[Federal Register: February 12, 2007 (Volume 72, Number 28)]
[Notices]
[Page 6580-6595]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12fe07-103]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket Nos. 02-09, 02-43]
Edmund Chein, M.D.; Revocation of Practitioner's Registration,
Denial of Application for Exporter's Registration
Introduction and Procedural History
This is a consolidated proceeding. On November 7, 2001, the then
Administrator of the Drug Enforcement Administration, issued an Order
to Show Cause and Notice of Immediate Suspension of the practitioner's
Certificate of Registration, AC1643661, issued to Edmund Chein, M.D.
(Respondent) of Palm Springs, California. The Notice of Immediate
Suspension was based on the Administrator's preliminary conclusion that
Respondent's continued registration constituted ``an imminent danger to
the public health and safety because of the substantial likelihood that
[Respondent would] continue exporting and diverting controlled
substances.'' Order to Show Cause and Notice of Immediate Suspension at
6 (2001 OSC). The Order further proposed to revoke Respondent's
practitioner's registration and deny any pending applications for
renewal of the registration on the ground that Respondent's continued
registration would be inconsistent with the public interest. See id. at
1; see also 21 U.S.C. 823(f) & 824(a)(4).
Subsequently, on May 24, 2002, the Deputy Assistant Administrator,
Office of Diversion Control, issued an additional Order to Show Cause
(hereinafter 2002 OSC) to Respondent. This Show Cause Order proposed to
deny Respondent's pending application for a registration as an exporter
on the ground that issuance of a registration would be inconsistent
with the public interest. 2002 OSC at 1; see also 21 U.S.C. 958(c)
&(d); id. 823(d).
The 2001 OSC alleged that Respondent had purchased ``large amounts
of anabolic steroids'' from a Mexican pharmacy and ``other illegitimate
sources'' and had distributed these substances to individuals who did
not have a legitimate medical need for them. 2001 OSC at 2. The OSC
further alleged that on May 28, 1996, Federal agents executed a search
warrant at Respondent's medical office and seized several vials of
steroids for which there were no records. Id. The OSC further alleged
that in June 1996, DEA obtained from Henry Schein, Inc., copies of
invoices which documented that Respondent had purchased controlled
substances on nine different occasions between January 1995 and May
1996. Id. at 3. The OSC alleged that Respondent had failed to keep
accurate records of the purchase, inventory, and dispensation of
controlled substances. Id.
The 2001 OSC next alleged that on January 31, 2001, DEA Diversion
Investigators (DIs) went to Respondent's Palm Springs medical office,
the Palm Springs Life Extension Institute (hereinafter PSLEI), to
conduct an administrative inspection. Id. The OSC alleged that the
invoices documenting the purchases of controlled substances were at an
accounting firm and not at the office. Id. The 2001 OSC further alleged
that ``none of [the] required controlled substance records were
accessible,'' because the records were stored in a computer and none of
the office personnel then present were capable of retrieving them. Id.
The OSC thus alleged that Respondent had violated the Controlled
Substance Act by failing ``to maintain in a readily available
condition'' initial and biennial inventory records, purchase invoices,
and dispensing records. Id.
The 2001 OSC further alleged that on February 5, 2001, DEA
personnel returned to Respondent's office and obtained an inventory of
controlled substances that was dated February 5, 2001, dispensing
records for the period July 1, 2000, through February 1, 2001, and
invoices for purchases of controlled substances from Barnes Wholesale,
Inc., for the period January 1, 1999, through February 4, 2001. Id. The
OSC also alleged that the dispensing records showed that between July
1, 2000, and February 5, 2001, Respondent dispensed anabolic steroids,
a Schedule III controlled substance, and phentermine, a Schedule IV
controlled substance, to persons in Korea, Belgium, Indonesia, Canada,
Japan, Spain, Germany, Switzerland, Mexico, England, and Hong Kong. Id.
at 3-4.
More specifically, the OSC alleged that Respondent had made 328
illegal exports comprised of 20 exports of phentermine 30 mg., 58
exports of phentermine 15 mg., 73 exports of testosterone gel 8 mg., 12
exports of testosterone gel 100 mg., 50 exports of testosterone
estradiol gel 4 mg, 113 exports of Depo testosterone 200 mg., and two
exports of testosterone 50 mg.
[[Page 6581]]
Id. at 4. The OSC alleged that these exports were illegal because
Respondent was not registered as an exporter, see 21 U.S.C. 957(a), and
had failed to file the necessary declarations. See id. section 953(e);
see also 2001 OSC at 4. The OSC also alleged that Respondent had failed
to maintain proper records of the exports. See 2001 OSC at 4.
The 2001 OSC alleged that upon discovering the exports, a DI
contacted Dr. Darryl Garber, an associate of Respondent, who informed
the DI that Respondent's clinic had patient records for each recipient
of the shipments, that some of the recipients were seen at the clinic
and others were seen by video conferencing, and that the controlled
substances were shipped by Federal Express. See id. The OSC alleged
that the DI instructed Dr. Garber that the shipments ``violated the
Controlled Substances Act and must be stopped immediately,'' and that
the DI subsequently faxed Dr. Garber the applicable provisions of the
United States Code. Id.
The 2001 OSC next alleged that on August 23, 2001, DEA personnel
visited the PSLEI and conducted a management conference with
Respondent. Id. The OSC alleged that during this meeting, the DI told
Respondent that the required records ``were not readily retrievable on
the date of the inspection[ ] as required'' by Federal law and that
Respondent acknowledged that he had discussed his non-compliance with
Dr. Garber. Id. at 5. The OSC alleged that during the conference,
Respondent admitted that based on the records provided to DEA in
February 2001, he ``had at least 150 exporting violations already on
record.'' Id. The OSC further alleged that Respondent admitted that he
had ``continued to export controlled substances'' notwithstanding the
March 2001 warning that the shipments were illegal, and that he would
continue to do so until he ``received written instructions from DEA.''
Id. The OSC also alleged that when DEA personnel requested that
Respondent produce his controlled substance shipping records,
Respondent refused to do so and invoked the Fifth Amendment. Id.
The 2001 OSC alleged that on various dates following the August
23rd, 2001 meeting, DEA personnel faxed Respondent the applicable
provisions of the United States Code and instructed him that he was not
authorized to either export or import controlled substances and ``must
immediately cease'' all such activity. Id. Based on the above
allegations, the Administrator made the preliminary finding that
Respondent was ``responsible for the diversion of large quantities of
controlled substances in violation of 21 U.S.C. 953, 957 and 958.'' Id.
at 6. Concluding that there was a ``substantial likelihood that
[Respondent would] continue exporting and diverting controlled
substances,'' the Administrator ordered the immediate suspension of
Respondent's practitioner's registration. Id.
The 2002 OSC, which proposed the denial of Respondent's application
for an exporter's registration, repeated many of the above allegations.
In addition, the 2002 OSC alleged that on April 27, 2001, Respondent
had applied for a registration as an exporter of Schedule III (non-
narcotic) and Schedule IV controlled substances and that DEA had
received the application on May 7, 2001. 2002 OSC at 2. The OSC alleged
that the ``application was not accepted for filing'' and that
Respondent's filing fee had been refunded. Id. The OSC also alleged
that on December 17, 2001, DEA received from Respondent an undated
application for a registration to export controlled substances in
Schedule III (non-narcotic) and Schedule IV. See id. at 3.
The 2002 OSC further alleged that on March 13, 2002, DEA DIs
executed an administrative inspection warrant at the PSLEI. See id. at
3. The OSC alleged that during the inspection, the DIs seized samples
of controlled substances for analysis and obtained copies of invoices,
inventories, dispensing logs and patient records. Id. The OSC alleged
that these records showed that notwithstanding the previous DEA
warnings that his exports were illegal, Respondent had ``continued to
dispense controlled substances * * * to overseas patients until
November 14, 2001,'' the date he was served with the Notice of
Immediate Suspension. Id. Finally, the OSC alleged that ``DEA reviewed
the patient records of selected overseas patients and determined that
[Respondent had] deviated from the appropriate standard of care for the
dispensation of controlled substances.'' Id. The OSC thus concluded
that Respondent had ``committed acts that would render the approval of
[his] pending DEA export application to be inconsistent with the public
interest.'' Id. at 3.
Respondent timely requested a hearing on the allegations of each
Show Cause Order; the cases were assigned to Administrative Law Judge
(ALJ) Gail Randall. The hearing on the issues raised by the 2001 Show
Cause Order was initially scheduled to begin on July 9, 2002, in
Riverside, California. However, on June 6, 2002, the parties filed a
joint motion to consolidate the cases and to continue the hearing. On
June 13, 2002, the ALJ granted the motions. ALJ Decision at 2 (ALJ).
The first stage of the hearing was held in Riverside, California,
on January 28-31, and February 3-6, 2003. During this portion of the
hearing, Respondent objected to DEA's proposed eliciting of testimony
of an expert witness, Dr. Robert Zipser, on the issue of whether
Respondent's dispensing practices were within the standard of care.
Among other things, Respondent asserted that the proposed testimony
related to an issue that was outside the subject matter jurisdiction of
this Agency. While the ALJ overruled Respondent's objection, she
granted Respondent leave to file an interlocutory appeal on the issue.
The ALJ further barred Dr. Zipser from testifying about Respondent's
dispensing practices until the interlocutory appeal was resolved.
On June 23, 2003, the Acting Administrator denied Respondent's
appeal. Thereafter, the second stage of the hearing was held in
Arlington, Virginia, on September 9-10, 2003, and the final stage was
held in Riverside on December 9 through 11, 2003.
During the hearing, both parties called witnesses and introduced
documentary evidence. Following the hearing, both parties submitted
proposed findings, conclusion of law, and argument.
On July 28, 2005, the ALJ issued her recommended decision. In that
decision, the ALJ recommended that I revoke Respondent's practitioner's
registration. ALJ at 82. The ALJ further recommended that I deny
Respondent's application for an export registration. See id. Neither
party filed exceptions.
Thereafter, the ALJ forwarded the record to me for final agency
action. On December 29, 2005, Respondent's counsel submitted a letter
to me setting forth various ``issues for review, exception, appeal and
judicial review,'' Resp. Ltr. at 1, and including as attachments copies
of various filings and motions that were previously submitted during
the course of this all too lengthy proceeding. To the extent
Respondent's letter raises ``exceptions'' as that term is used in the
Administrative Procedure Act, see 5 U.S.C. 557(c), it is out of
time.\1\ See 21 CFR 1316.66(a) (requiring filing of exceptions
``[w]ithin twenty days after the date upon which a party is served a
copy of the report of the'' ALJ).
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\1\ Respondent's letter does not specify which of the ALJ's
findings of fact and conclusions of law he is excepting to. Nor does
it provide ``a statement of supporting reasons for such exceptions,
together with evidence of record * * * and citations of authorities
relied upon.'' 21 CFR 1316.66(a).
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Having carefully considered the record as a whole, I hereby issue
this
[[Page 6582]]
final order. For the reasons set forth below, I concur with the ALJ's
conclusion that Respondent's continued registration as a practitioner
would be inconsistent with the public interest and therefore adopt the
ALJ's recommendation that Respondent's registration should be revoked.
I further concur with the ALJ's conclusion that granting Respondent's
application for registration as an exporter would be inconsistent with
the public interest and therefore adopt the ALJ's recommendation that
the application be denied. I make the following findings.
Findings of Fact
Respondent is a medical doctor and holds a license with the Medical
Board of California. Gov. Exh. 3, at 1. Respondent graduated in 1980
from the American University of the Caribbean School of Medicine and
also holds a law degree. Id.; see also ALJ at 5. Respondent practices
anti-aging medicine and is the owner of the Palm Springs Life Extension
Institute (PSLEI). ALJ at 5-6.
Respondent has developed a treatment protocol called Total Hormone
Replacement Therapy and obtained various patents for it.\2\ See
generally Resp. Exh. 1017. Respondent's practice involves using blood
tests to determine the levels of various hormones in a person and
prescribing various substances including hormones such as Human Growth
Hormone and Estrogen to a patient based on the level of these hormones
found in a healthy young adult. See generally id. Most significantly,
as part of his treatment protocol, Respondent frequently prescribed and
dispensed several controlled substances including testosterone in
various formulations, a Schedule III anabolic steroid (see 21 CFR
1308.13(f)), and phentermine, a Schedule IV stimulant. See 21 CFR
1308.14(e). Respondent used the term ``adrenal extract'' for
phentermine. See Gov. Exh. 117; Gov. Exh. 135.
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\2\ To obtain a U.S. patent, Respondent was not required to
demonstrate the safety or effectiveness of his protocol. See Gov.
Exh. 138, at 4 (Manual of Patent Examining Procedure Sec. 2107.03).
