[Federal Register Volume 76, Number 209 (Friday, October 28, 2011)]
[Notices]
[Pages 66986-66994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-27985]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 10-73]


Shawn M. Gallegos, D.D.S., Decision and Order

    On May 19, 2011, Administrative Law Judge (ALJ) Timothy D. Wing 
issued the attached recommended decision. Neither party filed 
exceptions to the decision.
    Having reviewed the entire record, I have decided to adopt the 
ALJ's findings of fact, conclusions of law and recommended order in its 
entirety except as explained below.\1\ Accordingly, I will order that 
the Respondent's application be denied.
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    \1\ At page 19 of the slip opinion, the ALJ explained that 
``Respondent's statement during the December 2, 2009 audit that the 
dispensing records were located within his patient records was found 
to be inaccurate. Even if true, the patient records would not 
substitute for required copies of DEA Form 222 relating to the 
Schedule II controlled substance oxycodone, among other 
recordkeeping requirements.'' To make clear, a DEA Form 222, which 
is otherwise known as an ``order form,'' must be executed for each 
distribution of a schedule II controlled substance with the 
exception of those distributions which are exempt under 21 CFR 
1305.03. This form is not required, however, to document a 
practitioner's dispensing of controlled substances, which must be 
recorded in a dispensing log. See 21 CFR 1304.03(b), 1304.22(c). 
While the record establishes that Respondent ordered oxycodone only 
a single time (for which he did not have a copy of the requisite 
Form 222), Respondent was also required to maintain, for a period of 
two years, records documenting the receipt of all controlled 
substances he acquired, as well as an initial inventory when he 
first engaged in controlled substances activities and biennial 
inventories thereafter for each controlled substance he acquired. 
Id. 1304.04(a), 1304.11, 1304.21(a). Respondent, however, had no 
such records.
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Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 28 
CFR 0.100(b), I hereby order that the application of Shawn M. Gallegos, 
D.D.S., for a DEA Certificate of Registration as a practitioner, be, 
and it hereby is, denied. This Order is effective immediately.

    Dated: October 7, 2011.
Michele M. Leonhart,
Administrator.
Theresa Krause, Esq. & Brian Bayly, Esq., for the Government
Shawn M. Gallegos, D.D.S., pro se, Respondent

Recommended Ruling, Findings of Fact, Conclusions of Law and Decision 
of the Administrative Law Judge

Introduction

    Administrative Law Judge Timothy D. Wing. This proceeding is an 
adjudication pursuant to the Administrative Procedure Act (APA), 5 
U.S.C. 551 et seq., to determine whether the Drug Enforcement 
Administration (DEA) should deny a dentist's application for a DEA 
Certificate of Registration (COR) as a practitioner. Without this 
registration the dentist, Shawn M. Gallegos, D.D.S. (Respondent or Dr. 
Gallegos), of Martinez, California, will be unable to lawfully 
prescribe, dispense or otherwise handle controlled substances in the 
course of his practice.
    On August 3, 2010, the DEA Deputy Assistant Administrator, Office 
of Diversion Control, issued an Order to Show Cause (OSC) to 
Respondent, giving Respondent notice of an opportunity to show cause 
why the DEA should not deny Respondent's application for a DEA COR, 
filed on or around January 27, 2010, pursuant to 21 U.S.C. 824(a)(4) 
and 21 U.S.C. 823(f), on the grounds that Respondent's registration 
would be inconsistent with the public interest as that term is used in 
21 U.S.C. 824(a)(4) and 823(f).
    In part and in substance, the OSC alleges that Respondent 
voluntarily surrendered his DEA registration number BG6936491 for cause 
on December 2, 2009, alleging that during the course of a DEA 
investigation concerning suspicious orders of hydrocodone and 
phentermine, Respondent stated the controlled substances were not used 
in the normal course of his dental practice. The OSC further alleges 
that on multiple occasions, Respondent failed in his responsibility as 
a practitioner to ensure that the controlled substances ordered and 
dispensed by him were for a legitimate medical purpose by a 
practitioner acting in the usual course of professional practice, in 
violation of 21 CFR 1306.04(a). Additional alleged violations include 
the inability to account for the dispensing of the controlled 
substances in violation of 21 CFR 1304.04(a); the failure to keep a 
dispensing log for controlled substances, in violation of 21 CFR 
1304.03(b); the failure to keep accurate, complete and mandatory 
records of controlled substances in violation of 21 CFR 1304.21(a); the 
failure to properly report the theft of hydrocodone and the 
unauthorized use of Respondent's registration, in violation of 21 CFR 
1301.76(b); the failure to establish a valid doctor-patient 
relationship before issuing and dispensing controlled substances (diet 
pills), which were for other than a legitimate medical purpose and 
outside the usual course of professional practice, in violation of 21 
CFR 1306.04; and the commission of ``such acts that would render 
Respondent's registration inconsistent

[[Page 66987]]

with the public interest, particularly in light of [the] failure to 
comply with State and Federal laws relating to controlled substances,'' 
citing 21 U.S.C. 823(f)(4) and 824(a)(4).\2\
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    \2\ ALJ Ex. 1.
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    In addition to the OSC, the Government also noticed and alleged in 
its September 24, 2010 prehearing statement that on January 16, 2010, 
Respondent used his previously surrendered DEA registration to call in 
a prescription for the controlled substance lorazepam, which was filled 
and dispensed to patient [GS]. (Gov't PHS at 7.) The Government further 
alleged that ``DI Windsor will testify that this [lorazepam] controlled 
substance is not used in the normal course of the Respondent's dental 
practice.'' \3\ (Gov't PHS at 7-8.) The Government further alleged that 
``Respondent will testify that he told DI Windsor and DI Myers that his 
suspicious orders of hydrocodone and phentermine were not used in the 
normal course of his dental practice.'' \4\ (Gov't PHS at 3.) Finally, 
the Government alleged various instances of unprofessional conduct 
contained within a document entitled: ``In the Matter of the Accusation 
Against [Respondent],'' brought on behalf of the Dental Board of 
California, and dated January 31, 2011. (Gov't Ex. 10.)
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    \3\ At hearing, DI Windsor offered no testimony specifically 
addressing this issue. The Government did offer testimony from Ms. 
Muratalla which was mixed in terms of the use of lorazepam in 
Respondent's dental practice. Ms. Muratalla testified in substance 
that lorazepam was ``used for other people'' and also for dental 
patients. (Tr. 63-64.)
    \4\ Notably, the only testimony offered at hearing by DI Windsor 
regarding Respondent's December 2, 2009 statements arguably relevant 
to controlled substances not being used in the normal course of his 
dental practice, consisted of the following: ``Dr. Gallegos had said 
that he ordered diet pills for his wife and he had also said that 
she had ordered them for herself.'' (Tr. 146.) DI Windsor further 
testified based on her knowledge and experience as a diversion 
investigator that diet pills were inconsistent with a dental 
practice. (Tr. 119-20.) There was no testimony supporting the 
allegation that Respondent made similar reference to hydrocodone. DI 
Myers was not called to testify at hearing and Respondent did not 
testify. No written reports were offered memorializing any 
statements made to DEA diversion investigators by Respondent.
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    On September 13, 2010, Respondent, acting pro se, requested a 
hearing on the allegations in the OSC. Following prehearing procedures, 
a hearing was held on April 5, 2011, in San Francisco, California, with 
the Government represented by counsel and Respondent appearing pro 
se.\5\ Both parties called witnesses to testify and introduced 
documentary evidence. Respondent elected not to testify. After the 
hearing, both parties filed proposed findings of fact, conclusions of 
law and argument. All of the evidence and post-hearing submissions have 
been considered, and to the extent the parties' proposed findings of 
fact have been adopted, they are substantively incorporated into those 
set forth below.
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    \5\ Throughout the course of prehearing procedures Respondent 
was afforded various opportunities to obtain counsel, to include a 
letter to Respondent from the Office of Administrative Law Judges 
identifying Respondent's right to counsel pursuant to 21 CFR 1316.50 
(2010) (ALJ Ex. 3), a similar notation in a November 12, 2010 
prehearing ruling (ALJ Ex. 5 at 1-2) and the granting of a 
continuance at Respondent's request so that Respondent might obtain 
counsel. (ALJ Ex. 8 at 1-2.) At hearing, Respondent affirmed that he 
wished to proceed with the hearing without the assistance of 
counsel. (Tr. 4.)
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Issue

    Whether the record establishes by substantial evidence that 
Respondent's application for a DEA COR, W10004582C, as a practitioner, 
should be denied pursuant to 21 U.S.C. 823(f) and 824(a)(4), because 
Respondent's registration would be inconsistent with the public 
interest as that term is used in 21 U.S.C. 823(f).

