[Federal Register Volume 76, Number 69 (Monday, April 11, 2011)]
[Notices]
[Pages 20011-20020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8536]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 07-20]


Mark De La Lama, P.A.; Denial of Application

    On January 16, 2007, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Mark De La Lama (Respondent), of Phoenix, Arizona. The 
Show Cause Order proposed the denial of Respondent's application for a 
DEA Certificate of Registration as a mid-level practitioner (i.e., 
physician assistant) on various grounds.
    Specifically, the Show Cause Order made four major allegations 
against Respondent. First, the Order alleged that Respondent's former 
DEA registration had expired on June 30, 2003, but that Respondent had 
continued writing prescriptions for controlled substances after that 
date. ALJ Ex. 1, at 1 & 3. Next, noting that as a condition of his 
initial registration Respondent had entered into a Memorandum of 
Agreement (MOA) with the Agency, the Order alleged that Respondent had 
violated the MOA in two ways: First, by failing to produce the log of 
his controlled substance prescriptions which he was required to 
maintain when DEA Diversion Investigators (DIs) visited his practice 
premises on April 13, 2005, and; second, by failing to report two 
changes of his practice location. Id. at 1, 2-3. Finally, the Order 
alleged that on November 21, 2004, Respondent submitted a new 
application for a registration which he falsified by failing to 
disclose his April 1992 and October 1994 felony convictions for 
offenses related to controlled substances, as well as the existence of 
the MOA. Id. at 3.
    Respondent, through his counsel, requested a hearing. The matter 
was assigned to a DEA Administrative Law Judge (ALJ), who conducted a 
hearing on January 16, 2008, in Phoenix, Arizona. ALJ at 2. Both 
parties called witnesses to testify and introduced documentary evidence 
into the record. Following the hearing, both parties filed briefs 
containing their proposed findings of fact, conclusions of law and 
argument. Id.
    On April 2, 2009, the ALJ issued her Recommended Decision. Therein, 
the ALJ concluded that Respondent ``knowingly issued prescriptions for 
controlled substances using an expired DEA registration number over a 
span of nearly two years'' but that the ``lack of evidence that 
Respondent issued prescriptions for other than a legitimate purpose * * 
* weigh[s] in favor of a finding that Respondent's registration would 
not be inconsistent with the public interest.'' Id. at 26.
    The ALJ also found that Respondent's conviction record for two 
felonies under Arizona law involving controlled substances weighed ``in 
favor of a finding that Respondent's registration would be inconsistent 
with the public interest.'' Id. at 27. Based on his failure to disclose 
these two felonies on his November 21, 2004 application, the ALJ 
further found that Respondent materially falsified his application but 
concluded that his conduct was only negligent because an office manager 
had completed the form for him. Id. at 28-29. The ALJ credited 
``Respondent's testimony and * * * his expressions of regret and 
recognition of his wrongdoing on this specific point, and * * * 
therefore conclude[d] that his material falsification in the 2004 
application [did] not warrant denying his application.'' Id. at 30.
    Next, the ALJ found ``that Respondent failed to adhere to certain 
requirements contained'' in a Memorandum of Agreement (MOA) which he 
was required to enter into with the Agency as a condition of obtaining 
a registration. Id. More specifically, Respondent ``failed to maintain 
a log of all controlled substances that he prescribed as of the date of 
the April 2005 site visit'' and he failed to notify the Agency of his 
changes in the location of his practice address. Id. 30-31. The ALJ 
also found, however, that Respondent ``equally accepts responsibility 
for what went wrong[ ] and has demonstrated a commitment to cooperate 
with DEA in the future.'' Id. at 32. Moreover, while the ALJ noted that 
Respondent had been convicted (in 1985) in Thailand of possession and 
attempted smuggling of marijuana, as well as a more recent conviction 
for driving under the influence, the ALJ also noted that Respondent was 
then practicing ``at a clinic that serves a primarily underserved and 
underinsured population'' and that this is ``an appropriate 
consideration in determining whether [his] application * * * should be 
granted.'' Id. at 33.
    Based on his multiple convictions for controlled substances 
offenses and his ``considerable difficulty [in] adhering to some of the 
requirements of the'' MOA, the ALJ concluded that the Agency had ``made 
out a prima facie case for denying [Respondent's] application.'' Id. 
The ALJ reasoned, however, that ``[d]espite his criminal convictions 
involving controlled substances in the 1990s, Respondent appears to 
have put that period of his life behind him.'' Id. at 34.

[[Page 20012]]

In the ALJ's view, Respondent's ``most recent conviction involving 
controlled substances occurred more than fifteen years ago [and] 
[s]ince that time, he has neither been implicated in nor been convicted 
of any other crime involving controlled substances [and] [t]he 
Government presented no evidence that the future would hold any 
differently.'' Id. Based on his ``expression of remorse and his 
expressed willingness to comply with restrictions on his 
registration,'' the ALJ ``conclude[d] that the public interest would 
best be served by granting Respondent a restricted registration'' 
subject to four conditions. Id. These were that: (1) Respondent must 
comply with all Federal, State and local laws and regulations relating 
to controlled substances; (2) Respondent may not personally use 
controlled substances in any form or for any reason without a 
prescription issued by a duly licensed physician who possesses a valid 
DEA Certificate of Registration; (3) Respondent must permit DEA 
personnel to enter his practice location at any time during normal 
business hours, without prior notice, to verify compliance with all 
applicable laws and regulations relating to controlled substances, as 
well as with any or all restrictions imposed on Respondent as a 
condition of his registration with the DEA; and (4) Respondent must 
notify the DEA Phoenix Division, in writing, of any change of business 
address or employer. Id. at 34-35.
    Neither party filed exceptions to the ALJ's decision. On May 7, 
2009, the ALJ forwarded the record to me for a final agency action.
    During the initial review of the record, it was noted that the 
Government had introduced into evidence--over Respondent's objection--a 
printout of a data compilation prepared by SearchPoint, a private 
entity, which purportedly listed the prescriptions Respondent issued 
between October 8, 2003 and May 23, 2005. The Government introduced 
this document, which is not a record required to be maintained under 
either federal or state law, to prove the allegations that Respondent 
had issued controlled substance prescriptions even after he knew his 
registration had expired and had done so even after being told to stop 
by DEA Investigators. Because Respondent's objection went to the 
foundation for admitting the compilation and the reliability of the 
information it contains, and the Government did not establish that the 
methods used to compile the data were sufficiently trustworthy, I 
remanded the case to the ALJ for further proceedings and specifically 
instructed the Government to address various questions as set forth in 
the remand order.\1\ Following additional proceedings, the ALJ 
forwarded the record back to me for final agency action.
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    \1\ To make clear, I remanded the case because there was no 
prior Agency decision addressing the admissibility of data 
compilations prepared by private entities.
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    Having considered the entire record, I hereby issue this Decision 
and Final Order. I agree with the ALJ's conclusions that: (1) 
Respondent materially falsified his application, (2) that he has a 
significant history of convictions relating to controlled substances; 
(3) that he failed to meet the MOA's requirements with respect to both 
his proper keeping of a log and his obligation to notify the Agency of 
any changes in his practice location.\2\ As the ALJ recognized, these 
findings establish a prima facie case for the denial of his 
application.
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    \2\ Under the express terms of the MOA, Respondent agreed to 
surrender his registration without issuance of an Order to Show 
Cause in the event that he failed to comply with the MOA. GX 3, at 
3. Also, a violation of the MOA's terms would ``result in the 
initiation of proceedings to revoke'' Respondent's registration. Id.
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    However, I reject the ALJ's conclusion that Respondent's employment 
at a clinic that serves an underserved population is ``an appropriate 
consideration in determining whether [his] application * * * should be 
granted.'' ALJ at 33; see also Gregory D. Owens, 74 FR 36751, 36756-57 
(2009) (rejecting consideration of socioeconomic status of 
practitioner's patients as appropriate consideration under the CSA). 
Moreover, while I do not reject the ALJ's findings that Respondent has 
accepted responsibility for his misconduct, I reject her proposed 
sanction because it clearly rests on a fundamental misunderstanding as 
to the scope of permissible sanctions under the CSA. Given the 
circumstances of this matter, I conclude that Respondent's application 
should be denied at this time.

