[Federal Register Volume 85, Number 144 (Monday, July 27, 2020)]
[Notices]
[Pages 45229-45240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16193]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 17-29]


Frank Joseph Stirlacci, M.D.; Decision and Order

I. Introduction

    On April 5, 2017, the then-Assistant Administrator, Diversion 
Control Division, Drug Enforcement Administration (hereinafter, DEA or 
Government), issued an Order to Show Cause to Frank Joseph Stirlacci, 
M.D. (hereinafter, Respondent), of Agawam, Massachusetts and Hammond, 
Indiana. Administrative Law Judge Exhibit (hereinafter, ALJX) 1 (Order 
to Show Cause (hereinafter, OSC)), at 1. The OSC proposed the 
revocation of Respondent's DEA certificate of registration 
(hereinafter, registration) on the ground that he ``materially 
falsified . . . [his] application for renewal in violation of 21 U.S.C. 
823(f) and 824(a)(1).'' Id.
    The substantive grounds for the proceeding, as more specifically 
alleged in the OSC, are that Respondent, ``[o]n or about February 7, 
2017, . . . submitted a renewal application for . . . [his registration 
number] BS5000411 seeking to change . . . [his] registered address to . 
. . Hammond, Indiana . . . [and] made two material false statements in 
. . . [his] renewal application''--(1) answering ``no'' to whether he 
had ever been convicted of a crime in connection with controlled 
substances under state or federal law, or whether any such action is 
pending, and (2) answering ``no'' to whether he had ever surrendered 
(for cause) or had a state professional license revoked, suspended, 
denied, restricted, or placed on probation, or whether any such action 
is pending. Id. at 2. Citing 21 U.S.C. 823(f) and 824(a)(1), the OSC 
concluded that ``DEA must revoke . . . [Respondent's registration] 
based upon . . . [his] material falsifications of . . . [his] renewal 
application.'' Id.
    The OSC notified 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 2-3 (citing 21 
CFR 1301.43). Respondent timely requested a hearing by letter dated 
April 29, 2017. ALJX 2 (Request for Hearing).
    The matter was placed on the docket of the Office of Administrative 
Law Judges and assigned to Chief Administrative Law Judge (hereinafter, 
ALJ) John J. Mulrooney, II. The parties initially agreed to eight 
stipulations.\1\

[[Page 45230]]

ALJX 11 (Prehearing Ruling, dated June 22, 2017), at 1-2.
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    \1\ ``1. The Respondent is registered with the DEA as a 
practitioner to handle controlled substances in Schedules II to V 
under DEA COR [certificate of registration] No. BS5000411, with a 
registered address of Regional Health Center, 559 State Street, 
Hammond, Indiana 46320. The Respondent's DEA COR expires by its own 
terms on February 29, 2020.
    ``2. From April 17, 2015 to May 11, 2015, the Respondent was 
incarcerated in Kentucky.
    ``3. On February 5, 2016, the Respondent entered into a 
Voluntary Agreement Not to Practice Medicine in the Commonwealth of 
Massachusetts with the Board of Registration.
    ``4. On January 26, 2017, the Respondent was indicted by the 
Commonwealth of Massachusetts for: (1) 26 counts of Improper 
Prescriptions, in violation of Mass. Gen. Laws ch. 94C Sec.  19(a); 
(2) 22 counts of False Health Care Claims, in violation of Mass. 
Gen. Laws ch. 175H Sec.  2; and (3) 20 counts of Uttering False 
Prescriptions, in violation of Mass. Gen. Laws ch. 94C Sec.  33(b).
    ``5. On February 7, 2017, at approximately 17:04 Eastern Time, 
the Respondent submitted a renewal application for his DEA COR.
    ``6. The Respondent did not disclose the February 5, 2016 
Voluntary Agreement Not to Practice Medicine on his February 7, 2017 
renewal application.
    ``7. The Respondent did not disclose the January 26, 2017 
indictments outlined above on his February 7, 2017 renewal 
application.
    ``8. The Respondent did not supplement his February 7, 2017 
renewal application.''
    On the hearing day, the parties submitted additional 
Stipulations. ALJX 26; transcript page number (hereinafter, Tr.) 5-
6. According to the ``Joint Notice of Stipulations,'' the parties 
stipulated to the authenticity of Respondent's registration in GX 1, 
of Respondent's registration history in GX 2, and of the Affidavit 
of Daniel Kelly, RX 3.
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    The hearing in this matter lasted one day and took place in 
Arlington, Virginia on August 22, 2017. The Recommended Rulings, 
Findings of Fact, Conclusions of Law, and Decision of the 
Administrative Law Judge (hereinafter, RD) is dated September 29, 2017. 
Respondent filed exceptions to the RD. ALJX 31 (Respondent's Exceptions 
to the CALJ's Recommended Decision, dated Oct. 19, 2017). The 
Government sought and received leave to respond to Respondent's 
Exceptions over Respondent's objection. ALJX 32 (Government's Request 
for Leave to File Response to Respondent's Exceptions, dated Oct. 19, 
2017); ALJX 34 (Order Granting the Government's Request for Leave to 
File Response to Respondent's Exceptions, dated Oct. 24, 2017). The 
Government's response to Respondent's Exceptions is dated November 1, 
2017. ALJX 35 (Government's Response to Respondent's Exceptions, dated 
Nov. 1, 2017).
    Having considered the record in its entirety, I agree with the RD's 
conclusion that the record establishes, by clear, unequivocal, and 
convincing evidence, that Respondent materially falsified his 
registration renewal application.\2\ I find that Respondent did not 
accept responsibility for the material falsification. Accordingly, I 
conclude that I can no longer entrust Respondent with a registration, 
that his registration should be revoked, and that any pending 
application by Respondent for registration in Indiana should be denied. 
I make the following findings.
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    \2\ I reviewed, and agree with, the Chief ALJ's pre-hearing, 
hearing, and post-hearing rulings and orders.
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II. Findings of Fact

A. Respondent's Current Registration

    Respondent's current registration, BS5000411, is at the Regional 
Health Center in Hammond, Indiana. GX 1 (Certificate of Registration), 
at 1; Tr. 13. Its expiration date is February 29, 2020.\3\ GX 1, at 1; 
GX 2 (Certification of Registration Status), at 1.
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    \3\ The current status of Respondent's registration, whether 
expired or timely renewed, does not impact my adjudication of this 
matter. Jeffrey D. Olsen, M.D., 84 FR 68,474 (2019); 5 U.S.C. 
558(c).
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B. The Investigation of Respondent

    A former employee of Respondent contacted DEA stating that 
Respondent ``authorized the issuing of prescriptions and seeing 
patients by a medical assistant in his office while he was 
incarcerated.'' Tr. 20, 23. The case Diversion Investigator 
(hereinafter, DI) followed up on the allegation by obtaining copies of 
prescriptions that Respondent issued during his incarceration and 
requesting recordings of telephone conversations between Respondent and 
his office staff during the same period. Id. at 23-30.
    While the hearing testimony's description of the allegation does 
not specify whether any of the alleged prescriptions were for 
controlled substances, there is substantial evidence in the record that 
the allegation did include, at least in part, the prescribing of 
controlled substances. For example, the DEA employee staffing the DEA 
tip line referred the allegation to DI. Id. at 20-23. If the allegation 
had no potential connection to controlled substances, the DEA employee 
initially receiving the tip would not have referred it to DI for 
investigation based on DEA's jurisdiction. Further, DI's investigation 
of the allegation included his request for information from 
prescription monitoring programs (hereinafter, PDMP). Id. at 23-24. The 
Massachusetts PDMP was established to ``maintain an electronic system 
to monitor the prescribing . . . of all schedule II to V, inclusive, 
controlled substances and certain additional drugs . . . determined . . 
. to carry a bona fide potential for abuse.'' Mass. Gen. Laws ch. 94C, 
Sec.  24A (Current through Chapter 44 of the 2020 2nd Annual Session). 
Had the tip not included an allegation related to controlled 
substances, there would not have been any reason for DI to request PDMP 
information. As such, I find that the allegation by Respondent's staff 
concerned, at least in part, the unlawful prescribing of controlled 
substances.

C. The Material Falsification Allegations

    As already discussed, the OSC alleges that Respondent submitted a 
renewal application containing two material falsifications. OSC, at 2. 
The first alleged material falsification is his negative response to 
whether he had ever been convicted of a crime in connection with 
controlled substances under state or federal law, or whether ``any such 
action [is] pending?'' Id. According to the Government, Respondent's 
negative response to this ``liability question'' was materially false, 
because the ``Commonwealth of Massachusetts had indicted . . . [him] 
for crimes in connection with controlled substances less than two weeks 
earlier.'' Id.
    The second alleged material falsification is Respondent's negative 
response to whether he had ``ever surrendered (for cause) or had a 
state professional license . . . revoked, suspended, denied, 
restricted, or placed on probation, or is any such action pending?'' 
Id. The OSC alleges, and the Government sufficiently and timely further 
explicated, that this negative response was materially false, because 
Respondent ``had just agreed to not practice medicine within the 
Commonwealth of Massachusetts.'' \4\ Id.; 5 U.S.C. 554(b)(3); contra 
ALJX 31, at 1.
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    \4\ Although the date in the OSC associated with this allegation 
is February 5, 2017, the parties subsequently agreed that the 
correct date is February 5, 2016. Joint Stipulation No. 3.
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    There is factual agreement among the witnesses on a number of 
matters. When there is factual disagreement, I apply my credibility 
determinations and the credibility recommendations of the Chief ALJ in 
all but a portion of one instance. Infra Section D.

