[Federal Register Volume 80, Number 159 (Tuesday, August 18, 2015)]
[Notices]
[Pages 50035-50041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20353]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Arthur H. Bell, D.O.; Decision and Order

    On July 15, 2014, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration, issued an Order to 
Show Cause to Arthur H. Bell, D.O. (Respondent), of Covington, 
Kentucky. GX 1, at 1. The Show Cause Order proposed the denial of 
Respondent's application for a DEA Certificate of Registration as a 
practitioner on multiple grounds, including that he had materially 
falsified his application for a registration, as well as that he had 
committed acts which render his registration inconsistent with the 
public interest. Id. at 1-2 (citing 21 U.S.C. 823(f) and 824(a)(1)).
    As for the material falsification allegation, the Show Cause Order 
alleged that on November 9, 2011, Respondent had voluntarily 
surrendered his previous DEA Registration. Id. The Order then alleged 
that on March 14, 2013, Respondent applied for a new DEA registration, 
but materially falsified the application when he ``answered `no' to 
question which asked, `[h]as the Respondent ever surrendered (for 
cause) or had a federal controlled substance registration revoked, 
suspended, restricted or denied, or is any such action pending?''' Id.
    As for the allegations that Respondent had committed acts which 
render his registration inconsistent with the public interest, the Show 
Cause Order alleged that Respondent violated federal law by issuing 
controlled substance prescriptions when he ``no longer possessed a DEA 
registration.'' Id. at 2 (citing 21 CFR 1306.03(a)). More specifically, 
the Order alleged that on May 5, 2012, Respondent had issued a 
prescription for 60 tablets of Lyrica 75 mg, a schedule V controlled 
substance, and on September 12, 2012, Respondent had issued a 
prescription for Zutripro 120 ml, a schedule III controlled substance. 
Id.
    The Show Cause Order also alleged that from July 11, 2011 through 
November 4, 2011, Respondent ``dispensed controlled substances on 
behalf of Care Plus Medical Group (CPMG), a purported pain management 
clinic formerly located in Creve Coeur, Missouri, [which] was owned by 
Scott Whitney.'' Id. The Order alleged that prior to beginning his 
employment with CPMG, Respondent arranged with Whitney to order 
schedule II controlled substances under his previous registration and 
that ``[t]o that end, . . . Whitney sent 20 DEA 222 forms to 
[Respondent's] residence, and asked that [he] pre-sign them so that 
controlled substances could be ordered on behalf of CPMG.'' Id. The 
Order then alleged that Respondent ``pre-signed the forms, dated them . 
. . and mailed them to . . . Whitney . . . [who] then used one . . . to 
place orders for oxycodone 30 mg and oxycodone 10/325 mg.'' Id. The 
Order alleged that this violated federal law because it ``authoriz[ed] 
. . . Whitney to place an order for controlled substances under 
[Respondent's] previous . . . registration without executing a power of 
attorney for . . . Whitney.'' Id. (citing 21 CFR 1303.05(a)).
    Next, the Show Cause Order alleged that on October 28, 2013, 
Respondent falsified his application for his Ohio medical license, when 
he failed to disclose that he had previously surrendered his DEA 
registration. Id. at 1-2. The Order further alleged that this ``conduct 
evidences a lack of candor to Ohio licensing authorities.'' Id. (citing 
21 U.S.C. 823(f)(5)).
    Finally, the Show Cause Order notified Respondent of his right to 
request a hearing on the allegations or to submit a written statement 
in lieu of a hearing, the procedure for electing either option, and the 
consequence of failing to elect either option. Id. at 2-3 (citing 21 
CFR 1301.43). The Government also included with the Order a sample 
Request for Hearing form. Id. at 4.

[[Page 50036]]

    The Government represents that on July 21, 2014, the Show Cause 
Order was served on Respondent by certified mail, and there is no 
dispute that service occurred, as on August 8, 2014, the Hearing Clerk, 
Office of Administrative Law Judges, received a letter from Respondent. 
Request for Final Agency Action, at 3; see also GX 10. In the letter, 
Respondent responded to each of the Government's allegations. GX 10, at 
1-2. Respondent did not, however, request a hearing.
    Based on Respondent's letter, I find that he had waived his right 
to a hearing on the allegations. 21 CFR 1301.43(c). However, pursuant 
to 21 CFR 1301.43(c), I deem Respondent's letter to be his ``written 
statement [of] position on the matters of fact and law involved'' in 
the proceeding.
    Thereafter, on December 12, 2014, the Government submitted its 
Request for Final Agency Action along with the Investigative Record. 
Having reviewed the Government's evidence as well as Respondent's 
Statement of Position, I make the following findings of fact.

