[Federal Register Volume 79, Number 67 (Tuesday, April 8, 2014)]
[Notices]
[Pages 19356-19374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07806]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 12-2]


Howard N. Robinson, M.D.; Decision and Order

    On March 1, 2012, Chief Administrative Law Judge (ALJ) John J. 
Mulrooney, II, issued the attached Recommended Decision.\1\ The 
Government filed Exceptions to the ALJ's Decision. Thereafter, 
Respondent moved to file a Response to the Exceptions, and upon the 
ALJ's granting of his motion, filed a Response.
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    \1\ For purposes of citation, the ALJ's Recommended Decision is 
abbreviated as R.D. All citations to the ALJ's Recommended Decision 
are to the slip opinion as issued by him.
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    Having considered the entire record, including the Government's 
Exceptions and Respondent's Response to them, I have decided to adopt 
the ALJ's findings of fact and conclusions of law with the exception of 
his conclusion that Respondent violated 21 CFR 1307.21(a)(1). See 
Jeffery J. Becker, D.D.S., 77 FR 72387, 72387-88 (2012); see also R.D. 
at 36, 41. Moreover, while I agree with the ALJ's conclusion that 
Respondent ``has successfully shown cause why his [registration] should 
not be revoked,'' R.D. at 44, and reject the Government's contention 
that Respondent has not put forward sufficient evidence to establish 
that he can be entrusted with a registration, I conclude that 
additional requirements should be imposed on his registration to 
protect the public interest. A discussion of the Government's 
Exceptions follows.

Exception One--Respondent Has Not Provided ``Sufficient Mitigating 
Evidence'' To Demonstrate That He Can Be Entrusted With a Registration

    The Government contends that Respondent has not provided sufficient 
evidence of the remedial measures he has undertaken to prevent the 
recurrence of some of the violations he committed and ``to prevent 
future diversion.'' Exceptions at 3. With respect to the former, the 
Government points to Respondent's failure to complete the order forms 
for schedule II controlled substances (DEA Form 222s) by noting the 
number of commercial or bulk containers received and the date of 
receipt. Exceptions at 2-3; see also 21 CFR 1305.13(d). In the 
Government's view, while Respondent produced evidence that he is now 
keeping the forms in a separate folder and apart from other records, 
``[t]he record evidence does not support that [he] is properly 
completing'' them. Id. at 3. The Government also contends that 
``Respondent has not demonstrated that he has a system in place to 
prevent future diversion of controlled substances'' because he 
acknowledged that he is not in the office every day and controlled 
substances deliveries may occur on day when he is not present. Id. at 
4. Finally, the Government contends that the ALJ misapplied Agency 
precedent when he concluded that the record as a whole does not support 
revocation. Id. at 6-8.
    With regard to the completion of the Form 222s, the Government 
completely ignores the testimony and report of Respondent's Expert, who 
reviewed his recordkeeping and procedures. As the Expert testified, 
while Respondent ``was not aware of his obligations and requirements . 
. . once he was informed, he took every action possible to correct them 
[the violations] and [did so] as quickly as possible.'' Tr. 397. 
Respondent's Expert further testified that with the exception of one 
suggestion, on which Respondent immediately took action, he ``found 
total compliance at the clinic'' and that ``everything else was in 
complete compliance.'' Id.
    Moreover, in his second report, Respondent's Expert found that 
Respondent ``now properly completes the check in procedures by listing 
the amount received and the date received on both the filled 222 forms 
and the perpetual narcotic inventory log book.'' RX 18, at 2. See also 
RX 17 (expert's report) (noting that while Respondent ``may not have 
fully complied with certain record keep[ing] obligations prior to the 
DEA investigation, . . . [w]hen the oversights were identified, he took 
immediate action to correct all problematic issues pointed out to him, 
in a timely fashion''); id. (``My review of the current procedures and 
operations of the clinic confirm that all corrective action has taken 
place and all regulations are being followed.'') (emphasis added). 
While the ALJ was not impressed by the Expert's various attempts to 
excuse Respondent's

[[Page 19357]]

failings,\2\ he nonetheless found that his testimony ``was sufficiently 
detailed, authoritative and candid to be credited.'' R.D. at 20. 
Accordingly, the Expert's testimony and report provide substantial 
evidence, that in the absence of refutation by the Government, 
establishes that Respondent is in compliance with the requirements of 
21 CFR 1305.13(d).
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    \2\ For example, the Expert noted that Respondent ``was not a 
full time practitioner'' at the clinic, RX 18, at 2, and that ``much 
of the problem stems from his good faith reliance on the 
professionalism of other co-workers and employees at the clinic, the 
licensed Consultant Pharmacist, and other regulatory agencies to do 
their jobs correctly.'' Id. at 3.
    The Government also notes the Expert's ``testimony that it is 
legal to destroy all narcotics by flushing [them] down the toilet, 
that he had followed this practice for 30 years, and that in the 
past, he had not contacted the Special Agent in Charge regarding the 
destruction of controlled substances.'' Exceptions at 6. The 
Government contends that the Expert's ``testimony exhibits a 
disregard of federal law and therefore, should not constitute 
sufficient mitigating evidence to assure the Administrator that he 
can be entrusted with [the] responsibility of carrying such a 
registration.'' Id. (citations omitted).
    As an initial matter, whether the Expert can be entrusted with a 
registration is not at issue in this proceeding. Moreover, even 
assuming that the Government meant that the Expert's testimony 
should not be credited because of his putative disregard for federal 
law, as recently explained, the Agency's disposal regulation is not 
a model of clarity and the Expert is hardly alone in his views. See 
Jeffery J. Becker, 77 FR at 72388 n.3 (noting testimony of dentist-
anesthesiologist and professor emeritus at Ohio State University 
regarding standard practice of Ohio dentists, who perform sedation, 
as to the disposal of excess drug). Finally, I am satisfied that in 
finding the Expert's testimony credible, the ALJ properly considered 
both that which supported, and that which detracted from, crediting 
his testimony.
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    As noted above, the Government also contends that Respondent lacks 
effective controls against diversion based on his testimony that he is 
not at the clinic every day of the week and may not be present when 
controlled substances are delivered. Exceptions at 3-5. The Government 
takes issue with the adequacy of Respondent's controls, because he is 
now the only person at the clinic who has access to the controlled-
substances cabinet and has directed the clinic staff not to open any 
shipments if he is not present.
    Neither the CSA nor DEA regulations require, however, that a 
registrant be present at his registered location whenever controlled 
substances are delivered to it. And while the controlled substances 
must be ``stored in a securely locked, substantially constructed 
cabinet,'' 21 CFR 1301.75(b), nothing in the CSA or DEA regulations 
prohibits a registrant from designating a properly-screened and 
trustworthy employee (or appointing an agent from the clinic's 
properly-screened employees if he is not the owner) to accept the 
delivery and place the controlled substances in the controlled-
substances cabinet.
    Indeed, it is undoubtedly the case that numerous clinics throughout 
the country receive deliveries of controlled substances when their 
registrants are not present and place them in the controlled-substances 
cabinet, and yet the Government points to no evidence that such 
practices create a substantial risk of diversion. While diversion 
clearly occurred here, the evidence establishes that this was the 
result of the actions of a rogue employee, who happened to be a 
convicted drug smuggler and who was subsequently terminated. See RX 21. 
To be sure, adherence to DEA regulations, in particular 21 CFR 
1301.76(a),\3\ would likely have entirely prevented this (as would have 
a periodic review of the narcotic log book). That being said, there is 
no basis to conclude that a registrant's practice of authorizing a non-
registrant to accept deliveries and place the drugs in the controlled-
substances cabinet, establishes that the registrant lacks an adequate 
system for monitoring the receipt of controlled substances, 21 CFR 
1301.71(b)(14), or lacks effective controls against diversion. Id. 
Sec.  1301.71(a).
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    \3\ This regulation provides, in relevant part, that a 
``registrant shall not employ as an agent or employee who has access 
to controlled substances, any person who has been convicted of a 
felony offense relating to controlled substances.'' 21 CFR 
1301.76(a). While Respondent did not hire the employee, he is still 
responsible for ensuring compliance with agency regulations at his 
registered location.
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    Finally, the Government contends that the ALJ misapplied two recent 
Agency cases, when he explained that they stand for the proposition 
that `` `when considering recordkeeping violations, the Agency has 
coupled consideration of the degree of severity with an analysis of 
whether the registrant has both acknowledged culpability and 
demonstrated credible efforts aimed at correction.' '' Exceptions at 7 
(quoting R.D. at 34) (discussing Ideal Pharmacy Care, Inc., d/b/a 
Esplanade Pharmacy Care, Inc., 76 FR 51415, 51416 (2011), and Terese, 
Inc., d/b/a Peach Orchard Drugs, 76 FR 46843, 46848 (2011)). The 
Government contends that the ALJ's conclusion that revocation is not 
supported by the record is misplaced, because the evidence shows that 
``the recordkeeping violations include more than non-egregious 
recordkeeping violations, such as the failure to account for 
significant deviations of controlled substances and the failure of 
Respondent to correct all violations.'' Id. Later, relying on Ideal 
Pharmacy, a case in which I revoked a pharmacy's registration based on 
large shortages of controlled substances, the Government argues that 
its audit of Respondent's handling of controlled substance activities 
showed percentage deviations comparable to those found in Ideal, and 
``represent significant amounts of controlled substances for which 
Respondent could not account and thus, on this basis alone, warrant 
revocation.'' Exceptions at 8.
    While the shortages and overages found in the Government's audit 
are sufficiently significant to support a revocation order, see Paul 
Weir Battershell, 76 FR 44359, 44368 (2011), the audit results here 
must be considered along with the evidence as to their underlying 
cause,\4\ and in any event, to adopt the Government's position would 
require overruling thirty years of agency precedent. See, e.g., Leo R. 
Miller, 53 FR 21931, 21932 (1988); David E. Trawick, 53 FR 5326, 5327 
(1988). Whether there may be a case in which a registrant's misconduct 
is so egregious, that the protection of the public interest would 
require revocation even if the registrant accepted responsibility and 
undertook remedial measures, I need not decide.\5\ Here, Respondent's 
misconduct cannot be characterized as anything more than negligence, 
and as the ALJ found, Respondent has fully accepted responsibility and 
demonstrated that he is not likely to commit similar omissions in the 
future. R.D. at 43-44.
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    \4\ In Ideal Pharmacy, the audit results found shortages of 
nearly 150,000 dosage units of hydrocodone drugs, more than 83,000 
dosage units of alprazolam, and more than 1.6 million milliliters of 
promethazine with codeine. 76 FR at 51416. While the registrant 
waived its right to a hearing, it is doubtful that it could have put 
on any evidence to rebut the conclusion that its principals were 
engaged in a scheme to intentionally divert drugs.
    \5\ See Robert Raymond Reppy, 76 FR 61154 (2011); Paul H. 
Volkman, 73 FR 30630 (2008).
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    Accordingly, I reject the Government's contention that revocation 
is warranted. However, because I find that Respondent's misconduct is 
serious, and led to the diversion of controlled substances, I conclude 
that additional sanctions are necessary to protect the public interest. 
Consistent with the sanctions I have ordered in other cases, see 
Battershell, 76 FR at 44369, I conclude that a suspension of 
Respondent's registration is warranted.
    Accordingly, I will order that Respondent's registration be 
suspended for a period of six months. However, in light of Respondent's 
acceptance of responsibility and the unrefuted evidence that upon being 
informed of

[[Page 19358]]

the violations, he immediately undertook remedial measures, I will stay 
the suspension and place Respondent on probation for a period of three 
years to begin on the date of this Order. Said suspension shall be 
vacated upon Respondent's successful completion of the probationary 
period.
    In addition, I will adopt, but modify, the second and third 
conditions proposed by the ALJ.\6\ With respect to the ALJ's 
recommendation that Respondent submit reports, at sixty-day intervals, 
regarding monthly regulatory compliance inspections, I conclude that 
such inspections need only be conducted on a quarterly basis ending on 
March 31st, June 30th, September 30th, and December 31st. Said 
inspections must be conducted by an independent and state-licensed 
consultant pharmacist and must include an audit of Respondent's 
controlled-substance handling, which must be verified for accuracy and 
signed by Respondent. The consultant pharmacist's report, which must 
identify any violations of controlled-substance regulations, along with 
a copy of the quarterly audit, must be submitted to the local DEA field 
office no later than fifteen (15) days after the close of each quarter. 
In the event Respondent materially fails to comply with this provision, 
his registration shall be subject to an order of Immediate Suspension.
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    \6\ In its Exceptions, the Government takes issue with the ALJ's 
criticism of its invocation of the law enforcement privilege when 
its lead DI was questioned as to whether she knew the identity of a 
person who had called her and alleged that the clinic's owner (and 
not Respondent) was a drug abuser and diverter. Notably, while the 
Government initially argued that the issue is moot, see ALJ Ex. 25, 
at 2; in its Exceptions, the Government now argues that it is not. 
See Exceptions at 8 (citing Norman v. Reed, 502 U.S. 279, 287-88 
(1992) (issue not moot if capable of repetition yet evading 
review)).
    Upon review, I conclude that the Government's initial view is 
correct because the DI ultimately answered the question, and 
testified that she did not know the caller's identity. As for 
whether the issue is capable of repetition yet evading review, many 
of the points made in the ALJ's Addendum are well taken and it is 
expected that they will be carefully studied by Government counsel. 
Thus, I conclude that it is speculative to conclude that Government 
counsel will, in the future, attempt to invoke the privilege in a 
factually similar circumstance, i.e., where it has elicited 
testimony regarding allegations of misconduct from a putatively 
anonymous source without first determining whether its witness knows 
the identity of the person and obtaining the requisite approval to 
invoke the privilege if necessary.
    Finally, as the ALJ acknowledged, ``the Respondent's case was 
not prejudiced in any cognizable manner.'' R.D. at 49. Accordingly, 
I decline to publish the Addendum.
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    In addition, within fifteen days of the date of issuance of this 
Order, Respondent shall execute a document manifesting his consent to 
inspections by DEA personnel and waiving his right to require that DEA 
personnel obtain an administrative inspection warrant prior to 
conducting any inspection. In the event Respondent fails to execute 
said document, his registration will be revoked.

Order

    Pursuant to the authority vested in me by 21 U.S.C. 823(f) and 
824(a), as well as 28 CFR 0.100(b), I hereby order that the DEA 
Certificate of Registration issued to Howard N. Robinson, M.D., be, and 
it hereby is, continued, subject to the conditions set forth above. 
This order is effective immediately.

    Dated: March 27, 2014.
Michele M. Leonhart,
Administrator.

Robert C. Gleason, Esq., and Dedra Curteman, Esq., for the 
Government Jason M. Wandner, Esq., for the Respondent

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

    Chief Administrative Law Judge John J. Mulrooney, II. On September 
7, 2011, the Deputy Assistant Administrator of the Drug Enforcement 
Administration (DEA or Government), issued an Order to Show Cause (OSC) 
proposing to revoke the DEA Certificate of Registration (COR), Number 
AR8666109 \7\ of Howard Robinson, M.D., (Respondent), pursuant to 21 
U.S.C. Sec.  824(a)(4), and deny any pending applications for renewal 
or modification. On October 6, 2011, the Respondent, through counsel, 
timely filed a request for hearing with the DEA Office of 
Administrative Law Judges (OALJ). The requested hearing was conducted 
in Miami, Florida on November 29-30, 2011.
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    \7\ A copy of Respondent's COR and a certification of 
Respondent's registration history have been admitted into the record 
as Government Exhibits 1 and 2, respectively. Respondent previously 
possessed COR Number BR9176238. Gov't Ex. 13. However, on January 4, 
2011, Respondent voluntarily surrendered the BR9176238 registration 
as surplusage. Gov't Ex. 13, at 2; Tr. at 67-69.
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    The issue ultimately to be adjudicated by the Administrator, with 
the assistance of this recommended decision, is whether the record as a 
whole establishes, by substantial evidence, that the Respondent's COR 
should be revoked as inconsistent with the public interest, as that 
term is used in 21 U.S.C. Sec. Sec.  823(f) and 824(a).
    After carefully considering the testimony elicited at the hearing, 
the admitted exhibits, the arguments of counsel, and the record as a 
whole, I have set forth my recommended findings of fact and conclusions 
of law below.

The Allegations

    The OSC issued by the Government contends that revocation of the 
Respondent's COR is appropriate because: (1) An audit of the 
Respondent's records revealed a number of unexplained recordkeeping 
abnormalities with regard to stocks of controlled substances, in 
violation of 21 U.S.C. Sec. Sec.  827(a)(3), 842(a)(5) and 21 CFR 
Sec. Sec.  1304.03-04, 1304.21; (2) the Respondent ``failed to maintain 
inventories and records of Schedule I and II controlled substances 
separately from all other records,'' in violation of 21 CFR 
1304.04(f)(1); (3) the Respondent ``failed to properly record on a DEA 
Form 222, the number of Schedule II commercial or bulk containers and 
the dates on which the containers were received in violation of 21 CFR 
1305.13(e);'' (4) the Respondent ``failed to properly dispose of 
controlled substances in violation of 21 CFR Sec.  1307.21(a)(1);'' (5) 
the Respondent ``failed to record nine shipments of Schedule II 
controlled substances that were transferred from [his] registered 
address in violation of 21 CFR Sec.  1305.03;'' (6) the Respondent 
``failed to maintain a biennial inventory of the controlled substances 
on the premises of [his] registered location and failed to properly 
maintain records for the controlled substances in violation of 21 CFR 
Sec. Sec.  1304.11(c) and 1304.21a(a);'' (7) the Respondent allowed a 
nurse anesthetist on his staff to place orders for controlled 
substances under the authority of his COR without having first executed 
a power of attorney as required by the regulations; and (8) the 
Respondent did not have access to the controlled substances in his 
office, and thus ``failed to provide an adequate system for monitoring 
the receipt, distribution and disposition of controlled substances,'' 
in violation of 21 CFR Sec.  1301.71.