The Reliability of the SearchPoint Data Compilation

    Before proceeding to make factual findings, it is necessary to 
resolve the issue of whether the ALJ properly admitted--over 
Respondent's objection that the Government had not laid a proper 
foundation--Government Exhibit 8, which it represents to be a data 
compilation listing the prescriptions Respondent issued between October 
8, 2003 and May 23, 2005.\3\ The Government argues that this exhibit 
showed that Respondent had issued controlled substance prescriptions 
not only following the expiration of his registration, but also after 
he knew it had expired and even after he was told by DEA Investigators 
to stop doing so.\4\ Gov. Proposed Findings at 7-8, 10-11. The ALJ 
relied on this evidence, in part, in her decision.
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    \3\ The ALJ overruled the objection after determining that the 
Exhibit had been provided to Respondent in advance of the hearing 
even though Respondent's counsel had objected on grounds of lack of 
foundation and that ``we have no way of determining the accuracy of 
the information as set forth herein.'' Tr. 66. While under the 
Agency's regulation, ``[t]he authenticity of all documents submitted 
in advance [is] deemed admitted unless written objection thereto is 
filed with the presiding officer,'' 21 CFR 1316.59(c), there is no 
such rule applicable to objections based on a lack of foundation. 
The ALJ apparently confused these two independent grounds for 
objecting to the admission of evidence.
    \4\ Notably, the Government did not introduce into evidence 
either copies of any prescriptions Respondent wrote during this 
period, or pharmacy dispensing logs, even though such evidence 
should have been readily obtainable (as a pharmacy is required to 
keep such records for two years, see 21 CFR1304.04(a) and 
1304.22(c)), and is what the Government customarily uses in these 
proceedings to establish that a practitioner wrote unlawful 
prescriptions.
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    Under the Administrative Procedure Act (APA), an Order must be 
``supported by and in accordance with the reliable, probative and 
substantial evidence.'' 5 U.S.C. 556(d). While the Agency's decision 
may be based on hearsay evidence, see Richardson v. Perales, 402 U.S. 
389, 410 (1971), such evidence must still be reliable.
    The compilation is not, however, a record maintained by a 
government agency. Nor is it a record which is required to be 
maintained under either federal or state law. Moreover, on reviewing 
the compilation, there appeared to be various discrepancies which 
called into question the data's reliability. As I noted in the remand 
order, this Office is unaware of any judicial decisions either 
admitting or excluding similar data compilations prepared by 
SearchPoint.
    At the hearing, a DI testified that prescription information is 
entered by a pharmacy into a computer which is then collected and sent 
to SearchPoint. Tr. 43. The DI did not, however, explain the basis of 
his knowledge. Moreover, the record did not establish the procedures or 
methods used by the pharmacies in entering the information, when the 
information is entered, whether either the pharmacies or SearchPoint 
have any procedures to verify the accuracy of the information, whether 
the data is properly secured, and whether there are procedures to 
protect the data from manipulation. Cf. McCormick on Evidence Sec.  
314, at 886 (3d ed. 1984).

[[Page 20013]]

    The record also did not establish whether a prescription that was 
signed by both Respondent and a supervising physician (which was one of 
Respondent's defenses to the allegation that he continued to prescribe 
even after he realized his registration had expired) would be 
attributed to Respondent or the physician. Nor did the record establish 
why, where refills were authorized by a single prescription, the 
printout provided the same date for the date the prescription was 
written and the date it was dispensed.
    Because the record did not adequately establish the procedures or 
methods used to compile this database and that the compilation is 
sufficiently trustworthy so as to satisfy the APA's requirement that 
the evidence be reliable, I remanded the case to the ALJ with 
instructions to address these various concerns. I also expressly 
ordered that the questions ``must be addressed by a witness who has 
personal knowledge of the procedures and methods used by Searchpoint.'' 
Remand Order at 3.
    On remand, the Government submitted an affidavit of the same 
Diversion Investigator whose testimony I previously found to be 
inadequate for establishing that the SearchPoint data is reliable. From 
his affidavit, it is clear that the DI lacks personal knowledge of the 
procedures and methods used by SearchPoint. See Affidavit of Miguel 
Rodriguez.
    This, by itself, is reason to conclude that the Government has 
failed to comply with the remand order. However, even in his affidavit, 
the DI offered no evidence which establishes that the SearchPoint data 
is reliable. To the contrary, the DI explained that:

[t]he accuracy and authenticity of the data was only as good as the 
accuracy of the pharmacy reporting. It was stipulated to all DEA 
investigators, that SearchPoint was only a pointing tool and the 
data provided by SearchPoint was to be verified against actual 
records that the pharmacy, distributor, [or] practitioner was 
required to maintain by current regulations and laws.''

Id. at 4 (emphasis added).

    The DI further acknowledged that he ``did not verify the 
information found during the query of the SearchPoint database prior to 
meeting with [Respondent] on April 13, 2005.'' Id. at 4-5. (Indeed, it 
is apparent that the DIs did not verify the information even after 
meeting with Respondent as there are no ``actual records'' in 
evidence.) The DI's statement that the SearchPoint data was only to be 
used as a ``pointing tool'' begs the question of why the actual 
pharmacy (or Respondent's patient) records were never obtained.
    Based on the DI's assertion that the SearchPoint database was ``a 
valuable tool in DEA's investigative efforts,'' id. at 5, ``the 
Government respectfully request[ed] an additional finding that the 
SearchPoint data proved useful in DEA's investigation of Respondent, 
and helped further the objectives of DEA's investigation.'' Gov't 
Memorandum on Remand at 2. Contrary to the Government's understanding, 
whether the SearchPoint data proved useful in its investigation is not 
material to the resolution of any issue in this proceeding.
    As the Government's brief makes clear, determining the extent of 
Respondent's issuance of prescriptions after his registration expired 
and assessing his culpability in doing so is one of the central issues 
in this matter. Given that there was no clear agency precedent 
addressing the admissibility of similar data compilations, this 
proceeding was remanded to determine whether the SearchPoint data was 
sufficiently reliable to prove that Respondent had continued to issue 
controlled substance prescriptions not only after he became aware that 
his registration had expired, but also after he was told by a DI to 
stop doing so.
    Notwithstanding that the remand order clearly stated what the 
Government was required to show to establish that this evidence is 
reliable, it failed to do so. Because the Government failed to comply 
with the remand order and offers no valid excuse for its failure to do 
so, I conclude that the SearchPoint compilation is not competent 
evidence and should have been excluded. See 21 CFR 1316.59(a) (``The 
presiding officer shall admit only evidence that is competent, 
relevant, material and not unduly repetitious.''). Accordingly, as 
ultimate factfinder, I do not base any of my findings on it.