Evidence and Incorporated Findings of Fact

I. Background

    Respondent was assigned DEA registration BG6936491 on September 7, 
2000, as a practitioner in Schedules II-V. (Gov't Ex. 1.) The last 
renewal of this registration was on October 1, 2009, at the address of 
220 E. Alamo Plaza, Alamo, California. On December 2, 2009, Respondent 
voluntarily surrendered this registration, ``after which date no 
controlled substances could be obtained, stored, administered, 
prescribed, or dispensed under DEA registration BG6936491.'' (Gov't 
Exs. 1 & 2.) On January 27, 2010, Respondent submitted an application 
for registration W10004582C as a practitioner in Schedules II-V, at the 
address of 220 E. Alamo Plaza, Alamo, California. (Gov't Exs. 1 & 3.)

II. The Government's Evidence

    At hearing, the Government presented the testimony of three 
witnesses: Respondent's former patient [GS]; \6\ Respondent's ex-wife 
and former employee Maria Muratalla (Ms. Muratalla), and DEA Diversion 
Investigator Jamee Windsor (DI Windsor). DI Windsor testified in 
substance to having over ten years of experience in law enforcement, 
and to having been a diversion investigator with DEA since July 2009. 
(Tr. 107-109.) DI Windsor first became involved in an investigation of 
Respondent following receipt of a June 11, 2009 ``Suspicious Order'' 
report by The Harvard Drug Group (Harvard),\7\ noting Respondent's 
order of four controlled substances that were inconsistent with his 
dental practice.\8\ The report noted in bold print, with asterisks: 
``*This dentist ordered the above items for their personal use.*'' \9\ 
(Tr. 113; Gov't Ex. 5 at 1.) DI Windsor testified that the four 
controlled substances in question \10\ are Schedule IV controlled 
substances used as diet aids to treat moderate to extreme obesity. (Tr. 
113-14.)
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    \6\ The patient's initials are used to protect patient privacy.
    \7\ Harvard was described by DI Windsor as a re-distributor of 
controlled substances to DEA registrants. (Tr. 116.)
    \8\ The report by Harvard contains a note at the bottom of the 
page which was determined by DI Windsor to be an error by Harvard. 
The notation ``[p]lease note that these are 3 separate 222 forms * * 
* all three signed by the same person'' was acknowledged by Harvard 
to be a mistake (``a typo'') on Harvard's part, but the remaining 
information in the report was believed to be accurate. (Tr. 127.)
    \9\ No testimony or evidence was offered regarding what 
knowledge or information formed the basis for this statement.
    \10\ Adipex (100 count bottle), Fastin (1000 count bottle), 
phentermine (1000 count bottle) and Tenuate (100 count bottle). (See 
Gov't Ex. 5 at 1.)
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    The evidence also included a transaction history report from DEA's 
Automation of Reports and Consolidated Orders System (ARCOS),\11\ 
reflecting six controlled substance transactions between Harvard and 
Respondent between October 2, 2007, and March 27, 2009. (Gov't Ex. 5 at 
2-5; Tr. 121-22.) Five of the orders were for Schedule III controlled 
substances, and one transaction, dated July 30, 2008, was for the 
Schedule II controlled substance oxycodone. (Tr. 141; Gov't Ex. 5 at 
2.)
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    \11\ DI Windsor offered testimony regarding the system. I also 
note that ``Registrants are also required to report records of sales 
or acquisitions of controlled substances in Schedules I and II, of 
narcotic controlled substances listed in Schedules III, IV and V, 
and of psychotropic controlled substances listed in Schedules III 
and IV with the DEA's Automation of Reports and Consolidated Orders 
System (ARCOS). 21 CFR 1304.33(c); 21 U.S.C. 827(d). These reports 
must be filed every quarter not later than the 15th day of the month 
succeeding the quarter for which it is submitted. 21 CFR 
1304.33(b).'' Easy Returns Worldwide, Inc. v. United States, 266 F. 
Supp. 2d 1014, 1016 (E.D. Mo. 2003).
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    DI Windsor next testified to visiting Respondent's registered 
practice location on the morning of December 2, 2009, accompanied by 
another DEA diversion investigator. (Tr. 129.) Respondent was present 
in the office along with a receptionist, and possibly a third employee. 
When the diversion investigators arrived they presented Respondent with 
a DEA form entitled Notice of Inspection of Controlled Premises, which 
was subsequently

[[Page 66988]]