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Respondent holds a DEA Certificate of Registration as a
practitioner, No. AC1643661, which authorizes him to dispense
controlled substances in Schedules II, II-N, III, III-N, IV and V. Gov.
Exh. 2. Respondent's registered location is 2825 Tahquitz Canyon
Building A, Palm Springs, CA, 92262. Id.
The First Investigation
Respondent first came to the attention of DEA in 1994, when a U.S.
Food and Drug Administration (FDA) Special Agent (SA) contacted Robert
Brasich, a Diversion Investigator assigned to the San Diego Field
Division, seeking a person to assist in an undercover investigation of
Respondent. Tr. 112. The FDA SA asked the DI whether he knew of any DEA
SA who could pose as body builder and perform an undercover visit with
Respondent. Id. at 118. The FDA SA told the DI that he had personally
conducted an undercover meeting during which he told Respondent that he
played rugby and wanted to increase his strength and endurance. Id. at
120. At the end of the visit, Respondent's staff gave the FDA SA human
growth hormone (HGH) and the FDA SA subsequently received shipments of
HGH on several occasions.\3\ Id.; see also Gov. Exh. 35, at 23.
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\3\ HGH is not a controlled substance. The facts surrounding
this visit are related solely to provide context.
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On October 17, 1994, another FDA SA also performed an undercover
visit with Respondent. Id. at 24. This SA told Respondent that he had
an injured disc, that he lifted weights, and that he wanted to increase
his muscle mass, and that he had taken steroids previously ``but wanted
a safer alternative.'' Id. at 25; see also Tr. at 121. According to an
affidavit filed to obtain a search warrant, Respondent told the SA that
``the problem with anabolic steroids in the past was their use without
medical supervision, but they weren't bad if administered by a
doctor.'' Gov. Ex. 35, at 25. At the end of the consultation,
Respondent gave the SA prescriptions for various items including
testosterone gel, a Schedule III controlled substance. Id. at 26. While
Respondent obtained a blood sample, he issued the prescription for
testosterone without obtaining the results. Id. at 26; see also Tr. at
149.
On March 17, 1995, a Customs SA performed an undercover visit with
Respondent. The Customs SA told Respondent that he was a competitive
powerlifter and used anadrol, an anabolic steroid, but that he wanted
HGH because he had lost competitions ``to guys who [were] `on the
juice.' '' Gov. Exh. 35, at 32. During the visit, Respondent told the
SA that ``[a]fter 1990, the whole body-building industry had switched
to natural testosterone, and the `new power lifting people use
testosterone and HGH.' '' Id. Respondent also told the SA that the
``most effective treatment for [his] goal would involve both [HGH] and
natural testosterone administered through the skin by means of a patch
or gel.'' Id. Respondent further told the SA that the ``testosterone
would not show up in drug testing at competitions if [he] followed
[Respondent's] instructions.'' Id. at 33. While Respondent drew blood
from the SA during this visit to determine his testosterone and HGH
levels, the results were not available by the end of the consultation.
Id. at 33-34; see also Tr. at 149. Respondent nonetheless gave the SA
prescriptions for various items including testosterone. Id. at 34.
Moreover, Respondent gave the SA a letter entitled ``testosterone
Replacement Therapy,'' which stated that the SA ``had been diagnosed
with hypogonadism for which testosterone replacement therapy was
required.'' Id. The letter further stated that all the testosterone
prescriptions and refills would be filled by a pharmacy in Fairfax,
Virginia, and that Respondent would send the SA's prescription directly
to the pharmacy. Id. at 34-35.
Finally, on July 20, 1995, a DEA SA conducted an undercover visit
with Respondent. Id. The SA told Respondent that he was a powerlifter
and was training to make the Olympic team. Id. Respondent told the SA
that because he ``had not done a lot of steroids in the past,'' his
``testosterone would be low which would provide a justification for
prescribing testosterone.'' Id. at 36. Respondent drew blood from the
SA, id. at 37, and told him that ``if the results came back low'' he
would also ship him HGH. Id. at 36. Respondent also gave the SA ``a
letter entitled `testosterone Replacement Therapy.' '' Id. at 37. The
letter ``was identical in substance to the letter given to'' the
Customs SA during the third undercover visit. Id. Thereafter, the same
Fairfax, Virginia pharmacy mentioned in the letter Respondent gave the
Customs SA sent 50 mg. of testosterone gel to the DEA SA. Id. at 38.
Subsequently, on May 23, 1996, the FDA SA obtained a search warrant
for the PSLEI. Id. at 2. Two DEA DIs participated in the execution of
the search. Tr. at 130. During the search, controlled substances, which
included testosterone gel, testosterone cypionate and nandrolone
decanoate, were found on the premises. Id. at 132; Gov. Exh. 35, at 71.
Moreover, while the CSA requires a registrant to maintain at his
registered location purchase records, an inventory, and a dispensing
log, see 21 CFR 1304.03 & 1304.04, no such records were found on the
premises during the search. Tr. at 134. The investigation also
determined that on numerous occasions between January 1, 1995, and June
3, 1996, Respondent had purchased controlled substances including
diazepam (Schedule IV) and various
[[Page 6583]]
anabolic steroids including deca-durabolin, nandrolone decanoate, and
testosterone cypionate from Henry Schein, Inc. See Tr. 135, Gov. Exh.
36.
The Second Investigation
On June 29, 1998, the Medical Board of California initiated
proceedings against Respondent which resulted in an administrative
hearing before a state ALJ. Govt. Exh. 3, at 1; Gov. Exh. 125. In a
decision dated December 27, 1999, the state ALJ issued a decision which
proposed the revocation of Respondent's state medical license. Gov.
Exh. 4, at 67. On January 19, 2000, the Medical Board's Division of
Medical Quality entered an order adopting the ALJ's decision with an
effective date of February 18, 2000.\4\ See id. at 32
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\4\ Respondent, however, sought judicial review in the
California state courts. On September 26, 2000, the Superior Court
granted Respondent's petition in part and ordered the Medical Board
to set aside its decision revoking Respondent's license and remanded
the case for further proceedings; on November 9, 2000, a judgment to
this effect was entered. See Gov. Exh. 4, at 25-26. On January 4,
2001, the Medical Board subsequently vacated and set aside its
decision. Id. at 1.
Subsequently, on August 15, 2002, the Medical Board filed an
additional accusation against Respondent which alleged thirteen
grounds for discipline including incompetence, prescribing without
medical indication, ``obtaining controlled substances by deceit,
misrepresentation and subterfuge,'' ``dispensing controlled
substances without proper privileges,'' and failing to maintain
adequate controlled substance records. Govt. Exh. 124, at 18; see
also id. at 10-11. This matter was still pending at the time the
record closed. See ALJ at 15.
Pursuant to 5 U.S.C. 556(e), I take official notice of the fact
that on September 22, 2005, Respondent entered into a Stipulation
Settlement and Disciplinary Order with the State of California,
which became effective on March 16, 2006. See In the Matter of the
Accusation Against: Edmund Chein, M.D., File No. 19-2000-107723,
Decision at 1, Stipulated Settlement and Disciplinary Order at 14. I
further note language in the stipulation asserting that it ``is
intended to resolve'' not only California's disciplinary action but
also ``any disciplinary action taken by another state or the federal
government based on the conduct alleged in * * * In the Matter of
Edmund Chein, M.D., Docket No. 02-9 and 02-43 pending before the
United States Drug Enforcement Administration.'' Stipulated
Settlement at 2-3. In accordance with the Administrative Procedure
Act, publication of this order will be withheld for a fifteen day
period in order to provide Respondent with ``an opportunity to show
the contrary.'' 5 U.S.C. 556(e).
The ALJ also found that on June 30, 1995, the Medical Board
placed Respondent on probation for a three year period for false
advertising and failing to obtain a fictitious name permit. See ALJ
at 12-13.
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On July 20, 2000, Respondent submitted an application to renew his
practitioner's registration (DEA From 224a). Gov. Exh. 1, at 1. His
California license having been revoked, Respondent gave the address of
his proposed registered location as 201 South Main, Suite 900, Salt
Lake City, UT 84111. Id. at 2; Gov. Exh. 18, at 1. Moreover, in
response to a question on the application, Respondent indicated that
his California license had been revoked but that his Utah license was
``not affected.'' See Gov. Exh. 1, at 2.\5\ Because Respondent had
indicated that California had revoked his license, the application was
not automatically renewed but forwarded to the DEA Salt Lake City
office and then to the DEA Riverside, California field office, for
further investigation, where it was assigned to Diversion Investigator
Doris DeSantis. Tr. at 216-17.
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\5\ On March 5, 2001, DEA received from Respondent a letter
which requested a modification of his registration back to 2825
Tahquitz Canyon Way, Building A, Palm Springs, CA, 92262, because he
had ``since * * * regained [his] California Medical License.'' Gov.
Exh. 18.
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No longer holding a valid California medical license, on or about
February 16, 2000, Respondent sold the PSLEI to his sister Connie
Chein, a board certified physician who practices obstetrics and
gynecology in Beverly Hills, California. ALJ at 6-7. Dr. Connie Chein
testified that she purchased PSLEI because under California law, ``you
have to be a licensed physician to own a medical facility.'' Tr. 1087.
The ALJ found that during this period, PSLEI was operated by Dr. Darryl
Garber, an associate of Respondent. See ALJ at 13 (citing Tr. 1050). On
or about December 20, 2000 (and following the Superior Court's granting
of judgment setting aside the State Board's revocation order), Dr.
Connie Chein sold the PSLEI back to Respondent. Id. at 7.\6\
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\6\ Given the circumstances surrounding Respondent's sale of the
clinic to his sister and her sale back to him, the transaction may
well have been a sham. But the Government did not attempt to prove
that it was.
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Dr. Connie Chein holds a DEA Certificate of Registration as a
practitioner, No. AC7093292, with a registered location in Beverly
Hills, California. Gov. Exh. 43, at 8. On various occasions, PSLEI
ordered controlled substances using Dr. Connie Chein's DEA
registration. See Gov. Exh. 43, at 2-6; Gov. Exh. 17 (invoices ordering
phentermine from Barnes Wholesale); Gov. Exh. 44(d), 44(g), 44(l), &
45(a) (invoices for testosterone ordered from Amend Drug & Chemical
Co., Inc.); Gov. Exh. 31 (Letter dated Dec. 17, 2001, from Marshall
Gilbert, Administrator, PSLEI, to Spectrum Chemicals) (``Dr. Connie
Chein is no longer with [PSLEI]. Dr. Darryl Garber is now in charge of
ordering all controlled substance[s].'').
During a December 13, 2001, interview with DEA Diversion
Investigators (DIs) at which she was represented by counsel, Dr. Connie
Chein stated that she never gave Respondent permission to use her DEA
registration to order controlled substances for PSLEI. Gov. Exh. 28, at
15. Moreover, Dr, Connie Chein stated that she never received
controlled substances at her Beverly Hills registered location which
were intended for PSLEI and was unaware of the fact that someone at
PSLEI was using her DEA registration to order controlled substances for
the clinic. Id. at 15-17, 19.
At the hearing, Dr. Connie Chein testified that she never treated
patients at PSLEI. Tr. 1092. When asked, however, as to whether she had
ever prescribed or dispensed controlled substances for patients of the
PSLEI, Dr. Connie Chein asserted the Fifth Amendment privilege against
self-incrimination. Id. at 1093. Moreover, when asked whether she had
ever ordered controlled substances for PSLEI, Dr. Connie Chein again
invoked her Fifth Amendment privilege. Id. at 1094. Dr. Connie Chein
also asserted her Fifth Amendment privilege when the Government
attempted to question her regarding various invoices and purchase
orders which used her DEA number and related documents. Tr. 1111-12;
1116-19; 1121-36.
The Government contends that notwithstanding Connie Chein's
ownership, Respondent remained in charge of the Palm Springs Clinic
during the period in which his state license was revoked. There is
substantial evidence in the record that supports this contention.
For example, on February 27, 2000, Respondent wrote an
``Interoffice Memo'' directing the Oral/Growth Hormone Department to
not ``ship any bottle to Japan, if the bottles do not appear clean to
you, because the Japanese custom is extremely clean.'' Gov. Exh. 136,
at 14. The memo further instructed that ``testosterone tubes frequently
have adhesive that appears black to them'' and that ``it must be
removed * * * before it can be shipped out.'' Id. The memo directed
clinic employees to ``sign that you have read this letter/memo, and
return it to my desk. From, Dr. Edmund Chein.'' Id. The memo also
stated that if there were ``any questions about the quality or the
product, you must let Charlie or Vanessa or me know, before'' shipping
the products. Id. Respondent's secretary, who worked at PSLEI's Palm
Springs, Cal. clinic, was Vanessa Koloen. Tr. 1331-36
Thereafter, in an Interoffice Memo dated February 29, 2000,
Respondent directed the Growth Hormone Department to ship phentermine
to a patient in Japan. See Gov. 105, at 36.
