[Federal Register Volume 62, Number 220 (Friday, November 14, 1997)]
[Notices]
[Pages 61145-61148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29972]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration
[Docket No. 97-5]


Martha Hernandez, M.D.; Reprimand and Continuation of 
Registrations With Restriction

    On January 14, 1997, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Martha Hernandez, M.D., (Respondent) of Chicago, 
Illinois and Gary, Indiana, notifying her of an opportunity to show 
cause as to why DEA should not revoke her DEA Certificates of 
Registration, AH2262424 and BH4493475, pursuant to 21 U.S.C. 824(a)(1), 
and deny any pending applications for renewal of her registrations as a 
practitioner under 21 U.S.C. 823(f). The Order to Show Cause alleged 
that Respondent materially falsified two applications for registration 
with DEA.
    By letter dated February 6, 1997, Respondent, through counsel, 
filed a timely request for a hearing, and following prehearing 
procedures, a hearing was held in Chicago, Illinois on May 27, 1997, 
before Administrative Law Judge Gail A. Randall. At the hearing, both 
parties called witnesses to testify and introduced documentary 
evidence. After the hearing, counsel for both parties submitted 
proposed findings of fact, conclusions of law and argument. On 
September 5, 1997, Judge Randall issued her Opinion and Recommended 
Ruling, recommending that Respondent's registrations not be revoked, 
but that Respondent be reprimanded and that she be required to submit 
certain documentation to DEA on an annual basis for three years. On 
September 25, 1997, the Government filed exceptions to Judge Randall's 
Opinion and Recommended Ruling, and on October 6, 1997, the record was 
transmitted to the Acting Deputy Administrator.
    On October 15, 1997, Respondent submitted a request to file a 
response to the Government's exceptions, as well as her response to the 
exceptions. Respondent argued that ``[t]he Government filed its 
exceptions on September 25, 1997 and pursuant to regulation the 
Respondent has 20 days to request leave and file a response.'' In 
addition, Respondent stated that the Government does not object to 
Respondent filing a response to the exceptions. The Acting Deputy 
Administrator finds that Respondent has misread 21 CFR 1316.66, which 
provides for the filing of exceptions within 20 days of service of the 
Administrative Law Judge's Opinion and Recommended Ruling. The 
regulation further provides that the Administrative Law Judge may grant 
time beyond the twenty days for the filing of a response to any 
exceptions filed. Nowhere in the regulations is a party given 20 days 
from the filing of exceptions to submit a response. However, the Acting 
Deputy Administrator will nonetheless consider Respondent's response to 
the Government's exceptions since it has been represented that the 
Government does not object to the consideration of Respondent's 
response.
    The Acting Deputy Administrator has considered the record in its 
entirety, and pursuant to 21 CFR 1316.67, hereby issues his final order 
based upon findings of fact and conclusions of law as hereinafter set 
forth. The Acting Deputy Administrator adopts, in full, the Opinion and 
Recommended Ruling of the Administrative Law Judge. His adoption is in 
no manner diminished by any recitation of facts, issues and conclusions 
herein, or of any failure to mention a matter of fact or law.
    The Acting Deputy Administrator finds that Respondent is a 
psychiatrist licensed to practice medicine in the states of Illinois 
and Indiana, with a DEA Certificate of Registration issued to her in 
each state. On June 15, 1990, the State of Illinois, Department of 
Professional Regulation (IDPR) refused to renew Respondent's Illinois 
medical license because she had defaulted on her student loan payments. 
On December 2, 1991, Respondent entered into a consent order with IDPR, 
which reinstated her Illinois medical license, but placed her license 
on probation until such time as she completes repayment of her student 
loan. The consent order set forth a schedule for repayment of the loan. 
However, by Order dated January 10, 1994, the IDPR indefinitely 
suspended Respondent's Illinois medical license due to her failure to 
abide by the repayment plan.
    On October 1, 1994, Respondent submitted a renewal application for 
DEA Certificate of Registration AH2262424 issued to her in Illinois. On 
this renewal application, Respondent indicated that she was currently 
authorized to handle controlled substances ``in the state in which [she 
is] operating or propos[ing] to operate'', yet she listed her Indiana 
state medical license number. Also, Respondent answered ``No'' to the 
liability question which asked, ``Has the applicant ever been convicted 
of a crime in connection with controlled substances under State or 
Federal law, or ever surrendered or had a Federal controlled substance 
registration revoked, suspended, restricted or denied, or ever had a 
State professional license or controlled substance registration 
revoked, suspended, denied, restricted or placed on probation?''
    DEA personnel telephonically contacted Respondent on January 31, 
1995, and again on May 3, 1995. During these conversations, the DEA 
personnel discussed with Respondent the effect of the IDPR's suspension 
upon Respondent's DEA registration; the possible voluntary surrender of 
Respondent's Illinois DEA registration in light of the continued 
suspension of her Illinois medical license; and the need for Respondent 
to submit a new application for registration with DEA in the State of 
Indiana. However, the DEA personnel did not indicate to Respondent 
during these conversations that her answer to the liability question on 
the October 1, 1994 renewal application was incorrect or questionable.
    On May 5, 1995, Respondent submitted a new application for a DEA 
registration in the State of Indiana. Again, she answered ``No'' to the 
liability question which asks, ``Has the applicant ever had a State 
professional license or controlled substance registration revoked, 
suspended, denied, restricted or placed on probation?'' Subsequently, 
on July 10, 1995, Respondent was issued DEA Certificate of Registration 
BH4493475, in the State of Indiana.
    On June 16, 1995, Respondent submitted an application to renew her 
Indiana medical license. On that application, Respondent answered 
``No'' to a question which asked, ``In the last two years, has 
disciplinary action been taken regarding any license, certificate, 
registration or permit you hold or have held?'' As a result of this 
application, Respondent's Indiana medical license was renewed on June 
30, 1995.
    Following her conversations with the DEA personnel, Respondent 
decided not