signed by Respondent.\12\ (Tr. 131-34.) DI Windsor further testified 
that the inspection included ``an inventory of [Respondent's] 
dispensing of his controlled substances * * *.'' (Tr. 134-35.) The 
results of the inventory reflected 89.5 tablets of 5mg/500mg 
hydrocodone present in the office. (Gov't Ex. 8; Tr. 138.) In addition 
to the inventory, the inspection also sought to review required 
records, to include biennial inventories, dispensing logs, copies of 
DEA Form 222 for Schedule II controlled substances and other invoices 
for Schedule III-V controlled substances. (Tr. 139-41.) DI Windsor 
testified that none of the required records could be located and 
Respondent was unable to produce any. (E.g., Tr. 141-42.) The diversion 
investigators reviewed a random sampling of Respondent's patient files, 
none of which included dispensing records for hydrocodone or oxycodone. 
(Tr. 142-43.)
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    \12\ The notice includes in pertinent part a statement of 
rights, to include the right to ``not have administrative inspection 
without an administrative inspection warrant,'' and an 
acknowledgment and consent section, requiring signature by the 
registrant to consent to the inspection. (Gov't Ex. 4.)
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    DI Windsor also testified regarding statements made by Respondent 
during the inspection relating to controlled substances. With regard to 
diet pills, DI Windsor testified that Respondent first raised the 
issue, stating that ``he had ordered diet pills for his wife [referring 
to Ms. Muratalla] and he had also said that she ordered them for 
herself.'' (Tr. 146.) DI Windsor did not recall specifically discussing 
the diet pills Adipex, Fastin, phentermine or Tenuate with Respondent, 
or the specific time frames for the orders. (Tr. 147.) The inspection 
revealed no invoices, inventory or dispensing records of any type for 
any of the diet pills referenced in shipment records to Respondent. 
(Tr. 147-48.) DI Windsor further testified that Respondent stated he 
purchased the diet pills with a company credit card, and informed DI 
Windsor that he would work on getting a copy of the bill, but as 
recently as the date of hearing Respondent had not produced a copy. 
(Tr. 153.)
    DI Windsor next testified that Respondent stated during the 
inspection that there had been two occasions within the preceding one 
or two years in which controlled substances believed to be hydrocodone 
that had been placed on his desk ``had come up missing.'' (Tr. 148, 
150.) Respondent further stated that ``on one occasion he did not 
contact law enforcement [and] on the second occasion he thought law 
enforcement had been contacted by one of his staff, but he wasn't 
certain of that.'' (Tr. 149.) Respondent was certain that neither 
incident had been reported to DEA. (Id.) The lack of available records 
at Respondent's registered location precluded DI Windsor from 
determining the amount of the loss.
    The evidence also included a form entitled Voluntary Surrender of 
Controlled Substances Privileges, dated December 2, 2009, and signed by 
Respondent. (Gov't Ex. 2.) DI Windsor testified that after the 
completion of the closing inventory and request for documentation, 
Respondent was presented the form, including an explanation of its 
terms and Respondent's right to re-apply at a later date. (Tr. 155-56.) 
Respondent signed the form but was unable to produce a copy of his DEA 
COR. (Tr. 159; Gov't Ex. 9.)
    On cross- and redirect examination, DI Windsor testified to being 
at Respondent's office on December 2, 2009 for approximately two hours. 
(Tr. 168.) DI Windsor testified that between December 2, 2009, and 
August 3, 2010, she spoke with Respondent by telephone approximately 
six times regarding Respondent's application and the California Dental 
Board, but DI Windsor ceased communication with Respondent after 
becoming aware that Respondent ``had a patient call [DI Windsor] 
pretending to be [Respondent's] attorney.'' (Tr. 169, 173.) DI Windsor 
further testified that upon Respondent's request that she contact 
Harvard to inquire about the ordering of diet pills, DI Windsor called 
Harvard and was informed that the person who ordered the diet pills in 
June 2009 was not Ms. Muratalla.\13\ (Tr. 170; 182-83.) DI Windsor's 
testimony was fully credible. Her testimony was internally consistent, 
corroborated by documentary evidence of record and the witness was able 
to recall factual events with a reasonable level of certainty.
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    \13\ No testimony or other evidence was offered regarding the 
identity of the person Harvard said ordered the diet pills.
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    The Government presented the testimony of Respondent's former 
patient [GS], who credibly testified in substance to being Respondent's 
patient from December 2009 until approximately March 2010. (Tr. 38-40.) 
[GS] testified that Respondent treated her initially in December 2009 
for an infected tooth, and later in or about January 2010 Respondent 
performed a root canal. (Tr. 38.) [GS] further testified that 
Respondent prescribed ``two rounds of antibiotics * * * initially [and] 
on the third visit * * * he gave me a prescription for lorazepam.'' 
(Tr. 39.) [GS] specifically recalls being prescribed the lorazepam in 
the latter part of January or February of 2010. (Id.) On cross-
examination, [GS] admitted to filing a complaint against Respondent 
with the California Dental Board ``for not finishing the work that I 
paid for.'' \14\ (Tr. 41.)
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    \14\ [GS] had also testified on direct examination to being 
awarded a court judgment for $6649. (Tr. 40.)
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    The evidence also included a pharmacy prescription record dated 
January 16, 2010, detailing a prescription for ``Amox'' and 
``Lorazepam'' to patient [GS], and listing Respondent as the 
prescriber. (Gov't Ex. 6.) DI Windsor credibly testified in relevant 
part that the prescription was ``phoned in'' and lorazepam was the only 
controlled substance prescribed and dispensed.\15\ (Tr. 162-63.)
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    \15\ Lorazepam is a Schedule IV controlled substance. (Tr. 163.)
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    The Government next offered the testimony of Ms. Muratalla, who 
testified in substance to having married Respondent in 1999, separated 
in May 2008, and divorced in June 2010. (Tr. 47-48.) Ms. Muratalla 
explained that she also had a working relationship with Respondent, 
initially working as colleagues and eventually opening their own 
practice in September 2002. (Tr. 48.) Ms. Muratalla testified that her 
primary duty was working as a dental hygienist, but also had 
responsibilities such as ``management, payroll * * * accounts 
receivable and accounts payable, as well as * * * cleaning crew on 
weekends.'' (Tr. 49.) Ms. Muratalla explained that she performed all of 
the above duties until July 22, 2008, when Respondent removed her 
access to his financial accounts. (Tr. 53-54.) From July 22, 2008, 
until September 11, 2008, Ms. Muratalla testified that she was not 
involved in any ordering of drugs and only worked in Respondent's 
office as a hygienist.\16\ (Tr. 51 & 53.)
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    \16\ Ms. Muratalla testified that she stopped working in 
Respondent's office altogether on September 11, 2008, because ``I 
had an official restraining order that was placed by [Respondent] on 
me.'' (Tr. 51.)
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    Ms. Muratalla outlined the drug ordering system in Respondent's 
office between 2002 and July 2008, noting that ``I'm not sure how we 
came across Harvard drugstore'' but opened an account and eventually 
began placing all orders through Harvard for financial reasons. (Tr. 
49.) In terms of Respondent's role in ordering drugs, Ms. Muratalla 
testified that Respondent did not make requests verbally, but was 
``very specific as far as writing down a list for me. He did every 
time.'' (Tr. 50.) Ms. Muratalla did not recall amounts ordered but did 
not believe the amounts

[[Page 66989]]

were excessive. (Tr. 51.) Ms. Muratalla further explained that she was 
the contact person in the office for drug orders which were sent to 
Respondent's office address using only Respondent's DEA number, because 
``[h]e was the sole proprietor * * * [and] only dentist working at the 
practice.'' (Tr. 55.) Ms. Muratalla testified that Respondent had 
``specific instructions to all staff members including myself, no one 
to open the box from [Harvard], it had to be placed on his desk without 
opening.'' (Id.) Respondent maintained the drugs in his office in a 
locked drawer and maintained possession of the key as well as the key 
to his office. (Tr. 60.)
    Ms. Muratalla further testified about a series of drug orders 
placed between October 2007 and March 2009. (Tr. 59; see Gov't Ex. 5 at 
2.) Ms. Muratalla indicated that the October 2, 2007 and February 5, 
2008 orders for hydrocodone and acetaminophen were common orders that 
she placed for the office, but would not have placed the remaining four 
orders.\17\ (Tr. 59.) Ms. Muratalla explained that she did not place 
the July 30, 2008 order for oxycodone and never recalled the office 
previously ordering or dispensing oxycodone. (Tr. 61.) Ms. Muratalla 
next testified to ordering controlled substances at the request of 
Respondent that she knew were used within and outside Respondent's 
dental practice, to include phentermine, Valium and Ambien, as well as 
``over-the-counter drugs.'' (Tr. 63-64.) With regard to diet pills, Ms. 
Muratalla is positive she did not order any after July 2008 but did 
make diet pill orders before that at the written direction of 
Respondent, stating that none were for her use. (Tr. 64.) Ms. Muratalla 
testified that she had suspicions as to who was using the diet pills 
but had ``never seen anyone take those pills.'' (Tr. 65.)
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    \17\ July 30, 2008 (oxycodone); October 16, 2008 (hydrocodone 
and acetaminophen); November 19, 2008 (hydrocodone); and March 27, 
2009 (hydrocodone and acetaminophen). (Gov't Ex. 5 at 2.)
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    On cross- and redirect examination, Ms. Muratalla testified that 
prior to 2007 when the dental practice was very busy approximately 4500 
hydrocodone pills could reasonably have been distributed to patients, 
who were given ten to twenty pills at a time. (Tr. 76.) After 2007, Ms. 
Muratalla testified that that level of distribution was not possible 
because ``there was absolutely no patients coming through the doors.'' 
(Tr. 75-76.) Ms. Muratalla testified that she was familiar with a 
person named Jennifer Savarese, a dental distributor who visited 
Respondent's office, but she never reviewed a Harvard drug catalogue 
with Ms. Savarese regarding diet pills and never handed diet pills to 
Ms. Savarese. (Tr. 77-78; 81-82.) Ms. Muratalla further testified that 
her relationship with Ms. Savarese was strictly professional, and she 
did not socialize with Ms. Savarese or consider her a friend. (Tr. 80.)
    In addition to the foregoing, the Government also introduced a 
document entitled: ``In the Matter of the Accusation Against'' 
[Respondent], brought on behalf of the Dental Board of California, and 
dated January 31, 2011.\18\ (Gov't Ex. 10 at 1, 14.) The Accusation 
includes various allegations against Respondent to include, among 
others, unprofessional conduct by: prescribing controlled substances 
after voluntary surrender of privileges, citing California Health and 
Safety Code 11155; procuring a prescription for controlled substances 
by misrepresentation, concealment of material fact and making a false 
statement, citing California Health and Safety Code 11173; obtaining, 
possessing or administering to oneself cocaine between May and October 
2008, and marijuana between March and April 2010, citing California 
Health and Safety Code 11054 and 11055; and using alcohol in a 
dangerous manner in or about January 8, 2010, citing California 
Business and Professions Code 1681(b).
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    \18\ When the document was tendered, DI Windsor testified in 
response to a question of when it is dated: ``This one. August 2nd, 
2000 (sic), is when they got the complaint, and it expires on March 
6th, 2011.'' (Tr. 188.) A review of the document reflects at 
paragraph two that the August 2, 2000 date refers to the issue date 
for Respondent's dental license with an expiration date of March 6, 
2011, unless renewed. (Gov't Ex. 10 at 1.) The document is dated 
January 31, 2011. (Id. at 14.)
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III. Respondent's Evidence