[[Page 6584]]
Specifically, the Memo reads: ``Mandy, please ship one (1) bottle of
phentermine to Ms. [K. H.] immediately.\7\ However, ship the oral
hormone, phentermine to Yamamoto Medical Clinic, instead of to her home
address.'' Id. Other documents in the record establish that Ms. Mandy
Boriski was involved in the filling of orders for Respondent's patients
and worked out of the Palm Springs, Cal. clinic. See Gov. Ex. 96, at
32, 33, 34, 36, 38.
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\7\ To protect patient privacy, patients will be referred to by
their initials.
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One of these documents is a July 14, 2000 memo from Ms. Boriski to
Dr. S.K., a German patient. The memo, which used the clinic's Palm
Springs, California address states: ``I have received your fax re: the
order with the pharmacy. I am awaiting approval from Dr. Chein for me
to send the prescriptions you requested. I apologize for the delay but
I am unable to send anything without his approval.'' Gov. Exh. 96, at
32 (emphasis added).
The record also contains a December 13, 2000 e-mail from Bob Jones,
a consultant and spokeperson for PSLEI to various employees of the
Palms Springs location, which discussed missing testosterone shipments
to a German citizen, R.D. The e-mail, which was copied to Respondent
and his Secretary Vanessa Koloen, states: ``Per Dr. Chein please send
duplicates of their last shipments of these items today.'' Gx. 107, at
23. As these various documents indicate, Respondent was still the boss
during the period in which his sister putatively owned the clinic and
continued to direct the clinic's employees in the handling of
controlled substances.
It is acknowledged that during this period, Respondent sometimes
used letterhead that referred to PSLEI's ``International Division'' and
gave an address in Salt Lake City, Utah, and typically used a
prescription form that included his Utah medical license number. But
even if Respondent actually maintained a medical practice in Utah, his
doing so does not exclude a finding that during this period, Respondent
continued to direct his employees regarding the distribution of drugs
from the clinic's Palm Springs, California location.\8\
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\8\ Other documents support the conclusion that Respondent
remained active in practicing medicine out of the Palm Springs,
California location. On May 22, 2000, Respondent sent a letter by
fax to Dr. S.K. Gov. Exh. 96, at 41. In this letter, Respondent
advised Dr. S.K. that her mother was ``not too old for the program''
and that ``[s]he may want to be on the silver program, which is the
basic hormone-balancing program without the growth hormone.'' Id.
Significantly, while this document was not written on PSLEI's
letterhead, Respondent used the clinic's Palm Springs fax number.
The record also contains correspondence written by Respondent
during this period on letterhead using the clinic's Palm Springs,
Ca. address. See Gov. Exh. 94, at 8. In an October 6, 2000 letter,
Respondent rendered medical advice to a Japanese clinic regarding
patient M.I. See id. Subsequently, on October 13, 2000, Dr. Chein
wrote this patient on PSLEI's Palm Springs, CA letterhead advising
that there was a dispute between himself and the doctors at the
Aoyama Medical Clinic. Id. at 6.
Thereafter, on December 5, 2000, Respondent wrote a letter on
the clinic's Palm Springs, Ca. letterhead notifying the patient that
``starting from 9th November 2000 the relation between Aoyama Clinic
and my Institute (Palm Springs Life Extension Institute, CA, U.S.A.)
has come to an end.'' Id. at 5 (emphasis added). Respondent thus
represented to others that he was the owner of the clinic during the
period in which his sister putatively owned it. Moreover, the
statement shows Respondent's continued involvement in the business
affairs of the Palm Springs clinic.
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Indeed, in the case of patient N.K., a Japanese citizen, Respondent
wrote a letter (dated October 11, 2000) to the patient on Palm Springs,
California letterhead discussing the results of a ``hormonal screening
panel test''; the letter also recommended that the patient take
testosterone gel and Adrenal Extract (phentermine). Gov. Exh. 93, at 6.
Respondent also prepared a form on ``Palm Spring Life Extension
Institute, Utah'' letterhead, which prescribed numerous products
including testosterone gel and phentermine (Adrenal Extract). Id. at
13. Both documents were faxed on October 19, 2000, and bear initials
showing that the same person faxed both documents. Compare id. at 6,
with id. at 13. Subsequently, on November 22, 2000, the Palm Springs,
California location dispensed testosterone gel to this patient. See
Gov. Exh. 15, at 20.
I further note that notwithstanding her putative ownership of the
clinic, Respondent's sister could not provide DEA investigators with
copies of the documents that transferred ownership. See ALJ at 20 (]
74). Furthermore, Respondent's sister told DEA investigators that she
had been out to the clinic's Palm Springs location once in five years.
See id. The ALJ also found that Dr. Garber operated the clinic during
this period. Id. at 13 (] 52). But during this period, Dr. Garber's
registered location was at his residence and not at the clinic. Id. at
21 (] 76). In any event, the ALJ's finding that Dr. Garber operated the
clinic does not preclude the additional finding that Respondent
continued to exercise control over the Palm Spring location's handling
of controlled substances during the period in which his sister owned
the clinic.
The ALJ found that Respondent dispensed controlled substance from
PSLEI while his California medical license was revoked. See ALJ at 13-
14, ] 52 (citing Tr. 827-29; Gov. Exh. 105, at 36, 45-46). I adopt this
finding. As found above, a February 29, 2000 memo from Respondent
directed an employee in the ``Growth Hormone Department'' to ``ship one
(1) bottle of phentermine to [Ms. K. H., a Japanese patient]
immediately.'' Gov. Exh. 105, at 36. See also id. at 45-46 (Feb. 29,
2000 letter from Respondent to Ms. K. H.; ``due to your twenty pound
weight gain, I will add phentermine adrenal hormone immediately.'').
Moreover, as explained above, the evidence shows that Respondent
dispensed testosterone Gel to patient N.K. from the Palm Springs
location while his California medical license was revoked.
The ALJ also found that ``on August 11, 2000, the Respondent,
without a DEA registration entitling him to so act, sent controlled
substances from PSLEI, International Division, in Salt Lake City, Utah,
to Japan.'' See ALJ at 14, ] 53 (citing Gov. Exh. 105, at 39-42). I do
not adopt this finding. While the documents which the ALJ relied on
establish that HGH and ``oral hormones'' were to be shipped, they do
not establish that the ``oral hormones'' included a controlled
substance.
The ALJ also made a finding that ``[s]ome of the shipments sent
from PSLEI were mislabled to avoid disclosing that the package
contained controlled substances.'' ALJ 57, ] 192. Relatedly, the
Government argues that various documents ``reflect[ ] PSLEI's
willingness to fraudulently misidentify shipments of drugs to mislead
customs officials.'' Govt. Br. at 50, ] 98.
The document cited by the ALJ does suggest that testosterone gel
was labeled as `` `a Skin Cream' and as a `gift' for Customs purpose.''
Gov. Ex. 107, at 21. A subsequent e-mail, dated December 13, 2000,
which was copied to Respondent, indicated that the substances had not
been received and directed the Palm Springs staff to send a new
shipment that day. Id. at 23. The e-mail further included ``guidelines
for shipping to Germany'' from the patient's secretary, which stated
that the goods should be declared as a ``sample'' with a value of ``$
5.00.'' Id. But while the invoice that accompanied the shipment
declared its value at $5.00, it also clearly described the goods as
``testosterone.'' Id. at 20. This document thus does not support the
ALJ's finding.
The Government also points to a September 8, 2000 fax from Ms.
Boriski to a Belgian citizen informing him that his order for melatonin
had been shipped and ``labeled as [a] Dietary supplement * * * per your
request. I
[[Page 6585]]
hope this does eliminate any delay with customs.'' Gov. Ex. 91, at 22.
However, melatonin is not a controlled substance and it is arguably
accurate to describe it as a ``dietary supplement.'' Moreover, even if
it was improper to declare it as a dietary supplement, this document
does not establish that Respondent was aware of this practice, and a
single document does not prove that it was the clinic's policy or
practice to falsify customs declarations.
Finally, the record contains a letter from Dr. S.K. ordering
estradiol/testosterone creme and suggesting that ``it might be
[declared as] a cosmetic product.'' Gov. Exh. 96, at 45a. The
Government, however, produced no evidence showing that the clinic did,
in fact, mislabel the shipment. Accordingly, the ALJ's finding is not
supported by substantial evidence. See NLRB v. Columbian Enameling &
Stamping Co., 306 U.S. 292, 300 (1939) (``Substantial evidence is more
than a scintilla, and must do more than create a suspicion of the
existence of the fact to be established.'').
The DEA On-Site Inspections and Their Aftermath
As stated above, because Respondent's state license had been
revoked, DI DeSantis was assigned to conduct an investigation regarding
his renewal application. On January 31, 2001, the DI went to the PSLEI
in Palm Springs to interview Respondent and inspect his recordkeeping.
Tr. 263; Gov. Exh. 5. Respondent was not present. Tr. 264. The DI met
with Dr. Darryl Garber and presented him with a Notice of Inspection.
Gov. Exh. 5.
The DI asked to see various records including invoices for the
purchase of controlled substances, inventories, and dispensing logs.
Tr. 268-69. Dr. Garber told the DI that he could not provide the
records because PSLEI had a new computer system and no one was present
who could access the records. Id. at 269. One of PSLEI's employees told
the DI that the invoices were not on-site but rather were at the office
of its accountant. Id. at 273. The only records the DI received were
two purchase orders but these had been generated by the PSLEI and were
not the invoices provided by the distributor. See Gov. Exh.6; Tr. 274-
75. The purchase orders did, however, establish that the PSLEI had
recently bought phentermine. See Gov. Exh.6.
The DI told Dr. Garber that the clinic was in violation of the
CSA's implementing regulations because the invoices were required to be
kept on-site. Tr. 274-76. The DI also informed Dr. Garber that the
clinic was in violation because the records were not readily
retrievable for inspection and copying. Id. at 274.
On February 5, 2001, the DI returned to the PSLEI to obtain the
records that the clinic was required to maintain. Once again,
Respondent was not present. Id. at 279. The DI again met with Dr.
Garber and asked for the records. Id. Dr. Garber asked the DI to sit in
the office while he retrieved the records. Id. The DI waited two to
three hours while Dr. Garber printed out the records. Id. at 280.
Dr. Garber provided the DI with a one page inventory report which
was dated February 5, 2001. See Gov. Exh. 8. Dr. Garber also provided
the DI with four invoices for phentermine. Tr. 331-33; Gov. Exh. 17(a)-
17(d). Although the DI had requested the invoices for all controlled
substances purchased by the clinic, no invoices for the purchase of
testosterone were provided. Tr. 334.
Dr. Garber also provided the DI with a dispensing log for various
controlled substances including testosterone gel, testosterone
estradiol gel, Subligual testosterone, testosterone, and depo
testosterone. See Gov. Exhs. 9-16; Tr. 284. Most of the dispensing
logs, however, only covered the period from July 1, 2000, through
February 5, 2001.\9\ See Gov. Exhs. 9-16. Moreover, none of the logs
indicated the name of the physician who had authorized each dispensing.
See id. The logs also included the names of numerous patients who
resided in foreign countries including Belgium, France, Germany, Great
Britain, Spain, Switzerland, China (Hong Kong), Indonesia, Japan, South
Korea, and Canada. See Gov. Exhs.10, 11, 12, 15, & 16. The Government
subsequently compiled from these records a separate document which
listed each dispensing. See Gov. Exh. 46. According to this document,
the dispensing logs showed that Respondent's clinic exported controlled
substances 317 times during the period from July 1, 2000, through
February 5, 2001.\9\ See id.; see also ALJ at 57, ] 191. Neither
Respondent nor Dr. Garber had an export registration as required under
21 U.S.C. 957 & 958.\10\
On March 9, 2001, DI DeSantis contacted Dr. Garber by telephone and
told him that PSLEI must stop exporting controlled substances. Tr.
1245. The DI also faxed to Dr. Garber various provisions of Federal law
pertaining to the exporting of controlled substances including 21
U.S.C. 953 & 960. Id.; see also Gov. Exh. 19. On the same day, Vanessa
Koloen, a PSLEI employee, faxed to the DI copies of various documents
including purchase orders and invoices related to the clinic's purchase
of testosterone. See Gov. Exh. 20. The earliest documents were,
however, dated November 20 & 21, 2000, see Gov. Exhs. 20(J) & 20(K),
and the dispensing records indicated that testosterone had been
dispensed before these dates. See, e.g., Gov. Exh. 15, at 21-26. Two
other documents provided by PSLEI used Dr. Garber's residence as the
billing and shipping address. See Gov. Exhs. 20(F) & 20(G). The
remaining documents were for purchases that occurred in mid to late
February 2001, following the DI's second visit. See Gov. Exhs. 20(a),
20(b), 20(c), 20(d), 20(e).