Findings

Respondent's Registration and Licensing Status

    Respondent previously held DEA Certificate of Registration 
BB6473538, pursuant to which he was authorized to dispense controlled 
substances in schedules II-V as a practitioner, at Care Plus Medical 
Group (CPMG) in Creve Coeur, Missouri. GX 3. According to a DEA 
Diversion Investigator (DI), following an investigation into CPMG by 
DEA, Respondent voluntarily surrendered his registration on November 9, 
2011, and on the form manifesting the surrender, Respondent 
acknowledged that he was surrendering his registration ``[i]n view of 
my alleged failure to comply with the Federal requirements pertaining 
to controlled substances.'' GX 5, at 1; GX 11, at 3. The next day, 
Respondent's registration was retired by the Agency. GX 2, at 2.
    On January 12, 2012, Respondent applied for a new registration. GX 
12, at 2. However, on March 5, 2012, following an interview with DEA 
Investigators regarding his activities at CPMG, Respondent withdrew 
this application. Id. at 2-3.
    On March 14, 2013, Respondent submitted a new application, seeking 
authority to dispense controlled substances in schedules II through V, 
at the registered location of Hometown Urgent Care, 4387 Winston Ave, 
Covington, KY. GX 7, at 1. It is this application which is at issue in 
this proceeding.
    On the application, Respondent was required to answer four 
questions, including number two, which asked: ``Has the Respondent ever 
surrendered (for cause) or had a federal controlled substance 
registration revoked, suspended, restricted or denied, or is any such 
action pending?'' Id. at 2. Respondent answered ``N'' for no. Id.
    Respondent also holds valid medical licenses in Ohio and Kentucky. 
These licenses expire on July 1, 2017 and February 29, 2016, 
respectively.\1\
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    \1\ The Government provided copies of online license searches 
which show that Respondent is licensed as an osteopathic physician 
in Ohio and Kentucky.
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The Investigation of Respondent

    According to a DI, Respondent was previously employed at CPMG from 
July 11, 2011 through November 4, 2011. GX 11, at 3 (Declaration of 
Diversion Investigator). CPMG was owned by Scott Whitney, and 
Respondent was the clinic's sole physician. Id. at 2.
    In August 2011, another DI received an anonymous tip alleging that 
CPMG was diverting controlled substances. Id. The tipster alleged that 
individuals could walk into the clinic without an appointment, could 
consult with a doctor in exchange for $250 in cash, that CPMG did not 
accept insurance, and that CPMG ``had an in-house pharmacy.'' Id. 
Subsequently, the DI determined that Mr. Whitney ``had prior ownership 
interests in other pain clinics in the State of Florida'' that had 
``dispensed oxycodone'' but had ``since closed.'' Id.
    On November 9, 2011, the DI interviewed Respondent. Id. at 3. 
Respondent told the DI that at some point prior to starting at CPMG, 
Whitney had requested that Respondent pre-sign DEA-222 Forms, which are 
required to order schedule II drugs such as oxycodone, see 21 U.S.C. 
828(a), ``as a way to start the business.'' Id. Whitney mailed 
approximately twenty DEA-222 forms to Respondent, who signed them and 
mailed them back to Whitney. Id.
    According to the DI, Whitney used at least one of the pre-signed 
order forms to place orders for 2,000 du of oxycodone 30 mg and 1,000 
oxycodone 10/325 mg from State Pharmaceuticals, Inc. on June 29, 2011. 
Id., see also GX 4. The DI also found that Respondent ``authorized [] 
Whitney to place an order for controlled substances under his DEA . . . 
registration without executing a power of attorney for him,'' a 
violation of 21 CFR 1305.05(a). Id.
    After the conclusion of the interview, the DI asked Respondent if 
he would voluntarily surrender his DEA registration. Id. at 3. 
Respondent agreed to do so, and executed a Voluntary Surrender Form. 
Id.; see also GX 5.
    On January 11, 2013, Respondent submitted an application for 
renewal of his Ohio medical license. GX 6, at 1. The application 
included a question which asked: ``Have you surrendered, consented to 
limitation of, or to suspension, reprimand or probation concerning, a 
license to practice any healthcare profession or state or federal 
privileges to prescribe controlled substances in any jurisdiction other 
than Ohio?'' Id. at 3. Respondent answered ``NO.'' Id.
    As noted above, on March 14, 2013, Respondent applied for a new 
registration. Thereafter, on May 22, 2013, a DI queried the Ohio 
Automated Rx Reporting System (OARRS), using Respondent's previously 
surrendered DEA registration (BB6473538). GX 12, at 3. The OARRS report 
showed that Respondent had issued two controlled substance 
prescriptions after he surrendered his registration: 1) on May 5, 2012, 
for 60 tablets of Lyrica 75 mg (a schedule V controlled substance) on 
May 5, 2012; and 2) on September 12, 2012, for Zutripro 120 ml (a 
schedule III cough syrup containing hydrocodone). Id. at 3-4.
    The DI then obtained copies of both prescriptions. Id. at 4. The 
first prescription, which is dated May 5, 2012, was for 60 capsules of 
Lyrica 75 mg, and was printed on a prescription form for Urgent Care of 
Fairfield, including its street address. GX 8. The prescription 
includes a handwritten signature of ``Art Bell DO'' above ``Art Bell 
DO,'' which is printed below the signature line. Id. However, no DEA 
number appears on the prescription. Id.
    The second prescription, which is dated September 12, 2012, was for 
``Bromfed DM 2mg-30mg-10mg/5ml Syrup,'' a non-controlled drug, and was 
also on a printed form bearing the name of Urgent Care of Fairfield and 
its address. GX 9. However, the drug name is lined-out and the word 
``Zutripro'' is handwritten above it. Id. Zutipro is a schedule III 
controlled substance which contains hydrocodone. As with the previous 
prescription, the signature line contains a handwritten signature of 
``Art Bell DO,'' with ``Art Bell DO'' printed below the signature line. 
Id. Also written on the prescription is the notation: ``per Katie 
Allen.'' Again, no DEA number appears on the prescription.\2\ Id. 
According to the DI, on the dates that each prescription was issued, 
Respondent was working at