[[Page 61146]]

to surrender her Illinois DEA registration. Judge Randall found that 
``Respondent credibly testified [at the hearing in this matter] that 
she had declined to surrender her DEA Certificate of Registration 
because she felt that the choices given on the DEA surrender form 
pertaining to the reason for the surrender implied failure on her part 
to comply with Federal law in her handling of controlled substances.'' 
Judge Randall further found that Respondent ``credibly testified that 
she had believed such form language did not apply to her, since the 
suspension of her Illinois medical license was due to her inability to 
repay her Illinois student loan, not due to her failure to comply with 
Federal law in her handling of controlled substances.''
    Since Respondent declined to voluntarily surrender her Illinois DEA 
registration, on November 27, 1995, DEA issued an Order to Show Cause 
to Respondent proposing to revoke her Illinois DEA Certificate of 
Registration in light of the fact that she was not then authorized to 
handle controlled substances in the State of Illinois due to the 
continued suspension of her Illinois medical license. However, on 
November 29, 1995, the IDPR entered into another consent agreement with 
Respondent, which reinstated Respondent's Illinois medical license and 
placed this license on probation subject to Respondent's adhering to a 
student loan repayment schedule. As a result of the consent agreement, 
the November 27, 1995 Order to Show Cause was not pursued.
    In July 1996, Respondent submitted an application to renew her 
Illinois medical license. On this application, Respondent answered 
``Yes'' to a question which asked, ``Since July 31, 1993, have you been 
denied a professional license or permit, or privilege of taking an 
examination, or had a professional license or permit disciplined in any 
way by any licensing authority in Illinois or elsewhere?'' Respondent 
testified that she answered the question in the affirmative, after 
discussing the interpretation of the question with an Illinois 
official.
    On July 8, 1996, the Indiana Medical Licensing Board (Indiana 
Board) issued a complaint against Respondent. The complaint alleged 
that Respondent had falsified her application for renewal of her 
Indiana medical license dated June 16, 1995, by indicating that in the 
last two years no disciplinary action had been taken against any 
licenses that she had held or was currently holding, even though the 
IDPR had indefinitely suspended her Illinois medical license on January 
10, 1994. In a letter dated January 13, 1997, Respondent informed the 
Indiana Board that ``[a]t the time I reapplied for my Indiana license 
[June 16, 1995] I was not aware of my Illinois license being 
resuspended.'' On July 14, 1997, the Indiana board issued its Findings 
of Fact and Order finding that Respondent's conduct constituted 
``knowingly engaging in fraud or material deception in order to obtain 
a license to practice in violation of Ind. Code. * * *'' Accordingly, 
the Indiana Board ordered that Respondent be reprimanded, fined $200.00 
and assessed costs.
    At the hearing in this matter, Respondent contradicated her January 
13, 1997 letter to the Indiana Board when she agreed that in January 
and May of 1995, she had had conversations with DEA personnel 
concerning the suspension of her Illinois medical license in January 
1995.
    Judge Randall found that ``Respondent credibly testified [at the 
hearing in this matter] that during 1994 she had experienced unexpected 
financial difficulties which contributed to her inability to pay her 
student loans * * * [and] that the suspension of her Illinois medical 
license in January of 1994 was not a rememberable event to her, since 
she was primarily practicing medicine in Indiana in 1994, and given the 
general turmoil of her life at that time.'' Judge Randall further found 
