at 12 (] 36). 
While Respondent testified that he never prescribed without conducting 
a telephone consultation with the patient, and that the consultations 
lasted twenty minutes on average, Ms. A.B., who received hydrocodone 
pursuant to a prescription issued by Respondent on December 8, 2004, 
see GX 17, stated to a DI that within a couple of hours after she faxed 
medical records to Liberty,\6\ she received a telephone call from a 
doctor which lasted approximately ``one minute.'' GX 35, at 1-2. The 
doctor, whose name she did not recall, asked her what her pain was. Id. 
at 2. Ms. A.B. told the doctor that she had previously been treated by 
a doctor in North Carolina for headaches caused by nerve damage 
incurred in an automobile accident; the doctor then agreed to prescribe 
for her, ninety tablets of hydrocodone/apap.\7\ Id. Ms. A.B. further 
stated that the doctor did not discuss with her how her progress would 
be monitored, what to do if she experienced side effects, and how to 
contact him in an emergency. Id.
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    \6\ Those records included a progress note dated September 16, 
2004, which indicated that A.B.'s physician had prescribed ninety 
Lorcet (10/650 mg.), with no refills. RX 6, at G0050. Lorcet is a 
schedule III controlled substance which combines hydrocodone with 
acetaminophen. See PDR, at 1287.
    \7\ Apap is an abbreviation for acetaminophen.
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    Another DI interviewed K.B., who had also obtained a combination 
drug containing hydrocodone through the Liberty Web site. See GX 21; 
Tr. 116-151. K.B. told the DI that she had become aware of Liberty 
through a pop-up ad and that she went to the Web site and filled out a 
questionnaire. Tr. 117. On August 4, 2004, K.B. sent Liberty an MRI 
report showing that she had a herniated disk. Id. at 118; RX 15, at 
G0190-91. ``A couple of days later,'' Tr. 118, K.B. was contacted by a 
woman who stated that she was a representative of Liberty. Id. 
According to K.B., the woman performed a consultation and told K.B. 
that a prescription had been approved by Respondent.\8\ Id. at 118 & 
131.
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    \8\ Having found that K.B. faxed a copy of the MRI report on 
August 4, 2004, four months before Respondent began his contract 
with Liberty, I find that Respondent did not issue the initial 
prescription which K.B. received from Liberty. I do find, however, 
that Respondent issued a prescription to K.B. on December 15, 2004. 
See GX 21.
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    On or about December 15, 2004, K.B. received ninety tablets of 
Lortab (hydrocodone/apap (10/500)), a schedule III controlled 
substance, pursuant to a prescription issued by Respondent. Id. at 119-
20, GX 21; see also PDR at 3240. K.B. received approximately twenty-
five prescriptions through Liberty, the majority of which were 
authorized by Respondent. Tr. 132, 141, 148, 150. K.B. never had a 
conversation with Respondent, id. at 140, and had no contact with 
Liberty with respect to any of the subsequent orders she placed other 
than when she contacted the Web site to determine the status of an 
order. Id. at 121. K.B. further told the DI that she became addicted to 
hydrocodone. Id. at 122. K.B. also obtained drugs from another Web site 
during a portion of the period in which she obtained drugs through 
Liberty; her primary care physician did not know that she was acquiring 
drugs through the internet. Id. at 120-22.\9\
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    \9\ Investigators also attempted to interview several other 
persons whose names were listed on the prescription sheets found 
during the trash runs. Some of the individuals could not be located, 
Tr. 162 & 165, others were uncooperative. Id. at 163. Investigators 
were unable to contact the persons named on the prescription labels 
because the labels did not contain addresses. Id. at 169.
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    DEA Investigators also attempted to contact the persons identified 
in Respondent's Exhibits 19-45, as patients who were denied 
prescriptions. Tr. 470. The DIs could not contact most of the 
individuals and were able to speak with only eight of them. See id. at 
634-44. Of these eight persons, the record establishes that Respondent 
prescribed to only one of them, Ms. S.A. See GX 26.\10\ More 
specifically, on

[[Page 10086]]

December 7, 2004, Respondent prescribed to S.A. ninety tablets of 
hydrocodone/apap (7.5/750 mg.).
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    \10\ For example, while a DI spoke to L.L.'s daughter (RX 20), 
she did not know whether her mother ever spoke with Respondent. Tr. 
635. R.T. (RX 24) stated that he never received drugs from Liberty, 
Tr. 637, and there is no evidence to the contrary. While M.A. stated 
that he did not speak with Respondent, id. at 637-38, documentary 
evidence indicated that Respondent did not issue a prescription 
because he felt that M.A. ``IS WANTING MEDS FOR SOMEONE ELSE.'' RX 
26. Again, there is no evidence establishing that Respondent issued 
a prescription to M.A.
    A.F. (RX 27) acknowledged taking Vicodin and sending medical 
records somewhere. Tr. 638. He did not, however, remember where, 
id.; and in any event, there is no evidence that Respondent 
prescribed to him. M.K. (RX 31) acknowledged receiving hydrocodone 
from Liberty ten times, that he received his first order without a 
consultation, and that his ``subsequent orders usually did involve a 
two to three minute conversation with someone claiming to be a 
physician or a physician's assistant.'' Tr. 640. Again, there is no 
evidence establishing that Respondent (as opposed to other doctors 
who worked for Liberty) prescribed to him. RX 31.
    M.B. (RX 33) acknowledged that he received hydrocodone from 
Liberty four times and ``recalled talking to someone at the Liberty 
Meds Web site but [did not] remember who.'' Tr. 641. K.K. (RX 36) 
acknowledged ordering hydrocodone ``four or five'' times, but 
identified a different doctor as the prescriber. Tr. 641-42. 
Similarly, T.A. (RX 37) stated that he had ordered hydrocodone from 
Liberty ``two or three'' times, and that he had conversations with 
either a doctor or physician's assistant lasting ``two to three 
minutes,'' but could only identify a different doctor as the person 
he spoke to. Id. at 642. As above, there is no evidence establishing 
that Respondent prescribed to either M.B. or T.A.
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    Ms. S.A. stated that she ordered hydrocodone from Liberty ``at 
least ten times and that she did not speak to any physician on the 
first two occasions.'' \11\ Tr. 643. S.A. further stated that on 
subsequent orders, she had ``very short conversations lasting 
approximately one minute or less,'' but could not recall the name of 
any person she had talked to. Id. at 643-44.
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    \11\ Here again, the evidence shows that S.A. faxed her records 
to Liberty on August 25, 2004, four months before Respondent began 
his contract with Liberty. RX 7, at G0113-14.
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    Respondent testified that S.A.'s medical record supported the 
prescription he issued and that the drug and dosage he prescribed was 
appropriate for her condition. Tr. 451. Yet the evidence suggests that 
the most recent medical report available to Respondent was an 
``Operative Report'' for a procedure which had been performed nearly 
eight months earlier. See RX 7, at G0112. Moreover, Respondent offered 
no explanation as to why S.A.'s condition was of such a nature as to 
justify prescribing based on an eight-month-old report.
    A DI also interviewed R.Z., to whom Respondent prescribed 90 
tablets of Vicodin ES (7.5/750 mg.), on January 5, 2005. GX 18. R.Z. 
told the DI that she had become aware of Liberty in approximately 
November 2004; someone at Liberty put R.Z. in contact with a man ``who 
claimed to be a doctor.'' Tr. 72. R.Z. could not, however, remember the 
name of the doctor, but did recall having a phone conversation of 
``approximately ten minutes'' duration with him in which she was asked 
questions about her condition, what type of pain she had, what type of 
pain medication she needed, how she tolerated pain medications, and her 
blood pressure. Id. at 73. The doctor then told R.Z. that he would 
prescribe to her ninety tablets of Vicodin. Id. at 74. R.Z. also told 
the DI that she had faxed to Liberty an x-ray report which showed that 
she had a bulging disk.\12\ Id. R.Z. further told the DI that she had 
received from Liberty monthly prescriptions for ninety tablets of 
Vicodin over ``a thirteen to fourteen-month period.'' \13\ Id. at 77-
78.
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    \12\ R.Z. stated that she had sent in only the x-ray report and 
filled out an online questionnaire. Tr. 89. R.Z. was never directed 
to obtain further tests (such as a new x-ray), and stated that she 
did not believe that Liberty ever contacted her primary doctor. Id. 
at 79, 89-90.
    \13\ R.Z. also stated that she had conversations every three to 
four months regarding her condition with a woman from Liberty who 
claimed to be a physician. Tr. 76, 87. R.Z. testified that she had a 
single conversation with a male caller. Id. at 96.
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    Respondent testified that the prescription he issued was consistent 
with the findings contained in the x-ray report. Id. at 459; RX 10, at 
G0154. The x-ray report contains the notations: ``Record Received on 1/
31/05,'' and ``Verified on 1/31/05 By MW.'' Id. In addition, the record 
includes a handwritten note dated ``1/31/05,'' which states in relevant 
part: ``Attention Leisha, Here are the results of the xray I had on my 
back. * * * I would like my refill sent when it becomes time to do 
so.'' Id. at G0153. Respondent further testified that ``I don't see a 
physical exam here but it would be something that we would require.'' 
Tr. 459. He also maintained that in order for R.Z. to get an x-ray, 
``she had to have some history,'' because ``you can't refer yourself 
for an x-ray.'' Id.
    Even so, that a patient needs a referral to obtain an x-ray, does 
not establish that Respondent reviewed R.Z.'s history and a physical 
exam report before he prescribed to her. Indeed, the absence of a 
physical exam report in R.Z.'s file is consistent with her statement 
that she sent in only the x-ray report. See Tr. 89. I therefore find 
that contrary to Respondent's testimony, he did not review a physical 
exam report before prescribing to R.Z.\14\
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    \14\ The ALJ noted that it ``is unclear * * * whether or not the 
Respondent had access to, or actually reviewed medical records prior 
to prescribing controlled substances to any of Liberty's customers 
discussed at the hearing.'' ALJ at 19 n.10. While this is correct 
with respect to some patients, with respect to R.Z., it is clear 
that Respondent prescribed without having any medical records that 
supported the prescription.
    In the context of discussing his prescribing through Liberty, 
Respondent also testified that ``I will always'' have some ``data'' 
and ``I won't just place them on a prescription.'' Tr. 442. Perhaps 
Respondent was testifying about his prescribing practices at the 
time of the hearing. Or perhaps he considered the answers Liberty's 
customers gave to the questionnaires to be ``data.'' In any event, 
the evidence establishes that he prescribed to R.Z. without either 
reviewing a physical exam report or the x-ray report.
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    As for Respondent's statement that the Vicodin prescription he 
issued to R.Z. was consistent with the findings of the x-ray report, 
the evidence shows that he issued the prescription on January 5, 2005, 
nearly four weeks before Liberty received the x-ray report. Respondent 
therefore could not have issued the prescription on the basis of the 
report.
    With respect to K.B. (whose interview with a DI is described 
above), Respondent also maintained that a report for an MRI which had 
been done ten months earlier, see RX 15, at G0190; established that the 
hydrocodone prescription he issued was appropriate. Tr. 467. Respondent 
then testified that Respondent ``had been on Toradol and Ultram and had 
not received results.'' Id. Continuing, Respondent stated that ``[s]he 
also had gotten Lortab it seems. If you look at G0195, in the middle 
where it says 2/19/04, it says renewed her Lortab and Flexeril.'' Id. 
at 467-68.
    Notably, both pages G0194 and G0195, which appear to contain 
progress notes of various visits K.B. made to an orthopedic clinic 
between January 15, 2003, and November 29, 2004, have the notations: 
``Record Received on 1/31/05,'' and ``Verified on 1/31/05 By MW.'' RX 
15, at G0194-95. Moreover, each page has a header indicating that it 
was faxed on January 31, 2005. See id. As found above, Respondent 
issued the prescription to K.B. on December 15, 2004, approximately six 
weeks before these documents were faxed to Liberty. GX 21. Here again, 
Respondent could not have relied on the documents when he issued the 
prescription to K.B., notwithstanding his testimony that ``we would 
require'' a physical exam. Tr. 459.\15\
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    \15\ As found above, Respondent never spoke with K.B. Tr. 140. 
During the period she was obtaining controlled substances from 
Liberty, K.B. was under the care of another physician; K.B., 
however, never told the latter physician that she was receiving 
drugs from Liberty. Id. at 122, 142-43.
    Respondent maintained that Liberty was ``unable to provide all 
the records'' because of problems it was having with its ``IT 
person.'' Tr. 410. However, the files for some of the patients 
appear extensive, see RXs 3 (22 pages), 5 (18 pages), 6 (64 pages), 
7 (17 pages), & 14 (23 pages), thus prompting the question of why 
Liberty was able to provide so much documentation for these patients 
but not for some of the others. Moreover, the patient files indicate 
that the patients almost always faxed or mailed their records to 
Liberty. Thus, even if the records were scanned into Liberty's 
computer system, Respondent offered no evidence to establish what 
happened to the original records. Finally, there is no evidence that 
Respondent requested a subpoena for the records. While the ALJ 
apparently found that Respondent credibly testified that he did not 
receive all of the information he requested, ALJ Dec. at 13 n.3., I 
conclude that the patient files Respondent introduced into evidence 
fairly reflect the patient files as obtained by Liberty.
    The ALJ further reasoned that Respondent's testimony supported 
``the requirement that [he] maintain his own patient records.'' Id. 
It is further noted that under the New Jersey Board of Medical 
Examiners' regulation which governs the prescribing of controlled 
substances, ``[t]he practitioner shall keep accurate and complete 
records.'' N.J. Adm. Code 13:35-7.6(g) (emphasis added). There is, 
however, no requirement under federal law that an ``individual 
practitioner * * * keep records of controlled substances in 
Schedules II, III, IV, and V which are prescribed in the lawful 
course of professional practice, unless such substances are 
prescribed in the course of maintenance or detoxification treatment 
of an individual.'' 21 CFR 1304.03. I do not decide whether it was 
permissible under the New Jersey regulation for Respondent to 
maintain medical records through the Liberty Web site.