[[Page 50037]]

Urgent Care of Fairfield in Hamilton, Ohio. GX 12, at 4.
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    \2\ GX 8 and GX 9 also include copies of the dispensing labels 
for each prescription.
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Respondent's Statement of Position

    In his response to the Order to Show Cause, Respondent stated that 
he re-applied for a DEA registration on March 14, 2013, ``not as a 
physician seeking authorization to handle controlled substances in 
Schedules II through V at a proposed registered address of 4387 Winston 
Avenue, Covington, Kentucky [] but to satisfy insurance company 
requirements.'' GX 10, at 1 (emphasis in original). He asserted that 
``many medical facilities require that their physicians have a DEA 
registration, and that ``I hardly ever wrote for any controlled 
substances prior to my employment with Care Plus Medical Group.'' Id.
    Regarding the allegation that he materially falsified his DEA 
application when he provided a ``no'' answer to question two, 
Respondent asserted that he provided the answer because ``I voluntarily 
surrendered my registration.'' Id. (emphasis in original.) He then 
maintained that ``the DEA agent advised me to do so stating that it 
most likely would be returned to me within 2-4 weeks. Since I 
voluntarily surrendered the registration and no one mentioned (for 
cause), I answered the question ``no.'' Id. (emphasis in original). 
Respondent added that he ``misunderstood and was completely unaware 
that by voluntarily surrendering one's DEA registration equals 
voluntarily surrendering (for cause).'' Id. (emphasis in original). He 
further stated that ``semantics may have played a part in the confusion 
of this situation. Please know that the thought never crossed my mind 
to commit a fraudulent act. I apologize for the confusion.'' Id.\3\
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    \3\ As for the false answer he provided on the application for 
his Ohio license, Applicant stated that ``the renewal of my 
application for an Ohio license was an oversight'' and that he had 
re-applied for renewal of his Kentucky and Missouri licenses and 
stated on both ``that I had voluntarily surrendered my DEA 
registration.'' GX 10, at 2. He wrote that ``I mistakenly thought I 
had checked the box that said I had voluntarily surrendered my DEA 
registration. . . . Therefore, I checked the box asking `if anything 
had changed since my last renewal?' `no'. [sic] I did not intend to 
deceive anyone. It was an honest mistake for which I apologize.'' 
Id.
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    As for the two prescriptions, Respondent denied having issued them. 
More specifically, he stated: ``As for the two prescriptions that I 
allegedly wrote for Lyrica 75 mg and Zutripro 120ml. I know nothing 
about this.'' Id. He then questioned whether there ``was a possibility 
that a substitute was given by the nurse without my approval because 
insurance would not cover the non-narcotic prescription that I had 
originally written?'' Id. He then added that ``I suppose anything is 
possible in this circumstance, but rest assured, that I have not 
written any prescriptions for controlled substances since the 
surrendering of my DEA registration on November 9, 2011.'' Id.
    Respondent did admit that he pre-signed 20 DEA-222 forms and that 
he sent the forms to Whitney and failed to execute a power of attorney 
authorizing Whitney to order the drugs. However, he then contended that 
the allegation \4\ that he ``arranged with Mr. Whitney to order 
Schedule II controlled substances under [his] previous DEA 
registration'' was not a correct statement, because ``Mr. Whitney 
arranged this with me--I did not know how to order controlled 
substances.'' Id. Continuing, Respondent wrote: ``[a]gain, that action 
was pure naivet[eacute] and ignorance of the law on my part'' and 
``saying I'm sorry does not even begin to express my remorse . . . 
[n]or does it alleviate the feelings of stupidity for my actions 
because of the poor judgment that I used on that day.'' Id.
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    \4\ This statement appears as an allegation in the Order to Show 
Cause. See GX 1, at 2.
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    Respondent concluded his letter by stating that he ``did not 
knowingly tell lies, nor . . . intentionally try to deceive anyone.'' 
Id. He expressed the hope that his letter ``conveys [his] remorse'' and 
stated that he ``would also like to be able to retire in a few years 
with my good name intact and above reproach.'' Id.

Discussion

    Section 303(f) of the Controlled Substances Act provides that an 
application for a practitioner's registration may be denied upon a 
determination ``that the issuance of such registration would be 
inconsistent with the public interest.'' 21 U.S.C. 823(f). In making 
the public interest determination, the CSA requires the consideration 
of the following factors:
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The Applicant's experience in dispensing . . . controlled 
substances.
    (3) The Applicant's conviction record under Federal or State laws 
relating to the manufacture, distribution, or dispensing of controlled 
substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.