D. The Government's Case

    The Government's admitted documentary evidence consists primarily 
of Respondent's renewal application (GX 6), the sixty-eight page 
Hampden County Superior Court criminal indictment of Respondent (GX 5), 
and the Voluntary Agreement Not to Practice Medicine that Respondent 
and his attorney signed and that the Massachusetts Board of 
Registration in Medicine (hereinafter, MBRM) ``accepted,'' on February 
5, 2016 (GX 3) (hereinafter, Mass. Accepted Voluntary No-Practice 
Agreement).\5\ The

[[Page 45231]]

Government called two witnesses: DI and an Investigator for the MBRM 
(hereinafter, MBRM Investigator).
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    \5\ The Hampden County Superior Court criminal indictment 
charges Respondent with twenty-six counts of ``improper 
prescription,'' twenty counts of ``uttering false prescription,'' 
and twenty-two counts of ``false health care claim.'' GX 5 
(Massachusetts Superior Court Indictment No. 17 039 (dated Jan. 26, 
2017)). The improper prescription allegations concern controlled 
substances such as hydrocodone (15 counts), oxycodone (6 counts), 
fentanyl (3 counts), and methadone (3 counts).
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    DI testified about his investigation-related activities of the 
``tip'' submitted by Respondent's former employee, including, his 
interaction with Respondent's attorney, Daniel M. Kelly, on February 6, 
2017, about the Hampden County Superior Court criminal indictment of 
Respondent and his request for the surrender of Respondent's 
registration, and his acquisition of an official copy of the Mass. 
Accepted Voluntary No-Practice Agreement (GX 3). Tr. 34-40 and 41-43, 
respectively.
    DI testified during the Government's rebuttal case that he 
investigated whether DEA had a record of Respondent's notification of 
the Mass. Accepted Voluntary No-Practice Agreement. Tr. 140. DI stated 
that he checked DEA's ``permanent and running database of any activity 
regarding any registrants or any DEA registration.'' Id. at 142. He 
also testified that he asked the registration specialist for 
Massachusetts, who is responsible for recording any communication from 
a registrant, whether DEA had received a communication from Respondent. 
Id. at 143. Neither the check of the database nor the check with the 
registration specialist showed any communication from Respondent about 
the Mass. Accepted Voluntary No-Practice Agreement. Id. at 140-45. DI 
acknowledged that Respondent could have notified DEA after DI checked 
the database and spoke with the registration specialist, and that the 
registration specialist's check may not have been thorough. Id. at 146-
48.
    I agree with the Chief ALJ that DI's testimony was ``sufficiently 
detailed, internally consistent, and plausible to be granted full 
credibility'' and that he ``presented as a credible, objective, 
dispassionate investigator without any discernible incentive to 
fabricate or exaggerate.'' RD, at 5.
    MBRM Investigator testified that he is the lead MBRM investigator 
assigned to assess the information the MBRM received from DEA about 
Respondent, that Respondent issued prescriptions when incarcerated in 
Kentucky, and that the investigation remains open. Tr. 59, 77. MBRM 
Investigator testified about the multiple oral and written 
communications he had with Respondent, Respondent's hiring an attorney, 
Respondent's signing the Mass. Accepted Voluntary No-Practice 
Agreement, and Respondent's continued lack of permission to practice 
medicine in Massachusetts due to his signing the Mass. Accepted 
Voluntary No-Practice Agreement.\6\ Tr. 59-75, 74, 74-75, and 75-80, 
respectively.
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    \6\ During cross-examination, MBRM Investigator responded ``no'' 
when Respondent's counsel asked if the Mass. Accepted Voluntary No-
Practice Agreement is a suspension, revocation, resignation, 
lapsing, or restriction on Respondent's medical license, or if it is 
a ``probationary agreement.'' Tr. 77-78.
     In response to questions posed by the Chief ALJ, MBRM 
Investigator stated his understanding that ``if you practice 
[medicine] during a voluntary, we as the Board of Medicine could 
possibly summarily suspend you.'' Tr. 80; see also GX 3, at 2.
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    MBRM Investigator testified during the Government's rebuttal case 
that he previously investigated two other cases concerning Respondent. 
Id. at 150-52. In both instances, MBRM Investigator stated, he notified 
Respondent of the investigation by phone, by letter, or by both phone 
and letter. Id. at 152.
    MBRM Investigator also testified during the Government's rebuttal 
case that Respondent ``would call and leave . . . messages'' about the 
case, ``continually . . . asking what he could do to speed the case 
along.'' Id. at 152-53. According to the MBRM Investigator, 
Respondent's calls occurred during the summer of 2016. Id. at 153. 
Respondent did not rebut this aspect of MBRM Investigator's testimony. 
Id. at 154.
    I agree with the Chief ALJ that MBRM Investigator's testimony was 
``sufficiently detailed, internally consistent, and plausible to be 
granted full credibility,'' except as to the plausibility of MBRM 
Investigator's interpretation of the legal effect of the Mass. Accepted 
Voluntary No-Practice Agreement. RD, at 5. I agree with the Chief ALJ 
that MBRM Investigator ``presented as a credible, objective, 
dispassionate investigator without any discernible incentive to 
fabricate or exaggerate.'' Id.

E. Respondent's Case

    Respondent testified and called no other witness. Tr. 81-82.
    During his testimony, Respondent recounted his pursuit of a career 
as a physician since his childhood, discussed his medical licenses and 
primary care physician practices in Indiana and Massachusetts, and 
explained that the ``immediate cause'' of his moving from Massachusetts 
to Indiana was his ``enter[ing] into the voluntary agreement not to 
practice medicine'' on February 5, 2016. Id. at 86-87, 88-93, and 93-
95, respectively.
    Respondent testified that he first found out from MBRM Investigator 
that Massachusetts was investigating him on or about January 27, 2016, 
about a week after he submitted a medical license renewal application. 
Id. at 131. Respondent testified he entered into the Mass. Accepted 
Voluntary No-Practice Agreement because the MBRM ``had concerns 
regarding what occurred with . . . [his] divorce, incarceration, 
contempt,'' and because MBRM Investigator asked him to sign it. Id. at 
95-96. He testified that he signed it with the assistance of Mr. Kelly, 
``the attorney who's representing . . . [him] in the indictment in 
Massachusetts,'' that his Massachusetts medical license had not 
expired, and that the Mass. Accepted Voluntary No-Practice Agreement 
``is non-disciplinary, there's no violation, so I guess it's a tool 
that Massachusetts has or a remedy until they can further pursue . . . 
whatever they have concerns about.'' \7\ Id. at 96-97.
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    \7\ Stipulation No. 2, ``From April 17, 2015 to May 11, 2015, 
the Respondent was incarcerated in Kentucky,'' concerns Respondent's 
having been held in contempt and incarcerated in Kentucky in 
connection with a divorce matter. ALJX 11, at 2. During cross-
examination, Respondent admitted that he responded in the negative 
to a question on the Massachusetts medical license renewal 
application about whether he had been ``charged with any criminal 
offense during this period?'' Tr. 124-25. He also admitted to 
responding ``no'' to questions on the same application about whether 
any criminal offenses or charges against him had been resolved 
during the time period, and whether any criminal charges were 
pending against him ``today.'' Tr. 125-26. Respondent explained that 
he answered ``no'' because the Kentucky matter was about his divorce 
and not, in his understanding, about a medical or criminal matter. 
Tr. 129. He stated that ``to think that contempt in my divorce rose 
to a level of criminal activity, it didn't quite register like that. 
I mean, I'm sorry. It just didn't.'' Id.
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    Respondent confirmed that there are ``reporting requirements'' 
associated with the Mass. Accepted Voluntary No-Practice Agreement and 
certified that he fulfilled them. Id. at 97-98, 155-56. He testified 
that he received a ``return receipt requested'' green card from his 
notification to DEA, but no actual notification of receipt from DEA. 
Id. at 98-99.\8\ He also stated that he did not have a ``direct 
conversation'' with anyone at DEA about his entering into the Mass. 
Accepted Voluntary No-Practice Agreement. Id. at 99.
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    \8\ According to Respondent, he ``possibly may,'' but does not 
``believe'' that he still has the return receipt card from the 
mailing to DEA. Tr. 115.
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    During cross-examination, Respondent offered his perspective of the 
Mass. Accepted Voluntary No-Practice Agreement. He testified that the 
``effect'' of the document is ``self-contained in the words of the 
document itself.'' Id. at 110. He stated that, although he did not know 
whether Massachusetts was still investigating him, he ``assumed'' that 
its investigation

[[Page 45232]]

was still open, more likely than not. Id. In response to a question 
posed by the Chief ALJ, however, Respondent agreed that his signing the 
Mass. Accepted Voluntary No-Practice Agreement meant that everything 
was ``sort of'' held in the status quo. Id. at 134. He again 
``assumed'' that the hold was so MBRM could finish its investigation. 
Id. at 135. As Respondent continued to say ``I don't know'' and ``I 
guess'' about the status of the MBRM investigation, the Chief ALJ 
sought clarification, asking, ``But your belief wasn't that you were 
just going to stop practicing medicine forever. Your belief was that 
until they sort this out, you were in this status?'' Id. Respondent 
answered, ``Until, right, right, that they would sort it.'' Id. at 135-
36.
    The Chief ALJ then asked Respondent ``who is Daniel Kelly? Where 
does he come into it?'' Id. at 136. Respondent replied that Mr. Kelly 
represented him in the federal and local criminal matters ``from the 
beginning . . . so he was aware of--he knew the entire situation, I 
guess,'' and that Respondent retained him ``a year prior'' to the 
indictment. Id. at 136-37. During this inquiry, the Chief ALJ 
suggested, and I agree, that Respondent retained a criminal defense 
attorney because he knew that a criminal investigation was pending. Id.
    Respondent stated his understanding that the ``or is any such 
action pending'' portion of the third liability question did not call 
for him to answer yes, even though he assumed that Massachusetts was 
still investigating him. Id. at 111-12. When asked if he would have had 
to answer ``yes'' if he knew about an investigation by Massachusetts, 
he answered yes, he should have answered ``yes'' if he were aware of a 
Massachusetts investigation. Id. at 114-15. He elaborated by 
reiterating his view that the Mass. Accepted Voluntary No-Practice 
Agreement is a ``tool'' of the MBRM. Id. at 112. He stated that it is 
``non-disciplinary'' and that it is ``not restriction, probation, all 
of the things that it has in there pertaining to the question, and my 
understanding is it's to avoid any action.'' Id. Further, on re-direct, 
Respondent testified that he ``answered the question [on the DEA 
application] honestly at that time . . . to the best of my knowledge.'' 
Id. at 130. On re-cross, Respondent answered ``no'' when asked whether 
he thought ``putting all those ``No's'' there, it was more likely that 
they were going to renew your certificate of registration.'' Id. at 
133. He responded ``not one way or the other. I mean, they're asking 
questions and then they will make a determination based on the totality 
of everything. . . . [I]t's up to them.'' Id.
    Regarding the Hampden County Superior Court criminal indictment, 
Respondent confirmed that its allegations stem ``from that time . . . 
[he] was incarcerated.'' Id. He testified that Mr. Kelly told him about 
the indictment on Thursday morning, February 9, 2017, a couple days 
after Respondent submitted the registration renewal. Id. at 100. He 
stated that he did not know that he had been indicted when he submitted 
the registration renewal. Id.; see also id. at 102-03 (denying he 
received personal service of the indictment before he submitted the 
renewal application).
    Respondent testified that he never had a problem with his 
registration since he first received it in ``approximately'' 1996, and 
that he has had a ``full unrestricted'' medical license since 1996. Id. 
at 100-01. He stated that his registration and medical licenses have 
``all been in good standing, unrestricted [in] full with all states 
that I've ever held licenses in.'' Id. at 101. Respondent explained his 
negative response to the third liability question on the renewal 
application by testifying that ``my license has not been revoked, my 
license has not been suspended. They did not deny my license. I have my 
license. It's currently preserved . . . . There's no restriction on my 
license. It has not been placed on probation. So the answer is no.'' 
Id. at 104. In addition, Respondent confirmed that he did not 
``consider whether the Massachusetts voluntary agreement not to 
practice medicine, whether that should cause . . . [him] to answer 
``Yes'' to that particular question.'' Id.
    Respondent testified that he ``honestly believed when . . . [he] 
completed the application that . . . [his] answers were truthful, to 
the best of . . . [his] ability,'' and that he had ``no intent to 
deceive the DEA. There would be no purpose in that.'' Id. at 104-05; 
see also id. at 109.\9\
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    \9\ Respondent also testified that he would lose his job if he 
did not have a registration. Tr. 105.
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    I agree with the Chief ALJ's analysis of the credibility of 
Respondent's testimony.