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

[[Page 10087]]

Other Patients

    On January 5, 2005, Respondent issued a prescription to K.A., a 
Texas resident, for ninety tablets of hydrocodone/apap (10/500mg). GX 
27. The record contains extensive progress notes showing that K.A. was 
being treated by a San Antonio, Texas pain management specialist during 
2004 and 2005 for neck pain.\16\ See RX 3. Respondent testified that 
K.A. ``has various different problems * * * that would cause one to 
have a ton of severe pain.'' Tr. 426. Respondent testified that based 
on his review of the record, the medication and dosage he prescribed 
was appropriate. Id. at 432. Respondent offered no testimony, however, 
as to whether he contacted the pain management specialist who was 
treating K.A. See generally id. at 426-32.
---------------------------------------------------------------------------

    \16\ Based on the progress notes as well as K.A.'s Texas 
driver's license, I find that K.A. was a resident of Texas. See RX 
3, at G0001.
---------------------------------------------------------------------------

    On December 20, 2004, Respondent prescribed to P.G., a Minnesota 
resident, ninety tablets of hydrocodone/apap (10/500 mg.) with one 
refill. GX 19. Although the most recent progress note in P.G.'s record, 
which was dated April 13, 2004, indicated that he had ``[c]hronic low 
back with right lower extremity radicular pain,'' and that his local 
physician had issued him a prescription for twenty tablets of Percocet 
p.r.n., P.G.'s physician further observed that ``[l]ong-term use of 
narcotics for back pain is not in his best interest and therefore he is 
given only 20 tablets at this time.'' RX 4, at G0024. While Respondent 
testified that his prescription was appropriate, Tr. 435, when asked on 
cross-examination whether the eight-month-old progress note was of 
sufficient recency to make a diagnosis, he testified: ``It really 
depended also on the patients and the physical findings but this does 
seem like it was two months later than we usually accept. * * *'' Id. 
at 525.
    On January 5, 2005, Respondent prescribed to D.C., a resident of 
Georgia, ninety tablets of hydrocodone/apap (10/325 mg.). GX 24. The 
most recent progress note in her file prior to this prescribing was 
dated June 24, 2004, and indicated that the physician's impression was: 
``Probable right C7 radiculopathy.'' RX 5, at G0035. When asked by his 
counsel whether this would ``indicate that pain should be in a 
particular area?,'' Respondent answered: ``Yes, she should have the 
pain in the right upper extremity. If I had spoken with this person 
about giving her a treatment, I would have first tried to elicit where 
her pain was coming from.'' Tr. 437 (emphasis added). Respondent then 
discussed the findings of a physical exam which occurred on April 21, 
2005, and which he obviously could not have relied on when he issued 
the prescription three months earlier. See id. at 437-38.
    Next, Respondent maintained that he would try to confirm with the 
patient whether their reported pain matched with ``what it should be.'' 
Id. at 439. He also maintained that his prescribing was consistent with 
the drug (Vicodin 7.5) that the physician, who physically examined her 
three months later, had prescribed. Id. at 440; RX 5, at G0032.
    On cross-examination, Respondent acknowledged that while the 
medical records showed that D.C. had been by an orthopedist and 
neurologist, neither had referred her to him. Tr. 527. When asked what 
his treatment plan was for D.C., Respondent could not recall. Id. He 
also did not refer her to a pain clinic near where she lived. Id. at 
528.
    On December 15, 2004, Respondent prescribed to S.K., a resident of 
Texas, ninety tablets of hydrocodone/apap (10/325mg.), with one refill. 
GX 22. Again, Respondent testified that the prescription he wrote 
``would be consistent with what she's experiencing on physical exam 
here.'' Tr. 454. While Respondent testified that S.K.'s records ``were 
accessed through PSDoctor,'' id. at 455; the only medical exam report 
in S.K.'s file is dated ``6/1/05,'' and was faxed on June 10, 2005. See 
RX 8, at G0129-31. Respondent therefore could not have relied on the 
report in issuing the prescription.
    On January 6, 2005, Respondent prescribed to S.B., a South Carolina 
resident, ninety tablets of Lortab (10/500mg.). GX 27. SB's patient 
file contains only three documents: a copy of her driver's license, a 
``consent for treatment'' form dated ``12/8/04,'' and the results of a 
blood test taken on October 28, 2003. See RX 11. Respondent maintained 
that S.B.'s file was ``incomplete,'' and that ``she would'' have been 
asked to provide other data. Tr. 460. The ALJ did not, however, make 
any findings regarding the credibility of Respondent's testimony 
pertaining to S.B. In light of the other instances in which Respondent 
prescribed even though a patient's file was missing information, I find 
that it is more likely than not that he prescribed to S.B. without 
obtaining any additional medical documentation.
    On January 5, 2005, Respondent prescribed to K.S., a resident of 
Texas, ninety tablets of hydrocodone/apap (10/500) with one refill. GX 
29. K.S.'s records include extensive progress notes which show that she 
had last been seen by a physician on September 28, 2004, and had last 
been prescribed a controlled substance (codeine/apap) on December 20, 
2004. RX 14, at G0182.
    Respondent testified that ``[i]t seemed like she had really good 
follow-up here according to these progress notes,'' Tr. 462-63, and 
that the prescription he wrote ``would be appropriate for'' the 
condition documented in the record. Id. at 465. Respondent offered no 
explanation as to why he was prescribing to a patient who had received 
a controlled substance prescription from another physician only two 
weeks earlier. Moreover, given his acknowledgment that K.S.'s records 
showed that she was receiving good follow-up care, he offered no 
testimony that he had contacted K.S.'s physician to coordinate her care 
and ensure that she was not engaged in doctor shopping.\17\
---------------------------------------------------------------------------

    \17\ K.S.'s file includes a letter which forwarded some records 
to Liberty. On the letter, there is a handwritten notation that the 
records had been reviewed, but that the clinic, which treated K.S., 
was ``closed for lunch.'' RX 14, at G0170.
---------------------------------------------------------------------------

