[Federal Register Volume 84, Number 173 (Friday, September 6, 2019)]
[Notices]
[Pages 46968-46974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19305]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Jeffrey Stein, M.D.; Decision and Order

    On February 26, 2019, the Assistant Administrator, Diversion 
Control Division, Drug Enforcement Administration (hereinafter, 
Government), issued an Order to Show Cause (hereinafter, OSC) to 
Jeffrey Stein, M.D. (hereinafter, Respondent) of New York, NY. OSC, at 
1. The OSC proposed the revocation of Respondent's Certificate of 
Registration No. FS6587868 on the ground that Respondent was 
``mandatorily excluded . . . from participation in Medicare, Medicaid, 
and all Federal health care programs for a minimum period of ten years 
pursuant to 42 U.S.C. 1320a-7(a)''; and that such exclusion ``warrants 
revocation of [Respondent's] registration pursuant to 21 U.S.C. 
824(a)(5).'' Id. at 2.
    Specifically, the OSC alleged that, on July 31, 2015, the United 
States District Court for the Southern District of New York 
(hereinafter, SDNY) issued a judgment against Respondent ``based on 
[Respondent's] guilty plea to `Corruptly Endeavoring to Obstruct and 
Impede the Due Administration of the Internal Revenue Laws' in 
violation of 26 U.S.C. 7212(a) and `Tax Evasion' in violation of 26 
U.S.C. 7201. U.S. v. Jeffrey S. Stein, No. 1:15CR00195-01(DLC) 
(S.D.N.Y. filed July 31, 2015).'' OSC, at 2. The OSC further alleged 
that ``based on [such] conviction, the U.S. Department of Health and 
Human Services, Office of Inspector General (``HHS/OIG''), by letter 
dated December 29, 2017, mandatorily excluded [Respondent] from 
participation in Medicare, Medicaid, and all Federal health care 
programs for a minimum period of ten years pursuant to 42 U.S.C. 1320a-
7(a), effective January 18, 2018.'' Id.
    The OSC notified Respondent of the right to request a hearing on 
the allegations or to submit a written statement while waiving the 
right to a hearing, the procedures for electing each option, and the 
consequences for failing to elect either option. Id. (citing 21 CFR 
1301.43). The OSC also notified Respondent of the opportunity to submit 
a corrective action plan. Id. at 3 (citing 21 U.S.C. 824(c)(2)(C)).
    The record includes a Form DEA-12 (8-02) ``Receipt for Cash or 
Other Items,'' dated February 28, 2019, which indicates that the OSC 
was provided to Respondent and the form is signed by ``Jeffrey Stein.'' 
Request for Final Agency Action (hereinafter, RFAA) Ex. 6.
    By letter dated March 21, 2019, Respondent submitted a written 
statement (hereinafter, Respondent Statement) in response to the OSC, 
in which he ``waive[d] a hearing and submit[ted a] written statement 
regarding [his] position on the matters of fact and law involved in 
this matter.'' RFAA Ex. 7 (Respondent Statement), at 1.
    On May 31, 2019, the Government submitted an RFAA, in which it 
argued, among other things, that ``Section 824(a)(5) should be read as 
requiring revocation of a respondent's DEA certificate of registration, 
upon an adequate showing of the factual predicate, at least for the 
duration of the mandatory exclusion.'' RFAA, at 4.
    I issue this Decision and Order based on the record and brief 
submitted by the Government in the RFAA and the Respondent Statement, 
which constitute the entire record before me. 21 CFR 1301.43(e).

Findings of Fact

Respondent's DEA Registration

    Respondent is the holder of DEA Certificate of Registration No. 
FS6587868 at the registered address of 1385 York Avenue, Suite 3B, New 
York, NY 10021-3911. RFAA Ex. 1 (Certificate

[[Page 46969]]

of Registration History), at 1. Pursuant to this registration, 
Respondent is authorized to dispense controlled substances in schedules 
II through V as a practitioner. Id. Respondent's registration expires 
on February 29, 2020, and currently is ``in an active pending status.'' 
Id.

