[Federal Register Volume 87, Number 69 (Monday, April 11, 2022)]
[Notices]
[Pages 21516-21546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07719]



[[Page 21515]]

Vol. 87

Monday,

No. 69

April 11, 2022

Part V





Department of Justice





-----------------------------------------------------------------------





Drug Enforcement Administration





-----------------------------------------------------------------------





OakmontScript Limited Partnership; Decision and Order; Notice

Federal Register / Vol. 87 , No. 69 / Monday, April 11, 2022 / 
Notices

[[Page 21516]]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 21-03]


OakmontScript Limited Partnership; Decision and Order

    On October 20, 2020, a former Assistant Administrator, Diversion 
Control Division, of the Drug Enforcement Administration (hereinafter, 
DEA or Government), issued an Order to Show Cause (hereinafter, OSC) to 
OakmontScript Limited Partnership (hereinafter, Respondent). 
Administrative Law Judge Exhibit (hereinafter, ALJ Ex.) 1, (OSC) at 1. 
The OSC proposed the revocation of Respondent's DEA Certificates of 
Registration Nos. RO0504680 and RO0527082 (hereinafter, CORs or 
registrations) and the denial of any pending application to modify or 
renew the registrations and any applications for any other DEA 
registrations pursuant to 21 U.S.C. 823, 824, 958, and other federal 
laws, because Respondent's ``registration[s are] inconsistent with the 
public interest,'' as that term is defined in 21 U.S.C. 823(b), (d), 
and (e); 824(a); and 958(c). Id.
    In response to the OSC, Respondent timely requested a hearing 
before an Administrative Law Judge. ALJ Ex. 2. The hearing in this 
matter was conducted from March 8-12, 2021, at the DEA Hearing Facility 
in Arlington, Virginia, with the parties and their witnesses 
participating through video-teleconference.*\A\ On June 11, 2021, 
Administrative Law Judge Paul E. Soeffing (hereinafter, ALJ) issued his 
Recommended Rulings, Findings of Fact, Conclusions of Law and Decision 
(hereinafter, Recommended Decision or RD). Neither party filed 
exceptions to the RD.
---------------------------------------------------------------------------

    *\A\ [This footnote has been relocated from RD n.1.] 
OakmontScript filed its Request for Hearing pro se, represented by 
Jufang (``Shirley'') Shi, its President and Chief Pharmacist. In the 
Order for Prehearing Statements issued by the tribunal on November 
19, 2020, the tribunal advised the Respondent of its right under 21 
CFR 1316.50 to seek representation by a qualified attorney at the 
Respondent's own expense. ALJ Ex. 3 at 1. At the Prehearing 
Conference held on January 5, 2021, this tribunal reiterated to the 
Respondent's representative the Respondent's right to obtain 
counsel. The Prehearing Ruling also discussed the Respondent's right 
to obtain counsel. ALJ Ex. 7 at 1 n.1.
---------------------------------------------------------------------------

    Having reviewed the entire record, I agree with the ALJ's 
Recommended Decision and I adopt it with minor modifications, as noted 
herein.*\B\
---------------------------------------------------------------------------

    *\B\ I have made minor, nonsubstantive, grammatical changes to 
the RD and nonsubstantive conforming edits. Where I have made 
substantive changes, omitted language for brevity or relevance, or 
where I have added to or modified the ALJ's opinion, I have noted 
the edits in brackets, and I have included specific descriptions of 
the modifications in brackets or in footnotes marked with an 
asterisk and a letter. Within those brackets and footnotes, the use 
of the personal pronoun ``I'' refers to myself--the Administrator.
---------------------------------------------------------------------------

Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision 
of the Administrative Law Judge *<SUP>C</SUP> <SUP>1</SUP>
---------------------------------------------------------------------------

    *\C\ I have omitted the RD's discussion of the procedural 
history to avoid repetition with my introduction.
    \1\ [Footnote relocated, see supra n.*A.]
---------------------------------------------------------------------------

    After carefully considering the testimony elicited at the hearing, 
the admitted exhibits, the arguments of counsel, and the record as a 
whole, I have set forth my recommended findings of fact and conclusions 
of law below.

The Allegations

    The Government alleges that the Respondent's CORs should be revoked 
because OakmontScript exported controlled substances prior to obtaining 
its exporter COR, exported controlled substances it was not approved to 
export, demonstrated a lack of candor about controlled substances it 
was exporting, falsified a copy of its distributor DEA registration, 
distributed controlled substances to an individual not registered with 
the DEA, exported controlled substances to fulfill prescriptions for 
underage patients, and failed to keep complete and accurate records.

The Evidence

Stipulations of Fact

    The Government and the Respondent have agreed to the below 
stipulations, which I recommend be accepted as fact in these 
proceedings: \2\
---------------------------------------------------------------------------

    \2\ The parties agreed to the following stipulations at the 
Prehearing Conference held on January 5, 2021. ALJ Ex. 7 at 2-3. The 
parties did not file any further Joint Stipulations.
---------------------------------------------------------------------------

    (1) OakmontScript Limited Partnership (``OakmontScript'') [was] 
registered with the DEA as a distributor licensed to handle controlled 
substances within Schedules II-V under DEA COR No. RO0504680 
(``Distributor COR'') at 1500 District Ave., Burlington, MA 01803-5069. 
DEA COR No. RO0504680 was first issued on October 7, 2016. [Respondent 
surrendered both registrations on December 22, 2021, therefore 
terminating these registrations.\*D\ Omitted.]
---------------------------------------------------------------------------

    \*D\ On January 3, 2022, I was notified by the Office of 
Administrative Law Judges that Respondent had surrendered its 
distributor and exporter registrations by submitting two DEA-104 
surrender forms signed by Respondent's representative, Jufang Shi. 
Pursuant to DEA regulations, Respondent's registrations terminated 
on the day of the surrender, and Respondent is no longer authorized 
to distribute or export controlled substances under federal law. 21 
CFR 1301.52 (``[T]he registration of any person . . . shall 
terminate, without any further action by the Administration, if and 
when such person . . . surrenders a registration.'') On January 20, 
2021, the Government filed a letter informing me of Respondent's 
surrender. However, notably the Government did not request that I 
dismiss this matter.
    Although Respondent's registrations have terminated, the Agency 
has discretion to adjudicate this Order to Show Cause to Finality. 
See Jeffrey D. Olsen, M.D., 84 FR 68,474, 68,479 (2019) (declining 
to dismiss an immediate suspension order as moot when the registrant 
allowed the subject registration to expire before final 
adjudication); Steven M. Kotsonis, M.D., 85 FR 85,667, 85,668-69 
(2020) (concluding that termination of a DEA registration under 21 
CFR 1301.52 does not preclude DEA from issuing a final decision on 
an order to show cause against that registration and stating that 
the Agency would assess such matters on a case-by-case basis to 
determine if a final adjudication is warranted or if the matter 
should be dismissed); The Pharmacy Place, 86 FR 21,008, 21,008-09 
(2021) (adjudicating to finality a registration terminated under 21 
CFR 1301.52 in order to create a final record of allegations and 
evidence related to the matter); Creekbend Community Pharmacy, 86 FR 
40,627, 40,628 n.4 (2021) (same).
    As in The Pharmacy Place and Creekbend, I have evaluated the 
particular circumstances of this matter and determined that the 
matter should be adjudicated to finality. 86 FR at 21,008-09; 86 FR 
40,627, 40,628 n.4. As my predecessor identified in Olsen, 
``[b]ecause nothing in the CSA prohibits an individual or an entity 
from applying for a registration even when there is . . . a history 
of having a registration suspended or revoked. . . . having a final, 
official record of allegations, evidence, and the Administrator's 
decisions regarding those allegations and evidence, assists and 
supports future interactions between the Agency and the registrant 
or applicant.'' 84 FR at 68,479. Here, absent a final adjudication, 
there would be no final record of the allegations and evidence from 
this matter. (Contrast with Kotsonis in which the plea agreement and 
judgment from the respondent's concurrent criminal case provided a 
final record on which the Agency could rely in any future 
interactions with the respondent. 85 FR at 85,667). Adjudicating 
this matter to finality will create an official record the Agency 
can use in any future interactions with Respondent's owners, 
employees, or other persons who were associated with Respondent. 
Moreover, as in The Pharmacy Place and Creekbend, ``adjudicating 
this matter to finality will create a public record to educate 
current and prospective registrants about the Agency's expectations 
regarding the responsibilities of registrant pharmacies under the 
CSA and allow stakeholders to provide feedback regarding the 
Agency's enforcement priorities and practices.'' 86 FR 21,008-09 
(applying Olsen, 84 FR 68,479); 86 FR 40,627, 40,628 n.4 (same).
    It is noted that I recognize the importance of the parties' 
ability to request dismissal of a case, even after it has been 
forwarded to me for final adjudication. However, because surrenders 
are unilaterally submitted by the Respondent, without explicit 
instructions from both parties, I cannot assume the intent of a 
surrender is to dismiss the case. In this case, I assume that the 
Government has determined that a final decision on the merits will 
further DEA's adjudicatory efforts and law enforcement goals, 
because its letter to me regarding the surrender significantly omits 
any indication otherwise.
---------------------------------------------------------------------------

    (2) OakmontScript is registered with the DEA as an exporter 
licensed to handle controlled substances within Schedules II-V under 
DEA COR No. RO0527082 (``Exporter COR'') at 1500 District Ave., 
Burlington, MA 01803-

[[Page 21517]]

5069. DEA COR No. RO0527082 was first issued on December 5, 2017. It 
will expire by its terms on December 31, 2021.\3\
---------------------------------------------------------------------------

    \3\ The parties agreed during the Prehearing Conference that 
since the filing of the Government's Prehearing Statement, DEA COR 
No. RO0527082 was renewed and [was] due to expire [again] on 
December 31, 2021.
---------------------------------------------------------------------------

    (3) OakmontScript has a Controlled Substance Registration, 
#MA0092875, as a Drug Distributor for Schedules II-V with the 
Commonwealth of Massachusetts, Department of Public Health, Drug 
Control Program.
    (4) Dr. Jufang ``Shirley'' Shi is OakmontScript's general partner, 
owner, and Resident Agent. She also serves as its Managing Director, 
President, and Chief Pharmacy Officer.
    (5) Dr. Shi is New England Executive Care Limited Partnership's 
(``NEEC'') Resident Agent.
    (6) Dr. L.W. is NEEC's General Partner. Dr. L.W. also has served as 
a consultant with OakmontScript. He has acted as OakmontScript's 
supervisory physician. He was employed by OakmontScript on an as-needed 
basis.
    (7) On or about September 16, 2016, DEA conducted a pre-
registration investigation of OakmontScript's then application for a 
distributor registration.
    (8) On or about June 22, 2017, DEA conducted a pre-registration 
investigation of OakmontScript's then application for an exporter 
registration.
    (9) On or about July 26, 2018, DEA conducted an on-site inspection 
for OakmontScript's Distributor COR at OakmontScript's registered 
location pursuant to a Notice of Inspection.
    (10) In or around January, 2017, OakmontScript falsified a print 
out of its DEA Distributor COR in order to set up a customer account 
with another company, Pharmacy Buying Association (``PBA''). 
Specifically, OakmontScript's DEA registration was altered so that the 
word ``Distributor'' was replaced with the word ``Pharmacy'' under the 
Business Activity section of the registration.
    (11) OakmontScript employed an intern from January 1, 2017, to 
February 2018.
    (12) Diazepam (brand name ``Valium'') is a Schedule IV controlled 
substance benzodiazepine class drug, commonly used to treat anxiety, 
muscle spasms, and seizures.
    (13) Briviact is the brand name for brivaracetam, a Schedule V 
controlled substance commonly used to treat seizures.
    (14) Belviq is the brand name for lorcaserin, a Schedule IV 
controlled substance commonly used to control appetite.
    (15) Lyrica is the brand name for pregabalin, a Schedule V 
controlled substance commonly used to treat nerve and muscle pain and 
seizures.
    (16) Clobazam (brand names include ``Sympazan'' and ``Onfi'') is a 
Schedule IV controlled substance benzodiazepine class drug that is 
commonly used to control seizures.
    (17) Lunesta is the brand name of eszopiclone, a Schedule IV 
controlled substance that is commonly used as a sedative.

The Government's Case

    The Government's case consisted of testimony from three witnesses: 
(1) Diversion Investigator (``DI'') 1, (2) DI 2, and (3) DI 3. Below is 
a summary of the testimony of these witnesses.\4\
---------------------------------------------------------------------------

    \4\ I do not make any findings of fact in these summaries. Any 
facts necessary for a disposition of this case are set forth in the 
Analysis section of this Recommended Decision.
---------------------------------------------------------------------------

DI 1

    DI 1 has been employed with the DEA for eighteen years. Tr. 35. For 
ten years, until 2010, she worked as a Registration Program Specialist 
in the New York Field Division where she reviewed applications and 
conducted background checks regarding registrants who applied for DEA 
registrations. Tr. 36-37. She currently serves as a DI in Boston where 
she does on-site inspections and educates applicants on the guidelines 
required by the Controlled Substances Act (``CSA''). Tr. 35, 37. She 
received a three-month training in Quantico and has worked on over 
eighty cases as a DI. Tr. 35, 37-38. She is familiar with DEA 
regulations and the CSA. Tr. 38.
    In August 2016, DI 1 was assigned as the lead investigator to the 
Respondent's first DEA application as a distributor, which was 
ultimately assigned COR No. RO504680. Tr. 38-39, 43. On September 16, 
2016, DI 1 coordinated with the Massachusetts Department of Health, 
through a Senior Investigator, to conduct an on-site inspection of 
OakmontScript. Tr. 44-45. During the inspection, DI 1 met with 
OakmontScript's Dr. Shi and L.W. Tr. 44-45. Dr. Shi informed DI 1 of 
her intention to potentially distribute controlled substances to 
international customers. Tr. 45-46. DI 1 explained to Dr. Shi that she 
would need to apply for a second DEA registration as an exporter, and 
to fill out a Form DEA-161, Application for Permit to Export Controlled 
Substances (``DEA Form 161''), and a Form DEA-236, Declaration of 
Exportation (``DEA Form 236''), which both apply to Schedule II-V 
controlled substances. Tr. 46-47. But see Tr. 94-95 (When questioned by 
the Respondent what schedule of controlled substances apply to a DEA 
Form 161, DI 1 stated ``I don't recall'' and when questioned regarding 
what controlled substances apply to a DEA Form 236 stated ``Schedule 
III through V.'').\5\
---------------------------------------------------------------------------

    \5\ The tribunal admitted a blank DEA Form 236 with instructions 
as Government Exhibit 47. For ``Type of Declaration'' the form 
includes a check box for export of ``Non-narcotic substances in 
Schedules III or IV and all substances in Schedule V,'' but does not 
have a check box for Schedules I or II. Gov't Ex. 47 at 1. The 
instruction page for the form states that its purpose is ``[t]o 
obtain information regarding the importation of nonnarcotic 
substances in Schedules III, IV, and V and the exportation of 
nonnarcotic substances in Schedules III and IV and all substances in 
Schedule V.'' Gov't Ex. 47 at 2.
---------------------------------------------------------------------------