    On January 3, 2005, Respondent prescribed ninety tablets of 
hydrocodone/apap (10/325 mg.) to E.M., a New Hampshire resident.\18\ 
Beside two copies of E.M.'s driver's license, her patient file contains 
two forms: (1) A Family and Medical Leave Act certification that E.M. 
had a serious illness, and (2) an Office of Workers Compensation 
Programs' form documenting a medical examination (performed on October 
1, 2004) and diagnosis and supporting the need for certain restrictions 
on E.M.'s work-related duties. See RX 16 at G0200-01. The latter form 
indicates that E.M. had low back pain and tendonitis in her hand and 
shoulder. Id. at G0201. The form, however, contains no

[[Page 10088]]

documentation of her vital signs. See id. Moreover, when asked by his 
counsel whether the prescription he issued to E.M. was appropriate, 
Respondent answered that ``we do prescribe medicine for'' tendonitis 
and carpal tunnel, but that ``it seems like this chart is incomplete,'' 
Tr. 469, and that ``[i]t might have been missing EMGs or other 
things.'' Id. at 536. He again testified that it was his practice to 
look for other data before prescribing such as ``radiographic or 
EMGs.'' Id. at 537. While Respondent acknowledged that E.M.'s record 
did not have any such data, he then maintained that ``this might be an 
incomplete record.'' Id.
---------------------------------------------------------------------------

    \18\ While the ALJ found that E.M. was a Texas resident, ALJ at 
27 (FOF 90), RX 16 includes copies of E.M.'s driver's license which 
appears to indicate that she was a New Hampshire resident. Moreover, 
the fax header indicted that the documents were faxed to Liberty 
from a phone number with a 603 area code, which is an area code for 
New Hampshire.
    The ALJ also noted that the prescription label (GX 29) was dated 
``1/3/04.'' ALJ at 27 n.18. Based on the undisputed evidence that 
Respondent did not commence working for Liberty until December 2004, 
the ALJ found that the actual date of the prescription was January 
3, 2005. Id.; see also Tr. 535. I adopt this finding.
---------------------------------------------------------------------------

    Yet several of the documents contained in E.M.'s patient file 
indicate that they were faxed to Liberty on December 31, 2004. Id. at 
G0202-03.\19\ Again, Respondent offered no credible explanation as to 
why E.M's file as turned over to him had these documents (which Liberty 
obtained shortly before he issued the prescription to her) but not the 
others which ``might have been missing.'' Id. at 536. I therefore find 
that there were no such additional documents in E.M.'s patient file 
when he prescribed to her.
---------------------------------------------------------------------------

    \19\ Again, while Respondent testified that the records that he 
requested from Liberty were incomplete, he offered no explanation as 
to why Liberty was able to provide some records for a patient but 
not the missing ones. Moreover, the evidence indicates that many of 
the patients faxed their records to Liberty. Even if these records 
were scanned into a database, Respondent offered no evidence as to 
what became of the original documents.
---------------------------------------------------------------------------

    On December 15, 2004, Respondent issued to L.F., a resident of New 
Jersey, a prescription for ninety tablets of hydrocodone/apap (7.5/
750mg.) with one refill. GX 23. Respondent testified that L.F.'s 
records showed that his physician ``did a physical exam,'' and that 
``[t]here is also one on 10/8/04 by the same physician which was 
consistent with what was found on 10/8/03, * * * you can see the same 
vertebral bodies marked off, so it's very consistent with what the 
patient is having.'' Tr. 456. Respondent maintained that L.F. had a 
condition which ``merit[ed] intervention for pain,'' id., and that the 
dosage he prescribed was consistent with his condition. Id. at 457.
    On cross-examination, the Government asked Respondent to compare 
the handwriting of the two reports of ``Examination Findings,'' which 
were dated ``10/8/03'' and ``10/8/04'' respectively. Id. at 530; see 
also RX 9, at G0142 & G0145. Respondent acknowledged that ``[a]ll the 
handwriting [on the two reports] is in exactly the same position.'' Tr. 
530. Respondent testified, however, that when he prescribed to L.F., he 
``did not'' recognize that one of the documents had probably been 
falsified. Id. Moreover, none of the documents in L.F's file contained 
his vital signs. See RX 9. And as with the other Liberty patients, 
Respondent did not physically examine L.F., even though he lived in 
northern New Jersey, and near where he practiced.\20\ See id. at G0147, 
GX 23.
---------------------------------------------------------------------------

    \20\ Respondent practiced pain management at a clinic in 
Livingston, New Jersey. RX 1; ALJ at 5. L.F. lived in Wallington, 
and L.W. lived in Warren, New Jersey. RXs 20 & 23. In accordance 
with 5 U.S.C. Sec.  556(e), I take official notice of the fact that 
all three of these cities are located in northern New Jersey. See 5 
Rand McNally, Business Traveler's Road Atlas 62, 68-69 (1994). 
Notwithstanding the proximity of his clinic to L.F.'s and L.W.'s 
residences, Respondent did not require them to appear for a physical 
examination.
    An agency ``may take official notice of facts at any stage in a 
proceeding--even in the final decision.'' U.S. Dept. of Justice, 
Attorney General's Manual on the Administrative Procedure Act 80 
(1947). In accordance with the Administrative Procedure Act and 
DEA's regulation, Respondent is ``entitled on timely request to an 
opportunity to show to the contrary.'' 5 U.S.C. 556(e); see also 21 
CFR 1316.59(e). Accordingly, Respondent may file a motion for 
reconsideration within fifteen days of service of this order which 
shall commence with the mailing of the order.
---------------------------------------------------------------------------

    On December 7, 2004, Respondent prescribed to L.W., another New 
Jersey resident, ninety tablets of hydrocodone/apap (10/325 mg.) with 
one refill. GX 20. L.W.'s patient file consisted of three pages: a 
progress note dated June 17, 2004, a sheet indicating that L.W. was 
faxing her driver's license, and a blurred copy of a driver's license. 
See RX 12. The progress note lists several diagnostic codes and under 
the handwritten notation of ``CODES,'' states: ``polycystic ovaries,'' 
``adhesions,'' and ``pelvic pain.'' RX 12, at G0158. Next to the column 
for history, the document includes a notation of ``Percocet  
120.'' Id.
    With respect to L.W., Respondent maintained that ``[t]hese patients 
have pelvic pain generally to the lower abdomen.'' Tr. 461. Respondent 
then testified that ``[t]here is no radiological exam that you would do 
to tell you anything differently[,] [b]ut obviously they know she has 
polycystic ovaries according to this physician's history and 
physical.'' Id. Respondent testified that the prescription was 
appropriate for a patient with this condition, and that he believed 
someone had verified L.W.'s identity with her physician because ``her 
license was blurred.'' Id. Respondent did not, however, testify that he 
called Respondent's physician.

Respondent's Other Evidence

    Respondent also testified that he had proposed that Liberty use a 
narcotic contract under which a patient was required to agree not to 
give or sell his drugs to others, as well as not to seek drugs from 
other physicians. Tr. 384; see also RX 11, at G0156. According to the 
contract, a patient would be dismissed for failing to comply. Tr. 384. 
Yet Respondent was not ``sure how'' Liberty determined whether a 
patient was obtaining drugs from other sources such as another Web 
site. Id. at 385.
    Respondent gave conflicting testimony as to whether he had 
prescribed oxycodone to Liberty's patients. First, he testified that he 
did so at a frequency that was ``pretty much equal'' to that of his 
hydrocodone prescribing. Id. at 585. Later, however, when Respondent 
was asked by the ALJ as to whether he ever recalled prescribing 
schedule II controlled substances to a Liberty patient, he appeared to 
backtrack from this testimony answering: ``Yes, there was a patient in 
our system you mean.'' Id. at 605.\21\
---------------------------------------------------------------------------

    \21\ The ALJ also found that Respondent authorized refills of 
schedule II controlled substances and that he ``was unaware of the 
forms needed to actually prescribe a schedule II controlled 
substance.'' ALJ 14 (citing Tr. 604-05). Respondent testified, 
however, that he was not ``aware of'' ``a requirement for a Schedule 
II substance to be prescribed on a specifically identified form.'' 
Tr. 605.
    Except for in an emergency situation, the dispensing of a 
schedule II controlled substance requires ``a written prescription 
signed by the practitioner,'' and the ``original written, signed 
prescription [must be] presented to the pharmacist for review prior 
to the actual dispensing of the controlled substance.'' 21 CFR 
1306.11(a). However, no special form is required to prescribe a 
schedule II drug and Respondent's testimony was correct. Federal law 
does, however, prohibit the refilling of a schedule II controlled 
substance. 21 U.S.C. 829(a).
---------------------------------------------------------------------------

    Respondent further testified that he believed that his prescribing 
practices complied with New Jersey's regulations and were consistent 
with a 2001 DEA Guidance Document. With respect to the New Jersey 
regulation, which provides that ``a practitioner shall not dispense 
drugs or issue prescriptions to an individual, * * * without first 
having conducted an examination, which shall be appropriately 
documented in the patient record,'' except for in six defined 
circumstances, N.J. Admin Code Sec.  13:35-7.1A, Respondent testified 
that exceptions three (``[f]or continuation medications on a short term 
basis for a new patient prior to the patient's first appointment'') and 
four (``[f]or an established patient who, based on sound medical 
practice, the physician believes does not require a new examination 
before issuing a new prescription''), ``could apply.'' Tr. 589; see 
also N.J. Admin. Code Sec.  13:35-7.1A(b)(3) & (4). Respondent did not, 
however, identify any patient he prescribed to over the

[[Page 10089]]

Internet who later came in for an appointment. Nor did he testify that 
any of the persons whose names were found on the prescription sheets 
and labels was an established patient.
    Respondent also maintained that his Internet prescribing was 
consistent with the statements in this Agency's Guidance Document, 
Dispensing and Purchasing Controlled Substances Over the Internet, 66 
FR 21181 (2001). More specifically, Respondent maintained that his 
practices were consistent with the Guidance Document because ``[w]e 
always had the patient's chief complaint, history was taken, a physical 
examination was done by another physician, and we collected all the 
evidence together and then I made my decision based on all the evidence 
including the radiographical evidence.'' Tr. 417. Respondent further 
maintained that ``it was not'' his practice to prescribe based solely 
on Internet correspondence. Id.
    Finally, Respondent's counsel read to him the following question 
and answer from the Guidance Document:

    I am a Physician. Does the need for a Physical Exam Mean that I 
Cannot Engage in Telemedicine and Prescribe Controlled Substances?
    No, DEA does not intend to limit the ability of doctors to 
engage in telemedicine. If the patient cannot travel to your office, 
but you supervise an exam given by a nurse or other professional, 
you can then prescribe the needed medications based on the results, 
to the extent that State law allows. In this case, your decision on 
the appropriateness of the medication is based on facts (symptoms, 
blood pressure, etc.) that have been verified by a qualified third 
party and observed by you electronically.