Findings

    Respondent is a physician assistant, who is licensed by the Arizona 
Regulatory Board of Physicians Assistants (The Board). GXs 6 & 7. At 
the time of the hearing, Respondent was 49 years of age. Tr. 286.
    Respondent obtained a Bachelor of Science degree in human biology 
in 1997 and a Master's degree in physician assistant studies in October 
1999. Id. at 208. After obtaining his state license, Respondent 
commenced working as a physician assistant; his duties involve 
performing physical exams, making diagnoses, treating patients, 
interpreting test results, and ordering diagnostic tests and studies. 
Id.
    On October 26, 2000, Respondent applied for a DEA registration to 
handle controlled substances in Schedules II through V as a mid-level 
practitioner. GX 2. On the application, Respondent was required to 
answer four ``liability questions''; the questions included whether the 
applicant had ever been convicted of an offense related to controlled 
substances under either federal or state law. Id. at 2.
    Respondent answered in the affirmative and provided an explanation 
of the circumstances surrounding a 1992 marijuana conviction. Id. 
Respondent wrote that in 1989 or 1990, a friend he met in karate class 
was involved in ``selling dope'' and that Respondent ``made the 
horrible mistake of trying to make a `fast buck.' '' Id. Respondent 
also stated on the application that ``I entered guilty pleas in 1992 
and have never violated any of the terms of my probation.'' Id.
    Respondent also stated on the application that his ``criminal 
convictions were expunged by the Maricopa County Superior Court in 
1999,'' based on the recommendation of his probation officer. Id. He 
also ``regret[ted] this experience in [his] life'' and that his ``goal 
was to be the best P.A. and father I can be.'' Id.
    On February 12, 2001, the Agency granted Respondent's application. 
GX 1. However, because of his prior conviction, the Agency issued him a 
restricted registration; as a condition of his registration, Respondent 
was required to enter into a Memorandum of Agreement (MOA), which 
imposed various conditions on his registration. Tr. 19; GX 3.
    The MOA further detailed Respondent's drug-related offenses, which 
included two other drug convictions, one of which should clearly have 
been disclosed on his application, but was not. On May 3, 1985, 
Respondent was convicted in Bangkok, Thailand for ``Possession and 
Attempted Smuggling'' of approximately 145 grams of marijuana. GX 3, at 
1. The court suspended the 21-month sentence, and Respondent paid a 
fine and completed two years of probation. Id.
    On or about April 10, 1992, Respondent entered into a plea 
agreement in which he pled guilty to ``Attempted[] Possession, Use, 
Production, Sale and Transportation'' of approximately eight pounds of 
marijuana, a class 3 felony under Arizona law. Id. Respondent paid a 
fine, was jailed for two months, and was placed on five years' 
probation.\5\ Id.

[[Page 20014]]

 With respect to this incident, Respondent maintained at the hearing 
that he ``was approached by somebody'' and ended up being ``a fall 
guy.'' Tr. 284.
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    \5\ On June 16, 1999, the Maricopa County Superior Court vacated 
the judgment of guilt and restored Respondent's civil rights. Id. at 
2. This is the felony that he listed on his application in 2000.
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    On October 24, 1994, Respondent was found guilty of ``Conspiracy to 
Transfer, Sell or Possess'' a narcotic drug, a class 2 felony under 
Arizona law, based on his involvement in a conspiracy to illegally 
import cocaine from Panama to the United States. GX 3, at 2. Respondent 
was fined and sentenced to seven years' probation, but the probation 
was subsequently reduced.\6\ Id. With respect to this conviction, 
Respondent maintained at the hearing that he was not ``directly 
involved'' in the conspiracy because he only ``had phone conversations 
with the particular individual,'' but he nevertheless pled guilty. Id. 
at 288-90.
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    \6\ The Superior Court also apparently vacated this conviction 
in 1999, when it restored Respondent's civil rights. Tr. 210.
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    Respondent did not disclose this conviction on his initial 
application. GX 2, at 2; Tr. 293. When questioned as to why, Respondent 
stated that he ``suppose[d]'' that it was because of ``inadvertence'' 
on his part and added that ``[i]t was all at the same time,'' 
apparently referring to the marijuana distribution offense. Tr. 293.
    As found above, as a condition of his registration, Respondent 
entered into an MOA, under which he agreed to comply with various 
conditions. The MOA was to remain in effect for five years from the 
date of signing, January 25, 2001, during which time the DEA would be 
able to monitor Respondent's handling of controlled substances. Tr. 
115-16; GX 3, at 2.
    As relevant to the allegations in this proceeding, Respondent 
agreed ``to maintain a log for five years, which will list all 
controlled substances that he prescribes.'' GX 3, at 2. The log was 
``subject to inspection by DEA for five years from the date'' the MOA 
was ``fully executed,'' which was January 30, 2001. Id. at 2-3.
    Second, Respondent agreed ``that DEA personnel may enter his place 
of practice at any time during regular business hours, without prior 
notice, to verify compliance'' with the MOA. Id. at 3. Finally, 
Respondent agreed ``to notify the DEA Phoenix Division prior to 
transferring his DEA Certificate of Registration to another address 
within the state of Arizona or to another state.'' Id. In the MOA, 
Respondent indicated that he would be registered at the location of 
3201 West Peoria Avenue, Suite A-202, Phoenix, Arizona. Id. at 1.
    In October 2000, Respondent began working as a physician assistant 
under the supervision of a Dr. John Curtin, at the above address. Tr. 
223. Sometime thereafter, Respondent contracted pneumonia and missed 
substantial time from work; upon his return, his hours were reduced. 
Id. at 224. Consequently, in 2001 or 2002, Respondent left this 
position and went to work for William Zachow, D.O., who owned 21st 
Century Family Medicine (21st Century), 6707 North 19th Ave., Suite 
201, Phoenix, Arizona. Id. at 167-68, 224. Respondent did not notify 
DEA of this change of practice address, as required by the MOA.\7\ Tr. 
38-39.
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    \7\ Respondent also testified that the year 2001 was a difficult 
year: In May his father fell from a roof and was hospitalized for 21 
days with a brain hemorrhage before he finally died; Respondent took 
in three more dependents into his household as a result of his 
father's death; later that year, Respondent developed pneumonia, and 
when he returned to work his employer noticed he was depressed and 
referred him to counseling; then the national crisis of September 
11, 2001 happened. Tr. 220-221. Respondent testified that ``there 
was a lot of stuff that happened in 2001 that I think I was a little 
bit confused, just overwhelm[ed].'' Id. at 221. While this sequence 
of events may have overwhelmed Respondent, and provide some basis 
for excusing his failure to notify the Agency of his having changed 
his location, it is not a credible explanation for his failure to 
renew his registration, which did not expire until June 30, 2003.
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    As part of Respondent's employment agreement at 21st Century, the 
clinic was to handle matters related to his licensing fees, his 
malpractice coverage and his DEA registration. Id. at 224. 
Specifically, Sonia Zachow, Dr. Zachow's wife, ``would take care of the 
fees and all the licensing and the DEA.'' Id. at 224-25. Respondent 
testified that this was a verbal agreement, as it had originally been 
with his first employer, Dr. John Curtin, and that he trusted Dr. 
Zachow to honor the agreement. Id. at 219. Respondent testified that 
``[f]rom my understanding, all my mail went to [Sonia Zachow] and 
through her. I didn't receive any.'' Id. at 225. In particular, 
Respondent testified that he never received a notification from DEA 
that his registration would expire after June 30, 2003. Id. Given that 
he had not notified the Agency of his new address, this is hardly 
surprising.
    Shirley Reigle, a medical assistant at 21st Century, testified that 
she was employed at the clinic when Respondent was hired and that she 
worked with Respondent for four or five years. Id. at 168, 193. Ms. 
Reigle testified that she managed the ``back office,'' coordinating the 
activities of the medical assistants, while Sonia Zachow managed the 
``front office,'' or business office. Id. at 169-71. Mrs. Zachow's 
responsibilities included the renewal of the licenses and DEA 
registrations held by the clinic's physicians and physician assistants, 
the renewal of insurance coverage and the billing of insurance claims. 
Id. at 171, 174, 176. According to Ms. Reigle, Mrs. Zachow's 
responsibilities further included notifying the DEA if a physician or 
physician assistant moved his or her location of practice. Id. at 188. 
However, in one instance prior to Respondent's employment at 21st 
Century, Ms. Reigle tried to induce Mrs. Zachow to give notice of a 
move but ended up having to provide the information to DEA herself. Id. 
at 204-05.
    Respondent's DEA registration expired June 30, 2003. Id. at 42; GX 
1. According to Ms. Reigle, sometime in late 2003, Mrs. Zachow entered 
the office that Ms. Reigle shared with Respondent and threw a bill from 
the DEA onto Respondent's desk, saying, ``Why should I pay his DEA 
license when we're selling the practice.'' Tr. 176-77, 181. Ms. Reigle 
testified that she believed that Respondent ``had gone for the day'' 
and that, when she told Respondent about the incident later and he went 
to his desk to look, the bill was no longer on his desk. Id. at 177, 
199. While Ms. Reigle testified that she told Respondent about the 
incident, he apparently took no action to determine whether he still 
held a valid registration.
    Respondent testified that he did not receive notice that his 
registration required renewal and that, had he known, he would not have 
continued to practice without it. Id. at 225. Respondent admitted, 
however, that at the time he received his registration he knew it was 
subject to renewal in three years. Id. at 301. He further asserted that 
he did not keep track of the time or display his registration 
certificate and that he expected the office manager to handle matters 
pertaining to his licenses, as that was done for all incoming health 
care providers. Id. Respondent did, however, acknowledge that he was 
ultimately responsible for renewing his registration. Id. at 220.
    Respondent left 21st Century sometime between July and October 
2004, when Dr. Zachow sold the clinic.\8\ Id. at 217. Respondent began 
practicing at the 51st Avenue Clinic (51st Avenue), which is located at 
4700 North 51st Street, Suite 6, in Phoenix. Id.; GX 4, at 1.\9\
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    \8\ As was much of his testimony regarding the dates of various 
events, Respondent's testimony as to the date when he left 21st 
Century and commenced working at the 51st Avenue clinic was vague.
    \9\ Respondent used the address of this clinic on his 2004 
application. GX 4.
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    When the clinic did not offer him adequate hours, Respondent 
resumed