    DI 1 had conversations with Dr. Shi explaining the term ``end-use 
statement,'' which is a statement that is provided by a pharmaceutical 
company or researcher stating the use of the drug. Tr. 47-49. DI 1 
explained that an ``ultimate user'' is an individual that would use 
controlled substances for his or her own personal medical use and that 
some people use the term ``end user'' and ``ultimate user'' 
interchangeably. Tr. 49-50. DI 1 further explained that ``ultimate 
user'' and ``end user'' are different from the ``end-use statement,'' 
which is something that is ``more for a business . . . a company for 
research purposes'' and is documented in writing. Tr. 50.
    DI 1 also discussed record-keeping requirements with Dr. Shi, 
including the requirement to create an initial inventory of controlled 
substances she has on site after her application is approved. Tr. 50. 
She explained that Dr. Shi needed to create a biennial inventory every 
two years, not to commingle records from her distributor registration 
and any future exporter registration, and to maintain records for two 
years. Tr. 50-51. As of April 28, 2017, DI 1's understanding was that 
OakmontScript had not exported any controlled substances, which was 
based on an email from OakmontScript stating ``we do not have any 
executed controlled items to report during last two quarters.'' Tr. 61; 
Gov't Ex. 4.
    OakmontScript first applied for an exporter registration with the 
DEA in April of 2017. Tr. 60. At some point, OakmontScript submitted a 
second exporter application.\6\ Tr. 62. Because the first exporter 
application was still pending action by DEA, DI 1 contacted Dr. Shi to 
inquire why she had filed a second exporter application, to which Dr. 
Shi responded that she wanted to import, not export. Tr. 62. Therefore, 
DI

[[Page 21518]]

1 contacted DEA Headquarters and had the second exporter application 
converted into an importer application. Tr. 62-63. The second exporter 
application, which was converted to an importer application, was 
ultimately withdrawn. Tr. 63.
---------------------------------------------------------------------------

    \6\ OakmontScript first applied for an exporter registration for 
Schedules III, IV, and V in April 2017 and then later requested 
Schedule II. Tr. 114, 115, 117.
---------------------------------------------------------------------------

    On June 22, 2017, Mr. L.U. sent DI 1 an email requesting that 
Schedule II be added to the existing exporter application and DI 1 
added this request for Schedule II to the exporter application on 
OakmontScript's behalf. Tr. 74-76; Gov't Ex. 50. DI 1 and the Senior 
Investigator from the Department of Health conducted a pre-registration 
inspection of OakmontScript for its exporter application on June 22, 
2017. Tr. 69-71. They discussed with Dr. Shi security and record-
keeping requirements including creating an initial inventory and 
maintaining records for at least two years. Tr. 71-72. DI 1 also 
discussed the importance of maintaining the DEA Form 161s and DEA Form 
236s as well as the enduse statements. Tr. 72-73. DI 1 also instructed 
Dr. Shi that records must be kept separate for separate registrations. 
Tr. 73. It was DI 1's understanding that OakmontScript had not exported 
or distributed any controlled substances. Tr. 70-71. At this 
inspection, DI 1 also noted that OakmontScript's safe was not connected 
to an alarm system, which was a security concern because OakmontScript 
was storing Schedule II drugs, which have a higher security standard. 
Tr. 77, 78.
    On September 1, 2017, DI 1 went back to OakmontScript for a return 
visit to test the safe's alarm after being notified by OakmontScript 
that the alarm would be professionally installed on August 30th. Tr. 
80-81, 83. On this visit, DI 1 found no issues with the alarm. Tr. 83. 
However, at this time, DI 1 noted that OakmontScript should obtain a 
larger-sized safe pending the approval of its exporter application, 
which she communicated to OakmontScript on September 6, 2017. Tr. 84-
85. DI 1 had a third visit on September 22, 2017, when she observed 
that OakmontScript purchased a larger safe and DI 1 tested the security 
system. Tr. 85-86.
    Sometime in October 2017, DI 1's supervisor informed her that 
OakmontScript added over 170 drug codes to its exporter application, 
which DI 1 thought to be an excessive amount of drug codes because 
OakmontScript had previously stated that it was only intending to 
export small amounts of Oxycodone. Tr. 86-87, 96-97, 100. DI 1 
testified that a drug code ``is a code that's assigned . . . to a 
controlled substance for identification purposes for individuals or 
pharmaceutical companies who are engaging in manufacturing, exporting, 
importing or distributing controlled substances.'' Tr. 86. DI 1 brought 
this issue to Dr. Shi's attention on November 17, 2017, and Dr. Shi 
stated that she had to select the drug code for each controlled 
substance on the web page in order to move to the next screen in the 
application process. Tr. 87-88. DI 1 worked with Dr. Shi, walked her 
through modifying the application, and eventually Dr. Shi applied for 
five drug codes. Tr. 88-89.
    On December 5, 2017, DEA COR No. RO0527082, an exporter 
registration, was assigned to OakmontScript. Tr. 90-91; Gov't Ex. 1B. 
DI 1 had no indication that OakmontScript had exported any controlled 
substances prior to this approval date. Tr. 91-92.
    DI 1's testimony included a discussion of the investigation of 
OakmontScript's first DEA application as a distributor, COR No. 
RO0504680, OakmontScript's two applications for exporter registrations, 
OakmontScript's request to add Schedule II to its exporter application, 
and OakmontScript's withdrawn importer application.
    Throughout her testimony, DI 1 was generally consistent, genuine, 
and credible.\7\ As a public servant, DI 1 has no personal stake in the 
revocation of the Respondent's registrations. There was no indication 
during her testimony that she had any animus against OakmontScript or 
any of its employees. I therefore find her testimony to be entirely 
credible and it will be afforded considerable weight.
---------------------------------------------------------------------------

    \7\ DI 1 explained to Dr. Shi that she would need to apply for a 
second DEA Registration as an exporter, and to fill out a DEA Form 
161 and a DEA Form 236, which both apply to drug schedules II-V. Tr. 
46-47; but see Tr. 94-95 (When questioned by the Respondent what 
schedule of controlled substances apply to a DEA Form 161, DI 1 
stated, ``I don't recall,'' and when questioned regarding what 
controlled substances apply to a DEA Form 236, she stated, 
``Schedule III through V.'') [I find these statements to be 
confusing and inconsistent, but not to detract from the overall 
credibility of DI 1].
---------------------------------------------------------------------------

DI 2

    DI 2 received a bachelor's degree in political science from the 
College of Charleston and worked as a paralegal for several years prior 
to joining the DEA. Tr. 124. She received a twelve-week training in 
Quantico when she became an investigator. Tr. 125.
    She has been employed as a DI for the DEA for approximately three 
years and works in the Boston Field Office. Tr. 124. As a DI, she 
ensures that DEA registrants are abiding by the DEA rules and 
regulations and the CSA to ensure there is no diversion of controlled 
substances from the point of manufacture to the end user. Tr. 125, 126. 
She has worked as a lead investigator on approximately twenty to thirty 
investigations. Tr. 125-26.
    DI 2 first became familiar with OakmontScript on July 26, 2018, 
when she met Dr. Shi to conduct an inspection regarding OakmontScript's 
distributor registration.\8\ Tr. 126-27, 128. DI 2 conducted an alarm 
test, performed a closing inventory, and reviewed OakmontScript's 
records. Tr. 130. DI 2 noted two issues with OakmontScript's record-
keeping: (1) Commingling records by keeping some of its distributor 
records with its exporter records \9\ and (2) a lack of any transfer 
documents showing the transfer of controlled substances between the 
distributor and exporter registrations. Tr. 131-33, 136. After she 
identified these issues, she discussed them with Dr. Shi and Dr. Shi 
stated that she understood and would not commingle records in the 
future. Tr. 133.\10\ As to the transfer documents, Dr. Shi created a 
template form that she stated she would use in the future. Tr. 133. DI 
2 was not aware that OakmontScript had any inconsistencies with its 
records relating to exports and did not receive any documents 
indicating that OakmontScript had exported controlled substances before 
receiving its exporter registration. Tr. 134.
---------------------------------------------------------------------------

    \8\ Dr. Shi consented to this inspection. Tr. 128-29; See Gov't 
Ex. 6.
    \9\ DI 2 noted that OakmontScript was required to do an 
inventory for its distributor registration and its exporter 
registration and keep separate records for each registration. Tr. 
138-39.
    \10\ DI 2 did not ``believe [Dr. Shi] knew about the commingling 
but once corrected, she understood.'' DI 2 further believed that Dr. 
Shi thought that transfer documents were only required for Schedule 
II drugs. Tr. 133-34.
---------------------------------------------------------------------------

    DI 2's testimony was limited to a one-time inspection of 
OakmontScript's distributor registration. As a public servant, DI 2 has 
no personal stake in the revocation of the Respondent's registrations. 
There was no indication during her testimony that she had any animus 
against OakmontScript or any of its employees. I therefore find her 
testimony to be entirely credible and it will be afforded considerable 
weight.

DI 3

Background

    DI 3 received her bachelor's degree in business administration in 
2015. Tr. 143. Prior to working with the DEA, she was working with the 
Department of the Army in California, where she mainly conducted 
background investigations. Tr. 143. She was then promoted to a 
headquarters position in Detroit, Michigan, where she worked until 
2017,

[[Page 21519]]

when she was hired by the DEA. Tr. 143. She received a twelve-week 
training in Quantico at the DEA Academy and had six months of on-the-
job training with a field investigator. Tr. 144-45. She received her 
master's degree in public policy in February 2021. Tr. 143.
    DI 3 currently works as a DI for the DEA in the New England Field 
Division, in Boston, Massachusetts. Tr. 141-42. She has been a DI for 
three years. Tr. 142. As a DI, she investigates the diversion of 
controlled substances from licit channels to illicit channels by 
conducting investigations including completing accountability audits, 
reviewing records, testing security, and conducting on-site 
inspections. Tr. 143-44. She has led approximately seventy 
investigations and assisted on thirty. Tr. 145. She is familiar with 
the CSA and her job is to ensure public safety. Tr. 145, 766.

OakmontScript Assignment

    DI 3 became familiar with OakmontScript in fiscal year 2019 when 
she was assigned to conduct an in-depth cyclical investigation of 
OakmontScript's exporter registration. Tr. 145-46. DI 3 reviewed 
OakmontScript's articles of limited partnership, with a date of 
organization of May 27, 2016, which indicate that Dr. Shi is the 
general partner and resident agent of OakmontScript. Tr. 146-49. Dr. 
Shi had explained to DI 3 that OakmontScript's business model was to 
procure controlled substances to export to foreign pharmaceutical 
companies for reverse engineering, so the companies can break down the 
controlled substance to recreate it. Tr. 150, 151, 760.
    New England Executive Care (``NEEC'') is an entity with a date of 
organization of May 10, 2018, with Dr. Shi listed as its resident agent 
and Dr. L.W. and Dr. Donghui Yu listed as the general partners and it 
has some type of relationship with OakmontScript. Tr. 152-54. DI 3 is 
still unclear what NEEC's business model is and its full connection to 
OakmontScript. Tr. 155. Dr. L.W. is a consulting physician for 
OakmontScript and reviews patients' medical records and possibly 
prescriptions to determine if the drug being exported is appropriate 
for the patients' treatment. Tr. 155, 620-21.

February 19, 2019 Inspection

    DI 3, DI 1, and DI 4, conducted an inspection of OakmontScript on 
February 19, 2019, and began their investigation by showing Dr. Shi 
their credentials and presenting a Notice of Inspection, which Dr. Shi 
signed. Tr. 156-58; Gov't Ex. 7. They discussed recordkeeping and the 
DIs explained that they would be conducting a controlled substance 
accountability audit.\11\ Tr. 159.
---------------------------------------------------------------------------

    \11\ The accountability audit is a fixed moment in time when the 
registrant has conducted a physical hand count of any controlled 
substances it has on hand and the DIs include anything the 
registrant has purchased or transferred. Tr. 165-66. The DIs then 
take a closing inventory based on what has been distributed, 
dispensed, etc. Tr. 166.
---------------------------------------------------------------------------

    The initial inventory date was February 19, 2018, and based on 
OakmontScript's self-reporting that it did not have any substances on 
hand, the initial count was a zero balance. Tr. 167, 763. According to 
the closing inventory dated February 19, 2019, which was signed by DI 
3, DI 4, and a representative from OakmontScript, OakmontScript did not 
have any of the eight controlled substances the DIs chose to audit on 
that date. Tr. 159-60; Gov't Exs. 8, 9.
    DI 3 also discussed drug codes \12\ with Dr. Shi and it is standard 
practice for her to discuss what drug codes a registrant is authorized 
to handle and whether the registrant is handling any other drug codes. 
Tr. 175-76, 597.\13\ DI 3 had accessed the DEA registration system and 
made a list of drug codes that OakmontScript was authorized to handle, 
and asked OakmontScript what drugs codes it was handling.\14\ Tr. 183; 
Gov't Ex. 11. Dr. Shi reported there were no other drug codes that 
OakmontScript was exporting or handling other than what DI 3 listed and 
that there were two drug codes OakmontScript was no longer handling. 
Tr. 189, 598, 889. Although the closing inventory was good because ``it 
tied out to zero,'' there were issues with OakmontScript's 
recordkeeping, including a failure to take an initial inventory, and 
there were also issues with the alarm system. Tr. 190, 192. DI 3 
discussed these issues with her group supervisor and her group 
supervisor asked her to return to OakmontScript to conduct an alarm 
test and conduct an expanded controlled substance accountability audit 
going back to December 5, 2017, which is when OakmontScript first 
received its DEA exporter registration. Tr. 192-93.
---------------------------------------------------------------------------

    \12\ A drug code, or Administrative Controlled Substance Code 
Number, is a four-digit code that is assigned to each controlled 
substance and certain DEA registrants are allowed to handle only 
specific drug codes for which they have been approved. Tr. 169, 868. 
For example, a DEA registrant who is an exporter is only able to 
purchase and export controlled substances for which it has an 
authorized drug code and cannot engage in exporting drugs for which 
it does not have the necessary drug code. Tr. 176-77. When exporting 
drugs, the registrant needs to report the drug codes in an export 
declaration, such as a DEA Form 236, to include the drug code, 
strength, quantity, shipping destination, shipping origin location, 
the anticipated date it is being released, the anticipated date it 
should arrive, and the drug's intended use. Tr. 178.
    \13\ Dr. Shi asked DI 3 questions during her direct examination 
that led to a discussion about drug codes OakmontScript had 
requested in December 2020. Tr. 880-88. These discussions are not 
part of the Order to Show Cause that is the subject of the 
proceedings before this tribunal.
    \14\ If a registrant wants to make a change to its registration, 
including adding or removing drug codes, it may request a 
modification of registration online or contact the local DEA office 
by email or phone, and adding drug codes can be approved at the 
field level, but may require further inspection. Tr. 273-74, 800, 
874-75, 876. There is no uniform guidance on how the DEA handles a 
request for adding or removing a drug code. Tr. 879.
---------------------------------------------------------------------------

March 29, 2019 Inspection

    On March 29, 2019, DI 3 completed another inspection with DI 5 and 
the audit did not show any discrepancies. Tr. 195-97. Dr. Shi provided 
a pack of additional documents to DI 3 and stated that she was having 
problems filing the DEA Form 236 for OakmontScript's exports. Tr. 198-
201; Gov't Ex. 12. After reviewing these documents, DI 3 determined 
that OakmontScript was having issues with the DEA Form 236 because 
OakmontScript did not have the authority to export the controlled 
substances as it did not have the appropriate drug codes in its 
registration for most of the drugs. Tr. 201. Therefore, OakmontScript 
was unable to select the drug codes from the online drop-down box in 
the DEA Form 236. Tr. 201-02, 613. Despite being unable to fill out the 
DEA Form 236, Dr. Shi ``exported them anyways'' and she did not think 
``it was a big deal.'' Tr. 204. Ultimately, DI 3 found that 
OakmontScript had violated the CSA by not filling out the DEA Form 
236s, by exporting drugs prior to holding its exporter 
registration,\15\ and exporting drugs it did not have authorization to 
handle. Tr. 205.
---------------------------------------------------------------------------

    \15\ DEA registrants are required to provide the proximate date 
of export and to provide return information within thirty days. Tr. 
759-60; See Gov't Ex. 47; 21 CFR 1304.22(d).
---------------------------------------------------------------------------

Follow-Up to March 29, 2019 Inspection

    On April 23, 2019, DI 3 had a phone call with Dr. Shi and requested 
a detailed list of exports OakmontScript had conducted because it was 
apparent that OakmontScript had exported a lot more than what Dr. Shi 
had previously stated. Tr. 206. DI 3 also discussed a fraudulent DEA 
registration. Tr. 206. During this discussion, Dr. Shi stated that 
OakmontScript had conducted its first export in May or June of 2017. 
Tr. 206.
    After the April 23, 2019 phone call, DI 3 and Dr. Shi had an email 
exchange in which Dr. Shi continued to provide conflicting information, 
so DI 3 asked

[[Page 21520]]

for further clarifying information. Tr. 208-21. See Gov't Exs. 16, 17, 
18, 19, 20. After reviewing the several documents Dr. Shi emailed, DI 3 
noted several issues, including that OakmontScript was not keeping 
complete and accurate records related to its controlled substance 
transactions, was unable to complete the DEA Form 236s, and was 
creating shipping labels well in advance of dropping off the controlled 
substances with the common carrier for shipment. Tr. 222-24; Gov't Exs. 
16, 17, 18, 19, 20 at 9 (Dr. Shi responded to an email from DI 3 and 
indicated that the shipping label for an export of Belviq was ``created 
on date of 10/13/2017, but drop-off on later date while waiting for 
receiving party get ready for custom clearance.'').