    While the Respondent's testimony was not without some credible 
aspects, it was also not without some bases for reservation. In 
addition to the incontrovertible fact that as the subject of these 
proceedings, the Respondent has the most at stake, his unequivocal 
assertion that his state licensure has never been the subject of any 
investigation since the commencement of his medical practice in 1996 
was convincingly contradicted by . . . [MBRM Investigator], who 
credibly testified that he investigated the Respondent regarding a 
patient complaint and failure to cooperate with that complaint, and 
that he telephonically informed him about that investigation. . . . 
Further, . . . [Respondent's] unwillingness to acknowledge that 
benign responses to the Liability Questions were less likely to 
raise concern did not enhance his credibility here. The Respondent 
is an educated professional, and irrespective of his view that his 
answers in the application were candid, his refusal to accept the 
proposition that unremarkable responses are generally more likely to 
result in a favorable outcome in a DEA application was a gratuitous 
depreciation of his overall credibility.
    Moreover, the Respondent's testimony that he forwarded a copy of 
the . . . [Mass. Accepted Voluntary No-Practice Agreement] to DEA, 
but failed to keep a shred of paperwork memorializing that act, is 
implausible. By the Respondent's own account, sending the Agreement 
to various offices, including DEA, was a term of the Agreement. . . 
. That he would fail to keep any evidence of his compliance with 
that term, particularly after he expounded on the importance of such 
compliance as an integral aspect of his profession, is simply not 
credible. Although much of the Respondent's testimony is worthy of 
belief, in instances where that testimony is at variance with other 
credible testimony, it must be viewed with heightened scrutiny.\10\
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    \10\ The RD ``found that Respondent's testimony was 
`convincingly contradicted' by a Government witness, thus disputing 
the credibility of Respondent's testimony.'' ALJX 31, at 9. 
Respondent took exception to this portion of the RD, arguing that 
the RD's credibility determination ``is not supported by the cited 
record as Respondent never made any such assertion.'' Id. at 10. I 
reject Respondent's exception.
     First, although Respondent correctly distinguishes between the 
words ``discipline'' and ``investigations'' in the transcript, he 
ignores the substance of MBRM Investigator's testimony. Tr. 101, 
151. MBRM Investigator clearly testified that he opened a ``second 
docket'' due to Respondent's ``failure to answer the . . . [MBRM] 
during that first case.'' Id. at 152. I find that Respondent's fully 
honest response to his counsel's question of ``And before all this 
started taking place, did you ever have any sort of medical state 
discipline?'' would have included and disclosed the opening of the 
second docket due to Respondent's failure to answer the MBRM during 
the first case. Id. at 101. Second, as the Government points out, 
Respondent inaccurately suggests that the RD makes a ``negative 
credibility determination based solely on Respondent's failure to 
disclose two prior state investigations.'' ALJX 35, at 8.
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RD, at 7-8 [citations and footnotes omitted].

F. Allegation That Respondent Submitted a Materially False Registration 
Renewal Application

    As already discussed, the OSC charged Respondent with submitting a 
renewal application containing two material false statements. The first 
alleged material false statement concerns Liability Question No. 1 and 
Respondent's negative response as to whether he had ever been convicted 
of a crime in connection with controlled substances under state or 
federal law, ``or [is] any such action pending.'' OSC, at 2. The second 
alleged material false

[[Page 45233]]

statement concerns Liability Question No. 3 and Respondent's negative 
response as to whether he had ever surrendered (for cause) or had a 
state professional license revoked, suspended, denied, restricted, or 
placed on probation, or whether ``any such action [is] pending.'' Id.

G. Liability Question No. 1

    I find that Respondent answered ``no'' to the first Liability 
Question on the registration application. GX 2, at 2; ALJX 11, at 2 
(Stipulation Nos. 7 and 8). I find that the Hampden County Superior 
Court criminal indictment of Respondent is dated January 26, 2017. GX 
5. I find that DI informed Respondent's attorney about the Hampden 
County Superior Court criminal indictment on February 6, 2017. Tr. 34-
40. Even if the Hampden County Superior Court criminal indictment is a 
precursor ``action pending'' to a possible criminal conviction in 
connection with controlled substances under state or federal law, I 
find that there is insufficient evidence in the record that Respondent, 
himself, as opposed to his attorney, knew about the Hampden County 
Superior Court criminal indictment on or before February 7, 2017. I, 
thus find that the evidence the Government submitted does not establish 
that Respondent's ``no'' response to the first Liability Question was 
false, let alone materially false, when he submitted his renewal 
application to DEA on February 7, 2017.

H. Liability Question No. 3

    I find from clear, unequivocal, and convincing evidence that 
Respondent answered ``no'' to the third Liability Question on the 
registration application. ALJX 11, at 2 (Stipulation Nos. 6 and 8); GX 
2, at 2. I find from clear, unequivocal, and convincing evidence that 
Respondent and his attorney signed the Mass. Accepted Voluntary No-
Practice Agreement on February 5, 2016. GX 3, at 3. I find from clear, 
unequivocal, and convincing evidence that the MBRM ``accepted'' and 
``ratified'' the Mass. Accepted Voluntary No-Practice Agreement on 
February 5, 2016 and February 11, 2016, respectively. Id.
    I find from clear, unequivocal, and convincing evidence that the 
Mass. Accepted Voluntary No-Practice Agreement resulted from the MBRM 
investigation of the tip DEA received, that the Mass. Accepted 
Voluntary No-Practice Agreement is still in effect, and that the MBRM 
investigation was open at least through the date of the DEA 
administrative hearing. Tr. 76-77. I find from clear, unequivocal, and 
convincing evidence that the Mass. Accepted Voluntary No-Practice 
Agreement is the reason Respondent is not permitted to practice 
medicine in Massachusetts. ALJX 11, at 2 (Stipulation No. 3); Tr. 94-
99. I find from clear, unequivocal, and convincing evidence that the 
terms of the Mass. Accepted Voluntary No-Practice Agreement include 
Respondent's ``immediate'' cessation of the practice of medicine in 
Massachusetts. GX 3, at 2. Based on clear, unequivocal, and convincing 
evidence, I find that the Mass. Accepted Voluntary No-Practice 
Agreement is a clear indicator, and is part, of pending action by the 
MBRM regarding Respondent's Massachusetts medical license. For example, 
the top of the first page of the Mass. Accepted Voluntary No-Practice 
Agreement is captioned ``In the Matter of'' Respondent and shows a 
docket number starting with the year. Id. The second paragraph clearly 
states that the Mass. Accepted Voluntary No-Practice Agreement ``will 
remain in effect'' until the MBRM modifies it, terminates it, ``takes 
other action against . . . [Respondent's] license to practice 
medicine,'' or ``takes final action on the above-referenced matter.'' 
Id. The sixth paragraph of the Mass. Accepted Voluntary No-Practice 
Agreement warns that ``[a]ny violation of this Agreement shall be prima 
facie evidence for immediate summary suspension of my license to 
practice medicine.'' Id. [italics added]. The last page of the Mass. 
Accepted Voluntary No-Practice Agreement contains the dates on which 
the MBRM ``accepted'' and ``ratified,'' by vote of the MBRM, the 
Agreement. GX 3, at 3. These terms and provisions leave no room for 
doubt that the Mass. Accepted Voluntary No-Practice Agreement 
evidences, and is part of, pending action by the MBRM regarding 
Respondent's medical license. Indeed, I find from clear, unequivocal, 
and convincing evidence that the Mass. Accepted Voluntary No-Practice 
Agreement envisions the possibility that it could be used as prima 
facie evidence for the ``immediate summary suspension'' of Respondent's 
Massachusetts medical license. GX 3, at 2.
    In sum, I find from clear, unequivocal, and convincing evidence 
that the third Liability Question on the application Respondent 
submitted to DEA asks whether the applicant ever surrendered (for 
cause) or had a state professional license or controlled substance 
registration revoked, suspended, denied, restricted, or placed on 
probation, ``or is any such action pending?'' \11\ GX 2, at 2. As 
already discussed, I find from clear, unequivocal, and convincing 
evidence that, at a minimum, the Mass. Accepted Voluntary No-Practice 
Agreement shows a pending action exists in Massachusetts concerning 
Respondent by its explicit warning that ``immediate summary 
suspension'' of Respondent's Massachusetts medical license is a 
possible result of ``any violation of this Agreement.'' \12\ GX 3, at 
2. Consequently, I find based on clear, unequivocal, and convincing 
evidence, that Respondent's ``no'' answer to the third Liability 
Question was false.\13\ For the same reasons, and based on the same 
clear, unequivocal, and convincing evidence, I also find that 
Respondent knew, or should have known, that his answer to the third 
Liability Question was false. Further, for the same reasons and based 
on the same evidence in conjunction with the credibility determinations 
I already made, I find that Respondent falsified his answer to the 
third Liability Question to help ensure DEA's favorable action on his 
application and, therefore, that Respondent's falsification indicates 
an intent to deceive.\14\
---------------------------------------------------------------------------