    Respondent did not testify and presented only one witness, Jennifer 
Yuen (n[eacute]e Savarese) (Ms. Savarese),\19\ a dental products 
representative. Ms. Savarese testified in substance that she worked as 
a dental products representative and was professionally introduced to 
Respondent through a mutual acquaintance. Initially, Ms. Savarese had 
only a business relationship with Respondent and Ms. Muratalla but over 
time became friends, describing her relationship with Respondent as 
``my dentist and friend.'' (Tr. 90.) Ms. Savarese described Ms. 
Muratalla as ``a very good friend of mine'' to include going out to 
lunch with Ms. Savarese and attending her wedding. (Id.)
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    \19\ The witness testified that she married in June 2008, but 
previously went by the last name Savarese. For purposes of this 
Recommended Decision, the witness will be referred to as Ms. 
Savarese.
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    With regard to the issue of diet pills, Ms. Savarese recalled going 
through a catalogue with Ms. Muratalla to order diet pills, and 
testified that ``she said she would order them through her rep for 
me.'' (Id.) When the pills came back to the office ``Maria gave them to 
me [and] I gave her cash.'' (Tr. 91.) Ms. Savarese specifically 
recalled that the only brand of diet pills ordered were phentermine, 
recalling placing two separate orders prior to 2007. (Tr. 94; 99-100.) 
She believed the total quantity ordered in 2006 and 2007 was at most 
600 dosage units based on two separate orders of 300. (Tr. 101.) Ms. 
Savarese also admitted that at the time she placed the order for 
phentermine she did not ``think that it was illegal'' but now realizes 
that it was illegal. (Tr. 105.)
    Respondent's evidence also included a May 11, 2000 Certificate of 
Recognition for high achievement in the Undergraduate Curriculum in 
Dental Care for Persons with Disabilities, a daily schedule calendar 
covering the period October 2007 to March 2009 and contact information 
for a probation office in Utah.\20\ (Resp't Exs. 2-4.)
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    \20\ Respondent stated that he had prior employment as a 
probation officer with the State of Utah from 1992 to 1996. (Tr. 
205.) Respondent also stated that the calendar was offered to show 
how many patients he had seen over a seventeen month period and 
``the work that I did, that [patients] would require pain 
medication, and to where the 4500 pills would have went to, over 17 
months.'' (Tr. 210.)
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    I find the testimony of Ms. Savarese fully credible. Her testimony 
was internally consistent, and the witness was able to recall factual 
events with a reasonable level of certainty. There is no documentary 
evidence of record that contradicts the testimony of Ms. Savarese, nor 
was there any evidence to suggest that she had a bias or other personal 
interest in the outcome of the case. Ms. Savarese's past relationship 
to Respondent was both professional and social, but no evidence was 
offered to suggest that the witness's relationship with Respondent or 
Ms. Muratalla would influence her testimony. Ms. Savarese's demeanor 
was serious and forthright throughout her testimony. The credibility of 
Ms. Savarese's testimony was further enhanced by her statement against 
interest, admitting that at the time she placed the order for 
phentermine she did not ``think that it was illegal'' but now realizes 
that it was illegal. (Tr. 105.)
    I find the testimony of Ms. Muratalla only partially credible. I do 
not find credible Ms. Muratalla's testimony that she never reviewed a 
Harvard drug

[[Page 66990]]

catalogue with Ms. Savarese regarding diet pills and never handed the 
pills to Ms. Muratalla. Nor do I find credible Ms. Muratalla's 
testimony that she did not socialize with Ms. Savarese. Evidence of Ms. 
Muratalla's past history with Respondent, including a severance of 
their professional and personal relationship in 2008, suggests the 
witness had a bias or interest in the outcome of the case. The 
witness's demeanor while testifying was fully consistent with that bias 
or interest, to include at various times nonresponsive answers or 
unsolicited comments adverse to Respondent.

The Parties' Contentions

I. The Government

    The Government argues in its post-hearing brief that ``the ALJ and 
Deputy Administrator may consider the Dental Board's complaint as a 
recommendation * * * `of the appropriate State licensing board.' '' 
\21\ (Gov't Br. at 21.) The Government further argues in substance that 
Respondent issued a prescription for lorazepam without authorization 
using his surrendered DEA registration, failed to keep records such as 
invoices, dispensing logs and inventories related to his purchases of 
hydrocodone and oxycodone and failed to keep required records related 
to his purchases of controlled substance diet pills. (Id. 22-24.) The 
Government further argues that Respondent failed to report thefts of 
controlled substances on two occasions to DEA, as required by 
regulation. Finally, the Government argues that ``Respondent has not 
demonstrated to DEA that the problems that have been on-going in his 
practice since at least 2007 will not continue * * * [and] Respondent 
has forfeited his opportunity to show remorse.'' (Id. at 27.)
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    \21\ I have specifically declined to consider the California 
Dental Board complaint as a ``recommendation,'' because at most it 
contains accusations that are unresolved.
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II. Respondent

    Respondent argues in his post-hearing brief that the Government has 
not met its burden to identify who ordered the diet pills from Harvard, 
and further argues that the testimony of Ms. Muratalla should be given 
no weight. (Resp't Br. at 8-9.) Respondent maintains that the DEA made 
insufficient investigation regarding mistaken information contained 
within Government Exhibit 5, noting that this ``page could definitely 
have altered the whole scope of this investigation if proper 
investigation was done.'' (Id. at 3.)
    Respondent argues at various points that the Government has not met 
its burden of proof,\22\ noting in part that Respondent has been an 
``outstanding citizen who served the country as a probation officer * * 
* [and] was awarded an exclusive award from `The Academy of Dentistry' 
for working with people with Disabilities when no one else would.'' 
(Id. at 9-10.) Respondent further argues that forms such as biennial 
inventories and invoice records were in the possession of Ms. Muratalla 
and the Government. (Id. at 6, 10.) Finally, Respondent argues in 
substance that due to reliance on hearsay and ``perjuries'' the 
Government has failed to establish by a preponderance of the evidence 
that Respondent's registration would be inconsistent with the public 
interest, and his application for registration should be granted. (Id. 
at 10.)
---------------------------------------------------------------------------

    \22\ Respondent appears to assert that the applicable standard 
of proof is the ``beyond a reasonable doubt'' standard. (See, e.g., 
Resp't Br. at 4.) Contrary to Respondent's argument, however, the 
applicable standard of proof in this administrative proceeding is 
``preponderance of the evidence.'' Arthur Sklar, R.Ph., d/b/a King 
Pharmacy, 54 FR. 34,623, 34,627 (DEA 1989). ``A sanction may not be 
imposed* * *except on consideration of the whole record* * *and 
supported by and in accordance with the reliable, probative, and 
substantial evidence.'' See 5 U.S.C. 556(d). Respondent appears to 
acknowledge as much, arguing that the ``issue before the court is 
whether the government has established by a preponderance of the 
evidence that Respondent's continued registration would be 
inconsistent with the public interest.'' (Resp't Br. at 8 (emphasis 
supplied).)
---------------------------------------------------------------------------

Discussion

I. The Applicable Statutory and Regulatory Provisions

    The Controlled Substances Act (CSA) provides that any person who 
dispenses (including prescribing) a controlled substance must obtain a 
registration issued by the DEA in accordance with applicable rules and 
regulations.\23\ ``A prescription for a controlled substance to be 
effective must be issued for a legitimate medical purpose by an 
individual practitioner acting in the usual course of his professional 
practice. The responsibility for the proper prescribing and dispensing 
of controlled substances is upon the prescribing practitioner'' with a 
corresponding responsibility on the pharmacist who fills the 
prescription.\24\ It is unlawful for any person to possess a controlled 
substance unless that substance was obtained pursuant to a valid 
prescription from a practitioner acting in the course of his 
professional practice.\25\ In addition, I conclude that the reference 
in 21 U.S.C. 823(f)(5) to ``other conduct which may threaten the public 
health and safety'' would as a matter of statutory interpretation 
logically encompass the factors listed in 824(a).\26\
---------------------------------------------------------------------------