Respondent's Exclusion

    The evidence in the record demonstrates that judgment was entered 
following a guilty plea on July 31, 2015, in the SDNY by Respondent for 
`` `Corruptly Endeavoring to Obstruct and Impede the Due Administration 
of the Internal Revenue Laws' in violation of 26 U.S.C. 7212(a) and 
`Tax Evasion' in violation of 26 U.S.C. 7210. U.S. v. Jeffrey Stein, 
No. 1:15CR00195-01(DLC) (S.D.N.Y. filed July 31, 2015).'' RFAA, at 3; 
see also RFAA Ex. 4 (Judgment). Respondent pled guilty to both counts 
of criminal violations of the Internal Revenue Code listed in the 
Information. RFAA Ex. 4, at 1. The first count alleged that Respondent 
and his wife ``provided various false and fictitious information to 
[his] Accountant in order to fraudulently reduce the amount of taxes 
they would have to pay to the IRS.'' RFAA Ex. 3 (Information), at 4. 
Further, after notification by the Internal Revenue Service 
(hereinafter, IRS) of an audit, Respondent and his wife, ``created and 
provided to the Accountant various fabricated and fictitious documents 
and information as part of a corrupt effort to convince the IRS Auditor 
that the expenses claimed . . . were legitimate.'' Id. at 7. The 
Information additionally alleged that Respondent, ``[u]sing the names 
of four disabled military veterans (including two former patients) 
whose identities he obtained as a result of his work for the V.A., . . 
. created bogus invoices in the names of those veterans.'' Id.
    By letter dated December 29, 2017, the HHS OIG notified Respondent 
of his exclusion from Medicare, Medicaid, and all federal health care 
programs under 42 U.S.C. 1320a-7(a) for a minimum period of ten years 
based on Respondent's felony convictions in SDNY. RFAA Ex. 5 
(hereinafter, Exclusion Letter), at 1. The Exclusion Letter stated that 
the exclusion would become effective twenty days from the date of the 
letter, or January 18, 2018,\1\ and notified Respondent of his appeal 
rights. Id. at 1-2.
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    \1\ The date of exclusion is 20 days from the date of the 
letter. RFAA Ex. 5, at 1.
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    Respondent admits to the guilty plea and to the HHS exclusion; 
however, he asserts that he appealed and that an HHS Administrative Law 
Judge sustained the exclusion, but reduced the period of exclusion to 
eight years ``based on the I.G. having issued an amended exclusion 
letter removing 42 CFR 1001.102(b)(9) as an aggravating factor and 
adjusting the term of exclusion from ten to eight years.'' Respondent 
Statement, at 2.
    Respondent included the HHS Administrative Law Judge's decision 
citation in his written statement. Id. at 2. The ALJ issued an opinion 
on August 3, 2018, upholding Respondent's exclusion and reducing it.\2\ 
In particular, she found that his crimes were committed in connection 
with the delivery of a health care item or service to warrant mandatory 
exclusion because:
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    \2\ I believe that it is appropriate to take note of the full 
contents of this decision, as it was referenced on page 2 of 
Respondent's Statement. See, e.g., Bell Atl. Corp. v. Twombly, 550 
U.S. 544, 568 n.13 (2007) (stating that courts may ``take notice of 
the full contents'' of published documents ``referenced in the 
complaint'' (citing Fed. R. Evid. 201)).

    Petitioner abused his position by appropriating the personal 
information of four veterans (including two individuals to whom he 
had provided health care services) to further his tax evasion 
scheme. Petitioner would not have been in a position to misuse the 
veterans' personal information had he not been part of the chain of 
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delivery of V.A. health care benefits.

Jeffrey S. Stein, M.D., Department Appeals Board No. CR5153, at 5 
(2018) (available at: https://www.hhs.gov/about/agencies/dab/decisions/alj-decisions/2018/alj-cr5153/index.html) (hereinafter HHS Appeals 
Board). The ALJ further found that:

    Petitioner used patient information, to which he had access 
based on his position of trust as a V.A. physician, to create 
fraudulent invoices in an attempt to cover up his income tax 
evasion. . . . These factors underscore the seriousness of his 
dishonest scheme. It is not unreasonable to infer . . . that he may 
pose a risk to the integrity of patient data systems.

Id. at 6.
    Respondent asserts that ``the two counts to which [he] pled guilty 
. . . pertained solely to [his] personal income tax statements'' and 
that ``[t]here were never any allegations of impropriety with respect 
to my medical practice or the furnishing of or billing for medical 
care, services or supplies.'' Respondent Statement, at 2. Additionally, 
Respondent states that ``full restitution of all taxes owed to the 
Federal government was made before the date of [his] sentencing'' \3\ 
and he has ``completed serving [his] sentence of 18 months and [he is] 
now once again a law-abiding person who continues to contribute to the 
well being of [his] community.'' Id.
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    \3\ Respondent appended to his Respondent Statement a 
Satisfaction of Judgment demonstrating that his restitution was 
satisfied. Respondent Statement Ex. 1 (Satisfaction of Judgment), at 
1.
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    Respondent submitted evidence related to the temporary suspension 
of his medical license in New York and subsequent censure, reprimand, 
and reinstatement by the Department of Health State Board for 
Professional Medical Conduct (hereinafter, BPMC) through a Hearing 
Committee (hereinafter, Committee) Determination and Order, dated 
December 15, 2016. Respondent Statement Ex. 2; see also Respondent 
Statement, at 3.
    The BPMC Committee based its decision on several factors. 
``Importantly, Respondent's crimes did not affect his clinical 
competence or quality of patient care. The Committee did not feel that 
[he] was a threat to the public. Moreover, the Committee acknowledged 
an exemplary surgical career and stable family life.'' Respondent 
Statement Ex. 2 (BPMC Hearing Committee Determination and Order), at 3. 
The Committee further cited to seventeen letters, which ``described 
Respondent as a talented, compassionate physician and trustworthy 
person.'' Id. Respondent additionally testified in front of the 
Committee, during which ``the Committee learned of [his] genuine 
connection to his patients'' and noted that it ``appreciated [his] 
sincere sense of remorse and repentance for his actions. Respondent 
accepted full responsibility for his conduct and the Committee felt 
that he has learned from his mistakes.'' Id.
    In sum, based on all of the evidence in the record, I find that the 
HHS OIG excluded Respondent from Medicare, Medicaid, and all federal 
health care programs under 42 U.S.C. 1320a-7(a) for eight years 
effective January 18, 2018, based on Respondent's conviction of two 
federal income tax-related felonies in the SDNY.