    \11\ I need not address Respondent's argument that his signing 
the Mass. Accepted Voluntary No-Practice Agreement was not a ``for 
cause'' surrender because my Decision is not based on that aspect of 
Liability Question No. 3.
    \12\ Respondent's argument that he is still subject to an open 
investigation may also be true. ALJX 30 (Respondent's Proposed 
Findings of Fact and Conclusions of Law, dated Sept. 21, 2017), at 
11. I need not address Respondent's argument that an investigation 
is not a ``pending action.'' Id. at 12-13. As already explained, the 
Mass. Accepted Voluntary No-Practice Agreement makes clear on its 
face that the MBRM has a pending action concerning Respondent, and I 
find unavailing all of Respondent's arguments to the contrary. See, 
e.g., ALJX 31, at 4-6.
    \13\ For the same reasons, I conclude that Respondent's 
arguments that he ``still maintains his license,'' that he did not 
surrender it, are misplaced and legally irrelevant.
    \14\ Proof of intent to deceive has never been, and is not, a 
required element of a material falsification under 21 U.S.C. 
824(a)(1). Indeed, at its essence, intent to deceive conflicts with 
Agency decisions' long-standing material falsification 
determinations of whether the applicant ``knew or should have 
known'' that the application was false. Some past Agency material 
falsification decisions address an intent to deceive in determining 
the appropriate sanction for a material falsification, as do I. See 
infra note 32.
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III. Discussion

A. The Controlled Substances Act and the OSC Allegations

    Pursuant to section 303(f) of the Controlled Substances Act 
(hereinafter, CSA), ``[t]he Attorney General shall register 
practitioners . . . to dispense . . . controlled substances . . . if 
the applicant is authorized to dispense . . .

[[Page 45234]]

controlled substances under the laws of the State in which he 
practices.'' 21 U.S.C. 823(f). Section 303(f) further 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.'' Id. In making the public 
interest determination, the CSA requires me to consider the following 
factors:
    (1) The recommendation of the appropriate State licensing board or 
professional disciplinary authority.
    (2) The applicant's experience in dispensing . . . 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 15,227, 15,230 (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,'' and I ``can `give each factor the weight . . . [I] 
determine[ ] is appropriate.' '' MacKay v. Drug Enf't Admin., 664 F.3d 
808, 816 (10th Cir. 2011) (quoting Volkman v. Drug Enf't Admin., 567 
F.3d 215, 222 (6th Cir. 2009) quoting Hoxie v. Drug Enf't Admin., 419 
F.3d 477, 482 (6th Cir. 2005)). In other words, the public interest 
determination ``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.'' Peter A. 
Ahles, M.D., 71 FR 50,097, 50,098-99 (2006).
    Pursuant to section 304(a)(1), the Attorney General is also 
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 this 
section are also properly considered in deciding whether to grant or 
deny an application under section 303. See Richard J. Settles, D.O., 81 
FR 64,940, 64,945 (2016); Arthur H. Bell, D.O., 80 FR 50,035, 50,037 
(2015); The Lawsons, Inc., t/a The Medicine Shoppe Pharmacy, 72 FR 
74,334, 74,338 (2007); Samuel S. Jackson, D.D.S., 72 FR 23,848, 23,852 
(2007); Alan R. Schankman, M.D., 63 FR 45,260, 45,260 (1998); Kuen H. 
Chen, M.D., 58 FR 65,401, 65,402 (1993).\15\
---------------------------------------------------------------------------

    \15\ 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. Richard 
J. Settles, D.O., 81 FR at 64,945; Arthur H. Bell, D.O., 80 FR at 
50,037; The Lawsons, Inc., t/a The Medicine Shoppe Pharmacy, 72 FR 
at 74,338; Bobby Watts, M.D., 58 FR 46,995, 46,995 (1993); Shannon 
L. Gallentine, D.P.M., 76 FR 45,864, 45,865 (2011).
---------------------------------------------------------------------------

    The Government has the burden of proof in this proceeding. 21 CFR 
1301.44.
    As already discussed, Respondent submitted a registration renewal 
application containing a false answer to the question of whether he 
``ever surrendered (for cause) or had a state professional license . . 
. revoked, suspended, denied, restricted, or placed on probation, or is 
any such action pending?'' The Supreme Court explained decades ago that 
``the ultimate finding of materiality turns on an interpretation of 
substantive law.'' Kungys v. United States, 485 U.S. 759, 772 (1988) 
(citing a Sixth Circuit case involving 18 U.S.C. 1001 and explaining 
that, even though the instant case concerned 8 U.S.C. 1451(a), ``we see 
no reason not to follow what has been done with the materiality 
requirement under other statutes dealing with misrepresentations to 
public officers''). The Supreme Court also clarified that a falsity is 
material if it is ``predictably capable of affecting, i.e., had a 
natural tendency to affect, the official decision.'' Id. at 771.
    In this case, application of the Supreme Court's materiality 
analysis, in the context of the CSA, means that Respondent's false 
submission was material. Id. Indeed, the falsity Respondent submitted 
in his renewal application relates to three of section 303(f)'s five 
factors, which provide the bases for my determination of whether an 
application is inconsistent with the public interest. 21 U.S.C. 823(f); 
see JM Pharmacy Group, Inc., d/b/a Farmacia Nueva and Best Pharma 
Corp., 80 FR 28,667, 28,681 (2015) (stating that a falsity must be 
analyzed in the context of the application requirements sought by DEA 
and provided by the applicant, and must relate to a ground that could 
affect the decision); see also ALJX 30 (Respondent's Proposed Findings 
of Fact and Conclusions of Law, dated Sept. 21, 2017), at 14; Universal 
Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 
2003 (2016) (hereinafter, Escobar) (stating that ``[u]nder any 
understanding of the concept, materiality `look[s] to the effect on the 
likely or actual behavior of the recipient of the alleged 
misrepresentation.'''); Maslenjak v. United States, 137 S. Ct. 1918, 
1928 (2017) (concluding that when ``there is an obvious causal link 
between the . . . lie and . . . [the] procurement of citizenship,'' the 
facts ``misrepresented are themselves disqualifying'' and I ``can make 
quick work of that inquiry''). Respondent's provision of false 
information deprived me of the ability to carry out my statutorily 
mandated five-factor analysis concerning the registration of 
practitioners. 21 U.S.C. 823(f). In other words, there is no doubt that 
Respondent's falsity was ``predictably capable of affecting, i.e., had 
a natural tendency to affect, the official decision'' the CSA instructs 
me to make. Kungys, 485 U.S. at 771.
    The facts in this case clearly demonstrate the connection between 
one liability question and three of section 303(f)'s five factors. 
Infra note 30. The first section 303(f) factor is the ``recommendation 
of the appropriate State licensing board or professional disciplinary 
authority.'' 21 U.S.C. 823(f)(1). In this case, the MBRM accepted and 
ratified Respondent's Mass. Accepted Voluntary No-Practice Agreement on 
February 5 and 11, 2016, respectively. GX 3, at 2. As already 
discussed, pursuant to Respondent's Mass. Accepted Voluntary No-
Practice Agreement, as accepted and ratified by the MBRM, Respondent 
admits that his Massachusetts medical license no longer permits him to 
practice medicine; Respondent's state professional license is 
restricted to a practical nullity. Tr. 89, 93. Further, as already 
discussed, the second paragraph of the Mass. Accepted Voluntary No-
Practice Agreement explicitly states that the ``Matter'' of 
Respondent's Mass. Accepted Voluntary No-Practice Agreement, Docket No. 
16-033, remains pending before the MBRM. GX 3, at 2 (``This Agreement 
will remain in effect until the . . . [MBRM] determines that this . . . 
[Mass. Accepted Voluntary No-Practice Agreement] should be modified or 
terminated; or until the . . . [MBRM] takes other action against . . . 
[Respondent's] license to practice medicine; or until the . . . [MBRM] 
takes final action on the above-

[[Page 45235]]

referenced matter.''). In addition, also already discussed, a clear 
indication of the significance of the Mass. Accepted Voluntary No-
Practice Agreement is the document's sixth paragraph that ``[a]ny 
violation . . . shall be prima facie evidence for immediate summary 
suspension'' of Respondent's medical license. Id. [italics added]. 
Thus, Respondent's false submission implicates the first factor that I 
am statutorily mandated to consider. John O. Dimowo, M.D., 85 FR 
15,800, 15,809-10 (2020).
    The second section 303(f) factor is the ``applicant's experience in 
dispensing . . . controlled substances.'' 21 U.S.C. 823(f)(2). I 
already found that DEA and Massachusetts law enforcement were 
investigating an allegation that Respondent unlawfully issued 
controlled substance prescriptions when he was incarcerated in 
Kentucky. Tr. 20-40. Further, the unrefuted record testimony is that 
Respondent entered into the Mass. Accepted Voluntary No-Practice 
Agreement after multiple interactions with the MBRM Investigator 
regarding this allegation. Id. at 93-97, 155-56; GX 5. The fact that 
this unrefuted record evidence includes unproven allegations does not 
change the salient point. The CSA requires me to consider Respondent's 
experience in dispensing controlled substances. Respondent's alleged 
controlled substance dispensing while incarcerated in Kentucky, which 
irrefutably led to the Mass. Accepted Voluntary No-Practice Agreement, 
implicates this CSA-mandated factor regardless of the weight, if any, I 
give it. The falsity Respondent submitted in his application deprived 
me of information potentially relevant to factor two, and, therefore, I 
was unable to carry out my CSA-mandated responsibilities.
    The analysis of the same unrefuted record evidence under factor 
four (compliance with applicable state, federal, and local laws 
relating to controlled substances) leads to the same conclusion. 
Respondent's submission of a falsified application deprived me of 
information potentially relevant to factor four, and, therefore, I was 
unable to carry out my CSA-mandated responsibilities.
    In sum, the falsity Respondent submitted relates to three of 
section 303(f)'s five factors. Based on an analysis of the CSA, 
Respondent's falsity directly implicates my statutorily mandated 
analysis and decision by depriving me of legally relevant facts. 
Escobar, 136 S. Ct. at 2002 (``Under any understanding of the concept, 
materiality `look[s] to the effect on the likely or actual behavior of 
the recipient of the alleged misrepresentation.'''). Consequently, I 
must find, based on the CSA and the analysis underlying multiple 
Supreme Court decisions involving materiality, that the falsity 
Respondent submitted was material.\16\
---------------------------------------------------------------------------

