[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Notices]
[Pages 61678-61681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26047]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 18-32]


Narciso A. Reyes, M.D.; Decision and Order

    On April 19, 2018, the Assistant Administrator, Diversion Control 
Division, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Narciso A. Reyes, M.D. 
(hereinafter, Respondent), of Luquillo, Puerto Rico. Order to Show 
Cause (hereinafter, OSC), at 1. The Show Cause Order proposes the 
revocation of Respondent's DEA Certificate of Registration on the 
grounds that he materially falsified applications he submitted to DEA 
and that he has been excluded from participation in a program pursuant 
to 42 U.S.C. 1320a-7(a). Id. (citing 21 U.S.C. 824(a)(1) and (5)). It 
also proposes the denial of ``any applications for renewal or 
modification of such registration and any applications for any other 
DEA registration.'' OSC, at 1 (citing 21 U.S.C. 824(a)(1) and (5)).
    Regarding jurisdiction, the Show Cause Order alleges that 
Respondent holds DEA Certificate of Registration No. FR4900305 at the 
registered address of Calle Fernandez Garcia 306, Luquillo, Puerto Rico 
00773, with a mailing address of P.O. Box 247, Luquillo, PR 00773. OSC, 
at 2. This registration, the OSC alleges, authorizes Respondent to 
dispense controlled substances in schedules II through V as a 
practitioner. Id. The Show Cause Order alleges that this registration 
expires on April 30, 2020. Id.
    Regarding the substantive grounds for the proceeding, the Show 
Cause Order alleges that, on October 20, 2009, the U.S. Department of 
Health and Human Services, Office of Inspector General (hereinafter, 
HHS/OIG), mandatorily excluded Respondent from participating in all 
Federal health care programs due to his conviction in U.S. District 
Court for conspiracy to commit health care fraud. Id. at 2 (citing 42 
U.S.C. 1320a-7(a)(1)). According to the OSC, Respondent's ``mandatory 
exclusion from Medicare, Medicaid and all Federal health care programs 
warrants revocation of . . . [his] registration.'' OSC, at 2 (citing 21 
U.S.C. 824(a)(5)).
    The Show Cause Order further alleges that Respondent provided false 
answers to two ``yes'' or ``no'' liability questions when he applied 
for a DEA registration on October 16, 2014 and when he filed a renewal 
application on April 17, 2017. OSC, at 2-3. Specifically, the Show

[[Page 61679]]

Cause Order alleges that Respondent twice answered that he had never 
been excluded from participation in a Medicare or state health care 
program when, in fact, he had been. Id. at 2-3. The Show Cause Order 
also alleges that Respondent twice answered that he had never 
surrendered (for cause) a Federal controlled substance registration 
when, in fact, he had. Id. at 3. According to the OSC, Respondent's 
answers to these liability questions are ``material falsifications'' 
that warrant revocation of his registration. Id.
    The Show Cause Order notifies Respondent of his right to request a 
hearing on the allegations or to submit a written statement while 
waiving his right to a hearing, the procedures for electing each 
option, and the consequences for failing to elect either option. Id. at 
3-4 (citing 21 CFR 1301.43). The Show Cause Order also notifies 
Respondent of the opportunity to submit a corrective action plan. OSC, 
at 4-5 (citing 21 U.S.C. 824(c)(2)(C)).
    Respondent timely requested a hearing on May 21, 2018.\1\ Hearing 
Request, at 1. In his Hearing Request, Respondent states that, ``It was 
not my intention to fail to declare a material fact in the request for 
renewal . . . . I do not master the English language well and this may 
have contributed to these errors.'' Id. He also states in his Hearing 
Request that, ``My inclusion of the word N in the renewal request was 
in my estimate to indicate that it did not apply since I had reached an 
agreement with the US Attorney's Office in Puerto Rico. Clearly my 
mistake.'' Id.
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    \1\ Attached to the Government's Notice of Service of Order to 
Show Cause is a DEA-12 (Receipt for Cash or Other Items) that, 
according to the Government's allegations, Respondent executed when 
the Government served the OSC on April 23, 2018. Respondent did 
challenge the Government's service-related allegations. Thus, I find 
that Respondent's Hearing Request was timely since it was filed 
within 30 days of service of the OSC. 21 CFR 1301.43(a).
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    The Office of Administrative Law Judges (hereinafter, OALJ) put the 
matter on the docket and assigned it to Administrative Law Judge 
Charles Wm. Dorman (hereinafter, ALJ). I adopt the following statement 
of procedural history from the ALJ's Order Granting the Government's 
Motion for Summary Disposition and Recommended Rulings, Findings of 
Fact, Conclusions of Law, and Decision dated June 22, 2018 
(hereinafter, R.D.).