[[Page 20015]]

working on a part-time base at 21st Century and split his time between 
the two clinics. Tr. 217-18. Sometime in October 2004, Respondent 
received a letter from the Arizona Physician's Assistants Board 
notifying him that his ``license had lapsed [on] October 1, 2004.'' GX 
9, at 4.
    Respondent testified that during the period in which he moved to 
the new practice, pharmacies were not honoring the prescriptions he 
wrote at his new employer, and that his ``office was getting calls for 
the prescriptions that [he] had been writing, and they were talking 
about a DEA number.'' Tr. 226-27. Notwithstanding the phone calls, 
Respondent maintained that he did not know that the registration had 
``lapsed'' until three or four months later when, in November 2004 or 
early 2005, he was ``contacted by DEA.'' Id. at 226-27. In November 
2004, Ms. Muniz, the office manager at 51st Avenue, told Respondent 
that he needed to reapply for a DEA registration.\10\ Id. at 228.
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    \10\ In a letter he faxed to a DI on April 24, 2005, Respondent 
indicated that in October of 2004, he ``received a letter stating 
that my P.A. license had expired'' and that after ``doing some 
investigation, it turn[ed] out [that] my fees had not been paid.'' 
GX 9, at 1. Sometime around the time that he got his state license 
reinstated, he ``got a call from the former office manager stating 
that I had better check up on my malpractice fees. It turn[ed] out 
those had not been paid in over a year.'' Id. Moreover, in the same 
October time period, his new clinic ``was getting calls back from 
the pharmacy saying that my DEA license was no longer valid'' but 
that he did not think too much about it at first as ``I didn't know 
that the license could expire.'' Id. at 2.
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    According to Respondent, Ms. Muniz filled out the application for 
him and showed him only the signature page, which he signed without 
reviewing. Id. at 228-29, 262-63, 309-10. As with his previous 
application, the form asked Respondent whether he had ``ever been 
convicted of a crime in connection with controlled substances under 
state or federal law?'' GX 4, at 1; ALJ Ex. 3, at 3. The ``no'' answer 
was circled on the application. GX 4, at 1. Moreover, Respondent left 
blank the box which the form provided for explaining a ``yes'' answer 
to this question, and which is on the same page as the signature block. 
Id. at 2. The application was then submitted.
    As to why he did not disclose his convictions, Respondent 
testified: ``I was busy. I was probably seeing 50 patients a day. I was 
trying to make an impression.'' Tr. 228. According to Respondent, had 
Ms. Muniz given him the entire application, he would have given a 
detailed explanation and an answer of ``yes'' to the liability 
question, just as he had done on his October 2000 application. Id. at 
229.
    The ALJ specifically credited Respondent's testimony that he would 
not have provided a ``no'' answer ``had he personally filled out the 
form'' and that ``he would have detailed the explanation of his past 
conduct as he had done in 2000.'' ALJ at 29. The ALJ further credited 
Respondent's ``expressions of regret and recognition of his 
wrongdoing'' in submitting the application. Id. at 30. The Government 
did not except to these findings.
    It is undisputed that after filing his application, Respondent 
continued to write prescriptions for controlled substances under his 
expired registration even though he then clearly knew that it had 
expired and did so through at least March 2005. See GX 9, at 4; see 
also Resp. Prop. Findings at 6-7. Respondent offered two main (and 
somewhat inconsistent) explanations for why he continued to write 
prescriptions during this period.
    First, in a written statement he provided to an Agency investigator 
in April 2005, Respondent claimed that ``after reapplying'' there was 
``some confusion * * * as to what was going on at that time, some 
months went by and [he] was informed by the clinic's office manager 
that she had taken care of everything and it was okay to write again.'' 
GX 9, at 4. Continuing, Respondent explained that Ms. Muniz had 
contacted someone ``at DEA headquarters and he had informed her that we 
had filled out the incorrect application and our money had been posted 
to the wrong account, he said he would fax over the correct application 
to be filled out immediately and faxed back.'' Id. Respondent 
maintained that employees had said that ``the money would be posted to 
the correct account and this would make the license active at this 
point.'' Id. Respondent faxed in the new application on February 17, 
2005. Id.
    Respondent further asserted that he ``wrote very few prescriptions 
during this time [when he] was waiting for a copy of the new license.'' 
Id. According to Respondent, ``[a]fter several weeks of not receiving 
[the] paperwork[,] we called again and were informed that there was a 
problem.'' Id. Respondent added that ``[a]t this time I discontinued 
completely and left the controlled substances, the few we do write up 
to the responsibility of my supervising physicians.'' Id. at 5. 
Finally, Respondent claimed that while he could not ``recall the very 
last prescription I wrote, it probably was over a month or two ago and 
was some cough syrup with codeine as I wrote very little in the first 
place.'' Id.
    Second, in his testimony, Respondent further claimed that he ``was 
getting co-signatures on the prescriptions if I did need to write or 
just having them written altogether by a supervising physician.'' Tr. 
230. Respondent explained that the co-signed prescriptions would be 
``[o]ne prescription, my name and the doctor's name, usually above 
mine.'' Id. at 231. Respondent also asserted that the pharmacy ``might 
have run it [the prescription] as my DEA, but actually the doctor, the 
supervising physician, it was under his DEA as well if his signature'' 
was on the prescription. Id. Respondent further asserted that he had 
``some copies'' available that would show that his prescriptions were 
being co-signed. Id.
    Respondent submitted a letter (which is unsworn) dated April 22, 
2005 written by Ms. Muniz, Director of Operations for the 51st Ave. 
Family Clinic. RX 8. According to the letter, Respondent submitted a 
renewal application sometime around December 3, 2004, when the payment 
for the application fee cleared. Id. However, after several months, 
Respondent had still not gotten his registration. Id. According to Ms. 
Muniz, she then called DEA Headquarters and was told that Respondent 
had submitted the wrong form. Id. The employee at DEA Headquarters then 
faxed over the correct form which Respondent then submitted. Id. 
According to Ms. Muniz, the employee told her that he would post the 
previous payment to the correct account and this would activate 
Respondent's registration. Id. However, according to an affidavit of a 
DEA Diversion Investigator, ``there is no record of'' Respondent's 
having submitted an application after November 21, 2004. Affidavit of 
Miguel Rodriguez, at 6.
    Based on Respondent's ``no'' answer on his 2004 application to the 
liability question regarding whether he had any prior convictions for 
controlled substances offenses, a DI commenced an investigation. Tr. 
93. The DI reviewed the records from the Agency's prior investigation, 
police reports and the MOA. Id. at 93-95. He also learned that, in 
September 2003, Respondent had been arrested in Florida for a hit-and-
run incident while driving under the influence.\11\ Id. at 103.
---------------------------------------------------------------------------

    \11\ There was no evidence presented that Respondent was under 
the influence of a controlled substance at the time of the incident. 
Tr. 256. Moreover, there is no evidence in this record that 
Respondent has recently abused controlled substances. I therefore 
conclude that the incident has little relevance to the issues in 
this proceeding and deem it unnecessary to make further findings.