    \16\ As the parties stipulated, Respondent's false submission to 
DEA appeared in the registration renewal application he submitted on 
February 7, 2017. ALJX 11, at 2 (Joint Stipulation No. 5), supra 
note 1. That renewal application was granted. Subsequently, DEA 
identified the falsity and issued the OSC seeking revocation based 
of 21 U.S.C. 824(a)(1).
     The liability questions implicate the public interest factors 
of 21 U.S.C. 823(f). Infra note 30. A false response to a liability 
question is, by definition, therefore, always ``material'' and 
always a reason why I may deny an initial or subsequent application 
under section 303(f). According to the terms of section 303(f), my 
ultimate decision of whether to deny such a materially false 
application shall be based on my determination of whether ``issuance 
of such registration or modification would be consistent with the 
public interest'' as determined by my consideration of that 
section's five factors.
    When, however, as here, the Agency does not identify the 
material falsity until after the registration or modification is 
granted, the determination of the appropriate sanction, if any, is 
based on the relevant facts and circumstances. 21 U.S.C. 824(a)(1).
---------------------------------------------------------------------------

B. Respondent's Arguments and Exceptions

    Respondent posited many arguments during the administrative hearing 
and in exceptions to the RD. Some have already been addressed. Others 
are addressed below.
    Respondent argues that a recent Supreme Court decision's treatment 
of ``materiality'' in a False Claims Act case is ``particularly 
unfavorable to the Government's attempt to prove materiality in light 
of DEA's informed inaction.'' ALJX 30, at 16 (citing Escobar). 
According to Respondent, ``[i]n terms of . . . [False Claims Act] 
liability, the [Supreme] Court held that evidence that the government 
knew about an alleged regulatory violation that caused a claim 
submitted to the government to be false yet continued to pay those 
claims was `very strong evidence' that the underlying conduct was not 
material.'' Id. at 17. Since the Supreme Court ``utilized the same 
definition of `material' set forth by the [Supreme] Court in Kungys,'' 
Respondent argues, the Government ``cannot prevail in light of its 
inaction despite knowledge of the alleged past conduct underlying the 
indictment.'' Id.
    The RD rejects this argument, as do I. RD, at 16-17.
    First, Respondent's reasoning, based on the appearance of the same 
root word, ``material,'' for applying Escobar's False Claims Act 
analysis to the CSA is not convincing. The Supreme Court in Escobar 
ties its analysis to ``other federal fraud statutes'' and to the common 
law.\17\ It connects its discussion of federal fraud statutes with the 
common law by stating that the ``common law could not have conceived of 
`fraud' without proof of materiality.'' Escobar, 136 S. Ct. at 2002 
(citing Neder v. United States, 527 U.S. 1, 22 (1999). It emphasizes 
the similarity of the definitions of ``materiality'' in the False 
Claims Act and in the common law by stating that ``[w]e need not 
decide'' whether the False Claims Act's ``materiality requirement is 
governed by . . . [the False Claims Act] or derived directly from the 
common law.'' Escobar, 136 S. Ct. at 2002. Thus, Respondent's 
invitation that I apply the Supreme Court's Escobar analysis of the 
False Claims Act to the CSA more broadly than only to the definition of 
``materiality'' goes beyond the clear boundaries of Escobar and is 
without merit.\18\ As the RD states, ``Whether the

[[Page 45236]]

Government decides to pay a [contract] claim despite knowledge that 
certain conditions of payment are not satisfied simply does not 
implicate the same considerations as the decision of the Government to 
delay (or even to forgo) bringing . . . [a CSA] action against a . . . 
[registrant] despite knowledge of alleged conduct which could support a 
sanction.'' RD, at 16-17. I reject Respondent's invitation to equate 
the CSA with the False Claims Act. I agree with the RD that these two 
statutes share no commonality that would legally support, let alone 
require, such a correlation.
---------------------------------------------------------------------------

    \17\ It explicitly mentions mail, bank, and wire fraud statutes, 
Neder v. United States, 527 U.S. 1 (1999), and fraudulent statements 
to immigration officials, Kungys v. United States, 485 U.S. 759 
(1988). Escobar, 136 S. Ct. at 2002.
    \18\ Likewise, in conjunction with the Court's statement in 
Maslenjak, the Court's more recent naturalization decision, that the 
naturalization process ``is set up to provide little or no room for 
subjective preferences,'' I note that the CSA differs from the 
naturalization process in that respect. Maslenjak, 137 S. Ct. at 
1928 (concluding that ``the question of what any individual 
decisionmaker might have done with accurate information is beside 
the point'' because the ``entire system . . . is set up to provide 
little or no room for subjective preferences''). While the CSA 
establishes parameters for issuing and terminating registrations, 
the final registration-related decision, such as granting or denying 
a registration, and continuing, suspending, or revoking a 
registration, is left to the reviewable discretion of the Attorney 
General. 21 U.S.C. 823 and 824 (using the word ``may'' in provisions 
to confer discretion on the Attorney General regarding the granting, 
denying, continuing, suspending, and revoking of practitioner 
registrations). The difference between the objective naturalization 
process and the discretionary CSA process, however, does not detract 
from the usefulness of the Supreme Court's decisions on the meaning 
of ``materially falsified'' under section 304(a)(1).
     Although the existence of a factor in 823(f) is not, in and of 
itself, disqualifying as a fact could be in the naturalization 
process, the CSA states clearly that ``in determining the public 
interest, the following factors shall be considered.'' 21 U.S.C. 
823(f) (emphasis added). Depriving me of accurate information that I 
am statutorily required to consider interferes with my 
responsibility to consider the public interest factors. The clear 
intent of the CSA is that applicants and registrants shall provide 
me with accurate information for my analysis under section 303, and 
that a falsification of any information concerning a section 303 
factor thwarts my ability to assess the public interest as the CSA 
requires me to do, and is therefore necessarily material to my 
decision on the application. In light of the discretion afforded me 
in the CSA, it would make little sense to impose a ``but for'' test 
or even a ``more likely than not'' test on the effect of a false 
statement. After all, I cannot analyze the five factors without 
accurate information.
---------------------------------------------------------------------------

    Second, Respondent's argument takes Escobar beyond the parameters 
of the Supreme Court's opinion. Respondent argues that the Government 
``cannot prevail in light of its inaction, despite knowledge of the 
alleged past conduct underlying the indictment.'' ALJX 30, at 17 
[emphasis added]. The Supreme Court, however, merely warned that ``if 
the Government pays a particular claim in full despite its actual 
knowledge that certain requirements were violated, that is very strong 
evidence that those requirements are not material.'' Escobar, 136 S. 
Ct. at 2003 [emphasis added]. Respondent's argument that the Government 
``cannot prevail in light of its [prior] inaction'' against Respondent, 
is not only inapposite, it also carries the Escobar decision beyond the 
Court's clear terms that inaction is ``very strong evidence,'' but not 
dispositive.
    Third, Respondent's argument incorrectly assumes that no crime or 
violation has occurred unless law enforcement has initiated a criminal 
prosecution or a civil or administrative enforcement action. According 
to Respondent, ``[i]f [Respondent's] alleged past conduct were 
material, DEA could have brought an order to show cause against . . . 
[him] based on this conduct at some point over the last two years. 
Instead, DEA has allowed . . . [Respondent] to maintain his COR.'' ALJX 
30, at 17. Respondent's position is untenable.
    Section 304 of the CSA states that the Attorney General ``may'' 
revoke or suspend a registration. 21 U.S.C. 824(a). The discretion the 
CSA affords the Attorney General regarding his initiation of a 
revocation or suspension enforcement action is unfettered.\19\ 
According to the Supreme Court, in situations such as the one presented 
by the CSA, ``an agency's decision not to prosecute or enforce, whether 
through civil or criminal process, is a decision generally committed to 
an agency's absolute discretion.'' Heckler v. Chaney, 470 U.S. 821, 831 
(1985); see also 5 U.S.C. 701(a) and Heckler v. Chaney, 470 U.S. at 
831-32 (discussing reasons why there is generally no judicial review of 
agency decisions not to enforce).
---------------------------------------------------------------------------

    \19\ Section 304(a)(1-5) lists grounds for suspension or 
revocation of a registration.
---------------------------------------------------------------------------

    Fourth, Agency decisions have addressed section 304(a)(1), 
including the meaning of ``materially,'' on multiple past occasions. 
Relying on those interpretations of the CSA, as opposed to taking the 
novel approach that Respondent proposes, is important to the Agency's 
mission.\20\
---------------------------------------------------------------------------

    \20\ To the extent that Agency decisions contain differences in 
their interpretations or applications of 21 U.S.C. 824(a)(1), I note 
F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502 (2009). In 
that case, the Supreme Court acknowledged that administrative agency 
adjudications change course and addressed how an agency may do so 
and continue to pass muster on appellate review under the 
Administrative Procedure Act (hereinafter, APA). First, the Supreme 
Court pointed out that the APA does not mention a heightened 
standard of review for agency adjudication course adjustments. Id. 
at 514. Instead, it stated that the narrow and deferential standard 
of review of agency adjudications set out in 5 U.S.C. 706 continues 
to apply. Id. at 513-14 (concluding that ``our opinion in State Farm 
neither held nor implied that every agency action representing a 
policy change must be justified by reasons more substantial than 
those required to adopt a policy in the first instance.'').
     Second, according to the Supreme Court, an agency would 
``ordinarily display awareness that it is changing position'' and it 
may not ``depart from a prior policy sub silentio or simply 
disregard rules that are still on the books.'' Id. at 515. Further, 
an agency must ``show that there are good reasons for the new 
policy'' but need not ``demonstrate to a court's satisfaction that 
the reasons for the new policy are better than the reasons for the 
old one; it suffices that the new policy is permissible under the 
statute, that there are good reasons for it, and that the agency 
believes it to be better.'' Id. (emphases in original). Finally, the 
Supreme Court had warned in an earlier decision that an ``irrational 
departure'' from agency policy, ``as opposed to an avowed alteration 
of it,'' could be overturned as arbitrary and capricious, or an 
abuse of discretion. I.N.S. v. Yueh-Shaio Yang, 519 U.S. 26, 32 
(1996).
     Thus, while my analysis of Agency decisions' legal 
interpretations over time of ``materially falsified'' shows 
substantial uniformity, I note a few instances of an arguable degree 
of departure. The departure may be attributable to particular or 
unusual facts, to my predecessor's perspective on the degree of 
transparency or candor required in the specific interaction with the 
Agency at issue, or the like. While my legal analysis of the CSA's 
provision addressing material falsification may not be the agency 
adjudication course adjustment the Supreme Court contemplated in Fox 
Television, I am following the Court's Fox Television parameters as 
I carry out my CSA-related responsibilities. The ramifications of my 
doing so include increasing transparency and facilitating any 
appellate review.
---------------------------------------------------------------------------