Discussion

    Under Section 824(a) of the Controlled Substances Act (hereinafter, 
CSA), a registration ``may be suspended or revoked'' upon a finding of 
one or more of five grounds. 21 U.S.C. 824. The ground in 21 U.S.C. 
824(a)(5) requires that the registrant ``has been excluded (or directed 
to be excluded) from participation in a program pursuant to section 
1320a-7(a) of Title 42.'' Id. 42 U.S.C. 1320a-7(a) provides a list of 
four predicate offenses for which exclusion from Medicare, Medicaid and 
federal health care programs is mandatory and sets out mandatory 
timeframes for such exclusion. Id. Respondent admits that

[[Page 46970]]

the HHS OIG mandatorily excluded him and, as such, there is no dispute 
in the record about this fact. Respondent Statement, at 2; see also 
RFAA, at Ex. 5.
    In pursuing revocation or suspension of Respondent's registration, 
the Government makes no argument on the merits of Respondent's 
mitigating evidence, but elects to make a legal argument that, instead 
of reviewing Respondent's individual circumstances, the Agency should 
read 21 U.S.C. 824(a)(5) to require revocation as long as the basis for 
revocation--here, exclusion from federal health care programs--is 
adequately shown. RFAA, at 4. In making this argument, the Government 
seems to be relying on two notions:
    1. That ``the best reading of the statutory language in 21 U.S.C. 
824(a)(5) and 42 U.S.C. 1320a-7(a) recognizes that Congress intended to 
carve out a specific set of circumstances (i.e., a criminal conviction 
for a specific set of crimes) that it found particularly serious. 
Therefore, . . . Section 824(a)(5) should be read as requiring 
revocation.'' Id.
    2. That, due to what the Government perceives as the Agency's 
inconsistency in evaluating revocations under Section 824(a)(5), 
particularly where the predicate crime has no nexus to controlled 
substances, the Agency should instead summarily revoke or suspend all 
registrants who have been excluded from federal health care programs 
for, at least, the duration of the exclusion. Id. at 6-9.
    I will address each of these issues separately prior to addressing 
the facts I found.

1. The Government Has Not Provided a Reasonable Interpretation of the 
CSA as Mandating Suspension or Revocation Under Section 824(a)(5)

    The Government's argument in proffering what it deems the ``best 
reading'' of the CSA is that in mandating exclusion from federal health 
care programs for certain predicate crimes in Section 1320a-7(a) of 
Title 42, Congress intended to carve out a particular set of crimes 
that it found particularly serious. RFAA, at 4. However, no further 
support for this reading of the statute is offered.
    Such a reading would be a significant departure from past Agency 
decisions. Notably, in Dinorah Drug Store, Inc., 61 FR 15972, 15974 
(1996), ``the Deputy Administrator agree[d] with Judge Tenney's 
conclusion that the denial of registration under Section 824(a)(5) is 
discretionary.'' Furthermore, the Government has not cited to, nor has 
there been, another mandatory exclusion case that has held that I must 
revoke or suspend on the basis of the mere finding of a mandatory 
exclusion under 42 U.S.C. 1320a-7(a), as is demonstrated by the fact 
that cases on this section have carefully considered mitigating 
evidence provided by the respondent. See, e.g., Mohammad Asgar, M.D., 
83 FR 29569 (2018); George D. Osafo, M.D., 58 FR 37508 (1993).
    The Government correctly notes, however, that under the third of 
the five grounds for revocation or suspension in Section 824(a), the 
Agency interprets the statute to require revocation or suspension once 
there is a conclusive finding that the registrant lacks authority to 
practice medicine and dispense controlled substances in the state of 
registration. 21 U.S.C. 824(a)(3). This procedure is unique amongst the 
five grounds listed in Section 824(a) and is rooted in two provisions 
of the CSA. The two provisions, when read together, lead to the 
ineluctable conclusion that the CSA leaves the decision maker no 
discretion as to sanction when such lack of authority is established. 
21 U.S.C. 802(21) (defining ``practitioner'' to require a license to 
dispense controlled substances in the state of registration) and 21 
U.S.C. 823(f) (establishing authorization to dispense controlled 
substances as a prerequisite for the issuance of a registration); see, 
e.g., James L. Hooper, M.D., 76 FR 71371 (2011), pet. for rev. denied, 
481 Fed. Appx. 826 (4th Cir. 2012); Frederick Marsh Blanton, M.D., 43 
FR 27616 (1978).
    Unlike Section 824(a)(3), the Government has proffered no 
reasonable statutory basis in the CSA, or otherwise, to read 824(a)(5) 
to require automatic revocation if a practitioner has been mandatorily 
excluded from Medicare, Medicaid, and all federal health care programs 
pursuant to 42 U.S.C. 1320a-7(a). The Government implies that the 
mandatory nature of the statute that controls the HHS Secretary in 
excluding an individual from participation in any federal health care 
program also negates the discretion of the Attorney General in applying 
the CSA. RFAA, at 10. However, in arguing this interpretation of the 
CSA, the Government would have to demonstrate that the interpretation 
is not ``in excess of statutory jurisdiction, authority, or limitations 
or short of statutory right.'' 5 U.S.C. 706(2)(C). In order for the 
Agency to support such a reading, the Government would at the very 
least have to demonstrate that the statute is ambiguous and that the 
interpretation ``is based on a permissible construction of the 
statute.'' Chevron U.S.A. v. Nat. Resources Def. Council, 467 U.S. 837, 
843 (1984).
    The Medicare and Medicaid Patient and Program Protection Act of 
1987 (hereinafter, Medicare Protection Act) enacted the mandatory and 
permissive exclusions in question and also simultaneously added Section 
824(a)(5) into the CSA. Medicare Protection Act, Public Law 100-93, 
8(j), 101 Stat. 680, 695 (1987). Notably, and as mentioned previously, 
Section 824(a) of the CSA uses the term ``may'' when prefacing the five 
grounds, including the ground in question, upon which ``a registration 
. . . may be suspended or revoked.'' 21 U.S.C. 824(a) (emphasis added). 
``Interpretation of a statute must begin with the statute's language.'' 
Mallard v. U.S. Dist. Court, 490 U.S. 296, 300-301 (1989) (citing e.g., 
United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989); 
Landreth Timber Co. v. Landreth, 471 U.S. 681, 685 (1985)). Further, 
the ``cardinal principle of statutory construction [is] that courts 
must give effect, if possible, to every clause and word of a statute.'' 
Williams v. Taylor, 533 U.S. 167, 174; see also Duncan v. Walker, 533 
U.S. 167, 173 (2001). In general, ``the word `may,' when used in a 
statute, usually implies some degree of discretion.'' United States v. 
Rodgers, 461 U.S. 677, 706 (1983). Although, it should be observed that 
that longstanding canon of statutory construction ``can be defeated by 
indications of legislative intent to the contrary or by obvious 
inferences from the structure and purpose of the statute.'' Id. (citing 
Mason v. Fearson, 50 U.S. 248 (1850); see generally United States ex 
rel. Siegel v. Thoman, 156 U.S. 353, 359-360 (1895)). Unlike the 
Agency's interpretation of Section 824(a)(3), here the Government has 
not offered any other statutory indication or legislative intent that 
the term ``may'' should be read differently under the provision in 
question.
    Furthermore, in passing the Medicare Protection Act, Congress 
clearly demonstrated that it knew how to differentiate between 
mandatory and permissive exclusions, because it did so unequivocally in 
the context of federal health care programs. In lieu of using the same 
clear language for the provision regarding controlled substance 
registrations, Congress chose to place this ground for revocation or 
suspension under the ``may'' provisions in Section 824. See Duncan v. 
Walker, 533 U.S. 167, 173 (2001) (holding that ``it is well settled 
that `` `[w]here Congress includes particular language in one section 
of a statute but omits it in another section of the same Act, it is 
generally presumed that Congress acts intentionally and purposely in 
the