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

[[Page 20016]]

    Using Respondent's registration number, the DI also conducted a 
search of Respondent's controlled substance prescriptions using the 
SearchPoint database. Id. at 42-44, 76. The data indicated that 
Respondent had written controlled substance prescriptions after the 
expiration of his registration (June 30, 2003). Id. at 42-43. However, 
the DI testified that after reviewing the data, he did not have any 
concerns about Respondent's prescribing other than that he lacked a 
registration. Tr. 152.
    On April 13, 2005, as part of his investigation of Respondent's 
application, the DI and his senior partner visited Respondent at the 
51st Avenue clinic, which was the address Respondent had given on his 
application. Tr. 30-31. However, this address was different from 
Respondent's address of record on file with the Agency, as Respondent 
had not notified the Agency that he had changed his practice location 
and had therefore violated the MOA. Id. at 31.
    According to the DI, Respondent was not authorized to handle 
controlled substances at the 51st Avenue clinic. Id. at 33. The DI 
testified that, although failing to notify DEA of a change of address 
is not typically the sole basis for revoking a DEA registration, 
Respondent's failure to comply with the address-change provision of the 
MOA gave cause for particular concern. Id. at 109. However, the 
Government produced no evidence that Respondent had done anything other 
than write prescriptions at this address.
    During the visit, the DI did not observe Respondent working under 
the supervision of a physician, and Respondent did not inform him or 
his partner that he was working under physician supervision. Id. at 31-
32. The DIs then asked to inspect the log which Respondent was required 
to maintain under the MOA. Id. at 33. Respondent left the room and 
returned with a box containing an assortment of papers and several 
folders in no particular order. Id. at 33-34. Respondent partially 
attributed the disorganization of his ``log'' to the fact that he was 
in the process of moving into a new practice while continuing to work 
part-time at the other such that each location had its own records. Id. 
at 327. Yet, at this point, he had been at 51st Avenue clinic for at 
least six months.
    According to the DI, his partner examined the contents of the box 
and asked whether Respondent had records more recent than those for the 
year 2003. Id. at 35-36, 124-25, 160-61. Respondent answered that he 
could ``put something together,'' thus indicating that he was not 
currently keeping a log. Id. at 36, 125. However, the DIs did not take 
the box to copy the contents and ``never asked for a copy.'' Id. at 
249, 251. Respondent later testified that ``I had it together and I'd 
have produced--I even took a ledger and * * * copied them all down so I 
did have a log book of the individual entries.'' \12\ Id. at 251.
---------------------------------------------------------------------------

    \12\ Copies of this document were apparently offered as 
Respondent's Exhibit 2. However, the Government objected to the 
admission of the exhibit on the ground that it was not timely 
exchanged, and the ALJ sustained the objection.
---------------------------------------------------------------------------

    In a subsequent conversation, Respondent offered the material to 
the DI to which the latter responded: `` `No, I'll give [the letters] 
you have already provided to me to Washington and it will go from 
there.' '' Id. The DI admitted that he and his partner did not ask for 
copies of the materials in the box and did not offer Respondent the 
option to submit later the materials that he would gather together. Id. 
at 128.
    Respondent testified that he had photocopied his notes of ``patient 
encounters,'' which contained ``the patient's name, date of birth, 
everything that we're seeing about that patient on that day and the 
reasonable explanation of why you would write a controlled substance 
for that patient on that day'' as well as the controlled substance 
prescriptions he had written and then placed the copies in a manila 
folder in a box. Id. at 216, 235, 239. Respondent testified that he 
thought this would be ``even better than a logbook.'' Id. at 216, 235. 
As he explained:

    Now I thought that if there was ever a question about my writing 
abilities and what I was doing, that I could pull up the patient 
encounter and show my reasonable action on why I would write a 
prescription on that particular day for that particular patient. So 
I thought it was actually better than a logbook.

Id. at 236.\13\
---------------------------------------------------------------------------

    \13\ At the hearing, Respondent attempted to enter copies of 
this ``log'' into evidence as Respondent's Exhibit 1, but the 
Government objected on the ground that the documents had not been 
timely provided to the Government. Id. at 242-43, 248. The ALJ's 
sustained the objection and rejected the evidence. Id. at 248.

    The parties disputed whether what Respondent had presented to the 
DIs constituted a log. According to the DI, a log is ``something that 
we could easily obtain and review to check and verify [Respondent's] 
prescription habits,'' which would normally be a ``bound book with 
notations'' or a ``binder with prescriptions.'' Tr. 34-35. The DI 
testified that he did not consider the records in the box to be 
``easily reviewable.'' Id. at 36. However, he later conceded that the 
MOA did not specify what format the log was to be maintained in and 
that the information he sought could be obtained from the copies of the 
prescriptions. Id. at 36, 122.
    Respondent testified that he ``[p]robably'' did not ``completely'' 
understand the MOA's requirement. Id. at 215. However, he also 
testified that ``[a] log is actually a journal reading; it's a 
journal.'' Id. at 321. Respondent then testified that he thought ``that 
a patient list was even better [and] was the same thing as a log 
book.'' Id. He also maintained that ``there was nothing in the [MOA] 
that told me how * * * a patient log book should look,'' but then 
acknowledged that he never inquired of the Agency what the log should 
consist of ``[b]ecause [he] thought that from what [he] had seen with 
other physicians, what they used was a photo- a three- or double--you 
know, the two-sided prescriptions where you just get a copy of it, 
that's what I'd seen.'' Id. at 322.
    Respondent further testified that, while initially he kept the 
copies of prescriptions and patient encounters in a box in the office 
in chronological order, when he moved from 21st Century to 51st Avenue 
in October 2004, he placed the records from the new location in another 
box. Id. at 217, 237. Thus, at the meeting on April 13, 2005, he was 
only able to produce a portion of the prescriptions he had written as 
the remaining records were at 21st Century. Id. at 235-38.
    The DIs discussed with Respondent the MOA's requirement that he 
notify the DEA before transferring his registration to another address. 
Id. at 37; GX 3, at 3. Respondent told them that he was not sure 
whether he had notified the Agency of his most recent move, and he 
acknowledged that he had moved to 51st Avenue approximately six months 
earlier. Tr. 38-39. He also told the DIs that he had worked at 21st 
Century for four years prior to the move to 51st Avenue and that this 
address was also different from the address at which he had originally 
been registered. Id. at 38-39, 154; RXs 6 & 8. Respondent provided the 
DIs with two changes of address: 4700 North 51st Avenue, Suite 6, 
Phoenix, Arizona, and 1526 West Glendale Avenue, Suite 109, Phoenix, 
Arizona. Tr. 38-39. Although he testified that it was ultimately his 
responsibility to advise the DEA that he had changed his practice 
address, Respondent maintained that it had been the responsibility of 
Mrs. Zachow to do so. Id. at 188 & 190.
    The DIs also discussed with Respondent the fact that his DEA

[[Page 20017]]

registration had expired. Tr. 59. Respondent told them that he had 
learned that the registration had expired several months before their 
meeting. Id. at 59, 113-14. Respondent further told the investigators 
that the office manager (Sonia Zachow) had been responsible for 
renewing the registration and had failed to do so. Id. at 112, 114-15.
    During the April 13, 2005 meeting, the DI's senior partner 
instructed Respondent to desist from writing prescriptions for 
controlled substances; Respondent agreed that he would not write 
prescriptions for controlled substances. Id. at 62-63, 78.
    At the hearing, Respondent testified that he had complied with the 
DI's instruction. Id. at 345. More specifically, Respondent testified 
that ``I've been compliant from the day when I said--when they told me 
you can't write controlled substances I've been--not written one.'' Id.
    A DI testified that sometime after May 23, 2005, he conducted a 
second search of Respondent's DEA registration number on SearchPoint 
and found that Respondent had written controlled substance 
prescriptions after the April 13, 2005, meeting. Tr. 77. However, for 
reasons explained above, because the Government did not comply with the 
instructions in the remand order for establishing that the SearchPoint 
data is reliable, I conclude that the Government has not proved that 
Respondent violated the DI's order to stop writing prescriptions. I 
further find that the Government has failed to produce any reliable 
evidence rebutting Respondent's contention that he had his 
prescriptions co-signed by a supervising physician after he became 
aware that his registration had expired.\14\
---------------------------------------------------------------------------