---------------------------------------------------------------------------
\9\ The dispensing log for phentermine 15 mg. covered the period
from July 26, 1999, through February 1, 2001. See Gov. Exh. 10. This
log, however, had no entries before August 22, 2000. See id. The
dispensing log for Depo testosterone covered the period July 1,
2000, through February 1, 2001. See Gov. Exh. 16.
\10\ While Dr. Garber held a DEA practitioner's registration, at
the time of the January 31 and February 5, 2001 visits, his
registered location was his residence in Rancho Mirage, California.
See ALJ at 21, ] 76. Dr. Garber did not change his registered
location to the PSLEI until February 12, 2001, after the two visits.
See id.
---------------------------------------------------------------------------
Subsequently, on April 27, 2001, Respondent applied for a
registration to export Schedule III Non-Narcotic and Schedule IV
controlled substances. See Gov. Exh. 48, at 3-4. According to a date
stamp, the application was received at DEA in May 7, 2001, and
Respondent's credit card was charged on May 15, 2001. See id. at 3. The
application, however, was never processed and the application fee was
refunded through a credit to Respondent's credit card. Tr. 2092-94 The
application bears the notation ``Already Have DEA.'' Gov. Exh.
48, at 3. The application was not returned to Respondent, and no one at
DEA ever notified him that the application had been rejected. See Gov.
Exh. 34 & 39; see also Resp. Proposed Findings at 12 (] 94). In
December 2001, Respondent submitted a second application for
registration as an Exporter. See Gov. Exh. 48 at 7-8.
On August 23, 2001, DI DeSantis (accompanied by another DI)
returned to PSLEI to conduct a conference with Respondent regarding the
violations that had been found during the inspection. Tr. 545-47. The
DI told Respondent that the violations included the clinic's lack of
readily retrievable records, its lack of a biennial inventory, and its
exporting of controlled substances to persons residing in foreign
countries without an export registration. Id. at 547-48, 559.
During the meeting, Respondent produced the statutes that the DI
had faxed to Dr. Garber and acknowledged that he had discussed the
violations with Dr. Garber. Id. at 548. Respondent admitted that he did
not have an
[[Page 6586]]
exporter's registration and claimed that under either 21 U.S.C.
953(a)(3) or (a)(4) he could export without a registration because he
was sending the controlled substances to another doctor, who was
legally authorized to handle controlled substances. Tr. 551-55. The DI
informed Respondent that he would still need an export permit under 21
U.S.C. 953(a)(5). Id. at 554. These provisions, however, address the
exportation of narcotic drugs and not the non-narcotic controlled
substances (testosterone and phentermine) that Respondent was
exporting. Rather, the export of these controlled substances is
governed by 21 U.S.C. 953(e), which requires the filing of a
declaration and documentary proof that the importation into the
destination country is not illegal.\11\ Moreover, a registration is
required to export both narcotic and non-narcotic controlled
substances. See 21 U.S.C. 957 & 958.
---------------------------------------------------------------------------
\11\ The record contains letters from the governments of Japan
and Taiwan to Respondent's associate (Dr. Garber) establishing the
illegality of PSLEI's exportation of phentermine to persons residing
in these countries. In a December 11, 2001 letter, the Government of
Japan notified Dr. Garber that ``[w]ith regard to the medicine
containing phentermine, you must not send the medicine to your
patient in Japan.'' Gov. Exh. 38(C) (Tab D) (Letter from Kaoru
Misawa, Deputy Director, Compliance and Narcotics Division,
Pharmaceutical and Food Safety Bureau, Ministry of Health, Labor,
and Welfare of Japan, to Darryl J. Garber). According to this
letter, a ``patient can import the medicine into Japan if he carries
the medicine containing less than 1.125 grams of phentermine by
himself when entering into Japan.'' Id. This letter further states
that while the Government of Japan did not object to the exportation
of testosterone gel to a patient in Japan, the medicine must be
``for his personal use and of the amount within one-month['s]
consumption.'' Id.
In a January 4, 2002 letter, the Government of Taiwan informed
Dr. Garber that ``phentermine * * * has been prohibited for use by
the Department of Health since December 8, 1980, and is not allowed
for importation.'' Gov. Exh. 38(C) (Tab E) (Letter, Kai-Yuan Tan,
M.D., Director-General, Bureau of Medical Affairs, Department of
Health, Taiwan, to Darryl J. Garber, M.D.).
The record also contains a letter dated July 26, 2001 from Dr.
Garber to Raymond A. Conner, Diversion Group Supervisor in DEA's
Riverside, California, office. In this letter, Dr. Garber
acknowledged that ``[i]n Japan and Korea it is against the law to
prescribe Anabolic Steroids * * * and phentermine * * * for the
purpose of Anti-Aging Medicine.'' Gov. Exh. 38(C) (Tab C).
---------------------------------------------------------------------------
During the meeting Respondent did not mention that he had applied
for an exporter's registration. Moreover, Respondent told the DI that
he had continued to export controlled substances notwithstanding her
earlier admonition to Dr. Garber to stop. Tr. 557. Respondent further
admitted that there had probably been many more violations in the
interim but that he would not stop until ``he received something in
writing from'' the DEA. Id. at 558.
The other DI asked Respondent how he was shipping the controlled
substances overseas. Id. Respondent refused to answer and invoked his
Fifth Amendment privilege against self-incrimination. Id. He also told
the investigators that ``it was up to [DEA] to find out how he was
shipping [the controlled substances] overseas.'' Id. at 559.
During the meeting, Respondent provided the DI with several
invoices for controlled substances. One of the invoices documented that
on March 14, 2001, PSLEI had purchased five kilograms of micronized
testosterone from Pharmacia and Upjohn and that the product was shipped
to Dr. Garber's residence. See Gov. Exh. 21.5, at 2. At the time,
Respondent owned PSLEI and Dr. Garber was no longer registered at his
residence. Id.
Respondent also provided the DI with an invoice from Farmacias
Castaneda, a pharmacy located in Tijuana, Mexico. See Gov. Exh. 22, Tr.
576. The invoice, which is dated June 26, 2001, indicated that the
PSLEI had purchased 120 units of Depo testosterone and 40 units of
Decadurabolin, two anabolic steroids and Schedule III controlled
substances, from the Tijuana pharmacy. See Gov. Exh. 22. The pharmacy
did not hold a DEA registration because DEA does not register foreign
pharmacies or distributors. Tr. 573-74. Neither Respondent, nor Mr.
Romero, the pharmacy's owner, was registered as an importer. See ALJ at
60, ] 205 (citing Tr. 167 & 970); Gov. Exh. 2.
On August 31, 2001, DI DeSantis sent an additional fax to
Respondent which included copies of 21 U.S.C. 823, 952, 953, 954 and
958. The ``Comments'' portion of the Cover Sheet included the following
statement:
I have attached all the registration requirements . * * *
concerning applicants to import or export controlled substances. You
are not currently registered with DEA as an exporter/importer (nor
do you possess any permits to export issued by the Attorney
General), thus you are not authorized to perform either activity.
You must immediately cease all [activity] in these areas as
previously instructed on 02/13/01 and 8/23/01 by D/I DeSantis.
Gov. Exh. 23, at 1. On September 5, 2001, DeSantis sent an additional
fax that included a copy of 21 U.S.C. 957 (Persons required to
register), which had been omitted from the previous fax. See Gov. Exh.
24.
On November 12, 2001, DI DeSantis along with other DEA personnel,
served the first Order to Show Cause and Notice of Immediate
Suspension. Tr. 591. Upon her arrival at the PSLEI, the DI was informed
that Respondent was out of the country and was not expected to return
for possibly two weeks. Id. at 592. The DI then met with Dr. Garber and
asked for Respondent's DEA Certificate of Registration. Id. at 592.
Neither Dr. Garber, nor Respondent's secretary, Vanessa Koloen, knew
where the certificate was. Id. at 593.
The DI also sought to seize the controlled substances on the
premises. Id. Dr. Garber told the DI that Respondent ``had not
purchased any controlled substances'' and that controlled substances at
the clinic were purchased by him. Id. at 593-94. Dr. Garber refused to
turn over the controlled substances. Id.
The DI then requested to see the invoices for controlled substance
purchases to verify Dr. Garber's statement. Id. at 594. Clinic
personnel gave the DI various invoices. Id; see also Gov. Exh. 45. The
first of these invoices documented that on March 26, 2001, PSLEI had
purchased two kilograms of testosterone (which was received on March
30, 2001) using Connie Chein's DEA number. See Gov. Exh. 45a. The next
three invoices documented that on three dates in February and March
2001 (Feb. 16 & 21, Mar. 13, 2001), PSLEI purchased various quantities
of testosterone which was shipped to Dr. Garber's residence. See Gov.
Exh. 45(b), (c), & (d). The first two of these invoices (the Mar. 14
Pharmacia & Upjohn and the Feb. 16 Gallipot) did not have a DEA number.
The third invoice (the Feb. 21 Gallipot) used Respondent's DEA number
even though the controlled substances were shipped to Dr. Garber's
residence. See Gov. Exh. 45(d), Gov. Exh. 2.
Finally, the seventh invoice documents a March 2, 2001, purchase by
Dr. Garber of testosterone from Paddock Laboratories, which was shipped
to Dr. Garber's residence. See Gov. Exh. 45(g). Of note, the invoice
gives the name ``Vanessa'' in the box which includes purchase order
information; in the ``Ship To Party Address'' box, the invoice gives
Dr. Garber's name followed on the next line with the notation ``c/o
Angela Santana.'' Id. The invoice also includes the handwritten
notation: ``Received by Angie 3/5/01.'' Id. Both these individuals were
PSLEI employees. Tr. 598. There is no dispute that Respondent was the
owner of the PSLEI when these four purchases were made.
Thereafter, on three occasions between January and March 2002, the
DI (accompanied by another DI) went to PSLEI to search through its
trash. Tr. 686. During the February trash run, the DIs found 50 empty
boxes for a testosterone product that had been
[[Page 6587]]
manufactured by Brovel, S.A., a Mexican firm. Tr. 709, Gov. Exh. 58.
The DI subsequently had someone translate the boxes' label, which was
written in Spanish. Tr. at 711. The label indicated that the
testosterone was not for human consumption but rather for animal use.
See Gov. Exh. 58, at 4; Tr. 711; see also Gov. Exh. 116, at 4
(declaration of FDA Associate Chief Counsel James Smith).
I do not, however, adopt the ALJ's finding that because
``Respondent does not treat animals[,] * * * the records supports an
inference that this non-human use testosterone was compounded into a
testosterone gel which was dispensed to the Respondent's human
patients.'' ALJ at 62. I acknowledge that the existence of the boxes
does create a suspicion that the substances were dispensed to human
patients. But the Government produced no additional evidence that PSLEI
used this testosterone to create products that were dispensed to
humans. Moreover, Respondent produced credible evidence that he
performed research into the development of a more effective delivery
system for testosterone. The Government did not foreclose the
possibility that the testosterone was used for that purpose by
producing evidence that the quantity represented by the boxes was in
excess of what would be needed for research purposes. While this is a
close call, it is the Government that bears the burden of proof on the
issue, and I therefore conclude that the ALJ's finding is not supported
by a preponderance of the evidence.
During this trash run, the DIs also found a fax for an invoice
documenting PSLEI's sale of various products to a resident of Japan.
See Gov. Exh. 70. The invoice was dated October 17, 2001, and lists
``Testosterone/estradiol Gel 20 ml.'' and ``Adrenal Extract 15 mg.
30'' as among the products sold. Id. As found above, PSLEI
used the term ``Adrenal Extract'' for phentermine. Of further
significance, the invoice establishes that PSLEI continued to export
controlled substances following the August 23, 2001 conference and the
August 31 and September 5, 2001 faxes which told Respondent to cease
the exports.
Another document found during this trash run bears the caption
``HORMONE DEPARTMENT PRESCRIPTION SHEET.'' Gov. Exh. 73. The document,
which is dated October 29, 2001, makes reference to a Japanese patient
and instructs a PSLEI employee to ``Please ship Ms. [S.] a tube of
female strength testosterone to Ginza at no charge, immediately.'' Id.
The document is signed ``E. Chein, M.D.'' Id.