[[Page 46971]]

disparate inclusion or exclusion.' '' '' (quoting Russello v. United 
States, 464 U.S. 16, 23 (1983)); see also Bates v. United States, 522 
U.S. 23, 29-30 (1997).
    Additionally, there is no further indication from legislative 
history that Congress intended to require automatic revocation or 
suspension in the context of the CSA on the grounds of exclusion. 
Congress amended Section 304 of the CSA to ``add exclusion from 
Medicare or a State health care program as a basis for denial, 
revocation, or suspension of registration to manufacture, distribute or 
dispense a controlled substance.'' S. Rep. No. 100-109, at 22 (1987), 
as reprinted in 1987 U.S.C.C.A.N. 682, 702; see also H.R. Rep. No. 100-
85, pt. 1, at 21 (1987). Although the phrase ``as a basis for'' could 
be read to be mandatory or permissive, there is no clear indication of 
a mandate, and throughout the Senate Report, lengthy explanation was 
provided to justify the reasoning behind each of the mandatory 
provisions of the Medicare Protection Act. See S. Rep. at 23-26. 
Furthermore, given the lack of conflicting statutory language and the 
statute's ``straightforward statutory command, there is no reason to 
resort to legislative history.'' United States v. Gonzales, 520 U.S. 1 
(1997).
    The Government has offered no evidence to demonstrate that Congress 
intended to remove the discretion of the Attorney General in revoking a 
registration in the context of the CSA, nor has the Government proven 
that an interpretation other than the plain meaning of this provision 
of the CSA is reasonable. In light of the lack of support for the 
proffered interpretation of the controlling provision of the CSA, I 
must review the evidence provided by Respondent to determine whether 
revocation or suspension is appropriate given the particular facts. See 
5 U.S.C. 556(d) (``A party is entitled to present his case or defense 
by oral or documentary evidence.''); 21 CFR 1301.43(c) (permitting a 
Respondent to file ``a waiver of an opportunity for a hearing . . . 
together with a written statement regarding such person's position on 
the matters of fact and law involved in such hearing.''); Jones Total 
Health Care Pharmacy, LLC v. Drug Enf't Admin., 881 F.3d 823, 829 (11th 
Cir. 2018) (``[W]e may set aside a decision as `arbitrary and 
capricious when, among other flaws, the agency has . . . entirely 
failed to consider an important aspect of the problem.' ''); Morall v. 
Drug Enf't Admin., 412 F.3d 165, 177 (D.C. Cir. 2005) (``To uphold 
DEA's decision, . . . we must satisfy ourselves `that the agency 
``examine[d] the relevant data and articulate[d] a satisfactory 
explanation for its action including a rational connection between the 
facts found and the choice made.'' ' ''); Kirk v. Mullen, 749 F.2d 297, 
299 (6th Cir. 1984) (Respondent ``was given an opportunity to present 
his case before his registration was revoked. This satisfied due 
process.'').