    \14\ The Government does not address whether this practice is 
even permissible under Arizona law.
---------------------------------------------------------------------------

    At the hearing, Respondent testified that he was compliant with the 
MOA; that his work as a physicians assistant was difficult and 
stressful; that he had no training in office administration; and that 
he had learned how to be a ``better professional'' from this experience 
with his DEA registration expiring. Tr. 257-59.
    Respondent testified that, although he currently works as a 
physicians assistant without writing controlled substance 
prescriptions, his lack of authority to do so significantly diminishes 
his employer clinic's ability to treat patients: he is the only health 
care provider at the current clinic and cannot prescribe drugs 
necessary to treat such common ailments as excessive weight, Attention 
Deficit Disorder/Attention Deficit-Hyperactivity Disorder, acute pain, 
acute anxiety attacks, and testosterone deficiencies. Id. at 267 & 278. 
If he cannot substitute a non-controlled substance, he must refer a 
patient who requires a controlled substance to a physician or another 
facility. Id. at 273.
    According to Respondent, in around July 2005, his boss at the 51st 
Avenue clinic gave him two weeks to resolve the issues surrounding his 
DEA registration and told him he would lose his job if he did not do so 
because insurance companies use the DEA registration number as a 
tracking number for reimbursement. Id. at 259-60. Respondent 
subsequently lost his job at this clinic but subsequently gained 
employment at his current clinic. Id. at 260.
    Respondent further testified that he had ``made a lot of mistakes'' 
and that he did not ``plan on this happening again.'' Id. at 267. 
Respondent added that he could not ``afford to make any mistakes in 
[his] life anymore,'' that he had ``made plenty'' and was ``sorry'' to 
have ``made them'' and was ``remorseful.'' Id. at 268. He further 
stated that while ``I made countless errors here * * * I've learned 
from them and I don't think I'll ever see a courtroom again.'' Id.

Discussion

    Section 303(f) of the Controlled Substances Act (CSA) provides that 
an application for a practitioner's registration may be denied upon a 
determination ``that the issuance of such registration would be 
inconsistent with the public interest.'' 21 U.S.C. 823(f). In making 
the public interest determination, the CSA requires that the following 
factors be considered:

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing * * * 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.
    These factors may be considered in the disjunctive, and I ``may 
rely on any one or a combination of factors and may give each factor 
the weight [I] deem[] appropriate'' in determining whether an 
application for registration should be denied. Robert A. Leslie, 68 FR 
15227, 15230 (2003). Moreover, I am ``not required to make findings as 
to all the factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); 
see also Morall v. DEA, 412 F.3d 165, 173-74 (DC Cir. 2005).
    Under DEA precedent, the various grounds for revocation or 
suspension of an existing registration which Congress enumerated in 
section 304(a), 21 U.S.C. 824(a), are also properly considered when 
deciding whether to grant or deny an application under section 303(f) 
because `` `the law would not require an agency to indulge in the 
useless act of granting a license on one day only to withdraw it on the 
next.' '' Anthony D. Funches, 64 FR 14267, 14268 (1999) (quoting Kuen 
H. Chen, 58 FR 65401, 65402 (1993)); see also Alan R. Schankman, 63 FR 
45260 (1998). These include section 304(a)(1), which provides for the 
suspension or revocation of a registration in the event that the 
registrant ``has materially falsified any application filed pursuant to 
or required by this subchapter.'' 21 U.S.C. 824(a)(1). Thus, the 
allegation that Respondent materially falsified his application is 
properly considered in this proceeding.
    The Government bears the burden of proof in showing that the 
issuance of a registration is inconsistent with the public interest. 21 
CFR 1301.44(d). However, where the Government has made out a prima 
facie case, the burden shifts to the applicant to ``present[] 
sufficient mitigating evidence'' to show why he can be entrusted with a 
new 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); Cuong Trong Tran, 63 FR 64280, 
62483 (1998); Prince George Daniels, 60 FR 62884, 62887 (1995).

Factor One--The Recommendation of the State Licensing Board

    The Arizona Regulatory Board of Physician Assistants has made no 
recommendation in this matter as to whether Respondent's application 
should be granted. However, it is undisputed that Respondent holds a 
current Arizona Physician Assistant's license and possesses authority 
under

[[Page 20018]]

State law to dispense controlled substances. While Respondent therefore 
meets an essential prerequisite for obtaining a registration under the 
CSA, 21 U.S.C. 823(f), DEA has held repeatedly that a practitioner's 
possession of State authority is not dispositive of the public interest 
determination. See Mortimer B. Levin, 55 FR 8209, 8210 (1990).

Factors Two, Three, and Four--Respondent's Experience in Dispensing 
Controlled Substances, Conviction Record Under Federal and State Laws 
for Offenses Related to the Manufacture, Distribution, or Dispensing of 
Controlled Substances, and Compliance With Applicable Laws Related to 
Controlled Substances

    As found above, on two prior occasions, Respondent was convicted of 
offenses under Arizona law related to the distribution of both 
marijuana (in 1992) and cocaine (in 1994).\15\ Subsequently, in 1999, 
both of these convictions were vacated upon his having successfully 
completed probation.
---------------------------------------------------------------------------

    \15\ It is also noted that in 1985, Respondent was convicted in 
Thailand of the offense of Possession and Attempted Smuggling'' of 
marijuana. While this conviction is not encompassed within factor 
three, it is properly considered under factor five.
---------------------------------------------------------------------------

    Given the obvious concerns raised by his prior criminal conduct, 
see GX 3, at 2; following Respondent's obtaining of his PA license, the 
Agency granted his application for a registration on the condition that 
he enter into the MOA, under which he agreed to comply with several 
conditions beyond those imposed by the CSA and DEA regulations. Of 
relevance here, Respondent agreed to maintain, for a period of five 
years, a log ``list[ing] all controlled substances that he prescribes'' 
which was also to ``be subject to inspection * * * for five years.'' GX 
3, at 3. In addition, Respondent ``agree[d] to notify the DEA Phoenix 
Division prior to transferring his * * * [r]egistration to another 
address within the state of Arizona or to another state.'' Id.
    As the ALJ found, Respondent did not comply with either condition. 
ALJ at 30-32. When asked to present his log, he provided a box which 
contained an assortment of papers and folders in no particular order, 
with some papers hanging out from the sides of the box. Moreover, the 
most recent records were for the year 2003.
    While the meaning of the MOA provision seems clear, and Respondent 
eventually acknowledged that a log is ``a journal,'' Tr. 321, even 
accepting Respondent's explanation that he was in compliance by 
compiling his notes of patient encounters and the controlled substance 
prescriptions, it undisputed that he did not have a complete record of 
his prescribing activities as he lacked records after the year 
2003.\16\ I therefore hold that he violated the MOA's log-keeping 
provision.
---------------------------------------------------------------------------

    \16\ Respondent did not dispute that he prescribed after 2003.
---------------------------------------------------------------------------

    Moreover, while the MOA clearly stated that Respondent was required 
to notify the local DEA office prior to transferring his registration 
to another address, Respondent twice changed his practice location 
without notifying the Agency. Here again, Respondent violated the terms 
of the MOA. However, standing alone, Respondent's violations of the MOA 
would not warrant the denial of his application given his expression of 
remorse.