    An Agency decision from 1986 noted that the Agency ``processes 
thousands of practitioner registrations each year'' and that there is 
``no feasible method . . . [for the Agency] to make an investigation 
into the accuracy of each application submitted.'' William M. Knarr, 
D.O., 51 FR 2772, 2773 (1986) (noting that the falsifications were 
discovered by accident). This decision and others interpreting section 
304(a)(1) concluded that the submission of falsified applications is a 
serious offense that cannot be tolerated because it renders the Agency 
``unable to meaningfully pass on the fitness of the applicant.'' Id.; 
see also Carl E. Darby, M.D., 53 FR 51,330, 51,331 (1988); Ronald H. 
Futch, M.D., 53 FR 38,990, 38,991 (1988). The questions on the 
registration application ``serve a purpose which cannot be overlooked 
by the Administrator'' and, had the applicant submitted accurate 
responses, ``an investigation could have taken place.'' Ezzat E. Majd 
Pour, M.D., 55 FR 47,547, 47,548 (1990) (finding finalized or pending 
medical license revocation/suspension proceedings in three states even 
though applicant provided a ``no'' answer to the relevant liability 
question on the application). In carrying out its statutory mission to 
authorize the dispensing of controlled substances in the public 
interest, the Agency must be able to rely on the truthfulness of 
applicants' submissions. Anne D. DeBlanco, M.D., 62 FR 36,844, 36,845 
(1997) (``Since DEA must rely on the truthfulness of information 
supplied by applicants in registering them to handle controlled 
substances, falsification cannot be tolerated.''); Leonel Tano, M.D., 
62 FR 22,968, 22,972 (1997) (same); Linwood T. Townsend, D.D.S., 59 FR 
32,224, 32,225 (1994) (same); Bobby Watts, M.D., 58 FR 46,995, 46,995 
(1993) (same); Carl E. Darby, M.D., 53 FR at 51,331 (same); Ronald H. 
Futch, M.D., 53 FR at 38,991 (same); William M. Knarr, D.O., 51 FR at 
2773 (concluding that the Agency ``must rely on the truthfulness of 
every applicant'').
    In the late 1990s, the Agency elaborated on its earlier decisions 
and distinguished between finding the existence of a material 
falsification and determining the appropriate sanction. Martha 
Hernandez, M.D. (hereinafter, Hernandez) repeated the observation from 
earlier Agency decisions that ``the Respondent knew, or should have 
known, that his DEA registration had been revoked.'' 62 FR 61,145, 
61,146 (1997) (citing Bobby Watts, M.D., 58 FR at 46,995 and Herbert J. 
Robinson, M.D., 59 FR 6304, 6304 (1994)). Hernandez, though, 
characterized this observation as a necessary part of the analysis of 
the existence of a material falsification. According to Hernandez, 
again referencing Bobby Watts, M.D. and Herbert J. Robinson, M.D., 
``DEA has previously held that in finding that there has been a 
material falsification of an application, it must be determined that 
the applicant knew or should have

[[Page 45237]]

known that the response given to the liability question was false.'' 62 
FR at 61,146. The Agency then ``conclude[d] that there is no question 
that . . . [respondent] materially falsified two of her applications 
for DEA registration'' and stated that this was ``extremely troubling 
since DEA relies on accurate information being submitted by its 
applicants.'' \21\ Id. at 61,148.
---------------------------------------------------------------------------

    \21\ The falsifications in that case related to the doctor's 
inability to repay her student loan. The repayment issue had 
ramifications for her medical licenses in Illinois and Indiana. The 
Hernandez respondent admitted that her responses to the 
application's liability questions were incorrect. 62 FR at 61,146.
---------------------------------------------------------------------------

    Admitting to the inaccuracy of the answers on her DEA application, 
the Hernandez respondent argued that she submitted no ``materially'' 
false statement, that she had no intent to deceive or mislead DEA, that 
her underlying misconduct was not related to controlled substances, and 
that she responded correctly to similar questions on a state 
application after someone explained the proper way to interpret the 
application question. Id. at 61,146. The Agency did not fully embrace 
her arguments. In addition to concluding that the falsifications were 
material, Hernandez made clear that a misinterpretation of the 
application does ``not relieve [respondent] . . . of her responsibility 
to carefully read the question and to honestly answer all parts of the 
question.'' Id. at 61,147. While the decision may be interpreted to 
agree with the Hernandez respondent that she did not intend to deceive 
DEA, the decision states that ``negligence and carelessness in 
completing an application could be a sufficient reason to revoke a 
registration.'' Id. Regarding the Hernandez respondent's argument that 
the falsification did not involve controlled substances, the Agency 
agreed with the Government that it had ``in fact revoked registrations 
in the past based upon the material falsification of an application 
that was not related to the mishandling of controlled substances.'' Id. 
at 61,148 (citing Ezzat E. Majd Pour, M.D.).
    Hernandez, then, drew the distinction between finding a material 
falsification and the next inquiry--whether ``revocation is the 
appropriate sanction in light of the facts and circumstances of this 
case.'' Id. The decision appears to credit as ``credible,'' while also 
stating it is ``clearly an incorrect interpretation,'' the Hernandez 
respondent's explanation for the falsity. Id. Further, the decision 
calls ``troubl[ing]'' the Hernandez respondent's ``carelessness in 
failing to carefully read the question on the applications.'' Id. 
Nevertheless, the decision finds ``significant'' that, prior to the 
issuance of the OSC, the Hernandez respondent ``answered a similar 
liability question correctly on her . . . Illinois application . . . 
after discussing the matter with an Illinois official.'' Id. The 
decision notes that the Illinois Department of Professional Regulation 
``has seen fit to allow . . . [her] to continue to practice medicine as 
long as she continues to repay her loan.'' Id. Thus, the decision 
concludes, the state medical boards' handling of the Hernandez 
respondent's student loan repayment challenges was ``relevant, although 
not dispositive, in determining the appropriate sanction.'' Id. After 
considering all of the facts and circumstances, the decision concludes 
that ``revocation would be too severe a sanction given the facts and 
circumstances of this case.'' Id. at 61,148. Instead, it reprimands the 
Hernandez respondent ``for her failure to properly complete her 
applications for registration,'' and required her, for three years, 
``to submit to the DEA . . . , on an annual basis, documentation from . 
. . [the] medical licensing authorities certifying that her medical 
licenses remain in good standing . . . and that there is no impediment 
to her handling controlled substances at the state level.'' Id.
    Some Agency decisions incorporate both pre-Hernandez and Hernandez 
analyses.\22\ Other Agency decisions apply the material falsification 
elaborations and distinctions articulated in Hernandez, and continue 
developing the application of 21 U.S.C. 824(a)(1).\23\ For example, in 
2005, the Agency confirmed the ``knew or should have known'' 
determination for whether there had been a ``material falsification'' 
and the consideration of all the facts and circumstances in determining 
the appropriate sanction. Felix K. Prakasam, M.D., 70 FR 33,203, 
33,205-06 (2005). When faced with a respondent whose ``explanations for 
the misstatements and his continued insistence that his answers were 
correct are disingenuous at best,'' the Agency bluntly stated that 
respondent's answers were not accurate. Id. The Agency then stated 
clearly what it had introduced in a 1993 decision--its ``concern 
regarding Respondent's on-going refusal or inability to acknowledge a 
registrant's responsibility to provide forthright and complete 
information to DEA, when required to do so as a matter of law or 
regulation. This attitude . . . does not auger well for his future 
compliance with the responsibilities of a registrant.'' \24\ Id. Thus, 
the Agency revoked respondent's registrations based on a finding of a 
violation of 21 U.S.C. 824(a)(1) and respondent's lack of legally 
mandated forthrightness and transparency. Id.
---------------------------------------------------------------------------

    \22\ See, e.g., VI Pharmacy, Rushdi Z. Salem, 69 FR 5584 (2004) 
(invoking the ``knew or should have known'' determination, stating 
that falsification cannot be tolerated since DEA must rely on the 
truthfulness of the information supplied by applicants in 
registering them, and evaluating the ``totality of the 
circumstances'' in determining the appropriate sanction); Thomas G. 
Easter II, M.D., 69 FR 5579 (2004) (citing Barry H. Brooks, M.D. 
concerning the ``knew or should have known'' determination, 
reiterating that answers to liability questions are always material 
because DEA relies on them to determine whether it is necessary to 
investigate the application, stating that falsification cannot be 
tolerated since DEA must rely on the truthfulness of the information 
supplied by applicants in registering them, and evaluating the 
``totality of the circumstances'' in determining the appropriate 
sanction); Barry H. Brooks, M.D., 66 FR 18,305 (2001) (recounting 
testimony explaining how DEA uses the liability questions to 
evaluate applications, noting the ``knew or should have known'' 
determination, rejecting the argument that the omission of relevant 
information from an application is not material if DEA already knows 
it, reiterating that answers to liability questions are always 
material because DEA relies on them to determine whether it is 
necessary to investigate the application, asserting that 
falsification cannot be tolerated, and evaluating the ``totality of 
the circumstances'' in determining the appropriate sanction).
    \23\ See, e.g., Theodore Neujahr, D.V.M., 64 FR 72,362 (1999) 
(noting Hernandez and the ``knew or should have known'' test to 
determine materiality); KK Pharmacy, 64 FR 49,507 (1999) (same); 
Saihb S. Halil, M.D., 64 FR 33,319 (1999) (reiterating that the 
application signatory is responsible for the truthfulness of the 
application's contents, even if he did not personally complete it, 
and relying on the ``knew or should have known'' determination, no 
state authority, and admitted lack of knowledge of controlled 
substance regulations to revoke the registration); Anthony D. 
Funches, 64 FR 14,267 (1999) (finding a material falsification not 
based on intentional or negligent behavior, and granting the 
distributor registration subject to applicant's acceptance of 
inspection concessions); John J. Cienki, M.D., 63 FR 52,293 (1998) 
(reiterating that the applicant ``knew or should have known'' about 
the falsity of the response for a material falsification to exist); 
Samuel Arnold, D.D.S., 63 FR 8687 (1998) (stating that the applicant 
``knew or should have known'' about the falsity of the response for 
there to be a material falsification, and that a consideration of 
all the facts and circumstances of the case determines the 
appropriate remedy when a material falsification exists); Richard S. 
Wagner, M.D., 63 FR 6771 (1998) (applying the ``knew or should have 
known'' determination, concluding that intent to deceive does not 
limit the sanction of revocation, and highlighting the extreme 
importance of truthful answers since they alert DEA as to whether 
further investigation is necessary).
    \24\ In Kuen H. Chen, M.D., the Agency characterized, and 
adopted in its entirety, the Administrative Law Judge's 
recommendation. 58 FR 65,401 (1993). It did not attach the 
recommendation. The recommendation, as described in the Agency 
decision, found that respondent's ``cavalier attitude toward the 
importance of accurately executing the application suggests a lack 
of concern for the responsibilities inherent in a DEA 
registration.'' Id. at 65,402.
---------------------------------------------------------------------------