The Stipulations of Fact

    The Government and the Respondent, through counsel, have entered 
into stipulations regarding the following matters:
    (1) The Respondent is an employee of Premiere Center for Cosmetic 
Surgery (PCCS), which is owned by VM.\8\
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    \8\ See Addendum.
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    (2) The Respondent has not been charged or convicted with any 
criminal offense in relation to the underlying cause.
    (3) The Respondent has not been disciplined by the State of Florida

[[Page 19359]]

Department of Health for the allegations in the underlying cause.
    (4) The Respondent has not materially falsified any application.
    (5) The Respondent has not been excluded from participation in any 
program.

The Evidence

    The Government's case-in-chief rested on the testimony of a single 
witness, Diversion Investigator (DI) Victoria McRae. DI McRae testified 
that she has been a Diversion Investigator with the DEA since 1988 and 
that she has been stationed in the DEA's Miami Field Division since 
November of 1989. Tr. 35-37. DI McRae testified that she has a college 
degree and has completed numerous DEA training evolutions. Tr. 37-38.
    Regarding the merits of the case, DI McRae testified that, on 
September 20, 2010, she received a telephone call from a ``person who 
wished to remain anonymous,'' who informed DI McRae that ``there was a 
nurse anesthetist at a medical office that appeared to be abusing 
controlled substances and was self-administering.'' Tr. 38-39. The 
caller identified the alleged drug abuser as VM, the owner of PCCS in 
Coconut Grove, Florida. Tr. 39. In this regard, the caller informed DI 
McRae that: (1) There were ``bloody gauze strips left in a bathroom;'' 
(2) ``there was drug paraphernalia in the trash cans;'' (3) ``everyone 
at the office was aware of behavior by [VM] that looked like drug 
activity;'' and (4) the Chief Operating Officer of the PCCS clinics, an 
ex-boyfriend of VM, ``had the employees at both of the locations sign a 
form stating that they were not going to spread any rumors about any 
activities by [VM].'' \9\ Tr. 40. The caller told DI McRae that 
``patients were not given enough medication while they were on the 
operating table [a]nd that some of the patients were squirming because 
they hadn't had enough.'' Tr. 61-62. Finally, the caller stated that 
controlled substances were purportedly transferred from the PCCS 
facility in Coconut Grove to a PCCS facility in Tampa, but ``that the 
drugs were probably being used by [VM] and not actually arriving at the 
Tampa office.'' Tr. 64.
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    \9\ The non-disclosure document was not found during the 
investigation. Tr. 237. However, DI McRae testified that the 
document would not have been within the scope of the administrative 
inspection warrant. Id.
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    After the phone call ended, DI McRae accessed the RICS \10\ 
database and looked up the names of the physicians mentioned during the 
call. Tr. 41. DI McRae also accessed the Florida Division of 
Corporations database \11\ and confirmed that PCCS had locations in 
Coconut Grove and Tampa, Florida. Tr. 42-44. DI McRae found that VM was 
listed as the registered agent, president, vice president, secretary 
and treasurer of PCCS.\12\ Tr. 42-44.
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    \10\ DI McRae explained that ``RICS is a database that we have 
at DEA that contains all of the DEA registrants.'' Tr. 42.
    \11\ DI McCrae testified that the database, found at Sunbiz.org, 
is an open source database available to the general public on the 
Internet. Tr. 43.
    \12\ DI McRae testified that the Florida Department of Health is 
``still working in [its] part of the investigation.'' Tr. 163.
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    On January 4, 2011, based on her anonymous lead, DI McRae issued a 
notice of inspection to the Respondent for the Coconut Grove PCCS 
location. Tr. 45-46. At the time of her inspection visit, DI McRae was 
accompanied by three employees of the Florida Department of Health.\13\ 
Tr. 60-61. Upon her arrival at the office, McRae presented the 
Respondent with the notice of inspection, which he signed.\14\ Tr. 47; 
Gov't Ex. 3. DI McRae then ``advised [the Respondent] that [she] would 
be looking at his controlled substance records, and that [she] would 
also be counting the controlled substances that he had on hand in order 
to do a closing inventory.'' Tr. 47. DI McRae ``asked for copies of all 
controlled substance records for the past two years [and] was provided 
with copies of order forms [and] invoices from the wholesaler, Prime 
Medical.'' Tr. 83. DI McRae also asked for, and was provided with, a 
copy of the Respondent's narcotics log. Tr. 83. It was McRae's 
recollection that the requested documents were handed over by an 
employee at the practice named ``Priscilla.'' Tr. 169.
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    \13\ DI McRae contacted the Florida Department of Health because 
of the allegations concerning patient care. Tr. 62.
    \14\ Tr. 47.
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    After the execution of the notice of inspection, VM offered to take 
DI McRae to the office's controlled substances safe, but stated that 
``at that time the office only had Versed \15\ in stock because the 
other medications were on backorder.'' Tr. 47-48. VM also stated that, 
because the controlled substances were kept in a sterile area, DI McRae 
would have to change into a gown and a wear a facemask and hair net. 
Tr. 48.
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    \15\ Versed is the brand name of a drug containing midazolam. 6-
V Attorneys' Dictionary of Medicine V-123111. Midazolam is a 
Schedule IV controlled substance. 21 CFR Sec.  1308.14(c)(35).
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    VM led DI McRae to a room where the former asked the latter to 
change into a set of green scrubs. Tr. 48. As McRae was donning the top 
of the scrubs, a capped hypodermic needle fell out of the left breast 
pocket of the scrubs she had been given. Tr. 48. DI McRae testified 
that when she picked up the needle she observed that it had some 
``redness in it,'' which she believed to be blood. Tr. 48, 52-53. DI 
McRae inquired why a capped hypodermic needle would come tumbling out 
of the scrubs she was offered, and VM responded that the needle was not 
hers, that ``[i]t couldn't have been one of the staff members, because 
all of the staff wear black scrubs [but] it could have been a patient's 
because the patients wear green scrubs.'' \16\ Tr. 50. After this 
exchange, DI McRae picked up the hypodermic needle and gave it to VM, 
who put it in a sharps container and led DI McRae into an operating 
room.\17\ Tr. 50.
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    \16\ DI McRae later testified that the patients she observed 
that day ``had on a gown, not scrubs.'' Tr. 55.
    \17\ Later, DI McRae asked the Respondent about the loose 
needle. Tr. 55-56. The Respondent speculated that an employee could 
have ``simply capped the needle, placed it in the pocket . . . 
continued on with their paperwork, and . . . forgotten to place the 
needle in a sharps container.'' Tr. 56.
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    In the operating room, VM ``unlocked [a] box on the wall where the 
drugs were contained.'' Tr. 50. VM and DI McRae counted five sealed 
vials of midazolam, plus ``one vial which [VM and DI McRae estimated] 
to contain three milliliters of liquid in it.'' Tr. 53-54, 75; Gov't 
Ex. 4. Based on this count, DI McRae wrote out a closing inventory form 
reflecting the 53 milliliters of midazolam on hand, which VM signed at 
DI McRae's direction. Id.
    In addition to the closing inventory, DI McRae conducted an 
inspection of the Respondent's records. Tr. 76. Of relevance to this 
case, DI McRae looked at a binder that was styled ``peer review 
pharmacy book,'' which contained ``order forms . . . among other 
documents.'' \18\ Tr. 76. Mixed with these documents was a November 23, 
2010, prescription for fifty vials of Demerol \19\ written by the 
Respondent for VM. Tr. 76; Gov't Ex. 11. When asked about this 
prescription (which was written to the owner of the clinic and tucked 
into a book that was clearly not a patient file) the Respondent 
explained that he wrote this prescription for VM during a time when 
``all of our drugs were on back order, [and the practice] needed some 
medication for office supply. So I wrote

[[Page 19360]]

the prescription for [VM], and she had it filled at a pharmacy.'' Tr. 
81. DI McRae then informed the Respondent that the writing of 
prescriptions for office use is a violation of DEA regulations. Tr. 81. 
On cross-examination, DI McRae agreed that Respondent's records 
reflected the addition of fifty vials of Demerol on November 23, 2010. 
Tr. 177. Thus, DI McRae testified that, although the medication was 
procured by prescription through a method not authorized under the 
regulations, the available paperwork (such as it was) did reflect the 
addition of the medication to the practice's stock of controlled 
substances. Tr. 177-78.
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    \18\ DI McRae testified that ``there were order forms [and] 
other forms that had to do with the office. There was a contract in 
there between the medical office and the consultant pharmacist that 
was there at the time.'' Tr. 80.
    \19\ Demerol is the brand name for tablets containing meperdine 
hydrochloride. 2-D Attorneys' Dictionary of Medicine D-32709. 
Meperdine is a Schedule II controlled substance pursuant to 21 CFR 
Sec.  1308.12(c)(18).
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    DI McRae also found an order form dated December 28, 2010, but was 
told by VM that the order had not been received because ``everything 
was on backorder.'' Tr. 116. Later, DI McRae received a shipping 
invoice for the December 28, 2010, order directly from the supplier. 
Tr. 116-18. The invoice corroborates VM's account to the extent that it 
shows that, while both fentanyl \20\ and Demerol were ordered, only 
fentanyl was shipped because the Demerol was on backorder. Tr. 116. DI 
McRae's investigation revealed that the fentanyl was shipped on 
December 28, 2010. Tr. 118. However, the Respondent's practice had no 
records of receipt of this shipment. Tr. 118.
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    \20\ Fentanyl is a Schedule II controlled substance pursuant to 
21 CFR Sec.  1308.12(c)(9) (2011).
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    When the closing inventory and inspection of the records were 
completed, DI McRae had a conversation with the Respondent wherein she 
inquired about office procedures related to the ordering of controlled 
substances. Tr. 57-58. The Respondent told DI McRae that drugs were 
ordered by VM, one of the nurse anesthetists, or by the 
anesthesiologist at the practice. Tr. 58. The Respondent told DI McRae 
that he believed drugs were ordered from a supplier called 
McKesson,\21\ and that once shipped, the drugs were received at PCCS 
either by VM or by DM, a female employee. Tr. 59-60. McRae's assessment 
of what she learned was that VM ``would complete the order form as to 
what particular drugs the office needed and then [the Respondent] would 
look at it and he would sign it.'' \22\ Tr. 184. DI McRae spoke to the 
supplier and was told ``that usually someone named Priscilla [is] 
responsible for receiving medication.'' \23\ Tr. 189.
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    \21\ Subsequent investigation revealed that McKesson was not a 
supplier for the Respondent's practice. Tr. 62.
    \22\ DI McRae testified that in her opinion this practice was 
compliant with the relevant regulations. Tr. 184. Thus, according to 
McRae (and contrary to the allegation in the Government's OSC), no 
power of attorney would be required under this protocol.
    \23\ Though DI McRae did not know whether the Priscilla 
described by the supplier was the Priscilla at the front desk, she 
did not know of any other Priscilla's employed by the Respondent. 
Tr. 189.
---------------------------------------------------------------------------

    During the same meeting, DI McRae asked the Respondent who had 
access to controlled substances. Tr. 63. The Respondent answered that 
only VM and DM had access to the controlled substances. Tr. 63. At this 
point, DI McRae told the Respondent that ``because these drugs are 
ordered under your DEA number, you're ultimately responsible for them, 
so you should know what's been coming in. You should know what's on 
hand at all times.'' Tr. 63-64.
    When asked about the alleged transfers between the PCCS facilities 
at Coconut Grove and Tampa, the Respondent initially indicated that he 
did not believe that controlled substances were transferred to Tampa, 
but on further reflection, told McRae that such transfers may have 
taken place under the direction of either VM, or Dr. Gloria Thomas--a 
doctor at the Tampa location. Tr. 64-65. The Respondent told DI McRae 
that there was no paperwork documenting such transfers.\24\ Tr. 64-65. 
Upon learning that the transfers of controlled substances had been made 
without paperwork, DI McRae informed the Respondent of the regulatory 
documentation requirements relative to transfers between practices. Tr. 
65-66. A subsequent inspection of the narcotics logbook at the Tampa 
location found that, while ``[t]here were notations in the log . . . 
there were no DEA order forms on site to . . . document that 
transfer.'' Tr. 147; see also id. at 239-40.
---------------------------------------------------------------------------

    \24\ DI McRae does not attribute any malfeasance to the 
Respondent's initial denial of transfers. Tr. 185. Indeed, DI McRae 
testified that Respondent was cooperative during the investigation. 
Tr. 66.
---------------------------------------------------------------------------

    McRae also learned from the Respondent that biennial inventories 
\25\ were not kept, and that needles containing controlled substances 
were emptied into a waste container, practices which DI McRae informed 
the Respondent were against DEA regulations. Tr. 60, 87. DI McRae asked 
the Respondent whether there had been any thefts or losses at the 
clinic, and Respondent stated that he was not aware of any. Tr. 63.\26\ 
Finally, DI McRae informed the Respondent that she would be conducting 
an audit based upon the copies of the records that she had obtained, 
and that she would let him know the results of the audit at a later 
date. Tr. 57. DI McRae estimated that her discussion with the 
Respondent that day spanned approximately one half hour and that, in 
her view, the Respondent was cooperative throughout. Tr. 58, 66.
---------------------------------------------------------------------------

    \25\ See 21 CFR Sec.  1304.11(c).
    \26\ At the hearing, the Government introduced a March 24, 2005, 
theft report from the Coconut Grove location. Tr. 109; Gov't Ex. 8. 
The form was filled out by Jon F. Harrell, D.O., of the same address 
as PCCS (3370 Mary Street, Coconut Grove, Florida). Id. When 
questioned on the relevance of the document, Government counsel 
proffered that ``this document is relevant to the extent that the 
Registrant . . . was unaware or untruthful.'' Tr. 110. Although the 
document was received into evidence without objection, id., it 
referred to a different registrant during a period that was outside 
the parameters of the audit. The regulations provide for the 
admission of evidence that is ``competent, relevant, material, and 
not unduly repetitious.'' 21 CFR Sec.  1316.59(a). ``Relevant 
evidence means evidence having any tendency to make the existence of 
any fact that is of consequence to the determination of the action 
more probable or less probable than it would be without the 
evidence.'' Fed. R. Evid. 401 (internal quotation marks omitted). 
This document made no fact of consequence more or less probable. 
Thus, this document has played no part in this recommended decision.
---------------------------------------------------------------------------

    After the inspection,\27\ DI McRae reviewed the material and 
information obtained during her inspection and conducted two audits 
incorporating data from January 5, 2010, through January 4, 2011. Tr. 
85. One audit was based on the purchase records of the Respondent, and 
another was based on shipment records obtained from the Respondent's 
supplier reflecting shipments to the Respondent's practice. Tr. 120-21. 
McRae testified that she put the results of each of the comparative 
audits into separate computation charts. Gov't Ex. 10. Both audits 
reflected significant discrepancies between what was on hand at the 
time of the closing inventory and what should have been on hand based 
on the purchase records and the shipment records.\28\ McRae testified 
that, based on her experience in the preparation of over a hundred 
audit charts throughout her career, the records that she reviewed were 
in violation of multiple recordkeeping requirements outlined in 21 CFR 
Sec.  1304.21. Tr. 124, 144.\29\ Also after the January inspection, DI 
McRae informed the Respondent that, ``for some unknown reason,'' he

[[Page 19361]]

had two active DEA CORs at the Coconut Grove location and that he only 
needed to have one.\30\ Tr. 67-68, 70. At DI McRae's suggestion, the 
Respondent filed a DEA Form 104, voluntarily relinquishing one of the 
CORs as unnecessary. Tr. 67-68.
---------------------------------------------------------------------------

    \27\ Tr. 83-84.
    \28\ The audit based on the Respondent's records showed: (1) 
shortages of 50 mg/ml Demerol and 50 mcg/ml fentanyl; and (2) 
overages of 100 mcg/ml fentanyl, 10 mg/10 ml Midazolam and 2 mg/ml 
Versed. Gov't Ex. 10, at 1. The audit based on the supplier's 
records showed: (1) shortages of 50 mg/ml Demerol, 50 mcg/ml 
fentanyl and 1 mg/ml Midazolam (10 ml vials); and (2) overages of 
100 mcg/ml fentanyl, 2 mg/ml Versed and 1 mg/ml Midazolam (2 ml 
vials). Gov't Ex. 10, at 2.
    \29\ The Respondent acknowledges that there were deficiencies 
regarding the controlled substance recordkeeping during the period 
of DI McRae's audit. Tr. 622-23; Resp't Posthearing Brief, at ]] 27-
28.
    \30\ DEA COR Number BR9176238 and DEA COR Number AR8666109.
---------------------------------------------------------------------------