    \23\ 21 U.S.C. 822(a)(2); 21 U.S.C. 802(10).
    \24\ 21 CFR 1306.04(a).
    \25\ 21 U.S.C. 844(a).
    \26\ See Kuen H. Chen, M.D., 58 FR. 65,401, 65,402 (DEA 1993).
---------------------------------------------------------------------------

A. The Public Interest Standard

    The CSA, at 21 U.S.C. 824(a)(4), provides, insofar as pertinent to 
this proceeding, that the Deputy Administrator may revoke a COR if she 
finds that the registrant's continued registration would be 
inconsistent with the public interest as that term is used in 21 U.S.C. 
823(f). In determining the public interest, the Deputy Administrator is 
required to consider the following factors:
    (1) The recommendation of the appropriate state licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing or conducting research 
with respect to controlled substances.
    (3) The applicant's conviction record under federal or state laws 
relating to the manufacture, distribution or dispensing of controlled 
substances.
    (4) Compliance with applicable state, federal or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.
    As a threshold matter, the factors specified in Section 823(f) are 
to be considered in the disjunctive: The Deputy Administrator may 
properly rely on any one or a combination of those factors, and give 
each factor the weight deemed appropriate, in determining whether a 
registration should be revoked or an application for registration 
denied. See David H. Gillis, M.D., 58 FR. 37,507, 37,508 (DEA 1993); 
see also D & S Sales, 71 FR. 37,607, 37,610 (DEA 2006); Joy's Ideas, 70 
FR. 33,195, 33,197 (DEA 2005); Henry J. Schwarz, Jr., M.D., 54 FR. 
16,422, 16,424 (DEA 1989). Additionally, in an action to deny a 
registrant's COR application, the DEA has the burden of proving that 
the requirements for revocation are satisfied.\27\ The burden of proof 
shifts to the respondent once the Government has made its prima facie 
case.\28\
---------------------------------------------------------------------------

    \27\ See 21 CFR 1301.44(e) (2010).
    \28\ See Medicine Shoppe--Jonesborough, 73 FR. 364, 380 (DEA 
2008); see also Thomas E. Johnston, 45 FR. 72,311, 72,311 (DEA 
1980).
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B. Other Factors

    In addition to the public interest factors discussed above, 21 
U.S.C. 824(a) provides four other factors that

[[Page 66991]]

the Deputy Administrator may consider in a proceeding to suspend or 
revoke a DEA COR.\29\ Despite the lack of an explicit provision 
applying these factors to a denial of an application
---------------------------------------------------------------------------

    \29\ That subsection provides that a DEA COR may be revoked upon 
a finding that the registrant: (1) has materially falsified an 
application; (2) has been convicted of a felony under the CSA or any 
other federal or state law relating to any controlled substance; (3) 
has had a state license or registration suspended, revoked or denied 
and is no longer authorized by state law to handle controlled 
substances; (4) has committed such acts as would render his 
registration under 21 U.S.C. 823 inconsistent with the public 
interest; or (5) has been excluded from participation in a program 
pursuant to 42 U.S.C. 1320a-7(a). It should also be noted that 
824(a) contains a reciprocal reference incorporating the public 
interest factors from 823(f). See 21 U.S.C. 824(a)(4).

[t]he agency has consistently held that the Administrator may also 
apply these bases to the denial of a registration, since the law would 
not require an agency to indulge in the useless act of granting a 
---------------------------------------------------------------------------
license on one day only to withdraw it on the next.\30\

    \30\ Kuen H. Chen, M.D., 58 FR. 65,401, 65,402 (DEA 1993) 
(citing Serling Drug Co. & Detroit Prescription Wholesaler, Inc., 40 
FR. 11,918, 11,919 (DEA 1975)); see also Scott J. Loman, D.D.S., 50 
FR. 18,941 (DEA 1985); Roger Lee Palmer, D.M.D., 49 FR. 950 (DEA 
1984).

In addition, I conclude that the reference in 823(f)(5) to ``other 
conduct which may threaten the public health and safety'' would as a 
matter of statutory interpretation logically encompass the factors 
listed in 824(a).\31\
---------------------------------------------------------------------------

    \31\ See Chen, 58 FR. at 65,402.
---------------------------------------------------------------------------

II. The Factors To Be Considered

Factors 1 and 3: The Recommendation of the Appropriate State Licensing 
Board or Professional Disciplinary Authority and Conviction Record 
Under Federal or State Laws Relating to the Manufacture, Distribution 
or Dispensing of Controlled Substances

    In this case, regarding Factor One, it is undisputed that 
Respondent currently holds a valid dental license in California, but 
Respondent's dental license is presently the subject of state 
disciplinary action pursuant to a pending state Accusation against 
Respondent, the results of which are unknown.\32\ (Gov't Ex. 10.) While 
not dispositive, Respondent's possession of a valid unrestricted dental 
license in California does weigh in favor of a finding that 
Respondent's registration would not be inconsistent with the public 
interest. See Robert A. Leslie, M.D., 68 FR. 15,227, 15,230 (DEA 2003) 
(state license is a necessary, but not a sufficient condition for 
registration, and therefore, this factor is not dispositive).
---------------------------------------------------------------------------

    \32\ No further evidence or testimony was offered with regard to 
the status or outcome of the state review, and I give the 
allegations contained within the Dental Board Accusation no 
evidentiary weight for purposes of this Recommended Decision.
---------------------------------------------------------------------------

    Regarding Factor Three, there is no evidence that Respondent has 
ever been convicted under any federal or state law relating to the 
manufacture, distribution or dispensing of controlled substances. I 
therefore find that this factor, although not dispositive, see Leslie, 
68 FR. at 15,230, weighs against a finding that Respondent's 
registration would be inconsistent with the public interest.

Factors 2 and 4: Respondent's Experience in Handling Controlled 
Substances; and Compliance With Applicable State, Federal or Local Laws 
Relating to Controlled Substances

    The Government alleges that Respondent failed to effectively 
monitor the receipt and distribution of controlled substances because 
Respondent did not maintain an effective recordkeeping system in 
accordance with 21 CFR 1304.03, 1304.04 and 1304.21, among others. The 
evidence and testimony in this case centered in significant part on 
Respondent's failure to properly handle controlled substances, as well 
as his failure to comply with applicable laws regarding mandatory 
record keeping. As an initial matter, this is not a case of a 
registrant failing to adhere to the finer points of record keeping. The 
undisputed evidence of record is that Respondent's record keeping was 
essentially non-existent.
    Pursuant to 21 CFR 1304.03(b), 1304.21(a), 1304.22(a)(2)(iv), 
1304.22(a)(2)(ix) and 1304.22(c), a registered individual practitioner 
is required to maintain records of controlled substances in Schedules 
II-V that are dispensed and received, including the number of dosage 
units, the date of receipt or disposal and the name, address and 
registration number of the distributor. It is unlawful to fail to make, 
keep or furnish required records.\33\ DEA regulations require that 
``each registered individual practitioner required to keep records'' 
shall maintain inventories and records of Schedule II controlled 
substances ``separately from all of the records of the registrant''; 
inventories and records of Schedule III-V controlled substances ``shall 
be maintained either separately from all other records of the 
registrant or in such form that the information required is readily 
retrievable from the ordinary business records of the registrant.'' 
\34\
---------------------------------------------------------------------------

    \33\ 21 U.S.C. 842(a)(5).
    \34\ 21 CFR 1304.04(g) & (f)(2).
---------------------------------------------------------------------------

    One mandatory recordkeeping vehicle is DEA Form 222, the ``official 
triplicate order form[] used by physicians to order scheduled 
narcotics'' and other controlled substances.\35\ A menu of federal 
regulations specifies procedures relating to DEA Form 222, such as 
obtaining, 21 CFR 1305.11, executing, 1305.12, filling, 1305.13, and 
endorsing DEA Form 222, 1305.14, among other procedures.\36\ In 
addition, 21 CFR 1305.03 requires that a DEA Form 222 be used for each 
distribution of a controlled substance listed in Schedule I or II, and 
Section 1305.17 provides that these order forms must be maintained 
separately from all other records and that they ``are required to be 
kept available for inspection for a period of 2 years.''
---------------------------------------------------------------------------