May 8, 2019 Inspection

    DI 3 served two administrative subpoenas on OakmontScript with DI 5 
on May 8, 2019, that were issued based on the serious violations that 
DI 3 discovered since conducting her initial inspection on February 19, 
2019.\16\ Tr. 235-40; Gov't Ex. 24.\17\
---------------------------------------------------------------------------

    \16\ At the May 8, 2019, meeting, DI 3 also discussed the Letter 
of No Objection (``LONO'') and that she had learned from someone at 
DEA Headquarters that a LONO must come from a foreign national 
government and not from a provincial or state-level government. Tr. 
889-91, 893, 895-96, 910-11, 1432-33. A LONO is provided by the 
importing country stating that it has no objection to a controlled 
substance being imported into that country. Tr. 910, 1431-32.
    \17\ The tribunal questioned DI 3 regarding markings on the 
administrative subpoenas. Tr. 790-91; Gov't Ex. 24. DI 3 stated that 
the various check and dash marks made on the front pages of the 
subpoenas were made by OakmontScript. Tr. 790. DI 3 further 
explained that when she had served the subpoenas, she had not made 
scanned copies that were hand-signed by the diversion program 
manager and these were copies that were provided by OakmontScript. 
Tr. 790-91.
---------------------------------------------------------------------------

    OakmontScript kept track of each controlled substance it exported 
or distributed by assigning a purchase order number, usually starting 
with ``OKS-'' and followed by a series of numbers. Tr. 242. At the 
inspection, Dr. Shi provided DI 3 a large packet that was divided into 
smaller bundles by invoice, that DI 3 later may have reordered 
chronologically, but she did not remove or add any pages to the stack. 
Tr. 243-48, 709, 794-95; See Gov't Ex. 26. DI 3 discussed with Dr. Shi 
OakmontScript's exports for direct patient use, including a shipment of 
clobazam that was potentially sent to an underage patient, a fraudulent 
DEA registration, and OakmontScript's relationship with NEEC. Tr. 256.

May 13, 2019 Inspection

    On May 13, 2019, DI 3 and DI 5 performed another inspection. Tr. 
268. DI 3 discussed various topics with Dr. Shi, including a detailed 
discussion of all the violations DI 3 uncovered. Tr. 268-69. Prior to 
this visit, DI 3 had also reached out to DEA Headquarters to verify 
whether OakmontScript had properly completed DEA Form 236s for its 
exports. Tr. 269-70; Gov't Ex. 48.

Alteration of Distributor Certificate of Registration

    A registrant receives a hard-copy certificate of registration, 
which is an official government document, based on DEA approval to hold 
a registration, which includes the company's or individual's name, the 
registered location address, the registrant's DEA registration number, 
the business activity for which the entity is approved, and--for 
exporters, importers, and bulk manufacturers--the drug codes that they 
are approved to handle. Tr. 272-73.
    DI 3 had been reviewing OakmontScript's case files and discovered 
that there was a report filed by the Kansas City District Office of the 
DEA, naming OakmontScript as fraudulently creating a DEA registration. 
Tr. 275. OakmontScript had altered its distributor registration to 
indicate that it was a pharmacy and submitted it to Pharmacy Buying 
Association (``PBA'').\18\ Tr. 275. PBA has a DEA registration and DI 3 
spoke to one of PBA's Regulatory Compliance Team Leaders, B.W., and 
received email correspondence from B.W. that noted PBA ``only sell[s] 
to pharmacies'' and it does not ``sell to other distributors.'' Tr. 
275-78; Gov't Ex. 55. PBA also requires customers to send a copy of 
their state pharmacy license and a copy of their DEA registration when 
they send in their account application. Tr. 278; Gov't Ex. 55. B.W. 
further noted that OakmontScript sent PBA a DEA registration indicating 
it was a pharmacy and after PBA performed its due diligence, PBA 
discovered that the document was altered. Tr. 278; Gov't Ex. 55. PBA 
reported OakmontScript and denied OakmontScript's account. Tr. 278; 
Gov't Ex. 55.
---------------------------------------------------------------------------

    \18\ PBA is a distributor of controlled substances and non-
controlled substances that only sells to pharmacies. Tr. 275, 1444; 
See Gov't Ex. 55.
---------------------------------------------------------------------------

    The DEA registration OakmontScript provided to PBA listed its 
business activity as ``pharmacy,'' even though the COR of RO0504680 
corresponded to OakmontScript's distributor registration. Tr. 286; 
Gov't Exs. 14, 55. Dr. Shi took responsibility for the falsified 
registration. Tr. 290-93.
    On April 23, 2019, DI 3 discussed the falsified registration with 
Dr. Shi on the phone. Tr. 293. Dr. Shi stated that she had hired an 
intern and Dr. Shi instructed the intern to establish relationships 
with OakmontScript's competitors to determine how they conduct 
business. Tr. 293-94. After PBA refused to establish a relationship 
with OakmontScript, the intern altered the DEA registration to list 
OakmontScript as a pharmacy. Tr. 294; Gov't Ex. 14. During this phone 
call, Dr. Shi indicated to DI 3 that she had fired the intern as a 
result of this incident. Tr. 294. However, in an email dated April 24, 
2019, Dr. Shi indicated that the intern moved back to China and her 
employment dates were January 1, 2017, to February 2018. Tr. 297; Gov't 
Ex. 20 at 13. The phone conversation and email were therefore in 
``direct conflict'' and it appeared that the intern had not been fired 
for falsifying the registration. Tr. 297-98. Dr. Shi also texted 
information regarding this incident in May 2019 where she said if the 
incident regarding the falsified registration ``constitutes any 
offensive sort, `I' should take responsibility. If any actions taken 
toward, please address to me directly.'' Tr. 300-01; Gov't Ex. 29.
    DI 3 had a follow-up inspection on May 13, 2019, and asked Dr. Shi 
why the intern's employment dates seemed to span an additional year 
after the date of the fraudulent DEA registration. Tr. 301-02. Dr. Shi 
stated that she had ties with the intern's family, who she felt had 
pressured her to keep the intern employed. Tr. 302. Dr. Shi also 
explained that the intern had come to her and explained that PBA would 
not ``do business with them because they viewed OakmontScript as a 
competitor'' and Dr. Shi had told the intern to ``do whatever is 
needed'' and to ``[g]ive them basically whatever they want in order to 
establish this . . . client relationship with them.'' Tr. 303. DI 3 was 
never able to contact the intern to discuss this violation with her. 
Tr. 304. OakmontScript was not able to obtain controlled substances 
from PBA. Tr. 304.
    In this instance, DI 3 found that Dr. Shi had exhibited a lack of 
candor \19\ because Dr. Shi initially stated that the intern had been 
fired and later stated the intern had not been fired, but maintained a 
position at OakmontScript and actually left the country and her

[[Page 21521]]

position with OakmontScript because her visa had expired. Tr. 307, 788.
---------------------------------------------------------------------------

    \19\ Upon direct questioning by the tribunal, DI 3 testified 
that Dr. Shi exhibited a lack of candor when she ``led me to believe 
that [the intern] had been fired for her actions related to that 
forged DEA registration'' and that in their conversation Dr. Shi did 
use the exact word ``fired.'' Tr. 792-93. DI 3 did not believe this 
was a simple mistake by Dr. Shi. Tr. 793.
---------------------------------------------------------------------------

February 2020 Subpoena

    DI 3 served another administrative subpoena on OakmontScript on 
February 28, 2020, and issued an administrative subpoena to NEEC after 
learning that Dr. L.W. was writing prescriptions for direct patient 
care at Dr. Shi's request.\20\ Tr. 389-95; Gov't Exs. 37, 38.
---------------------------------------------------------------------------

    \20\ As discussed supra, Dr. L.W. was listed as a general 
partner of NEEC. Tr. 154. Furthermore, based on Dr. Shi's 
statements, it was unclear to DI 3 as to what role NEEC was playing 
in OakmontScript's exports. Tr. 393-94.
---------------------------------------------------------------------------

    In response to the subpoenas, David Schumacher sent a letter dated 
March 26, 2020, indicating he was an attorney representing 
OakmontScript and NEEC and that neither OakmontScript nor NEEC had any 
records that were responsive to the subpoena, but he did re-produce 
certain documentation to DI 3 and addressed certain questions DI 3 
posed in a March 10, 2020 email. Tr. 397-98; Gov't Ex. 42. DI 3 
followed up with questions to Mr. Schumacher in an April 14, 2020 
email, and he subsequently sent an email to DI 3 on April 17, 2020, 
which responded to some of these questions. Tr. 402-03; Gov't Ex. 44. 
DI 3 sent her April 14, 2020, email to seek clarification regarding two 
identical prescriptions she identified for clobazam and what role they 
played in the export of this controlled substance. Tr. 405; Gov't Ex. 
44.

Invoice OKS-00243 (Diazepam)

    OakmontScript received diazepam, 10 milligram gel on May 16, 2017, 
from McKesson that appears to have been shipped by OakmontScript on 
June 10, 2017. Tr. 352-53, 366, 432; Gov't Exs. 12 at 14, 26 at 20.\21\ 
However on other documentation, the shipping date is listed as May 18, 
2017, and the client's name is listed as Par Pharmaceutical, an Endo 
International Company. Tr. 356, 1448; Gov't Ex. 17 at 3. In other 
documentation, the shipping date is listed as May 18, 2017, and the 
client is listed as Cangzhou People's Hospital. Tr. 357, 1449; Gov't 
Ex. 18 at 3. Furthermore, Dr. Shi sent an email to DI 3 on April 23, 
2019, indicating that she was unsure of the exact date of export 
because the ``shipping label was not retrievable due to USPS system 
update'' and Ms. Liu has ``made edit in the date multiple times and she 
thought the proper date is on the date of payment. . . .'' Tr. 358-59, 
386, 1449; Gov't Exs. 20 at 8, 28 at 22.\22\ The ``ship to name'' is 
listed as H.H.\23\ at Cangzhou People's Hospital in China and Dr. Shi's 
guess of the ``best possible date'' of shipment was the date of payment 
on May 18, 2017. Tr. 361-63, 1449-50; Gov't Ex. 21 at 9. The use was 
listed as ``for research'' and the ``bill to'' party was H.X.Z. at Par 
Pharmaceutical and the ship to party was Dr. H.H. at Cangzhou People's 
Hospital in China. Tr. 365, 435; Gov't Ex. 26 at 19.
---------------------------------------------------------------------------

    \21\ This McKesson invoice listed OakmontScript's address as 15 
New England Executive Park. Gov't Ex. 26 at 20. Dr. Shi explained 
that this address and the 1500 District Avenue address 
(OakmontScript's current address) are the same address. Tr. 367. Dr. 
Shi stated that the whole area where OakmontScript is located got 
``reorganized'' and OakmontScript's address changed, but 
OakmontScript never changed its physical location. Tr. 368.
    \22\ This was concerning for DI 3 because a registrant is 
required to know when it has conducted a transaction with a 
controlled substance and OakmontScript was unable to provide this 
information. Tr. 360.
    \23\ In the translated prescription, H.H. appears to be a doctor 
in China. Tr. 413; Gov't Ex. 45 at 4. DI 3 conducted a search within 
the DEA database and determined that Dr. H.H. did not have a DEA 
registration. Tr. 413-14.
---------------------------------------------------------------------------

    One of the license transfer documents for this export indicates 
that the diazepam was transferred from OakmontScript's distributor 
registration to its exporter registration on May 7, 2018. Tr. 371-72, 
435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer 
document indicates that the date of transfer was May 20, 2017. Tr. 371, 
436; Gov't Ex. 26 at 22.\24\ Other documentation provided by 
OakmontScript states that the diazepam prescription was made based on a 
request from a family in China for Patient S.Z. and was shipped 
sometime in May 2019. Tr. 407-09; Gov't Ex. 44 at 1-2. OakmontScript 
was unable to complete a DEA Form 236 for this export.\25\ Tr. 352-53; 
Gov't Exs. 12 at 14, 16 at 2.
---------------------------------------------------------------------------

    \24\ DI 3 indicated that ``it seems more likely . . . that this 
license transfer document from May 20, 2017, is the more likely of 
the two to be accurate,'' based on comparing the McKesson invoice 
that was dated in 2017. Tr. 436.
    \25\ This is noted as ``no XFER'' in the Excel spreadsheets in 
the documents provided by OakmontScript, which indicates that 
OakmontScript was not able to fill out a DEA Form 236 for a 
particular drug. Tr. 202.
---------------------------------------------------------------------------

    DI 3 confronted Dr. Shi regarding this conflicting information at 
the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that 
this diazepam had been shipped for direct patient use in China. Tr. 
363-64. Dr. Shi stated that OakmontScript had to label the reason for 
export as ``research'' in order to get the shipment past Chinese Custom 
Officials and that the actual intended use of the diazepam was for 
direct patient use. Tr. 366, 1446.
    DI 3 was also confused by documents provided by Dr. Shi because 
although they appeared to be the exact same documents--a prescription 
written in Chinese, a hospital's government licenses, and a doctor's 
medical license--these documents were provided in stacks for two 
different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on 
a translation that DI 3 ultimately obtained for these documents, DI 3 
learned that both prescriptions were for diazepam. Tr. 383.
    OakmontScript also failed to include a DEA Form 236 for this 
invoice, which it was required to do. Tr. 416-19. Furthermore, 
OakmontScript's distributor registration and exporter registration do 
not allow for OakmontScript to fill prescriptions, as such 
prescriptions may only be filled by a pharmacist. Tr. 420-23, 429; 21 
U.S.C. 1306.06. OakmontScript also did not provide the information 
required under Section 3a or Section 3b of the DEA Form 236.\26\ Tr. 
418-19; Gov't Ex. 48. Based on the records, OakmontScript appears to 
have exported 10 milligrams of diazepam under invoice number OKS-00243 
prior to obtaining its DEA exporter registration on December 5, 2017. 
Tr. 423-25, 1433, 1452.
---------------------------------------------------------------------------

    \26\ Section 3a of DEA Form 236 requires that, for exports, the 
exporter ``list the U.S. port of export (port name, city, state) 
from where the shipment departs the United States and the 
anticipated date it will depart.'' Gov't Ex. 47 at 1, 2. Section 3b 
of DEA Form 236 requires that, for exports, the exporter ``list the 
foreign port of import (port name, city, country) and the 
anticipated date it will arrive.'' Gov't Ex. 47 at 1, 2.
---------------------------------------------------------------------------

    Furthermore, invoice OKS-00243 did not provide the DEA registration 
of the doctor prescribing the controlled substance and the patient's 
home address. Tr. 430-31. See 21 CFR 1306.05(a).\27\ DI 3 stated that 
this failure to provide the required information is a danger to the 
public because the information is needed to ensure registered 
practitioners are prescribing appropriately. Tr. 431.
---------------------------------------------------------------------------