2. Agency Caselaw Revoking or Suspending a Registration on the Ground 
of Mandatory Exclusion Consistently Provides Respondent an Opportunity 
To Present Mitigating Evidence and Does Not Require a Nexus to 
Controlled Substances as a Prerequisite to Sanction

    In reviewing the Agency decisions on Section 824(a)(5), several of 
the existing cases involve additional grounds under 824(a), do not rely 
heavily on the (a)(5) exclusion, and thus do not always offer useful 
guidance in how the Agency has evaluated this ground in the past. See, 
e.g., John P. Moore, III, M.D., 82 FR 10398 (2017) (revocation based on 
(a)(2) controlled substances felony, (a)(3) loss of state authority and 
(a)(5) mandatory exclusion not related to controlled substances). I 
agree with the Government that ``each subsection [of Section 824(a)] 
provides `an independent and adequate ground to impose a sanction on a 
registrant.' '' RFAA, at 4 (citing Arnold E. Feldman, M.D., 82 FR 
39614, 39617 (2017)); see also Gilbert L. Franklin, D.D.S., 57 FR 3,441 
(1992) (``[M]andatory exclusion from participation in the Medicare 
program constitutes an independent ground for revocation pursuant to 21 
U.S.C. [Sec.  ] 824(a)(5).'').
    Additionally, in many of the previous Section 824(a)(5) cases, the 
registrant offered no mitigating evidence upon which the Administrator 
could analyze the facts. See, e.g., Sassan Bassiri, D.D.S., 82 FR 
32200, 32201 (2017). In particular, the Government highlights Richard 
Hauser, M.D., 83 FR 26308 (2018), where revocation was sought under 
Section 824(a)(5) of the CSA and the registrant ``did not respond.'' 
RFAA, at 6 (citing to Hauser, at 26310). Therefore, the registrant's 
certificate of registration was revoked `` `based on the unchallenged 
basis for his mandatory exclusion.' '' Id. (quoting Hauser at 26310). 
When the basis for revocation or suspension is clear and the registrant 
has had notice and the opportunity to present evidence, whether in a 
hearing or a written statement in accordance with 21 CFR 1301.43, but 
has chosen not to present any such evidence that could inform the 
Administrator's decision, it is reasonable that the Administrator might 
revoke or suspend. See KK Pharmacy, 64 FR 49507, 49510 (1999); Orlando 
Ortega-Ortiz, M.D. 70 FR 15122 (2005); Lazaro Guerra, 68 FR 15266 
(2003) (basis for revocation was both (a)(3) and (a)(5)).
    In contrast, as I have explained above, when a respondent does 
present evidence either in a written statement or in the context of a 
hearing, then I must review the relevant data and adequately articulate 
the rationale for my decision. See Morall v. Drug Enf't Admin., 412 
F.3d 165, 177 (D.C. Cir. 2005). With respect to the ground for 
revocation or suspension in Section 824(a)(5), Congress has given 
little indication of how the Agency should weigh mitigating evidence in 
revocations or suspensions, and to what extent the underlying crime 
that forms the basis for the mandatory exclusion should have a nexus to 
controlled substances. See generally S. Rep. 100-109, at 22 (1987).
    This Agency has concluded repeatedly that the underlying crime 
requiring exclusion from federal health care programs under Section 
1320a-7(a) of Title 42 does not require a nexus to controlled 
substances in order to be used as a ground for revocation or suspension 
of a registration. See Narciso Reyes, M.D., 83 FR 61678, 61681 (2018); 
KK Pharmacy, 64 FR at 49510 (collecting cases); Melvin N. Seglin, M.D., 
63 Red. Reg. 70431, 70433 (1998); Stanley Dubin, D.D.S., 61 FR 60727, 
60728 (1996). I believe that this conclusion is well founded in the CSA 
for several reasons. First, only one of the four mandatory exclusion 
categories is related to controlled substances. 42 U.S.C. 1320a-7(a)(4) 
(``Any individual or entity that has been convicted for an offense 
which occurred after August 21, 1996, under Federal or State law, of a 
criminal offense consisting of a felony relating to the unlawful 
manufacture, distribution, prescription, or dispensing of a controlled 
substance.''). However, Congress specifically cited to the entirety of 
1320a-7(a) of Title 42 in 21 U.S.C. 824(a)(5), rather than only 
including Section 1320a-7(a)(4). The legislative history further 
supports the notion that Congress intended to add exclusion from 
federal health care programs as a basis for revocation or suspension 
under the CSA, not just the particular section related to controlled 
substances. See S. Rep. 100-109, at 22 (1987). Moreover, to require 
such crimes to be related to controlled substances would be largely 
duplicative of Section 824(a)(2), which provides as a basis for 
revocation or suspension, a registrant's conviction ``of a felony under 
this subchapter or subchapter II of this chapter or any other law of 
the United

[[Page 46972]]

States, or of any State, relating to any substance defined in this 
subchapter as a controlled substance or a list I chemical.'' 21 U.S.C. 
824(a)(2). To limit the application of Section 824(a)(5) to crimes 
involving controlled substances would be an impermissible statutory 
construction, because it would render Congress's amendment superfluous. 
See Dept. of Def., Army Air Force Exchange Serv. v. Fed. Labor 
Relations Auth., 659 F.2d 1140, 1160 (D.C. Cir. 1981), cert. denied, 
455 U.S. 945 (1982) (A statute should be read in a ``manner which 
effectuates rather than frustrates the major purpose of the legislative 
draftsmen.'').
    The Government raises concerns that the Reyes decision creates 
confusion about whether the Government is required to demonstrate a 
controlled substance nexus in order to revoke or suspend a registration 
under Section 824(a)(5). See RFAA, at 8. Reyes is factually distinct 
from the present case, because the respondent in Reyes provided no 
substantive mitigating evidence. Reyes, 83 FR at 61680. As discussed 
herein, I believe that in such cases, where the ground for exclusion 
has been proven, and there is nothing for me to weigh, revocation or 
suspension is appropriate. See, e.g., KK Pharmacy, 64 FR at 49510. 
Despite the lack of substantive mitigating evidence in Reyes, my 
predecessor took the opportunity to agree with and quote the ALJ 
stating, `` `this type of fraudulent behavior does not inspire 
confidence that . . . [Respondent] can be trusted with a prescription 
pad bearing a DEA registration number.' '' Reyes, 83 FR at 61,681. The 
decision goes on to state, ``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. Where the underlying crimes have a 
nexus to the practice of medicine, and in particular, as in Reyes, 
where the crime demonstrates activity that is similar to activity that 
is frequently used to divert controlled substances, such activity 
logically should explicitly be factored into my determination of 
whether the practitioner can be entrusted with a DEA registration. As 
demonstrated in Reyes, there does not need to be a nexus to controlled 
substances to make a connection between the activity that caused the 
mandatory exclusion and the potential for abuse of a DEA registration. 
In Respondent's case, the crimes related to tax fraud clearly have no 
nexus to controlled substances, but as explained below, in particular, 
the crime related to obstructing justice could be relevant to 
Respondent's compliance with the CSA and its implementing regulations.

