[Federal Register Volume 88, Number 101 (Thursday, May 25, 2023)]
[Notices]
[Pages 33908-33910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11131]



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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 22-26]


Keith Ly, M.D.; Decision and Order

I. Introduction

    On April 28, 2022, the Drug Enforcement Administration (DEA or 
Government) issued an Order to Show Cause (OSC) to Keith Ly, M.D. 
(Applicant), of Houston, Texas.\1\ OSC, at 1, 4. The OSC proposes the 
denial of Applicant's application for a DEA Registration (Control No. 
W21134341C), pursuant to 21 U.S.C. 824(a)(2 and 4) and 823(g)(1). Id. 
at 1. The OSC more specifically alleges that Applicant is a convicted 
felon, due to his violations of federal controlled substance laws, and 
committed other acts rendering his registration inconsistent with the 
public interest.\2\ Id.
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    \1\ Also referred to as ``Keith Ly, D.O.'' Compare Order 
Rejecting Applicant's Subpoena Request, at 1, with Recommended 
Rulings, Findings of Fact, Conclusions of Law and Decision of the 
Administrative Law Judge (RD), at 1.
    Effective December 2, 2022, the Medical Marijuana and 
Cannabidiol Research Expansion Act, Public Law 117-215, 136 Stat. 
2257 (2022) (MRA), amended the Controlled Substances Act (CSA) and 
other statutes. Relevant to this matter, the MRA redesignated 21 
U.S.C. 823(f), cited in the OSC, as 21 U.S.C. 823(g)(1). 
Accordingly, this Decision cites to the current designation, 21 
U.S.C. 823(g)(1), and to the MRA-amended CSA throughout.
    \2\ During the hearing, without Applicant's objection, the 
Government corrected two, legally irrelevant errors in the OSC. Tr. 
65, 69. Applicant did not file Exceptions about and, therefore, the 
Agency does not address, any of the Administrative Law Judge's pre-
hearing, hearing, or post-hearing rulings.
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    The hearing Applicant requested was held on September 8, 2022. 
Transcript of Video-Teleconference. Referencing Applicant's prior seven 
felony convictions and his failure to accept unequivocal responsibility 
for his actions, the RD recommends that Applicant's application be 
denied. RD, at 19-21, 23. Given the seriousness and extent of 
Applicant's founded violations, infra sections II.C., II.D., III.B., 
III.C., and IV., the Agency agrees.
    Having thoroughly analyzed the record and applicable law, the 
Agency summarizes its findings and conclusions: (1) the Government 
presented a prima facie case that Applicant is a felon convicted of 
seven violations of federal law relating to a controlled substance and 
that Applicant wrote prescriptions for controlled substances when he 
was not legally authorized to do so, (2) Applicant attempted, but 
failed, to rebut the Government's prima facie case, and (3) substantial 
record evidence shows that the extent of Applicant's legal violations 
calls for the denial of his application for a DEA registration. 
Accordingly, the Agency will deny Applicant's registration application. 
Infra Order.

II. Findings of Fact

A. The Government's Case

    The Agency finds that the parties stipulated to Applicant's seven 
felony convictions.\3\ Joint Stipulation No. 2 (set out in Prehearing 
Ruling, at 2); see also GX 3 (Amended Judgment in a Criminal Case: 
United States v. Keith Ly, 2:13CR00157MJP-002), at 1-2. The Agency 
finds that Applicant did not object to the introduction of GX 3, and 
does not dispute that he was sentenced to prison for sixty months. Tr. 
28-29; GX 3, at 3; see also, e.g., Tr. 150-51; Applicant's Closing 
Argument, at 1. Accordingly, the Agency finds uncontroverted, 
substantial record evidence that Applicant has seven prior felony 
convictions under federal law.
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    \3\ ``On December 19, 2014, Applicant was convicted of seven 
felonies under Title 21 in the United States District Court for the 
Western District of Washington, in Case No. 13-CR-157. Specifically, 
Applicant was convicted of the following: a. Count One, Conspiracy 
to Distribute and Dispense a Schedule I Controlled Substance, in 
violation of 21 U.S.C. 841 and 846; b. Counts Two-Four, 
Manufacturing Marijuana a Schedule 1 Controlled Substance, in 
violation of 21 U.S.C. 841; and c. Counts Five-Seven, Maintaining a 
Drug Involved Premises, in violation of 21 U.S.C. 856.'' Joint 
Stipulation No. 2 (set out in Prehearing Ruling, at 2).
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    Regarding the allegation of unlawful controlled substance 
prescribing, the Government successfully moved into evidence the 
Agency's prior Decision/Order concerning Applicant. GX 6 (Keith Ky Ly, 
D.O., 80 FR 29025 (May 20, 2015)). Accordingly, there is substantial 
record evidence that the Agency immediately suspended Applicant's prior 
DEA registration and affirmed that suspension in a published final 
Decision/Order dated May 20, 2015. Further, there is substantial record 
evidence that Applicant had reason to be aware of that immediate 
suspension on January 28, 2013. GX 6, at 3; see also Tr. 54-55, 61.
    The Government successfully moved into evidence four controlled 
substance prescriptions. GX 5a-d (lorazepam, OxyContin, clonazepam, and 
phenobarbital).\4\ The Diversion Investigator (DI) who testified that 
he obtained these prescriptions also testified that he confirmed with 
pharmacies that they dispensed, and with Applicant's patients that they 
received, the controlled substances issued in GX 5a-d.\5\ Tr. 56-70. 
Accordingly, the Agency finds substantial record evidence that 
Applicant issued controlled substance prescriptions between February 1, 
2013 and March 12, 2014, when his DEA registration was suspended.
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    \4\ In addition to containing controlled substance 
prescriptions, GX 5a-d also includes prescriptions for items that 
are not controlled.
    \5\ The Agency agrees with the RD's decision to afford DI's 
testimony ``full credibility.'' RD, at 6.
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B. Applicant's Case