    \27\ The personal use exemption allows someone who is traveling 
across international boundaries to take a controlled substance with 
them and a third-party shipping a controlled substance overseas 
would not fall within a personal use exemption. Tr. 437-38.
---------------------------------------------------------------------------

Invoice OKS-00301 (Briviact) \28\
---------------------------------------------------------------------------

    \28\ Throughout her testimony, DI 3 mentioned that there were 
several handwritten notes or post-it notes with writing on the 
certain documents, and that these notes were in the documents when 
they were presented to her by OakmontScript. Tr. 373. There was one 
instance, however, where DI 3 acknowledged that she had made a 
handwritten note. Tr. 375-76; Gov't 26 at 25. Specifically, she had 
written the word ``Par'' next to the ``Bill To'' line of this 
invoice. She also made handwritten notes in Government Exhibit 26 
noting that the scanned documents were a ``Hospital's Central Gov. 
License,'' ``Doctor's Medical License,'' and a ``Prescription.'' Tr. 
380-81; See Gov't Ex. 26 at 12, 14.
---------------------------------------------------------------------------

    OakmontScript received 10 milligrams and 100 milligrams of

[[Page 21522]]

Briviact on July 12, 2017, that were shipped in August 2017--four 
months prior to OakmontScript receiving its exporter registration. Tr. 
440-57, 1433; Gov't Exs. 12 at 7, 20 at 8, 26 at 35-36, 27 at 2, 28 at 
27.\29\ However, in other documentation provided by OakmontScript, this 
OKS-00301 invoice is not included in what is supposed to be a list of 
all controlled substances OakmontScript has exported. See Gov't Ex. 18 
at 3-4. In other documentation, the commercial invoice for invoice OKS-
00301 indicates that this shipment occurred May 8, 2019, and the 
indicated use was listed as ``research.'' \30\ Gov't Ex. 26 at 33, 34.
---------------------------------------------------------------------------

    \29\ This exhibit is titled as ``Customer End-Use 
Certification.'' Gov't Ex. 28 at 27; Tr. 453. An exporter is 
expected to know what the controlled substances it is exporting are 
being used for and this form includes questions regarding this use. 
Tr. 453-54. This is not a form created by the DEA, but rather a form 
``the industry has come up with'' in order to meet the standards set 
forth in the Code of Federal Regulations. Tr. 454.
    \30\ DI 3 discussed the fact that the Respondent asserted in its 
prehearing statement that there was an Excel macro that affected 
some of the dates on OakmontScript's documents. Tr. 574. In this 
instance, the document is dated May 8, 2019, which was the date of 
one of DI 3's inspections. Tr. 575. Therefore, this could account 
for the incorrect date listed in this invoice. DI 3 stated that she 
became aware of the macro issue after the May 8, 2019 inspection, 
but OakmontScript never specifically brought this to her attention 
during her investigation. Tr. 1439-40. If DI 3 had been made aware 
of this issue at the time, she would have worked with OakmontScript 
to obtain the most accurate records. Tr. 1440-41.
---------------------------------------------------------------------------

    OakmontScript did not file a DEA Form 236 for this invoice because 
it was unable to do so. Tr. 443, 456-57; Gov't Exs. 20 at 8, 48. Dr. 
Shi claimed that OakmontScript did not need to make a declaration to 
Customs and Border Control as the value of the shipment was less than 
$2500. Tr. 443; Gov't Ex. 20 at 8.\31\
---------------------------------------------------------------------------

    \31\ An ultimate user is the individual who will be ingesting 
the controlled substance or providing it for a pet's use, while an 
end-use certification addresses what the controlled substance is 
being used for and if it is going to be re-exported. Tr. 454-55.
---------------------------------------------------------------------------

Invoice OKS-00315-1 (Belviq)

    OakmontScript received 10 milligrams of Belviq on September 18, 
2017, which was shipped on November 1, 2017, and OakmontScript was not 
able to file a DEA Form 236 for this prescription. Tr. 457-70; Gov't 
Exs. 12 at 3, 20 at 8,\32\ 26 at 38-39, 27 at 2, 28 at 6. However, 
Belviq is omitted from two Excel spreadsheets that were provided to DI 
3 by Dr. Shi, which were supposed to include all of OakmontScript's 
exports. Gov't Ex. 17 at 2-3, 18 at 3-4. Also, a different invoice 
provided by OakmontScript is dated September 18, 2017. Gov't Ex. 26 at 
37. Another commercial invoice is dated May 8, 2019. Gov't Ex. 26 at 
40. Based on the November 1, 2017, shipping date, OakmontScript 
exported this Belviq product approximately one month before it obtained 
its exporter registration. Tr. 470, 1433.
---------------------------------------------------------------------------

    \32\ In response to DI 3's email, Dr. Shi sent a reply email 
stating that per the DHL shipping label, the shipment was made by a 
custom broker, Hangzhou Junyuan Meditech, LLC and the end-user is 
Changzhou Pharmaceuticals with an address in China, but no export 
date was provided. Tr. 461-62.
---------------------------------------------------------------------------

Invoice OKS-00315-2 (Lyrica)

    This invoice included several strengths of Lyrica: 25 milligram, 50 
milligram, 75 milligram, 100 milligram, 150 milligram, 200 milligram, 
225 milligram, and 300 milligram tablets. Tr. 470.
    OakmontScript purchased Lyrica on September 12, 2017, from American 
Pharma Wholesale and it was shipped sometime between November 17 
through 21 of 2017 to Changzhou Pharmaceuticals in China and 
OakmontScript did not file a DEA Form 236 because it was unable to do 
so.\33\ Tr. 470-83, 895; Gov't Exs. 12 at 9-10, 26 at 41-43, 27 at 2, 
28 at 8, 78, 48. However, in other documentation provided by 
OakmontScript, Lyrica is not listed as an export. Gov't Exs. 17 at 2-3, 
18 at 3-4. Furthermore, in other documentation, the invoice is dated 
August 2017. Gov't Exs. 26 at 44, 28 at 31. This shipment of Lyrica was 
shipped approximately one month prior to OakmontScript receiving its 
exporter registration. Tr. 483, 1433.
---------------------------------------------------------------------------

    \33\ DI 3 later testified that OakmontScript did submit a DEA 
Form 236, but it was subsequently cancelled. Tr. 909.
---------------------------------------------------------------------------

Invoice OKS-00108 (Belviq XR)

    OakmontScript received Belviq on July 20, 2017, and shipped the 
same quantity of Belviq XR 20 milligrams on December 1, 2017. Tr. 483-
95; Gov't Exs. 12 at 3; 26 at 45, 47, 27 at 2, 28 at 5, 19 (the 
shipping date is listed as December 1, 2017), 76 (the date 
OakmontScript transferred the Belviq from its distributor to exporter 
registration is listed as November 29, 2017). However, in other 
documentation provided by OakmontScript, Belviq is not listed as an 
export. Gov't Exs. 17 at 2-3, 18 at 3-4. In other documentation 
provided by OakmontScript, the shipping label for this invoice was 
created on October 13, 2017, and the customer was listed as Jiangsu 
Alicorn Pharmaceutical Co. Ltd in China. Gov't Ex. 20 at 9. There are 
also various dates included in the ``Import Drugs Approval Notice'' 
including February 16, 2017 and February 15, 2018. Gov't Ex. 26 at 46; 
Tr. 489. The packing list that OakmontScript provided is dated May 8, 
2019. Gov't Ex. 28 at 19. OakmontScript did not file a DEA Form 236 for 
this export. Tr. 494. Regardless of whether the shipment was exported 
on December 1, 2017 or October 13, 2017, this shipment would have been 
exported prior to OakmontScript obtaining its exporter registration. 
Tr. 495, 1433.

Invoice OKS-00650 (Lunesta)

    OakmontScript received Lunesta in May 2018 and shipped the Lunesta 
to Disha Pharmaceutical Group on May 21, 2018. Tr. 499-535; Gov't Exs. 
12 at 17, 17 at 3, 18 at 3, 28 at 94. The Lunesta was shipped to Mr. 
Z.Y. at an address in the United States in Kearny, New Jersey. Tr. 
1455; Gov't Ex. 22 at 10-11. Another document for this export that is 
dated May 3, 2017, states that this shipment was shipped to P.Z. in New 
Jersey. Tr. 515, 522-23; Gov't Ex. 26 at 87.
    Upon further investigation, DI 3 realized that this was a domestic 
distribution or distributing to a registrant in the United States, as 
opposed to an export. Tr. 508, 510, 529, 533, 904-05; Gov't Exs. 22 at 
10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68. OakmontScript did 
not fill out a DEA Form 236 for this export. Tr. 500-01.
    A distributor is not permitted to distribute controlled substances 
to an ultimate user and there is no coincidental activity that permits 
a distributor to provide controlled substances to non-DEA individuals 
or persons or companies. Tr. 511-12, 723. Distribution occurs between 
registrants while dispensing would take place through a prescription 
being filled by a pharmacy after a practitioner prescribes a controlled 
substance. Tr. 513.
    DI 3 discussed this invoice with Dr. Shi. Tr. 513-14. Dr. Shi 
stated that she was provided a business card showing that Mr. Z.Y. was 
an employee of Disha Pharmaceutical Group, a pharmaceutical company in 
China, and that he was getting ready to move to China and asked that 
the Lunesta be shipped to his home address in New Jersey, and paid via 
personal payment. Tr. 514, 516, 531, 534-35. This invoice indicates 
that the ``bill to'' party was Disha Pharmaceutical Group. Tr. 530-31; 
Gov't Ex. 28 at 44. Dr. Shi had explained that Larry Yu, a colleague 
she had met at a conference, had requested the Lunesta for RefDrug and 
asked Dr. Shi to send the Lunesta to Mr. Z.Y. to

[[Page 21523]]

have him provide it in China as Dr. Yu was not able to acquire it. Tr. 
515-16.
    Dr. Shi confirmed for DI 3 that OakmontScript had purchased this 
Lunesta with its distributor registration and then distributed it to 
Mr. Z.Y. at his home address in New Jersey, which DI 3 testified was 
improper. Tr. 517-18. Dr. Shi did not believe that this incident was a 
violation and stated that because Disha Pharmaceutical Group was the 
end-user of this controlled substance that it did not have to be 
licensed or registered with the DEA to obtain this controlled 
substance. Tr. 518. In contrast, DI 3 believed that Disha was not the 
end-user or ultimate user \34\ because it was seeking the Lunesta in 
order to conduct research as opposed to using it for personal medical 
use. Tr. 518-19, 772-73.
---------------------------------------------------------------------------

    \34\ 21 U.S.C. 802(27) defines ``ultimate user'' as ``a person 
who has lawfully obtained, and who possesses, a controlled substance 
for his own use or for the use of a member of his household or for 
an animal owned by him or by a member of his household.''
---------------------------------------------------------------------------

    DI 3 conducted searches to see whether certain parties in this 
transaction had a DEA registration. Tr. 545. She conducted a search for 
Mr. Z.Y., RefDrug, Inc., L.Y., P.Z., Disha Pharmaceutical Group, and 
the address in Kearny, New Jersey, and found no results for any active 
or inactive DEA registrations for any of these searches. Tr. 545-54. DI 
3 also conducted a Google search of the Kearny, New Jersey, address and 
was not provided any information from OakmontScript that this was a 
freight forwarding facility. Tr. 555-56, 558.

Invoice OKS-00715 (Lyrica)

    A variety of Lyrica strengths were shipped on November 21, 2018, to 
J.F. at YaoPharma. Tr. 558-72; Gov't Ex. 31 at 1-4, 27 at 3, 31 at 1, 
3-4. However, other documentation provided by Dr. Shi indicates that 
the date is November 21, 2019. Gov't Ex. 12 at 12.\35\ Dr. Shi also 
sent an email stating that the label for the Lyrica was created on 
November 21, 2018, and the drop-off date was December 4, 2018. Gov't 
Ex. 20 at 10. Other documents list the date as March 29, 2019. Gov't 
Ex. 31 at 3. Other documents list an invoice date of May 8, 2019. Gov't 
Ex. 26 at 102.\36\ The date of the invoice was also listed as August 8, 
2018. Gov't Ex. 28 at 48. OakmontScript did not file a DEA Form 236 for 
this export. Tr. 572-73; Gov't Ex. 48.
---------------------------------------------------------------------------

    \35\ DI 3 discussed these issues with Dr. Shi on April 23, 2019, 
and Dr. Shi indicated that this was an incorrect date and the date 
should be listed as November 21, 2018. Tr. 564.
    \36\ This incorrect date could be related to the macro issue, 
but regardless, having these incorrect dates caused confusion for DI 
3. Tr. 576-77.
---------------------------------------------------------------------------

Invoice OKS-00753 (Briviact)

    Briviact 50 milligram and 100 milligram, a Schedule V drug, was 
received on October 22, 2018, the shipping label was created on October 
25, 2018, and it was shipped on November 2, 2018. Tr. 579-96; Gov't 
Exs. 12 at 8, 20 at 10. Other documentation provided by OakmontScript 
states that this was shipped on October 26, 2018. Gov't Exs. 17 at 2, 
18 at 4. The commercial invoice is dated September 26, 2018 and the 
``bill to'' and ``ship to parties'' are Y.P. at Zhejiang Le Pu 
Technology Limited Company in China. Gov't Exs. 26 at 106, 28 at 
53.\37\ In other documentation provided by OakmontScript, no shipping 
date is provided. Gov't Ex. 27 at 3-4. OakmontScript did not have the 
authority to export Briviact. Tr. 580-81, 599, 1434-35; Gov't Ex. 11. 
OakmontScript did not fill out a DEA Form 236 for this controlled 
substance. Tr. 596, 1435-36; Gov't Ex. 48.
---------------------------------------------------------------------------

    \37\ While this exhibit was being discussed, Dr. Shi objected 
and explained that this ``page of the shipping label is different. 
So it's our mistake to put the shipping label of 715 in here. So 
this shipping label should not be discussed with this, it's our 
fault to misplace this page.'' Tr. 591. This issue is discussed 
infra, during Dr. Shi's testimony.
---------------------------------------------------------------------------

    DI 3 found Dr. Shi's statement regarding drug codes to demonstrate 
a lack of candor because she had specifically asked Dr. Shi if 
OakmontScript was handling other controlled substances outside those 
listed and Dr. Shi reported that she had not. Tr. 600, 724, 788.

Invoice OKS-00902 (Belviq)

    Belviq, 10 milligrams was received by OakmontScript on January 30, 
2019, transferred from its distributor license to its export license on 
February 14, 2019, and shipped on February 15, 2019, to Beijing 
HeMingTang Pharmaceutical Company Limited. Tr. 602-13; Gov't. Exs. 12 
at 5, 18 at 4, 26 at 121, 27 at 4, 28 at 60, 82. However, other 
documentation provided by Dr. Shi listed a packing slip date of January 
16, 2019. Gov't Ex. 26 at 119. Other documentation listed an invoice 
date of May 8, 2019. Gov't Ex. 26 at 122.\38\ Other documentation lists 
the billing date from McKesson as January 16, 2019. Gov't Ex. 28 at 18. 
OakmontScript did not file a DEA Form 236 for the Belviq. Tr. 609, 
1435-36; Gov't Ex. 48. OakmontScript did not have the authority to 
export Belviq at this time. Tr. 612, 1435; Gov't Ex. 11.
---------------------------------------------------------------------------

    \38\ This could have also been related to the macro issue as the 
invoice was dated May 8, 2019, one of the dates DI 3 was present for 
an inspection.
---------------------------------------------------------------------------

    DI 3 believed Dr. Shi's previous statement regarding drug codes 
demonstrated a lack of candor because she had specifically asked Dr. 
Shi if OakmontScript was handling other controlled substances outside 
those listed and Dr. Shi failed to report that OakmontScript had 
recently exported Belviq. Tr. 613, 724, 788.