Id.
    ``These factors are . . . considered in the disjunctive.'' Robert 
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or 
a combination of factors, and may give each factor the weight [I] 
deem[] appropriate in determining whether . . . an application for 
registration [should be] denied.'' Id. Moreover, while I am required to 
consider each of the factors, I ``need not make explicit findings as to 
each one.'' MacKay v. DEA, 664 F.3d 808, 816 (10th Cir. 2011) (quoting 
Volkman, 567 F.3d 215, 222 (6th Cir. 2009) (quoting Hoxie, 419 F.3d 
477, 482 (6th Cir. 2005))).
    ``In short, this 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; what matters is the seriousness of the registrant's 
misconduct.'' Jayam Krishna-Iyer, 74 FR 459, 462 (2009).
    Also, pursuant to section 304(a)(1), the Attorney General is 
authorized to suspend or revoke a registration ``upon a finding that 
the registrant . . . has materially falsified any application filed 
pursuant to or required by this subchapter.'' 21 U.S.C. 824(a)(1). It 
is well established that the various grounds for revocation or 
suspension of an existing registration that Congress enumerated in 
section 304(a), 21 U.S.C. 824(a), are also properly considered in 
deciding whether to grant or deny an application under section 303. See 
The Lawsons, Inc., 72 FR 74334, 74337 (2007); Anthony D. Funches, 64 FR 
14267, 14268 (1999); Alan R. Schankman, 63 FR 45260 (1998); Kuen H. 
Chen, 58 FR 65401, 65402 (1993).
    Thus, the allegation that Respondent materially falsified his 
application is properly considered in this proceeding. See Samuel S. 
Jackson, 72 FR 23848, 23852 (2007). Moreover, just as materially 
falsifying an application provides a basis for revoking an existing 
registration without proof of any other misconduct, see 21 U.S.C. 
824(a)(1), it also provides an independent and adequate ground for 
denying an application. The Lawsons, 72 FR at 74338; cf. Bobby Watts, 
M.D., 58 FR 46995 (1993).
    The Government has ``[t]he burden of proving that the requirements 
for . . . registration . . . are not satisfied.'' 21 CFR 1301.44(d). 
Having considered all of the public interest factors, as well as the 
separate allegation that Respondent materially falsified his 
application for a DEA registration, I conclude that the Government has 
established a prima facie case to deny his application. While I have 
considered Respondent's

[[Page 50038]]

Statement of Position, I do not find his expressions of remorse 
persuasive and hold that he has not produced sufficient evidence to 
refute the Government's prima facie case. Accordingly, I will order 
that his application be denied.

