[Federal Register Volume 85, Number 224 (Thursday, November 19, 2020)]
[Notices]
[Pages 73784-73786]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25523]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Verne A. Schwager, M.D.; Decision and Order

    On August 24, 2020, the Acting Assistant Administrator, Diversion 
Control Division, Drug Enforcement Administration (hereinafter, 
Government or DEA), issued an Order to Show Cause (hereinafter, OSC) to 
Verne A. Schwager, M.D., (hereinafter, Registrant), of Arlington 
Heights, Illinois. Government's Request for Final Agency Action 
(hereinafter, RFAA) Exhibit (hereinafter RFAAX) 4 (OSC), at 1. The OSC 
proposed the revocation of Registrant's Certificate of Registration No. 
AS2410075. It alleged that Registrant is without ``authority to

[[Page 73785]]

handle controlled substances in Illinois, the state in which 
[Registrant is] registered with the DEA.'' Id. at 2 (citing 21 U.S.C. 
824(a)(3)).
    Specifically, the OSC alleged that ``[o]n March 12, 2020, the 
Illinois Department of Financial and Professional Regulation 
([hereinafter,] ``IDFPR'') suspended [Registrant's] state Physician and 
Surgeon license . . . for a period of 12 months following its finding 
of [his] noncompliance with a February 2019 Consent Order that [he] 
entered into with IDFPR,'' and the license remains suspended. Id. The 
OSC further alleged that Registrant is not eligible to obtain or retain 
a DEA registration because he lacks state authority to handle 
controlled substances in the State of Illinois. Id.
    The OSC notified Registrant of the right to either request a 
hearing on the allegations or submit a written statement in lieu of 
exercising the right to a hearing, the procedures for electing each 
option, and the consequences for failing to elect either option. Id. 
(citing 21 CFR 1301.43). The OSC also notified Registrant of the 
opportunity to submit a corrective action plan. Id. at 3 (citing 21 
U.S.C. 824(c)(2)(C)).

I. Adequacy of Service

    On August 26, 2020, a DEA Diversion Investigator (hereinafter, DI) 
traveled with another DI to Registrant's registered location at 2025 
South Arlington Heights Road, Suite 106, Arlington Heights, Illinois 
60005 to serve Registrant with the OSC. RFAAX 7, at 2-3 (Declaration of 
Diversion Investigator, dated October 6, 2020). At Registrant's 
registered location, the DIs met with Registrant's office manager, who 
``informed [them] that [Registrant] was out of the office, but was 
expected to return later that afternoon.'' Id. at 3. The DI ``provided 
[the office manager] with a copy of the [OSC] and [the DI's] business 
card, and asked her to provide both to [Registrant] once he returned to 
the office. Later in the afternoon of August 26[th], [the DI] contacted 
the office of [Registrant] by telephone and was informed by [the office 
manager] that she provided the [OSC] copy to [Registrant].'' Id. The DI 
also ``sent a copy of the [OSC] via email, to [Registrant's] counsel,'' 
who ``replied to [the] email confirming her receipt of the [OSC].'' Id.
    On September 25, 2020, Registrant, through counsel, explained that 
Registrant was ``continu[ing] to negotiate with the IDFPR'' and 
``ask[ed] that the DEA forebear from proceeding to revoke his DEA 
registration pending resolution of this matter.'' RFAAX 5, at 2. 
Registrant further stated that ``at this time [he] waives his right to 
a hearing with the DEA.'' Id. at 3.
    The Government forwarded its RFAA along with the evidentiary 
record, to this office on October 19, 2020. In its RFAA, the Government 
represents that ``[Registrant], through his legal counsel, has also 
informed DEA of [Registrant]'s decision to waive his right to a 
hearing.'' RFAA, at 6 (citing Warren B. Dailey. M.D., 82 FR 46,525, 
56,526 (2017); David D. Moon, D.O., 82 FR 19,385, 19,387 (2017); 21 CFR 
1301.43(e)). The Government argues that ``grounds exist for the 
revocation of [Registrant]'s DEA [registration] pursuant to 21 U.S.C. 
823(f) and 824(a)(3)'' and requests ``the issuance of a DEA Final Order 
for the revocation'' of Registrant's registration. Id. at 6.
    I find that more than thirty days have now passed since the 
Government accomplished service of the OSC. Further, based on the 
Government's written representations and Registrant's own statements, I 
find that neither Registrant, nor anyone purporting to represent 
Registrant, requested a hearing, submitted a written statement while 
waiving Registrant's right to a hearing, or submitted a corrective 
action plan. RFAA, at 2. Accordingly, I find that Registrant has waived 
the right to a hearing and the right to submit a written statement and 
corrective action plan. 21 CFR 1301.43(d) and 21 U.S.C. 824(c)(2)(C). 
I, therefore, issue this Decision and Order based on the record 
submitted by the Government, which constitutes the entire record before 
me. 21 CFR 1301.46.