GX 6, at 5; Tr. 418.\22\
---------------------------------------------------------------------------

    \22\ At the hearing, Respondent's counsel slightly altered the 
text of the answer published in the Guidance Document. The 
alteration did not, however, materially change the meaning of the 
answer.
---------------------------------------------------------------------------

    Respondent was then asked by his counsel whether his Internet 
practice was consistent with this statement. Tr. 418-19. Respondent 
answered: ``Yes. In fact, we've exceeded those, also communicating with 
the physicians, not just electronically but via telephone.'' Id. at 
419. Respondent then explained that ``the radiographical reports were 
read by a physician radiologist, the physical exams were done by 
another physician, so sometimes we have a couple of physicians involved 
in the process. Id.\23\
---------------------------------------------------------------------------

    \23\ Respondent also testified that the first time he saw the 
2001 Guidance Document was at the hearing. Tr. 522.
---------------------------------------------------------------------------

    Respondent did not, however, identify a single instance in which he 
supervised and observed a physical exam as it was being performed by 
another qualified medical professional. Moreover, Respondent did not 
have any recollection as to having spoken to any of the physicians who 
were identified in the patient records that were introduced into 
evidence in this proceeding. Id. at 573. Finally, he was unaware as to 
whether any of the patient notes he made were ever sent by Liberty to 
the primary care physicians of those he prescribed to. Id. at 614. He 
also never gave written referrals for Liberty patients to see local 
doctors. Id. at 512.
    Respondent testified that he had stopped performing telemedicine 
consultations for Liberty in late December of 2005. Id. at 487. He also 
represented that it was not his ``present intention'' to resume 
internet based prescribing. Id.
    As noted above, Respondent introduced into evidence a number of 
printouts from Liberty's software with the heading ``Patient 
Information for Appointment.'' See RXs 19-45. These printouts establish 
that in several instances, patients were denied drugs because they were 
receiving them from other sources. See RXs 19, 21, 27, 32, 33, 39. 
Moreover, in other instances Respondent did not approve a prescription, 
see RX 23, 34, 43; and in at least one case, Respondent denied a 
prescription because he felt the person ``was wanting meds for someone 
else.'' RX 26. Moreover, the printouts suggest that in other instances, 
either Liberty or Respondent denied requests because the person was 
seeking the drugs too soon, RX 22, 35, 36; the patient's records had 
not been verified, RX 28; or the patient needed to be evaluated and 
send in records before Respondent approved a refill. RX 42 & 44. Only 
one of these printouts, however, corresponds with a patient (S.A.) who 
was identified above as having received a prescription which was issued 
by Respondent.\24\ Compare RX 44 with GX 26.
---------------------------------------------------------------------------

    \24\ The National Center on Addiction and Substance Abuse (CASA) 
has reported that ``[t]he number of people who admit abusing 
controlled prescription drugs increased from 7.8 million in 1992 to 
15.1 million in 2003.'' National Center on Addiction and Substance 
Abuse, Under the Counter: The Diversion and Abuse of Controlled 
Prescription Drugs in the U.S. 3 (2005) (GX 3). Moreover, 
``[a]pproximately six percent of the U.S. population (15.1 million 
people) admitted abusing controlled prescription drugs in 2003, 23 
percent more than the combined number abusing cocaine (5.9 million), 
hallucinogens (4.0 million), inhalants (2.1 million) and heroin 
(328,000).'' Id. Relatedly, ``[b]etween 1992 and 2003, there has 
been a * * * 140.5 percent increase in the self-reported abuse of 
prescription opioids''; in the same period, the ``abuse of 
controlled prescription drugs has been growing at a rate twice that 
of marijuana abuse, five times greater than cocaine abuse and 60 
times greater than heroin abuse.'' Id. at 4.
    CASA has further reported that teenagers ``represent an 
especially vulnerable group,'' because ``[t]eens may view 
prescription drugs as relatively safe either when abused alone or in 
combination with alcohol or other drugs.'' Id. According to CASA, 
``[i]n 2003, 2.3 million teens ages 12 to 17 (9.3 percent) reported 
abusing a controlled prescription drug in the past year; 83 percent 
of them reported abusing opioids.'' Id. Moreover, ``[b]etween 1992 
and 2002, the number of [first time] teenage prescription opioid 
abusers increased by 542 percent.'' Id. at 35.
    Finally, CASA noted that ``[i]nternet sites not adhering to 
state licensing requirements, medical board standards or federal law 
have enabled consumers to obtain controlled prescription drugs 
without a valid prescription or physician supervision and without 
regard to age.'' Id. at 63. CASA also noted that ``illegal 
[i]nternet pharmacies have introduced a new avenue through which 
unscrupulous buyers and users can purchase controlled substances for 
unlawful purposes.'' Id. Moreover, ``[t]he age of the customers 
appears not to be an issue for Internet pharmacies,'' and that there 
are ``no mechanisms in place to block children from purchasing 
controlled drugs over the Internet.'' Id. at 66.
---------------------------------------------------------------------------

Discussion

    Section 304(a) of the Controlled Substances Act (CSA) provides that 
a registration to ``dispense a controlled substance * * * may be 
suspended or revoked by the Attorney General upon a finding that the 
registrant * * * has committed such acts as would render his 
registration under section 823 of this title inconsistent with the 
public interest as determined under such section.'' 21 U.S.C. 
824(a)(4). With respect to a practitioner, the Act requires the 
consideration of the following factors in making the public interest 
determination:

    (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. section 823(f).

    ``[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 
a combination of factors, and may give each factor the weight [I] 
deem[] appropriate in determining whether a registration should be 
revoked.'' Id. Moreover, I am ``not required to make findings as to all 
of the factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see 
also Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005).
    In this matter, it is undisputed that neither the State of New York 
nor the

[[Page 10090]]

State of New Jersey has taken action against Respondent's medical 
license (factor one). It is also undisputed that Respondent has not 
been convicted of an offense related to controlled substances under 
federal or state law (factor three).\25\ This proceeding focused, 
however, on Respondent's experience in dispensing controlled substances 
and his record of compliance with applicable laws. As discussed below, 
the evidence pertaining to these factors is disturbing and 
establishes--at a minimum--that Respondent committed numerous 
violations of both Federal and state laws.
---------------------------------------------------------------------------

    \25\ Under settled precedent, neither of these factors is 
dispositive. See Edmund Chein, 72 FR 6580, 6590 n.22 (2007); 
Mortimer B. Levin, 55 FR 8209, 8210 (1990).
---------------------------------------------------------------------------

Factor Two and Four--Respondent's Experience in Dispensing Controlled 
Substances and Record of Compliance With Applicable Controlled 
Substance Laws

    Under a longstanding DEA regulation, a prescription for a 
controlled substance is not ``effective'' unless it is ``issued for a 
legitimate medical purpose by an individual practitioner acting in the 
usual course of his professional practice.'' 21 CFR 1306.04(a). This 
regulation further provides that ``an order purporting to be a 
prescription issued not in the usual course of professional treatment * 
* * is not a prescription within the meaning and intent of [21 U.S.C. 
829] and * * * the person issuing it, shall be subject to the penalties 
provided for violations of the provisions of law relating to controlled 
substances.'' Id. As the Supreme Court recently explained, ``the 
prescription requirement * * * ensures patients use controlled 
substances under the supervision of a doctor so as to prevent addiction 
and recreational abuse. As a corollary, [it] also bars doctors from 
peddling to patients who crave the drugs for those prohibited uses.'' 
Gonzales v. Oregon, 546 U.S. 243, 274 (2006) (citing United States v. 
Moore, 423 U.S. 122, 135 (1975)).
    Under the CSA, it is fundamental that a practitioner must establish 
a bonafide doctor-patient relationship in order to act ``in the usual 
course of * * * professional practice'' and to issue a prescription for 
a ``legitimate medical purpose.'' Moore, 423 U.S. at 141-43. The CSA, 
however, generally looks to state law to determine whether a doctor and 
patient have established a bonafide doctor-patient relationship. See 
Kamir Garces-Mejias, 72 FR 54931, 54935 (2007); United Prescription 
Services, Inc., 72 FR 50397, 50407 (2007); Dispensing and Purchasing 
Controlled Substances Over the Internet, 66 FR at 21182-83.\26\
---------------------------------------------------------------------------

    \26\ On October 15, 2008, the President signed into law, the 
Ryan Haight Online Pharmacy Consumer Protection Act of 2008, Pub. L. 
110-425, 122 Stat. 4820 (2008). Section 2 of the Act prohibits the 
dispensing of a prescription controlled substance ``by means of the 
Internet without a valid prescription,'' and defines, in relevant 
part, the ``[t]he term `valid prescription' [to] mean[] a 
prescription that is issued for a legitimate medical purpose in the 
usual course of professional practice by * * * a practitioner who 
has conducted at least 1 in-person medical evaluation of the 
patient.'' 122 Stat. 4820. Section 2 further defines ``[t]he term 
`in-person medical evaluation' [to] mean[] a medical evaluation that 
is conducted with the patient in the physical presence of the 
practitioner, without regard to whether portions of the evaluation 
are conducted by other health professionals.'' Id. These provisions 
do not, however, apply to Respondent's conduct.
---------------------------------------------------------------------------