    In addition to the results of the audit,\31\ DI McRae also 
testified that she found fifteen ``discrepancies'' in the narcotics 
log. Tr. 94. Specifically, DI McRae testified that the narcotics log 
kept a type of ``perpetual inventory'' whereby a remaining balance for 
a controlled substance was written after each entry. Tr. 95. DI McRae 
observed a number of instances where the perpetual inventory for a 
given day was updated inaccurately. Tr. 96. That is, the remaining 
balance was either greater or less than the difference (or sum) of the 
previous balance and the amount used or added (as reflected in the 
entry). During her testimony, McRae highlighted several examples of 
this phenomenon and provided the following hypothetical: ``The office 
may have ended the day with . . . 10 milliliters of a particular drug. 
The next time that drug is used, there should be 10 milliliters . . . 
available [but] the next day that drug was used the[y] would start with 
an inventory of maybe, seven [milliliters].'' Tr. 95-96.\32\ Under 
these circumstances, three milliliters would be ``unaccounted for.'' 
Tr. 96. Counting up the fifteen of these ``discrepancies,'' DI McRae 
found the following total amount of ``unaccounted for'' drugs: (1) 213 
milliliters of fentanyl; (2) 120 milliliters of Demerol; and (3) 49 
milliliters of midazolam. Tr. 97-98. DI McRae testified that fourteen 
of the fifteen ``discrepancies'' were ``signed off'' by VM. Tr. 
196.\33\
---------------------------------------------------------------------------

    \31\ On cross-examination the Respondent's counsel raised the 
possibility of an internal diverter. Tr. 195. While DI McRae allowed 
that internal diversion was possible, she noted that ``[t]he audit 
numbers would still be the same because [in her audit she was] 
looking at the numbers that are reflected in the records. [T]hat's 
what I use for the audit.'' Tr. 195; see also Tr. 246-47.
    \32\ As an example of the foregoing, DI McRae pointed to the 
narcotics log entry for February 5, 2010, which showed a final 
balance of twelve milliliters of fentanyl. The next entry showed an 
addition of 160 milliliters of fentanyl, yielding a final balance of 
160 milliliters. Under this scenario, twelve milliliters would be 
unaccounted for. Tr. 99.
    \33\ DI McRae agreed that there were ``alterations''--physical 
changes--in the log not counted in her list of fifteen dates where 
controlled substances were unaccounted for. Tr. 198; see also Tr. 
94. There did not appear to be a correlation between the dates of 
alterations and which staff member verified the entries.
---------------------------------------------------------------------------

    DI McRae also testified to a number of violations she found in the 
DEA Form 222s she collected from the Respondent's pharmacy book.\34\ 
Tr. 101-03. Specifically, DI McRae testified that the Respondent had 
not completed the Form 222s by filling in the number of packages 
received from each order, and the dates such packages were received. 
Tr. 103. DI McRae also explained that the way the Form 222s were kept 
in the peer review pharmacy book was itself a violation of DEA 
regulations insofar as the regulations require that records of Schedule 
II controlled substances be maintained separately from other records. 
Tr. 105-06.
---------------------------------------------------------------------------

    \34\ The relevant Form 222s were admitted into evidence as 
Government Exhibit 6.
---------------------------------------------------------------------------

    On May 16, 2011, DI McRae had a follow-up meeting with the 
Respondent to discuss the results of the audit. Tr. 143. During the 
meeting, the Respondent acknowledged to the investigator that he had 
been ``fairly casual about the procedures that had gone on at the 
office,'' but that he had taken a number of steps to remedy the 
problems. Tr. 143-44. In particular, the Respondent claimed that, as of 
that date, he was the only one with access to the controlled substances 
at the office. Tr. 143. The Respondent also stated that ``inventories 
were taken . . . before and right after procedures [and] that the 
records were being kept separate from the other records.'' Tr. 143. 
However, the Respondent also admitted that, since the January 
inspection, he had disposed of approximately ten vials of Demerol 
without documenting the destruction, a practice that McRae explained to 
him as being improper. Tr. 142, 206.
    In summary, DI McRae persuasively testified to the following 
violations uncovered at the Respondent's practice: (1) ``the Schedule 
II controlled substances were maintained with other records [in] 
violation of Section 1304 in the [CFR];'' (2) ``there was no biennial 
inventory on hand at the facility . . . in violation of Section 1304;'' 
(3) ``records were not complete and accurate because there was a 
discrepancy between what the doctor said he received and what the 
distributor said he distributed to the doctor,'' and because the 
narcotics logbook contained discrepancies; (4) ``there were no [DEA] 
order forms that were completed for the transfer of medications between 
the Miami and the Tampa offices;'' (5) ``the [DEA] order forms . . . 
were not properly completed by [the Respondent];'' and (6) the 
Respondent destroyed controlled substances without filling out a DEA 
Form 41, as required by DEA regulations.\35\ Tr. 140-42, 144-45. DI 
McRae presented testimony that was consistent, detailed, and plausible, 
and her testimony is fully credited in this recommended decision.
---------------------------------------------------------------------------

    \35\ DI McRae testified that a practitioner seeking to dispose 
of controlled substances should contact a reverse distributor. Tr. 
204. However, if the practitioner intends to dispose of controlled 
substances himself, he must send the ``DEA a letter advising of 
[how] he proposes to destroy the controlled substances.'' Tr. 204. 
It is unclear whether Respondent has followed this procedure since 
May of 2011. Tr. 205.
---------------------------------------------------------------------------

    The Respondent testified on his own behalf, and presented the 
expert testimony and reports of Robert S. Litman, a consultant 
pharmacist.\36\ Litman holds degrees in Zoology and Pharmacy from the 
University of Florida, is a licensed pharmacist and is Board certified 
in Pharmaceutical Geriatrics.\37\ He also serves as Clinical Assistant 
Professor of Pharmacy Practice (Geriatrics and Advanced Geriatrics) at 
the Ohio State University College of Pharmacy and the Nova Southeastern 
University, College of Pharmacy.\38\ Tr. 262; Resp't Exs. 1, 20. Over 
the Government's objection,\39\ he was accepted as an expert in the 
standards applicable to the documentation, record keeping and disposal 
requirements of controlled substances, as those requirements pertain to 
medical professionals. Tr. 266, 279.
---------------------------------------------------------------------------

    \36\ Mr. Litman testified that the designation as a consultant 
pharmacist requires course work, continuing education and a special 
license. Tr. 262.
    \37\ The Government interposed an objection to a compilation of 
Mr. Litman's qualifications from a consultant Web site on the unique 
basis that the document was not a CV. Tr. 256, 259-61. Although this 
objection was overruled, and the document was received into evidence 
(Resp't Ex. 1), Litman's CV was subsequently provided and also 
admitted into the record. Resp't Ex. 25; Tr. 543-44.
    \38\ Mr. Litman testified that, while ``there's always further 
certifications you may get . . . in long term care, Board 
certification in geriatrics is the ultimate goal for most 
clinicians.'' Tr. 262-63.
    \39\ Tr. 275-76. Although the Government interposed an objection 
to receiving Mr. Litman as an expert, the nature of the objection 
was framed entirely as an argument as to weight and raised no 
appreciable issue regarding the qualifications of the witness to 
present expert testimony. See Fed. R. Evid. 702. The Government's 
objections, namely that the witness focused primarily on the 
stricter of state versus federal requirements, and that much of his 
consulting work is focused on long-term care facilities (Tr. 276), 
did not shed any insight upon the salient concerns of whether: (1) 
``the expert's scientific, technical, or other specialized knowledge 
[would] help the trier of fact to understand the evidence or to 
determine a fact in issue;'' (2) the testimony is based on 
sufficient facts or data; (3) the testimony is the product of 
reliable principles and methods; and (4) the expert reliably applied 
the principles and methods to the facts of the case. See Fed.R.Evid. 
702. This objection was without merit and was overruled.
---------------------------------------------------------------------------

    Mr. Litman explained that consultant pharmacists are employed in 
different venues, such as long-term care facilities, diagnostic centers 
and surgical centers,

[[Page 19362]]

and that they monitor ``for proper record keeping, acquiring of 
pharmaceuticals and . . . disposition of pharmaceuticals.'' Tr. 254. If 
a pharmaceutical consultant uncovers a violation in the course of his 
duties, it is his job ``to document it, to point it out and to further 
the correction.'' Tr. 256. Mr. Litman estimated that, since becoming a 
pharmacy consultant in 1984, about eighty-percent of his time has been 
devoted to consulting, while twenty-percent of his time has been 
devoted to actual pharmacy work.\40\ Tr. 268. Mr. Litman also conceded 
that much of his consulting business relates to compliance with state 
law, Tr. 274-75, and that, at present, his consulting business is 
confined to long term care facilities. Tr. 411.
---------------------------------------------------------------------------

    \40\ Mr. Litman works about 5-10 hours per week as a pharmacist. 
Tr. 268-269.
---------------------------------------------------------------------------

    Mr. Litman testified that he was retained in this case ``to do an 
audit, to review records, to see if there was any diversion or any poor 
record keeping [or] if there were any compliance issues as far as 
storage of medications.'' Tr. 280-81. In this vein, Mr. Litman ``went 
through the [Respondent's] clinic . . . . looked at storage areas . . . 
. looked at narcotics aids . . . . evaluated the narcotic log book 
register, went through 222 forms [and] any other documentation . . . 
.that was available to look at.'' Tr. 281. The contracted rate for his 
involvement is $300 per hour. Tr. 404-05.\41\
---------------------------------------------------------------------------

    \41\ Mr. Litman estimated that he expected to earn approximately 
$5,500 for his involvement in this case. Tr. 404-05.
---------------------------------------------------------------------------

    Based on his inquiries, Mr. Litman concluded that ``[t]here was 
sloppy record keeping. It was very problematic. It was inconsistent. 
There was no consistency in the log[ins] meaning that some people would 
log things in by vials, others by cc[]s.'' \42\ Tr. 281. Mr. Litman 
found instances where controlled substances were added to the narcotics 
log without a corresponding 222 order form,\43\ and where errors were 
made in the perpetual balance tally.\44\ Tr. 321. Mr. Litman testified 
that Respondent failed to maintain the proper documentation for 
transfers and that the narcotics log contained ``write overs and 
changes in numbers [and] also white out.'' \45\ Tr. 337, 426-27. Litman 
characterized the recordkeeping as ``lax.'' Tr. 419.
---------------------------------------------------------------------------

    \42\ Notwithstanding how critical Mr. Litman's testimony was of 
the Respondent's recordkeeping, and that it was generally consistent 
with the Government's position that the Respondent had committed 
numerous recordkeeping violations, the Government interposed an 
objection to Mr. Litman's testimony and expert reports based upon 
the Respondent's failure to provide underlying data related to Mr. 
Litman's audit results and opinions. Tr. 285. Agency precedent 
directs that expert opinions may be excluded where a timely request 
for underlying data has been registered. See C.B.S. Wholesale 
Distributors, 74 FR 36746, 36749 (2009) (failure on the part of the 
Government to disclose underlying documentation utilized by its 
expert that was ``necessary to support [a] critical component of 
[that expert's] testimony'' held to ``deny the Respondent a 
meaningful opportunity to challenge the expert's conclusion'' and, 
thus held to preclude[] a finding that the expert's conclusions are 
supported by substantial and reliable evidence''). However, here 
there was no timely request for the underlying data made by the 
Government in advance of the hearing. Without reaching the issue 
here, suffice it to say that had the Government sought this data in 
advance of the hearing and its request was refused, the result of 
its objection could well have been different and the expert opinions 
derived from the withheld underlying data could have been properly 
excluded from playing any role in a finding supported by substantial 
evidence.
    \43\ As an example of this type of discrepancy, Mr. Litman 
pointed to the date of February 9, 2010, where 100 ccs of fentanyl 
were added without a 222 form. Tr. 321. However, he allowed that 
this type of ``discrepancy'' may not have been the type of issue a 
pharmacy consultant would have looked for. Tr. 332-33. Entries 
reflecting additions of controlled substances from Tampa were not 
included in this category. Tr. 346.
    \44\ Mr. Litman pointed to the date of November 14, 2010, where 
there was an opening balance of sixty ccs, six ampuls were 
administered, and 48 ccs remained. Tr. 333.
    \45\ He explained that ``you should never use white out on 
anything.'' Tr. 337.
---------------------------------------------------------------------------

    Despite the observed discrepancies, Mr. Litman testified that he 
compared patient records to the dispensing records in the narcotics log 
and that ``they all jibed . . . . Everything that Dr. Robinson had 
listed [in the log] for the patients was listed on the surgery 
reports.'' \46\ Tr. 335. Stated differently, the entries reflecting 
medications dispensed from the narcotics log matched the amounts 
indicated in the surgical records from the patient charts. Further, 
Litman's review of the charts told him that, although the practice was 
ordering more controlled substances, the Respondent's dosage levels 
during surgical procedures remained constant. Tr. 430.
---------------------------------------------------------------------------

    \46\ On cross-examination Mr. Litman testified that he looked at 
approximately 20% of patient records. Tr. 409. These were a ``random 
sampling of charts from 2010 in various months.'' Tr. 431.
---------------------------------------------------------------------------

    Additionally, Mr. Litman found eleven ``major discrepancies'' in 
the narcotics log where the amount of controlled substances ordered on 
a particular date varied drastically from the amount of controlled 
substances checked into the log.\47\ Tr. 282. These ``major 
discrepancies'' accounted for ``a little under 95 percent of the drugs 
that were missing.'' Tr. 355. Mr. Litman testified that these 
discrepancies could not be explained by sloppy record keeping and were, 
in his opinion, caused by diversion ``at the point of entry of 
reception of the drugs.'' Tr. 281-82; see also, id. at 55. In addition 
to these major discrepancies, Mr. Litman identified forty instances of 
what he characterized as ``smaller theft.'' Tr. 355.
---------------------------------------------------------------------------

    \47\ As an example of such a discrepancy, Mr. Litman pointed to 
the date of October 21, 2010, on which an order for Demerol was sent 
to the supplier, but was never logged in by PCCS. Tr. 298.
---------------------------------------------------------------------------

    Upon investigation, Mr. Litman learned that an employee named 
Priscilla Arciniega received the Respondent's drug shipments. Tr. 355-
56. In short, Ms. Arciniega was the functionary manning ``the point of 
entry'' for PCCS. Based on this information, Mr. Litman conducted a 
review of Ms. Arciniega's employment records. Tr. 358. The employment 
records showed that Ms. Arciniega was hired in November of 2009,\48\ 
one month before Mr. Litman began to see inconsistencies in the 
narcotics log. Tr. 496. Mr. Litman also found that during a single week 
in early March 2011, a week where Ms. Arciniega was absent from PCCS, 
``there was no missing narcotics,'' and that when she returned to work 
``there was diversion again.'' \49\ Tr. 362-63. Further, Litman noted 
that the controlled substance losses/thefts stopped after Ms. Arciniega 
was terminated from PCCS in March of 2011. Tr. 358.
---------------------------------------------------------------------------

    \48\ Resp't Ex. 15.
    \49\ The Respondent, through the testimony of counsel retained 
by PCCS, introduced a printout from the Public Access to Court 
Electronic Records (PACER) system reflecting the docket from a 
criminal matter in the Eastern District of New York, U.S. v. 
Arciniega, et al, 1:03-cr-00759-CBA, which shows that, in 2003, Ms. 
Arcieniega pled guilty to one count of conspiring to import heroin 
into the United States. Resp't Ex. 21, at 1.
---------------------------------------------------------------------------

    With regard to the November 23, 2010, prescription, Mr. Litman 
concluded that, while the prescription was obtained improperly, it was 
``intended to be used for a medically necessary purpose.'' Tr. 338; see 
also Tr. 413. Mr. Litman based this conclusion on the fact that the 
prescription was kept in the peer review pharmacy book, explaining that 
``[i]f they were really trying to divert that, they wouldn't have kept 
a copy of it.'' Tr. 339. Thus, although obtained through the improper 
vehicle of a prescription to a non-patient, the Demerol was entered and 
tracked for use on patients at the clinic. Mr. Litman further explained 
that drug shortages are ``becoming a big problem in our community'' and 
that facilities and practitioners have been forced to obtain necessary 
controlled substances by writing prescriptions for, in essence, office 
use.\50\ Tr. 340-42. Litman stated

[[Page 19363]]

that drug shortages are currently so profound that hospitals and 
nursing homes will sometimes borrow medications from retail or hospital 
pharmacies. Tr. 340. According to Mr. Litman, ``it's not legal to do 
that[,] it's not proper to do it, but it's done quite frequently.'' Id. 
Mr. Litman also shared his experience that it is not uncommon for 
practitioners to (improperly) write prescriptions for office use once 
they have exhausted authorized channels. Tr. 342.
---------------------------------------------------------------------------

    \50\ Mr. Litman testified that if a client of his was having 
difficulty locating necessary controlled substances, he ``would 
advise them to call different pharmacies. Call several hospital 
pharmacies to see if they had it.'' Tr. 342. He said that he would 
``never'' suggest that a practitioner obtain controlled substances 
by writing a prescription for an employee. Tr. 343.
---------------------------------------------------------------------------

    Also related to the November 23, 2010, prescription, Mr. Litman 
testified that the fifty vials of Demerol obtained by filling the 
prescription were added to the logbook, but that ``all the entries 
[that day] were altered and changed.'' Tr. 346-47. Mr. Litman testified 
that he became suspicious as to the accuracy of the November 23, 2010, 
records when he saw that all fifty vials of Demerol were used on three 
procedures,\51\ despite that the fact that he thought that ``they may 
have used four to five vials'' throughout the day for such 
procedures.\52\ Tr. 346-47. Accordingly, Mr. Litman asked to see the 
records for the patients who were seen on November 23, 2010, and was 
told by an unnamed PCCS staff member that two of the three relevant 
charts were missing. Tr. 347, 351. Furthermore, the lone chart that was 
produced to Litman by PCCS contained a significant internal 
inconsistency. Tr. 352-53; Resp't Ex. 19. Specifically, that portion of 
the chart, which reflects the quantity of Demerol administered during 
the patient's procedure, shows eight contemporaneous administrations of 
Demerol totaling three-hundred milligrams. However, the ``total'' 
column of Demerol administered reflects that only fifty milligrams of 
Demerol had been administered to the patient during the procedure. Tr. 
352-53. In short, the contemporaneous entries had been obviously 
altered to show an increased amount of medication administered per 
dose, but the individual who altered the document lacked the presence 
of mind to alter the ultimate total figure entered, which remained 
fifty milligrams.
---------------------------------------------------------------------------