    \35\ Robert L. Dougherty, Jr., M.D., 60 FR. 55,047, 55,048 (DEA 
1995).
    \36\ See, e.g., 21 CFR 1305.15- .19.
---------------------------------------------------------------------------

    Failing to comply with recordkeeping laws and regulations relating 
to controlled substances can justify adverse action against a 
registrant's COR. ``[A] blatant disregard for statutory provisions 
implemented to maintain a record of the flow of controlled substances 
and to prevent the diversion of controlled substances to unauthorized 
individuals, would justify revocation'' of a certificate of 
registration.\37\
---------------------------------------------------------------------------

    \37\ Robert L. Dougherty, Jr., M.D., 60 FR. 55,047, 55,050 (DEA 
1995) (citing George D. Osafo, M.D., 58 FR 37,508, 37,509 (1993) 
(revoking practitioner's registration where ``[r]espondent failed to 
comply with numerous recordkeeping requirements[, explaining that] * 
* * it is a registrant's responsibility to be familiar with the 
Federal regulations applicable to controlled substances'')); see 
also Hugh I. Schade, M.D., 60 FR. 56,354, 56,356 (DEA 1995) (noting 
the inventory procedures required by Sections 1304.11 to 1304.13, 
and 1305.06).
---------------------------------------------------------------------------

    DEA regulations state that a registered individual practitioner is 
required to keep records of controlled substances in Schedules II, III, 
IV and V which are dispensed.\38\ As a general matter, records are 
required to be kept by the registrant and must be available for at 
least two years.\39\
---------------------------------------------------------------------------

    \38\ 21 CFR 1304.03(b) (2010).
    \39\ 21 CFR 1304.04.
---------------------------------------------------------------------------

    The undisputed evidence of record reflects that Respondent 
consented to an inspection of his registered location on December 2, 
2009, by two DEA diversion investigators. The evidence also reflects 
that between October 2007 and March 2009, Respondent had received in 
six separate shipments from his supplier, Harvard Drug Group, several 
thousand tablets of hydrocodone, and in July 2008, a significant 
quantity of oxycodone. (Gov't Ex. 5 at 2-5.) Additionally, the evidence 
reflects Respondent's order and receipt in or before June 2009 of 
significant quantities of the Schedule IV controlled substances Adipex, 
Fastin,

[[Page 66992]]

phentermine, and Tenuate, referred to collectively as ``diet pills.'' 
As of December 2, 2009, Respondent had received thousands of tablets of 
controlled substances, requiring various levels of record keeping. The 
December 2, 2009 audit of Respondent's registered location, with 
Respondent present, resulted in the inventory and accounting of only 
89.5 tablets of hydrocodone. (Gov't Ex. 8.) Moreover, no copies were 
found of required DEA Form 222, which should have documented each 
distribution of the Schedule II controlled substance oxycodone. Nor 
were any other required records found or produced by Respondent during 
the inspection, to include biennial inventories, dispensing logs and 
invoices for controlled substances. (Tr. 139-40.)
    Respondent's statement during the December 2, 2009 audit that the 
dispensing records were located within his patient records was found to 
be inaccurate. Even if true, the patient records would not substitute 
for required copies of DEA Form 222 relating to the Schedule II 
controlled substance oxycodone, among other recordkeeping requirements. 
Respondent's attempt to produce relevant patient records during the 
audit to support his claim was also revealing. Respondent initially 
produced patient records that were outside the scope of the inspection 
period, and was redirected by the diversion investigators to produce 
relevant files. (Tr. 142.) Respondent then produced a ``printout of 
patient names.'' (Tr. 143.) At that point, the diversion investigators 
identified a random sample of patient files by name within the time 
frame of the audit, which upon production and review were found to 
contain no dispensing records. (Id.)
    I find by a preponderance of the evidence that Respondent 
unlawfully failed to make, keep or furnish required records relating to 
his handling of controlled substances, in violation of 21 U.S.C. 
842(a)(5) and 827(a) and applicable regulations.\40\
---------------------------------------------------------------------------

    \40\ Respondent argues for the first time in his post-hearing 
brief that Ms. Muratalla and counsel for the Government had copies 
at the hearing of Respondent's biennial inventories and invoices for 
controlled substances. (Resp't Br. 6.) This unsworn assertion by 
Respondent is neither evidence nor is it supported by testimonial or 
documentary evidence of record. In fact, evidence of controlled 
substance shipments to Respondent that post-date Ms. Muratalla's 
access to the records plainly refutes the assertion. Moreover, 
Respondent had the opportunity to cross-examine Ms. Muratalla at 
hearing and declined to offer any evidence to support his claim. I 
therefore find that Respondent's argument, that required records did 
in fact exist, is without factual support.
---------------------------------------------------------------------------

    The Government also alleged and offered evidence of Respondent's 
failure to properly report the theft of controlled substances, in 
violation of 21 CFR 1301.76(b). During the December 2, 2009 audit, 
Respondent stated to diversion investigators that there were two 
separate occasions within the preceding two years in which Respondent 
believed that hydrocodone which had been placed on his desk had come up 
missing. (Tr. 148, 150.) Respondent was also certain that neither 
incident had been reported to DEA. (Tr. 149.) The applicable regulation 
unambiguously requires a registrant to notify the ``Field Division 
Office of [DEA] in writing, of the theft or significant loss of any 
controlled substances within one business day of discovery * * *.'' 21 
CFR 1301.76(b). In this case, Respondent's violation was not a de 
minimis one, such as missing the one business day deadline or notifying 
the wrong office in writing. Rather, Respondent stated that on one 
occasion he recalls law enforcement was not notified at all, and the 
second he ``thought law enforcement had been contacted by one of his 
staff, but he wasn't certain of that.'' (Tr. 149.) Notably, 
Respondent's failure to maintain any required records precluded DI 
Windsor from determining the amount of the loss. (Tr. 152-53.)
    I find by a preponderance of the evidence that Respondent failed to 
timely notify DEA of the theft or loss of controlled substances on two 
separate occasions between 2007 and 2009, in violation of 21 U.S.C. 
1301.76(b).
    The Government also offered evidence of Respondent's unlawful use 
of his surrendered DEA registration to issue a prescription for 
lorazepam in January 2010. This evidence centered on the testimony of 
patient [GS], along with the testimony of DI Windsor, as corroborated 
by a pharmacy copy of the filled prescription. The evidence at hearing 
clearly documented Respondent's voluntary surrender of his DEA 
registration on December 2, 2009.\41\ (Gov't Ex. 2.) In relevant part, 
the surrender form states: ``I understand that I will not be permitted 
to order, manufacture, distribute, possess, dispense, administer, 
prescribe, or engage in any other controlled substance activities 
whatever, until such time as I am again properly registered.'' (Id.)
---------------------------------------------------------------------------

    \41\ DI Windsor testified in relevant part that Respondent's 
surrender of his registration included an oral discussion between 
Respondent and investigators, as well as a written surrender form 
(DEA-104) that Respondent read and signed. (Tr. 154-59.) DI Windsor 
also testified in response to Respondent's question about his state 
of mind at the time of surrender, that he appeared ``overwhelmed'', 
but Respondent offered no testimony or documentary evidence to 
contradict the voluntariness of his surrender. I find by a 
preponderance of the evidence that Respondent's surrender of 
registration on December 2, 2009, was in fact voluntary.
---------------------------------------------------------------------------