    Moreover, ``[a] physician who engages in the unauthorized practice 
of medicine'' under state laws ``is not a `practitioner acting in the 
usual course of * * * professional practice''' under the CSA. United 
Prescription Services, 72 FR at 50407 (quoting 21 CFR 1306.04(a)). As 
explained therein, this rule is supported by the plain meaning of the 
Act, which defines the ``[t]he term `practitioner' [to] mean[] a 
physician * * * licensed, registered, or otherwise permitted, by the 
United States or the jurisdiction in which he practices * * * to * * * 
dispense * * * a controlled substance,'' 21 U.S.C. 802(21), and ``[t]he 
term `dispense' [to] mean[] to deliver a controlled substance to an 
ultimate user * * * by, or pursuant to the lawful order of, a 
practitioner.'' Id. section 802(10). See also id. section 823(f) (``The 
Attorney General shall register practitioners * * * to dispense * * * 
if the applicant is authorized to dispense * * * controlled substances 
under the laws of the State in which he practices.'').
    As I noted in United Prescription Services, shortly after the CSA's 
enactment, the Supreme Court explained that ``[i]n the case of a 
physician [the Act] contemplates that he is authorized by the State to 
practice medicine and to dispense drugs in connection with his 
professional practice.'' Moore, 423 U.S. at 140-41 (emphasis added) 
(quoted at 72 FR 50407). A controlled-substance prescription issued by 
a physician who lacks the license or other authority required to 
practice medicine within a State is therefore unlawful under the CSA. 
See 21 CFR 1306.04(a) (``An order purporting to be a prescription 
issued not in the usual course of professional treatment * * * is not a 
prescription within the meaning an intent of'' the CSA); cf. 21 CFR 
1306.03(a)(1) (``A prescription for a controlled substance may be 
issued only by an individual practitioner who is * * * [a]uthorized to 
prescribe controlled substances by the jurisdiction in which he is 
licensed to practice his profession[.]'').\27\
---------------------------------------------------------------------------

    \27\ As the California Court of Appeal has noted: the 
``proscription of the unlicensed practice of medicine is neither an 
obscure nor an unusual state prohibition of which ignorance can 
reasonably be claimed, and certainly not by persons * * * who are 
licensed health care providers. Nor can such persons reasonably 
claim ignorance of the fact that authorization of a prescription 
pharmaceutical constitutes the practice of medicine.'' Hageseth v. 
Superior Court, 59 Cal. Rptr.3d 385, 403 (Ct. App. 2007).
---------------------------------------------------------------------------

    Under the regulation of the New Jersey Board of Medical Examiners, 
``a practitioner shall not dispense drugs or issue prescriptions to an 
individual * * * without first having conducted an examination, which 
shall be appropriately documented in the patient record.'' N.J. Admin 
Code Sec.  13:35-7.1A(a). This rule further requires that ``[a]s part 
of the patient examination, the practitioner shall'':

    1. Perform an appropriate history and physical examination;
    2. Make a diagnosis based upon the examination and all 
diagnostic and laboratory tests consistent with good medical care;
    3. Formulate a therapeutic plan and discuss such plan, along 
with the basis for the plan and the risks and benefits of various 
treatment options, with the patient; and
    4. Ensure the availability of the physician or coverage for 
appropriate follow-up care.

Id.

    It is undisputed that Respondent did not perform a physical 
examination on any of the Liberty patients he prescribed to, including 
those who were New Jersey residents. Instead, Respondent asserted that 
two exceptions provided in the New Jersey rule ``could apply'' to his 
internet prescribing. Tr. 589. The first of these authorizes the 
prescribing of ``continuation medications on a short term basis for a 
new patient prior to the patient's first appointment''; the second 
authorizes prescribing ``[f]or an established patient who, based on 
sound medical practice, the physician believes does not require a new 
examination before issuing a new prescription.'' N.J. Admin Code 13:35-
7.1A(b)(3) & (4).
    As the record establishes, none of Respondent's Liberty patients 
were ever expected to see him for a ``first appointment,'' and none 
did. Moreover, Respondent offered no evidence that any of his Liberty 
patients were his ``established patients.'' \28\
---------------------------------------------------------------------------

    \28\ I acknowledge that in Gonzales, the Supreme Court stated 
that ``[a]s for the federal law factor, though it does require the 
Attorney General to decide `[c]ompliance' with the law, it does not 
suggest he may decide what the law says. Were it otherwise, the 
Attorney General could authoritatively interpret `State' and `local 
laws,' which are also included in 21 U.S.C. 823(f), despite the 
obvious constitutional problems in his doing so.'' 546 U.S. at 264.
    In determining whether Respondent established a legitimate 
doctor-patient relationship with the Liberty patients, this Agency 
must necessarily examine state law. Moreover, the requirement that a 
practitioner must generally perform a physical exam in order to 
properly diagnose a patient is one which is universally accepted 
throughout the medical community and by state medical boards. See 
American Medical Association, Guidance for Physicians on Internet 
Prescribing (GX 8); see also Federation of State Medical Boards, 
Internet Prescribing Language By State (available at http://www.fsmb.org/ncip_resources.html/).
    Notably, Respondent cites no decision of either the New Jersey 
Board of Medical Examiners or the New Jersey courts holding that 
conduct similar to his internet prescribing was lawful under the 
exceptions which he contended ``could apply.'' Tr. 589. If 
Respondent had, this Agency would, of course, respect that decision.

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

[[Page 10091]]

    In his brief, Respondent also contends that New Jersey's exception 
``[f]or a patient examined by a healthcare professional who is in 
collaborative practice with the practitioner'' also applies. Id. Sec.  
13:35-7.1A(b)(5); see Resp. Prop. Findings 52. However, with respect to 
this exception, Respondent testified that ``I don't know what 
collaborative means there,'' Tr. 589, and in any event, there is no 
credible evidence that Respondent collaborated with any of the 
practitioners who may have previously examined the Liberty patients. 
Id. at 573 & 614.
    Respondent thus failed to establish a legitimate doctor-patient 
relationship under the New Jersey regulation. I therefore further hold 
that Respondent's prescriptions to the Liberty patients were not 
``issued for a legitimate medical purpose by an individual practitioner 
acting in the usual course of his professional practice,'' 21 CFR 
1306.04(a) and thus violated the CSA as well.
    Respondent's prescriptions also violated numerous laws of the 
States where the patients were located. Respondent prescribed 
controlled substances to two residents of Georgia, A.B. and D.C. Under 
the rules of the Georgia Composite State Board of Medical Examiners, it 
is ``unprofessional conduct'' to ``[p]rovid[e] treatment and/or 
consultation recommendations via electronic or other means unless the 
licensee has performed a history and physical examination of the 
patient adequate to establish differential diagnoses and identify 
underlying conditions and/or contra-indications to the treatment 
recommended.'' Ga. Comp. R. & Regs. 360-3.02(6).\29\ Moreover, 
Respondent violated Georgia law because he engaged in the unlicensed 
practice of medicine. See Ga. Code Ann. Sec.  43-34-31.1.\30\
---------------------------------------------------------------------------

    \29\ It is noted that the rule does ``not prohibit a licensee 
who is on call or covering for another licensee from treating and/or 
consulting a patient of such other licensee.'' Ga. Comp. R. & Regs. 
360-3-.02(6). Respondent did not maintain that he was covering for, 
or consulting with, other physicians who were treating either A.B. 
or D.C.
    \30\ This statute provides:
    (a) A person who is physically located in another state * * * 
and who, through the use of any means, including electronic * * * or 
other means of telecommunication, through which medical information 
or data is transmitted, performs an act that is part of a patient 
care service located in this state * * * that would affect the 
diagnosis or treatment of the patient is engaged in the practice of 
medicine in this state. Any person who performs such acts through 
such means shall be required to have a license to practice medicine 
in this state and shall be subject to regulation by the board.
    Ga. Code Ann. Sec.  43-34-31.1(a). While the statute includes 
exceptions when, inter alia, the physician ``[p]rovides consultation 
services at the request of a physician licensed in this state,'' or 
``[p]rovides consultation services in the case of an emergency,'' 
id. Sec.  43-34-31.1(b)(1) & (2), neither exception applies to 
Respondent.
---------------------------------------------------------------------------

    Respondent also prescribed controlled substances to four residents 
of Texas, S.A., K.A., S.K., and K.S. Respondent did not hold a Texas 
medical license. See Tex. Occup. Code Sec.  155.001; see also id. Sec.  
151.056(a) (``A person who is physically located in another 
jurisdiction but who, through the use of any medium, including an 
electronic medium, performs an act that is part of a patient care 
service initiated in this state, * * * and that would affect the 
diagnosis or treatment of the patient, is considered to be engaged in 
the practice of medicine in this state and is subject to appropriate 
regulations by the board.''); 22 Tex. Admin. Code Sec.  174.4(c) 
(``Physicians who treat and prescribe through the Internet are 
practicing medicine and must possess appropriate licensure in all 
jurisdictions where patients reside.'').
    Respondent also lacked the state registration required to prescribe 
a controlled substance. See Tex. Health & Safety Code Sec.  481.061(a) 
(requiring state registration to dispense); id. Sec.  481.063(d) 
(requiring as a condition for registration that ``a practitioner [be] 
licensed under the laws of this state''). Respondent thus also violated 
Texas law, and the CSA, in prescribing controlled substances to that 
State's residents. See Moore, 423 U.S. at 140-41 (``In the case of a 
physician [the CSA] contemplates that he is authorized by the State to 
practice medicine and to dispense drugs in connection with his 
professional practice.'') (emphasis added); United Prescription 
Services, 72 FR at 50407 (``A controlled-substance prescription issued 
by a physician who lacks the license [or other authority required] to 
practice medicine within a State is * * * unlawful under the CSA.''); 
21 U.S.C. 802(10) (defining `` `dispense' [to] mean[] to deliver a 
controlled substance to an ultimate user * * * by, or pursuant to the 
lawful order of, a practitioner'').
    Respondent prescribed a controlled substance to R.Z., a 
Massachusetts resident. Massachusetts law follows nearly verbatim the 
CSA's prescription requirement. Compare Mass. Gen. Laws ch. 94C, Sec.  
19(a), with 21 CFR 1306.04(a). In December 2003, the Massachusetts 
Board of Registration in Medicine issued the following interpretation 
of the State's prescription law:

[t]o satisfy the requirement that a prescription be issued by a 
practitioner in the usual course of his professional practice, there 
must be a physician-patient relationship that is for the purpose of 
maintaining the patient's well-being and the physician must conform 
to certain minimum norms and standards for the care of patients, 
such as taking an adequate medical history and conducting an 
appropriate physical and/or mental status examination and recording 
the results. Issuance of a prescription, by any means, including the 
Internet or other electronic process, that does not meet these 
requirements is therefore unlawful.