    \51\ Litman testified that ``at the end of the day, all 50 vials 
were gone.'' Tr. 346.
    \52\ Mr. Litman based this assumption on a number of apparent 
alterations on the narcotics log. Tr. 349.
---------------------------------------------------------------------------

    On the issue of disposal of controlled substances, Mr. Litman 
testified that disposal of controlled substances is ``a tricky issue'' 
and that it has been his experience that ``[t]he problem is when you do 
call the agency and many times for small amounts, they don't want to be 
bothered by it.'' Tr. 371. Litman testified that he has called DEA in 
the past to report minor thefts and destruction of controlled 
substances and the employee on the other end of the phone would say 
``don't bother with it, call the police.'' Tr. 372. Mr. Litman further 
explained that if a client asked what to do with controlled substances 
leftover from a procedure, he would ``say you flush it with a 
witness.'' \53\ Tr. 377. Somewhat troublingly, Mr. Litman initially 
insisted that he is licensed by the state to destroy controlled 
substances without notifying the DEA, but later retreated from this 
position when shown 21 CFR Sec.  1307.21. Tr. 372-73, 377-79. Despite 
his testimonial epiphany on the subject of disposal authority, Litman 
testified that he has been disposing of controlled substances without 
notifying the DEA \54\ for approximately thirty years.\55\ Tr. 379.
---------------------------------------------------------------------------

    \53\ Mr. Litman presented his (legally unfounded) opinion that 
DEA regulations related to disposal may not apply to small 
quantities of controlled substances. Tr. 382.
    \54\ Litman stated that in his opinion, storing residual 
controlled substance in a practice presents a greater risk of 
diversion than destroying it outright because it could be taken and 
diverted while waiting to be transported to a reverse distributor. 
Tr. 376-77.
    \55\ Mr. Litman pointed to section 64B16-28.303 of the Florida 
Administrative Code as authority for his disposal methods. Tr. 541.
---------------------------------------------------------------------------

    Mr. Litman testified regarding an October 12, 2011, letter to the 
Respondent from the Florida Department of Health stating that it had 
received a letter from PCCS correcting deficiencies found during a 
September 12, 2011, inspection. Tr. 301. Mr. Litman explained that the 
letter would have followed an inspection and that, ``if [PCCS] were not 
in compliance, they would never receive this letter.'' Tr. 302. 
Similarly, Mr. Litman testified regarding a certificate of 
accreditation for PCCS from AAAA--the American Association for 
Accreditation of Ambulatory Surgical Facilities (``Quad A'')--for the 
time period from March 3, 2010, through March 31, 2011. Tr. 307; Resp't 
Ex. 14. Mr. Litman explained that a Quad A certification inspection 
would have included ``an investigation of record keeping and medication 
and narcotics usage and documentation and disposal'' and that a 
certification would be given at the conclusion of a successful 
inspection. Tr. 307. Mr. Litman testified that successful inspections 
by accrediting agencies would give a practitioner a ``false sense of 
security.'' Tr. 311.
    Mr. Litman also testified that, in his inspection of the 
Respondent's records, he discovered that PCCS had retained a pharmacy 
consultant named Joe Koptowsky. Tr. 312-13; Resp't Ex. 7. Of relevance 
here, the agreement between PCCS and Mr. Koptowsky called for Mr. 
Koptowsky ``[t]o review the pharmacy section of patient records . . . . 
for conformance with State and Federal laws regarding dispensing, 
labeling, storage and administration of drugs; To review the drug 
distribution system, including ordering and administration or disposal 
(wastage) of medications[;] To review the labeling and storage of 
drugs[; and] To review the controlled substances documentation and 
audit records.'' Resp't Ex. 7. By reviewing inspection records prepared 
by Mr. Koptowsky, Mr. Litman discovered that Mr. Koptowsky performed 
inspections of PCCS Coconut Grove approximately once every six months 
from May of 2006 until May of 2009, and once every year from May of 
2009, through November of 2010. Tr. 315-16, 321; Resp't Ex. 8. 
Remarkably, a November 9, 2010, Koptowsky inspection found no 
irregularities at the Coconut Grove facility, although that date fell 
two months prior to the DEA audit that revealed the deficient 
recordkeeping, and squarely within a period of time when controlled 
substance losses at PCCS were at an apex. Tr. 321-24; Resp't Ex. 8, at 
10.
    Mr. Litman testified that, if Mr. Koptowsky had found 
irregularities, it would have been incumbent upon him, as a pharmacy 
consultant, to bring the irregularities to the attention of PCCS.\56\ 
Tr. 324. Though Mr. Litman acknowledged that the duty to maintain 
accurate records was the Respondent's ultimate responsibility, he 
testified, in essence, that it was not unreasonable for a practitioner 
to rely on a consultant pharmacist, and that the act of hiring a 
pharmacy consultant showed a desire on the part of the Respondent to 
comply with the applicable regulations. Tr. 407, 533-34. According to 
Litman, a pharmacy consultant who was acting responsibly would have 
identified the issues raised by DEA regarding the recordkeeping and 
shortage issues at PCCS and taken steps to bring the client into 
compliance. Tr. 525. However, Litman also freely conceded that as a 
registrant, the Respondent is ultimately responsible for actions taken 
under his registration regarding controlled substances, and that he is 
aware of no legal authority that would allow a practitioner to escape 
responsibility for

[[Page 19364]]

his actions by virtue of his reliance upon a pharmacy consultant. Tr. 
408.
---------------------------------------------------------------------------

    \56\ Mr. Litman has worked with Mr. Koptowsky in the past, and 
regards him as a ``poor quality pharmacist.'' Tr. 327.
---------------------------------------------------------------------------

    Mr. Litman testified regarding the Government's audit. Tr. 385. He 
explained that, while the Government's audit, which relied on the 
narcotic logbook, reflected that the Respondent's practice had 
distributed fentanyl in 100 mcg/ml concentrations, no 100 mcg/ml 
concentration existed.\57\ Tr. 385-87. Rather, the practice received 
and distributed the medication in only the 50 mcg/ml strength, not one 
hundred.\58\ Tr. 387-88. When viewed in this light, Mr. Litman asserted 
that the fentanyl discrepancies found by DI McRae--the large overage of 
100 mcg/ml fentanyl and the large shortage of 50 mcg/ml fentanyl--are 
``almost a wash.'' Tr. 388.
---------------------------------------------------------------------------

    \57\ Mr. Litman believed this error was caused by the fact that 
the fentanyl came in different vial sizes. Tr. 387.
    \58\ Litman testified that the corrected data demonstrates 
approximately 400 missing vials, not 600 or 790, as reflected in the 
Government's audits. Tr. 388.
---------------------------------------------------------------------------

    Mr. Litman also set forth the results of an audit he conducted 
based upon the Respondent's records of fentanyl and Demerol from 
January 5, 2010, through March 2, 2011.\59\ Tr. 391, 418; Gov't Ex. 14. 
When conducting the audit, Mr. Litman derived the starting and closing 
inventories from the logbook. Tr. 496, 500. Mr. Litman explained that 
he conducted an ``ongoing perpetual inventory'' based on the narcotics 
log, the 222 forms and the invoices.\60\ Tr. 508. Under this process, 
he noted when controlled substances were used, transferred \61\ or 
received, and would tally the drugs as they went missing. Tr. 508.
---------------------------------------------------------------------------

    \59\ Mr. Litman chose to end the audit once he found that the 
records ``showed no discrepancies.'' Tr. 492. Litman explained that 
he extended the length of the audit he conducted by two months over 
the audit period utilized by the Government so that he could capture 
the employment time of Ms. Arciniega, which was also the end (in his 
view) of the controlled substance discrepancies issues. Tr. 491-92, 
497. Litman also noted that inconsistencies in the controlled 
substance records at PCCS began to appear around December 2009, and 
that before that, the records seemed ``very consistent.'' Tr. 496.
    \60\ During the course of his testimony, Litman opined that the 
numbers expressed in the Government audit, although placed into a 
chart, were ``pretty arbitrary'' and that, in his view his audit 
``is more accurate because [his] is done on a daily basis [and] can 
actually pinpoint the days the drugs were missing,'' contrary to the 
Government audit, which ``just tells you what was ordered and 
received.'' Tr. 512.
    \61\ Mr. Litman assumed that additions without documentation 
were transfers from the Tampa office. Tr. 509.
---------------------------------------------------------------------------

    In his audit, Mr. Litman found shortages of Demerol and fentanyl in 
the approximate \62\ amounts of 681 vials and 401 vials, respectively. 
Tr. 391-92. Converting these amounts to milliliters, the unit of 
measurement used by DI McRae in her audits, Mr. Litman found a shortage 
of fentanyl of approximately 802 milliliters, and a shortage of Demerol 
of approximately 681 milliliters.\63\
---------------------------------------------------------------------------

    \62\ According to Mr. Litman, ``when you have somebody who's 
stealing narcotics, generally a seasoned addict will be able to 
manipulate data, change records.'' Tr. 494. Accordingly, it is 
difficult to ascertain the exact shortage of drugs. Tr. 494.
    \63\ The Respondent received shipments of Demerol containing 1 
ml vials, and shipments of fentanyl containing 2 ml ampuls. Gov't 
Ex. 9.
---------------------------------------------------------------------------

    Mr. Litman further testified that when he was retained by the 
Respondent in October of 2011, ``I found everything corrected.'' Tr. 
364. In particular, Mr. Litman testified that the Respondent: (1) 
``instated new narcotic lock boxes [and] lock keys;'' \64\ (2) had 
assumed sole access to the combination of the lock box; (3) separated 
Schedule II controlled substance records from other records; (4) 
instituted a procedure of conducting a twice a day inventory whenever 
surgical procedures are performed; (5) conducted perpetual and biennial 
inventories; and (6) separated DEA Form 222s from other records. Tr. 
365-68. Additionally since Mr. Litman was retained, the Respondent has 
replaced Mr. Koptowsky.\65\ Tr. 365. Mr. Litman explained that ``I've 
seen this kind of scenario before where employees will often steal . . 
. drugs and blame other employees. Basically I feel [the Respondent] 
was kind of a patsy in this case [and that] his greatest . . . deficit, 
failure would be that he didn't monitor it properly and he trusted the 
other people to inform him of problems that they never told him 
about.'' Tr. 527. Mr. Litman testified that once the Respondent gained 
an appreciation of the situation, he ``made every effort to put the 
facility in compliance with all regulations.'' Tr. 371; see also, id. 
at 523-24.
---------------------------------------------------------------------------

    \64\ The Government objected to the photographs of the lock 
boxes the Mr. Litman examined essentially because, although he 
recognized the boxes in the photos, he did not actually operate the 
camera that took the pictures. This objection was overruled.
    \65\ Mr. Litman explained that approximately a week before the 
hearing, the Respondent ``retained'' a new consultant. Tr. 413-14. 
On cross examination Mr. Litman said that a contract had not been 
signed, ``but we will do it this week.'' Tr. 515. Subsequent to the 
hearing, the Respondent and Mr. Litman entered into a pharmacy 
consultant agreement. Resp't Ex. 22.
---------------------------------------------------------------------------

    Two reports authored by Mr. Litman were received into the record. 
Litman's initial report (Litman Report I), dated October 28, 2011, 
contained a brief summary of his qualifications and a somewhat less 
brief summary of the Respondent's contentions and factual assertions 
for which Mr. Litman had no first-hand knowledge.\66\ Resp't Ex. 17. 
Additionally (and more helpfully), the Litman Report I sets forth 
selective analyses of various aspects of the Respondent's records and 
recordkeeping practices. Included in his review was his written 
evaluation of Respondent's illegal controlled-substance-stock 
replenishment evolution. Id. at 2. Consistent with his testimony, 
Litman characterized this evolution as ``evidence of some lax attention 
to a record keeping regulation . . . .'' Id. Overall, Litman opined 
that his examination of the Respondent's practice demonstrated to him 
that:
---------------------------------------------------------------------------

    \66\ A non-exhaustive list of the areas that the Litman Report I 
expounds upon on, without apparent basis for doing so, includes: (1) 
Whether VM, the owner of PCCS, is addicted to controlled substances; 
(2) the details of a conversation between VM and DI McRae where Mr. 
Litman was not present; (3) an analysis of the regulatory 
requirements for a power of attorney; (4) a signature analysis on an 
entry in the PCCS narcotic logbook; and (5) whether a wholesaler 
utilized by PCCS had a delay in providing Demerol. Resp't Ex. 17. 
Naturally, these matters, and any others for which Mr. Litman had no 
apparent factual basis for the opinions included in the Litman 
Report I have been afforded no weight in this recommended decision.

    [T]here was a substandard job performed in the maintenance of 
the narcotic records as well as insufficient logging in of newly 
received orders as the narcotic counts were not accurate. [The 
Respondent] did review all narcotic orders prior to them being 
ordered, but did not sign in the amounts and dates arrived properly 
[sic], nor did he properly fill out forms for the transfer of 
medications from one clinic to another. There was inconsistency in 
the amounts of drugs received as there was no uniform system in 
place for this accounting. One nurse may have logged medications as 
---------------------------------------------------------------------------
``cc'' or ``ml'' leading to difficult and improper accounting.

    Id., at 2. In his report, as in his testimony, Litman provides his 
view that ``much of the problems stems [sic] from [the Respondent's] 
good faith reliance on the professionalism of other employees at the 
clinic, and [a] Consultant Pharmacist.'' Id., at 3.
    Curiously, the Litman Report I contains the observation that 
``[w]hen discussing these issues with [the Respondent] he was sullen 
and remorseful about his poor oversight into the accounting.'' Id. 
There was also some account of Litman's recollection of some self-
serving representations made by the Respondent to him concerning what 
he would have done had he known about his (own) lax oversight, as well 
as purported corrections he had and intended to make in the future, as 
well as Litman's peculiar estimation that (despite unreliable and 
inaccurate recordkeeping) the Respondent never created a risk of 
diversion or to public safety. Id.
    Although Mr. Litman's second report (Litman Report II),\67\ dated 
November 8, 2011, unquestionably suffers from many

[[Page 19365]]

of the same variety of unsupported overreaching and extrapolation that 
plagued its predecessor, the second version does a better job at 
describing the data and elements of the Respondent's recordkeeping that 
Litman analyzed in reaching his opinions. Specifically, the Litman 
Report II indicates that its author reviewed 36 randomly-selected 
charts from a total of 170 procedures conducted at PCCS in 2010 
(approximately 21 percent of the procedures conducted at that 
facility), and found no discrepancies between entries in the patient 
charts compared to the narcotics logs. Resp't Ex. 18.
---------------------------------------------------------------------------

    \67\ Resp't Ex. 18.
---------------------------------------------------------------------------

    Litman's discovery of a 2010 spike in the Respondent's per-
procedure use of Demerol and fentanyl compared to the years 2009 and 
2011 is presented in his report without any suggestion as to the 
significance that data played in the balance of his opinions.\68\ Id. 
However, during his testimony, Mr. Litman clarified the importance of 
this data, explaining that, in his opinion, ``[t]hey were still using 
the same amount for each procedure,\69\ but then there was an extra 
amount . . . that was being stolen.'' Tr. 428-29.
---------------------------------------------------------------------------

    \68\ Mr. Litman's report states that the Demerol calculations 
were ``based on 222 form drug orders, not actual procedures.'' 
Resp't Ex 18, at 1. Litman's testimony explained that he garnered 
surgical procedure information from the Respondent's surgical 
records.
    \69\ Mr. Litman concluded that they were using the same amount 
per procedure after going through the records, and after being told 
by the Respondent that he was ``using consistent the same as . . . 
always.'' Tr. 429-30.
---------------------------------------------------------------------------

    The Litman Report II also presents the results of what he 
characterizes as ``an in-depth review of all [PCCS] narcotic usage, 
primarily focusing [sic] on the drugs [f]entanyl and Demerol from 
January 2010 thru April 2011.'' Resp't Ex 18 at 1. In what he 
subsequently refers to as an ``audit,'' \70\ Litman catalogues ``major 
discrepancies in drug counts,'' tallying about 40 in a 15-month time 
frame. Id. (emphasis supplied). The Litman Report II documents a 681-
vial shortage of Demerol and a 401-vial shortage of fentanyl.\71\ Id. 
Litman also notes eight instances where controlled substances were 
shipped to the ``Tampa area clinic'' without filling out ``the proper 
DEA forms as per regulation.'' Id. Further, the Litman Report II 
contains his observation that ``[t]here appeared to be shrinkage 
(theft) occurring randomly on a weekly-monthly basis (~ 1 box stolen 
every 12 days) since January 2010 and ending immediately after March 2, 
2011 . . . . [a time frame that coincides] with the employment dates of 
[an] employee who had access to these missing narcotics'' that Litman 
characterizes as ``questionable.'' \72\ Id., at 2. The Litman Report II 
also volunteers that ``[t]here were no missing drugs during a specific 
week this employee did not come to work and shrinkage resumed the week 
she returned to work,'' and that ``[t]here were also white-outs noted, 
combined with changed entries on the Narcotic Log Book, coincidently, 
on the last day of her employment.'' Id.
---------------------------------------------------------------------------