Invoice DIW-0019 and NEEC-0019 (Clobazam)

    Clobazam is a Schedule IV controlled substance. Tr. 614; Gov't Ex. 
10 at 4. OakmontScript received a shipment of clobazam on February 28, 
2019, and shipped it on March 5, 2019, to Patient J.L.'s home address 
in China. Tr. 613-41, 673-723, 727-33, 907, 912; Gov't Exs. 12 at 21, 
26 at 15-16, 27 at 4, 28 at 65.
    However, in other documentation provided by OakmontScript, there is 
no indication that clobazam was shipped or it is not listed on the 
invoice. Gov't Exs. 17 at 2-3, 18 at 3-4. OakmontScript did not have 
the authority to export clobazam and DI 3 was unable to confirm that it 
was used for a legitimate scientific, research, or medical purpose. Tr. 
612-13; Gov't Ex. 11. OakmontScript also did not fill out a DEA Form 
236 for this invoice. Tr. 615, 1435-36; Gov't Exs. 26 at 16, 28 at 76, 
48 at 1.
    At the May 8, 2019 visit, DI 3 asked why there was a discrepancy 
and Dr. Shi stated that the request had come to export the clobazam for 
direct patient use. Tr. 617-18. During this conversation, Dr. Shi 
stated that she had ``begged'' Dr. L.W. for about a week to write a 
prescription to legitimize this export of controlled substances and 
although he initially said no, he ``eventually relented'' and wrote the 
prescription, but asked that Dr. Shi not ask him to write a 
prescription like that again. Tr. 619-20, 621, 673, 769, 912, 1456.
    It was DI 3's understanding that Patient J.L. was treated at Boston 
Children's Hospital, had returned to China, and was now seeking an 
export of clobazam to China. Tr. 620. Dr. Shi never provided this 
prescription to DI 3. Tr. 621-22.\39\
---------------------------------------------------------------------------

    \39\ Other documentation provided by OakmontScript indicates 
that the prescription was transferred to a doctor's office in the 
United States, which would appear to be a domestic distribution, but 
during the May 8, 2019 conversation, Dr. Shi indicated that the 
controlled substance was directly exported to Patient J.L. in China, 
which she asserted a distributor is able to do. Tr. 624, 633, 641, 
726, 915; Gov't Ex. 20 at 11.

---------------------------------------------------------------------------

[[Page 21524]]

Administrative Subpoenas

    DI 3 and DI 6 met with Dr. L.W. in January or February of 2020. Tr. 
674. Upon arriving, both DIs explained the reason for the visit, 
identified themselves, and showed their credentials. Tr. 674. Dr. L.W. 
indicated he would be fine to answer questions. Tr. 674. During the 
interview, Dr. L.W. indicated that he was a consulting physician for 
OakmontScript, was paid a monthly stipend, and received extra 
compensation each time he wrote a prescription for OakmontScript. Tr. 
675. It was unclear what his position was with NEEC. Tr. 675. Dr. L.W. 
reviewed the material transfer document that indicated the clobazam, 
invoice NEEC-019, was shipped directly to him and he stated that he had 
never taken physical possession of the clobazam or any controlled 
substances. Tr. 676, 677, 730. See Gov't Ex. 26 at 16. Dr. L.W. told DI 
3 that he wrote prescriptions for OakmontScript after OakmontScript 
provided him with medical records for foreign patients who were being 
treated for illnesses in other counties and he would determine whether 
the drug OakmontScript wanted to export was the appropriate drug for 
the treatment of those patients. Tr. 677. He further stated that he had 
never seen Patient J.L. and did not have any medical records for 
Patient J.L. Tr. 678, 682. He stated that he did not have authority to 
write prescriptions for patients located outside of the United States, 
nor does he have foreign medical licenses or overseas privileges as a 
practitioner. Tr. 678.
    DI 3 served an administrative subpoena on Dr. L.W. that was dated 
January 2, 2020. Tr. 678-79; Gov't Ex. 35. Dr. L.W. later called DI 3 
to discuss the subpoena she had served on him. Tr. 681. Dr. L.W. stated 
that he did not have a response to the subpoena and he had not written 
prescriptions for controlled substances for OakmontScript. Tr. 681-82; 
Gov't Ex. 36. DI 3 asked him to email her his official response and he 
sent DI 3 an email stating this. Tr. 681-82; Gov't Ex. 36.
    On March 6, 2020, DI 3 had an email exchange with Attorney 
Schumacher, in response to the administrative subpoenas that were 
served on OakmontScript and NEEC. Tr. 690; Gov't Ex. 40. See Gov't Exs. 
37, 38. Mr. Shumacher indicated that he had no response to the 
subpoenas. Tr. 687-706; Gov't Exs. 39, 40, 41, 42.
    Regarding the clobazam prescription,\40\ Mr. Schumacher indicated 
that the prescription had been initiated or authorized by Dr. G.T. from 
a hospital in China and that this physician did not have a relationship 
with OakmontScript or NEEC. Tr. 710-11; Gov't Ex. 44 at 1. DI 3 
conducted a search for Dr. G.T. in the DEA registration database known 
as RICS or CSA2 to determine whether Dr. G.T. or his hospital ever had 
a DEA registration associated with them and the search turned up no 
results. Tr. 715-17, 722.
---------------------------------------------------------------------------

    \40\ DI 3 obtained a translation of the clobazam prescription. 
Tr. 713-16; Gov't Ex. 46.
---------------------------------------------------------------------------

    Regarding the clobazam, 019 invoice, DI 3 found that Dr. Shi 
demonstrated a lack of candor because she initially provided documents 
indicating the clobazam had been exported, but then later provided 
information that it was actually transferred domestically to a doctor's 
office in Massachusetts and Dr. Shi continued to provide conflicting 
information. Tr. 730-31. This lack of candor made it difficult for DI 3 
to understand what had actually been exported. Tr. 731, 788-89.
    OakmontScript did not provide return information or a DEA Form 236 
for the exports discussed at the hearing including, invoice OKS-00243 
(Diazepam), invoice OKS-00301 (Briviact), invoice OKS-00315/OKS-00315-1 
(Belviq), invoice OKS-00315/OKS-00315-2 (Lyrica), invoice OKS-00108 
(Belviq XR), invoice OKS-00715 (Lyrica), invoice OKS-00753 (Briviact), 
invoice OKS-00902 (Belviq), and invoice DIW-0019/NEEC-0019 (clobazam). 
Tr. 732-35.
    Overall, DI 3's investigation of OakmontScript identified record-
keeping issues including, not having an initial inventory,\41\ 
exporting before receiving its exporter registration,\42\ and 
commingling records.\43\ During her investigation in 2019, DI 3 
requested that Dr. Shi provide specific dates of export, which is the 
actual date the controlled substance left the registrant's registered 
location and the date that the controlled substance was released by a 
customs official, which must be recorded within thirty days after the 
registrant learns of the export or within ten days if the Administrator 
asks for it earlier. Tr. 759-60, 807. The manner in which OakmontScript 
was conducting business violated the CSA and DEA regulations, which 
made it a potential threat to public safety. Tr. 762, 786. Although Dr. 
Shi and OakmontScript provided information upon request, the 
information was consistently conflicting and not necessarily helpful to 
DI 3. Tr. 765. Even if part of the exportation process occurred after 
OakmontScript obtained its exporter registration on December 5, 2017, 
this would not have legitimized the export because OakmontScript's 
intent to export the controlled substances was there once it 
transferred them to the common carrier. Tr. 1442-44.
---------------------------------------------------------------------------

    \41\ Tr. 735-41; Gov't Exs. 9, 13.
    \42\ DI 3 learned that OakmontScript had exported thirteen 
controlled substances prior to being granted its export license on 
December 5, 2017, which was counted based on each drug and strength. 
Tr. 864. DI 3 offered an example for the Briviact shipment, which 
was 10 milligrams and 100 milligrams, which would count as two 
separate controlled substances. Tr. 864-68.
    \43\ There were issues with recordkeeping as OakmontScript had 
commingled records. Tr. 739. For instance, OakmontScript was keeping 
inventories for both its distributor registration and its exporter 
registration on the same document and it was difficult to discern 
under which registration each transaction had occurred. Tr. 743-48, 
782; Gov't Ex. 12. DEA registrants are also required to take a 
physical hand count of all controlled substances that they have on 
hand under that DEA registration and document the results, which 
OakmontScript failed to do prior to the March 29, 2019 inspection 
date. Tr. 749, 778; Gov't Ex. 12.
---------------------------------------------------------------------------

    DI 3 effectively explained her interactions with OakmontScript 
employees, including Dr. Shi and Dr. L.W. As a public servant, DI 2 has 
no personal stake in the outcome of the instant investigation or in the 
revocation of the Respondent's registration. There was no indication 
during her testimony that she had any animus against OakmontScript or 
any of its employees. I therefore find her testimony to be credible and 
it will be afforded considerable weight.

The Respondent's Case

    The Respondent's case-in-chief consisted of the testimony of four 
witnesses: (1) Yujing Liu, (2) DI 3,\44\ (3) Donghui Yu, Ph.D., and (4) 
Jufang Shirley Shi. Below is a summary of the testimony of these 
witnesses.\45\
---------------------------------------------------------------------------

    \44\ The Respondent called DI 3 as a witness for its case-in-
chief. Tr. 862-63. The testimony elicited from DI 3 by the 
Respondent is incorporated into the summary of DI 3's testimony 
discussed above.
    \45\ I do not make any findings of fact in these summaries. Any 
facts necessary for a disposition of this case are set forth in the 
Analysis section of this Recommended Decision.
---------------------------------------------------------------------------

Yujing Liu

    Yujing Liu graduated from Northeastern University in 2015 with a 
major in project management. Tr. 814-15. Ms. Liu has been working for 
OakmontScript since February 2018 and coordinates logistics for 
OakmontScript including monitoring and tracking shipments, and 
preparing documents to support the exporting process. Tr. 815-16, 844. 
Ms. Liu also maintains OakmontScript's records on exports in a computer 
system that she reviews for accuracy, but all OakmontScript employees 
have access to these records. Tr. 849-50. A commercial invoice is part 
of the documents that are required to show the sale price of the drug. 
Tr.

[[Page 21525]]

834. A commercial invoice's ``Bill to Address'' and ``Shipping to 
Address'' are not always the same. Tr. 834-35. After creating the 
commercial invoice, Ms. Liu will save the document as a PDF because the 
Excel formula \46\ of OakmontScript's working documents does not 
capture the accurate date. Tr. 854-58. When Ms. Liu provided export 
records to DI 3, she provided OakmontScript's internal documents from 
the Dropbox, which are the working templates, rather than the PDF 
versions. Tr. 831-32.
---------------------------------------------------------------------------

    \46\ The Excel formula is a macro that populates the current 
date that the document is open. Tr. 857-58.
---------------------------------------------------------------------------

    Ms. Liu knows how to fill out a DEA Form 236 and DEA Form 161, 
which is not difficult to do if the drug code is available or assigned 
to OakmontScript and the national level import permit is available. Tr. 
817, 830, 859-61.
    The exporting process includes many events, including tracking when 
the shipment passes Customs. Tr. 816, 844. It is difficult for Ms. Liu 
to track when Customs clears a shipment and she cannot record that 
date. Tr. 844-45. Instead of providing that exact date, OakmontScript 
records ``every step we did,'' which includes when Customs clears a 
controlled substance to leave the United States, but not when the 
controlled substance is released by the country it is being shipped to. 
Tr. 845-48. OakmontScript uses the date on the customer's import 
permit, which is the customer's deadline to receive the export and 
finish the customer clearance date. Tr. 848. OakmontScript uses the 
common carrier DHL, but can only track DHL shipments for three months 
because the DHL system only provides three months of history. Tr. 848-
49. Therefore, if the shipment arrives with the client outside this 
three-month window, OakmontScript is not able to track the exact date 
the shipment arrives and although a client will tell OakmontScript when 
it receives a shipment, OakmontScript does not record this information. 
Tr. 849.
    On cross-examination, Ms. Liu agreed with Government counsel that 
the dates of shipment for invoice OKS-00715, as recorded in the 
Respondent's documentation admitted as Government Exhibits 26 (showing 
a shipment date of May 8, 2019) and 31 (showing a shipment date of 
March 29, 2019) are incorrect, based on the Respondent's documentation 
admitted as Government Exhibit 27 (showing a shipment date of November 
21, 2018). Tr. 856-58.
    Throughout her testimony, Ms. Liu was generally consistent and 
credible. As an employee of OakmontScript, she has a personal stake in 
the outcome of the instant investigation as well as the revocation of 
the Respondent's registrations. Her testimony generally involved her 
job duties with OakmontScript. At one point, she also agreed with 
Government counsel that the dates of shipment for invoice OKS-00715 
were incorrect, based on different documents providing conflicting 
dates. Overall, I found Ms. Liu's testimony credible.

Donghui Yu, Ph.D.

    Donghui Yu has a Ph.D. in Pharmacology and her post-doctoral 
training was at Dana-Farber Cancer Institute and Harvard Medical 
School. Tr. 918. Her research focus was in oncology research and cancer 
drug development. Tr. 918. She was a teaching assistant at the School 
of Medicine in Beijing University, a Research Scientist at the Cubist 
Pharmaceutical, and an Investigator at Infectious Diseases at Novartis 
in Cambridge, Massachusetts. Tr. 918. During 2011 and 2015, she 
volunteered at Boston Children's Hospital by hosting weekly craft 
activities and saw children who had diseases that were still not 
cured.\47\ Tr. 919. She worked in a health-related facility in Needham, 
Massachusetts, helping her husband, from 2012 through 2017. Tr. 1015-
16.
---------------------------------------------------------------------------

    \47\ Dr. Yu was connected to Patient J.L.'s parents when he had 
surgery at Boston Children's Hospital. Tr. 920.
---------------------------------------------------------------------------

    Dr. Yu started working at OakmontScript in June 2017 and she enjoys 
working for OakmontScript because it gives her the opportunity to serve 
people in need in the medical and science field. Tr. 919, 930, 1015. 
She is the Executive Director and helps Dr. Shi train new employees by 
using OakmontScript's Standard Operating Procedure (``SOP''), and 
ensures that the Drug Supply Chain Security Act is implemented in the 
SOP and that OakmontScript is complying with the FDA and following the 
rules of other countries.\48\ Tr. 921, 925, 932. She also ensures that 
the SOP is timely updated, the employees are trained properly, and all 
the procedures are followed in the SOP. Tr. 921, 923, 930. Client 
validation is a very important part of compliance and OakmontScript 
considers customer verification a top priority as the drug abuse 
epidemic was caused by controlled substances being distributed for a 
non-legitimate use. Tr. 922. OakmontScript invested in security 
including having a security system, a safe box, a door lock, an alarm, 
and temperature control in the warehouse where pharmaceutical products 
are being stored. Tr. 925-26.
---------------------------------------------------------------------------

    \48\ This includes working with a Chinese client and needing to 
comply with the Chinese National Medical Product Administration. Tr. 
933.
---------------------------------------------------------------------------

    In order to export controlled substances legally in the United 
States, the person conducting the export of the controlled substance 
must have a DEA registration. Tr. 1029-30. Dr. Yu agreed with 
Government counsel's statement that applying for a DEA registration is 
not the same thing as having a DEA registration. Tr. 1030. Furthermore, 
a registrant can only export controlled substances for which it has 
authorization to do so. Tr. 1030-34.
    OakmontScript obtained its DEA export registration on December 5, 
2017. Tr. 1030. Dr. Yu stated that before DI 2 performed her on-site 
inspection,\49\ OakmontScript was not aware that to do an export, it 
needed to transfer the controlled substances from its distributor 
registration to its exporter registration. Tr. 1011. As a result, after 
DI 2's inspection, OakmontScript updated its export process SOP to 
include the ``license transfer document.'' Tr. 1011. When a new 
customer comes to OakmontScript, OakmontScript checks the customer's 
business card, makes sure it belongs to the company it claims, ensures 
that person is the company's legal representative, obtains the 
company's business registration, and checks the company's website. Tr. 
923. If there is an export of controlled substances to a Chinese 
client, OakmontScript asks the client to provide its business 
authorization for controlled substance usage, development, or 
manufacture. Tr. 923. OakmontScript also requires clients to fill out a 
form that ``covers all the business, and the history, and their 
financial situation, so on, so on.'' Tr. 923. In cases where clients 
need a clinical trial registration, OakmontScript will ask them to 
provide their clinical registration in order to go through its clinical 
trial protocol and once OakmontScript makes sure it is for a legitimate 
use, OakmontScript enters this information in a specific Dropbox 
database. Tr. 924.
---------------------------------------------------------------------------