Alleged Violations of 21 U.S.C. 843(a)(2)

    Under the CSA, it is ``unlawful for any person knowingly or 
intentionally * * * to use in the * * * dispensing of a controlled 
substance * * * a registration number which is fictitious, revoked, 
suspended, expired, or issued to another person[.]'' 21 U.S.C. 
843(a)(2) (emphasis added). Doing so is a felony offense which is 
punishable by ``a term of imprisonment of not more than 4 years, a fine 
under Title 18, or both.'' Id. at Sec.  843(d)(1).
    The ALJ found that that ``is undisputed that Respondent issued 
prescriptions for controlled substances after his DEA registration 
expired in June 2003, and that he continued to do so even after 
submitting an application for a new registration.'' ALJ at 24. While 
apparently crediting Respondent's testimony that he was not aware that 
his registration expired ``until late 2004,'' the ALJ concluded that 
``there is no doubt that he was aware of its expiration after that 
time, and that he therefore knowingly used an expired registration in 
violation of the statute when he continued to write prescriptions after 
late 2004.'' Id. (citing 21 U.S.C. 843(a)(2)). However, the ALJ 
rejected the Government's contention that Respondent issued 
prescriptions even after the April 2005 meeting during which a DI told 
him to stop. Id.
    The Government apparently accepts Respondent's contention that he 
did not know that his registration had expired until sometime in the 
fall of 2004 when he applied for a new registration. See Gov. Br. 6 
(Proposed Finding 11) (``Respondent testified that he was unaware that 
his DEA registration had expired and wasn't notified in writing or 
otherwise of the expiration.'').\17\ The Government's contention that 
Respondent violated 21 U.S.C. 843(a)(2) is therefore based on his 
having issued prescriptions even after he submitted his application and 
clearly knew that his registration had expired. Id. at 10. The 
Government further argues that ``exacerbat[ing] his unlawful conduct, 
Respondent continued issuing prescriptions under his expired * * * 
registration after DEA investigators advised him against doing so 
during the * * * April 2005 inspection.'' Id. at 10-11.
---------------------------------------------------------------------------

    \17\ While the Government established that Respondent's 
registration expired on June 30, 2003, GX 1, it did not introduce 
into evidence a copy of the Certificate of Registration which was 
issued to him. Such certificates typically include the expiration 
date. Nor does the Government argue that proof of actual knowledge 
is not required to sustain a violation of 21 U.S.C. 843(a)(2).
---------------------------------------------------------------------------

    To prove these allegations, the Government relied on a data 
compilation of his purported prescriptions, the reliability of which it 
failed to establish. As the DI candidly explained, this data ``was only 
a pointing tool'' and ``was to be verified against the actual records 
that'' a pharmacy or practitioner is ``required to maintain'' under the 
CSA and DEA's regulations. Inexplicably, the Government did not produce 
any reliable evidence showing the controlled substances prescriptions 
he authorized such as patient medical records, copies of the actual 
prescriptions, or pharmacy dispensing logs. In sum, the Government did 
not produce reliable evidence establishing the extent to which 
Respondent continued to prescribe controlled substances following the 
expiration of his registration.
    It acknowledged that in a letter to one of the DIs, Respondent 
stated that he had resumed prescribing at some point following the 
submission of his application. Moreover, there is a degree of 
inconsistency between Respondent's contentions that: (1) His office 
manager had contacted someone at DEA Headquarters and been told that he 
could write again; and (2) that he had a supervising physician co-sign 
the prescriptions. Nonetheless, because there is no reliable proof 
establishing the specific prescriptions which Respondent wrote 
following his becoming aware that his registration had expired, and the 
Government does not dispute either the factual basis of his contention 
that he had his prescriptions co-signed or the legality of this 
practice, there is insufficient evidence to show that Respondent 
violated 21 U.S.C. 843(a)(2). I therefore reject the

[[Page 20019]]

Government's contention (and the ALJ's conclusion) that Respondent 
violated 21 U.S.C. 843(a)(2).

Factor Five--Such Other Conduct Which May Threaten Public Health and 
Safety

    Under this factor, the ALJ considered the allegations that 
Respondent materially falsified his 2004 application and that he had 
been convicted of driving under the influence. ALJ at 27-33. She also 
deemed it appropriate to consider Respondent's ``employment at a clinic 
that serves a primarily underserved and underinsured population.'' Id. 
at 33.\18\
---------------------------------------------------------------------------

    \18\ She also considered Respondent's violations of the MOA 
under this factor. I conclude, however that these violations are 
properly considered in assessing his experience in dispensing 
controlled substances. Moreover, as noted above, Respondent's 1985 
conviction in the Thai courts for possession and attempting to 
smuggle marijuana is properly considered under this factor. However, 
it is noted that this conviction is now twenty-five years old.
---------------------------------------------------------------------------

The Material Falsification Allegation

    As found above, on his 2004 application, Respondent answered ``no'' 
to the question: ``Has the applicant ever been convicted of a crime in 
connection with controlled substances under state or federal law?'' GX 
4, at 1. Moreover, Respondent left blank the box which the application 
provided for explaining a ``yes'' answer. Id. at 2. By signing the 
application, Respondent ``certif[ied] that the forgoing information 
furnished on [the] application [wa]s true and correct.'' Id.
    Respondent does not dispute that he should have disclosed the two 
Arizona convictions on his application. Resp. Br. at 13 (``It seems 
obvious that the 2004 application should have included the same 
information regarding felony convictions that [the] 2000 application 
had.''). Indeed, it cannot be disputed that his answer was false and 
materially so given that under the public interest standard, the Agency 
is required to consider, inter alia, both an ``applicant's conviction 
record under Federal or State laws relating to the manufacture, 
distribution, or dispensing of controlled substances,'' 21 U.S.C. 
823(f)(3), and his ``[c]ompliance with applicable State, Federal, or 
local laws relating to controlled substances.'' Id. Sec.  823(f)(4). 
Given the statutory factors, it is clear that Respondent's false answer 
was ``capable of influencing'' the decision as to whether his 
application should be granted. See Jackson, 72 FR at 23852 (`` `The 
most common formulation' of the concept of materiality is that `a 
concealment or misrepresentation is material if it ``has a natural 
tendency to influence, or was capable of influencing, the decision of'' 
the decisionmaking body to which it was addressed.' '' (quoting Kungys 
v. United States, 485 U.S. 759, 770 (1988) (quoting Weinstock v. United 
States, 231 F.2d 699, 701 (DC Cir. 1956))).
    That the Agency did not rely on Respondent's false statement and 
grant his application does not make the statement immaterial. The 
Lawsons, Inc., 72 FR 74334, 74339 (2007) (quoting United States v. 
Alemany Rivera, 781 F.2d 229, 234 (1st Cir. 1985) (``It makes no 
difference that a specific falsification did not exert influence so 
long as it had the capacity to do so.''); United States v. Norris, 749 
F.2d 1116, 1121 (4th Cir. 1984) (``There is no requirement that the 
false statement influence or effect the decision making process of a 
department of the United States Government.''). Nor does it matter that 
some employees of the Agency were previously aware of Respondent's 
criminal history. See The Lawsons, 72 FR at 74339 n.7.
    Respondent nonetheless contends that he did not intentionally 
falsify the application, Resp. Br. at 13-14, and the ALJ credited his 
testimony that the office manager at the clinic, where he was then 
working, filled out the application for him and that he signed it in 
haste without carefully reviewing it. ALJ at 8. The ALJ also credited 
his testimony that if he had ``personally filled out the form * * * he 
would have detailed the explanation of his past conduct as he had done 
in 2000.'' Id. at 29.
    While I accept the ALJ's credibility findings, I reject her 
conclusion that Respondent was merely ``negligent.'' Id. Notably, 
between the form's blocks for signing and printing one's name, the form 
stated: ``I hereby certify that the forgoing information furnished on 
this application is true and correct.'' GX 4, at 2. Given the 
certification's location on the application, Respondent cannot credibly 
claim that he did not read it. Respondent's testimony simply begs the 
question of what information he thought he was certifying as being 
``true.''
    Likewise, the form's block for explaining his answers to the 
liability questions was on the same side as the signature and 
certification blocks. In addition, Respondent had previously completed 
an application in which he disclosed his criminal convictions; he 
likewise knew, based on the detailed recitation of his various drug-
related offenses in the MOA (although he apparently rarely, if ever, 
reviewed the MOA), that these offenses were of particular concern to 
DEA. Respondent clearly had reason to know that he was required to 
disclose his criminal convictions to the Agency.
    Finally, the ALJ gave insufficient consideration to the 
circumstances surrounding the 2004 renewal. Notably, this was not a 
routine renewal. Rather, at the time it was submitted, Respondent 
clearly knew that his registration had long since expired. And, 
notwithstanding his claim that he was a harried practitioner who was 
trying to make an impression with his employer by seeing numerous 
patients, reviewing the form for completeness would have taken no more 
than a few minutes.
    I therefore conclude that Respondent deliberately failed to read 
the front of the form. As several courts have noted, deliberate 
avoidance is generally not a defense to an allegation of material 
misrepresentation. United States v. Puente, 982 F.2d 156, 159 (5th Cir. 
1993) (``[A] defendant who deliberately avoids reading the form he is 
signing cannot avoid criminal sanctions for any false statements 
contained therein.''); Hanna v. Gonzales, 128 Fed. Appx. 478, 480 (6th 
Cir. 2005) (rejecting alien's claim that he did not willfully 
misrepresent material fact because friend filled out application for 
him; having signed the application under oath, his ``failure to apprise 
himself of the contents of this important document constituted 
deliberate avoidance--an act the law generally does not recognize as a 
defense to misrepresentation'').
    The ALJ failed to acknowledge this line of authority. Instead, she 
relied on several Agency decisions and reasoned that the ``lack of 
intent to deceive is a relevant consideration in determining whether a 
registrant or applicant should possess a DEA registration.'' ALJ at 30 
(quoting Rosalind A. Cropper, 66 FR 41040, 41048 (2001)). However, the 
cases cited by the ALJ are readily distinguishable. See id. (citing 
Samuel Arnold, 63 FR 8687 (1998); Martha Hernandez, 62 FR 61145 
(1997)).
    For instance, in Cropper, the physician was completely unaware of 
the underlying agency action which she had failed to disclose on her 
application. 66 FR at 41048. That is a far cry from this case as 
Respondent clearly knew that he had been previously convicted of two 
felony drug offenses in the Arizona courts.
    In Samuel Arnold, a physician failed to disclose on his application 
a prior suspension of his state medical license based on misconduct 
which was not related to controlled substances. 63 FR at 8687. However, 
the Deputy Administrator found credible the testimony of two witnesses 
that Respondent had called a DEA Office on