    \70\ Id.
    \71\ In contrast to the audit conducted by DEA, Litman found 
only shortages, and no overages. Resp't Ex. 18, at 1; Gov't Ex. 10.
    \72\ It is clear from Mr. Litman's testimony that he was 
referring to Ms. Arciniega.
---------------------------------------------------------------------------

    Much as is true in the initial report and the witness's testimony, 
the Litman Report II essays to excuse any assignment of responsibility 
to the Respondent under the (legally-unsupportable) theory that all 
noted discrepancies were understandably overlooked by the Respondent 
because he ``was not a full time practitioner at PCCS during the year 
2010[,] was not properly up to date as to proper record-keeping, 
transfers of medications, logging in of new orders, and ongoing 
inventory control [and really] stems from [Respondent's] good[-]faith 
reliance on the professionalism of other co-workers and employees at 
the clinic, the licensed Consultant Pharmacist, and other regulatory 
agencies to do their jobs correctly'' Id., at 2, 4.
    The Litman Report II also notes some security enhancements the 
Respondent put into effect after the DEA audit, and once again 
reiterates Litman's odd assurance that the Respondent's wholly 
substandard recordkeeping has resulted in neither a public threat nor a 
risk of drug diversion. Id. at 2.
    During his testimony, Mr. Litman did not shy away from those areas 
where he concluded that the Respondent fell below the standard of due 
care in his recordkeeping obligations, and in many respects, his audit 
assessments painted an even bleaker picture of the Respondent's 
recordkeeping than the Government's version. While his view that the 
Respondent should somehow be absolved of his obligations as a 
registrant by virtue of his reliance upon a pharmacy consultant is 
wholly unpersuasive, it did not undermine the value of his expert 
opinions in this case. In short, Mr. Litman's presented testimony that 
was sufficiently detailed, authoritative and candid to be credited in 
this decision.
    The Respondent testified that he was born in St. Louis, Missouri, 
in 1946 and that he graduated from St. Louis University and the St. 
Louis University School of Medicine. Tr. 549. After graduating from 
medical school, the Respondent completed a two-year residency in basic 
surgery at the University of Florida.\73\ Tr. 549. The Respondent 
volunteered that he has published scholarly articles in his field of 
practice, and that as a medical student, he discovered the cause of 
burn anemia and presented his findings at a meeting of the Saint Louis 
Surgical Society, where he was awarded a prize in recognition of his 
achievement. Tr. 550. Once done with his residency, the Respondent 
performed general surgery for two years in St. Louis, and then 
completed a one-year fellowship in burns.\74\ Tr. 549. After the burns 
fellowship, the Respondent finished a two-year residency in plastic 
surgery at the University of Illinois in Chicago. Tr. 549, 562. During 
this time, the Respondent taught a course in burn management to 
pediatricians at the University of Illinois-Chicago, lectured in 
pediatric burn care, and was appointed as Instructor in Surgery. Tr. 
562. The Respondent moved to Broward County in 1979 to open a practice 
in plastic surgery. Tr. 549. The Respondent stated that he has remained 
in southern Florida since 1979. Tr. 549.
---------------------------------------------------------------------------

    \73\ The Respondent's CV was received into evidence without 
objection. Resp't Ex. 2.
    \74\ The Respondent has published several articles in the fields 
of burns. However, he tested that he was ``unfortunate [in] that in 
south Florida, they were unwilling to need somebody who had my 
expertise.'' Tr. 550.
---------------------------------------------------------------------------

    Though the Respondent maintained a general plastic surgery practice 
in Pembroke Pines, Florida, he explained that for years he also covered 
emergency rooms and focused his practice on ``reconstructive surgery, 
primarily facial skin cancers, post-mastectomy breast reconstruction, 
and . . . difficult wounds.'' Tr. 551. According to the Respondent, 
``[u]ltimately, like most plastic surgeons, as [he] got older, [his] 
practice gravitated to primarily cosmetic surgery,'' but allowed that 
he still performs some reconstructive work. Tr. 551-52. In 1999 the 
Respondent ``began doing some work'' \75\ at a PCCS office in Weston, 
Florida.\76\ Tr. 550. The Respondent testified that, while he initially 
worked at PCCS ``one day a week or every other Saturday . . . . as the 
other physicians came and went, I seemed to get more . . . time 
there.'' Tr. 550-51. Although other physicians

[[Page 19366]]

seemed to come for periods of time and move on, he testified that he 
stayed with PCCS. Tr. 558-59. The Respondent explained that over the 
years several physicians were appointed by PCCS as the primary doctor. 
---------------------------------------------------------------------------
Tr. 559. According to the Respondent:

    \75\ At this time, the Respondent was an ``independent 
contractor'' at PCCS and was paid a percentage of the amount PCCS 
charged for a surgery he performed. Tr. 554. The Respondent also 
testified that PCCS maintained the state required certifications for 
conscious and general sedation. Tr. 555-56.
    \76\ Weston is in ``western Broward County west of Ft. 
Lauderdale.'' Tr. 553.

    I would occasionally become the primary doctor because someone 
left, moved on, got fired. But I was really never the primary doctor 
until maybe 2008. And even then, they would occasionally bring 
someone in to either do some work or even to the majority of the 
work. It disappointed me a little bit but since I had my private 
office at the time, and I wasn't willing to give it up, I didn't 
feel there was much I could say about that because I was not 
---------------------------------------------------------------------------
devoting all my time to PCCS.

Id.
    In or around 2005, the surgeon working at the Coconut Grove PCCS 
location moved to Weston, so PCCS asked the Respondent to ``go down to 
Coconut Grove and take his place.'' Tr. 552. Because Respondent's home 
at the time was equidistant from Weston and Coconut Grove, he accepted 
the proposed move. Tr. 553. It was in 2005, when he assumed the duties 
at PCCS Coconut Grove,\77\ that his COR was utilized to handle 
controlled substances in the clinic.\78\ Tr. 559-60. The Respondent 
testified that ``when the supply of drugs got low, they would tell 
[him] that they needed for [him] to fill out a form. Sometimes they 
would write in the amounts, sometimes they'd tell [him] and [he] would 
just write it in and sign it and they'd send it off and order the 
drugs.'' Tr. 560. The Respondent indicated that he became ``the primary 
doctor'' at PCCS sometime around 2008. Tr. 559.
---------------------------------------------------------------------------

    \77\ The Respondent clarified that this was not ``a compensation 
position.'' Tr. 561.
    \78\ The Respondent indicated that he could not recall whether 
he signed a document specifically authorizing the use of his DEA 
COR. Tr. 561. However, he testified that he thought the document 
appointing him medical director ``calls . . . for them to use my 
narcotic registration.'' Tr. 561.
---------------------------------------------------------------------------

    According to the Respondent, just over a year ago he began 
``slowing down'' his private practice, a process which he explained as 
``limiting [his] procedures, not taking on any more complicated cases 
or cases that would require multiple procedures or a long time[, a]nd 
basically telling the patients that [he] was going to be leaving in 
some period of time.'' Tr. 571-73. On April 18, 2011, the Respondent 
closed his private practice to focus on his work at PCCS.\79\ Tr. 571-
73, 665. In this regard, the Respondent explained that ``about 99 
percent'' of his practice involves controlled substances and that a 
limitation on his ability to use narcotics ``would be like cutting off 
my hands.'' Tr. 575.
---------------------------------------------------------------------------

    \79\ The Respondent testified that his decision to focus on PCCS 
was motivated by his desire to ``not have any overhead to worry 
about, not have to worry about payrolls and all the other things 
that you have to concern yourself with and then . . . [he] could 
pretty much walk away from there because [he] didn't have the same 
responsibilities [he] had in a private practice.'' Tr. 573.
---------------------------------------------------------------------------

    Turning to the allegations underlying this case, the Respondent 
testified that ``when I first discovered that I had done something 
wrong . . . I was pretty devastated. I couldn't believe it. The center 
seemed to run so well for a number of years.'' \80\ Tr. 566.
---------------------------------------------------------------------------

    \80\ The Respondent testified that there were ``very minor'' 
problems regarding entries in the narcotics log, where ``one person 
was using cc[]s and the other person was using vials.'' Tr. 567-68.
---------------------------------------------------------------------------

    As a partial explanation for his surprise, the Respondent offered 
PCCS' employment of Mr. Koptowsky as a pharmacy consultant. Tr. 567. In 
this regard, the Respondent testified that he met Mr. Koptowsky once, 
during his November 9, 2010, inspection, and that, while he had never 
seen the actual inspection forms, he ``was aware that they existed and 
that there wasn't anything that applied, there wasn't any correction or 
problem that was listed that . . . I needed to do something about.'' 
Tr. 630, 639. 41; Resp't Ex. 9.
    Relatedly, the Respondent also testified that the Board of Medicine 
requires that a facility be accredited by one of three organizations--
Quad A, AAA, or the State--``in order to be able to perform procedures 
which require general anesthesia or conscious sedation.'' \81\ Tr. 580. 
To obtain certification through either the State or the Quad A, a 
facility must undergo an inspection conducted by a medical doctor. Tr. 
587-88. The Respondent presented his understanding that the physician 
conducting such an inspection examines many facets of the practice, 
including procedure manuals, a random sampling of charts, and the 
operating room. Tr. 588, 590.
---------------------------------------------------------------------------

    \81\ The Respondent never sought certification for his private 
practice because he was able to perform surgeries at a local 
ambulatory surgical facility. Tr. 557.
---------------------------------------------------------------------------

    On March 31, 2010, the PCCS facility in Coconut Grove passed a Quad 
A inspection, and was granted a certification to March 31, 2011. Resp't 
Ex. 14. Sometime after the Quad A inspection, PCCS opted to obtain a 
certification through the State. Tr. 590-91. However, due to a backlog, 
the State inspection did not occur until September of 2011. Tr. 590-91. 
When the State inspection took place, the inspector found some 
violations, which the Respondent explained as ``mostly small things,'' 
such as ``some of the more recent charts [not having] their operating 
notes.'' Tr. 592-93. After the inspection, PCCS sent a letter to the 
State stating that the uncovered deficiencies had been corrected. Tr. 
592-93; Resp't Ex. 4. On October 12, 2011, the State sent a letter to 
PCCS acknowledging the receipt of the correction letter.\82\ The 
Respondent explained that the October 12, 2011, letter was ``final.'' 
Tr. 593.
---------------------------------------------------------------------------

    \82\ According to the Respondent, in a State inspection, 
deficiencies are outlined in a letter directing correction and that 
when the issues are minor, no post-correction re-inspection 
customarily occurs. Tr. 589.
---------------------------------------------------------------------------

    The Respondent testified that when the allegations regarding VM's 
drug abuse surfaced, ``she wanted to be drug tested because she totally 
denied the allegations.'' Tr. 577. Accordingly, the Respondent 
authorized a drug test for VM. Tr. 577. On April 19, 2011, a hair 
sample from VM was collected. Gov't Ex. 3. Three days later, on April 
22, 2011, the sample tested negative for all controlled substances. 
Gov't Ex. 3.\83\
---------------------------------------------------------------------------

    \83\ Respondent Exhibit 3, which was admitted into evidence, 
also contains two negative drug tests from September of 2011. The 
Respondent testified ``I don't think I wrote the one in September.'' 
Tr. 663.
---------------------------------------------------------------------------

    With regard to the November 23, 2010, prescription to VM, the 
Respondent explained that, on the relevant date, he had three surgeries 
planned, but there were no narcotics on hand at the practice. Tr. 593-
94. To address this problem, the Respondent issued a prescription in 
VM's name ``so that at least we'd have some for future surgeries if we 
needed them [a]nd that was obviously a mistake.'' Tr. 595-96.\84\ 
Later, when reviewing the patient charts for the three patients seen on 
November 23, 2010, the Respondent discovered that two of the three 
anesthesia records from the November 23, 2010, operations were missing. 
Tr. 599-600. Furthermore, the remaining anesthesia record that was 
found reflected indicia of alterations. Tr. 599-602.
---------------------------------------------------------------------------

    \84\ The Respondent further testified (incorrectly) that ``I 
should have written a prescription to each, for each patient for the 
amount of narcotic I thought we were going to use. And that way, 
probably would be all proper. I'm not sure . . . .'' Tr. 595. See 21 
CFR Sec.  1305.03.
---------------------------------------------------------------------------

    The Respondent explained that, when he performs a surgery requiring 
anesthesia, the nurse anesthetist or the anesthesiologist will keep the 
anesthesia record by ``writ[ing] in each of the drugs that are being 
administered and . . . what dosage is administered [a]nd then at the 
end, they usually put some sort of a total.'' Tr. 599. However, the 
anesthesia record from November 23, 2010, reflected ``way too many 
drugs . . . listed across the contemporaneous portion.'' Tr. 601. 
Specifically, the

[[Page 19367]]

Respondent testified that the particular procedure reflected on the 
chart would have taken about an hour, but that he saw what ``looked 
like seven ampules had been administered [a]nd that's . . . just not 
going to be done for a procedure that takes less than an hour.'' Tr. 
601-02.\85\ The Respondent allowed that if the high doses reflected on 
the chart reflected the reality, the patient's respiratory muscles 
would have been paralyzed, which the Respondent testified did not 
occur. Tr. 609-10. It is the Respondent's opinion that the logs were 
altered. Tr. 611. When questioned about who would have access to the 
logs, the Respondent testified that ``the three people that would 
always be present in the operating room were the anesthetist . . . 
[DN], who was the scrub nurse; and myself.'' Tr. 611. However, 
Priscilla Arciniega, the receptionist at the office, would ``often'' 
help clean up. Tr. 611-13. Furthermore, it ``was part of Ms. 
Arciniega's responsibility to at least . . . ha[ve] access to all the 
medical records.'' \86\ Tr. 614.
---------------------------------------------------------------------------

    \85\ The patient chart was admitted as Respondent's Exhibit 19. 
The chart shows eight contemporaneous administrations of Demerol 
totaling 300 milligrams. However, the ``total'' column reflects that 
only 50 mgs of Demerol had been administered to the patient. Though 
acknowledging that he is ``not a handwriting expert,'' the 
Respondent testified that the handwriting for the higher dosages 
appeared different than other entries on the chart. Tr. 607. 
However, he could not remember the name of the anesthesiologist. Tr. 
672-73.
    \86\ The Respondent testified that it is standard for office 
staff to have access to patient medical records. Tr. 614-15. When 
asked whether he could limit staff access to medical records the 
Respondent replied that ``it's not efficient and it's not 
required.'' Tr. 616-17.
---------------------------------------------------------------------------

    The Respondent testified that Ms. Arciniega was ``hired as kind of 
a jack of all trades. [I]t turned out that another plastic surgeon 
whose office [VM] used to provide anesthesia for was retiring or 
closing his office and . . . had worked with [Arciniega] . . . before. 
And since we needed a person [VM] gave [Arciniega] a job.'' Tr. 612. 
The Respondent testified that although he was not present when 
Arciniega left the practice, it was his understanding that she was 
terminated for cause when she was unable to supply a physician's note 
as requested by VM to excuse a work absence. Tr. 658-59. The Respondent 
testified that the allegedly unexcused absence occurred sometime at the 
end of February of 2011. Tr. 655. However, a timecard admitted into 
evidence shows that from February 23 through March 9, 2011, Ms. 
Arciniega worked 34.5 hours. Resp't Ex. 15, at 5. The Respondent also 
testified that, during the preparation for his testimony with his 
counsel, he learned that Ms. Arciniega had ``been arrested in New York 
for distribution of narcotics.'' \87\ Tr. 660.
---------------------------------------------------------------------------

    \87\ The Respondent testified that, if he had known that Ms. 
Arciniega had been arrested for drug trafficking, ``I don't think 
she would have ever been hired . . . and if she were hired, she 
would have been terminated immediately.'' Tr. 660.
---------------------------------------------------------------------------

    The Respondent testified that he took numerous steps to address the 
compliance issues that had been related to him by DI McRae during her 
January visit. Tr. 569. Specifically, the Respondent testified that he: 
(1) ``Assumed immediate control of the key [to the controlled 
substances safe];'' (2) ``took control of the record keeping and 
[checks] the addition and subtraction after every single case and at 
the end of the operating day;'' and (3) implemented a new policy 
wherein he personally oversees the opening of all controlled substance 
shipments to the office.\88\ Tr. 569-71. The Respondent explained that 
``if there [is] any medication that's sitting on the anesthesia cart, 
we put it back in the box after our inventory has been done. I lock the 
box and take the key, put it back in the lock box and close it.'' Tr. 
620. The Respondent also fixed a broken lock on the controlled 
substance safe and created separate folders for DEA Form 222s and 
biennial inventories. Tr. 624-27. During the hearing he expressed an 
intention to begin performing background checks on new hires. Tr. 661. 
When asked about his current level of attention to his responsibilities 
as a registrant, the Respondent declared that his current practice is 
``[a] 180 from what was going on before. I have taken complete control 
and I have now accepted my responsibility, which I obviously had 
neglected before.'' Tr. 623.
---------------------------------------------------------------------------

    \88\ The Respondent indicated his intention to seek Agency 
advice on the issue of how to better implement this control in light 
of the limited number of days he works in the PCCS office. Tr. 569-
71, 621, 674-77, 688.
---------------------------------------------------------------------------

    The Respondent presented testimony that was sufficiently detailed, 
internally consistent, and plausible to be fully credited in this 
recommended decision. When asked about his missteps as a registrant, 
the Respondent unequivocally offered: ``Obviously I made some terrible 
mistakes but I felt there wasn't anything there that I couldn't 
correct, that I didn't want to correct.'' Tr. 569. At another point in 
his testimony, the Respondent declared that he ``absolutely 
recognize[s]'' that he has not complied with his obligations as a 
registrant, and flatly acknowledged that, notwithstanding the fact that 
his practice prior to 2005 involved others handling controlled 
substances during his procedures, that he ``was ultimately 
responsible.'' Tr. 575. His demeanor presented all the indicia 
generally associated with candor, including unfaltering 
acknowledgements of weaknesses in his past performance as a registrant 
and mistakes he has made founded in lack of the oversight required by 
his position. He presented the fact that a (derelict) consultant had 
been retained by PCCS in a manner that made it clear that he was not 
shrinking from his own culpability regarding the condition of his 
recordkeeping and other issues.
    The Government presented the testimony of DI McRae in a purported 
rebuttal to Mr. Litman's testimony. Tr. 607. In truth, while some 
nuances of Littman's audit and some elements (such as time span 
covered) of that audit that distinguished it from the Government's 
audit were elicited, there was little of consequence that was actually 
rebutted. The Respondent's recordkeeping, as he has conceded from the 
outset, was problematic.
    Other facts required for a disposition of this matter are set forth 
in the balance of this recommended decision.