that ``Respondent credibly testified that she was unaware of a need for 
a separate DEA Certificate of Registration to reflect her Indiana place 
of business.'' In addition, Respondent testified that she answered 
``No'' to the liability question on the DEA applications because she 
thought that since she was applying for a Federal registration to 
handle controlled substances, the question only pertained to actions 
taken based upon malpractice, criminal activity, or improper 
prescribing of controlled substances, and not to the suspension of a 
medical license due to a failure to repay a student loan.
    Pursuant to 21 U.S.C. 824(a)(1), ``A registration pursuant to 
section 823 of this title to * * * dispense a controlled substance * * 
* may be suspended or revoked by the Attorney General upon a finding 
that the registrant--(1) has materially falsified any application filed 
pursuant to or required by this subchapter or subchapter II of this 
chapter.'' The Government contends that Respondent's DEA Certificates 
of Registration should be revoked pursuant to 21 U.S.C. 824(a)(1) 
because she falsified two different DEA applications by indicating that 
no adverse action had been taken against any of her state professional 
licenses when in fact such action had been taken against her Illinois 
medical license. In addition, she improperly answered a similar 
question on her application for an Indiana medical license. The 
Government argues that the crucial issues are ``Respondent's 
credibility and the ability of DEA investigators to ascertain the 
status of a registrant's or an applicant's past history based upon 
answers to the applicable liability questions.'' The Government 
contends that Respondent's testimony regarding her responses to the 
liability questions was not credible.
    Respondent admits that her responses to the liability questions 
were incorrect. However, Respondent argues that the statements at issue 
were not ``material'' falsifications. Respondent further contends that 
revocation would be too harsh a sanction since she had no intent to 
deceive or mislead DEA; because her underlying misconduct was not 
related to malpractice in her treatment of patients or the mishandling 
of controlled substances; and, since once advised by the IDPR of the 
correct interpretation of the liability questions, she answered the 
question on her July 1996 state application appropriately.
    As Judge Randall notes, ``[a]nswers to the liability question are 
material, since the DEA relies upon such answers to determine whether 
an investigation is needed prior to grating the application.'' DEA has 
previously held that in finding that there has been a material 
falsification of an application, it must be determined that the 
applicant knew or should have known that the response given to the 
liability question was false. See Bobby Watts, M.D., 58 FR 4699 (1993); 
Herbert J. Robinson, M.D., 59 FR 6304 (1994).
    The Acting Deputy Administrator concurs with Judge Randall's 
conclusion that Respondent materially falsified her October 1, 1994 
renewal application for her Illinois DEA Certificate of Registration 
and her May 5, 1995 application for a DEA registration in Indiana. 
Respondent indicated on both of these applications that she had not had 
a state professional license denied or suspended, even through she knew 
that the renewal of her Illinois medical license had been denied in 
1990, and that after being reinstated, was again suspended in 1994. 
Respondent does not deny that she incorrectly answered the liability 
question on the applications, but contends that she did not think that 
the actions of the IDPR due to her failure to repay her student loan 
was the type of action that needed to be disclosed in response to the 
question. The Acting Deputy Administrator concurs with Judge Randall's 
conclusion that, ``[a]lthough the Respondent credibly

[[Page 61147]]