    \49\ DI 2 performed her on-site inspection on July 26, 2018. Tr. 
126-27.
---------------------------------------------------------------------------

    OakmontScript's company goal is to serve the clients and the public 
and to make sure every step of its SOP is executed properly. Tr. 926-
27. Otherwise, it can impact public safety and OakmontScript always 
discusses and modifies the SOP when it finds a problem that is not 
perfectly described in the SOP. Tr. 927.
    Dr. Yu is familiar with the CSA and DEA regulations and it would be 
wrong for a DEA registrant to fail to comply with these. Tr. 1023-25. 
However, what

[[Page 21526]]

is wrong or correct is defined by the DEA and not everything can be 
defined as black and white. Tr. 1024. For instance, some substances 
that are controlled substances in the United States are not controlled 
substances in China including Lyrica, Belviq, Briviact, and clobazam, 
while substances like caffeine, are not controlled in the United 
States, but are considered controlled substances in China. Tr. 936.
    It is difficult for OakmontScript to obtain the LONO *\E\ from 
other countries, particularly China, and instead the clients present 
the permits from the local province. Tr. 937. Dr. Yu noted that one 
example occurred with Belviq, OKS Invoice 00902. Tr. 1048-49. Because 
Belviq was not a controlled substance in China, OakmontScript was 
unable to obtain a LONO letter for the Belviq. Tr. 1049. In addition, 
OakmontScript did not complete a DEA Form 236 for this shipment of 
Belviq. Tr. 1049. Further, on the date that OakmontScript shipped 
clobazam, invoice number NEEC-019, it did not have a drug code for 
clobazam and did not submit a DEA-236. Tr. 1049-51. Finally, on the 
date that OakmontScript shipped Briviact, invoice number 753, it did 
not have a drug code for Briviact and did not file a DEA-236. Tr. 1051-
53.
---------------------------------------------------------------------------

    *\E\ Although LONO was not defined in the RD, it is believed to 
reference a Letter of No Objection.
---------------------------------------------------------------------------

    Dr. Yu's understanding of a drug code is that it is used for a 
controlled substance export only and is for controlled substance 
identification purposes as different dosage forms or formulations of 
drug substances could be assigned different drug codes. Tr. 970-71. 
This does not apply to Schedule V controlled substances, where only one 
drug code is assigned for different doses and populations. Tr. 971. The 
DEA field agents told OakmontScript that there were several ways to 
obtain new drug codes, including filling out an online application, 
emailing the local DI agent, and adding new drug codes when it renews 
its license. Tr. 972. OakmontScript is not a manufacturer and does not 
deal with controlled substance manufacturers in the United States. Tr. 
982.
    Dr. Yu discussed the macro issue that Ms. Liu had previously 
mentioned in her testimony, and noted that once OakmontScript realized 
this caused a potential problem, Dr. Yu corrected the template. Tr. 
984, 1053-60. Dr. Yu would also create separate PDFs that list the 
correct date, and save them to the same folder. Tr. 1055-57. 
OakmontScript's SOP does not contain the ``concept of date of export'' 
as OakmontScript feels it ``is unable to define'' it. Tr. 986. Instead, 
OakmontScript ``just document[s] every step we handled'' because an 
``export is really a process.'' Tr. 986. Therefore OakmontScript ``had 
nothing to present'' when DI 3 asked about a ``specific export time.'' 
Tr. 987. Although DI 3 used the shipping labels, OakmontScript did not 
believe the shipping label was proper to use as the export date. Tr. 
987. Dr. Yu was ``frightened'' when DI 3 asked about the date of export 
at the February 19, 2019, inspection because she did not know the exact 
document to show her. Tr. 991-92. However, Dr. Yu later went on to 
confirm that the date of shipment is the date the controlled substance 
departed from the registered location. Tr. 1046.
    There is a date of EEI \50\ and all shipments need to claim EEI for 
the customs declaration for export. Tr. 988. The shipping label is 
created and OakmontScript prints out the label, but the package is not 
necessarily ready to be shipped. Tr. 988. OakmontScript then needs to 
send the shipping label to its clients to let them start the import 
process. Tr. 988. The most important part is ``custom clearance ticket 
obtaining'' and that process depends on how the country handles that 
and different city customs handle the speed differently, which could be 
a couple weeks to several months. Tr. 988-89, 990.
---------------------------------------------------------------------------

    \50\ Dr. Yu did not provide the full term for this acronym, 
however, DI 3 defined this during her testimony as ``Electronic 
Export Information.'' Tr. 480.
---------------------------------------------------------------------------

    There is a date of custom clearance, which is a cutoff date in 
which OakmontScript has an obligation to help the customer finish 
before the due date, or the whole purchase becomes invalid. Tr. 989. If 
the DEA Form 236 is available, OakmontScript records that transaction 
date. Tr. 989, 1039-41. At the end of the transaction, OakmontScript 
receives verbal confirmation from the client that it received the 
product. Tr. 989. Ms. Liu generates the shipping labels and takes care 
of the customs clearance and EEI. Tr. 989-90.
    It would be ideal to use the DHL database to record the export 
date, but this was not part of OakmontScript's SOP. Tr. 990. Doing this 
is not always practical because the DHL online system only displays the 
last ninety days and if the package is dropped off several weeks after 
the shipping label was created, then it may fall out of this ninety-day 
window and OakmontScript cannot track this package. Tr. 991. Other 
issues occur when a client picks its own private carrier to pick up the 
package and OakmontScript can only get verbal confirmation from the 
client that it received the package. Tr. 991. OakmontScript records the 
date the client verbally tells it the package was received. Tr. 989, 
991.
    Physicians can order medications from distributors without a 
prescription, which includes foreign physicians who, in the name of the 
patient, order medication from an exporter or distributor. Tr. 993. 
Distributors or exporters need to verify the doctor's medical license. 
Tr. 993. As a DEA-registered distributor and exporter, OakmontScript is 
able to fill medical orders to serve hospitals, physicians, and other 
entities domestically and foreign research organizations. Tr. 993-94. 
Specifically, as it relates to the clobazam prescription, 
OakmontScript's client included the Chinese medical doctor, the 
hospital, and also pharmacists who ``have the medical history based on 
Boston Children's Hospital.'' Tr. 994. Without a legal prescription 
from a local hospital or physician, the controlled substance would not 
be permitted to enter the receiving country. Tr. 994. The foreign 
prescription has two functions: (1) Showing the medical necessity of 
the patient and (2) providing evidence to show when the controlled 
substance is imported at the Chinese border, acting as an import 
permit. Tr. 994-95.
    For Patient J.L., the doctor's instruction is required to show that 
the patient was not hospitalized and instead had a chronic condition. 
Tr. 995. Per the doctor's instruction, OakmontScript contacted the 
patient and learned from his family that he was no longer in the 
hospital. Tr. 995-96, 1071. It is OakmontScript's practice to send 
controlled substances directly to patients if it receives a doctor's 
order to do so. Tr. 1066-67, 1070.
    During the February 19, 2019, inspection, DI 3 told OakmontScript 
that it needed to fill out a DEA Form 236 for controlled substances 
Schedules III, IV, and V prior to shipping, and after receiving the 
approved DEA Form 236, it needed to wait for fourteen days to start 
shipping, which was new information to Dr. Yu. Tr. 996, 1025-26, 1028. 
Dr. Yu was not sure if this is what the regulation stated and was 
unable to confirm this is what the regulation actually required. Tr. 
996-97, 1025-28. See 21 CFR 1312.27(a).\51\
---------------------------------------------------------------------------

    \51\ The regulation states that DEA Form 236 must be filed with 
DEA ``not less than 15 calendar days prior to the anticipated date 
of release by a customs officer at the port of export.'' 21 CFR 
1312.27(a).

---------------------------------------------------------------------------

[[Page 21527]]

    As a scientist, Dr. Yu believes it is important to keep complete 
and accurate records, and even though mistakes are possible, failing to 
keep accurate records can lead to further mistakes. Tr. 1017-18. Dr. Yu 
feels lucky to work at OakmontScript and finds it to be a good 
opportunity and the work OakmontScript does is meaningful to the whole 
pharmaceutical industry. Tr. 997-98. She and her colleagues work 
together every day to learn and grow, but sometimes they make mistakes 
and Dr. Shi takes full responsibility and never blames them. Tr. 998.
    Overall, Dr. Yu provided consistent testimony. She testified 
regarding her employment and noted that client verification is a top 
priority for OakmontScript. As the Executive Director of OakmontScript, 
she has a direct stake in the outcome of this case and whether 
OakmontScript loses either of its registrations. It was evident 
throughout her testimony that Dr. Yu had a strong allegiance to Dr. Shi 
and that she had been thoroughly coached on her direct examination. Dr. 
Yu had nothing but positive things to say about Dr. Shi and even 
refused to provide a specific answer to a question because the answer 
was not ``black and white.'' Tr. 1024. At one point Dr. Yu testified 
that she was ``frightened'' when DI 3 asked about the date of export at 
the February 19, 2019, inspection because she did not know the exact 
document to show her. Tr. 991-92. However, Dr. Yu later went on to 
confirm on cross examination that the date of shipment is the date the 
controlled substance departed from the registered location. Tr. 1046. 
Such inconsistencies in her testimony, coupled with Dr. Yu's evident 
allegiance to Dr. Shi, does not allow me to fully credit Dr. Yu's 
testimony.

Jufang ``Shirley'' Shi

Background

    Dr. Shi came to the United States to study as a graduate student in 
1988. Tr. 1075. She received her Ph.D. in Pharmaceutical Sciences from 
Duquesne University in Pittsburgh, Pennsylvania, and a Pharm.D., and 
then worked in various industries as a scientist. Tr. 1076, 1280. She 
also taught pharmacodynamics and pharmacokinetics to pharmacy students 
at Northeastern University during 2005 and 2007. Tr. 1277-78. After 
fifteen years, she dedicated herself to becoming a clinical pharmacist 
and has been registered as a pharmacist in Massachusetts since 2008. 
Tr. 1076, 1276-77. She has contributed to technology that led to eight 
patents. Tr. 1076-77. She became a fellow in the American Society of 
Consultant Pharmacists (``FASCP'') after passing a pharmacist exam and 
the Certificate of Geriatric Pharmacotherapy (``CGP'') for which she 
needed to know how to apply a safe protocol to her client. Tr. 1278-79. 
She also worked in retail pharmacies and an institutional pharmacy, as 
well as hospitals. Tr. 1077-78. This included working for PharmMerica 
and Lahey Hospital. Tr. 1280-81. Based on these experiences, she 
``decided to take some risk and to start a company'' to aid in the 
support of the ``global research need.'' Tr. 1078.
    Dr. Shi started OakmontScript in May 2016 as the owner, chief 
pharmacist, and president. Tr. 1078-79, 1283-85. She is familiar with 
the CSA and DEA regulations including 21 CFR 1306.04, 1306.05(a). Tr. 
1079, 1280-82. Dr. Shi needed to obtain a license from the state prior 
to receiving OakmontScript's ``federal license.'' Tr. 1080-81; Resp't 
Ex. 4. After receiving OakmontScript's DEA registration for Schedule 
III, IV, and V controlled substances, Dr. Shi requested to add Schedule 
II controlled substances and had updated its security system by adding 
a monitor and camera, updated the safe, and worked on updating the 
alarm system. Tr. 1082-84. Dr. Shi's thought process was to first 
obtain access to Schedule III, IV, and V controlled substances and 
later request the Schedule II drugs. Tr. 1084-91; Resp't Ex. 5, 6, 7.
    Dr. Shi received the first state license as a distributor for 
Schedules III, IV, and V within a couple of months. Tr. 1086. After 
receiving the state license, it took less than a month for Dr. Shi to 
obtain the Federal distributor COR, on October 7, 2016. Tr. 1086-87. 
Dr. Shi then applied for the Schedule II DEA registration, for which 
the approval process took about eight months. Tr. 1088-89. During this 
time, Dr. Shi made sure OakmontScript was in compliance and she spent 
more time training her employees. Tr. 1088-89.

Exporter Registration

    OakmontScript applied for its first exporter COR on April 26, 2017 
and applied for its second exporter COR on May 10, 2017. Tr. 1091, 
1286, 1289-91, 1308; Gov't Ex. 4 at 6-8. At the time OakmontScript 
submitted the second exporter application on May 2017, the first 
application filed in April 2017 was still pending. Tr. 1291. At some 
point in May 2017, DI 1 informed Dr. Shi that the applications were 
duplicates and Mr. L.U. and DI 1 discussed OakmontScript getting an 
importer COR. Tr. 1291-92. Dr. Shi recalls discussions regarding 
converting an exporter application to an importer application, but did 
not recall if it was ever done. Tr. 1293-95.\52\ Regardless, Dr. Shi 
recalled withdrawing the May 2017 application in October 2017 and 
OakmontScript never obtained an importer registration. Tr. 1295-97. Dr. 
Shi felt that the April application was ``neglected'' by the DEA and 
the May 10 application was ``mistreated.'' Tr. 1093, 1493.\53\ Although 
Dr. Shi has a ``great appreciation for'' DI 1, she ``feel very bad'' 
because her application had ``been mistreated.'' Tr. 1094. In an email 
to DI 1 dated April 28, 2017, Dr. Shi indicated that OakmontScript had 
not exported any controlled substances as of that date. Tr. 1287-88; 
Gov't Ex. 4 at 1.
---------------------------------------------------------------------------

    \52\ After several unsuccessful attempts by Government counsel 
to elicit a response regarding whether Dr. Shi was aware whether 
OakmontScript had converted one of its exporter applications to an 
importer application, the tribunal intervened and asked Dr. Shi to 
directly answer the Government's question and--even then--the 
tribunal needed to ask the question four times. Tr. 1294-95.
    \53\ This is not the first or only time Dr. Shi blamed the DEA 
or made disparaging comments about the DEA. Most notably, Dr. Shi 
made the following comments about the DEA in her closing statement: 
``Despite all evidence showed to their face, I'm very concerned 
about DEA's manner of how to treat the public, how to treat a small 
business, and how to treat the people who have a bundle of knowledge 
while they obviously lack it.'' Tr. at 1497.
---------------------------------------------------------------------------

    An inspection took place on June 22, 2017, with DI 1 and a Senior 
Investigator from the Massachusetts Department of Health. Tr. 1297-
98.\54\ At that time, Dr. Shi stated that she had not distributed or 
exported controlled substances as of that date. Tr. 1298. DI 1 also 
told Dr. Shi ``everything that's required'' including the requirement 
to maintain initial and biennial inventories, DEA Form 161s, DEA Form 
236s, and foreign documents or invoices. Tr. 1298-99. DI 1 also 
explained that records must be maintained for at least two years, 
records for the DEA registrations must be maintained separately 
according to business activity, and theft or loss of controlled 
substances must be reported immediately. Tr. 1299. Overall, DI 1 was 
able to help OakmontScript address issues and problems. Tr. 1353-54.
---------------------------------------------------------------------------

    \54\ Based on Dr. Shi's testimony on cross-examination, it 
appears that Dr. Shi was under the impression that DI 1's June 22, 
2017, inspection was based on OakmontScript's request to add 
Schedule II drugs to its exporter application. Tr. 1308-10. However, 
Mr. L.U. had not yet made a request to add Schedule II to 
OakmontScript's exporter application when DI 1 scheduled the 
inspection. Tr. 1309-10.
---------------------------------------------------------------------------