The Analysis

    Pursuant to 21 U.S.C. 824(a)(4) (2006), the Administrator \89\ is 
permitted to revoke a COR if persuaded that the registrant ``has 
committed such acts as would render . . . registration under section 
823 . . . inconsistent with the public interest . . . .'' The following 
factors have been provided by Congress in determining ``the public 
interest'':
---------------------------------------------------------------------------

    \89\ This authority has been delegated pursuant to 28 CFR 
Sec. Sec.  0.100(b) and 0.104 (2010).

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The [registrant's] experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The [registrant'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.

21 U.S.C. Sec.  823(f) (2006 & Supp. III 2010).

    ``[T]hese factors are considered in the disjunctive.'' Robert A. 
Leslie, M.D., 68 FR 15227, 15230 (2003). Any one or a combination of 
factors may be relied upon, and when exercising authority as an 
impartial adjudicator, the Administrator may properly give each factor 
whatever weight she deems appropriate in determining whether a 
registration should be rejected. Morall v.

[[Page 19368]]

DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005); JLB, Inc., d/b/a Boyd 
Drugs, 53 Fed. Reg. 43945, 43947 (1988); David E. Trawick, D.D.S., 53 
Fed. Reg. 5326, 5327 (1988); see also Joy's Ideas, 70 Fed. Reg. 33195, 
33197 (2005); David H. Gillis, M.D., 58 Fed. Reg. 37507, 37508 (1993); 
Henry J. Schwarz, Jr., M.D., 54 Fed. Reg. 16422, 16424 (1989). 
Moreover, the Administrator is ``not required to make findings as to 
all of the factors . . . .'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 
2005); see also Morall, 412 F.3d at 173-74. The Administrator is not 
required to discuss consideration of each factor in equal detail, or 
even every factor in any given level of detail. Trawick v. DEA, 861 
F.2d 72, 76 (4th Cir. 1988) (the Administrator's obligation to explain 
the decision rationale may be satisfied even if only minimal 
consideration is given to the relevant factors and remand is required 
only when it is unclear whether the relevant factors were considered at 
all). The balancing of the public interest factors ``is not a contest 
in which score is kept; the Agency is not required to mechanically 
count up the factors and determine how many favor the Government and 
how many favor the registrant. Rather, it is an inquiry which focuses 
on protecting the public interest . . . .'' Jayam Krishna-Iyer, M.D., 
74 Fed. Reg. 459, 462 (2009).
    In an action to revoke a registrant's COR, the DEA has the burden 
of proving that the requirements for revocation are satisfied. 21 CFR 
Sec.  1301.44(e) (2011). The Government may sustain its burden by 
showing that the Respondent has committed acts inconsistent with the 
public interest. Jeri Hassman, M.D., 75 Fed. Reg. 8194, 8235-36 (2010). 
Once DEA has made its prima facie case for revocation of the 
registrant's COR, the burden of production then shifts to the 
Respondent to present sufficient mitigating evidence to assure the 
Administrator that he or she can be entrusted with the responsibility 
commensurate with such a registration. Steven M. Abbadessa, D.O., 74 
Fed. Reg. 10077, 10078, 10081 (2009); Medicine Shoppe-Jonesborough, 73 
Fed. Reg. 364, 387 (2008); Samuel S. Jackson, D.D.S., 72 Fed. Reg. 
23848, 23853 (2007);. Morall, 412 F.3d at 174; Humphreys v. DEA, 96 
F.3d 658, 661 (3d Cir. 1996); Shatz v. U.S. Dept. of Justice, 873 F.2d 
1089, 1091 (8th Cir. 1989); Thomas E. Johnston, 45 Fed. Reg. 72311, 
72312 (1980). ``[T]o rebut the Government's prima facie case, [the 
Respondent] is required not only to accept responsibility for [the 
established] misconduct, but also to demonstrate what corrective 
measures [have been] undertaken to prevent the reoccurrence of similar 
acts.'' Jeri Hassman, M.D., 75 Fed. Reg. at 8236. Normal hardships to 
the practitioner and even to the surrounding community that are 
attendant upon the lack of registration are not relevant 
considerations. Abbadessa, 74 Fed. Reg. at 10078; see also Gregory D. 
Owens, D.D.S., 74 Fed. Reg. 36751, 36757 (2009).
    The Agency's conclusion that past performance is the best predictor 
of future performance has been sustained on review in the courts, Alra 
Labs. v. DEA, 54 F.3d 450, 452 (7th Cir. 1995), as has the Agency's 
consistent policy of strongly weighing whether a registrant who has 
committed acts inconsistent with the public interest has accepted 
responsibility and demonstrated that he or she will not engage in 
future misconduct. Hoxie, 419 F.3d at 483; Ronald Lynch, M.D., 75 Fed. 
Reg. 78745, 78749 (2010) (Respondent's attempts to minimize misconduct 
held to undermine acceptance of responsibility); George Mathew, M.D., 
75 Fed. Reg. 66138, 66140, 66145, 66148 (2010); East Main Street 
Pharmacy, 75 Fed. Reg. 66149, 66165 (2010); George C. Aycock, M.D., 74 
Fed. Reg. 17529, 17543 (2009); Abbadessa, 74 Fed. Reg. at 10078; 
Krishna-Iyer, 74 Fed. Reg. at 463; Medicine Shoppe, 73 Fed. Reg. at 
387.
    While the burden of proof at this administrative level is a 
preponderance-of-the-evidence standard, see Steadman v. SEC, 450 U.S. 
91, 100-01 (1981), the Administrator's factual findings will be 
sustained on review so long as they are supported by ``substantial 
evidence.'' Hoxie, 419 F.3d at 481. Thus, ``the possibility of drawing 
two inconsistent conclusions from the evidence'' does not limit the 
Administrator's ability to find facts on either side of the contested 
issues in the case. Shatz, 873 F.2d at 1092; Trawick, 861 F.2d at 77. 
However, in rendering a decision, the Administrator must consider all 
``important aspect[s] of the problem,'' such as a Respondent's defense 
or explanation that runs counter to the Government's evidence. 
Wedgewood Vill. Pharmacy v. DEA, 509 F.3d 541, 549 (D.C. Cir. 2007); 
Humphreys, 96 F.3d at 663. The ultimate disposition of the case must be 
in accordance with the weight of the evidence, not simply supported by 
enough evidence to justify, if the trial were to a jury, a refusal to 
direct a verdict when the conclusion sought to be drawn from it is one 
of fact for the jury. Steadman, 450 U.S. at 99 (internal quotation 
marks omitted).
    Regarding the exercise of discretionary authority, the courts have 
recognized that gross deviations from past agency precedent must be 
adequately supported. Morall, 412 F.3d at 183. Mere unevenness in 
application standing alone does not, however, render a particular 
discretionary action unwarranted. Chein v. DEA, 533 F.3d 828, 835 (D.C. 
Cir. 2008) (citing Butz v. Glover Livestock Comm. Co., 411 U.S. 182, 
188 (1973)), cert. denied, U.S., 129 S. Ct. 1033, 1033 (2009). It is 
well-settled that since the Administrative Law Judge has had the 
opportunity to observe the demeanor and conduct of hearing witnesses, 
the factual findings set forth in a recommended decision are entitled 
to significant deference. Universal Camera Corp. v. NLRB, 340 U.S. 474, 
496 (1951). Thus, a recommended decision constitutes an important part 
of the record that must be considered in the Administrator's decision. 
Morall, 412 F.3d at 179. However, any recommendations set forth herein 
regarding the exercise of discretion are not binding on the 
Administrator and do not limit the exercise of that discretion. 5 
U.S.C. Sec.  557(b) (2006); River Forest Pharmacy, Inc. v. DEA, 501 
F.2d 1202, 1206 (7th Cir. 1974); Attorney General's Manual on the 
Administrative Procedure Act 8 (1947).

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

    In this case, it is undisputed that the Respondent holds a valid 
and current state license to practice medicine in Florida. The record 
contains no evidence of a recommendation regarding the Respondent's 
medical privileges by any cognizant state licensing board or 
professional disciplinary authority. However, that a state has not 
acted against a registrant's medical license is not dispositive in this 
administrative determination as to whether continuation of a 
registration is consistent with the public interest. Patrick W. 
Stodola, M.D., 74 Fed. Reg. 20727, 20730 (2009); Jayam Krishna-Iyer, 74 
Fed. Reg. at 461. It is well-established Agency precedent that a 
``state license is a necessary, but not a sufficient condition for 
registration.'' Leslie, 68 Fed. Reg. at 15230; John H. Kennedy, M.D., 
71 Fed. Reg. 35705, 35708 (2006). Even the reinstatement of a state 
medical license does not affect the DEA's independent responsibility to 
determine whether a registration is in the public interest. Mortimer B. 
Levin, D.O., 55 Fed. Reg. 9209, 8210 (1990).

[[Page 19369]]

The ultimate responsibility to determine whether a registration is 
consistent with the public interest has been delegated exclusively to 
the DEA, not to entities within state government. Edmund Chein, M.D., 
72 Fed. Reg. 6580, 6590 (2007), aff'd, Chein v. DEA, 533 F.3d 828 (D.C. 
Cir. 2008), cert. denied, U.S., 129 S. Ct. 1033 (2009). Congress vested 
authority to enforce the CSA in the Attorney General, not state 
officials. Stodola, 74 Fed. Reg. at 20375. Here, there is no evidence 
of record that the state licensing board has even considered the issue 
of a formal action against the Respondent's licensure. Thus, on these 
facts, the absence of a recommendation by a state licensing board does 
not weigh for or against a determination as to whether continuation of 
the Respondent's DEA certification is consistent with the public 
interest. See Roni Dreszer, M.D., 76 Fed. Reg. 19434, 19444 (2011) 
(``[T]he fact that the record contains no evidence of a recommendation 
by a state licensing board does not weigh for or against a 
determination as to whether continuation of the Respondent's DEA 
certification is consistent with the public interest.'').
    Regarding the third factor (convictions relating to the 
manufacture, distribution, or dispensing of controlled substances), the 
record in this case does not contain evidence that the Respondent has 
been convicted of (or charged with) a crime related to the manufacture, 
distribution, or dispensing of controlled substances. DEA 
administrative proceedings are non-punitive and ``a remedial measure, 
based upon the public interest and the necessity to protect the public 
from those individuals who have misused controlled substances or their 
DEA COR, and who have not presented sufficient mitigating evidence to 
assure the [Administrator] that they can be trusted with the 
responsibility carried by such a registration.'' Jackson, 72 Fed. Reg. 
at 23853; Leo R. Miller, M.D., 53 Fed. Reg. 21931, 21932 (1988). Where 
evidence in a particular case reflects that the Respondent has acquired 
convictions relating to the manufacture, distribution, or dispensing of 
controlled substances, those convictions must be carefully examined and 
weighed in the adjudication of whether the issuance of a registration 
is in the public interest. 21 U.S.C. Sec.  823(f).
    Although the standard of proof in a criminal case is more stringent 
than the standard required at an administrative proceeding, and the 
elements of both federal and state crimes relating to controlled 
substances are not always co-extensive with conduct that is relevant to 
a determination of whether registration is within the public interest, 
evidence that a registrant has been convicted of crimes related to 
controlled substances is a factor to be evaluated in reaching a 
determination as to whether he or she should be entrusted with a DEA 
certificate. The probative value of an absence of any evidence of 
criminal prosecution is somewhat diminished by the myriad of 
considerations that are factored into a decision to initiate, pursue, 
and dispose of criminal proceedings by federal, state, and local 
prosecution authorities. See Robert L. Dougherty, M.D., 76 Fed. Reg. 
16823, 16833 n.13 (2011); Dewey C. Mackay, M.D., 75 Fed. Reg. 49956, 
49973 (2010) (``[W]hile a history of criminal convictions for offenses 
involving the distribution or dispensing of controlled substances is a 
highly relevant consideration, there are any number of reasons why a 
registrant may not have been convicted of such an offense, and thus, 
the absence of such a conviction is of considerably less consequence in 
the public interest inquiry''), aff'd, Mackay v. DEA, 664 F.3d 808 
(10th Cir. 2011); Ladapo O. Shyngle, M.D., 74 Fed. Reg. 6056, 6057 n.2 
(2009).
    Accordingly, consideration of the evidence of record under the 
first and third factors neither supports the Government's argument for 
revocation nor militates against it.

Factors 2 and 4: Experience in Dispensing Controlled Substances and 
Compliance With Applicable State, Federal, or Local Laws Relating to 
Controlled Substances

    In this case, the gravamen of the Government's case seeking 
revocation relates to its allegations that the Respondent failed to 
adhere to the CSA's recordkeeping and security requirements and was 
unable to account for both shortages and overages of controlled 
substances. Factors Two and Four are relevant to the analysis.
    Regarding Factor Two, in requiring an examination of a registrant's 
experience in dispensing controlled substances, Congress manifested an 
acknowledgement that the qualitative manner and the quantitative volume 
in which a registrant has engaged in the dispensing of controlled 
substances, and how long he or she has been in the business of doing 
so, are significant factors to be evaluated in reaching a determination 
as to whether he or she should be entrusted with a DEA COR. In some 
cases, viewing a registrant's actions against a backdrop of how she has 
performed activity within the scope of the certificate can provide a 
contextual lens to assist in a fair adjudication of whether continued 
registration is in the public interest.
    Evidence that a practitioner may have conducted a significant level 
of sustained activity within the scope of the registration for a 
sustained period is a relevant and correct consideration, which must be 
accorded due weight. The registrant's knowledge and experience 
regarding the rules and regulations applicable to practitioners also 
may be considered. See Volusia Wholesale, 69 Fed. Reg. 69409, 69410 
(2004) (List I case).\90\ However, the Agency has taken the reasonable 
position that this factor can be outweighed by acts held to be 
inconsistent with the public interest. Jayam Krishna-Iyer, 74 Fed. Reg. 
at 463; see also Jeri Hassman, M.D., 75 Fed. Reg. 8194, 8235 (2010) 
(acknowledging Agency precedential rejection of the concept that 
conduct which is inconsistent with the public interest is rendered less 
so by comparing it with a respondent's legitimate activities which 
occurred in substantially higher numbers); Paul J. Cargine, Jr., 63 
Fed. Reg. 51592, 51560 (1998) (``[E]ven though the patients at issue 
are only a small portion of Respondent's patient population, his 
prescribing of controlled substances to these individuals raises 
serious concerns regarding [his] ability to responsibly handle 
controlled substances in the future.''). The Agency's approach in this 
regard has been sustained by on review. Mackay, 664 F.3d at 819.
---------------------------------------------------------------------------

    \90\ In Cynthia M. Cadet, M.D., 76 Fed. Reg. 19450, 19450 n.1 
(2011), the Agency reasonably ruled that the Volusia Wholesale List 
I analysis of Factor Two experience would not be applied to 
practitioner cases where intentional diversion allegations were 
sustained. However, insofar as the CSA requires consideration of 
``experience'' in both the List I and practitioner contexts, it is 
reasonable (and not inconsistent with existing Agency precedent) to 
apply this measure in practitioner cases where intentional diversion 
has not been established. Compare 21 U.S.C. 823(h) (List I section 
mandating consideration of ``any past experience of the applicant in 
the manufacture and distribution of chemicals,'') (emphasis added) 
with 21 U.S.C. 823(f) (practitioner section mandating consideration 
of ``[t]he applicant's experience in dispensing, or conducting 
research with respect to controlled substances.); see U.S. v. 
Tinklenberg, 131 S.Ct. 2007, 2019-20 (2011) (``Identical words used 
in different parts of a statute are presumed to have the same 
meaning absent indication to the contrary.''). In reaching this 
conclusion, the word ``past'' in 823(h) is treated in surplusage for 
the simple reason that all experience is past. See Merriam-Webster's 
Collegiate Dictionary 440 (11th ed. 2007); c.f. TMW Enterprises, 
Inc. v. Federal Ins. Co., 619 F.3d 574, 580 (6th Cir. 2010) 
(``[A]pplying the rule against surplusage is often overrated.'').
---------------------------------------------------------------------------

    Experience which occurred prior or subsequent to proven allegations 
of malfeasance may be relevant. Evidence that precedes proven 
misconduct may add support to the contention that, even