testified concerning her misinterpretation of the question, she was not 
relieved of her responsibility to carefully read the question and to 
honestly answer all parts of the question.''
    Therefore, the Acting Deputy Administrator concludes that based 
upon Respondent's material falsification of the two applications, 
ground exist to revoke her DEA Certificates of Registration pursuant to 
21 U.S.C. 824(a)(1). The question now becomes whether the Acting Deputy 
Administrator, in exercising his discretion, believes that revocation 
is the appropriate sanction in light of the facts and circumstances of 
this case.
    Judge Randall found that ``Respondent's testimony was credible 
during her explanation of her confusion concerning the DEA registration 
requirements for her Indiana practice, and her misunderstanding, albeit 
unjustified, concerning the phrasing of the liability questions in 
issue.'' Therefore, Judge Randall concluded that Respondent did not 
intend to deceive DEA, but that her falsification of the applications 
was due to her carelessness and negligence. As Judge Randall noted, 
``lack of intent is irrelevant to the legal test of material 
falsification.'' However she suggested that ``such a lack of intent 
should be considered in fitting the remedy to the situation in this 
case.''
    The Government filed exceptions to Judge Randall's conclusion 
arguing that Respondent intentionally sought to deceive DEA by 
incorrectly answering the liability question on the applications. The 
Government argues that Respondent clearly knew that her Illinois 
medical license had been suspended, yet she indicated on her 
applications for registration that no adverse action had been taken 
against her state professional license.
    The Acting Deputy Administrator agrees with Judge Randall that a 
lack of intent to deceive should be considered in determining whether a 
registration should be revoked. However, the Acting Deputy 
Administrator further notes that negligence and carelessness in 
completing an application could be a sufficient reason to revoke a 
registration. In determining whether revocation is warranted, the 
Acting Deputy Administrator looks at the totality of the circumstances 
in each case.
    In this case, it is undisputed that Respondent knew that her 
Illinois medical license had been suspended. But, the Acting Deputy 
Administrator does not agree with the Government that Respondent 
intended to deceive DEA in responding to the liability question. 
Respondent testified at the hearing in this matter that she thought 
that since she was applying to handle controlled substances, the 
question on the applications did not apply to her since her Illinois 
medical license was suspended due to her failure to repay a student 
loan, and not due to inadequate patient care or mishandling of 
controlled substances. While this is clearly an incorrect 
interpretation of the liability question, the Acting Deputy 
Administrator concurs with Judge Randall's conclusion that this is a 
credible explanation for the falsification.
    Notwithstanding the foregoing, the Acting Deputy Administrator is 
troubled by Respondent's carelessness in failing to carefully read the 
question on the applications. However, the Acting Deputy Administrator 
finds it significant that prior to receiving the Order to Show Cause in 
this matter alleging that Respondent materially falsified her 
applications, Respondent answered a similar liability question 
correctly on her July 1996 Illinois application. Respondent testified 
that she gave a different response on this application after discussing 
the matter with an Illinois official.
    In considering the appropriate sanction, Judge Randall also found 
it significant that ``both the Illinois medical board and the Indiana 
medical board chose to grant [Respondent's] applications, even in light 
of her past failures to remain current in the payment of her student 
loan, and more recently, even in light of the Indiana Board's finding 
that the Respondent's June 1995 renewal application had been prepared 
in a fraudulent or materially deceptive manner.'' The Government, in 
its exceptions, argues that the fact that the IDPR has not currently 
taken action against Respondent's Illinois medical license should not 
be considered a mitigating factor, since it has taken significant 
action against her state license in the past. The Acting Deputy 
Administrator finds that the actions of the state boards are relevant, 
although not dispositive, in determining the appropriate sanction in 
this matter. As stated previously, the Acting Deputy Administrator must 
look at all of the circumstances surrounding a particular case. The 
Acting Deputy Administrator concludes that while it is true that 
Respondent's Illinois medical license was not renewed in 1990 and was 
suspended in 1994 due to her failure to repay a student loan, the IDPR 
has seen fit to allow Respondent to continue to practice medicine as 
long as she continues to repay her loan.
    The Government further argues in its exceptions that the action of 
the Indiana Board should not be considered a mitigating factor, because 
it was not the result of an adjudicatory proceeding, but rather a 
settlement conference. The Government contends that in John W. 
Copeland, M.D., 59 FR 46,063 (1994), DEA previously held that a consent 
decree between the Respondent and the state in no way detracted from 
the findings and conclusions found in the DEA's final order. In that 
case the then-Deputy Administrator found egregious violations regarding 
the handling of controlled substances and that the consent order of the 
state board did not change those findings. In this case, the Acting 
Deputy Administrator has not found similar violations. In fact, as the 
Government points out, in this case the Indiana Board found that 
Respondent knowingly engaged in fraud or material deception. The 
Indiana Board nonetheless allowed her to continue to practice medicine 
with a reprimand and a fine. As stated previously, unlike the Indiana 
Board, the Acting Deputy Administrator has found that Respondent did 
not intend to deceive DEA with her answers to the liability question on 
the applications.
    To not consider a state's action simply because it was reached by 
agreement, rather than following an adjudicatory proceeding, would be 
unreasonable. Therefore, the Acting Deputy Administrator disagrees with 
the Government's contention that consent orders should not be 
considered as mitigating evidence. Accordingly, the Acting Deputy 
Administrator agrees with Judge Randall in this case, that while not 
dispositive, the fact that both the Indiana and Illinois medical 
licensing authorities have allowed Respondent to continue to practice 
medicine is a mitigating factor when evaluating all of the 
circumstances of this case to determine the appropriate sanction.
    Judge Randall also found it appropriate to consider that 
Respondent's falsification of her applications stemmed from her failure 
to repay a student loan, and that there are no allegations that 
Respondent improperly handled controlled substances. As Judge Randall 
noted, ``this lack of connection to controlled substances is not 
dispositive of the matter,'' however, she suggested that, ``it is 
relevant in determining the appropriate remedy.'' The Government, in 
its exceptions, argues that the lack of improper handling of controlled 
substances ``should not be considered in mitigation,'' and that ``DEA's 
past policy has been not to distinguish between those falsifications 
that do and do not