Commonwealth of Massachusetts, Board of Registration in Medicine, 
Policy 03-06 INTERNET PRESCRIBING (Adopted Dec. 17, 2003).\31\ As the 
Board's interpretation makes plain, Respondent acted outside of the 
usual course of professional practice when he prescribed a controlled 
substance to R.Z., and therefore violated both Massachusetts law and 
the CSA.\32\

    \31\ The ALJ also noted that Respondent was required to be 
licensed to practice medicine in Massachusetts and that ``[o]nly a 
practitioner who is authorized to prescribe controlled substances 
may do so.'' ALJ at 39 (citing Mass. Gen. Laws. ch. 94C, Sec.  
18(a)). In light of the Massachusetts' Board clear interpretation as 
set forth in its policy on Internet Prescribing, I conclude that it 
is unnecessary to address whether Respondent also violated the 
State's provisions requiring a license and controlled substance 
registration which appear to allow an out-of-state practitioner to 
issue a prescription to a state resident in some instances. Id. 
Sec.  18(c).
    \32\ The ALJ also found that Respondent violated Minnesota law 
when he prescribed to P.G. because he lacked either a state medical 
license or a telemedicine registration. ALJ at 39-40 (citing Minn. 
Stat. Sec.  147.081). The ALJ observed that Minnesota allows a 
physician to provide telemedicine services if four conditions are 
met including that the physician register with the State. ALJ at 40 
(citing Minn. Stat. Sec.  147.032 Subd. 1(a)). The Minnesota 
statute, however, exempts a physician who holds a valid license to 
practice in another state ``if * * * the services are provided on an 
irregular or infrequent basis,'' which is defined as ``if the person 
provides the services less than once a month or provides the 
services to fewer than ten patients annually.'' Id. Subd. 2(2).
    The Government's evidence established that Respondent issued 
only a single prescription to P.G.; there is no evidence that he 
prescribed to any other Minnesota residents. While it may well be 
the case that Respondent issued additional prescriptions to P.G. or 
other Minnesota residents, the Government has not proved that he 
engaged in the unauthorized practice of medicine within Minnesota.

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

[[Page 10092]]

    Respondent also issued a prescription for controlled substance to 
E.M., a New Hampshire resident. In April 2004, the New Hampshire Board 
of Medicine issued Guidelines on internet prescribing. In pertinent 
---------------------------------------------------------------------------
part, the Board stated:

    The members of the NH Board of Medicine have interpreted that a 
sufficient examination in the establishment of a valid physician-
patient relationship cannot take place without an initial face-to-
face encounter with the patient. It requires at a minimum: (1) 
Verifying the person requesting the medication is who they claim to 
be; (2) establishing a diagnosis through the use of acceptable 
medical practices, such as patient history, mental status exam, 
physical exam, and appropriate diagnostic and laboratory testing by 
the prescribing physician; (3) discussing with the patient the 
diagnosis and the evidence for it, and the risks and benefits of 
various treatment options; and (4) ensuring availability of the 
physician or coverage for the patient for appropriate follow-up 
care; (which usually includes a face-to-face encounter at least once 
a year and as often as is necessary to assure safe continuation of 
medication). Complete management of a patient by Internet, e-mail, 
or other forms of electronic communication is inappropriate.

New Hampshire Board of Medicine, Guidelines for Physician Internet and 
Telephone Prescribing (April 7, 2004).
    Moreover, under New Hampshire law, ``[a]ny person shall be regarded 
as practicing medicine * * * who shall diagnose, treat * * * or 
prescribe any treatment of medicine for any disease or human ailment.'' 
N.H. Rev. Stat. Sec.  329:1. Moreover, practicing medicine without a 
license or as ``otherwise authorized according to the law of'' the 
State constitutes the ``unlawful practice'' of medicine.\33\ Id. Sec.  
329:24. I thus conclude that Respondent acted outside of the usual 
course of professional practice in prescribing a controlled substance 
to E.M. and violated both New Hampshire law and the CSA.
---------------------------------------------------------------------------

    \33\ Respondent produced no evidence that his internet practice 
came within any of the exceptions to New Hampshire's licensing 
requirement. See N.H. Rev. Stat. Sec.  329:21.
---------------------------------------------------------------------------

    Respondent also prescribed a controlled substance to S.B., a South 
Carolina resident. In May 2001, the South Carolina Board of Medical 
Examiners promulgated its regulation on ``Contact with Patients before 
Prescribing.'' S.C. Code Regs. 81-28. This regulation declares that 
``[i]t is unprofessional conduct for a physician to initially prescribe 
drugs to an individual without first establishing a proper physician-
patient relationship.'' Id. Continuing, the regulation states that 
forming ``a proper relationship'' requires that a physician:

    (1) Personally perform an appropriate history and physical 
examination, make a diagnosis, and formulate a therapeutic plan. 
This process must be documented appropriately; and
    (2) Discuss with the patient the diagnosis and evidence for it, 
and the risks and benefits of various treatment options; and
    (3) Insure the availability of the physician or coverage for 
appropriate follow-up care.

Id.\34\ Here too, Respondent failed to establish a valid doctor-patient 
relationship with S.B. under South Carolina law and thus violated the 
CSA when he prescribed a controlled substance to her. 21 CFR 
1306.04(a).

    \34\ Similar to other State's regulations (such as New 
Jersey's), the South Carolina rules recognizes several circumstances 
in which a physician can lawfully prescribe to a patient he had not 
personally examined. See S.C. Code of Regs. R. 81-28(B). Respondent 
has not, however, demonstrated that his prescribing to S.B. came 
within any of the exceptions that excuse a physician from personally 
examining his patient before prescribing.
---------------------------------------------------------------------------

    Respondent also issued a prescription to K.B., a resident of 
Alabama. Under Alabama law, ``[t]he practice of medicine * * * across 
state lines means the practice of medicine * * * as defined in Section 
34-24-50(1), as it applies to * * * [t]he rendering of treatment to a 
patient located within this state by a physician located outside this 
state as a result of transmission of individual patient data by 
electronic or other means from this state to such physician or his or 
her agent.'' Ala. Code Sec.  34-24-501(a); see also id. Sec.  34-24-50 
(defining the ``practice of medicine'' as meaning ``[t]o diagnose, 
treat, correct, advise or prescribe for any human disease, ailment, 
injury, infirmity, deformity, pain or other condition, physical or 
mental, real or imaginary, by any means or instrumentality''). 
Moreover, under Alabama law, ``[n]o person shall engage in the practice 
of medicine * * * across state lines in this state * * * unless he * * 
* has been issued a special purpose license to practice medicine * * * 
across state lines.'' Id. Sec.  34-24-502(a).
    Respondent did not hold either a medical license or a special 
purpose license to practice medicine across state lines as required by 
Alabama law. In issuing the prescription to K.B., Respondent not only 
violated Alabama law, he acted outside of the usual course of 
professional practice and thereby violated the CSA as well.
    As the foregoing demonstrates, Respondent repeatedly violated both 
the CSA and various State laws in prescribing to Liberty's customers. 
Respondent nonetheless contends that the Supreme Court's decision in 
Gonzales ``indicates that the continuation of his registration should 
not turn on [this Agency's] determination of whether in fact he had 
satisfied the relevant standards for establishing a doctor-patient 
relationship.'' Resp. Br. at 51; see also id. at 52 (arguing that 
Gonzales ``militates against a determination by the agency, for 
purposes of determining whether [Respondent's] registration should be 
revoked, as to whether [his] practices with internet patients satisfied 
state * * * standards for effective medical practice'').
    Contrary to Respondent's view, Gonzales expressly recognized that 
one of the core purposes of the prescription requirement was to 
``ensure[] [that] patients use controlled substances under the 
supervision of a doctor so as to prevent addiction and recreational 
abuse.'' 546 U.S. at 274. Respondent's internet prescribing practices 
beg the question of how he was supervising the persons to whom he 
prescribed, to prevent them from becoming addicted to, or engaging in 
recreational abuse of, the drugs.\35\ Examining whether Respondent 
established legitimate doctor-patient relationships under state law 
with those to whom he prescribed, is thus a necessary incident of 
determining whether he violated the CSA.
---------------------------------------------------------------------------

    \35\ Respondent contends that his internet practice ``was not 
substantially different from the evaluation process he would perform 
when he was contacted by a nurse from [the hospital] while he was on 
call,'' in that ``without examining the patient directly, [he] would 
draw upon his substantial experience and expertise to get the 
information he needed * * * to determine what care the patient 
required.'' Response to Gov.'s Exceptions at 5. It does not require 
a degree in medicine, however, to recognize that there is a critical 
difference between the two situations. In the on-call situation, a 
nurse is personally observing the patient and likely relating the 
patient's vital signs and other information regarding the patient's 
symptoms/condition to the physician. In contrast, even when 
Respondent, in the course of his internet prescribing, reviewed the 
results of physical examinations, he had no current information 
available as to the patient's vital signs and other symptoms.
---------------------------------------------------------------------------

    Respondent further argues that the DEA 2001 Guidance ``does not 
require the doctor personally to take the history or perform the 
[physical] examination.'' Resp. Br. at 50. Relatedly, Respondent 
contends that ``in terms of the indicia'' of a legitimate doctor-
patient relationship as stated in the Guidance, ``there is clearly room 
for a physician to issue a prescription premised in part upon an 
examination or history conducted by another professional.'' Id.
    At the hearing, however, Respondent testified that he had not seen 
the Guidance prior to this proceeding, Tr.