    As already discussed, Applicant admits that he is a felon. Supra 
section II.A. He argues, though, that the convictions are ``totally 
unrelated to any conduct in his medical practice. It was for marijuana 
and not a prescribed drug, nor one that is presently illegal in most 
states.'' Applicant Exceptions, at 1. Applicant also argues that the 
convictions stem ``from actions that took place almost a decade ago,'' 
and that nobody has ever alleged that his controlled substance 
prescribing reflected an ``inappropriate medical diagnosis, practice or 
procedure.'' \6\ Id. at 2. He posits that the RD reflects a prejudging 
of his case ``due to a conviction . . . totally unrelated'' to his 
registration application. Id. at 2. Applicant similarly argues that the 
RD shows a ``misinterpret[ation]'' of his approach to acceptance of 
responsibility, as it fails to ``distinguish between a person who 
explains what took place,'' as he claims to have done, ``as opposed to 
someone who seeks to offer an excuse for what took place.'' Id.
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    \6\ Applicant also asserts that the notion that past performance 
is the best indicator of future results is ``archaic reasoning'' 
that ``flies in the face of countless examples of rehabilitation, 
restitution and recovery.'' Applicant Exceptions, at 1.
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    Regarding the allegation that he prescribed controlled substances 
when he did not have legal authority to do so, Applicant argues that GX 
5a-d includes prescriptions that are not for controlled substances, 
that some of the alleged prescriptions are not ``prescriptions'' 
because they do not include all of the elements required by regulation, 
and that the signature on the alleged controlled substance 
prescriptions is not his. Tr. 172-176; 186-192; 198-206; see also, 
e.g., Applicant's Closing Argument at 5. He also argues that the 
``prescriptions'' do not evidence or ``constitute any substandard 
medical procedures or diagnosis.'' Applicant Exceptions, at 2; 
Applicant's Closing Argument, at 4, 5. Instead, Applicant states that, 
throughout his practice, he has ``provide[d] medical[ly] necessary 
assistance with prescribed, controlled substances when the patient's 
condition(s) suggest that such a

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treatment would be in the patient's best interest.'' Id.
    Applicant's case highlights the continuing medical education (CME) 
classes he took while incarcerated and the Texas Medical Board's re-
issuance of his medical license. Id. at 2.
    The Agency agrees with the RD's analysis of, and conclusions about, 
the credibility of Applicant's testimony. RD, at 8-9. Accordingly, in 
this adjudication, the Agency gives DI's testimony controlling weight 
when there is a conflict between it and Applicant's testimony, and 
gives Applicant's testimony little to no weight in all other 
circumstances. Id. at 9.

C. Allegation That Applicant Is a Convicted Felon

    Based on a review of all of the record evidence, the Agency notes 
Applicant's admission that he has been convicted of seven felonies. 
Supra section II.A.; n.3. Accordingly, the Agency finds substantial, 
uncontroverted record evidence that Applicant is a seven-time convicted 
felon.