Material Falsification

    As found above, on March 4, 2013, Respondent applied for a new 
registration and answered ``N'' or no to the question: ``[h]as the 
applicant ever surrendered (for cause) or had a federal controlled 
substance registration revoked, suspended, restricted or denied, or is 
any such action pending?'' Respondent's answer was false because on 
November 9, 2011, he voluntarily surrendered his DEA registration 
following an interview with a DEA Investigator regarding his activities 
at CPMG, during which he admitted to signing schedule II order forms 
while failing to execute a power of attorney as required under DEA's 
regulation. He then provided those forms to CPMG's owner, thereby by 
allowing the latter to order 2,000 du of oxycodone 30 and 1,000 du of 
oxycodone 10/325.
    This was a violation of DEA regulations and federal law. See 21 
U.S.C. 842(a)(5) (``It shall be unlawful for any person . . . to refuse 
or negligently fail to make, keep, or furnish any record, report, 
notification, declaration, order or order form, statement, invoice, or 
information required under this subchapter.''); 21 CFR 1305.04(a) 
(``Only persons who are registered with DEA under section 303 of the 
Act . . . to handle Schedule I or II controlled substances . . . may 
obtain and use DEA From 222 . . . for these substances.''); id. Sec.  
1305.05(a) (``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. . . .'').
    Respondent nonetheless asserts that he misunderstood the question. 
He claims that because he ``voluntarily surrendered'' his 
registration'' and ``no one mentioned (for cause),'' he did not believe 
that he had surrendered his registration ``for cause.'' However, the 
circumstances surrounding the interview during which he surrendered his 
registration, coupled with the language of the voluntary surrender form 
on which Respondent acknowledged that he was surrendering his 
registration ``[i]n view of my alleged failure to comply with the 
Federal requirements pertaining to controlled substances'' GX 5, at 1, 
are sufficient to support the conclusion that Respondent surrendered 
his registration ``for cause.''
    I also conclude that Respondent's answer was materially false. As 
the Supreme Court has explained, ``[t]he most common formulation'' of 
the concept of materiality ``is that a concealment or misrepresentation 
is material if it `has a natural tendency to influence, or was capable 
of influencing, the decision of' the decisionmaking body to which it 
was addressed.'' Kungys v. United States, 485 U.S. 759, 770 (1988) 
(quoting Weinstock v. United States, 231 F.2d 699, 701 (D.C. Cir. 
1956)) (other citation omitted); see also United States v. Wells, 519 
U.S. 482, 489 (1997) (quoting Kungys, 485 U.S. at 770).
    ``[I]t has never been the test of materiality that the 
misrepresentation or concealment would more likely than not have 
produced an erroneous decision, or even that it would more likely than 
not have triggered an investigation, but rather, whether the 
misrepresentation or concealment was predictably capable of affecting, 
i.e., had a natural tendency to affect, the official decision.'' 
Kungys, 485 U.S. at 771. While the evidence must be ``clear, 
unequivocal, and convincing,'' the ``ultimate finding of materiality 
turns on an interpretation of the substantive law.'' Id. at 772 (int. 
quotations and citations omitted).
    Notwithstanding that the Agency did not grant his application, 
Respondent's false answer to question two was clearly ``capable of 
affecting'' the decision of whether to grant his application because he 
surrendered his registration in response to allegations that he 
violated DEA regulations, and under the public interest standard, the 
Agency is required to consider the Applicant's ``[c]ompliance with 
applicable State, Federal, or local laws relating to controlled 
substances.'' 21 U.S.C. 823(f)(4). Accordingly, I conclude that 
Respondent materially falsified his March 2013 application for 
registration.
    In his statement, Respondent contends that ``semantics may have 
played a part in the confusion of this situation. Please know that the 
thought never crossed my mind to commit a fraudulent act. I apologize 
for the confusion.'' GX 10, at 1.
    Respondent's explanation is not persuasive. Here, the evidence also 
shows that when Respondent applied for his Ohio medical license, the 
State's application contained the following question: ``Have you 
surrendered, consented to limitation of, or to suspension, reprimand or 
probation concerning . . . state or federal privileges to prescribe 
controlled substances in any jurisdiction other than Ohio?'' GX 6, at 
3. Respondent, however, answered ``NO.'' Id. Notably, in contrast to 
the question on the DEA application, the Ohio question did not ask 
whether he surrendered ``for cause'' and thus presented no issue of--in 
Respondent's view--semantics. Further, Respondent does not claim that 
he was confused by the question.\5\ Id. Yet Respondent still provided a 
false answer to the Ohio question. Thus, I reject his claim of 
confusion and conclude that his false answer on the Ohio application is 
probative of his intent in answering the DEA question and that his 
intent was fraudulent. Cf. Fed. R. Evid. R. 404(b)(2).
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    \5\ Rather, Respondent asserts that his answer on the Ohio 
medical license application ``was an oversight,'' that he 
``mistakenly thought I had checked the box that said I had 
voluntarily surrendered my DEA registration,'' and that ``I checked 
the box asking `if anything had changed since my last renewal?' 
`no.' '' GX 10, at 2. However, Respondent filed his Ohio medical 
license application on January 11, 2013, and according to the Web 
site of the State Medical Board, ``Doctors of Osteopathic Medicine 
[DOs] are required to renew their licenses biennially in order to 
maintain an active certificate to practice.'' See http://www.med.ohio.gov/RenewalCME/DoctorofOstepathicMedicine(DO).aspx.
     As found above, Respondent surrendered his DEA registration on 
November 9, 2011, and given that his Ohio license was good for two 
years, I conclude that his previous Ohio application was filed 
before he surrendered his DEA registration. Thus, at the time he 
filed his Ohio medical license application, something ``had changed 
since [his] last renewal.'' GX 10, at 2. Moreover, the Ohio 
application clearly instructed: ``Please review all information you 
have provided. Click on the `Review' button to change any 
information given. . . .'' GX 6, at 2. The form also included the 
following statements: ``I understand that submitting a false, 
fraudulent, or forged statement or document or omitting a material 
fact in obtaining licensure may be grounds for disciplinary action 
against my license'' and ``Under penalty of law, I hereby swear or 
affirm that the information I have provided in the application is 
complete and correct, and that I have complied with all criteria for 
applying on line.'' Id. at 6.
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    This conclusion finds further support in the circumstances 
surrounding the March 5, 2012 interview, which resulted in his 
withdrawal of the January 5, 2012 application. While the Government did 
not submit any evidence as to whether Respondent truthfully answered 
Question Two on this application, a DEA Investigator provided a sworn 
statement that on March 5, 2012, he interviewed Respondent regarding 
his activities at CPMG.\6\ See GX 12, at 2. According to the DI, ``[a]t 
the conclusion of the interview, DEA investigators informed 
[Respondent's] legal counsel that [he] could face criminal charges 
based on his previous handling of controlled substances on behalf of 
CPMG.'' Id. at 2-3. Thereafter,

[[Page 50039]]

Respondent consulted with his attorney and decided to withdraw his 
application. Id. at 3. Given that the March 5, 2012 interview involved 
the same matters as had been discussed at the time Respondent 
surrendered his registration and that he had been threatened with 
criminal prosecution, Respondent cannot credibly argue that, at the 
time he submitted the March 2013 application, he remained confused as 
to whether he had previously surrendered the registration ``for 
cause.''
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    \6\ Agency records, of which I take official notice, see 21 CFR 
1316.59(e), show that Applicant also answered ``No'' to Liability 
Question Two on his January 2012 application. There is, however, no 
evidence that his response was specifically addressed by the 
investigating DI at the time.
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    I therefore conclude that substantial evidence supports findings 
that Respondent materially falsified his application for March 2013 
application for registration when he failed to disclose that he had 
surrendered his DEA registration ``for cause,'' and that he did so 
intentionally. See GX 10, GX 12 at 2-3. I further conclude that these 
findings support the denial of Respondent's application.