[[Page 10093]]

414-15; Respondent therefore could not have been induced into believing 
that his conduct was legal by the Guidance. Moreover, the Guidance made 
clear that its discussion of the criteria for establishing a legitimate 
doctor-patient relationship was based on a summary of the standards 
adopted by the various States. See 66 FR at 21182 (GX 6, at 4).\36\
---------------------------------------------------------------------------

    \36\ The Guidance is not a regulation and thus does not have the 
force and effect of law. Rather, it is a Notice which simply 
provides guidance.
---------------------------------------------------------------------------

    As Respondent acknowledged, he did not conduct his own review of 
state laws or seek legal advice concerning the legality of prescribing 
through the Liberty website. At the time he commenced his contract with 
Liberty, numerous state medical boards had already issued either policy 
statements or regulations (including those States discussed above) 
which addressed the legality of a physician's prescribing to patients 
he had not personally examined. Moreover, at the time Respondent 
commenced his contract with Liberty, this Agency had published several 
final orders revoking practitioners' registrations based on their 
prescribing over the internet and without performing a physical 
examination.\37\ See, e.g., Marvin L. Gibbs, Jr., M.D., 69 FR 11658, 
11661 (issued Mar. 11, 2004); Mark Wade, M.D., 69 FR 7018, 7021-22 
(issued Feb. 12, 2004); Rick Joe Nelson, M.D., 66 FR 30752, 30753 
(2001) (noting immediate suspension of practitioner's registration 
based on internet prescribing).
---------------------------------------------------------------------------

    \37\ Respondent also contends that his shortfalls were of one 
``seeking to practice in an area where the technical requirements 
are both widely dispersed and in flux.'' Resp. Br. 46; see also id. 
at 52. However, at the time he commenced his contract with Liberty, 
each of the States discussed above had already either enacted laws, 
or issued regulations or policy statements, addressing the propriety 
of this activity. And in any event, Respondent cannot credibly argue 
that his conduct should be excused because the legal requirements 
were in flux when he made no inquiry as to what the requirements 
were.
---------------------------------------------------------------------------

    In his response to the Government's Exceptions, Respondent contends 
that because of Boswell's ``attentiveness to regulatory and compliance 
issues,'' he was ``led * * * to believe that his internet practice 
would be proper.'' Response to Gov.'s Exceptions 7. This is not a 
persuasive argument. Indeed, one would think that a licensed 
professional and the holder of an appointment as a clinical professor 
would be well aware of such state laws and regulations as those 
prohibiting the unauthorized practice medicine and those defining 
something as fundamental to the practice of medicine as the steps 
necessary to establish a legitimate doctor-patient relationship. As the 
California Court of Appeal has explained:

[the] proscription of the unlicensed practice of medicine is neither 
an obscure nor an unusual state prohibition of which ignorance can 
reasonably be claimed, and certainly not by persons * * * who are 
licensed health care providers. Nor can such persons reasonably 
claim ignorance of the fact that authorization of a prescription 
pharmaceutical constitutes the practice of medicine.

Hageseth v. Superior Court, 59 Cal. Rptr.3d 385, 403 (Ct. App. 2007).

    Respondent further contends that his case is distinguishable from 
other Agency cases involving internet prescribers. See Resp. Br. at 43-
46. More specifically, Respondent contends that in contrast to other 
internet prescribers, he ``issued no more than a handful of 
prescriptions a day,'' that he prescribed ``only after reviewing the 
patient's medical record and conducting a searching personal 
interview,'' that he ``only prescribed medications that were pertinent 
to his area of medical expertise,'' and that he ``rejected many 
requests for medication that he deemed inappropriate.'' Id. at 43. 
Relatedly, Respondent contends that Liberty attempted to identify 
persons who were obtaining drugs from multiple sources and that it 
verified medical records. Id. at 45. He also contends that ``[h]e 
genuinely made a good faith effort'' to practice ``medicine properly 
and effectively.'' Resp. to Gov.'s Exceptions at 10.
    As to these contentions, the evidence is mixed. While there is no 
evidence rebutting his contention that he issued only a small number of 
prescriptions each day, by his own admission he consulted for Liberty 
for approximately one year during which he issued between 800 and 1200 
prescriptions. However, the record does not establish the extent to 
which these prescriptions were for controlled substances. Moreover, he 
continued to prescribe for three months after being served with the 
Order to Show Cause.\38\ While it seems likely that he prescribed 
controlled substances during this period, the Government did not 
establish the scope of his controlled substance prescribing activity 
after he was served with the Order.
---------------------------------------------------------------------------

    \38\ With respect to his prescribing following the service of 
the Show Cause Order, Respondent does not maintain that he did not 
prescribe controlled substances in this period. Rather, he argues 
that I should consider the fact that the Order alleged that he 
``improperly prescribed drugs [phentermine and phendimetrazine] that 
he never in fact prescribed.'' Response to Gov.'s Exceptions at 11. 
Respondent ignores, however, that the Show Cause Order also quoted 
the prescription requirement of 21 CFR 1306.04(a), and the New 
Jersey regulation setting forth the requirements for prescribing a 
drug including that a ``practitioner shall * * * perform an 
appropriate history and physical examination.'' Show Cause Order at 
1 & 3. Moreover, the Show Cause Order alleged that Respondent was 
prescribing to persons that he was not physically examining and had 
no prior doctor-patient relationship with, and was thus violating 21 
CFR 1306.04. Id. at 6. The Show Cause Order thus provided Respondent 
with fair warning as to the illegality of his conduct.
---------------------------------------------------------------------------

    Moreover, notwithstanding his contention that he prescribed only 
after reviewing a patient's medical record and ``conducting a 
searching'' interview, the evidence establishes that in some instances 
(R.Z. and S.K.) he prescribed before Liberty even obtained the records, 
and that in other instances he relied on records that--according to his 
own testimony--were outdated (P.G) and even indicated that narcotics 
were not in the patient's best interest. Relatedly, as the ALJ noted, 
other evidence casts serious doubt as to his assertions that he always 
conducted a consultation with the patients, let alone a searching 
interview of them. ALJ at 12. (FoF 36).
    On the other hand, there is some evidence that Liberty rejected 
patients who were seeking drugs from multiple sources, or who were 
seeking drugs to give to others. There is also evidence that in some 
instances, Liberty verified a patient's records with the patient's 
original physicians although it is unclear what this process involved 
and how often it was undertaken.\39\ Relatedly, even though the patient 
files typically included photocopies of a driver's license, there is no 
guarantee that the drugs were actually going to these persons.
---------------------------------------------------------------------------

    \39\ For example, did Liberty's employees simply ask whether a 
person had been a patient? Did they ask whether the patient was 
still being treated by the physician? Did they ask what the 
physician's diagnosis was? And did they ask if there was any 
evidence that the patient had engaged in drug seeking behavior? 
Moreover, in some instances, Respondent prescribed before the 
records were even sent to Liberty. Finally, in at least one case 
(patient L.F.), it appeared that some of the records were 
fraudulent.
---------------------------------------------------------------------------

    Moreover, the ALJ found that Respondent ``declined to prescribe 
medications in many instances where Liberty customers were directed to 
him.'' ALJ at 17 (FoF 52). The Government produced no evidence to rebut 
Respondent's contention as to the frequency of his refusals to 
prescribe. Relatedly, there is also evidence that Respondent rejected a 
request for drugs when he thought the person would divert or was 
seeking drugs from multiple sources. Moreover, there is evidence that 
Respondent refused to prescribe because a person's complaint (and the 
supporting records) had not been verified.

[[Page 10094]]

    While the record as a whole may not conclusively show that 
Respondent knowingly diverted, at the very least it establishes that 
Respondent acted with reckless disregard for his obligations as a 
practitioner under both the CSA and numerous state laws. Moreover, 
Respondent acknowledged that he prescribed schedule II drugs and 
authorized refills of these prescriptions, in violation of federal law. 
See 21 U.S.C. 829(a).\40\ The Government has therefore proved that 
Respondent has committed acts that render his registration 
``inconsistent with the public interest.'' Id. Sec.  824(a)(4).
---------------------------------------------------------------------------

    \40\ Respondent also provided Liberty with an electronic copy of 
his signature. Tr. 511 & 570. While Respondent credibly testified 
that he had no reason to suspect that Liberty was using his 
signature to authorize prescriptions which he had not approved, he 
acknowledged that he had no way of determining whether Liberty was 
misusing his signature. Id. at 570. This Agency has previously held 
that failing to safeguard one's signature constitutes conduct 
inconsistent with the public interest. See Robert G. Hallermeier, 
M.D., 62 FR 26818, 26820 (1997).
---------------------------------------------------------------------------