D. Allegation That Applicant Issued Controlled Substance Prescriptions 
When His DEA Registration Was Suspended

    Based on a review of all of the record evidence, and application of 
its credibility assessments, the Agency rejects the arguments of 
Applicant about the content of GX 5a-d that conflict with DI's 
testimony.\7\ Applicant's argument that GX 5a-d's controlled substance 
prescriptions are not valid, because they do not include the elements 
required by federal regulation, lacks merit against DI's credible 
testimony that a pharmacy filled them and dispensed controlled 
substances to Applicant's patients.\8\ See RD, at 14-15. Accordingly, 
the Agency finds substantial record evidence that Applicant issued 
controlled substance prescriptions when his DEA registration was 
suspended.
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    \7\ Applicant's argument that the contents of GX 5a-d include 
prescriptions for non-controlled substances is not germane because 
GX 5a-d also contain prescriptions for controlled substances. See 
n.4, supra. The latter are material to the evaluation of 
Respondent's application, the former are not.
    \8\ Applicant's argument that the signatures on those controlled 
substance prescriptions do not belong to him is not credible for the 
same reasons.
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III. Discussion

A. The Controlled Substances Act (CSA) and Implementing Regulations

    According to the CSA, a practitioner's application for a DEA 
registration may be denied upon a determination that ``the issuance of 
such registration . . . would be inconsistent with the public 
interest.'' 21 U.S.C. 823(g)(1). In making the public interest 
determination, the CSA requires consideration of five factors. 21 
U.S.C. 823(g)(1)(A-E). The five factors are considered in the 
disjunctive. Robert A. Leslie, M.D., 68 FR 15227, 15230 (2003).
    According to Agency decisions, the Agency ``may rely on any one or 
a combination of factors and may give each factor the weight [it] deems 
appropriate in determining whether'' to revoke a registration. Id.; see 
also Jones Total Health Care Pharmacy, LLC v. Drug Enf't Admin., 881 
F.3d 823, 830 (11th Cir. 2018) (citing Akhtar-Zaidi v. Drug Enf't 
Admin., 841 F.3d 707, 711 (6th Cir. 2016)); MacKay v. Drug Enf't 
Admin., 664 F.3d 808, 816 (10th Cir. 2011); Volkman v. U.S. Drug Enf't 
Admin., 567 F.3d 215, 222 (6th Cir. 2009); Hoxie v. Drug Enf't Admin., 
419 F.3d 477, 482 (6th Cir. 2005). Moreover, while the Agency is 
required to consider each of the factors, it ``need not make explicit 
findings as to each one.'' MacKay, 664 F.3d at 816 (quoting Volkman, 
567 F.3d at 222); see also Hoxie, 419 F.3d at 482. ``In short, . . . 
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.'' Jayam Krishna-Iyer, M.D., 74 FR 459, 462 (2009).
    Accordingly, as the Tenth Circuit has recognized, findings under a 
single factor can support the revocation of a registration. MacKay, 664 
F.3d at 821. In this matter, while all of the 21 U.S.C. 823(g)(1) 
factors have been considered, the Government's evidence is confined to 
Factors B, C, and D.\9\ OSC, at 1-2.
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    \9\ Neither Applicant nor the Government purports to offer 
evidence relevant to Factors A or E. The Agency considered Factors A 
and E, and finds that neither of them is relevant to this 
adjudication.
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B. Factor ``C''--Applicant's Conviction Record Under Federal Laws 
Relating to the Manufacture, Distribution, or Dispensing of Controlled 
Substances

    As already discussed, the record, including Applicant's admissions, 
contains substantial evidence that Applicant has been convicted of 
seven felonies. Supra sections II.A. and II.C.; n.3. It is self-evident 
that each of these seven felonies involves a controlled substance and 
relates to the ``manufacture, distribution, or dispensing'' of a 
controlled substance. n.3; 21 U.S.C. 823(g)(1)(C). Accordingly, the 
Agency finds substantial record evidence that Applicant was convicted 
of seven felonies ``relating to the manufacture, distribution, or 
dispensing of controlled substances,'' that the Government presented a 
prima facie case under Factor C, that Applicant failed to rebut the 
Government's prima facie case, and that Applicant's continued 
registration is inconsistent with the public interest, supporting 
denial of his registration application. Id.

C. Factors B and D--Applicant's Experience Dispensing Controlled 
Substances and Compliance With Applicable Laws Relating to Controlled 
Substances

    As already discussed, the Agency finds substantial record evidence 
that Applicant issued controlled substance prescriptions when his DEA 
registration was suspended. Supra section II.D; see also section II.A. 
Under the CSA, a practitioner must possess a DEA registration to 
dispense a controlled substance lawfully. See, e.g., 21 U.S.C. 
823(g)(1). Accordingly, the Agency finds substantial record evidence of 
Applicant's unlawful controlled substance dispensing and failure to 
comply with federal law relating to controlled substances, that the 
Government presented a prima facie case under Factors B and D, that 
Applicant failed to rebut the Government's prima facie case, and that 
Applicant's continued registration is inconsistent with the public 
interest, supporting denial of his registration application. Id.; see 
also RD, at 14 (first full paragraph) through 17 (the penultimate 
sentence of the first full paragraph).