Following a third trash run, see Gov. Exh. 121, DI DeSantis
obtained an Administrative Inspection warrant which was executed at
PSLEI on March 13, 2002. Tr. 721. During the inspection, DEA personnel
asked for the biennial inventories that are required by DEA
regulations. Id. at 759-60. The clinic did not have them, id. at 760,
and instead provided the investigators with a document entitled
``Instant Inventory Report.'' Gov. Exh. 82, at 7; Tr. at 760. DEA
personnel also obtained dispensing logs and approximately 100 patient
files for patients who lived outside the United States. Id. at 764 &
811.
The dispensing logs document hundreds of instances in which
Respondent dispensed/exported controlled substances to residents of
foreign countries. See, e.g, Gov. Exh. 84 (dispensing log for
testosterone-estrogen (4mg.-50 mg. 20 ml.) covering period May 1, 2001,
through December 31, 2001).\12\ Many of the dispensings/exports
occurred following the August 23rd conference and the subsequent faxes.
See id. at pp.1-15. Moreover, the log indicates that on November 13 and
14, 2001, the day after service of the Notice of Immediate Suspension,
Respondent dispensed/exported this controlled substance thirteen times.
See id. at 3-4.
---------------------------------------------------------------------------
\12\ The cover sheet of this document indicates that the period
it covered was from ``11/30/01-5/1/01.'' Gov. Exh. 84. The document,
however, also includes dispensings that occurred in December 2001.
See id. at .5 & 1.
---------------------------------------------------------------------------
The dispensing log for testosterone gel (0.8% 20 ml.) also
documents that Respondent dispensed and/or exported following the
service of the Notice of Immediate Suspension. See Gov. Exh. 87. Of
note, Respondent dispensed to a Japanese patient on November 13, 2001,
after service of the Notice of Immediate Suspension. See id. at 6.
The dispensing log for phentermine 15 mg. likewise documents that
Respondent made numerous dispensings and/or exports of this controlled
substance to foreign patients. See generally Gov. Exh. 88. Moreover, it
also documents that Respondent made several dispensing/ exports after
service of the Notice of Immediate Suspension. See id. For example, on
November 13, 2001, Respondent made eight dispensings to foreign
patients, and on November 14, 2001, Respondent made five dispensings to
foreign patients. See id. at 6-7. Furthermore, on November 27, 2001,
Respondent dispensed to a New Jersey patient. See id. at 6.\13\ This
dispensing occurred more than two weeks after service of the Notice of
Immediate Suspension.
---------------------------------------------------------------------------
\13\ Like the dispensing logs that were obtained in February
2001, some of the logs also failed to contain the name of the
dispensing physician. See Gov. Exh. 86, at pp. 1-29 (testosterone
gel 8mg./ml., 20 ml.); Gov. Exh. 89, at 2-8 (phentermine 15 mg.).
---------------------------------------------------------------------------
On October 3, 2002, an additional search warrant was executed at
the PSLEI. Tr. 836. During the search, DEA investigators seized
approximately 83 pill containers labeled as ``Adrenal Extract 15 mg,''
which held approximately 4300 pills, and 63 pill containers labeled as
``Adrenal Extract 30mg,'' which held approximately 3150 pills. Gov.
Exh. 135. The pills were sent to the DEA Southwest Regional Laboratory
for analysis. See id. The lab determined that the pills contained
phentermine HCL. See id.
During the search, DEA also seized a variety of documents. Among
them is the previously described ``Interoffice Memo'' from Respondent,
which is dated February 27, 2000, and which directed PSLEI's oral/
growth hormone departments to ensure the cleanliness of the
testosterone products that were shipped to Japan. Gov. Exh. 136, at 14.
The investigators also obtained several other memos on PSLEI's
letterhead that were written from ``Dr. Chein'' on March 6, April 14,
and July 3, 2000, that discuss shipments to Japan and Taiwan. See id.
at 11-13. The memos, however, are not signed and do not indicate
whether the memo was created by Respondent or his sister.
DEA also seized another memo, which is dated January 14, 2002, and
which is signed ``Edmund Chein MD.'' Id. at 10. The memo stated that
``[e]ffective January 15th, all medicines being shipped to Tokyo goes
[sic] directly to the patient address, except for patients with the
chart number LEI-Y.'' Id. The memo then directed that ``[a]ll medicines
for the patients with the chart number LEI-Y will be shipped directly
to the Osaka clinic address[.]'' Id. Finally, the memo directed that
shipments for two patients should not be addressed ``as Ever young
Technologies'' because the patients ``have to pay taxes on the
shipments that are addressed to Ever young Technologies.'' Id.
Respondent prepared this memo, which is signed as having been received
by an employee, following the service of the Notice of Immediate
Suspension.\14\
---------------------------------------------------------------------------
\14\ Both the Government and Respondent elicited extensive
expert testimony on whether Respondent's dispensing of testosterone
and phentermine to six patients who resided in foreign countries was
for a legitimate medical purpose and within the usual course of
professional practice. In light of Respondent's flagrant and
repeated violations of federal law, I conclude that it is not
necessary to make any findings on this issue.
---------------------------------------------------------------------------
[[Page 6588]]
Discussion
Respondent's Challenges to the Proceeding
In the course of this matter, Respondent filed numerous motions
challenging various aspects of this proceeding. In light of my
conclusion that there is no need to consider the expert testimony
regarding Respondent's practices with respect to foreign patients, many
of the issues raised in these motions are now moot. Respondent also
filed motions seeking to dismiss various allegations or to bar the
Government from introducing evidence on various issues. Upon reviewing
the record, I am satisfied that the ALJ's rulings on these motions were
correct and that further discussion is not warranted.
One of the motions, however, challenges the integrity of this
proceeding and therefore requires further discussion before proceeding
to the merits. More specifically, Respondent alleges that the Office of
Chief Counsel ``engaged in a pattern of unlawful and unethical
misconduct in the instant proceeding mandating the disqualification of
that office.'' Resp. Memorandum of Points and Authorities in Support of
Respondent's Motion To Disqualify Office of Chief Counsel and Dismiss
Administrative Proceeding at 1. The alleged ``pattern'' involves two
statements in an affidavit prepared by an attorney in the Office of
Chief Counsel and signed by a DEA employee which discussed the
circumstances surrounding DEA's failure to process Respondent's
application for an Exporter's Registration. Specifically, the employee
stated that she was the acting unit chief of the registration unit when
she signed the declaration (and was not), and that ``the reason why Dr.
Chein obtained a refund of his registration fee was `unexplained,' ''
Resp. Memo. at 1, when there was an explanation.
Respondent argues that this amounts to the subornation of perjury
and that it ``mandate[s] the disqualification of [the Office of Chief
Counsel] and its replacement with * * * private counsel.'' Id.
Respondent contends that this is so because ``[t]he Office of Chief
Counsel shall defend, cover up and represent its own interests in
relation to the felony perjury charge and it will also be called to
testify regarding the Respondent's Complaint that is to be filed in the
District Court.'' Id. at 3.\15\ Therefore, Respondent maintains that
``private counsel * * * should be required to continue with any
prosecution of this matter.'' Id. Respondent further asserts that it is
not enough to simply ``disregard'' the ``offending evidence'' because
this would not be an ``effective discouragement of the wrong.'' Id. at
5. Respondent thus argues that I should take the extraordinary step of
dismissing the entire proceeding which took thirteen days of hearings
and produced a record that includes a nearly three thousand page
transcript and hundreds of exhibits.
---------------------------------------------------------------------------
\15\ Respondent did not submit a copy of the purported ``felony
perjury charge'' for the record. He did, however, submit a copy of a
proposed complaint for a Bivens action.
---------------------------------------------------------------------------
As a component of the Department of Justice, this agency takes most
seriously allegations of employee misconduct. Respondent's offer of
proof, however, falls far short of establishing that an employee of the
Chief Counsel's office suborned perjury. Moreover, even if Respondent
could make out a prima facie case of subornation of perjury, he offers
no authority that supports his proposed remedy.
[P]roof of actual perjury is a necessary element of subornation''
of perjury, United States v. Hairston, 46 F.3d 361, 376 (4th Cir.
1995), and proof of perjury requires a showing that ``[a] witness
testifying under oath or affirmation * * * [gave] false testimony
concerning a material matter with the willful intent to provide false
testimony, rather than as a result of confusion, mistake, or faulty
memory.'' United States v. Dunnigan, 507 U.S. 87, 94 (1993).
Respondent, however, cannot show either willfulness on the part of the
employee or that her statements were material.
The most common formulation'' of the concept of materiality is 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.'' Kungys v. United
States, 485 U.S. 759, 770 (1988) (quoting Weinstock v. United States,
231 F.2d 699, 701 (D.C. Cir. 1956)) (other citation omitted); see also
United States v. Wells, 519 U.S. 482, 489 (1997) (quoting Kungys, 485
U.S. at 770). The evidence must be ``clear, unequivocal, and
convincing.'' Kungys, 485 U.S. at 772; see also Herring v. United
States, 424 F.3d 384, 386-87 (3d Cir. 2005) (``[A] determination of
fraud on the court may be justified only by the most egregious
misconduct directed to the court itself, and * * * it must be supported
by clear, unequivocal and convincing evidence.'') (int. quotations and
citation omitted); In re Coordinated Pretrial Proceedings in Antibiotic
Antitrust Actions, 538 F.2d 180, 195 (8th Cir. 1976).
Moreover, ``although the materiality of a statement rests upon a
factual evidentiary showing, the ultimate finding of materiality turns
on an interpretation of substantive law.'' Kungys, 485 U.S. at 772
(int. quotations and citation omitted). As the ALJ pointed out, the
issues in this case are whether Respondent's continued registration as
a practitioner ``is inconsistent with the public interest as that term
is defined in 21 U.S.C. 823(f),'' and whether issuing Respondent a
registration as an exporter ``would be inconsistent with the public
interest as that term is defined in 21 U.S.C. 958(c) and 823(d).'' ALJ
Notice and Order Denying Respondent's Motion to Disqualify Office of
Chief Counsel and to Dismiss Administrative Proceedings, at 7. Applying
these principles, I conclude that the two statements at issue here are
not material to the resolution of the issues in this case.
The first allegedly perjurious statement is the employee's
assertion that ``I am the Acting Unit Chief of the Registration Unit,''
Gov. Exh. 48, when, in fact, the employee served in this capacity on
the day she was approached by the attorney about Respondent's exporter
application, but served in this capacity for only a few days and was
not the Acting Unit Chief on the day she signed the declaration. Tr.
2198-99. The employee did, however, investigate the facts surrounding
the non-acceptance of Respondent's application. Ultimately, whether the
employee was still serving as Acting Unit Chief on the day she signed
the declaration is of no consequence in deciding any issue in this
case. In short, the assertion is not the type of statement that ``has a
natural tendency to influence'' the decision in this case because what
matters is not her specific title on the date she signed the
declaration but the fact that she investigated the incident. See
Kungys, 485 U.S. at 770 (int. quotations and other citations omitted).
Moreover, Respondent has produced no evidence, let alone that which is
``clear, unequivocal, and convincing'' that shows that when the
employee signed the declaration, she did so with the intent to deceive.
Id. at 772.
The second allegedly perjurious statement is the employee's
assertion that ``[f]or an unexplained reason, DEA did not accept the
application for filing'' and the employee's further statement
speculating that ``it is likely that [Respondent] or someone from his
office contacted DEA to request the refund.'' Gov. Exh. 48; Resp. Memo
at 1. According to Respondent, the statement
[[Page 6589]]
was perjurious because another employee had told the declarant ``that a
Registration Unit supervisor had instructed her to refund
[Respondent's] money because he already had a DEA number'' and the
employee knew ``that neither [Respondent] nor anyone from his office
had contacted the DEA to request a refund.'' Id.
Respondent's argument as to why this statement is material to any
issue in the case is somewhat opaque. Apparently, Respondent believes
that there was a ``mandatory'' statutory duty to register him as an
exporter ``unless there was a finding that to do so would not be in the
public interest'' and that ``there was no such finding'' here. Reply to
Govt. Resp. to Motion to Disqualify Office of Chief Counsel at 3.
Respondent further asserts that ``[i]f the DEA had acted properly, and
had corrected its mistake, the Respondent would have been registered.''
Id.
Under longstanding DEA policy, the approval of an application for
an Exporter's registration is not a ministerial act. Rather, the
application is subject to an extensive pre-registration investigation
which includes a review of the six statutory factors set forth in 21
U.S.C. 823(d). See 21 U.S.C. 958(c). Although Respondent's application
should have been processed, the violations uncovered during the January
and February 2001 visits, as well as the information Respondent
provided on his application regarding prior disciplinary actions of the
state authorities, would have supported a finding that granting his
registration would be inconsistent with the public interest. Indeed,
that is why the second Show Cause Order (which proposed to deny his
second application for an Exporter's registration) was issued.