The Public Interest Analysis

    The Government also argues that Respondent's application should be 
denied on the separate ground that his registration is ``inconsistent 
with the public interest.'' 21 U.S.C. 823(f). More specifically, the 
Government argues that factors two (experience in dispensing), four 
(compliance with applicable laws related to controlled substances) and 
five (other conduct which may threaten public health and safety), 
support the denial of his application.\7\ Government's Request for 
Final Agency Action, at 10.
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    \7\ I acknowledge that Applicant remains licensed in Kentucky, 
the State in which he seeks registration, and therefore, he meets 
the CSA's prerequisite for holding a practitioner's registration in 
that State. See 21 U.S.C. 823(f) (``The Attorney General shall 
register practitioners . . . to dispense . . . controlled substances 
. . . if the applicant is authorized to dispense . . . controlled 
substances under the laws of the State in which he practices.''); 
see also id. Sec.  802(21) (``The term `practitioner' means a 
physician . . . or other persons licensed, registered, or otherwise 
permitted, by the United States or the jurisdiction in which he 
practices . . . to distribute, dispense, . . . [or] administer . . . 
a controlled substance.'').
     However, the possession of state authority ``is not dispositive 
of the public interest inquiry.'' George Mathew, 75 FR 66138, 66145 
(2010), pet. for rev. denied, Mathew v. DEA, 472 Fed. Appx. 453 (9th 
Cir. 2012); see also Patrick W. Stodola, 74 FR 20727, 20730 n.16 
(2009). As the Agency has long held, ``the Controlled Substances Act 
requires that the Administrator . . . make an independent 
determination [from that made by state officials] as to whether the 
granting of controlled substance privileges would be in the public 
interest.'' Mortimer Levin, 57 FR 8680, 8681 (1992). Accordingly, 
this factor is not dispositive either for, or against, the granting 
of Respondent's application. Paul Weir Battershell, 76 FR 44359, 
44366 (2011) (citing Edmund Chein, 72 FR 6580, 6590 (2007), pet. for 
rev. denied, Chein v. DEA, 533 F.3d 828 (D.C. Cir. 2008)).
     As for factor three, there is no evidence that Applicant has 
been convicted of an offense ``relating to the manufacture, 
distribution or dispensing of controlled substances.'' 21 U.S.C. 
823(f)(3). However, there are a number of reasons why even a person 
who has engaged in misconduct may never have been convicted of an 
offense under this factor, let alone prosecuted for one. Dewey C. 
MacKay, 75 FR 49956, 49973 (2010), pet. for rev. denied MacKay v. 
DEA, 664 F.3d 808 (10th Cir. 2011). The Agency has therefore held 
that ``the absence of such a conviction is of considerably less 
consequence in the public interest inquiry'' and is therefore not 
dispositive. Id.
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    With regard to factors two and four, the Government alleges that 
Respondent issued two controlled-substance prescriptions after he 
surrendered his registration. In his written statement, Respondent 
denies any knowledge of both prescriptions, and posits ``that a 
substitute was given by a nurse without [his] approval because 
insurance would not cover the non-narcotic prescription that [he] had 
originally written?'' GX 10, at 2.
    Having reviewed the signatures on the prescriptions with the other 
documents in the record which indisputably contain Respondent's 
signature (i.e., his written statement of position, the voluntary 
surrender form, and the DEA Form 222), I conclude that Respondent 
signed both prescriptions. See United States v. Clifford, 704 F.2d 86, 
90 n.5 (3d Cir. 1983) (``[A] jury can compare a known handwriting 
sample with another sample to determine if the handwriting in the 
latter sample is genuine. The jury can make that comparison without the 
benefit of expert witnesses.'') (citations omitted); see also 28 U.S.C. 
1731 (``The admitted or proved handwriting of any person shall be 
admissible, for purposes of comparison, to determine genuineness of 
other handwriting attributed to such person.'').
    Notwithstanding that Respondent did not include a DEA number on the 
prescription, I find that Respondent unlawfully issued the May 5, 2012 
prescription for Lyrica. See 21 U.S.C. 841(a)(1) (``Except as 
authorized by this subchapter, it shall be unlawful for any person 
knowingly or intentionally . . . to . . . dispense . . . a controlled 
substance.''); id. Sec.  822(a)(2) (Every person who dispenses . . . 
shall obtain from the Attorney General a registration issued in 
accordance with the rules and regulations promulgated by him.''); 21 
CFR 1306.03(a)(2) (``A prescription for a controlled substance may be 
issued only by an individual practitioner who is . . . [e]ither 
registered or exempted from registration. . . .''); Cf. id. Sec.  
843(a)(2) (``It shall be unlawful for any person knowing or 
intentionally . . . to use in the course of the . . . dispensing of a 
controlled substance . . . a registration number which is fictitious, 
revoked, suspended, [or] expired. . . .'').
    However, I do not find the evidence sufficient to sustain the 
allegation as to the September 12, 2012 prescription. As the evidence 
shows, the prescription was originally issued for Bromfed DM (a non-
narcotic), but was then changed to Zutripro, a schedule III controlled 
substance, and bears the handwritten notation ``per Katie Allen.'' The 
Government offered no further evidence regarding the circumstances 
surrounding the change in the prescription. It did not explain who Ms. 
Katie Allen is and where she was working on September 12, 2012. Nor did 
it offer any evidence that it interviewed the pharmacist who filled the 
prescription, the patient, or Ms. Allen.
    As found above, Respondent also admitted that he pre-signed twenty 
schedule II order forms and that he mailed them to Whitney, so that 
Whitney could order controlled substances for his pain clinic and 
``start the business,'' which Whitney then used to order oxycodone. 
Respondent violated federal law and Agency regulations because while he 
clearly authorized Whitney to order the drugs, he failed to execute a 
power of attorney for him. See 21 U.S.C. 842(a)(5); 21 CFR 1305.04(a); 
id. Sec.  1305.05(a).\8\
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    \8\ Of further note, Whitney could not have obtained the order 
forms without Respondent having provided him with his DEA 
Registration number, which is pre-printed on the forms when issued 
by DEA. See GX 4; see also 21 CFR 1305.04(a). However, the Agency 
has repeatedly held that a registrant is strictly liable for any 
misconduct engaged in by a person to whom a registrant entrusts his 
registration. See Satinder Dang, 76 FR 51424, 51429 (2011); Rosemary 
Jacinta Lewis, 72 FR 4035, 4041 (2007). The evidence offered by the 
Government as to whether Whitney and Respondent were diverting 
controlled substances at CPMG does not, however, create more than a 
suspicion.
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    Respondent admitted to these violations. GX 10, at 2. However, he 
then stated that he ``did not know how to order controlled substances'' 
and that ``that action was pure naivet[eacute] and ignorance of the law 
on my part.'' \9\ GX 10, at 2. This is not a particularly persuasive 
explanation for one who seeks a DEA registration.
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    \9\ It is well settled that ``ignorance of the law or a mistake 
of law is no defense.'' Cheek v. United States, 498 U.S. 192, 199 
(1991). Moreover, the principle ``applies whether the law be a 
statute or a duly promulgated and published regulation.'' United 
States v. International Minerals & Chemical Corp., 402 U.S. 558, 563 
(1971).
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    I therefore conclude that the evidence with respect to factors two 
and four supports the conclusion that issuing Respondent a new 
registration ``would be inconsistent with the public interest.'' 21 
U.S.C. 823(f).