    On May 31, 2018, the Government filed a Motion for Summary 
Disposition (``Government's Motion''). The Government's Motion 
argued that there is no issue of material fact in this case to 
warrant an adversarial hearing. The Government's Motion further 
requested that I summarily dispose of this matter without a hearing 
and recommend to the Acting Administrator that . . . [Respondent's] 
DEA registration be revoked. On the same day, I issued an Order 
affording . . . [Respondent] the opportunity to respond to the 
Government's Motion by June 14, 2018. I explained that if . . . 
[Respondent] disagreed with any of the Government's statements of 
undisputed material facts as outlined in its motion for summary 
disposition, he should provide copies of documentary evidence 
refuting the Government's statement(s). I further directed . . . 
[Respondent] to identify the material fact(s) which justify an 
evidentiary hearing in this case. . . . [Respondent] failed to 
respond to the Government's Motion by the deadline on June 14, 2018.
    On June 15, 2018, the day after . . . [Respondent's] Response 
was due, chambers staff emailed . . . [Respondent's] counsel 
notifying him that the OALJ had not received a response from him and 
asking whether he intended to submit a late filing. . . . 
[Respondent's] counsel replied by email on June 17, 2018, with the 
following statement: ``There are no allegations on behalf of . . . 
[Respondent]. The documents are self [e]xplanatory.''
    Then, on June 21, 2018, the OALJ received a filing from . . . 
[Respondent's] counsel titled ``Statement of Narciso A. Reyes, 
M.D.'' The filing states that . . . [Respondent] ``will not make any 
statement regarding this administrative action'' and that ``[t]he 
issue is hereby submitted for final ruling.''

R.D., at 2-3, 7.
    The ALJ correctly concluded that Respondent's choice not to refute, 
challenge, or even address any of the Government's reliable and 
probative evidence and legal arguments ``strongly indicates that he no 
longer wishes to proceed to hearing.'' Id. at 10. After analyzing the 
Government's evidence and legal argument, the ALJ granted the 
Government's Motion for Summary Disposition and recommended that I 
revoke Respondent's registration and deny any pending applications for 
renewal or modification. Id. at 10, 18.
    By letter dated July 16, 2018, the ALJ certified and transmitted 
the record to me for final Agency action. In that letter, the ALJ 
advised that neither party filed exceptions and that the time period to 
do so had expired.
    I issue this Decision and Order based on the entire record before 
me. 21 CFR 1301.43(e). I make the following findings of fact.

Findings of Fact

Respondent's Criminal Conviction and Ensuing Mandatory Exclusion

    On November 3, 2008, Respondent pled guilty in Federal District 
Court to one count of conspiracy to commit health care fraud. 
Government's Motion, GE-2 (Plea Agreement, United States v. Reyes 
Carrillo, No. 08-cr-168 (D. P.R. Nov. 3, 2008)), at 1. According to the 
facts submitted by the Assistant United States Attorney and explicitly 
adopted by Respondent, Respondent signed blank or previously completed 
false Certificates of Medical Necessity for durable medical equipment 
for Medicare beneficiaries whom he had never seen. Id. at 9. The 
Federal District Judge entered judgment against Respondent on March 13, 
2009. Government's Motion, GE-3 (Judgment, United States v. Reyes 
Carrillo, No. 08-cr-168-03 (D. P.R. March 13, 2009)), at 1.
    Based on Respondent's conviction for conspiracy to commit health 
care fraud, the HHS/OIG notified Respondent of his mandatory exclusion 
from participation in any capacity in Medicare, Medicaid, and all 
Federal health care programs for the minimum statutory period of five 
years effective October 20, 2009. Government's Motion, GE-4 (HHS/OIG 
Exclusion Letter), at 1 (citing 42 U.S.C. 1320a-7(a)); Government's 
Motion, GE-5 (HHS/OIG Exclusions Search Results: Verify), at 1. The 
HHS/OIG Exclusion Letter advised Respondent that reinstatement of 
eligibility to participate in these programs is not automatic. 
Government's Motion, GE-4, at 2. Respondent is still excluded from 
participation in these programs. Government's Motion, GE-5, at 1.