[[Page 19370]]

acknowledging the gravity of a registrant's transgressions, they are 
sufficiently isolated and/or attenuated that adverse action against his 
registration may not be compelled by public interest concerns. 
Likewise, evidence presented by the Government that the proven 
allegations are congruous with a consistent past pattern of poor 
behavior can enhance the Government's case.
    In a similar vein, conduct which occurs after proven allegations 
can shed light on whether a registrant has taken steps to reform and/or 
conform his conduct to appropriate standards. Contrariwise, a 
registrant who has persisted in incorrect behavior, or made attempts to 
circumvent Agency directives, even after being put on notice, can 
diminish the strength of his case. Novelty, Inc., 73 Fed. Reg. 52689, 
52703 (2008), aff'd, 571 F.3d 1176 (D.C. Cir. 2009); Southwood Pharm., 
Inc., 72 Fed. Reg. 36487, 36503 (2007); John J. Fotinopoulous, 72 Fed. 
Reg. 24602, 24606 (2007).
    In Jayam Krishna-Iyer, 74 Fed. Reg. at 463, DEA acknowledged the 
reality that even a significant and sustained history of uneventful 
practice under a DEA certificate can be offset by proof that a 
registrant has committed acts inconsistent with the public interest. 
Id. The Agency, in its administrative precedent, has further curtailed 
the scope of Factor Two. The Agency's current view regarding Factor Two 
is that, while evidence of a registrant's experience handling 
controlled substances may be entitled to some weight in assessing 
whether errant practices have been reformed, where the evidence of 
record raises intentional or reckless actions on the part of the 
registrant, such evidence is entitled to no weight where a practitioner 
fails to acknowledge wrongdoing in the matters before the Agency. 
Cynthia M. Cadet, M.D., 76 Fed. Reg. at 19450 n.3; Roni Dreszer, M.D., 
76 Fed. Reg. 19434 n.3 (2011); Michael J. Aruta, M.D., 76 Fed. Reg. 
19420 n.3 (2011); Jacobo Dreszer, M.D., 76 Fed. Reg. 19386-87 n.3 
(2011). Even, ``evidence that a practitioner has treated thousands of 
patients does not negate a prima facie showing that the practitioner 
has committed acts inconsistent with the public interest.'' Jayam 
Krishna-Iyer, M.D., 74 Fed. Reg. at 463.This evolution is rooted in the 
sensible logic that conduct that is never acknowledged as improper 
cannot reasonably be argued as aberrant. This is so because the actor 
in such a scenario has not isolated his past actions to be in any way 
wrong and worthy of avoidance in the future. This feature of the 
Agency's interpretation of its statutory mandate has also been 
sustained on review. Mackay, 664 F.3d at 822.
    As discussed more fully, infra, the Government's evidence that the 
Respondent improperly prescribed Demerol to replenish office stocks, as 
well as the actions he took upon being apprised of his deficiencies as 
a registrant reflect negatively and positively, respectively under 
Factor Two.
    Regarding Factor Four (compliance with laws related to controlled 
substances), to effectuate the dual goals of conquering drug abuse and 
controlling both legitimate and illegitimate traffic in controlled 
substances, ``Congress devised a closed regulatory system making it 
unlawful to manufacture, distribute, dispense, or possess any 
controlled substance except in a manner authorized by the CSA.'' 
Gonzales v. Raich, 545 U.S. 1, 13 (2005). ``Recordkeeping is one of the 
central features of the CSA's closed system of distribution. . . . . A 
registrant's accurate and diligent adherence to this obligation is 
absolutely essential to protect against the diversion of controlled 
substances.'' Satinder Dang, M.D., 76 Fed. Reg. 51424, 51429 (2011) 
(internal punctuation and citations omitted). There is no question that 
the maintenance of accurate records by registrant's is key to the DEA's 
ability to fulfill its obligations to regulate controlled substances. 
As previously held by the Agency, ``[r]ecordkeeping is one of the CSA's 
central features; a registrant's accurate and diligent adherence to 
this obligation is absolutely essential to protect against the 
diversion of controlled substances.'' Paul H. Volkman, 73 Fed. Reg. 
30630, 30633 (2008), aff'd, Volkman, 567 F.3d at 224 (DEA 
Administrator's reliance on recordkeeping violations in denying COR 
application specifically upheld). Thus, recordkeeping deficiencies may 
``provide[] reason alone to conclude (with respect to factors two and 
four) that [a registrant's] continued registration is inconsistent with 
the public interest.'' Id. (internal punctuation omitted). However, the 
Agency has also held that where non-egregious recordkeeping errors are 
acknowledged and remedied promptly, revocation may not always be 
required. Terese, Inc., d/b/a/Peach Orchard Drugs, 76 Fed. Reg. 46843, 
46848 (2011).
    In Terese, substantial evidence established that the registrant had 
failed to conduct an initial inventory as required under 21 CFR Sec.  
1304.11(b), failed to execute a power of attorney form as required by 
21 CFR Sec.  1305.05(a), and failed to include dates on DEA Forms 222, 
as required by 21 CFR Sec.  1305.13(e). In declining to revoke Terese's 
registration, the Agency, emphasizing that the registrant had accepted 
responsibility for its violations and had instituted corrective 
actions, determined that, under the circumstances, the three 
recordkeeping violations did not render its continued registration 
inconsistent with the public interest. Id. at 46848. In Ideal Pharmacy 
Care, Inc. d/b/a/Esplande Pharmacy, 76 Fed. Reg. 51415, 51416 (2011), 
an audit of the registrant's records showed a shortage of 150,000 
dosage units of hydrocodone, 83,000 dosage units of alprazolam, and 1.6 
million milliliters of promethazine with codeine. However, in contrast 
to Terese, the Agency found \91\ that Ideal Pharmacy's failure to 
maintain accurate records constituted an act which rendered its 
continued registration inconsistent with the public interest. Id. Taken 
together, Ideal and Terese indicate that, when considering 
recordkeeping violations, the Agency has coupled consideration of the 
degree of severity with an analysis of whether the registrant has both 
acknowledged culpability and demonstrated credible efforts aimed at 
correction. The current state of the Agency's precedent thus provides a 
logical framework upon which the current evidence can be evaluated.
---------------------------------------------------------------------------

    \91\ The registrant in Ideal waived its right to hearing and 
presented no evidence to the Agency on its behalf. Id.
---------------------------------------------------------------------------

    DEA regulations provide that ``[e]very registrant required to keep 
records pursuant to Sec.  1304.03 \92\ shall maintain on a current 
basis a complete and accurate record of each substance . . . imported, 
received, sold, delivered, exported, or otherwise disposed of by him/
her, except that no registrant shall be required to maintain a 
perpetual inventory.'' 21 CFR Sec.  1304.21(a). Additionally, Florida 
law requires that all persons dispensing or distributing controlled 
substances must, ``on a current basis, [maintain] a complete and 
accurate record of each substance, manufactured, received, sold, 
delivered, or otherwise disposed of by him or her.'' Fla. Stat. Sec.  
893.07(1)(b).
---------------------------------------------------------------------------

    \92\ Section 1304.03 provides that ``[e]each registrant shall 
maintain the records and inventories and shall file the reports 
required by this part, except as exempted by this section.'' 
Respondent does not contend that any of the Sec.  1304.03 exemptions 
apply in this case.
---------------------------------------------------------------------------

    In this case, factual issues related to compliance with applicable 
laws do not reflect well on the Respondent's suitability as a 
registrant. DI McRae's audit revealed shortages of Demerol and 50 mcg/
ml fentanyl accounting for approximately 75% and 100% of the 
Respondent's inventory, respectively.

[[Page 19371]]

Furthermore, the audit revealed overages of: (1) 2,371.6% of the 
Respondent's inventory of 100 mcg/ml fentanyl; (2) 100% of the 
Respondent's inventory of 10 mg/10ml Midazolam; and (3) 290.2% of 
Respondent's inventory of 2 mg/2 ml Versed. Gov't Ex. 10. The audit 
conducted by Respondent's expert likewise found significant shortages 
of Diazepam and fentanyl, but no overages.\93\ Resp't Ex. 18. While the 
dates and results of the audits conflict, it is unnecessary to resolve 
the differences because, regardless of the audit considered, it is 
clear that the Respondent's records were disturbingly inaccurate, that 
the discrepant amounts were significant, and that substantial evidence 
supports the conclusion that the Respondent violated federal law by 
failing to maintain a complete and accurate record of each substance. 
See Bill Lloyd Drug, 64 Fed. Reg. 1823, 1824 (1999) (``The shortages 
and overages revealed by the accountability audit show that Respondent 
does not keep complete and accurate records of its controlled substance 
handling as required by 21 U.S.C. 827 and 21 CFR 1304.21.''); see also 
Alexander Drug Company, Inc., 66 Fed. Reg. 18299, 18303 (2001) 
(Shortages or overages constitute violations of 21 CFR Sec.  1304.21 
and 21 U.S.C. Sec.  827.); Ellis Turk, M.D., 62 Fed. Reg. 19603, 19605 
(1997) (same). Furthermore, insofar as it is clear that the Respondent 
failed to maintain accurate records of the controlled substances 
received at his office, substantial evidence supports a conclusion that 
he violated Fla. Stat. Sec.  893.07(1)(b). These are conclusions that 
the Respondent does not resist.
---------------------------------------------------------------------------

    \93\ As explained above, the Mr. Litman's audit did not consider 
the Respondent's supplies of Midazolam.
---------------------------------------------------------------------------

    DEA regulations also require that ``[i]nventories and records of 
controlled substances listed in Schedules I and II shall be maintained 
separately from all of the records of the registrant.'' 21 CFR Sec.  
1304.04(f)(1). Florida law has also adopted the separate record 
requirement for inventories and records of Schedule I or Schedule II 
controlled substances. Fla. Stat. Sec.  893.07(4)(A). In the present 
matter, substantial evidence supports the conclusion that the 
Respondent violated the foregoing federal and state separate records 
requirements by maintaining his Schedule II records with other records 
in the peer review pharmacy book. Tr. 105-06.
    DEA regulations require that each registrant ``take a new inventory 
of all stocks of controlled substances on hand at least every two 
years.'' 21 CFR Sec.  1304.11(c). Florida law has also adopted this 
biennial record requirement. See Flat. Stat. Sec.  893.07(1)(a). The 
Government's evidence establishes that the Respondent did not conduct 
the biennial inventory as required by these federal and state 
regulations. Tr. 87.
    DEA regulations also contain a requirement that a purchaser 
desiring to obtain a supply of Schedule I or Schedule II controlled 
substances must execute three copies of a DEA Form 222. See 21 CFR 
Sec. Sec.  1304.03, 1304.13. Upon completion, two copies must be sent 
to the supplier, while one copy must be retained by the purchaser. 21 
CFR Sec.  1301. These federal regulations require that the purchaser 
retain its copy of the form in its files, and that the supplier retain 
its copies of the form in its files. Id. ``The purchaser must record on 
[its copy] of the DEA Form 222 the number of commercial or bulk 
containers furnished on each item and the dates on which the containers 
are received by the purchaser.'' 21 CFR Sec.  1305.13(e). It is a 
violation of the regulations to file an incomplete, illegible, 
improperly prepared, improperly executed, or improperly endorsed Form 
222. 21 CFR Sec.  1305.15(a)(1). Similarly, 21 CFR Sec.  1305.03, 
requires that (subject to specified exceptions not applicable here) ``a 
DEA Form 222 or its electronic equivalent . . . is required for each 
distribution of a Schedule I or II controlled substance.'' In the 
present case, the Respondent transferred Schedule II controlled 
substances from his registered address, in Miami, Florida, to a Tampa, 
Florida, PCCS office, without complying with the federal recordkeeping 
requirements of section 1305.03. Tr. 64-65, 426-27. Furthermore, it is 
undisputed that the Respondent failed to fill out at least fourteen 
Form 222s properly, insofar as he did not record the quantity of 
controlled substance shipments received, or the dates that the 
shipments arrived. Gov't Ex. 6.
    Beyond the recordkeeping violations at issue here, the Government 
has also alleged that the Respondent ``failed to properly dispose of 
controlled substances in violation of 21 CFR Sec.  1307.21(a)(1).'' 
Section 1307.21(a)(1) provides that, a person desiring to dispose of a 
controlled substance may contact the cognizant DEA Special Agent in 
Charge in order to gain authority to dispose of the substance. 
Necessarily, this language implies that a person who does not request 
assistance to dispose of a controlled substance does not have authority 
to dispose of such substance. This is a classic example of permissive 
language which ``plainly carr[ies] a restrictive meaning.'' See Forest 
Grove School Dist. v. T.A., 129 S.Ct. 2484, 2499 n. 1 (2009) (citing 
Carlisle v. U.S., 517 U.S. 416-431-32 (1996) (collecting cases)). Under 
a plain reading of the regulation, a registrant is not required to 
dispose of controlled substances, but once he or she elects to do so, 
such disposal may not be made without authorization from the specified 
DEA official. To obtain the necessary authorization, a registrant 
``shall list the controlled substance or substances which he . . . 
desires to dispose of on DEA Form 41, and submit three copies of that 
form to the Special Agent in Charge in his . . . area.'' 21 CFR Sec.  
1307.21(a)(1). Here, substantial evidence supports the conclusion that, 
on numerous occasions, the Respondent disposed of controlled substances 
without notifying the DEA. Tr. 60, 142.
    In its charging document, the Government also alleged that the 
Respondent failed to execute a power of attorney to authorize VM to 
order controlled substances on his behalf, as required by 21 CFR Sec.  
1305.05(a). ALJ Ex. 1 at 2. Section 1305.05 provides, in relevant part, 
that ``[a] registrant may authorize one or more individuals . . . to 
issue orders for Schedule I and II controlled substances on the 
registrant's behalf by executing a power of attorney for each such 
individual . . . .'' As with the disposal provisions discussed above, 
the language of section 1305.05 clearly is intended to create a 
restrictive meaning whereby a registrant may not authorize another 
person to issue orders for Schedule I or Schedule II controlled 
substances absent an authorized power of attorney. See Forest Grove 
School Dist., 129 S.Ct. at 2499 n. 1. During the hearing, DI McRae 
testified that the Respondent's practice of having a staff member fill 
out the DEA Form 222s was not a violation of the relevant regulation 
because the Respondent signed the DEA Form 222s. Tr. 184. Thus, this 
allegation stands unsupported by the evidence of record.
    The Government contends that the Respondent ``failed to provide an 
adequate system for monitoring the receipt, distribution, and 
disposition of controlled substances, in violation of 21 CFR Sec. Sec.  
1305.05(a) and 1301.71.'' Gov't Posthearing Brief, at 20; see also ALJ 
Ex. 1, at 2. As an initial matter, as discussed immediately above, DI 
McRae testified that the Respondent's ordering process was not a 
violation of the power of attorney requirements of section 1305.05. Tr. 
184. As to the allegation of a security violation, 21 CFR Sec.  1301.71 
provides, in relevant part, that ``[a]ll applicants and registrants 
shall provide effective controls and procedures to

[[Page 19372]]

guard against theft and diversion of controlled substances. In order to 
determine whether a registrant has provided effective controls against 
diversion, the Administrator shall use the security requirements set 
forth in Sec. Sec.  1301.72-1301.76 as standards for the physical 
security controls and operating procedures necessary to prevent 
diversion.'' However, 21 CFR Sec.  1301.71(b) sets forth fifteen 
factors which may be used to determine whether there is a ``need for 
strict compliance with [the] security requirements.'' Of relevance 
here, one of the section (b) factors is ``[t]he adequacy of the 
registrant's . . . system for monitoring the receipt, manufacture, 
distribution, and disposition of controlled substances in its 
operations.'' 21 CFR Sec.  1301.71(b)(14).
    While the ``security requirements'' set forth in sections 1301.72 
through 1301.76 are used as standards to determine compliance with 
section 1301.71(a), the language of each of these sections is phrased 
in mandatory terms. See e.g., 21 CFR Sec.  1301.75(a) (``Controlled 
substances listed in Schedule I shall be stored in a securely, locked, 
substantially constructed cabinet.'') (emphasis added); 21 CFR 
1301.76(a) (``The registrant shall not . . . .'') (emphasis added). 
Thus, while compliance with the security provisions is a consideration 
under 21 CFR Sec.  1301.71(a)'s inquiry into the adequacy of a 
registrant's security system, violation of any such provision will be 
an independent consideration under Factor Four. In contrast, insofar as 
the factors set forth in subsection (b) are to be used only to 
determine the ``need for strict compliance with [the] security 
requirements,'' it follows that non-compliance with any of the factors 
in subsection (b) is not a per se violation of the security 
requirements. Accordingly, the Government's contention that the 
Respondent's alleged violation of section 1301.71(b)(14) may be used to 
sustain a violation of section 1301.71(a)'s security requirements is a 
facially defective allegation ab initio.
    Finally, DEA regulations provide explicitly that ``[a] prescription 
may not be issued in order for an individual practitioner to obtain 
controlled substances for supplying the individual practitioner for the 
purpose of general dispensing to patients.'' 21 CFR Sec.  1306.04(b). 
Similarly, Florida law provides as grounds for a disciplinary action 
the act of ``[p]rescribing any medicinal drug appearing on Schedule II 
\94\ in chapter 893 by the physician for office use.'' Fla. Stat. Sec.  
458.331(1)(bb). Here, the Government's evidence establishes that on a 
single occasion, the Respondent procured Demerol through a prescription 
written in the name of an individual who was never intended as its 
recipient, in violation of federal and state law.\95\
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    \94\ Meperidine, the generic form of Demerol, is listed as a 
Schedule II drug under Chapter 893 of the Florida code. See Fla. 
Stat. Sec.  893.03(2).
    \95\ As discussed elsewhere in this recommended decision, the 
evidence of record presented by the Government simply did not 
support its espoused theory that VM was addicted to and abusing 
Demerol which was supplied by the Respondent. Agency precedent is 
clear that ``under the substantial evidence test, the evidence must 
`do more than create a suspicion of the existence of the fact to be 
established.''' Alvin Darby, M.D., 75 FR 26993, 26999, n.31 (2010) 
(citing NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 
300 (1939)).
---------------------------------------------------------------------------