Respondent's assertion that his application would have been granted had
DEA not mistakenly failed to process his application is thus wishful
thinking.
More importantly, Federal law makes clear that ``[n]o person may *
* * export from the United States any controlled substance * * * unless
there is in effect with respect to such person a registration issued by
the Attorney General under section 958 of this title, or unless such
person is exempt from registration under subsection(b) of this
section.'' Id. section 957(a). DEA's regulations further state that
``[n]o person required to be registered shall engage in any activity
for which registration is required until the application for
registration is granted and a Certificate of Registration is issued by
the Administrator to such person.'' 21 CFR 1301.13(a) (emphasis added).
Furthermore, Federal law does not provide an exemption from
registration because one has submitted an application which was
subsequently mishandled. See Dennis Robert Howard, M.D., 62 FR 32658,
32661 (1997) (``there is no `good faith' exemption from liability in
administrative proceedings'' under the CSA). And while DEA has
recognized that acting with a ``good faith belief that [one is]
properly registered with DEA * * * is a mitigating factor in
determining the public interest,'' id., DEA has recognized this defense
in only two situations. The first is where a person had previously held
a registration for the activity and believed it to be still valid
pending an appeal of a final order of revocation. See Stanley Alan
Azen, M.D., 61 FR 57893, 57895-96 (1996). The second is where an
applicant applied for a registration and received from DEA controlled
substance order forms that were imprinted with a new DEA number. See
Howard, 62 FR at 32660.\16\ Howard is thus properly understood as a
case involving reliance on an affirmative act of the government.
---------------------------------------------------------------------------
\16\ I decline to extend the good faith defense beyond these
situations. Indeed, to do so in a case like this would create an
incentive for applicants to engage in activities before they had
obtained the required registration and demonstrated their fitness to
perform the activity. Such a rule would clearly threaten public
safety.
---------------------------------------------------------------------------
The good faith defense recognized in Azen is not applicable to
Respondent's situation because Respondent never held an Exporter's
Registration. Nor can Respondent claim that the allegedly perjurious
statement is material under the defense recognized in Howard. While
Respondent's application fee was refunded based on an employee's
mistaken belief that Respondent already had a DEA number, see Resp.
Memo at 1, Respondent does not claim that DEA personnel told him that
he did not need a separate Exporter's registration and Respondent has
produced no evidence that the application form was returned to him.
Indeed, in his brief, Respondent concedes that DEA ``never informed
him'' that his application had been rejected. Resp. Br. 24.
Furthermore, Respondent has offered no testimony to the effect that
he relied on DEA's refunding of his application fee in concluding that
he did not need an Exporter's registration. In fact, during the August
2001 management conference, Respondent asserted that he was not
required to obtain an Exporter's registration because he qualified for
a statutory exemption under 21 U.S.C. 957(b); he did not claim that he
did not need the registration because his application fee had been
refunded or that the application had been returned to him and that he
had relied on the handwritten statement on the application.
Accordingly, because Respondent makes no claim of reliance on any act
of DEA, he cannot establish the materiality of the statements regarding
DEA's failure to process his application.
Finally, even if Respondent had made out a prima facie case with
respect to the declarant and could show that the government counsel who
prepared the affidavit also intended to deceive--a point on which
Respondent offers nothing more than conclusory assertions--Respondent
provides no authority to support his proposed remedy of dismissing the
entire proceeding. Doing so would be an especially untoward result in
light of the statutory purpose to protect the public interest.
Furthermore, the Government made available the declarant and Respondent
was able to thoroughly examine her and demonstrate the inaccuracies in
her declaration. Under these circumstances, no further relief is
warranted.
The Statutory Factors
Respondent's Practitioner's Registration
Section 304(a) of the Controlled Substances Act provides that a
registration to ``dispense a controlled substance * * * may be
suspended or revoked by the Attorney General upon a finding that the
registrant * * * has committed such acts as would render his
registration under section 823 of this title inconsistent with the
public interest as determined under such section.'' 21 U.S.C.
824(a)(4). In making the public interest determination, the Act
requires the consideration of 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. section 823(f).
``[T]hese factors are * * * considered in the disjunctive.'' Robert
A. Leslie, M.D., 68 FR 15227, 15230 (2003). I ``may rely on any one or
a combination of factors, and may give each factor the weight [I] deem[
] appropriate in
[[Page 6590]]
determining whether a registration should be revoked or an application
for registration [should be] denied.'' Id. Moreover, case law
establishes that I am ``not required to make findings as to all of the
factors.'' Hoxie v. DEA, 419 F.3d 477, 482 (6th Cir. 2005); see also
Morall v. DEA, 412 F.3d 165, 173-74 (D.C. Cir. 2005).
Factor One--The Recommendation of the State Licensing Board
As explained above, on three occasions the Medical Board of
California has imposed sanctions against Respondent. At the time the
ALJ rendered her decision, the the most recent accusation had not been
resolved. The ALJ nonetheless concluded that ``[t]hroughout the Medical
Board's proceedings, the Respondent has exhibited an unwillingness to
practice medicine in a manner consistent with the California Medical
Board's rules and regulations,'' and that Respondent's ``attitude'' and
``conduct[ ] demonstrate that [his] continued dispensing of controlled
substances is not in the public interest.'' ALJ at 66-67.
There is some merit to the notion that if one is not willing to
comply with State law they are not likely to comply with Federal law
either. I conclude, however, that it is unnecessary to decide whether a
registrant's unwillingness to comply with State rules that are
unrelated to controlled substances can be considered under the Act when
the registrant maintains a valid State license.
In any event, the ALJ did not have the benefit of knowing the
outcome of the most recent State proceeding which placed Respondent on
probation for a variety of acts that included several related to his
handling of controlled substances. See n.4. The Stipulated Settlement
and Disciplinary Order further states that it ``is intended to resolve
* * * any disciplinary action taken by another State or the Federal
government based on conduct alleged in * * * In the Matter of Edmund
Chein, M.D., Docket No. 02-9 and 02-43 pending before the United States
Drug Enforcement Administration.'' Stipulated Settlement at 2-3.
I acknowledge that the Medical Board acted within its sovereign
prerogatives when it resolved matters arising under State law and
decided to continue to license Respondent as a medical doctor.
Moreover, a State can also adopt Federal standards as part of its State
law. The Controlled Substance Act does not, however, delegate to State
officials the authority to decide whether the continuation of a DEA
registration is consistent with the public interest. See 21 U.S.C. 824.
Rather, Congress entrusted that authority with the Attorney General of
the United States, and that authority has been delegated solely to the
officials of this Agency. See id.; see also 28 CFR 0.100(b). State
officials therefore lack authority to resolve a matter pending before
the Drug Enforcement Administration and the Stipulated Settlement
cannot bind this agency. See, e.g., Fourth Street Pharmacy v. DEA, 836
F.2d 1137, 1139 (8th Cir. 1988).
Moreover, even viewing the stipulated settlement as, in effect,
nothing more than a recommendation to continue Respondent's
registration, I decline to give it deference. As will be explained
below, the record is replete with evidence of Respondent's repeated and
flagrant violations of Federal law. Therefore, I conclude that it would
be inconsistent with the public interest to defer to the Medical
Board's recommendation and give it no weight in the public interest
analysis.
Factors Two and Four--Respondent's Experience in Dispensing Controlled
Substances and His Record of Compliance With Laws Relating To
Controlled Substances
The Dispensing and Export Violations
As the ALJ found, on March 17, 1995, and July 20, 1995, Respondent
dispensed testosterone, an anabolic steroid and Schedule III controlled
substance, to two undercover agents. As the record establishes,
Respondent wrote each special agent a prescription for the steroids in
response to each of the agent's representations that they were
competitive powerlifters and were seeking the steroids to improve their
performance in athletic competitions. Respondent also issued each agent
a letter stating that they had been diagnosed with hypogonadism
notwithstanding that he did not have the test results. Based on this
evidence, I conclude that the prescriptions violated Federal law
because Respondent issued them without a legitimate medical purpose.
See 21 CFR 1306.04(a).\17\
---------------------------------------------------------------------------
\17\ While these incidents occurred some time ago, there is no
statute of limitations applicable to these proceedings, which are
remedial in nature and are instituted to protect the public
interest. See Pettigrew Rexall Drugs, 64 FR 8855, 8859 (1999). While
the passage of time since the wrongdoing is a factor to be
considered, the statute expressly directs that a registrant's
``experience in dispensing'' be considered, an inquiry which
necessarily requires some review of a registrant's history. If
Respondent's misconduct was limited to these two instances, this
would be a different case.
---------------------------------------------------------------------------
The record further establishes that on February 29, 2000,
Respondent directed his California employees to dispense phentermine, a
Schedule IV controlled substance, to a patient in Japan. On that date,
Respondent's state license had been revoked and Respondent was
therefore without authority under the CSA to dispense. See 21 U.S.C.
802(21) (``The term `practitioner' means a physician * * * licensed,
registered, or otherwise permitted, by the United States or the
jurisdiction in which he practices * * * to * * * dispense * * *.'');
id. section 802(10) (``The term `dispense' means to deliver a
controlled substance to an ultimate user * * * by, or pursuant to the
lawful order of, a practitioner * * *.'').
Finally, the record establishes that Respondent repeatedly
dispensed controlled substances to persons residing in foreign
countries. As explained more fully below, Respondent violated Federal
law because he was not registered as an exporter and did not file the
required declarations. Moreover, the record shows that Respondent did
so even after having been notified that his conduct was illegal.
Finally, Respondent did so even after he was served with the Notice of
Immediate Suspension.
Respondent contends that his practitioner's registration
``authorize[d] him as a registered doctor to dispense to his patient,
wherever that patient is located.'' Resp. Exh. 75, at 4 (Resp. Memo.
Pts. & Auth. in Support of Motion to Dismiss Export Charges); see also
Resp. Br. at 22. According to Respondent, ``[e]xporting and dispensing
to an individual simply are two completely different matters,'' Resp.
Exh. 75, at 3, and ``[t]hese terms simply contemplate different
conduct.'' Id. at 4.
Respondent further argues that under 21 U.S.C. 822(b), a registered
physician is authorized to dispense to the extent authorized by his
registration and in conformity with the other provisions of subchapter
I. See Resp. Br. at 23. In Respondent's view, under the statute he was
only required to comply with subchapter I, which ``expressly authorizes
physicians to dispense to their patients,'' and because the export
statutes are located in subchapter II, he was not required to obtain an
export registration and comply with the other requirements of that
subchapter. Id. Perhaps recognizing how unpersuasive this argument is,
Respondent further claims that the statute is ambiguous and that his
interpretation of section 822(b) is reasonable. Id.
The starting point in statutory construction is the language of the
statute. Ardestani v. INS, 502 U.S. 129, 135 (1991) (other citations
omitted). Section 302(b) of the CSA provides that:
[[Page 6591]]
Persons registered by the Attorney General under this subchapter
to manufacture, distribute, or dispense controlled substances * * *
are authorized to possess, manufacture, distribute or dispense such
substances * * * to the extent authorized by their registration and
in conformity with the other provisions of this subchapter.
21 U.S.C. 822(b).
As the Supreme Court has recognized, ``[t]his is a qualified
authorization of certain activities, not a blanket authorization of all
acts by certain persons.'' United States v. Moore, 423 U.S. 122, 131
(1975). The statute grants a registrant authority only to perform those
acts ``authorized by their registration.'' 21 U.S.C. 822(b).
Contrary to Respondent's understanding, the ``in conformity with
the provisions of this subchapter'' clause is a further ``limitation''
on a registrant's authority. Moore, 423 U.S. at 131. It compels a
registrant to obey the requirements contained in Subchapter I. What it
does not do is excuse a registrant from complying with other
requirements of federal law such as those imposed by Subchapter II, the
Controlled Substances Import and Export Act (CSIEA). Indeed, under
Respondent's interpretation, any entity which possessed a distributor's
registration would also be exempt from the requirement of obtaining an
exporter's registration (as well as obtaining the permits or filing the
necessary declarations) because the term ``distribute'' is broadly
defined as ``mean[ing] to deliver * * * a controlled substance,'' 21
U.S.C. 802(11), which is what an exporter does when it ships a product
to a foreign entity.
DEA has never interpreted the Act in this manner for obvious
reason--it would render the CSIEA a nullity. And contrary to
Respondent's second contention that Federal law is ambiguous, both the
statutes and our regulations make clear that Respondent was required to
obtain an Exporter's registration to ship controlled substances to
foreign countries.
Indeed, Respondent completely ignores the clear text of the Export
Registration provision, 21 U.S.C. 957(a). This section expressly
provides that ``[n]o person may * * * export from the United States any
controlled substance * * * unless there is in effect with respect to
such person a registration issued by the Attorney General under section
958 of this title, or unless such person is exempt from registration
under subsection(b) of this section.'' 21 U.S.C. 957(a) (emphasis
added).