II. Findings of Fact

A. Registrant's DEA Registration

    Registrant is the holder of DEA Certificate of Registration No. 
AS2410075 at the registered address of 2025 S Arlington Heights Road, 
Suite 106, Arlington Heights, Illinois 60005. RFAAX 2 (Certification of 
Registration History). Pursuant to this registration, Registrant is 
authorized to dispense controlled substances in schedules II through V 
as a practitioner. Id. Registrant's registration expired on its own 
terms on February 29, 2020, and a renewal application was timely filed 
on March 4, 2020. Id. The registration ``is in a renewal pending status 
until the resolution of administrative proceedings.'' Id.

B. The Status of Registrant's State License

    On March 12, 2020, the IDFPR indefinitely suspended Registrant's 
Illinois Physician and Surgeon license ``for a minimum period of 12 
months.'' RFAAX 3 (Suspension Order), at 3. The Suspension Order stated 
that Registrant's Physician and Surgeon License had been on indefinite 
probation since February 2019, and as a condition of probation, 
Registrant ``had agreed to comply with all of [its] terms and 
conditions,'' and Registrant ``has failed to comply.'' Id. at 2. 
Therefore, in accordance with the terms of probation, IDFPR suspended 
Registrant's Physician and Surgeon license. Id. at 3.
    According to Illinois' online records, of which I take official 
notice, Registrant's medical license is still suspended and his 
``Licensed Physician Controlled Substance'' license is ``inoperative.'' 
\1\ IDFPR Search for a License, available at https://ilesonline.idfpr.illinois.gov/DFPR/Lookup/LicenseLookup.aspx (last 
visited October 27, 2020).
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    \1\ Under the Administrative Procedure Act, an agency ``may take 
official notice of facts at any stage in a proceeding--even in the 
final decision.'' United States Department of Justice, Attorney 
General's Manual on the Administrative Procedure Act 80 (1947) (Wm. 
W. Gaunt & Sons, Inc., Reprint 1979). Pursuant to 5 U.S.C. 556(e), 
``[w]hen an agency decision rests on official notice of a material 
fact not appearing in the evidence in the record, a party is 
entitled, on timely request, to an opportunity to show the 
contrary.'' Accordingly, Registrant may dispute my finding by filing 
a properly supported motion for reconsideration of finding of fact 
within fifteen calendar days of the date of this Order. Any such 
motion shall be filed with the Office of the Administrator and a 
copy shall be served on the Government. In the event Registrant 
files a motion, the Government shall have fifteen calendar days to 
file a response. Any such motion and response may be filed and 
served by email ([email protected]).
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    Accordingly, I find that Registrant currently is neither licensed 
to engage in the practice of medicine nor licensed to dispense 
controlled substances in Illinois, the state in which Registrant is 
registered with the DEA.