    In light of the foregoing, substantial evidence of record supports 
a finding that: (1) The Respondent violated 21 CFR Sec.  1304.21(a) and 
Fla. Stat. Sec.  893.07(1)(b) by failing to keep accurate records of 
controlled substances; (2) the Respondent violated 21 CFR Sec.  
1304.04(f)(1) and Fla. Stat. Sec.  893.07(4)(A) by failing to maintain 
inventories and records of Schedule I and Schedule II controlled 
substances separately from other inventories and records; (3) the 
Respondent transferred Schedule II controlled substances from his 
registered address without complying with the recordkeeping 
requirements of section 1305.03; (4) the Respondent disposed of 
controlled substances without completing a DEA Form 41, as required by 
21 CFR Sec.  1307.21(a)(1); and (5) the Respondent violated 21 CFR 
Sec.  1306.04(b) and Fla. Stat. Sec.  458.331(1)(bb) by prescribing 
Demerol for office use, which also reflected negatively on the 
Respondent's experience in dispensing controlled substances under 
Factor Two.
    Insofar as the preceding statutes and regulations relate to 
controlled substances, this litany of violations weighs substantially 
in favor of revocation under Factor Four. See Ideal Pharmacy, 76 Fed. 
Reg. at 51416 (Severe recordkeeping violations sufficient to meet 
Government's prima facie burden). Regarding the Respondent's experience 
in dispensing controlled substances under Factor Two, the record 
establishes that, prior to the events underlying this case, the 
Respondent practiced uneventfully for more than thirty years--at least 
to the extent that his conduct did not arouse the attention of DEA or 
other regulatory authorities. Tr. 549-62. As discussed, supra, in view 
of the Respondent's election to take responsibility for his 
wrongdoings, and because there has been no intentional diversion proven 
in this case, such experience may be considered in a positive light 
under Factor Two. See supra note 98 and accompanying text. However, the 
positive value of such experience is tempered by the Respondent's 
admitted uncertainty regarding certain requirements of DEA regulations. 
See Tr. 595, 680-81 (Where the Respondent expressed uncertainty 
regarding DEA requirements); see also Volusia Wholesale, 69 Fed. Reg. 
at 69410 (Factor Two requires consideration of the Respondent's 
knowledge of DEA regulations and requirements). Furthermore, the 
evidence or record which unequivocally establishes that he issued a 
Demerol prescription to improperly replenish his office stocks reflects 
that the Respondent is an individual who simply did not make any 
serious effort to understand his important responsibilities as a 
registrant.\96\ Under these circumstances, the experience component of 
Factor Two, even assuming, arguendo, that the Respondent's many years 
of prior practice were compliant with the applicable regulations, 
weighs in favor of revocation.
---------------------------------------------------------------------------

    \96\ The act of prescribing is a form of ``dispensing'' under 
the CSA. 21 U.S.C. Sec.  802(10).
---------------------------------------------------------------------------

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

    The fifth statutory public interest factor directs consideration of 
``[s]uch other conduct which may threaten the public health and 
safety.'' 21 U.S.C. 823(f)(5) (emphasis supplied). Existing Agency 
precedent has long held that this factor encompasses ``conduct which 
creates a probable or possible threat (and not only an actual [threat]) 
to public health and safety.'' Dreszer, 76 FR at 19434 n.3; Aruta, 76 
FR at 19420 n.3; Boshers, 76 Fed. Reg. 19403 n.4; Dreszer, 76 FR at 
19386-87 n.3. Agency precedent has generally embraced the principle 
that any conduct that is properly the subject of Factor Five must have 
a nexus to controlled substances and the underlying purposes of the 
CSA. Terese, 76 FR 46848; Tony T. Bui, M.D., 75 FR 49979, 49989 (2010) 
(prescribing practices related to a non-controlled substance such as 
human growth hormone may not provide an independent basis for 
concluding that a registrant has engaged in conduct which may threaten 
public health and safety); cf., Paul Weir Battershell, N.P., 76 FR 
44359, 44368 n.27 (2011) (although

[[Page 19373]]

a registrant's non-compliance with the Food, Drug, and Cosmetic Act is 
not relevant under Factor Five, consideration of such conduct may 
properly be considered on the narrow issue of assessing a respondent's 
future compliance with the CSA).
    Similar ``catch all'' language is employed by Congress in the CSA 
related to the Agency's authorization to regulate controlled substance 
manufacturing and List I chemical distribution, but the language is by 
no means identical. 21 U.S.C. 823(d)(6), (h)(5). Under the language 
utilized by Congress in those provisions, the Agency may consider 
``such other factors as are relevant to and consistent with the public 
health and safety.'' Id. (emphasis supplied). In Holloway Distributors, 
72 FR 42118, 42126 (2007), the Agency held this catch all language to 
be broader than the language directed at practitioners under ``other 
conduct which may threaten the public health and safety'' utilized in 
21 U.S.C. 823(f)(5). In Holloway, the Administrator stated that 
regarding the List I catch all:

    [T]he Government is not required to prove that the 
[r]espondent's conduct poses a threat to public health and safety to 
obtain an adverse finding under factor five. See T. Young, 71 [Fed. 
Reg.] at 60572 n.13. Rather, the statutory text directs the 
consideration of ``such other factors as are relevant to and 
consistent with the public health and safety.'' 21 U.S.C. Sec.  
823(h)(5). This standard thus grants the Attorney General broader 
discretion than that which applies in the case of other registrants 
such as practitioners. See id. Sec.  823(f)(5) (directing 
consideration of ``[s]uch other conduct which may threaten the 
public health and safety'').

72 FR at 42126.\97\ Thus, the Agency has recognized that, while the 
fifth factor applicable to List I chemical distributors--21 U.S.C. 
823(h)(5)--encompasses all ``factors,'' the Factor Five applied to 
practitioners--21 U.S.C. Sec.  823(f)(5)--considers only ``conduct.'' 
However, because section 823(f)(5) only implicates ``such other 
conduct,'' it necessarily follows that conduct considered in Factors 
One through Four may not be considered at Factor Five.
---------------------------------------------------------------------------

    \97\ In Bui, the Agency clarified that ``an adverse finding 
under [Factor Five did not require a] showing that the relevant 
conduct actually constituted a threat to public safety.'' 75 Fed. 
Reg. 49888 n.12.
---------------------------------------------------------------------------

    In this case, the Government has not alleged any conduct which may 
be properly considered under Factor Five.\98\ Accordingly, Factor Five 
does not weigh for or against revocation.
---------------------------------------------------------------------------

    \98\ In the section of its brief dealing with Factor Five, the 
Government alleges that the ``Respondent was unaware of his 
obligations [as a registrant]'' (2) the Respondent ``exhibited 
ongoing violations of Federal law;'' and (3) the Respondent 
``admitted that he does not have a system in place to prevent the 
future of diversion [sic] of controlled substances.'' Gov't 
Posthearing Brief, at 22-23. These issues are more properly 
considered under the discussion of the Respondent's rebuttal case, 
infra. See Hassman, 75 Fed. Reg. at 8236 (``to rebut the 
Government's prima facie case, [the Respondent] is required not only 
to accept responsibility for [the established] misconduct, but also 
to demonstrate what corrective measures [have been] undertaken to 
prevent the reoccurrence of similar acts.'' ).
---------------------------------------------------------------------------

Recommendation

    Based on the foregoing, the Government has certainly established 
that the Respondent has committed acts that are inconsistent with the 
public interest. Consideration of the record evidence under the Fourth 
and Second Factors weighs in favor of revocation. On this record, the 
recordkeeping violations are alone are sufficient to establish a prima 
facie case that the Respondent has committed acts which render his 
continued registration inconsistent with the public interest. See Ideal 
Pharmacy, 76 Fed. Reg. at 51416 (Severe recordkeeping violations 
sufficient to meet Government's prima facie burden). However, this is 
not a case of only recordkeeping violations. Indeed, the record also 
establishes violations of the disposal and dispensing provisions of the 
CSA. Accordingly, a balancing of the statutory public interest factors 
as presented by the Government in its case-in-chief is sufficient to 
sustain a revocation of the Respondent's COR. Id.
    Because the Government has sustained its burden of showing that 
Respondent committed acts inconsistent with the public interest, the 
burden shifts to the Respondent to show that he can be entrusted with a 
DEA registration. As discussed above, ``to rebut the Government's prima 
facie case, [the Respondent] is required not only to accept 
responsibility for [the established] misconduct, but also to 
demonstrate what corrective measures [have been] undertaken to prevent 
the reoccurrence of similar acts.'' Jeri Hassman, M.D., 75 Fed. Reg. at 
8236; Hoxie v. DEA, 419 F.3d 477, 483 (6th Cir. 2005); Ronald Lynch, 
M.D., 75 Fed. Reg. 78745, 78749 (Respondent's attempts to minimize 
misconduct held to undermine acceptance of responsibility); George 
Mathew, M.D., 75 Fed. Reg. 66138, 66140, 66145, 66148 (2010); George C. 
Aycock, M.D., 74 Fed. Reg. 17529, 17543 (2009); Steven M. Abbadessa, 
D.O., 74 Fed. Reg. 10077, 10078 (2009); Jayam Krishna-Iyer, M.D., 74 
Fed. Reg. 459, 463 (2009); Medicine Shoppe-Jonesborough, 73 Fed. Reg. 
364, 387 (2008). This feature of the Agency's interpretation of its 
statutory mandate has been sustained on review. Mackay, 664 F.3d at 
822. Evidence that the Respondent has persisted in wrongful activity 
after being informed of a violation will weigh against a finding that 
he may be entrusted with continued registration. See Paul Weir 
Battershell, N.P., 76 Fed. Reg. 44359, 44368 (2011) (finding that 
continued violations ``raises a serious question as to whether 
Respondent can be trusted to responsibly discharge his obligations as a 
registrant.''). In contrast, prompt corrective action weighs in a 
respondent's favor. Terese, 76 Fed. Reg. at 46848.
    In this case, the preponderant credible evidence establishes that, 
after learning that his Form 222s were not completed at the time of 
receipt and were stored improperly, the Respondent assumed control of 
the receipt of drugs and created a separate folder for the Form 222s. 
Tr. 569-71, 624-27. Upon his (albeit late) estimation that controlled 
substances may have been diverted at the time of receipt at PCCS, the 
Respondent prohibited the opening of controlled substance shipments 
without his supervision. Tr. 569-71. As a further safeguard against 
diversion, the Respondent assumed exclusive control of the controlled 
substances safe and has installed procedures requiring the keeping of 
an accurate perpetual inventory. Tr. 365-68; 569-71. Violations 
regarding the creation and maintenance of biennial inventories have 
been corrected as well. Tr. 365-68. Finally, to ensure future 
compliance, the Respondent has retained a new pharmacy consultant. Tr. 
365. While it is unquestionably fair to observe that these steps amount 
to no more than a prudent registrant would be required to undertake 
without the Government enduring the expense of an administrative 
enforcement action, these proceedings are not punitive, and current 
Agency precedent places high value on acknowledgement of wrongdoing and 
establishment of measures to preclude future transgressions.
    The Government argues that, despite taking these steps, the 
Respondent has failed to rebut the Government's case because: (1) The 
``Respondent was unaware of his obligations [as a registrant]'' (2) the 
Respondent ``exhibited ongoing violations of Federal law;'' and (3) the 
Respondent ``admitted that he does not have a system in place to 
prevent the future of diversion [sic] of controlled substances.'' Gov't 
Posthearing Brief, at 22-23.
    Addressing the purported lack of controls against diversion, the 
Government contends that the

[[Page 19374]]

``Respondent specifically testified that he is not at his registered 
address when controlled substances arrive and that controlled 
substances are left unguarded at the registered location and can be 
left unsecured for up to two days due to his absence from the clinic.'' 
Gov't Posthearing Brief, at 24. Without entering a specific finding on 
the issue, it would be difficult to characterize this argument as 
anything other than a clear misstatement of the Respondent's testimony. 
The Respondent testified that, because he has prohibited employees at 
PCCS from opening shipments of controlled substances, and because he is 
not in the practice every day, it is possible that a future shipment of 
controlled substances could be left unsecured, but that he is in the 
process of divining a solution to the issue and intends to contact DI 
McRae to seek her counsel on the matter. Tr. 569-71, 675-77. The 
Respondent also testified that he felt that he could place an order for 
controlled substances so as to avoid a shipment from being delivered on 
a day that he is absent. Tr. 689. Given this testimony, and the 
specified remedial steps outlined above, the Government's contention 
that the Respondent replied at this hearing that he ``does not have a 
system in place to prevent . . . future diversion'' \99\ is simply not 
what the man said.\100\
---------------------------------------------------------------------------

    \99\ Gov't Posth'g Brf. at 23.
    \100\ C.f., Berger v. United States, 295 U.S. 78, 88 (1935) (a 
prosecutor ``may strike hard blows [but is not] at liberty to strike 
foul ones'').
---------------------------------------------------------------------------

    Turning to the alleged post-inspection violations, the record 
establishes that the Respondent disposed of approximately ten vials of 
Demerol in May of 2011 and that, despite learning of thefts of 
controlled substances which occurred as late as February or March of 
2011, the Respondent failed to notify the Miami Field Division Office 
of such thefts and to file a DEA Form 106 reporting the thefts, in 
violation of 21 C.F.R. Sec.  1301.76(b).\101\ Under the circumstances 
presented here, where the Respondent first became aware of the 
recordkeeping deficiencies in the course of an audit that was conducted 
by DI McRae, that the Respondent did not submit a report of theft to 
DEA during active enforcement proceedings, based on the litigation 
theory of his counsel that a former employee may have perpetrated 
diversion, is not evidence that persuasively militates in favor of 
revocation. While post-inspection violations can raise ``a serious 
question as to whether [the] Respondent can be trusted to responsibly 
discharge his obligations as a registrant,'' they do not compel 
revocation on their own, Battershell, N.P., 76 Fed. Reg. at 44368-69 
(declining to revoke registration despite post-inspection violations), 
and clearly do not do so in this case.
---------------------------------------------------------------------------

    \101\ 21 C.F.R. Sec.  1301.76(b) provides, in relevant part: 
``The registrant shall notify the Field Division Office of the 
Administration in his area, in writing, of the theft or significant 
loss of any controlled substances within one business day of 
discovery of such loss or theft. The registrant shall also complete, 
and submit to the Field Division Office in his area, DEA Form 106 
regarding the loss or theft.''
---------------------------------------------------------------------------

    In whole, the Respondent has expressed contrition for his 
negligence and has corrected every violation represented to him, but 
for the unlicensed disposal, which was brought to the attention of the 
DEA by the Respondent himself, and the failure to report thefts, which 
were brought to the Government's attention during this proceeding as a 
potential defense investigated and tendered by Respondent through 
counsel. While the post-inspection violations are relevant 
considerations, on this record, they are not dispositive to the public 
interest inquiry. Battershell, N.P., 76 Fed. Reg. at 44368-69. Rather, 
the record has a whole shows that the Respondent has transgressed 
profoundly in his failure to understand and execute his obligations as 
a registrant, acknowledged his failings without discernible 
reservation, made a committed and sustained effort to come into 
compliance with the requirements of the CSA, DEA, and state law, and 
has outlined a reasonable approach to maintaining that compliance. 
Thus, the Respondent has successfully demonstrated, that he can be 
entrusted with continued registration. Jeri Hassman, M.D., 75 Fed. Reg. 
at 8236. These proceedings are non-punitive,\102\ and current Agency 
precedent requires no more to lodge successful rebuttal to the 
Government's prima facie case.
---------------------------------------------------------------------------

    \102\ See Jackson, 72 Fed. Reg. at 23853; Leo R. Miller, M.D., 
53 Fed. Reg. 21931, 21932 (1988).
---------------------------------------------------------------------------

    Accordingly, the Respondent, consistent with the direction set 
forth in the OSC issued in this matter, has successfully shown cause 
why his Certificate of Registration should not be revoked, and thus, 
the Government's petition to revoke the Respondent's Registration 
should be DENIED. However, the record in this matter justifies the 
IMPOSITION OF SPECIFIED CONDITIONS ON THE RESPONDENT'S REGISTRATION, to 
wit: (1) the Respondent must comply with all regulatory obligations 
relative to the prescribing, dispensing, storage, and handling of 
controlled substances under his COR; (2) the Respondent, at his own 
expense, shall submit regular reports at sixty-day intervals (or such 
other interval as directed by DEA) to a designated DEA official, from 
an independent pharmacy contractor, pre-approved by a designated DEA 
official, reflecting monthly regulatory compliance inspections; and (3) 
within thirty days of the issuance a final Agency order in this case, 
the Respondent will execute a document memorializing an irrevocable 
consent for any and all agents of DEA to inspect any and all records 
related to the handling and prescribing of controlled substances for a 
period of one year. The Respondent is placed on notice that the failure 
on his part to timely and correctly submit all documentation required 
by these conditions, and to comply scrupulously with all requirements 
set forth in these enumerated conditions, will constitute an 
independent basis for administrative enforcement proceedings.

    Dated: March 1, 2012.
John J. Mulrooney, II,
Chief Administrative Law Judge.
[FR Doc. 2014-07806 Filed 4-7-14; 8:45 am]
BILLING CODE 4410-09-P