[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\
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\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\
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\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).
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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.
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\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.
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\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.
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\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.
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\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\
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\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.
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\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