Sanction

    Under Agency precedent, where, as here, ``the Government has proved 
that a registrant has committed acts inconsistent with the public 
interest, a registrant must `` `present sufficient mitigating evidence 
to assure the Administrator that [he] can be entrusted with the 
responsibility carried by such a registration.' '' Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008) (quoting Samuel S. Jackson, 72 FR 
23848, 23853 (2007) (quoting Leo R. Miller, 53 FR 21931, 21932 (1988)). 
``Moreover, because `past performance is the best predictor of future 
performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), 
[DEA] has repeatedly held that where a registrant has committed acts 
inconsistent with the public interest, the registrant must accept 
responsibility for [his] actions and demonstrate that [he] will not 
engage in future misconduct.'' Medicine Shoppe, 73 FR at 387; see also 
Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 35705, 35709 (2006); 
Prince George Daniels, 60 FR 62884, 62887 (1995). See also Hoxie v. 
DEA, 419 F.3d at 483 (``admitting fault'' is ``properly consider[ed]'' 
by DEA to be an ``important factor[]'' in the public interest 
determination).
    The ALJ acknowledged that the Government had ``clearly 
demonstrated'' that Respondent's internet prescribing practices 
violated the CSA. ALJ at 43. While the ALJ recognized that Respondent's 
internet prescribing was ``egregious conduct,'' id., that he ``fail[ed] 
to be totally truthful during his testimony,'' id. at 44, and that he 
``demonstrated a lack of sound judgment'' in continuing his internet 
prescribing for three months following the service of the Show Cause 
Order, id., she also noted that he ``is clearly a very educated, 
dedicated and talented physician,'' id.; that he had been practicing 
medicine for eleven years, and that ``the only instances of [his] 
improper handling of controlled substances were related to his'' 
internet prescribing. Id. Balancing Respondent's misconduct against his 
overall practice, the ALJ recommended that I continue his registration, 
subject only to the condition that he not prescribe over the internet. 
Id.
    As explained above, this Agency has repeatedly held that accepting 
responsibility for one's misconduct is an ``important factor'' in the 
public interest determination. See Hoxie, 419 F.3d at 483 (upholding 
Agency's consideration of whether registrant/applicant has admitted 
fault); Jackson, 72 FR at 23853; Kennedy, 71 FR at 35709; Daniels, 60 
FR at 62887. The ALJ, however, made no finding as to whether Respondent 
had accepted responsibility for his misconduct.
    While Respondent testified that it was not his ``present 
intention'' to resume internet prescribing,\41\ the record as a whole 
does not establish that he has accepted responsibility for his 
misconduct. I acknowledge that the DI who served Respondent with the 
Show Cause Order described him as cooperative, and that Respondent 
admitted that his internet prescribing was even more extensive than 
that shown by the Government. In his testimony, however, Respondent 
continued to maintain that his prescribing without performing a 
physical exam was lawful under New Jersey's regulation. Moreover, 
Respondent did not acknowledge that he violated either the CSA, or any 
other state laws and regulations, whether they related to the standards 
for establishing a legitimate doctor-patient relationship or addressed 
the unauthorized practice of medicine. Respondent's failure to 
acknowledge the illegality of his conduct does not inspire confidence 
that he will refrain from engaging in similar acts in the future.
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    \41\ Notably, while the ALJ credited this testimony, she was 
less than impressed with Respondent's testimony that he did not 
intend to resume internet prescribing. See ALJ 15 n.4 (``Although 
[Respondent] appeared to be credible when he testified here to his 
intent, I do question how he resolves this intent with his continued 
interest in telemedicine.''). Indeed, intentions can change, and 
Respondent's statement is hardly an unequivocal statement that he 
will not resume such conduct in the future.
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    Moreover, while a registrant must accept responsibility and 
demonstrate that he will not engage in future misconduct in order to 
establish that his/her continued registration is consistent with the 
public interest, these are not the only factors that are relevant in 
determining the appropriate sanction. As I have previously noted, 
``[n]either Jackson nor any other agency decision holds * * * that the 
Agency cannot consider the deterrent value of a sanction in deciding 
whether a registration should be [suspended or] revoked.'' Southwood 
Pharmaceuticals, Inc., 72 FR 36487, 36504 (2007).\42\
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    \42\ Southwood was decided before the ALJ issued her recommended 
decision in this matter. The ALJ did not, however, even acknowledge 
the decision.
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    In Southwood, I explained that ``even when a proceeding serves a 
remedial purpose, an administrative agency can properly consider the 
need to deter others from engaging in similar acts.'' Id. (citing Butz 
v. Glover Livestock Commission Co., Inc., 411 U.S. 182, 187-88 (1973)). 
I further noted that the ``[c]onsideration of the deterrent effect of a 
potential sanction is supported by the CSA's purpose of protecting the 
public interest, see 21 U.S.C. 801, and the broad grant of authority 
conveyed in the statutory text, which authorizes the [suspension or] 
revocation of a registration when a registrant `has committed such acts 
as would render [his] registration * * * inconsistent with the public 
interest,' id. section 824(a)(4), and [which] specifically directs the 
Attorney General to consider [`such other conduct which may threaten 
public health and safety,' id. section 823(f)].'' Southwood, 72 FR at 
36504.
    I acknowledge that Respondent has impressive credentials, and that 
except for his internet prescribing, there is no evidence that he 
violated the CSA or state laws in his years of practice as an 
anesthesiologist and pain management specialist. However, under any 
circumstance, Respondent's conduct as an internet prescriber would be 
disturbing. That he holds an appointment as a clinical professor 
renders his conduct even more so. Relatedly, Respondent's testimony as 
to why he believed that his Internet prescribing was lawful and failed 
to perform his own inquiries into the legality of this practice is 
especially unpersuasive and does not excuse his failure to obey the 
law.
    Moreover, Respondent's Internet prescribing was not a brief sojourn 
into illegality. Rather, he engaged in his

[[Page 10095]]

misconduct for a year, during which time he likely issued between 800 
to 1,200 prescriptions. Yet the record does not establish the extent to 
which these prescriptions were for controlled substances.\43\
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    \43\ It is also noted that Respondent continued his internet 
prescribing for three months after he received the Show Cause Order, 
even though the Order put him on notice as to the requirements for a 
lawful prescription under both the CSA and state law. While 
Respondent did not dispute that he prescribed controlled substances 
during this period, I do not rely on this conduct in setting the 
sanction because the Government did not identify a single controlled 
substance prescription that he issued following the service of the 
Show Cause Order. If the Government had shown specific instances of 
Respondent's prescribing of controlled substances following service 
of the Order, I would have found that he knowingly diverted 
controlled substances and revoked his registration.
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    I acknowledge that proceedings under Section 304 are non-punitive. 
But even were I to ignore that Respondent has not accepted 
responsibility for his misconduct, and credit his testimony that he did 
not intend to resume his internet practice, I would still conclude that 
a lengthy suspension of his registration is warranted.
    As found above, the diversion and abuse of prescription drugs has 
increased dramatically, with the number of people admitting to such 
abuse (approximately 15.1 million) exceeding by twenty-three percent, 
the number who abuse cocaine, hallucinogens, inhalants and heroin 
combined. Moreover, the growth rate of prescription drug abuse is twice 
the growth rate of marijuana abuse and five times the growth rate of 
cocaine abuse; between 1992 and 2002, the growth in prescription opioid 
abuse among teenagers grew by 542 percent.
    The use of the internet and telephone to prescribe to individuals 
with whom a physician has not established a bona fide doctor-patient 
relationship is one of the primary means by which controlled substances 
are being diverted and obtained for recreational abuse. The growth of 
this means of diversion represents a grave threat to public health and 
safety. Accordingly, this Agency has repeatedly revoked the 
registrations of numerous practitioners who have committed similar acts 
by prescribing over the internet without establishing legitimate 
doctor-patient relationships. See, e.g., Kamir Garces-Mejias, 72 FR 
54931 (2007); William Lockridge, 71 FR 77791 (2006); Mario Diaz, 71 FR 
70788 (2006). The ALJ did not, however, even acknowledge any of the 
numerous Agency decisions to this effect.
    Respondent maintains that his case is distinguishable from these 
and other reported decisions involving internet prescribers because he 
``genuinely believed * * * that he was practicing medicine properly and 
effectively[,]'' and ``genuinely made a good faith effort to do so.'' 
Response to Gov.'s Exceptions at 10. He also contends that he ``is an 
extraordinarily dedicated and tireless physician who saw the internet 
as a way to care for more patients,'' and that while he ``can be 
faulted'' for ``having trusted colleagues and new business associates 
when he should have been more skeptical,'' ``the price should not be 
his career.'' Id. at 14.
    It is true that in other Agency decisions revoking the 
registrations of internet prescribers, the evidence strongly supported 
the conclusion that the physicians were engaged in intentional acts of 
diversion. Here, by contrast, the evidence does not establish that he 
knowingly distributed controlled substances to those who were seeking 
the drugs to abuse them or to sell them to abusers. His conduct--which 
is extraordinary for its recklessness--nonetheless violated the CSA.
    Continuing Respondent's registration, subject only to the condition 
that he refrain from prescribing over the Internet, is no sanction at 
all given the numerous state laws and new Federal law which prohibit 
this practice in the manner Respondent engaged in it. Adopting the 
ALJ's recommendation would not only ``ignore how irresponsibly 
[Respondent] acted,'' Southwood, 71 FR at 36503; it would also signal 
to others that one can ignore the law (and his obligation to determine 
what the law is) and yet incur no consequence for having done so. Given 
the extraordinary harm to public health and safety caused by internet 
prescribing, this is not the message that should be sent to those who 
contemplate prescribing controlled substances in this manner. Rather, 
such persons should understand that they are responsible for knowing 
the law and acting in conformity therewith, and that there will be 
serious consequences for those who fail to do so.
    Accordingly, I conclude that Respondent's registration should be 
suspended for a period of one year. Moreover, Respondent's pending 
application for renewal of his registration will be held in abeyance 
during the course of the suspension. Upon completion of the suspension, 
his application will be approved provided that he fulfills the 
following condition. Because Respondent has not acknowledged that his 
internet prescribing practices violated the CSA, he must provide a 
sworn statement to this effect. If Respondent complies with this 
condition (and he commits no other acts which would warrant the denial 
of his application), the Agency will expeditiously grant his renewal 
application. If, however, if he fails to do so, his application will be 
denied.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 
824(a), as well as 28 CFR 0.100(b) & 0.104, I hereby order that the DEA 
Certificate of Registration issued to Joseph Gaudio, M.D., be, and it 
hereby is, suspended for a period of one year. I further order that 
Respondent's pending application to renew his registration be, and it 
hereby will be, held in abeyance pending the completion of the period 
of suspension and Respondent's providing to this Agency a sworn 
statement acknowledging that his internet prescribing activities 
violated the Controlled Substances Act and DEA regulations. This Order 
is effective April 8, 2009.\44\
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    \44\ Respondent can choose to commence serving his suspension 
earlier by tendering his Certificate of Registration and any order 
forms he has been issued to the nearest DEA office.

    Dated: February 26, 2009.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E9-4903 Filed 3-6-09; 8:45 am]
BILLING CODE 4410-09-P