[[Page 20020]]

a speaker phone to inquire as to whether he was required to disclose 
the suspension and was told by an Agency employee that he did not have 
to because his ``license was no longer suspended.'' Id. at 8687-88. 
Here, however, Respondent makes no claim that in filling out the 
application he relied on erroneous advice from an Agency employee as to 
what he was required to disclose.
    Of the cases cited by the ALJ, only Martha Hernandez, 62 FR 61145 
(1997), and Theodore Neujahr, 65 FR 5680 (2000), provide any comfort to 
Respondent. In Hernandez, while my predecessor concluded that the 
practitioner's material falsifications in failing to disclose the 
suspension by two States of her medical licenses (for failing to pay 
her student loans, which she believed was not within the intent of the 
liability question) ``indicate a careless disregard for attention to 
detail,'' he imposed only a reprimand and conditions on her 
registration. Id. at 61148. While my predecessor agreed that ``this 
lack of connection to controlled substances [wa]s not dispositive of 
the matter,'' he concluded that it was ``relevant in determining the 
appropriate remedy.'' Id. Here, by contrast, Respondent's 
falsifications involve his failure to disclose his convictions for 
controlled substances offenses and are clearly relevant in determining 
the appropriate sanction.\19\ See 21 U.S.C. 823(f)(3).
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    \19\ Having reviewed the Agency's decision in Neujahr, I 
conclude that the case was wrongly decided because the respondent 
there did not fully address his misconduct, which included not only 
his failure to disclose his having surrendered his authority under 
Federal law to write prescriptions for schedule II controlled 
substances, but also his failure to disclose a State proceeding 
which placed his veterinary license on probation; at his DEA 
hearing, the respondent offered no explanation as to this separate 
act of material falsification. 65 FR at 5681. In Neujahr, the ALJ 
concluded that the respondent ``apparently regretted that conduct.'' 
Id. at 5682. To make clear, the Agency should not have to guess as 
to whether one has accepted responsibility for his misconduct. A 
registrant/applicant's acceptance of responsibility must be clear 
and manifest.
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    The ALJ also relied on Neujahr, a case in which the Agency granted 
the application of practitioner, notwithstanding that he had he had 
materially falsified it, because he ``acknowledged that he falsified 
his applications, he apparently regretted that conduct, and [the ALJ] 
believe[d] that he will not repeat it.'' ALJ at 30 & n.86 (quoting 65 
FR at 5682). Subsequently in her decision, the ALJ reasoned that while 
the Government had ``made out a prima face case for denying his 
application, * * * it is important to note that the [Agency's] decision 
whether to grant or deny an application for registration is a 
prospective, rather than a retrospective, determination.'' Id. at 34.
    It is true that proceedings under section 303 and 304 of the CSA 
are remedial and not punitive. See, e. g., Jackson, 72 FR at 23853. 
However, contrary to the ALJ's understanding, the remedial nature of 
this proceeding does not preclude the Agency from considering the 
deterrent value of a sanction with respect to both the Respondent and 
others in setting the remedy. See Southwood Pharmaceuticals, Inc., 72 
FR 36487, 36504 (2007). As Southwood makes clear, ``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, 187-188 (1973) (upholding Agency's authority ``to employ that 
sanction as in [its] judgment best serves to deter violations and 
achieve the objectives of [the] statute'')). The ALJ, however, did not 
even acknowledge Southwood.
    Contrary to the ALJ's conclusion that Respondent will conduct 
himself henceforth in a responsible fashion, see ALJ at 34, Respondent 
made a similar promise in the MOA when he agreed to ``abide by its 
contents in good faith.'' GX 3, at 3. See also ALRA Laboratories, Inc. 
v. DEA, 54 F.3d 450, 452 (7th Cir. 1995) (``An agency rationally may 
conclude that past performance is the best predictor of future 
performance.''). Respondent, however, then proceeded to ignore his 
obligations under the MOA.
    Under these circumstances, granting Respondent's application 
subject to the restrictions proposed by the ALJ, which do no more than 
replicate the conditions imposed by the MOA, amounts to no sanction at 
all. In short, adopting the ALJ's proposed sanction would send the 
wrong message to both Respondent, who has demonstrated a disturbing 
lack of attention to the requirements of being a registrant, as well as 
other applicants/registrants, especially those who would submit an 
application without carefully reviewing it for completeness and 
truthfulness.
    Accordingly, I conclude that Respondent's application should be 
denied. However, given Respondent's expression of remorse, I conclude 
that Respondent can re-apply for a new registration six months from the 
effective date of this Order. Provided that his application is not 
materially false and that he has committed no other acts which would 
warrant the denial of his application, the Agency will expeditiously 
grant his renewal application and issue him a new registration subject 
to the conditions of the 2001 MOA.\20\
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    \20\ I place no weight on Respondent's DUI/Hit and Run 
conviction there being no evidence that he was under the influence 
of a controlled substance at the time. See David E. Trawick, 53 FR 
5326, 5327 (1988) (noting that factor five encompasses ``wrongful 
acts relating to controlled substances committed by a registrant 
outside of his professional practice but which relate to controlled 
substances'').
     The ALJ also opined that it is appropriate to consider 
Respondent's employment at a clinic that serves an ``underserved and 
underinsured populations.'' ALJ at 33. However, I have previously 
rejected this reasoning noting that ``[t]he public interest standard 
of 21 U.S.C. 823(f) is not a freewheeling inquiry but is guided by 
the five specific factors which Congress directed the Attorney 
General to consider [and that] consideration of the socioeconomic 
status of a practitioner's patient population is not mandated by the 
text of either 21 U.S.C. 823(f) or 824(a)(4), which focus primarily 
on the acts committed by a practitioner.'' Gregory D. Owens, 74 FR 
36751, 36757 (2009). I further noted that such a rule is 
``unworkable,'' and ``would inject a new level of complexity into 
already complex proceedings and take the Agency far afield of the 
purpose of the CSA's registration provisions, which is to prevent 
diversion.'' Id. at n.22. I therefore do not consider the issue.
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well 
as 28 CFR 0.100(b) and 0.104, I order that the application of Mark De 
La Lama for a DEA Certificate of Registration as a mid-level 
practitioner be, and it hereby is, denied. This order is effective May 
11, 2011.

    Dated: April 1, 2011.
Michele M. Leonhart,
Administrator.
[FR Doc. 2011-8536 Filed 4-8-11; 8:45 am]
BILLING CODE 4410-09-P