Respondent's DEA Registration History and Current Registration Status

    On January 31, 2013, Respondent voluntarily surrendered for cause 
DEA registration No. BR3465944. Government's Motion, GE-8 (Respondent's 
DEA-104 Voluntary Surrender of Controlled Substances Privileges), at 1; 
Government's Motion, GE-9 (Certification of Registration History), at 
1. Neither the DEA-104 nor any other evidence in the record explains 
the context of this voluntary surrender. DEA retired registration No. 
BR3465944 on February 4, 2013. Government's Motion, GE-9, at 1.
    On October 16, 2014, Respondent submitted an application for a new 
DEA registration. Government's Motion, GE-10 (Respondent's DEA Form 224 
submitted on October 16, 2014), at 1. The application Respondent 
completed includes ``yes'' or ``no'' liability questions that an 
applicant must answer to advance to the next page of the online DEA 
application. Government's Motion, GE-l (Certification of Registration 
Status), at 2; Government's Motion, GE-10, at 1.
    The first liability question that Respondent answered on his online 
DEA application for a registration asks: ``Has the applicant ever been 
convicted

[[Page 61680]]

of a crime in connection with controlled substance(s) under state or 
federal law, or been excluded or directed to be excluded from 
participation in a medicare or state health care program, or [is] any 
such action pending?'' Government's Motion, GE-1, at 2; Government's 
Motion, GE-10, at 1. Respondent answered ``no'' to this question. 
Government's Motion, GE-1, at 2; Government's Motion, GE-10, at 1. The 
HHS/OIG Exclusion letter makes it clear that Respondent knew or should 
have known that his ``no'' response to this question was false. 
Government's Motion, GE-4, at 1-2.
    The second liability question that Respondent answered on his 
online DEA application for a registration asks: ``Has the applicant 
ever surrendered (for cause) or had a federal controlled substance 
registration revoked, suspended, restricted or denied, or is any such 
action pending?'' Government's Motion, GE-l, at 2; Government's Motion, 
GE-10, at 1. Respondent answered ``no'' to this question. Government's 
Motion, GE-1, at 2; Government's Motion, GE-10, at 1. The DEA-104 
Voluntary Surrender of Controlled Substances Privileges form that 
Respondent signed, however, makes it clear that Respondent knew or 
should have known that his ``no'' response to this question was false. 
Government's Motion, GE-8, at 1.
    DEA approved Respondent's application and, on October 17, 2014, 
assigned DEA Certificate of Registration No. FR4900305 to him. 
Government's Motion, GE-1, at 1.
    On April 17, 2017, Respondent submitted an online DEA renewal 
application for his DEA registration No. FR4900305. Government's 
Motion, GE-1, at 1; Government's Motion, GE-11 (Respondent's DEA Form 
224A submitted on April 17, 2017), at 1. The online DEA renewal 
application Respondent submitted includes ``yes'' or ``no'' liability 
questions that an applicant must answer to advance to the next page of 
the online DEA renewal application. Government's Motion, GE-l, at 1; 
Government's Motion, GE-11, at 1.
    The first liability question that Respondent answered on his online 
DEA renewal application asks: ``Has the applicant ever been convicted 
of a crime in connection with controlled substance(s) under state or 
federal law, or been excluded or directed to be excluded from 
participation in a medicare or state health care program, or [is] any 
such action pending?'' Government's Motion, GE-1, at 1; Government's 
Motion, GE-11, at 1. Respondent answered ``no'' to this question. 
Government's Motion, GE-1, at 1; Government's Motion, GE-11, at 1. 
Again, the HHS/OIG Exclusion letter makes it clear that Respondent knew 
or should have known that his ``no'' response to this question was 
false. Government's Motion, GE-4, at 1-2.
    The second liability question that Respondent answered on his 
online DEA renewal application asks: ``Has the applicant ever 
surrendered (for cause) or had a federal controlled substance 
registration revoked, suspended, restricted or denied, or is any such 
action pending?'' Government's Motion, GE-l, at 1; Government's Motion, 
GE-11, at 1. Respondent answered ``no'' to this question. Government's 
Motion, GE-1, at 1; Government's Motion, GE-11, at 1. Again, the DEA-
104 Voluntary Surrender of Controlled Substances Privileges form that 
Respondent signed makes it clear that Respondent knew or should have 
known that his ``no'' response to this question was false. Government's 
Motion, GE-8, at 1.
    DEA approved Respondent's renewal application on April 19, 2017. 
Government's Motion, GE-1, at 1.
    In sum, Respondent is currently registered as a practitioner in 
schedules II through V under DEA Certificate of Registration FR4900305 
at Calle Fernandez Garcia 306, Luquillo, Puerto Rico 00773. 
Government's Motion, GE-1, at 1. Respondent's registration expires on 
April 30, 2020. Id.