[[Page 50040]]

Factor Five

    The Government further argues that Respondent committed actionable 
misconduct under factor five when he failed to disclose the surrender 
of his DEA registration on his application to the Ohio Medical Board. 
Request for Final Agency Action, at 11. In support of its contention, 
the Government cites David A. Hoxie, M.D., 69 FR 51477, 51478 (2004), 
for the proposition that providing false answers on a state 
professional license application ``demonstrate[s] questionable 
candor.'' Id. (citing Bernard C. Musselman, M.D., 64 FR 55965 (1999)). 
It also cites Leonard E. Reeves, III, 63 FR 44471, 44784 (1998), which 
ordered a stayed revocation of the physician's DEA registration 
relying, in part, on a state board's denial of the physician's 
application for a medical license based on the physician's ``total lack 
of truthful, accurate and complete answers on his written application 
for licensure.'' \10\
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    \10\ The physician was not, however, registered in the State 
which found that he had submitted a false application for a second 
medical license.
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    Undoubtedly, providing a materially false answer to a question on a 
state medical license application is probative evidence of whether a 
registrant or applicant demonstrates ``questionable candor.'' However, 
here, in contrast to Reeves, there has been no adjudication by the 
State of Ohio and Respondent retains a valid osteopathic license in 
that State. Thus, the question remains as to whether this Agency should 
be adjudicating this allegation in the first instance, especially 
where, as here, Respondent is neither registered in Ohio nor seeks 
registration in that State.
    To be sure, Hoxie went beyond Reeves by holding that the 
physician's falsifications of his medical license applications were 
actionable under factor five even in the absence of a state board 
finding. Hoxie, however, preceded the Supreme Court's decision in 
Gonzales v. Oregon, 546 U.S. 243 (2006). Therein, the Supreme Court 
explained that the CSA ``manifests no intent to regulate the practice 
of medicine generally'' and that ``[t]he structure and operation of the 
CSA presume and rely upon a functioning medical profession regulated 
under the States' police powers.'' Id. at 270.
    While the Government contends that Respondent's false statement on 
his Ohio medical license application can be considered as a separate 
act of actionable misconduct under factor five, it offers no 
explanation as to why it is consistent with Gonzales, that DEA, rather 
than the Ohio Medical Board, should be the first body to adjudicate the 
issue. Nor does the Government offer any explanation as to why the Ohio 
Board is incapable of enforcing its own laws. Finally, the Government 
does not even cite the applicable provision of Ohio law, let alone 
explain whether there is a materiality requirement under Ohio law, and 
if so, what the standard is under Ohio law.
    While the Government's position would be stronger if Respondent was 
registered in Ohio--on the theory that the falsification of his state 
application resulted in the State granting him the osteopathic license 
necessary to obtain his DEA registration,\11\ see 21 U.S.C. 823(f)--
Respondent is neither registered, nor seeking registration, in Ohio. 
Thus, in the absence of a state board finding, I decline to follow 
Hoxie and do not consider Respondent's falsification of his Ohio 
application other than for the limited purpose of evaluating his claim 
that he was confused by the wording on his DEA application.\12\
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    \11\ It seems unlikely that a physician would falsify his state 
medical license application but then truthfully disclose a sanction 
against his federal registration on his DEA application.
    \12\ Notably, Hoxie does not cite Reeves, but rather Musselman, 
as authority for the proposition. See 69 FR at 51479. While 
Musselman discusses the factual findings of a state board proceeding 
which was based, in part, on an allegation that the physician had 
falsified a state license application, the state board did not find 
the allegation proved, and in discussing factor five, the Agency's 
decision discusses only the physician's falsification of his DEA 
application. See 64 FR at 55967. Thus, Musselman clearly does not 
support Hoxie.
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Summary of the Government's Prima Facie Case

    As found above, Respondent intentionally and materially falsified 
his March 14, 2013 application for a DEA registration. This finding 
alone provides an adequate basis to deny his application. 21 U.S.C. 
824(a)(1) and 843(a)(4)(A).
    The evidence also shows that Respondent violated DEA regulations 
when he provided schedule II order forms to Mr. Whitney, CPMG's owner, 
and authorized him to order oxycodone without having executed a power 
of attorney as required by 21 CFR 1305.05(a). Finally, the evidence 
also shows that Respondent issued a prescription for Lyrica, a schedule 
V controlled substance, when he was no longer registered, and thus 
violated 21 U.S.C. 841(a)(1) and 822(a)(2). I therefore find that the 
Government's evidence under factors two and four is sufficient to 
conclude that the Government has met its prima facie burden on the 
issue of whether the issuance of a registration ``would be inconsistent 
with the public interest.'' 21 U.S.C. 823(f).