IV. Sanction

    Where, as here, the Government has met its prima facie burden of 
showing that Applicant's continued registration is inconsistent with 
the public interest, the burden shifts to Applicant to show why he can 
be entrusted with a registration. Garrett Howard Smith, M.D., 83 FR 
18882 (2018). Moreover, as past performance is the best predictor of 
future performance, the Agency has required that an applicant who has 
committed acts inconsistent with the public interest must unequivocally 
accept responsibility for those acts and demonstrate that he will not 
engage in future misconduct. Id. In addition, an applicant's candor 
during the investigation and hearing has been an important factor in 
determining acceptance of responsibility and the appropriate sanction. 
Id. In addition, the Agency has found that the egregiousness and extent 
of the misconduct are

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significant factors in determining the appropriate sanction. Id. The 
Agency has also considered the need to deter similar acts by an 
applicant and by the community of registrants. Id.
    Applicant posits that the RD ``prejudge[s]'' him and 
``misinterprets'' his approach by not ``distinguish[ing] between a 
person who explains what took place,'' as he argues he did, ``as 
opposed to someone who seeks to offer an excuse for what took place.'' 
Applicant Exceptions, at 2; supra section II.B. Applicant also argues 
that he stated, ``truthfully,'' ``how the grow houses became used for 
marijuana'' and ``admit[ted] his responsibility in same.'' Applicant 
Exceptions, at 2. Citing his ``remarkable'' CME compliance and re-
issued Texas medical license, Applicant also claims that he ``has 
demonstrated, through his actions since, that he is worthy of any 
discretion the Court could provide.'' Id.; but see RD, at 19.
    Even if the Agency were to credit Applicant's arguments, they do 
not change the fact that he did not unequivocally accept responsibility 
for the founded violations. Supra sections III.B. and III.C. For 
example, regarding the allegation that he prescribed controlled 
substances after the 2013 suspension of his registration, Applicant 
even refused to admit that the signatures on the controlled substance 
orders were his. Supra section II.B. The RD credits the DI's testimony 
over Applicant's steadfast refusal to acknowledge his signatures, and 
the Agency agrees. RD, at 14-15; see also supra sections II.A., II.B., 
and II.D.
    This record evidence also shows that Applicant, despite his 
``remarkable'' CME compliance, does not understand the responsibilities 
the CSA places on practitioners. Applicant posits that, ``throughout 
his practice, he has provide[d] medical[ly] necessary assistance with 
prescribed, controlled substances when the patient's condition(s) 
suggest that such a treatment would be in the patient's best 
interest.'' Applicant's Closing Argument, at 2; see also Applicant 
Exceptions, at 2-4. Such statements attempt to minimize, or divert 
attention from, his unlawful activity, and show Applicant's lack of 
understanding of the CSA's requirements. Accordingly, the Agency finds 
that Applicant did not unequivocally accept responsibility for the 
unlawful acts he committed and has not convinced the Agency that he can 
be entrusted with a registration.\10\
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    \10\ Remedial measures are insufficient without an unequivocal 
acceptance of responsibility. Brenton D. Wynn, M.D., 87 FR 24228, 
24261 (2022); see also Michael T. Harris, M.D., 87 FR 30276, 30278 
(2022) (collecting Agency decisions).
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    The interests of specific and general deterrence weigh in favor of 
denying Applicant's registration application. See, e.g., Garrett Howard 
Smith, M.D., 83 FR at 18910 (collecting cases) (``The egregiousness and 
extent of the misconduct are significant factors in determining the 
appropriate sanction.''). Given the seriousness and extent of 
Applicant's founded violations, a sanction less than application denial 
would tell prospective registrants that compliance with the law is not 
a condition precedent to the issuance of a registration.
    Accordingly, the Agency shall order the sanction the Government 
requested.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 823(g)(1), I hereby deny the DEA registration application of 
Keith Ly, M.D. (Control No. W21134341C). Further, pursuant to 28 CFR 
0.100(b) and the authority vested in me by 21 U.S.C. 823(g)(1), I 
hereby deny any pending application of Keith Ly, M.D., for a DEA 
Registration in Texas. This Order is effective June 26, 2023.

Signing Authority

    This document of the Drug Enforcement Administration was signed on 
May 16, 2023, by Administrator Anne Milgram. That document with the 
original signature and date is maintained by DEA. For administrative 
purposes only, and in compliance with requirements of the Office of the 
Federal Register, the undersigned DEA Federal Register Liaison Officer 
has been authorized to sign and submit the document in electronic 
format for publication, as an official document of DEA. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

Heather Achbach,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2023-11131 Filed 5-24-23; 8:45 am]
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