Sanction

    Here, there is no dispute in the record that Respondent is 
mandatorily excluded pursuant to Section 1320a-7(a) of Title 42 and, 
therefore, that a ground for the revocation or suspension of 
Respondent's registration exists. RFAA, at 4; Respondent Statement, at 
1. Additionally, I have explained that there is no requirement for the 
mandatory exclusion to have a nexus to controlled substances in order 
to revoke or suspend a registration under Section 824(a)(5) of the CSA.
    The CSA authorizes the Attorney General to ``promulgate and enforce 
any rules, regulations, and procedures which he may deem necessary and 
appropriate for the efficient execution of his functions under this 
subchapter.'' 21 U.S.C. 871(b). This authority specifically relates 
``to `registration' and `control,' and `for the efficient execution of 
his functions' under the statute.'' Gonzales v. Oregon, 546 U.S. 243, 
259 (2006). A clear purpose of this authority is to ``bar[ ] doctors 
from using their prescription-writing powers as a means to engage in 
illicit drug dealing and trafficking.'' Id. at 270. In efficiently 
executing the revocation and suspension authority delegated to me under 
the CSA for the aforementioned purposes, I review the evidence and 
argument Respondent submitted to determine whether or not he has 
presented ``sufficient mitigating evidence to assure the Administrator 
that [he] can be trusted with the responsibility carried by such a 
registration.'' Samuel S. Jackson, D.D.S., 72 FR 23848, 23853 (2007) 
(quoting Leo R. Miller, M.D., 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), [the Agency] has repeatedly held that where a registrant has 
committed acts inconsistent with the public interest, the registrant 
must accept responsibility for [the registrant's] actions and 
demonstrate that [registrant] will not engage in future misconduct.' '' 
Jayam Krishna-Iyer, 74 FR 459, 463 (2009) (quoting Medicine Shoppe, 73 
FR 364, 387 (2008)); see also Jackson, 72 FR at 23853; John H. 
Kennnedy, M.D., 71 FR 35705, 35709 (2006); Prince George Daniels, 
D.D.S., 60 FR 62884, 62887 (1995).\4\ The issue of trust is necessarily 
a fact-dependent determination based on the circumstances presented by 
the individual respondent; therefore, the Agency looks at factors, such 
as the acceptance of responsibility and the credibility of that 
acceptance as it relates to the probability of repeat violations or 
behavior and the nature of the misconduct that forms the basis for 
sanction, while also considering the Agency's interest in deterring 
similar acts. See Arvinder Singh, M.D., 81 FR 8247, 8248 (2016).
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    \4\ In future 824(a)(5) cases, I hope to additionally have the 
benefit of the Government's analysis of Respondent's mitigating 
evidence.
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    In evaluating the degree required of a Respondent's acceptance of 
responsibility to entrust him with a registration, in Mohammed Asgar, 
M.D., 83 FR 29569, 29572 (2018), the Agency looked for ``unequivocal 
acceptance of responsibility when a respondent has committed knowing or 
intentional misconduct.'' Id. (citing Lon F. Alexander, M.D., 82 FR 
49704, 49728). In this case, I believe the charge to which Respondent 
pled guilty of ``Corruptly Endeavoring to Obstruct and Impede the Due 
Administration of the Internal Revenue Laws,'' where Respondent 
falsified documents in order to conceal his tax fraud from IRS 
officials, sufficiently demonstrates knowing and intentional misconduct 
to require clear acceptance of responsibility. See RFAA, at 3 and Ex 4.
    Respondent indisputably states, ``I accept and acknowledge complete 
personal responsibility for the actions that I have pled guilty to and 
remain sincerely remorseful for my actions.'' Respondent Statement, at 
3. There was no DEA hearing in which to judge Respondent's credibility 
in making this statement, or the other evidence he offered on his own 
behalf, thus under the CSA regulations, I must ``consider . . . [the 
statement] in light of the lack of opportunity for cross-examination in 
determining the weight to be attached to matters of fact asserted 
therein.'' 21 CFR 1301.43(c). Respondent did attach to his statement 
the results of his testimony in front of the BPMC Hearing Committee, 
and during which the Committee noted in restoring his license that it 
``appreciated [his] sincere sense of remorse and repentance for his 
actions. [Respondent] accepted full responsibility for his conduct and 
the Committee felt that he has learned from his mistakes.'' Respondent 
Statement Ex. 2, at 3. Respondent's direct statement and the Hearing 
Committee's finding weigh heavily in favor of Respondent's acceptance 
of

[[Page 46973]]

responsibility, and the Government offers no contradictory evidence.
    However, Respondent also asserts that his crimes ``pertained solely 
to [his] personal income tax statements'' and ``[t]here were never any 
allegations of impropriety with respect to [his] medical practice or 
the furnishing of or billing for medical care services or supplies.'' 
Respondent Statement, at 2. Contrary to this assertion, in his HHS 
exclusion proceeding, the HHS ALJ particularly found that Respondent's 
crime was committed in connection with the delivery of a health care 
item or service because:

    Petitioner abused his position by appropriating the personal 
information of four veterans (including two individuals to whom he 
had provided health care services) to further his tax evasion 
scheme. [Respondent] would not have been in a position to misuse the 
veterans' personal information had he not been part of the chain of 
delivery of V.A. health care benefits.