While the statute does not define the term ``export,'' the
regulations do. See 21 CFR 1300.01(b)(12). ``The term * * * means, with
respect to any article, any taking out or removal of such article from
the jurisdiction of the United States (whether or not such taking out
or removal constitutes an exportation within the meaning of the customs
and related laws of the United States).'' Id. Relatedly, the
regulations define ``[t]he term exporter [to] include[ ] every person
who exports * * * controlled substances listed in any schedule.'' Id.
1301(b)(13). Shipping a controlled substance to a person residing in a
foreign country is to take out or remove the ``article from the
jurisdiction of the United States,'' id. 1301(b)(12), even if the
person the drug is being shipped to is an ultimate user.
Beyond that, Congress clearly stated that a person may not export a
controlled substance, ``unless there is in effect with respect to such
person a registration issued * * * under section 958 of this title.''
21 U.S.C. 957(a). A practitioner's registration is not issued under
section 958, but rather under section 823(f). It thus does not provide
its holder with authority to export.
Nor is there any merit to Respondent's contention that because he
shipped out only small amounts of controlled substances, he was not
engaged in exporting. Section 957(a) clearly provides that exporting
``any controlled substance'' triggers the registration requirement
unless a person falls within one of the three statutory exemptions. As
the plain language demonstrates, there is no threshold amount which
triggers the registration requirement. Rather, to export any amount, no
matter how small, a person must first obtain an exporter's
registration.\18\
---------------------------------------------------------------------------
\18\ Indeed, each exportation was a felony under Federal law.
See 21 U.S.C. Sec. 960.
---------------------------------------------------------------------------
The exemptions to the export registration requirement also
foreclose Respondent's interpretation. While the statute exempts from
registration ``[a]n ultimate user who possesses'' a controlled
substance for lawful use by themselves or a family member, this
provision does not apply to Respondent. 21 U.S.C. 957(b)(1)(C). Under
this exemption, an ultimate user must have the controlled substance
``in his possession'' at the time of export from the United States. Id.
section 956(a)(1). Shipping controlled substances to persons in foreign
countries is thus not within this exemption; the other exemptions are
not remotely applicable to Respondent's conduct. See id. Section
957(b)(1).
DEA's Regulations also provided clear notice to Respondent that he
was required to register as an Exporter. Under 21 CFR 1301.13(e),
``[a]ny person who is required to be registered and who is not so
registered, shall make application for registration for one of the
following groups of controlled substance activities, which are deemed
to be independent of each other.'' (emphasis added). The regulation
then provides a table that lists each activity and the coincident
activities that are permissible under a registration for a particular
activity. As the table makes clear, dispensing and exporting are
independent activities. See id. Moreover, exporting is not included in
the Regulation's discussion of the ``[c]oincident activities allowed''
for a registration which authorizes dispensing. See id.
As the foregoing demonstrates, the law and regulations provided
clear notice to Respondent that he could not ship controlled substances
to persons residing in foreign countries without obtaining an export
registration. And while it is true that Respondent was not required to
obtain an Export Permit for either the testosterone or phentermine he
exported,\19\ he was still required to file an Export Declaration
(DEA--Form 236) and submit ``documentary proof that [the] importation
is not contrary to the laws or regulations of the country of
destination'' for each shipment. 21 U.S.C. 953(e).\20\
---------------------------------------------------------------------------
\19\ While the DI may have misinformed Respondent that he was
required to obtain a permit, she did not tell him that he had no
obligation to comply with Federal law.
\20\ Respondent also contends that he was not required to file
the declarations (DEA Form 236) because the form ``requires the
listing of the name and address of the `foreign consignee/
consignor,''' and that ``[i]n this case, there is no `foreign
consignee/consignor,' since the recipients are end user patients.''
Resp. Br. 26. Respondent further contends that these ``terms are
used in trade to describe the persons from whom and to whom goods
are shipped for sale to third parties.'' Id.
The short answer to this contention is that in common usage, the
term ``consignee'' means ``one to whom something is consigned or
shipped.'' Merriam-Webster's Collegiate Dictionary 246 (10th ed.
1998). Beyond that, the record contains a copy of the ``Commercial
Invoice'' form that Respondent used to ship products (including
testosterone) to his foreign patients. Gov. Exh. 107, at 20. Under
this form, which used the term ``consignee,'' Respondent's clinic
inserted the patient's name. See id.
---------------------------------------------------------------------------
As the record demonstrates, phentermine is a controlled substance
in Belgium, Canada, Germany, Indonesia, Japan, the Republic of Korea,
and Taiwan. Gov. Exh. 38(c), at 5. The record also establishes that
both Japan and Taiwan prohibit the importation of this drug. Id. at
Tabs D & E. Furthermore, testosterone is controlled in both Canada and
the United Kingdom. See id. at 5.
Respondent's failure to declare these shipments to DEA prevents the
United
[[Page 6592]]
States from fulfilling its treaty obligations and denies the country of
destination the opportunity to determine whether a shipment of a
controlled substance is permissible before it occurs. See id. at 3. It
thus undermines the system of international cooperation to prevent the
illegal flow of controlled substances. See, e.g., Convention on
Psychotropic Substances, 1971, Art. 21 (``[T]he Parties shall * * *
[a]ssist each other in the campaign against the illicit traffic in
psychotropic substances * * * [and] [c]o-operate closely with each
other * * * with a view to maintaining a co-ordinated campaign against
the illicit traffic.'').
Respondent further contends that he acted in good faith to obtain
an Export registration. But as explained above, Federal law makes clear
that ``[n]o person may* * * export from the United States any
controlled substance * * * unless [a registration] is in effect,'' 21
U.S.C. 957(b), and the regulations further provide that a person cannot
``engage in any activity for which registration is required until the
application * * * is granted and a Certificate of Registration is
issued.'' 21 CFR 1301.13(a). Determining whether the granting of an
application for an export registration is consistent with the public
interest requires an extensive and time consuming investigation into
the same criteria that apply to manufacturers. 21 U.S.C. 958(c) &
823(d). Granting such a registration is not a ministerial act, and in
this case, the conduct uncovered before Respondent even applied for the
registration was enough to deny his application.
Furthermore, the record establishes that Respondent subsequently
acted with deliberate disregard for the requirements of federal law.
Both during the August 2001 management conference, and in several faxes
thereafter, Respondent was warned by the DI to stop the foreign
shipments. He nonetheless continued to send controlled substances to
persons in foreign countries. Furthermore, notwithstanding the service
of the Notice of Immediate Suspension of his registration, Respondent
made further dispensings of controlled substances to persons who
resided both within the U.S. and abroad. Respondent's conduct
demonstrates that he acted with a deliberate disregard for the law.
The Import Allegations
The record also contains evidence suggesting that Respondent
obtained testosterone products from Mexico. This evidence includes the
invoice which Respondent gave the DI during the August 2001 management
conference. Specifically, the invoice, which was dated June 26, 2001,
indicated that PSLEI had purchased 120 units of Depo testosterone and
40 units of Decadurabolin from Farmacias Castaneda, which listed its
address as Tijuana, Mexico. Gov. Exh. 22. Moreover, during the February
2002 trash run, the DIs found 50 empty boxes of a testosterone product
that had been manufactured by Brovel, S.A., a Mexican firm. Tr. 709,
Gov. Exh. 58.
The ALJ concluded that the Government had failed to prove that
Respondent ``received imported controlled substances from Mexico,''
apparently because the record ``contains evidence that the owner of the
Mexican pharmacy, Dr. Romero, may have shipped the controlled
substances from a location in San Diego.'' ALJ 75. The ALJ further
explained that ``[t]here are no shipping documents in the record to
refute this evidence.'' Id.
Romero was not, however, a registered importer. And even accepting
the ALJ's finding that the drugs may have been shipped to Respondent
from a location in San Diego, I do not find persuasive the ALJ's
reasoning that Respondent therefore did not engage in importation.
Indeed, I conclude that the ALJ's reasoning is contrary to well settled
authority and that adopting it would gut Federal drug laws.
``Importation is a continuing crime that is not complete until the
controlled substance reaches its final destination.'' United States v.
Camargo-Vergara, 57 F.3d 993, 1001 (11th Cir. 1995); see also United
States v. Martinez, 763 F.2d 1297, 1304 (11th Cir. 1985). The fact that
someone else brought the drugs across the border, or that the drugs
were shipped from a way station within the United States, does not make
the final intended recipient any less an importer. As the Fifth Circuit
has explained, one ``need not have participated directly in the
physical movement of the [controlled substance] across the border to be
convicted under 21 U.S.C. 952(a).'' United States v. Lopez-Escobar, 920
F.2d 1241, 1245 (1991). Indeed, drug dealers frequently use third
parties to smuggle controlled substances into this country. That does
not make them any less an importer.
Rather, the Government need only show that ``the defendant
knowingly played a role in bringing the substance from a foreign
country into the United States,'' United States v. Jackson, 55 F.3d
1219, 1225 (6th Cir. 1995); or that ``the defendant either imported the
substance or caused it to be imported.'' United States v. Nusraty, 867
F.2d 759, 766 (2d Cir. 1989); Accord United States v. Samad, 754 F.2d
1091, 1096 (4th Cir. 1984). See also United States v. Diaz-Carreon 915
F.2d 951, 953 (5th Cir. 1990). The Government's proof satisfies either
standard.
The Farmacia Castaneda invoice clearly establishes that: (1) Two
controlled substances were shipped to Respondent, and (2) that the
source of the controlled substances was a Mexican based pharmacy
notwithstanding that the substances may have been shipped from Mr.
Romero's San Diego address. The invoice further establishes that (3)
Respondent caused the controlled substances to be imported by ordering
them from the pharmacy. Finally, Respondent does not dispute that he
received these two controlled substances but rather only whether the
substances ``came from San Diego, [and] not Mexico.'' Resp. Proposed
Findings at 14. The record thus contains substantial evidence that
Respondent imported controlled substances.
Under Federal law, ``[n]o person may * * * import into the United
States from any place outside thereof, any controlled substance * * *
unless there is in effect with respect to such person a registration
issued * * * under section 958 of this title'' or the person ``is
exempt from registration under subsection(b).'' 21 U.S.C. 957(a).
Respondent was not registered as an importer, Gov. Exh. 2, and does
fall within any of the three exemptions. See 21 U.S.C. 957(b). I thus
conclude that Respondent violated federal law when he imported depo
testosterone and decadurabolin from Mexico without being registered to
do so.\21\
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\21\ I have reviewed Respondent's contention that these
allegations should be dismissed because they were not alleged in the
Order to Show Cause. While it is true that our regulations and the
Administrative Procedure Act require that an Order to Show Cause
contain ``a summary of the matters of fact and law asserted,'' 21
CFR 1301.37(c), an agency is not required ``to give every
[Respondent] a complete bill of particulars as to every allegation
that [it] will confront.'' Boston Carrier, Inc. v. ICC, 746 F.2d
1555, 1560 (D.C. Cir. 1984).
Having reviewed the pre-hearing statements, I conclude that the
Government gave Respondent fair notice that the import allegations
would be raised and litigated. I further conclude that Respondent
had ``a meaningful opportunity to litigate the * * * issue in the
hearing itself.'' NLRB v. Blake Construction Co., Inc., 663 F.2d
272, 279 (D.C. Cir. 1981). The Government's refusal to turn over
FedEx documents that would have shown that the two controlled
substances had been shipped from Romero's San Diego location did not
deny Respondent a meaningful opportunity to litigate the issue;
indeed, I accept that the steroids may have been shipped to
Respondent from a San Diego address.
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The Record Keeping Violations
The record further establishes that Respondent committed numerous
recordkeeping violations. Beginning
[[Page 6593]]
with the 1994-95 investigation, during the execution of the search
warrant, none of the required records were found even though Respondent
had purchased a variety of controlled substances included various
anabolic steroids and diazepam.
Moreover, on January 31, 2001, DEA visited Respondent's clinic and
requested to see its controlled substance records. The invoices for the
purchase of controlled substance were not on-site, but rather were at
the office of the clinic's accountant. This violated 21 CFR 1304.04(a).
Moreover, the inventory records and dispensing logs were stored in a
computer system and no one was present at the clinic who could access
them. Tr. 269.
DEA regulations require that ``each registered individual
practitioner required to keep records'' shall maintain the records
``either separately from all other records of the registrant or in such
form that the information required is readily retrievable from the
ordinary business records of the registrant.'' 21 CFR 1304.04(g) &
(f)(2). As relevant here, DEA regulations define the term ``readily
retrievable'' to mean ``that certain records are kept by automatic data
processing systems or other electronic or mechanized record-keeping
systems in such a manner that they can be separated out from all other
records in a reasonable time.'' Id. Sec. 1300.01(b)(38) (emphasis
added).