    In addition to the actual notice Respondent received as to his lack 
of authority to handle controlled substances on and after December 2, 
2009, applicable law and regulations provide clear guidance. ``Except 
as authorized by this title, it shall be unlawful for any person 
knowingly or intentionally * * * to * * * dispense[] a controlled 
substance.'' 21 U.S.C. 841(a). Moreover, ``[e]very person who dispenses 
* * * any controlled substance, shall obtain from the Attorney General 
a registration,'' \42\ 21 U.S.C. 822(a)(2), with the exception of 
``[a]n agent or employee of any registered * * * dispenser of any 
controlled substance if such agent or employee is acting in the usual 
course of his business or employment,'' id. 822(c)(1). ``Every person 
who manufactures, distributes, dispenses, imports or exports any 
controlled substance or who proposes to [do so] * * * shall obtain a 
registration unless exempted by law or pursuant to 1301.22-1301.26.'' 
21 CFR 1301.11(a) (2010). Although a person may apply for registration 
at any time, ``[n]o person required to be registered shall engage in 
any activity for which registration is required until the application 
for registration is granted and a Certificate of Registration is issued 
by the Administrator to such person.'' 21 CFR 1301.13(a) (2010).\43\ 
Respondent did not submit an application for a new DEA registration 
until approximately January 27, 2010. (Gov't Ex. 1.)
---------------------------------------------------------------------------

    \42\ See also 21 CFR 1301.11 (2010).
    \43\ Applicable California law also prohibits the prescribing of 
controlled substances without ``current registration from the 
appropriate federal agency as provided by law. Cal. Health & Safety 
Code 11155. ``No person shall issue a prescription that is false or 
fictitious in any respect.'' Id. 11157.
---------------------------------------------------------------------------

    The uncontroverted evidence of record reflects that notwithstanding 
his lack of DEA registration, Respondent unlawfully prescribed the 
Schedule IV controlled substance lorazepam to patient [GS] on January 
16, 2010. Patient [GS] credibly testified to being treated by 
Respondent for an infected tooth beginning in December 2009 and further 
testified that in the latter part of January 2010, Respondent performed 
a root canal on [GS]. (Tr. 38.) [GS] specifically recalls Respondent 
prescribing lorazepam on a third office visit, recalling the time frame 
as the latter part of January or February 2010. (Tr. 39.) Corroborating 
[GS]'s testimony, the

[[Page 66993]]

evidence included a pharmacy copy of a phoned-in prescription for [GS] 
issued in Respondent's name dated January 16, 2010, using Respondent's 
surrendered DEA registration number, prescribing ``Amox'' and 
``Lorazepam'', the latter being a Schedule IV controlled substance. 
(Gov't Ex. 6; Tr. 163.)
    I find by a preponderance of the evidence that Respondent violated 
federal and state law by prescribing a Schedule IV controlled substance 
on January 16, 2010, knowing that he lacked a DEA registration and was 
prohibited from prescribing any controlled substance.\44\
---------------------------------------------------------------------------

    \44\ See 21 U.S.C. 841(a)(1); 21 CFR 1301.11(a); 1301.13(a); 
Cal. Health & Safety Code 11155 & 11157.
---------------------------------------------------------------------------

    Another issue in this case concerns Respondent's prescribing 
practices with regard to hydrocodone and phentermine, which the 
Government alleges were not prescribed pursuant to a legitimate medical 
purpose or within the usual course of professional practice, contrary 
to 21 CFR 1306.04(a) (2010). (Gov't PHS at 7.) Evaluation of 
Respondent's prescribing conduct in this case is governed by applicable 
federal and state law. The applicable standard under federal law is 
whether a prescription for a controlled substance 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). The 
standard of care refers to that generally recognized and accepted in 
the medical community rather than a standard unique to the 
practitioner. Robert L. Dougherty, M.D., 76 FR. 16,823, 16,832 (DEA 
2011) (citing Brown v. Colm, 11 Cal.3d 639, 642-43 (1974)). Although it 
is recognized that state law is a relevant factor in determining 
whether a practitioner is acting in the ``usual course of professional 
practice,'' it is also appropriate in the context of an inquiry under 
federal law to also consider ``generally recognized and accepted 
medical practices'' in the United States. Bienvenido Tan, M.D., 76 FR. 
17,673, 17,681 (DEA 2011).
    The applicable standards under California law may be found in 
various provisions of the California Business and Professional Code as 
well as the California Health and Safety Code. Mirroring federal law in 
substantial part, California law provides that

[a] prescription for a controlled substance shall only be issued for 
a legitimate medical purpose by an individual practitioner acting in 
the usual course of his or her professional practice. The 
responsibility for the proper prescribing and dispensing of 
controlled substances is upon the prescribing practitioner, but a 
corresponding responsibility rests with the pharmacist who fills the 
prescription.

Cal. Health & Safety Code 11153(a).

    Turning to the evidence of record, with regard to Respondent's 
prescribing practices for hydrocodone, no specific evidence was offered 
other than the evidence discussed above as to a complete lack of 
documentation. The evidence pertaining to Respondent's prescribing 
practices for phentermine and related diet pills included Respondent's 
admission on December 2, 2009, that ``he had ordered diet pills for his 
wife [Ms. Muratalla] and he had also said that she ordered them for 
herself.'' (Tr. 146.) The evidence with regard to the 2200 tablets of 
diet pills that formed the basis of the investigation of Respondent 
after Harvard's June 11, 2009 Suspicious Order Report was minimal, as 
DI Windsor testified that she did not recall specifically discussing 
with Respondent the diet pills Adipex, Fastin, phentermine or Tenuate, 
with reference to a specific time frame for the orders. (Tr. 146-47.) 
Ms. Muratalla testified that she ordered diet pills on Respondent's 
behalf prior to July 2008, but is certain she did not order any after 
that date. (Tr. 64.) Ms. Savarese testified that she ordered 
phentermine from Ms. Muratalla, recalling placing two separate orders 
prior to 2007. (Tr. 94; 99-100.)
    Although the foregoing evidence is vague as to time frames and 
mixed as to who placed each order, there is no ambiguity in the 
evidence that Respondent ordered and dispensed the Schedule IV 
controlled substances phentermine, Adipex-P, Fastin and Tenuate in or 
before December 2009, without a legitimate medical purpose and not in 
the usual course of his professional practice. Respondent admitted on 
December 2, 2009, that he had ordered diet pills for his wife and knew 
that she had ordered them for herself. Ms. Savarese also credibly 
testified that she received two separate orders of phentermine from Ms. 
Muratalla in exchange for cash, without a prescription between 2006 and 
2007. The evidence of record reflects a shipment of phentermine, 
Adipex, Fastin, and Tenuate to Respondent in June 2009, none of which 
was present or accounted for at Respondent's registered location in 
December 2009.
    Accordingly, I find by a preponderance of the evidence that 
Respondent violated applicable federal and state law in ordering and 
prescribing Schedule IV controlled substances without a legitimate 
medical purpose and outside the usual course of professional practice 
at various times between 2006 and December 2, 2009. Additionally, 
Respondent's handling of these controlled substances failed to comply 
with any of the mandated record keeping requirements under the CSA, 
discussed above.\45\
---------------------------------------------------------------------------

    \45\ See 21 U.S.C. 841(a)(1), 827(a) and (b); 21 CFR 1306.04(a); 
Cal. Health & Safety Code 11153(a).
---------------------------------------------------------------------------

    Respondent elected not to testify in this case and the Government 
suggests summarily in its post-hearing brief that ``DEA may draw an 
adverse interest (sic) that Respondent presented no testimony on his 
own behalf.'' (Gov't Br. at 20; see Tr. 201-05.) Agency precedent 
permits but does not require the drawing of an adverse inference from a 
Respondent's silence in the face of accusation, ``since it is assumed 
in such circumstances [one] would be more likely than not to dispute an 
untrue accusation.'' Hoxie v. DEA, 419 F.3d 477, 483 (6th Cir. 2005) 
(citing United States v. Hale, 422 U.S. 171, 176 (1975)). Although 
Respondent's decision not to testify could arguably support an adverse 
inference in the face of accusation as to some allegations, I decline 
to do so on the facts of this case, other than in the context of 
Respondent's failure to accept responsibility for his misconduct.\46\
---------------------------------------------------------------------------

    \46\ The Government's invitation to draw an adverse inference 
does not refer to any particular allegation, leaving open to 
question whether the request was intended to apply to all 
allegations noticed in the OSC and prehearing proceedings. For 
example, the Government alleged and proffered that ``Respondent had 
been hospitalized in August 2008 for alcohol and cocaine abuse.'' 
(Gov't Supp. Preh'g Statement (SPHS) at 4.) The proffered testimony 
at hearing by Ms. Muratalla directly contradicted that allegation 
and was consistent with Respondent's unsworn statements during the 
hearing that he was hospitalized due to an assault and related 
trauma. (Compare Tr. 67-68, with Tr. 74.) Respondent's testimonial 
silence as to that allegation does not seem to make the allegation 
any truer. I also note that the Government listed Respondent as a 
witness, but chose not to call him at hearing. (Gov't PHS at 3; Tr. 
201.) In light of the foregoing, I find that drawing an adverse 
inference in this case is unwarranted, particularly given the lack 
of focus to the Government's request.
---------------------------------------------------------------------------

    The evidence of Respondent's experience in dispensing controlled 
substances and compliance with applicable law and regulations weighs 
heavily in favor of a finding that Respondent's registration would be 
inconsistent with the public interest under Factors Two and Four.