    HHS Appeals Board, at 5. Although the HHS ALJ was reviewing the 
connection between Respondent's criminal misconduct and ``health 
services'' under HHS legal precedent, and therefore the HHS ALJ's 
finding is contextually distinct from Respondent's statement, I believe 
that Respondent goes too far in claiming that there was no impropriety 
related to his medical practice. See Respondent Statement, at 2. 
Respondent had reason to know that this statement was inaccurate, 
because the HHS ALJ had explicitly rejected his argument. HHS Appeals 
Board, at 5.
    Had there been a hearing on the OSC, it is possible that the HHS 
ALJ's finding would have come to light on cross-examination and that 
Respondent could have clarified his statement that his crimes were not 
related to impropriety related to his medical practice in the sense 
that they were not related to patient care, but without a hearing and a 
DEA ALJ's assessment of credibility in this case, I must weigh this 
statement against Respondent's overall credibility in accepting 
responsibility. There were no allegations with respect to Respondent's 
care of his patients, which was clearly one of the reasons that New 
York reinstated his state license to practice, but I cannot find that 
his crimes were unrelated to his medical practice. See Respondent 
Statement Ex. 3, at 2. With such limited information from Respondent, 
this statement appears to be aimed at minimizing the egregiousness of 
his conduct, which the Agency has previously weighed against a finding 
of acceptance of full responsibility. See Ronald Lynch, M.D., 75 FR 
78745, 78754 (2010) (Respondent did not accept responsibility noting 
that he ``repeatedly attempted to minimize his [egregious] 
misconduct''; see also Michael White, M.D., 79 FR 62957, 62967 (2014) 
(finding that Respondent's ``acceptance of responsibility was tenuous 
at best'' and that he ``minimized the severity of his misconduct by 
suggesting that he thinks the requirements for prescribing Phentermine 
are too strict.''). In light of Respondent's minimization of his 
crimes' connection to his medical practice, and the lack of a hearing 
to determine whether his remorse is credible, Respondent's acceptance 
of responsibility cannot be characterized as unequivocal. As this 
situation highlights, the degree of acceptance of responsibility that 
is required does not hinge on the respondent uttering ``magic words'' 
of repentance, but rather on whether the respondent has credibly and 
candidly demonstrated that he will not repeat the same behavior and 
endanger the public in a manner that instills confidence in the 
Administrator.
    The Agency also looks to the nature of the crime in determining the 
likelihood of recidivism and the need for deterrence. In this case, 
Respondent's actions can be characterized as egregious. He clearly 
acted out of greed in defrauding the government of taxes and he further 
misused the trust of his positions in stealing the identities of 
veterans in order to hide his criminal activity. See Nelson Ramirez-
Gonzales, M.D., 58 FR 52787, 52788 (1993) (``fraud perpetrated by the 
respondent casts doubt upon his integrity, and as such supports an 
action against his registration''); George D. Osafo, M.D. 58 FR 37508, 
37509 (1993) (``Respondent's submission of fraudulent medical claims 
and subsequent convictions of larceny indicated that Respondent placed 
monetary gain above the welfare of his patients, and in so doing, 
endangered the public health and safety.''). In addition, Respondent 
callously endangered the livelihood of his unwitting accountant in the 
cover-up by submitting the fraudulent invoices to the accountant to 
then provide to the IRS. RFAA Ex. 3, at 7.
    In sanction determinations, the Agency has historically considered 
its interest in deterring similar acts, both with respect to the 
respondent in a particular case and the community of registrants. See 
Joseph Gaudio, M.D., 74 FR 10083, 10095 (2009); Singh, 81 FR at 8248. 
Where the respondent has committed a crime with no nexus to controlled 
substances, and that is only partially related to his medical practice, 
it is much more difficult to demonstrate that sanction will be useful 
to generally deter the community of registrants. The underlying crimes 
in this case relate to tax fraud, and although I believe that deterring 
the registrant community from committing tax fraud is certainly in the 
best interest of the United States, it is not arguably within the 
purview of the CSA. In the context of general deterrence as it relates 
to the CSA, what is concerning is Respondent's misappropriation of his 
patients' identities to cover up his criminal activity. RFAA Ex. 3, at 
7. If practitioners used their patients' identities to hide their 
illicit activities in violation of the CSA, such activity would be very 
challenging to detect.
    Respondent has asserted that he has served his sentence of 18 
months, paid his restitution in full, and that ``the goals of justice, 
deterrence and punishment have already been fully realized.'' 
Respondent Statement, at 2. See Asgar, 83 FR at 29573 (suspending 
registration until ``Respondent[ ] provid[es] evidence that he has 
satisfied the judgment of the District Court''); but see Singh, 81 FR 
at 8248-49 (denying Respondent's application even though underlying 
crime was 15 years prior and debt to society had been paid because it 
was overwhelmingly clear that Respondent did not believe he was 
mistaken in any way). Here, it is undisputed that Respondent complied 
with the criminal judgment, but it remains unclear whether he can be 
entrusted with a CSA registration and whether sanction is appropriate 
to protect the public from a recurrence of his fraudulent actions. See 
Leo R. Miller, M.D., 53 FR 21931, 21932 (1988) (describing revocation 
as a remedial measure ``based upon the public interest and the 
necessity to protect the public from individuals who have misused 
controlled substances or their DEA Certificate of Registration 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.'').
    Despite the fact that Respondent did not violate the CSA in 
committing the underlying crimes, I believe that Respondent's 
particular criminal activity and egregious behavior in impeding the IRS 
investigation into his tax fraud is relevant to his particular future 
compliance with the CSA and its implementing regulations. Stealing the 
identities of patients to create fraudulent receipts is a clear 
indication that Respondent lacks respect for the investigatory process 
and will take extreme measures to hide his illegal activity. RFAA Ex. 
3, at 6. As the HHS ALJ summarized, Respondent ``used