    The Agency continued to develop the Felix K. Prakasam, M.D. 
forthrightness

[[Page 45238]]

and transparency analysis for 21 U.S.C. 824(a)(1) in Peter A. Ahles, 
M.D. According to that decision, ``it is clear'' and ``indisputable'' 
that respondent materially falsified his application by not disclosing 
that California placed his medical license on probation three times. 71 
FR at 50,098. After finding that respondent materially falsified his 
application, the decision, citing the Sixth Circuit, stated that the 
Agency considers candor to be an ``important factor when assessing 
whether a physician's registration is consistent with the public 
interest'' and, therefore, ``falsification cannot be tolerated.'' Id. 
at 50,099 (citing Hoxie v. Drug Enf't Admin., 419 F.3d at 483).
    My analysis shows that the approach to section 304(a)(1) taken by 
most past Agency decisions aligns with the instruction Kungys and its 
progeny provide concerning the meaning of ``material'' absent a 
definition in the relevant statute.\25\ As already discussed, the 
approach of Kungys and its progeny to materiality is consistent with 
the CSA.\26\ The Supreme Court's interpretation and analysis rest on 
the ``most common formulation . . . 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.'' 485 U.S. at 770. The 
Court emphasized that the test for materiality ``has never been'' 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.'' \27\ Id. at 771 [emphases in 
original]. According to the Court, the materiality test ``must be met, 
of course, by evidence that is clear, unequivocal, and convincing.'' 
Id. at 772.
---------------------------------------------------------------------------

    \25\ Indeed, in 2007, an Agency decision relied on Kungys for 
the meaning of ``material.'' Samuel S. Jackson, D.D.S., 72 FR 23,848 
(2007). In that Decision, the Agency determined that the 
Government's evidence was insufficient to establish a violation of 
21 U.S.C. 824(a)(1).
    \26\ Regarding the different substantive legal contexts in which 
``material'' appears, the Supreme Court stated that a statute 
revoking citizenship and a criminal statute whose penalties are a 
fine or imprisonment are not ``so different as to justify adoption 
of a different standard.'' Kungys, 485 U.S. at 770. According to the 
Court, ``[w]here Congress uses terms that have accumulated settled 
meaning under either equity or the common law, a court must infer, 
unless the statute otherwise dictates, that Congress means to 
incorporate the established meaning of these terms.'' Id. My review 
of Supreme Court cases citing Kungys shows that decision cited in a 
variety of cases, including the False Claims Act (Escobar, 136 S. 
Ct. 1989 (2016)), a false statement in conjunction with a firearm 
sale (Abramski v. United States, 573 U.S. 169 (2014)), mail and tax 
fraud (Neder v. United States, 527 U.S. 1 (1999)), and a false 
statement to federally insured financial institutions (United States 
v. Wells, 519 U.S. 482 (1997)). Thus, the Supreme Court instructs on 
the meaning of ``material'' in situations when ``material'' is not 
defined in the statute at issue.
    \27\ Citing this portion of Kungys, some Agency decisions 
explicitly step away from pre-Kungys Agency decisions that found a 
false answer to a liability question ``always material'' due to 
DEA's reliance on the answers to those questions. See, e.g., Mark 
William Andrew Holder, M.D., 80 FR 71,618 n.19 (2015). I, however, 
see no inevitable conflict between these pre-Kungys Agency decisions 
and Kungys and its progeny.
---------------------------------------------------------------------------

    Thus, following the Supreme Court, I conclude that the 
falsification of any of the liability questions is ``material'' under 
21 U.S.C. 824(a)(1). My conclusion flows directly from the fact that 
each of the liability questions is connected to at least one of section 
303(f) factors that, according to the CSA, I ``shall'' consider as I 
analyze whether issuing a registration ``would be inconsistent with the 
public interest.'' \28\ 21 U.S.C. 823(f). I am unable to discharge the 
responsibilities of the CSA every time I am given false information in 
response to a liability question. Thus, each falsification of a 
liability question has a natural tendency to influence, or is capable 
of influencing my decision and is therefore material.
---------------------------------------------------------------------------

    \28\ The liability questions on the DEA-225 (04-12), 
``Application for Registration,'' (Approved OMB NO 1117-0012, Form 
Expires: 9/30/2021) are (1) ``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?'' (see 21 U.S.C. 823(f)(2-4); see also Sec.  
824(a)(2) and (5)); (2) ``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?'' 
(see 21 U.S.C. 823(f)(2-5); see also Sec.  824); (3) ``Has the 
applicant ever surrendered (for cause) or had a state professional 
license or controlled substance registration revoked, suspended, 
denied, restricted, or placed on probation, or is any such action 
pending?'' (see 21 U.S.C. 823(f)(1), (3), and (4); see also Sec.  
824(a)(3)); and (4) ``If the applicant is a corporation (other than 
a corporation whose stock is owned and traded by the public), 
association, partnership, or pharmacy, has any officer, partner, 
stockholder, or proprietor been convicted of a crime in connection 
with controlled substance(s) under state or federal law, or ever 
surrendered, for cause, or had a federal controlled substance 
registration revoked, suspended, restricted, denied, or ever had a 
state professional license or controlled substance registration 
revoked, suspended, denied, restricted or placed on probation, or is 
any such action pending?'' (see 21 U.S.C. 823(f)(1 through 5); see 
also Sec. Sec.  824 and 824(a)(2) and (3)) [emphases in original].
---------------------------------------------------------------------------

    After finding the existence of a material falsification, I then 
determine the appropriate sanction. My determination involves 
considering all the facts and circumstances before me.
    This Kungys/Maslenjak-based two-step analysis is consistent with 
the provisions of the CSA. It is consistent with the statutory 
requirements under section 303 (``the following factors shall be 
considered'' emphasis added), and the discretion afforded under section 
303(f) (``may deny an application'' emphasis added) regarding whether 
to deny a registration application or modification. In addition, my 
analysis and conclusion that this Respondent submitted a materially 
false renewal application are in line with the weight of past Agency 
decisions.\29\ Some of the

[[Page 45239]]

cases that Respondent urges me to follow are not.\30\
---------------------------------------------------------------------------