Factor 5: Such Other Conduct Which May Threaten the Public Health and 
Safety

    Under Factor Five, the Deputy Administrator is authorized to 
consider ``other conduct which may threaten the public health and 
safety.'' 5 U.S.C. 823(f)(5). The Agency has accordingly

[[Page 66994]]

held that ``where a registrant has committed acts inconsistent with the 
public interest, the registrant must accept responsibility'' for his or 
her actions and demonstrate that he or she will not engage in future 
misconduct. Patrick W. Stodola, 74 FR. 20,727, 20,734 (DEA 2009).\47\ A 
respondent's acceptance of responsibility must be ``clear and 
manifest.'' Mark De La Lama, P.A., 76 FR. 20,011, 20,020 n.19 (DEA 
2011). A ``[r]espondent's lack of candor and inconsistent 
explanations'' may serve as a basis for denial of a registration. John 
Stanford Noell, M.D., 59 FR. 47,359, 47,361 (DEA 1994). Additionally, 
``[c]onsideration of the deterrent effect of a potential sanction is 
supported by the CSA's purpose of protecting the public interest.'' 
Joseph Gaudio, M.D., 74 FR. 10,083, 10,094 (DEA 2009).
---------------------------------------------------------------------------

    \47\ See also Hoxie v. DEA, 419 F.3d 477, 484 (6th Cir. 2005) 
(decision to revoke registration ``consistent with the DEA's view of 
the importance of physician candor and cooperation.'')
---------------------------------------------------------------------------

    The Government alleged ``other conduct'' relevant to Factor Five 
during the course of prehearing procedures in the form of a February 
24, 2011 Motion to Include Dental Board of California Complaint. The 
proposed document is entitled: ``In the Matter of the Accusation 
Against'' [Respondent], brought on behalf of the Dental Board of 
California, and dated January 31, 2011. (Gov't Ex. 10.) The California 
Dental Board allegations relevant to Factor Five include obtaining, 
possessing or administering to oneself, cocaine between May and October 
2008, and marijuana between March and April 2010, citing California 
Health and Safety Code 11054 and 11055; and using alcohol in a 
dangerous manner in or about January 8, 2010, citing California 
Business and Professions Code 1681(b). The Government's prehearing 
notice of evidence to support the above issues consisted of a 
supplemental prehearing statement dated January 21, 2011, stating in 
relevant part ``Ms. Murutalla (sic) will testify that she told the DEA 
that the Respondent had been hospitalized in August 2008 for alcohol 
and cocaine abuse.'' (Gov't SPHS at 4.)
    At hearing, I excluded Ms. Muratalla's proposed testimony on the 
limited issue of alcohol and cocaine abuse based in part on lack of 
adequate notice, particularly given the brevity of the noticed 
testimony and variance from allegations of the California Dental Board. 
I did allow the Government to proffer in detail Ms. Muratalla's 
proposed testimony, which produced even greater variance from the 
alleged conduct.\48\ Even if Ms. Muratalla's proposed testimony had 
been adequately noticed, her proffered testimony at hearing provided no 
substantive basis to support the allegations by the California Dental 
Board pertaining to cocaine, alcohol and marijuana. (See Tr. 73-74.) I 
do take note of Respondent's admission in a February 9, 2011 prehearing 
filing that he used marijuana one time ``during a dark day in April'' 
of 2010, while intoxicated, which he states he did while unemployed and 
not seeing patients.\49\
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    \48\ See Gov't SPHS at 4. At hearing and consistent with 
Respondent's prehearing objection to the issue, Respondent timely 
objected to the testimony related to his hospitalization. (Tr. 65.) 
I requested the Government to proffer the proposed testimony of Ms. 
Muratalla given the very limited disclosure of proposed testimony 
contained in the Government's SPHS. The proffer was similarly brief 
in content and varied somewhat from the SPHS insofar as the proffer 
lacked a reference to alcohol. (Tr. 69.) Following argument, I 
excluded the testimony based on notice and relevance issues. (Tr. 
71.) At the Government's request, I did allow the Government to 
question Ms. Muratalla by way of proffer regarding the alleged 
August 2008 hospitalization. Notably, Ms. Muratalla's proposed 
testimony made no reference to cocaine, alcohol or any other 
substance abuse, nor was any other testimonial evidence on the topic 
offered by the Government at hearing. (Tr. 73-74.)
    \49\ Respondent's Reply Regarding Government Request for Motion 
dated February 9, 2011.
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    Agency precedent has ``long held that a practitioner's self-abuse 
of a controlled substance is a relevant consideration under factor five 
and has done so even when there is no evidence that the registrant 
abused his prescription writing authority.'' Tony T. Bui, M.D., 75 FR. 
49,979, 49,989 (DEA 2010). Respondent's admitted misuse of marijuana 
while intoxicated is a relevant consideration as to whether granting 
Respondent a DEA COR would be consistent with the public interest. See 
David E. Trawick, D.D.S., 53 FR. 5326, 5326 (DEA 1988) (holding that 
``offences or wrongful acts committed by a registrant outside of his 
professional practice, but which relate to controlled substances may 
constitute sufficient grounds'' for denying relief favorable to 
respondent, where respondent had history of alcohol and controlled 
substance abuse).
    Although I have considered Respondent's prehearing admission of a 
single instance of marijuana use while intoxicated in April 2010, I 
give it little overall weight for purposes of this Recommended 
Decision, particularly given the absence of any other credible evidence 
of record to support allegations of other drug or alcohol abuse by 
Respondent at any other time.

Conclusion and Recommendation

    I find by a preponderance of the evidence that the Government has 
met its burden to establish a prima facie case based on substantial 
evidence of record. After considering all of the relevant factors, the 
evidence is fully consistent with a denial of Respondent's application 
for a DEA COR as a practitioner, because Respondent's registration 
would be inconsistent with the public interest. See 21 U.S.C. 823(f) 
and 824(a)(4). Because the Government has made out a prima facie case 
against Respondent, a remaining issue in this case is whether 
Respondent has adequately accepted responsibility for his past 
misconduct such that his registration might nevertheless be consistent 
with the public interest. See Patrick W. Stodola, 74 FR. 20,727, 20,734 
(DEA 2009).
    Respondent has not sustained his burden in this regard. Respondent 
did not testify and did not accept responsibility for his past 
misconduct. Moreover, Respondent presented no credible evidence to 
demonstrate that he has learned from his past mistakes or to 
demonstrate that he would now handle controlled substances properly if 
granted a registration.
    In light of the foregoing, Respondent's evidence as a whole fails 
to sustain his burden to accept responsibility for his misconduct and 
demonstrate that he will not engage in future misconduct. I find that 
Factor Five strongly weighs in favor of a finding that Respondent's 
registration would be inconsistent with the public interest.
    Accordingly, I recommend denial of Respondent's application for a 
COR. I find the evidence as a whole demonstrates that Respondent has 
not accepted responsibility, and Respondent's registration would be 
inconsistent with the public interest.


    Dated: May 19, 2011
Timothy D. Wing,
Administrative Law Judge.

[FR Doc. 2011-27985 Filed 10-27-11; 8:45 am]
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