Discussion

The Material Falsification Allegation

    Pursuant to 21 U.S.C. 824(a)(1), the Attorney General may suspend 
or revoke a registration issued under section 823 of Title 21, ``upon a 
finding that the registrant . . . has materially falsified any 
application filed pursuant to or required by this subchapter.'' 
According to Agency precedent, the Government must show that a 
respondent ``knew or should have known'' that his response to a 
liability question was false. Samuel S. Jackson, D.D.S., 72 FR 23,848, 
23,852 (2007). Also according to Agency precedent, a respondent's claim 
that he misunderstood a liability question is not a defense. Alvin 
Darby, M.D., 75 FR 26,993, 26,999 (2010).
    According to the Supreme Court, Federal courts' ``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, 701-02 (D.C. Cir. 1956) (other citation omitted)). The 
Court explicitly addressed what 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.'' Kungys, 
supra, 485 U.S. at 771 (emphasis in original). Instead, the Court 
articulated the specific test as ``whether the misrepresentation or 
concealment was predictably capable of affecting, i.e., had a natural 
tendency to affect, the official decision.'' Id.
    As already discussed, when Respondent submitted an online DEA 
application for a registration and an online DEA renewal application, 
he answered ``no'' to whether he had ever been excluded from 
participation in Medicare and to whether he had ever surrendered a 
registration for cause. As I already found above, Respondent's four 
answers were false and he ``knew or should have known'' that they were 
false.
    I next determine the ``materiality'' of Respondent's four answers. 
21 U.S.C. 824(a)(1). Concerning Respondent's false statements about his 
voluntary surrender of DEA registration No. BR3465944, the DEA-104 that 
Respondent executed does not indicate the underlying reason(s) for 
Respondent's ``alleged failure to comply with the Federal requirements 
pertaining to controlled substances.'' Government's Motion, GE-8, at 1. 
Further, as the ALJ noted, the DEA-104 reveals nothing about whether 
Respondent's ``alleged failure'' ``had a natural tendency to affect'' 
an Agency decision. R.D., at 13-14 (quoting Michel P. Toret, M.D., 82 
FR 60,041, 60,043 (2017) quoting Kungys, supra, 485 U.S. at 771). I 
found no evidence in the record concerning the materiality of 
Respondent's two false answers about his voluntary surrender. Thus, I 
agree with the ALJ that the record does not support a finding that 
Respondent's two false answers about his voluntary surrender of 
registration No. BR3465944 were ``materially'' false. 21 U.S.C. 
824(a)(1).
    Concerning Respondent's false statements regarding his mandatory 
exclusion, the Agency has never before considered the materiality of a 
respondent's false answers about his mandatory exclusion as that 
question is posed in this case. I find the ALJ's analysis persuasive: 
``Considering that exclusion from a federal health care program under 
42 U.S.C. 1320a-7(a) is an independent basis for revoking [a]

[[Page 61681]]

registration . . ., it is reasonable to conclude that information 
regarding an applicant's mandatory exclusion by HHS would be `capable 
of influencing the [DEA's] decision.' '' R.D., at 13 (citations 
omitted). I agree with the ALJ. I find that Respondent's failure to 
disclose his mandatory exclusion from a Federal health care program is 
material. Id. Thus, I find that there is substantial evidence in the 
record that Respondent materially falsified a DEA registration 
application and a DEA registration renewal application concerning his 
mandatory exclusion. 21 U.S.C. 824(a)(1).