Sanction

    Where, as here, the Government has established grounds to deny an 
application, Respondent must then ``present[] sufficient mitigating 
evidence'' to show why he can be entrusted with a new registration. 
Samuel S. Jackson, 72 FR 23848, 23853 (2007) (quoting Leo R. Miller, 53 
FR 21931, 21932 (1988)). ```Moreover, because `past performance is the 
best predictor of future performance,' ALRA Labs, Inc. v. DEA, 54 F.3d 
450, 452 (7th Cir. 1995), [DEA] has repeatedly held that where [an 
applicant] has committed acts inconsistent with the public interest, 
the [applicant] must accept responsibility for [his] actions and 
demonstrate that [he] will not engage in future misconduct.'' Jayam 
Krishna-Iyer, 74 FR 459, 463 (2009) (citing Medicine Shoppe, 73 FR 364, 
387 (2008)); see also Jackson, 72 FR at 23853; John H. Kennedy, 71 FR 
35705, 35709 (2006); Cuong Tron Tran, 63 FR 64280, 64283 (1998); Prince 
George Daniels, 60 FR 62884, 62887 (1995).\13\
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    \13\ This rule also applies to other grounds that support the 
denial of an application, such as where the Government has proven 
that an applicant materially falsified his application. See Jackson, 
72 FR, at 23853.
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    While an applicant must accept responsibility for his misconduct 
and demonstrate that he will not engage in future misconduct in order 
to establish that its registration is consistent with the public 
interest, DEA has repeatedly held that these are not the only factors 
that are relevant in determining the appropriate sanction. See, e.g., 
Joseph Gaudio, 74 FR 10083, 10094 (2009); Southwood Pharmaceuticals, 
Inc., 72 FR 36487, 36504 (2007). Obviously, the egregiousness and 
extent of a registrant's misconduct are significant factors in 
determining the appropriate sanction. See Jacobo Dreszer, 76 FR 19386, 
19387-88 (2011) (explaining that a respondent can ``argue that even 
though the Government has made out a prima facie case, his conduct was 
not so egregious as to warrant revocation''); Paul H. Volkman, 73 FR 
30630, 30644 (2008); see also Paul Weir Battershell, 76 FR 44359, 44369 
(2010) (imposing six-month suspension, noting that the evidence was not 
limited to security and recordkeeping violations found at first 
inspection and ``manifested a disturbing pattern of indifference on the 
part of [r]espondent to his obligations as a registrant''); Gregory D. 
Owens, 74 FR 36751, 36757 n.22 (2009). So too, the Agency can consider 
the need to deter similar acts, both with respect to the

[[Page 50041]]

respondent in a particular case and the community of registrants. See 
Gaudio, 74 FR at 10095 (quoting Southwood, 71 FR at 36503). Cf. 
McCarthy v. SEC, 406 F.3d 179, 188-89 (2d Cir. 2005) (upholding SEC's 
express adoption of ``deterrence, both specific and general, as a 
component in analyzing the remedial efficacy of sanctions'').
    Having reviewed Respondent's Statement of Position, I conclude that 
he has failed to produce sufficient evidence to show why he should be 
entrusted with a new registration. His acceptance of responsibility is 
equivocal at best, as while he appears to acknowledge his wrongdoing 
with respect to his having provided the Schedule II order forms to Mr. 
Whitney, his explanation for why he materially falsified his DEA 
application is clearly disingenuous. So too, is his assertion that he 
``did not knowingly tell lies, nor . . . intentionally try to deceive 
anyone.'' Because Respondent committed intentional misconduct when he 
materially falsified his application, I find his misconduct to be 
egregious.\14\ Accordingly, his failure to accept responsibility for 
this misconduct is reason alone to conclude that he cannot be entrusted 
with a new registration.\15\ Moreover, the Agency has a manifest 
interest in deterring misconduct on the part of others who may 
contemplate materially falsifying their applications for registration. 
Accordingly, I conclude that denial of his application is necessary to 
protect the public interest.
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    \14\ Having found that Respondent's material falsification of 
his application is egregious and that he has not accepted 
responsibility for the violation, I need not decide whether the 
other proven violations are sufficiently egregious to support the 
denial of the application.
    \15\ As to the violation in authorizing Whitney to order 
schedule II drugs, Respondent stated that this was the result of 
``pure naivet[eacute] and ignorance of the law on my part.'' 
However, Respondent has offered no evidence of remedial actions he 
has taken to demonstrate that he is now familiar with the laws and 
regulations applicable to the lawful dispensing of controlled 
substances.
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Order

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

    Dated: August 10, 2015.
Chuck Rosenberg,
Acting Administrator.
[FR Doc. 2015-20353 Filed 8-17-15; 8:45 am]
 BILLING CODE 4410-09-P