    \29\ See, e.g., Zelideh I. Cordova-Velazco, M.D., 83 FR 62,902 
(2018) (citing both the ``knew or should have known'' determination 
and Kungys regarding material falsification allegations, and 
concluding that applicant's now-current state license is ``simply 
not relevant in terms of resolving'' the material falsification 
allegation); Richard Jay Blackburn, D.O., 82 FR 18,669 (2017) 
(citing Kungys and denying the application without a sanction 
analysis because the applicant had not opposed the Government's 
motion for summary disposition, let alone offered an explanation for 
the falsification or mitigating evidence); Wesley Pope, M.D., 82 FR 
14,944 (2017) (emphasizing an Agency decision that had applied the 
``knew or should have known'' determination); Daniel A. Glick, 
D.D.S., 80 FR 74,800 (2015) (citing Kungys, stating that the 
``correct analysis depends on whether the registrant knew or should 
have known that he or she submitted a false application,'' and 
considering the ``totality of the circumstances'' in determining the 
sanction); Mark William Andrew Holder, M.D., 80 FR 71,618 (2015) 
(finding a clear, intentional, and material falsification because 
applicant did not want DEA to discover that he was a drug abuser); 
Arthur H. Bell, D.O., 80 FR 50,035 (2015) (citing Kungys, concluding 
that applicant's failure to disclose his surrender of his DEA 
registration ``for cause'' was materially false and intentional, and 
finding that applicant failed to produce sufficient evidence showing 
why he should be entrusted with a new registration); JM Pharmacy 
Group, Inc., d/b/a Farmacia Nueva and Best Pharma Corp., 80 FR 
28,667 (2015) (citing both the ``knew or should have known'' 
determination and Kungys regarding material falsification 
allegations, and concluding that applicant ``clearly knew'' that he 
``(1) [h]ad surrendered his registrations, (2) had done so in 
response to allegations that his pharmacies had committed violations 
of the CSA, and (3) did so to avoid proceedings to revoke the 
registrations, [meaning] he also clearly knew that he had 
surrendered ``for cause''); Jose G. Zavaleta, M.D., 78 FR 27,431 
(2013) (citing both the ``knew or should have known'' determination 
and Kungys regarding material falsification allegations); Richard A. 
Herbert, M.D., 76 FR 53,942 (2011) (citing both the ``knew or should 
have known'' determination and Kungys regarding material 
falsification allegations, citing Hoxie about the importance of 
candor in the assessment of whether a registration is in the public 
interest, and explicitly tying the falsification to two 21 U.S.C. 
823(f) factors); Shannon L. Gallentine, D.P.M., 76 FR 45,864 (2011) 
(citing Kungys regarding material falsification allegations and 
explaining that ``[g]iven the circumstances of the surrender, during 
which . . . [applicant] was confronted with questions by the 
Investigators about his prescribing practices and lack of 
documentation to justify his prescriptions, . . . [applicant] cannot 
claim that he did not surrender his registration for cause''); Mark 
De La Lama, P.A., 76 FR 20,011 (2011) (citing Kungys regarding 
material falsification allegations); Gilbert Eugene Johnson, M.D., 
75 FR 65,663 (2010) (finding that registrant knew his answers were 
false, citing Kungys, and stating that the false answers were 
material because the CSA requires consideration of the matters 
registrant falsified); Alvin Darby, M.D., 75 FR 26,993 (2010) 
(citing both ``knew or should have known'' and Kungys regarding 
material falsification allegations); Craig H. Bammer, D.O., 73 FR 
34,327 (2008) (citing Kungys on the meaning of a ``material'' false 
statement and Hoxie on ``candor''); The Lawsons, Inc., t/a The 
Medicine Shoppe Pharmacy, 72 FR 74,334 (2007) (citing both the 
``knew or should have known'' determination and Kungys regarding 
material falsification allegations, and citing Hoxie about the 
importance of candor in the assessment of a registration 
application); but see Michel P. Toret, M.D., 82 FR 60,041 (2017) 
(ruling that a Voluntary Surrender Form alone, indicating nothing 
about applicant's failure to comply with any controlled substance 
requirement, is an insufficient basis to find a material 
falsification); Richard D. Vitalis, D.O., 79 FR 68,701 (2014) 
(citing Kungys, finding three ``clearly false, and knowingly so'' 
answers regarding the suspension of his state medical license based 
on his history of alcohol dependency, and concluding that those 
false answers were not material because alcohol dependency is not 
actionable misconduct under the CSA); Hoi Y. Kam, M.D., 78 FR 62,694 
(2013) (citing Kungys, finding a false statement, stating that the 
``relevant decision for assessing whether a false statement is 
material is the Agency's decision as to whether an applicant is 
entitled to be registered,'' and concluding the falsity was not 
material because the state license was no longer revoked and ``the 
Government offers no argument, let alone any evidence, that the 
truthful disclosure of the State's action against his medical 
license would have led it to evidence in the exclusion proceeding 
that Respondent violated any state rules or regulations regarding 
controlled substances and thus would have supported the denial of 
his application''); Scott C. Bickman, M.D., 76 FR 17,694, 17,701 
(2011) (citing both the ``knew or should have known'' determination 
and Kungys regarding material falsification allegations, citing 
Hoxie about the importance of candor in the assessment of a 
registration application and, citing Gonzales v. Oregon, granting 
the renewal application because the Government's evidence did not 
establish that ``Respondent's failure to disclose that the State 
Board had placed him on probation was capable of influencing the 
decision to grant his renewal application,'' because the probation 
was for medical malpractice and the CSA does not state that medical 
malpractice is a disqualification for a registration).
    \30\ See, e.g., Respondent's citation to, and reliance on, the 
results in Hoi Y. Kam, M.D., 78 FR 62,694 (2013) and Scott C. 
Bickman, M.D., 76 FR 17,694, 17,701 (2011). ALJX 30, at 14.
     Respondent also argues that ``the Government must prove that 
the overall intent of the application was to deceive DEA.'' ALJX 30, 
at 9 (citing Daniel A. Glick, D.D.S., 80 FR 74,800, 74,808 (2015) 
and Samuel S. Jackson, D.D.S., 72 FR 23,848, 23,852-53 (2007)).
     According to Daniel A. Glick, D.D.S., 80 FR at 74,808, ``the 
correct analysis depends on whether the registrant knew or should 
have known that he or she submitted a false application,'' and 
``[a]lthough even an unintentional falsification can serve as a 
basis for adverse action regarding a registration, lack of intent to 
deceive and evidence that the falsification was not intentional or 
negligent are all relevant considerations.'' Similarly, according to 
Samuel S. Jackson, D.D.S., 63 FR at 23,852, citing the ``knew or 
should have known'' determination, Agency decisions ``make clear 
that culpability short of intentional falsification is actionable.''
     Thus, both Decisions Respondent cites, Daniel A. Glick, D.D.S. 
and Samuel S. Jackson, D.D.S., to support his argument state that a 
falsification need not be intentional to be actionable. I reject 
Respondent's argument that the Government must prove an ``overall 
intent to deceive DEA.'' An intent to deceive, however, has been 
considered as part of the totality of the circumstances when 
determining the appropriate sanction in the face of a material 
falsification. See, e.g., Daniel A. Glick, D.D.S., 80 FR at 74,808; 
Anthony D. Funches, 64 FR at 14,268-69.
---------------------------------------------------------------------------

    In sum, I carefully considered all of Respondent's arguments and 
conclude, based on
    clear, unequivocal, and convincing record evidence, that Respondent 
materially falsified his registration renewal application.

IV. Sanction

    Where, as here, the Government has established by clear, 
unequivocal, and convincing evidence that a respondent materially 
falsified his registration renewal application, the respondent must 
then ``present[ ] sufficient mitigating evidence'' to show why he can 
be entrusted with a registration. Garrett Howard Smith, M.D., 83 FR 
18,882, 18,910 (2018). Further, as past performance is the best 
predictor of future performance, Agency decisions require the 
respondent unequivocally to accept responsibility for his actions and 
demonstrate that he will not engage in future misconduct. ALRA Labs, 
Inc. v. Drug Enf't Admin., 54 F.3d 450, 452 (7th Cir. 1995); Jayam 
Krishna-Iyer, M.D., 74 FR 459, 463 (2009) (collecting cases); Jeffrey 
Stein, M.D., 84 FR 46,968, 46,972-73 (2019). In addition, a 
registrant's candor during the investigation and hearing has been an 
important factor in determining acceptance of responsibility and the 
appropriate sanction. Garrett Howard Smith, M.D., 83 FR at 18,910 
(collecting cases). The Agency has decided that the egregiousness and 
extent of the misconduct are significant factors in determining the 
appropriate sanction. Id. The Agency has also considered the need to 
deter similar acts by the respondent and by the community of 
registrants. Id. Consistent with past Agency decisions, I consider the 
totality of the facts and circumstances before me to determine the 
appropriate sanction. See, e.g., Hernandez, 62 FR at 61,147-48 (finding 
material falsification, but denying the Government's request for 
revocation as ``too severe'' given the facts and circumstances of the 
case).
    Respondent's misconduct proven by the record evidence is one 
falsity on one application. However, the falsity was not the result of 
confusion or inadvertence, but a deliberate attempt to hide the 
existence of the Mass. Accepted Voluntary No-Practice Agreement. RD, at 
20. The record evidence regarding that falsity clearly demonstrates to 
me that Respondent does not take his responsibility of candor to the 
Agency seriously. Id. Accomplishing the scope of DEA's law enforcement 
responsibilities would be extraordinarily difficult if the Agency could 
not rely on the candor of applicants and those in the regulated 
community. Id.
    I agree with the Chief ALJ that Respondent, through counsel, 
explicitly stated that Respondent did not accept responsibility and did 
not offer any remedial measures during his testimony.\31\ Id. at 18; 
Tr. 179. In his Posthearing Brief, Respondent reiterated that he does 
not prescribe controlled substances in his current position, yet needs 
a registration to continue to qualify for that position. ALJX 30, at 
23; Tr. 92, 105. The Posthearing Brief argues that revoking 
Respondent's registration would deprive the low-income and homeless 
patients he currently serves of his medical services.\32\ ALJX 30, at 
23. This argument is not consistent with recent Agency decisions 
concerning community impact evidence. I decline to accept Respondent's 
community impact argument.
---------------------------------------------------------------------------

    \31\ Respondent's proposed Corrective Action Plan would have 
``counsel review all registration applications [for the next five 
years] prior to submission to DEA to ensure accuracy and compliance 
with DEA's application disclosure requirements,'' and to take two, 
specified continuing medical education courses concerning opioids.
    \32\ Respondent also argued that ``the sanction of revocation . 
. . would deviate from the Agency's decisions in Funches and 
Hernandez.'' ALJX 30, at 23. Both Funches and Hernandez, however, 
are inapposite.
     In Funches, the application was for a registration as a retail 
distributor of list I chemicals. 64 FR at 14,267. The applicant 
indisputably operated his business in a ``responsible manner'' and 
credibly testified that the falsification was neither intentional 
nor negligent. Id. at 14,268. The falsification concerned a guilty 
plea twenty years before to a misdemeanor whose sentence was 
subsequently suspended, and ``involvement'' in a cocaine transaction 
over twenty years before. Id. at 14,267-69.
    Hernandez, already discussed in detail, concerned a respondent's 
student loan repayment challenges and the state licensing 
authority's decision to allow the respondent to retain her medical 
license as long as she continued to repay her student loans. 62 FR 
at 61,147. The decision appeared to credit as ``credible,'' while 
also calling it ``clearly an erroneous interpretation,'' the 
respondent's explanation for the falsity. Id.
---------------------------------------------------------------------------

    As the Chief ALJ concluded, Respondent acknowledged no deficiency 
and offered no plan to conform his future conduct. RD, at 19. ``In his 
view,'' the RD observes, Respondent ``did nothing wrong and would 
presumably enter the same false response on a future renewal 
application if faced with like circumstances.'' Id. In this situation, 
revocation is appropriate to avoid another proceeding charging material 
falsification ``because the Respondent believes his conduct to have 
been appropriate.'' Id.

[[Page 45240]]

    I agree with the Chief ALJ that ``[c]onsiderations of specific and 
general deterrence militate in favor of revocation.'' Id. Failing to 
sanction Respondent in this case would send a message to Respondent and 
others in the registrant community that Respondent is vindicated, and 
that his false answer to Liability Question No. 3 is the ``benchmark of 
exactly how candid . . . [one] ever needs to be in providing 
information to DEA.'' Id. at 19-20. I decline to create a ``perverse 
incentive on registrants and applicants to withhold requested 
application information any time where the withheld information may 
lead to an adverse decision on a DEA registration or renewal 
application.'' Id. at 20.
    I agree with the former Acting Assistant Administrator of the 
Diversion Control Division, that Respondent's proposed Corrective 
Action Plan provides no basis for me to discontinue or defer this 
proceeding. Its insufficiencies include Respondent's failure to accept 
responsibility, to institute remedial measures, and to convince me to 
entrust him with a registration. 21 U.S.C. 824(c)(3).
    Accordingly, I shall order the sanctions the Government requested, 
as contained in the Order below.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 824(a), I hereby revoke DEA Certificates of Registration 
BS5000411 issued to Frank Joseph Stirlacci, M.D. Pursuant to 28 CFR 
0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I further 
hereby deny any pending application of Frank Joseph Stirlacci, M.D., to 
renew or modify this registration, as well as any other pending 
application of Frank Joseph Stirlacci, M.D. for registration in 
Indiana. This Order is effective August 26, 2020.

Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-16193 Filed 7-24-20; 8:45 am]
BILLING CODE 4410-09-P