[[Page 46974]]

patient information, to which he had access based on his position of 
trust as a V.A. physician, to create fraudulent invoices in an attempt 
to cover up his income tax evasion. . . . These factors underscore the 
seriousness of his dishonest scheme.'' Jeffrey S. Stein, M.D., HHS 
Appeals Board, at 6. It is this activity, which demonstrates a lack of 
integrity, coupled with Respondent's statement attempting to minimize 
the connection of his crimes to his medical practice that give me the 
most pause in determining the nature or appropriateness of a sanction 
in this case. See Dubin, 61 FR at 60728 (revoking based on respondent's 
``continual use of the Medical Assistance claims, the names and 
provider numbers of his employee dentists without their permission'' 
and finding that `` `these actions cast substantial doubt on 
Respondent's integrity.' '').
    Respondent must convince the Administrator that his acceptance of 
responsibility and remorse are sufficiently credible to demonstrate 
that the misconduct will not recur. In some circumstances, the Agency 
has found that repentance and honesty weigh in favor of continuing to 
entrust the respondent with a registration. See, e.g., Melvin N. 
Seglin, M.D., 63 FR 70431, 70433 (1998) (The ALJ was `` `persuaded that 
Respondent has accepted responsibility for his misconduct and that is 
not likely to recur.' The Deputy Administrator agree[d] with [the ALJ], 
finding it significant that Respondent did not attempt to conceal his 
misconduct and in fact was quite straightforward with the 
investigator.''). Here, Respondent pled guilty and stated remorse and 
seemingly accepted responsibility, but the crime itself demonstrates a 
complex scheme in which he misused patients' personal information to 
conceal his original crime of tax fraud. See RFAA Ex. 3, at 7.
    If Respondent were to repeat such dishonest interference in the 
context of a DEA investigation, it could impact the Agency's mission in 
preventing the diversion and misuse of controlled substances. DEA 
budgets for approximately 1,625 Diversion positions involved in 
regulating more than 1.8 million registrants overall.\5\ Ensuring that 
a registrant is honest and does not avoid detection through fraudulent 
documentation is crucial to the Agency's ability to complete its 
mission of preventing diversion within such a large regulated 
population.
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    \5\ See DEA FY2020 Budget Request available at https://www.justice.gov/jmd/page/file/1142431/download.
---------------------------------------------------------------------------

    ``While mandatory exclusion can provide an independent basis for 
revocation, DEA has often reserved that sanction to cases where `there 
were serious questions as to the integrity of the registrant.'' Kwan Bo 
Jin, M.D., 77 FR 35021, 35026 (2012) (quoting Anibal P. Herrera, M.D., 
61 FR 65075, 65078 (1996) (permitting the continuation of registration 
with restriction where respondent fully accepts responsibility and has 
paid restitution)). I will refrain from revocation in this case because 
of the conflicting information in the record with regard to 
Respondent's integrity and because I appreciate the forthright nature 
of his statements regarding acceptance of responsibility. However, in 
light of his diminishment of the full extent of his crimes, and without 
having the benefit of a hearing to weigh the credibility of such 
statements, I believe that the record presents a legitimate concern 
that Respondent might impede a DEA investigation in the same manner as 
he obstructed his IRS investigation. Even though he has accepted 
responsibility and demonstrated remorse, he also glossed over the 
misuse of patient information, which seems consistent with his prior 
behavior of concealing his crimes. I am concerned that, although 
Respondent may not be likely to commit tax fraud again, he may be 
dishonest in dealing with Diversion Investigators or DEA Special Agents 
in the future. I believe that some degree of sanction is appropriate to 
prevent Respondent from circumventing the CSA requirements to the 
detriment of its effective implementation in order to protect the 
public. Therefore, I will suspend Respondent's registration for a 
period of two years. The suspension is significantly less than his 
eight-year federal health care program exclusion, because the CSA is 
not bound by the same minimal suspension standards as HHS. Respondent 
has paid his restitution, he has completed his incarceration and is 
fulfilling his probation, but I must ensure that he is fully candid and 
cooperative and his fraudulent behavior is not likely to recur in order 
to entrust him with a CSA registration.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 824(a), I hereby suspend DEA Certificate of Registration No. 
FS6587868 issued to Jeffrey Stein, M.D. for a period of two years 
starting from the effective date of this Order. This Order is effective 
October 7, 2019.

    Dated: August 23, 2019.
Uttam Dhillon,
Acting Administrator.
[FR Doc. 2019-19305 Filed 9-5-19; 8:45 am]
 BILLING CODE 4410-09-P