    As of July 26, 2017, Dr. Shi was aware that OakmontScript's 
exporter application was still being reviewed by the DEA, but that it 
was ``coming any

[[Page 21528]]

time.'' Tr. 1300-01.\55\ As of July 26, 2017, Dr. Shi did not recall 
receiving a DEA communication about OakmontScript's April 2017 exporter 
application being approved. Tr. 1305. While waiting for OakmontScript's 
exporter registration, Dr. Shi assured her staff the exporter 
registration ``should be coming any time, should be coming any minute. 
But it didn't come. And I thought it's coming any minute,'' because it 
was her experience with the DEA that it only took about a month for the 
DEA to process an application for registration. Tr. 1095. She continued 
to tell her staff that the registration ``should be coming any time'' 
and that they should ``start preparing'' because ``[i]t should come in 
any minute.'' Tr. 1096.
---------------------------------------------------------------------------

    \55\ Again, Government counsel made several attempts to get Dr. 
Shi to answer a specific question, in this case whether as of June 
26, 2017, Dr. Shi was aware that OakmontScript's exporter 
application was still being reviewed. Tr. 1300-05. And again, the 
tribunal needed to interject and direct Dr. Shi to ``listen to this 
question very carefully and give a direct response.'' Tr. 1304.
---------------------------------------------------------------------------

    Dr. Shi put too much trust in Mr. L.U., her chief pharmacist, who 
was her previous boss, but she also shares in the responsibility for 
not following up regarding the exporter application and leading her 
``people to believe the license coming any day.'' Tr. 1096-97, 1305. 
Dr. Shi ``made [the] assumption it should come in any minute'' and 
``misled [her] people'' by saying the exporter registration was on the 
way and thus OakmontScript started taking orders for Schedules III, IV, 
and V controlled substances. Tr. 1097-98. Dr. Shi began instructing her 
employees in June 2017 to start working on preparing controlled 
substances to be exported. Tr. 1311. OakmontScript ultimately received 
its exporter registration on December 5, 2017, in the mail.\56\ Tr. 
1099; Gov't Ex. 4 at 6-8.
---------------------------------------------------------------------------

    \56\ According to the Government's Certification of Registration 
History, the Respondent was assigned an exporter Certificate of 
Registration number on December 5, 2017. Gov't Ex. 1B.
---------------------------------------------------------------------------

OakmontScript's Export Process

    Based on DI 3's request for an exact export date, Dr. Shi created a 
document to track various parts of the export process. Tr. 1126-27. 
First, OakmontScript verifies the clients and records their import 
permit and sometimes their research proposal. Tr. 1126. The next step 
is to go through the contract to make sure everybody agrees on fees and 
that all parties are satisfied with the arrangement. Tr. 1127. The 
third step is to go through the ``contract process'' which is needed to 
finish the exporting process so the customer does not have to go back 
and reapply. Tr. 1127. OakmontScript also checks with Customs and 
Border Protection to see what type of license it needs to file. Tr. 
1127-28. The U.S. Custom and Border Protection (``CBP'') also has 
updates that OakmontScript cannot ``log into the process'' if the value 
of the reported drugs are less than $2500, and this number is currently 
even lower. Tr. 1128. Dr. Shi updates the SOP based on the rules and 
regulations from the CBP, FDA, and the local government regarding the 
exporting process. Tr. 1128-29.
    OakmontScript then prepares the shipping label and the customer 
ticket, which usually takes about two to four weeks. Tr. 1129-30. Dr. 
Shi instructs her staff to record what things happen, as opposed to 
providing the ``right date'' and she does not ``want her people to have 
any concept about what is the right date'' as this is not how this 
industry operates. Tr. 1130, 1366-67, 1495, 1498-99. Dr. Shi noted that 
``because we lack of the drug code . . . our export process foundation 
didn't lay out perfectly for my people'' as it relates to the DEA Form 
236. Tr. 1130-31. Dr. Shi does not ``want to blame the government[ ] 
who didn't give'' her a drug code. Tr. 1132. OakmontScript was not able 
to fill out DEA Form 236s for the diazepam 243 invoice, the Briviact 
301 invoice, the Belviq 315 or 315-1 invoice, the Lyrica 315 or 315-2 
invoice, or the Belviq 108 invoice. Tr. 1355.
    OakmontScript did not export controlled substances prior to 
receiving its exporter registration on December 5, 2017, because the 
exporting process is not based around a specific date, but rather a 
customer's need. Tr. 1133. Dr. Shi started telling her employees that 
by May 2017, they ``could start the business'' because ``the license 
[was] on the way.'' Tr. 1134. The ``right'' date does not apply to 
OakmontScript because sometimes projects get cancelled and then 
reinstated. Tr. 1135. It takes about six to twelve months for 
OakmontScript to ``work[ ] out each detail'' to complete an export. Tr. 
1136. The customer gives OakmontScript a due date and states when it 
wants OakmontScript to finish it. Tr. 1136-37. The exact date of export 
is not when the shipping label is created and the export is not defined 
by the exact date of export. Tr. 1138, 1495.
    Dr. Shi discussed using a ``buy and bill'' model and how 
OakmontScript has collaborated with other companies including 
Biologics, Accredo, McKesson, and Specialty Biologics. Tr. 1209. If the 
buy and bill model has problems, then OakmontScript will establish 
another channel by using its ``doctors to provide another channel to 
support'' patients. Tr. 1209-10.
    OakmontScript must submit the DEA Form 236 about two weeks before 
the planned export, so OakmontScript needs to have the anticipated date 
of departure from the port of export. Tr. 1371-72. For its exports, 
OakmontScript has the information required by section 3b of the DEA 
Form 236, but the information is ``recorded differently.'' Tr. 1375; 
See Gov't Ex. 47. The foreign client provides a custom clearance ticket 
that is issued by the country, which provides a window of time in which 
the export must occur and can be as far as a year into the future. Tr. 
1376-77. OakmontScript records the required DEA Form 236 section 3a 
information in the app because if OakmontScript does not record, then 
things ``cannot move forward'' and the logistical team uses ``that app 
to record everything.'' Tr. 1379. After ``things done,'' OakmontScript 
then downloads the information to the Dropbox. Tr. 1379-80. If the 
foreign clients do not call OakmontScript or report any problems, 
OakmontScript reports the due date for section 3b. Tr. 1380. Otherwise, 
OakmontScript's record will show any issues. Tr. 1380. OakmontScript 
records the anticipated arrival date in the app and will save a copy to 
the Dropbox ``once things finish.'' Tr. 1381. OakmontScript only 
provided ``a portion'' of the information to DI 3 based on her subpoena 
because ``it's Chinese so she cannot read anyway, then. And so I 
stopped our oversharing with her, right.'' Tr. 1381. DI 3, from the 
app, ``should see that . . . all [OakmontScript's] process is being 
recorded in the app.'' Tr. 1381. Dr. Shi did not tell DI 3 that 
OakmontScript was using the app, but ``screenshotted a portion of the . 
. . app.'' Tr. 1381-82.
    Dr. Shi reviewed DEA regulations and conducted her own research to 
learn about drug codes because OakmontScript had ``no guidelines . . . 
no laws, no rules'' and was ``left without being able to support our 
community of the research.'' Tr. 1149-50. She reviewed the DEA's 
website and 21 CFR 1308.03. Tr. 1156-61. The DEA has a lot of resources 
and Dr. Shi wishes she was ``led to a better source'' regarding drug 
codes. Tr. 1161. Dr. Shi continues to study the law, rules, and 
regulations in order to understand and ``better to learn how to help 
the people in this situation.'' Tr. 1194.

OakmontScript's Interactions With DI 3

    DI 3 initially told Dr. Shi that she wanted to help OakmontScript, 
but through this hearing, Dr. Shi learned that DI 3's duty was not to 
help her. Tr.

[[Page 21529]]

1147. Dr. Shi disagrees with the Government's accusation that she 
lacked candor. Tr. 1167-71. During the inspection in ``the beginning,'' 
OakmontScript showed DI 3 two lists and when DI 3 asked if 
OakmontScript was handling any other drugs, Dr. Shi said ``thank you 
for asking,'' ``praised'' DI 3 for asking this question, and stated 
that she was having trouble with another list of drugs for which 
OakmontScript did not have drug codes. Tr. 1172.
    Dr. Shi provided two lists to DI 3 for clobazam with one list 
listing the clobazam and the other not listing the clobazam because DI 
3 had repeatedly told her ``I come in to help your business'' and Dr. 
Shi did not know what DI 3's ``true agenda'' was. Tr. 1172-73. Dr. Shi 
did not ``keep complete and accurate records'' based on DI 3's 
standards, ``so that should not be basis for lack of candor.'' Tr. 
1173. Dr. Shi ``shared more than'' she should have and believed that DI 
3 would take all of the information they had discussed and ``dialogue 
with'' her. Tr. 1174-76, 1351. Dr. Shi never provided updated records 
to DI 3 after Dr. Shi found errors in the spreadsheets Dr. Shi had 
previously provided. Tr. 1321-23.\57\
---------------------------------------------------------------------------

    \57\ Again, Government counsel made several attempts to get Dr. 
Shi to answer a specific question, in this instance, whether Dr. Shi 
provided updated spreadsheets to DI 3. Tr. 1321-22. And again, the 
tribunal interjected and instructed that Dr. Shi answer the question 
posed by Government counsel, noting that the Government ``is asking 
you very direct questions and we need direct answers for clarity of 
the record on this. Please answer . . . and please respond directly 
to the question that's asked.'' Tr. 1322.
---------------------------------------------------------------------------

OakmontScript's Use of the WeChat App

    OakmontScript uses an app \58\ to communicate with foreign 
customers and uses this app to explain what is needed for an export. 
Tr. 1196-98. OakmontScript is not able to export to a hospital in bulk, 
such as tens of thousands of bottles. Tr. 1197. OakmontScript can only 
export if it has the name of a patient. Tr. 1197.
---------------------------------------------------------------------------

    \58\ This app is called ``WeChat.'' Tr. 1382.
---------------------------------------------------------------------------

    Dr. L.W. is part of the app and does not write prescriptions, but 
is there as a physician consultant and ``check'' for Dr. Shi as he 
``know[s] the medical record,'' that a medication is being used for a 
legitimate purpose, and ensures that OakmontScript is delivering the 
treatment to the right patient. Tr. 1197-99.
    OakmontScript will exchange documents with foreign clients through 
this app and will respond to clients with urgent issues. Tr. 1382-
83.\59\
---------------------------------------------------------------------------

    \59\ Dr. Shi reviewed an example of her use of the WeChat app. 
Tr. 1383-90; Gov't Ex. 26 at 23. Dr. Shi translated this 
conversation, which was predominantly in Chinese. Tr. 1384-85. Part 
of this included a woman explaining that there was a child in her 
family that had seizures and she wanted to help that child. Tr. 
1384. Dr. Shi explained that this person needed to send her the 
patient record, doctor's information, doctor's prescription, and the 
doctor's and hospital's registration so Dr. Shi could establish an 
account with her. Tr. 1385. Dr. Shi then obtained more information 
from a doctor in China. Tr. 1386. This document was then ``dumped'' 
to the Dropbox once this Order was done. Tr. 1385-86.
---------------------------------------------------------------------------

OakmontScript's Record-Keeping System <SUP>60</SUP>
---------------------------------------------------------------------------

    \60\ Dr. Shi noted that Government Exhibit 28, page 54, was 
misplaced and should actually be page 51 and with the other 
documents for invoice OKS-00715. Tr. 1391-92.
---------------------------------------------------------------------------

    OakmontScript keeps accurate and complete records for controlled 
substances in a database system so all records are readily retrievable 
as required by the DEA based on OakmontScript's SOP. Tr. 1248-49, 1250. 
These folders contain subfolders and capture any changes that are made 
to an order. Tr. 1249-50. Each file has a name with a label and a 
number and these numbers are then assigned to a specific team to 
complete that order. Tr. 1250-52. Dr. Shi also created a link that a 
party can access if she gives that person authority to open a file. Tr. 
1260. On the date of DI 3's March 29, 2019, inspection, Dr. Shi's 
printer had ink problems, so she wanted to be able to electronically 
download files and give access to DI 3, but DI 3 stated that she would 
only accept paper copies. Tr. 1260-61.
    OakmontScript maintains separate inventory records for Schedule II, 
III, IV, and V controlled substances. Tr. 1268. There are separate 
folders for Schedule II and then Schedules III through V, for the 
initial inventory, for the biennial inventory, for exports, and for the 
distributions. Tr. 1268-69.

Corrective Measures

    At the June 22, 2017 meeting, DI 1 told Dr. Shi there was an issue 
with OakmontScript's alarm system and OakmontScript then took steps to 
fix the alarm issue. Tr. 1313-14. DI 1 came back at some point to check 
the alarm. Tr. 1315-16. During DI 1's return visit to check the alarm, 
she also informed Dr. Shi that OakmontScript would need to get a 
different safe. Tr. 1316. In mid-September 2017, OakmontScript notified 
DI 1 that it was going to install a new safe. Tr. 1316-17. The new safe 
was installed in late September or early October 2017. Tr. 1317. At 
some point, DI 1 came back to OakmontScript to check the new safe and 
DI 1 stated that it ``was okay.'' Tr. 1317-18.
    In approximately November 2017, Dr. Shi recalls having a 
conversation with DI 1 regarding requesting excessive drug codes. Tr. 
1324-25. DI 1 walked Dr. Shi through how to delete the excess codes, 
and Dr. Shi deleted the codes. Tr. 1324-28.
    Dr. Shi did not review 21 CFR 1301.26 when shipping the diazepam 
invoice number 243 and clobazam invoice number 0019 overseas because it 
is ``a U.S. law'' and ``of course, I cannot base[ ] on that'' and if 
the DEA is able to provide ``such a law'' that shows this regulation is 
applied globally, she ``will be happy.'' Tr. 1365. Before a controlled 
substance leaves the United States, OakmontScript complies with United 
States law and then ``after border, [OakmontScript] comply[ ] whatever 
the law required upon'' OakmontScript by the recipient country. Tr. 
1366.

Alteration of Distributor Certificate of Registration

    Dr. Shi met the intern through the intern's grandmother who was 
also Dr. Shi's teacher. Tr. 1395. Around Christmastime of 2016, the 
intern started working for OakmontScript as Dr. Shi's intern. Tr. 1395. 
The intern altered OakmontScript's distributor Certificate of 
Registration by using Adobe Shop on her personal laptop. Tr. 1405-06. 
Once Dr. Shi learned that the intern had changed OakmontScript's 
registration to state it was a pharmacy, Dr. Shi immediately analyzed 
the situation, realized the intern made a mistake and was still only 
learning so it was ``not all her fault.'' Tr. 1397. See Gov't Ex. 14. 
Therefore, Dr. Shi did not fire the intern and instead moved her to a 
different position with OakmontScript making shipping labels, which is 
a ``more straightforward job.'' Tr. 1397.
    When Dr. Shi did business with other partners, including PBA and 
its staff, they would say they wanted OakmontScript to submit a 
pharmacy license. Tr. 1409. Dr. Shi believed that the intern made a 
change to the registration based on lack of experience. Tr. 1410-
11.\61\ Dr. Shi hoped to create an account with PBA so OakmontScript 
could purchase drugs from PBA. Tr. 1411-12. Dr. Shi believes that PBA

[[Page 21530]]

distributes to other distributors. Tr. 1412-13. Essentially, PBA told 
the intern that it needed some information about a pharmacy license 
associated with OakmontScript and the intern then used her laptop to 
edit the distributor registration to indicate it was a pharmacy 
registration, without specific instruction from an OakmontScript 
employee to do so. Tr. 1414-15.
---------------------------------------------------------------------------

    \61\ Dr. Shi mentioned that OakmontScript has an ``all-in-one 
license'' from the state. Tr. 1396-97; 1409; ALJ Ex. 26 at 3-4. It 
is unclear what Dr. Shi believes the effect of this ``all-in-one-
license'' is on its DEA registration. Regardless, it is clear that 
the intern altered OakmontScript's DEA distributor registration to 
state ``Pharmacy'' after B.W. indicated that PBA would only conduct 
business with pharmacies. Gov't Exs. 14, 55.
---------------------------------------------------------------------------

    The intern left OakmontScript in February 2018 for multiple 
reasons, including that her visa expired. Tr. 1398. Dr. Shi explained 
to DI 3 that she ``could have fired'' the intern, but thought this 
would be ``a little too much'' because it was only the intern's ``first 
week she ever entered the job.'' Tr. 1399-1400.
    Dr. Shi testified that it is a serious issue to falsify a DEA 
registration based on the consequences, but this issue did not get 
``somebody killed'' or cause ``some pandemic'' and the intern was 
allowed to bring her laptop and continue to access OakmontScript files 
after this issue, but was limited to the ``non-vendor'' part. Tr. 1417-
18. Furthermore, in her closing statement, Dr. Shi stated ``this is not 
a controlled-substance-related issue,'' yet the DEA ``continued to 
maintain their limited understanding about controlled substances.'' Tr. 
1496. Dr. Shi went on in her closing to state that OakmontScript ``did 
more than the minimum, we did 500 times more than what's required to 
address this incident.'' Tr. 1496.