[[Page 61148]]

have related controlled substance issues.''
    The Acting Deputy Administrator agrees with the Government insofar 
as DEA has in fact revoked registrations in the past based upon the 
material falsification of an application that was not related to the 
mishandling of controlled substances. See Ezzat E. Majd Pour, M.D., 55 
FR 47,547 (1990). However, the Acting Deputy Administrator concludes 
that in exercising his discretion in determining the appropriate 
remedy, he must consider all of the facts and circumstances of a 
particular case. Here, it is relevant that Respondent credibly 
testified that she did not think that the liability question applied to 
her since the suspension of her Illinois license was to due to the 
improper handling of controlled substances. The Acting Deputy 
Administrator also finds it relevant that Respondent correctly answered 
a similar question on a subsequent state application even before she 
received the Order to Show Cause from DEA alleging that she had 
materially falsified two of her applications.
    Judge Randall concluded that revocation would be too harsh a 
sanction in this case, ``[h]owever, the Respondent's failure to pay 
close enough attention to the administrative details necessary to 
maintain her credentials in good standing warrants some concern about 
the Respondent's meeting the responsibilities levied against a person 
provided the authority to prescribe and to dispense controlled 
substances.'' Therefore, Judge Randall recommended that Respondent be 
reprimanded for her failure to properly complete here DEA registration 
applications; and ``that for a period of three years, that Respondent 
be ordered to file with the appropriate local DEA resident office, on 
an annual basis, a copy of a document from both the Illinois and the 
Indiana medical boards certifying that her medical licenses remain in 
good standing in both States, and that there is no impediment to her 
handling controlled substances at the State level.''
    The Acting Deputy Administrator concludes that there is no question 
that Respondent materially falsified two of her applications for DEA 
registration. This is extremely troubling since DEA relies on accurate 
information being submitted by its applicants. Further, Respondent's 
actions indicate a careless disregard for attention to detail. This 
lack of attention to detail is of great concern to the Acting Deputy 
Administrator since DEA registrants are tasked with keeping meticulous 
records regarding the handling of controlled substances in order to 
prevent the diversion of these dangerous substances. However, the 
Acting Deputy Administrator agrees with Judge Randall that revocation 
would be too severe a sanction given the facts and circumstances of 
this case. The Acting Deputy Administrator concurs with Judge Randall's 
recommendation that Respondent be reprimanded for her failure to 
properly complete her applications for registration and that she be 
required for a period of three years to submit to the DEA Chicago Field 
Division, on an annual basis, documentation from both the Illinois and 
the Indiana medical licensing authorities certifying that her medical 
licenses remain in good standing in both states, and that there is no 
impediment to her handling controlled substances at the state level. 
The first such documentation should be forwarded to DEA within thirty 
days of the effective date of this final order.
    Accordingly, the Acting Deputy Administrator of the Drug 
Enforcement Administration, pursuant to the authority vested in him by 
21 U.S.C. 823 and 824, and 28 CFR 0.100(b) and 0.104, hereby reprimands 
Martha Hernandez, M.D., for failing to properly complete her DEA 
registration applications. The Acting Deputy Administrator further 
orders that DEA Certificates of Registration AH2262424 and BH4493475, 
issued to Martha Hernandez, M.D., be continued, and any pending 
applications be granted, subject to the above described restriction. 
This order is effective December 15, 1997.

    Dated: November 4, 1997.
James S. Milford,
Acting Deputy Administrator.
[FR Doc. 97-29972 Filed 11-13-97; 8:45 am]
BILLING CODE 4410-09-M