III. Discussion

    Pursuant to 21 U.S.C. 824(a)(3), the Attorney General is authorized 
to suspend or revoke a registration issued under section 823 of the CSA 
``upon a finding that the registrant . . . has had his State license or 
registration suspended . . . [or] revoked . . . by competent State 
authority and is no longer authorized by State law to engage in the . . 
. dispensing of controlled substances.'' With respect to a 
practitioner, the DEA has also long held that the possession of 
authority to dispense controlled substances under the laws of the state 
in which a practitioner engages in professional practice is a 
fundamental condition for obtaining and maintaining a practitioner's 
registration. See, e.g., James L. Hooper, M.D., 76 FR 71,371 (2011), 
pet. for rev. denied, 481 Fed.

[[Page 73786]]

Appx. 826 (4th Cir. 2012); Frederick Marsh Blanton, M.D., 43 FR 27,616, 
27,617 (1978).
    This rule derives from the text of two provisions of the CSA. 
First, Congress defined the term ``practitioner'' to mean ``a physician 
. . . or other person licensed, registered, or otherwise permitted, by 
. . . the jurisdiction in which he practices . . . , to distribute, 
dispense, . . . [or] administer . . . a controlled substance in the 
course of professional practice.'' 21 U.S.C. 802(21). Second, in 
setting the requirements for obtaining a practitioner's registration, 
Congress directed that ``[t]he Attorney General shall register 
practitioners . . . if the applicant is authorized to dispense . . . 
controlled substances under the laws of the State in which he 
practices.'' 21 U.S.C. 823(f). Because Congress has clearly mandated 
that a practitioner possess state authority in order to be deemed a 
practitioner under the CSA, the DEA has held repeatedly that revocation 
of a practitioner's registration is the appropriate sanction whenever 
he is no longer authorized to dispense controlled substances under the 
laws of the state in which he practices. See, e.g., James L. Hooper, 76 
FR at 71,371-72; Sheran Arden Yeates, M.D., 71 FR 39,130, 39,131 
(2006); Dominick A. Ricci, M.D., 58 FR 51,104, 51,105 (1993); Bobby 
Watts, M.D., 53 FR 11,919, 11,920 (1988); Frederick Marsh Blanton, 43 
FR at 27,617.
    Pursuant to the Illinois Controlled Substances Act, a 
```[p]ractitioner' means a physician licensed to practice medicine in 
all its branches . . . or other person licensed, registered, or 
otherwise lawfully permitted by the United States or this State to 
distribute, dispense, conduct research with respect to, administer or 
use in teaching or chemical analysis, a controlled substance in the 
course of professional practice or research.'' 720 Ill. Comp. Stat. 
Ann. 570/102(kk) (West). Illinois law requires that ``[e]very person 
who manufactures, distributes, or dispenses any controlled substances . 
. . . must obtain a registration issued by the Department of Financial 
and Professional Regulation in accordance with its rules.'' Id. at 570/
302(a).
    Further, under Illinois law, the Illinois Controlled Substances Act 
authorizes the IDFPR to discipline a practitioner holding a controlled 
substance license. ``A registration under Section 303 to manufacture, 
distribute, or dispense a controlled substance . . . may be denied, 
refused renewal, suspended, or revoked by the Department of Financial 
and Professional Regulation.'' Id. at 570/304(a).
    Here, the undisputed evidence in the record is that Registrant 
currently lacks authority to handle controlled substances in Illinois, 
as his controlled substance license is ``inoperative.'' As already 
discussed, a practitioner must hold a valid controlled substance 
license to dispense a controlled substance in Illinois. Thus, because 
Registrant lacks authority to handle controlled substances in Illinois, 
Registrant is not eligible to maintain a DEA registration. Accordingly, 
I order that Registrant's DEA registration be revoked.

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 Certificate of Registration No. 
AS2410075 issued to Verne A. Schwager, M.D. Further, pursuant to 28 CFR 
0.100(b) and the authority vested in me by 21 U.S.C. 823(f), I hereby 
deny any pending application of Verne A. Schwager, M.D. to renew or 
modify this registration, as well as any pending application of Verne 
A. Schwager, M.D. for registration in Illinois. This Order is effective 
December 21, 2020.

Timothy J. Shea,
Acting Administrator.
[FR Doc. 2020-25523 Filed 11-18-20; 8:45 am]
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