Respondent is correct that this regulation does not require that
records be ``instantaneously produced.'' Resp. Br. 9. Moreover, the
record does not indicate how long DEA personnel were at the clinic
during the January 31, 2001 visit. Accordingly, there is no basis to
conclude that the inventory and dispensing records were not readily
retrievable on that date.
I nonetheless note Respondent's argument that he ``was not required
to produce his records on the same day as the DEA's demand.'' Id. at
17. This is so, Respondent contends, because ``[n]either the statute
nor the regulation prescribes a time limit within which a practitioner
must produce his controlled substance records upon the DEA's request to
examine them.'' Id.
The regulation does, however, require that records be retrievable
in ``a reasonable time.'' While what constitutes ``a reasonable time''
necessarily depends on the circumstances, under normal circumstances if
a practice is open for business, it should be capable of producing a
complete set of records within several hours of the request. In this
case, I conclude that on the second visit, the clinic's provision of
the records within two to three hours complied with the regulation but
barely so. To allow a registrant an even greater period of time to
produce the records would create an incentive for those who are engaged
in illegal activity to obstruct investigations by stalling for time in
the hopes that DEA personnel would eventually give up and leave.
Most significantly, the records that were provided did not comply
with DEA's regulations. The ``inventory report'' was dated February 5,
2001. It did not include a DEA number for either Respondent or his
associate and did not indicate that it had been done at the opening or
closing of business. 21 CFR 1304.03(a) & 1304.11(a). Furthermore, the
dispensing logs did not reflect the name of the dispensing registrant.
Id. Sec. 1304.03(b). Moreover, the logs covered only a period of
approximately seven months and not the required two years. Id. Sec.
1304.04(a). Finally, no invoices for testosterone were provided even
though the other records clearly showed that the PSLEI had testosterone
products on hand and was actively dispensing them. Id. Sec.
1304.21(a).
Nor were Respondent's recordkeeping violations limited to this time
period. During the March 2002 Administrative Inspection, DEA personnel
again requested to inspect Respondent's records including the required
inventories. While Respondent was not available, the clinic could not
provide the required inventories for the various controlled substances
that were being dispensed. See ALJ 23.
Other Violations
The record contains evidence of further violations of DEA
regulations during the period of Respondent's ownership. In March 2001,
Respondent's clinic used Connie Chein's DEA number to order controlled
substances even though Ms. Chein did not practice at the clinic and the
clinic was not her registered location. See Gov. Exh. 45(a). This was a
violation of 21 U.S.C. 843(a)(2) (prohibiting use of a registration
number ``issued to another person'' for purpose of obtaining controlled
substances). Moreover, Respondent's employees ordered controlled
substances for the clinic using Dr. Garber's registration and had them
shipped to Dr. Garber's residence, which was no longer a registered
location. See Gov. Exh 45(b), (c), (d) & (g). This conduct undermines
the CSA's closed system of distribution which requires that a
registrant maintain a registration at each place of business from where
a registrant distributes controlled substances. 21 U.S.C. 822(e); 21
CFR 1301.12. Under DEA precedents, a registrant is responsible for
violations of the CSA committed by his employees and his practice's
failure to comply with the Act. See Leonard Merkow, 60 FR 22075, 22076
(1995).
In conclusion, the evidence of Respondent's non-compliance with
applicable laws related to controlled substances is extensive and
shocking. Taken as a whole, Respondent's record reflects a flagrant
disregard for the requirements of Federal law. Accordingly, I conclude
that Respondent's continued registration as a practitioner would be
inconsistent with the public interest.\22\
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\22\ I acknowledge that Respondent has not been convicted under
either Federal or State law of a controlled substances offense.
Given Respondent's extensive record of non-compliance with
applicable laws, this factor is entitled to no weight. Moreover,
because Respondent's record of violations is extensive enough to
support the revocation of his registration, it is not necessary to
discuss whether he engaged in other conduct which threatens public
health and safety.
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Respondent's Export Application
Section 1008 of the Controlled Substances Act provides that ``[t]he
Attorney General may deny an application for registration [to export
controlled substances in schedule III or IV] * * * if he determines
that such registration is inconsistent with the public interest * * *
or with the United States obligation under international treaties,
conventions, or protocols in effect on May 1, 1971.'' 21 U.S.C.
958(d)(2). In making the public interest determination for an
application to export Schedule III and IV controlled substances,
Congress further directed that the Attorney General consider the
factors applicable to manufacturers of Schedule III through V
controlled substances. Id. section 958(c)(1). The factors are:
(1) Maintenance of effective controls against diversion of
particular controlled substances and any controlled substance in
schedule III, IV or V compounded therefrom into other than
legitimate medical, scientific, or industrial channels;
(2) Compliance with applicable State and local law;
(3) Promotion of technical advances in the art of manufacturing
these substances and the development of new substances;
(4) Prior conviction record of applicant under Federal or State
laws relating to the manufacture, distribution, or dispensing of
such substances;
(5) Past experience in the manufacture, distribution, and
dispensing of controlled substances, and the existence in the
establishment of effective controls against diversion; and
(6) Such other factors as may be relevant to and consistent with
the public health and safety.
[[Page 6594]]
21 U.S.C. 823(d). As with the public interest determinations applicable
to other categories of registrants, ``these factors are * * *
considered in the disjunctive.'' ALRA Laboratories, Inc., 59 FR 50620,
50621 (1994). I ``may * * * rely on any one or a combination of
factors, and give each factor the weight [I] deem appropriate'' in
considering whether to grant Respondent's application. Id. Moreover,
case law establishes that I am ``not required to make findings as to
all of the factors.'' Hoxie, 419 F.3d at 482.
Here, while Congress has directed a slightly different analysis
than that applicable to Respondent's practitioner's registration, I
conclude that the same reasons that support the revocation of that
registration also require the conclusion that granting Respondent's
application for an export registration would be inconsistent with the
public interest. There is no need to engage in a lengthy rehashing of
those factors (such as Respondent's past experience and lack of
compliance with Federal law) which have already been discussed; that
discussion is therefore incorporated by reference.
Both factors one and five inquire into whether an applicant has
effective controls against diversion. Respondent clearly does not as
demonstrated by his clinic's repeated failure to provide DEA with
either initial or biennial inventories that complied with the
regulations. Accurate inventories are essential to conduct
accountability audits and to determine whether diversion has occurred.
Respondent asserts that ``[t]here was no diversion of controlled
substances from the legitimate chain of distribution.'' Resp. Br. 6.
That is not so. The record contains abundant evidence that phentermine
was sent to patients in Japan, Korea, and Taiwan. See Gov. Exh. 128. As
demonstrated by a letter from a Japanese Ministry of Health official,
it was illegal to export phentermine to Japan (although a person is
allowed to bring in a small amount of the drug on his person). See Gov.
Exh. 38(C). Furthermore, Taiwan had prohibited the use of phentermine
and its importation. Finally, the record indicates that it is illegal
to prescribe phentermine for anti-aging purposes in Korea and Japan.
Both Japan and the United States have ratified the 1971 Convention
on Psychotropic Substances, which regulates phentermine; the Republic
of Korea has also become a party to the Convention by accession.\23\ As
explained above, under the Convention, the United States agreed to
undertake certain measures including assisting other parties ``in the
campaign against the illicit traffic in psychotropic substances.''
Convention on Psychotropic Substances Art. 21(b).
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\23\ Taiwan was also a signatory to the Convention on
Psychotropic Substances. It is acknowledged that Republic of China
has declared Taiwan's ratification of the Convention to be null and
void.
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In light of the authority that an export registration grants, as
well as our treaty obligations, it is appropriate to consider the
potential impact of Respondent's conduct not only on this country, but
also on other parties to the Convention.\24\ The statements of various
government officials regarding the prohibition on the exportation of
phentermine to their countries, as well as other evidence that it is
illegal to prescribe phentermine for anti-aging purposes in several of
these countries, establish that Respondent's exports of phentermine to
foreign patients were not within the legitimate chain of distribution
and were not for a legitimate medical purpose. The shipments thus
establish that Respondent has engaged in diversion. I therefore
conclude that Respondent's past experience in distributing and
dispensing controlled substances demonstrates that his practice lacks
effective controls against diversion--indeed, he is the cause of the
diversion--and that this factor further supports a finding that
granting Respondent's application would be inconsistent with the public
interest. For the same reason, factor one supports a finding that
granting Respondent's application would be inconsistent with the public
interest.
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\24\ Noramco v. DEA, 375 F.3d 1148, 1156 (D.C. Cir. 2004), is
not to the contrary. That case involved an assertion by a competitor
of a domestic manufacturer that granting the latter an importer's
registration would lead to increased diversion of narcotic raw
materials in India, the country of origin. See Penick Corp., Inc.,
68 FR 6947, 6951 (2003). While this assertion was entirely
speculative, my predecessor further ruled that DEA was not required
to consider the impact on diversion in the country of origin. See
id. In affirming that interpretation as a reasonable construction of
the statute, the court of appeals reasoned that ``Congress was
concerned with preventing diversion in this country rather than
abroad.'' 375 F.3d at 1156.
Here, however, Federal law expressly requires that an exporter,
before exporting any nonnarcotic controlled substance in schedules
III or IV, ``furnish'' to DEA ``documentary proof that importation
is not contrary to the laws or regulations of the country of
destination for consumption for medical, scientific, or other
legitimate purposes.'' 21 U.S.C. 953(e)(1). Thus, in contrast to the
situation at issue in Penick, here, other provisions of the CSIEA
suggest that in assessing Respondent's application, it is
appropriate to consider the potential for diversion of the
controlled substance in the destination country.
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The ALJ found that Respondent has promoted technical advances in
the development of new substances (Factor 3) as demonstrated by his
obtaining of several patents including one for his total hormone
replacement therapy. See ALJ at 80. The ALJ further concluded that
granting Respondent an export registration ``would enhance his ability
to continue to develop [the] therapy for his patients.'' Id.
I acknowledge that Respondent has obtained various patents for his
treatment regimen and had applied for a patent for a particular
testosterone composition. See Resp. Ex. 1016. Even so, Respondent's
contributions in this area are greatly outweighed by his record of
misconduct and his flagrant disregard for the requirements of federal
law. This factor is thus entitled to no weight. I further note,
however, that denying Respondent's application for an export
registration (and revoking his practitioner's registration) does not
preclude him from developing new treatment protocols. Respondent can
continue to do so as long as he limits his research to non-controlled
substances.
Finally, in discussing other relevant factors (Factor 6), the ALJ
found ``that the public has an interest in the continued access to
Respondent's total hormone replacement therapy,'' and suggested that I
could consider this in deciding whether to deny Respondent's
application for an export registration (as well as to revoke his
practitioner's registration). ALJ at 81. I need not decide whether this
is an appropriate consideration under the statute because even if it
is, Respondent's extensive history of misconduct clearly outweighs any
benefit to the public that would accrue from allowing Respondent to
handle controlled substances as either an exporter or practitioner. And
in any event, Respondent can always license his patents to other
physicians or offer to teach them his medical discoveries.
Considering all of the factors, I conclude that Respondent's past
experience in distributing and dispensing controlled substances is
entitled to dispositive weight in the public interest determination
applicable to his application for registration as an Exporter. Because
that experience manifests a sustained and flagrant disregard for the
requirements of Federal law, I conclude that granting Respondent's
application would be inconsistent with the public interest.\25\
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\25\ Even if the Court of Appeals was to disagree with my
finding that Respondent was still in charge of the Palm Springs
clinic's dispensation of controlled substances during the period of
his sister's putative ownership, the scope of his misconduct during
the periods in which he owned the clinic is so extensive and
egregious that I would still revoke his practitioner's registration
and deny his exporter's application.
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[[Page 6595]]
Order
Pursuant to the authority vested in me by 21 U.S.C. 823(f) &
824(a), as well as 28 CFR 0.100(b) & 0.104, I hereby order that DEA
Certificate of Registration, AC1643661, issued to Edmund Chein, M.D.,
be, and it hereby is, revoked. I also order that any pending
applications for renewal or modification of such registration be, and
they hereby are, denied.
Pursuant to the authority vested in me by 21 U.S.C. 958(d), as well
as 28 CFR 0.100(b) & 0.104, I further order that the application of
Edmund Chein, M.D., for a DEA Certificate of Registration as an
Exporter of controlled substances be, and it hereby is, denied.
Dated: January 19, 2007.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. E7-2217 Filed 2-9-07; 8:45 am]
BILLING CODE 4410-09-P