The Allegation of Mandatory Exclusion From a Federal Health Care 
Program

    Pursuant to 21 U.S.C. 824(a)(5), the Attorney General may suspend 
or revoke a registration issued under section 823 of Title 21, ``upon a 
finding that the registrant . . . has been excluded . . . from 
participation in a program pursuant to section 1320a-7(a) of Title 
42.'' Agency precedent makes clear that revocation under 21 U.S.C. 
824(a)(5) may be appropriate regardless of whether or not the 
misconduct that led to the mandatory exclusion involved controlled 
substances. KK Pharmacy, 64 FR 49,507, 49,510 (1999) (collecting cases) 
(The Agency ``has previously held that misconduct which does not 
involve controlled substances may constitute grounds, under 21 U.S.C. 
824(a)(5), for the revocation of a DEA Certificate of Registration.''); 
Melvin N. Seglin, M.D., 63 FR 70,431, 70,433 (1998) (``[M]isconduct 
which does not involve controlled substances may constitute grounds for 
the revocation of a DEA registration pursuant to 21 U.S.C. 
824(a)(5).''); Stanley Dubin, D.D.S., 61 FR 60,727, 60,728 (1996) 
(Registration revoked and pending applications for renewal denied when 
registrant's ``actions cast substantial doubt on . . . [his] 
integrity.''); George D. Osafo, M.D., 58 FR 37,508, 37,509 (1993) 
(Submission of fraudulent medical claims and larceny convictions 
indicated that registrant ``placed monetary gain above the welfare of 
his patients, and in so doing, endangered the public health and 
safety.'').
    Under 42 U.S.C. 1320a-7(a)(1), the HHS OIG is required to exclude 
from participation in any Federal health care program any individual 
who has been convicted of a criminal offense ``related to the delivery 
of an item or service under . . . [42 U.S.C. 1395 et seq.] or under any 
State health care program.'' Based on the uncontroverted evidence in 
the record, as already discussed, I found that Respondent has been 
excluded from participation in any capacity in Medicare, Medicaid, and 
all Federal health care programs and that Respondent is still excluded 
from participation in these programs. Accordingly, I find that the 
evidence in the record satisfies the Government's prima facie burden to 
support the revocation of Respondent's registration under 21 U.S.C. 
824(a)(5).

Sanction

    Where, as here, the Government has met its prima facie burden, the 
burden shifts to Respondent to show why he can be entrusted with a 
registration. Respondent, however, did not submit evidence for the 
record. Instead, he stated that the documents are self-explanatory, 
that he ``will not make any statement regarding this administrative 
action,'' and that ``[t]he issue is hereby submitted for final 
ruling.'' R.D., at 7. Thus, the question now is whether revocation is 
the appropriate sanction under the facts I have found: Two separate 
violations whose statutory sanctions include revocation. 21 U.S.C. 
824(a)(1) and (5).
    I agree with the ALJ's analysis and conclude that revocation is 
independently the appropriate sanction for each of the separate 
violations the facts support. In particular, I agree with the ALJ's 
analysis that, even though the underlying misconduct which led to 
Respondent's conviction and mandatory exclusion did not involve 
controlled substances, it did involve the unlawful use of Respondent's 
prescribing authority. R.D., at 17. As the ALJ stated, ``This type of 
fraudulent behavior does not inspire confidence that . . . [Respondent] 
can be trusted with a prescription pad bearing a DEA registration 
number.'' Id. After all, if Respondent signed blank certificates of 
medical necessity for durable medical equipment that was not medically 
necessary, ``it is doubtful that DEA can expect . . . [Respondent] to 
honestly prescribe controlled substances for only legitimate medical 
purposes.'' Id.
    Further, Respondent materially falsified two DEA applications. One 
such falsification, alone, is sufficient, without proof of any other 
misconduct, to revoke a registration. Toret, supra, 82 FR at 60,043. As 
the ALJ stated, ``[N]ot only has the Government proven two independent 
bases for revoking . . . [Respondent's] registration . . ., but . . . 
[Respondent] has not advanced any evidence that he `can be trusted to 
responsibly discharge his obligations as a registrant.' '' R.D., at 17-
18 (citation omitted).
    Accordingly, based on the evidence in the record supporting two 
independent bases for revocation, I shall order that Respondent's DEA 
registration be revoked and that any pending application of Respondent 
to renew or to modify that registration be denied.

Order

    Pursuant to 28 CFR 0.100(b) and the authority thus vested in me by 
21 U.S.C. 824(a), I order that DEA Certificate of Registration No. 
FR4900305 issued to Narciso A. Reyes, M.D., be, and it hereby is, 
revoked. Pursuant to 28 CFR 0.100(b) and the authority thus vested in 
me by 21 U.S.C. 823(f), I further order that any pending application of 
Narciso A. Reyes, M.D., to renew or to modify this registration, be, 
and it hereby is, denied. This Order is effective December 31, 2018.

    Dated: November 19, 2018.
 Uttam Dhillon,
Acting Administrator.
[FR Doc. 2018-26047 Filed 11-29-18; 8:45 am]
 BILLING CODE 4410-09-P