Invoice OKS-00243 (Diazepam) <SUP>62</SUP>
---------------------------------------------------------------------------

    \62\ This invoice indicates that OakmontScript's address is 15 
New England Executive Park, which is the same as the 1500 District 
Avenue address, because after 2017, the District of Burlington was 
acquired and updated by a development company, National Development 
Corporation. Tr. 1393-94; Gov't Ex. 26 at 20.
---------------------------------------------------------------------------

    Two of the documents provided by OakmontScript indicate that 
diazepam was shipped on May 18, 2017. Tr. 1311-12; Gov't Exs. 17 at 3, 
18 at 3. Another document indicates that the diazepam was shipped on 
June 10, 2017. Tr. 1313; \63\ Gov't Ex. 12 at 14. Dr. Shi had indicated 
that OakmontScript had not exported controlled substances at the June 
22, 2017, meeting with DI 1, but both of these dates are prior to the 
meeting date with DI 1. Tr. 1313. Dr. Shi was not able to provide the 
date the diazepam was shipped because the USPS updated its online 
system sometime in 2017 and ``erased all the information'' during the 
upgrade. Tr. 1368-69.
---------------------------------------------------------------------------

    \63\ During Dr. Shi's response on cross-examination regarding 
the shipping date of this diazepam, the tribunal needed to interject 
and instruct Dr. Shi to ``[j]ust respond to the question please.'' 
Tr. 1312.
---------------------------------------------------------------------------

Invoice OKS-00650 (Lunesta)

    As it pertained to the Lunesta invoice, Dr. Shi testified that this 
transaction was an export and not a domestic distribution as claimed by 
the Government, because the address was the contact address for a 
company representative, Z.Y., who was taking this prescription to China 
and the company in China was the end-user. Tr. 1180-82, 1359. Dr. Shi 
had used ``common sense'' when sending this prescription because the 
representative of the company signed a contract with OakmontScript, the 
address was named on the PO contact,\64\ it gave OakmontScript its 
import permit, and it signed the end-user certification. Tr. 1182. An 
``end-user is the person who signed the end-user statement to give 
[OakmontScript] a certificate.'' Tr. 1183.
---------------------------------------------------------------------------

    \64\ It is unclear what Dr. Shi meant by ``PO contact.''
---------------------------------------------------------------------------

    Dr. Shi noted this was an ``informal channel'' and ``since this 
incident and since DI 3 have point this out, [OakmontScript] no longer 
accept[s] informal channel of delivery for any order.'' Tr. 1182, 1183.

Subpoena Served on May 8, 2019 <SUP>65</SUP>
---------------------------------------------------------------------------

    \65\ The subpoena was admitted as Government Exhibit 24.
---------------------------------------------------------------------------

    Dr. Shi acknowledged that dates entered on OakmontScript's shipping 
labels are not actual shipping dates. Tr. 1342-43. Dr. Shi noted that 
``[w]e have, we have of course, we have the date, we have all the 
records.'' Tr. 1344. After receiving the May 8, 2019 subpoena, Dr. Shi 
did not provide the specific information of the shipping date because 
it was ``not required. [DI 3] didn't, she didn't ask for it'' and DI 3 
was ``so confused about what is the shipping date, she don't know what 
to ask.'' Tr. 1343-46. Furthermore, there is ``no such things as the 
export date . . . [the regulations] do not require the export date to 
be recorded. That's, that's actually pity . . . wrong information to 
ask.'' Tr. 1347. However, Dr. Shi provided export dates when DI 3 asked 
for them. Tr. 1347-48; Gov't Ex. 20 at 9.

Invoice OKS-00301 (Briviact)

    Briviact was shipped on August 2, 2017. Tr. 1314; Gov't Exs. 12 at 
7, 27 at 2.

Invoice OKS-00315-1 (Belviq)

    OakmontScript shipped Belviq on November 1, 2017, based on the 
shipping label. Tr. 1318-19; Gov't Exs. 12 at 3, 27 at 2. However, the 
shipping label is an estimated time. Tr. 1319.

Invoice OKS-00315-2 (Lyrica)

    Documentation provided by OakmontScript indicates that Lyrica was 
shipped on November 20, 2017. Tr. 1328-35; \66\ Gov't Ex. 12 at 9-
10.\67\ However, other documentation provided by OakmontScript 
indicated that the Lyrica was shipped a day later, on November 21, 
2017. Tr. 1339; Gov't Ex. 27 at 2. Dr. Shi does not know which document 
is incorrect and claims that regardless, it is ``one days apart. This 
is not like somebody get killed or something.'' Tr. 1340. Dr. Shi went 
on to say ``I know it's mistake. It's 20 or 21st.'' Tr. 1340. Moments 
later, Dr. Shi stated ``I can say both [dates] are correct, or I mean, 
both are incorrect . . . I also can say both are right. Because that's 
just the date.'' Tr. 1341. Dr. Shi stated OakmontScript did the best it 
could when entering these dates into the spreadsheets. Tr. 1341. 
OakmontScript has the exact date because in ``the record, we have every 
app, the people coming to pick up. And then, all those too.'' Tr. 1342. 
Regarding dates that OakmontScript's products were provided to the 
common carrier, Dr. Shi stated ``[w]e have the record. But I didn't 
give it to DI 3'' and ``whatever cannot be exact, I cannot provide to 
her because that complicated her understanding.'' Tr. 1349-50.
---------------------------------------------------------------------------

    \66\ Again, Government counsel made several attempts to get Dr. 
Shi to answer a specific question, in this instance, how Dr. Shi's 
employees would have filled out documents. Tr. 1331. And again, the 
tribunal interjected and instructed Dr. Shi to answer the 
``straightforward question'' posed by Government counsel. Tr. 1331. 
The tribunal needed to interject again during this cross-examination 
regarding the Lyrica and instructed Dr. Shi that she needed ``to 
answer the question'' and to ``[l]isten carefully to the question.'' 
Tr. 1334.
    \67\ Dr. Shi was evasive in testifying that the ``ship to date'' 
was indeed the date the Lyrica was shipped. Dr. Shi continued to 
claim that there were several steps in the export process and this 
was likely the date the shipping label was created and this Lyrica 
would have been shipped ``approximately around'' November 20, 2017. 
Tr. 1338-39.
---------------------------------------------------------------------------

Invoice OKS-00108 (Belviq)

    Some documentation indicates that the Belviq was shipped on 
December 1, 2017. Tr. 1351; Gov't Exs. 12 at 3, 27 at 2.

Invoices DIW-0019 and NEEC-0019 (Clobazam)

    Patient J.L.'s family came into contact with Dr. Yu, who learned 
about Patient J.L.'s situation while doing community service at Boston 
Children's Hospital. Tr. 1195. When the family returned to China, they 
wanted to continue the therapy and they supplied

[[Page 21531]]

OakmontScript with the hospital discharge paper, the prescription from 
China, and the prescription from the United States. Tr. 1194-96.
    As the founder and President of OakmontScript, Dr. Shi has the most 
at stake in this case involving the potential revocation of 
OakmontScript's CORs. Throughout her testimony, she was often evasive 
in answering the questions posed by opposing counsel to the point where 
Government counsel had to repeat questions multiple times and the 
tribunal even needed to intervene multiple times to instruct Dr. Shi to 
answer direct questions posed by the Government.\68\ By her own 
admission, Dr. Shi purposely withheld documents that OakmontScript had 
in its possession and were requested in not one, but two administrative 
subpoenas that were served on OakmontScript. During her testimony, she 
condoned these actions and even when confronted with documents that 
provided conflicting export dates, she continued to be evasive and 
refused to admit there were errors. I therefore cannot make a wholly 
positive credibility finding with respect to Dr. Shi's testimony.
---------------------------------------------------------------------------

    \68\ See supra at 36 n.52, 37 n.55, 40 n.57, 44 n.63, 45 n.66, 
45 n.67.
---------------------------------------------------------------------------

Analysis

    The Government seeks revocation of the Respondent's distributor and 
exporter CORs based on its contention that the Respondent, through its 
employees, has committed acts that would render its registration 
inconsistent with the public interest as that term is defined in 21 
U.S.C. 823(b), (d), and (e), 824(a), and/or 958. ALJ Ex. 1 at 1. The 
Government alleges that the Respondent's CORs should be revoked because 
it exported controlled substances prior to obtaining its exporter COR, 
exported controlled substances it was not approved to export, 
demonstrated a lack of candor to DEA investigators regarding its 
business activities, falsified a copy of its DEA distributor COR, 
distributed controlled substances to a non-DEA registered individual, 
exported controlled substances to fill prescriptions for underage 
patients, and commingled the records for its two registrations and 
otherwise failed to keep complete and accurate records.
    Although the burden of proof at this administrative hearing is a 
preponderance-of-the-evidence standard, see Steadman v. SEC, 450 U.S. 
91, 100-01 (1981), the Acting Administrator's factual findings will be 
sustained on review to the extent they are supported by ``substantial 
evidence.'' Hoxie v. DEA, 419 F.3d 477, 481 (6th Cir. 2005). [Omitted 
for brevity.] While ``the possibility of drawing two inconsistent 
conclusions from the evidence'' does not limit the Acting 
Administrator's ability to find facts on either side of the contested 
issues in the case, Trawick v. DEA, 861 F.2d 72, 77 (4th Cir. 1988), 
all ``important aspect[s] of the problem,'' such as a respondent's 
defense or explanation that runs counter to the Government's evidence, 
must be considered. Wedgewood Vill. Pharmacy v. DEA, 509 F.3d 541, 549 
(D.C. Cir. 2007).
    [Omitted for brevity.] It is well-settled that since the 
Administrative Law Judge has had the opportunity to observe the 
demeanor and conduct of hearing witnesses, the factual findings set 
forth in this Recommended Decision are entitled to significant 
deference, see Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 
(1951), and that this Recommended Decision constitutes an important 
part of the record that must be considered in the Acting 
Administrator's decision, see Morall, 412 F.3d at 179. However, any 
recommendations set forth herein regarding the exercise of discretion 
are by no means binding on the Acting Administrator and do not limit 
the exercise of that discretion. 5 U.S.C. 557(b); River Forest 
Pharmacy, Inc. v. DEA, 501 F.2d 1202, 1206 (7th Cir. 1974); Attorney 
General's Manual on the Administrative Procedure Act 8 (1947).

Public Interest Determination: The Standard

    The Government seeks revocation of the Respondent's DEA CORs based 
on its allegations that continuation would be inconsistent with the 
public interest as that term is defined in 21 U.S.C. 823(b), (d), and 
(e). The CSA provides that the Agency may suspend or revoke a 
registrant's COR ``upon a finding that the registrant . . . has 
committed such acts as would render [its] registration under section 
823 . . . inconsistent with the public interest.'' 21 U.S.C. 824(a)(4). 
The Government specifically alleged that the Respondent violated the 
law regarding its distributor registration by: (1) Falsifying its 
distributor registration, (2) displaying a lack of candor regarding 
this falsified registration, (3) domestically distributing Lunesta, a 
controlled substance, to a non-registrant in May 2018, and (4) 
commingling records. The Government further alleges that the Respondent 
violated the law regarding its exporter registration by: (1) Exporting 
controlled substances prior to obtaining its exporter COR, (2) 
exporting controlled substances it was not approved to export, (3) 
exporting controlled substances to fill foreign prescriptions for 
underage patients, and (4) failing to keep complete and accurate 
records of controlled substances it had exported.
    The Government bears the burden of proving that the Respondent's 
continued registration would be inconsistent with the public interest. 
21 CFR 1301.44(e). Where the Government has met its burden by making a 
prima facie case for revocation (or some other sanction), the burden of 
production then shifts to the registrant to show that, given the 
totality of the facts and circumstances in the record, revocation (or 
any other sanction) would not be appropriate. Southwood Pharm., Inc., 
72 FR 36487, 36498, 36504 (2007) (citing Gregory D. Owens, D.D.S., 67 
FR 50461, 50464 (2002)).
    Any additional facts necessary for a disposition of this case are 
set forth in the balance of this Recommended Decision.

Distributor Registration

    As to its distributor COR, the Government alleges that the 
Respondent violated the CSA and its implementing regulations by: (1) 
Altering its distributor registration to state that it was a pharmacy 
and then representing to another DEA registrant that it was a pharmacy 
by presenting the altered DEA COR, (2) displaying a lack of candor 
regarding this falsified registration, (3) domestically distributing 
Lunesta (eszopiclone, a schedule IV controlled substance) to a non-
registrant in May 2018, and (4) commingling its distributor records 
with records pertaining to its exporter registration. The Government 
seeks the revocation of the Respondent's distributor COR based on its 
allegations that the Respondent's continued registration would be 
inconsistent with the public interest as that term is defined in 21 
U.S.C. 823(b) and (e).
    The CSA provides that ``[a] registration . . . to manufacture, 
distribute, or dispense a controlled substance or a list I chemical may 
be suspended or revoked by the Attorney General upon a finding that the 
registrant . . . has committed such acts as would render [its] 
registration under section 823 . . . inconsistent with the public 
interest as determined under such section.'' 21 U.S.C. 824(a)(4).
    Congress has provided the following factors to be considered in the 
public interest analysis as it relates to

[[Page 21532]]

distributors of controlled substances, as set forth in 21 U.S.C. 823(b) 
and (e): \69\
---------------------------------------------------------------------------

    \69\ Subsection (b) applies to distributors of controlled 
substances in schedule I or II and subsection (e) applies to 
distributors of controlled substances in schedule III, IV, or V.

    (1) Maintenance of effective control(s) \70\ against diversion 
of particular controlled substances into other than legitimate 
medical, scientific, and industrial channels;
---------------------------------------------------------------------------

    \70\ 21 U.S.C. 823(b) uses the term ``control,'' whereas 21 
U.S.C. 823(e) uses the term ``controls.'' The origin of the variance 
appears typographical, not substantive. The text of subsections (b) 
and (e) is otherwise identical.
---------------------------------------------------------------------------

    (2) compliance with applicable State and local law;
    (3) prior conviction record of [the registrant] under Federal or 
State laws relating to the manufacture, distribution, or dispensing 
of such substances;
    (4) past experience in the distribution of controlled 
substances; and
    (5) such other factors as may be relevant to and consistent with 
the public health and safety.

    21 U.S.C. 823(b), (e). The factors are considered in the 
disjunctive, and the Agency may give each factor the weight it deems 
appropriate in determining whether to revoke a registrant's 
registration. Masters Pharm., Inc., 80 FR 55418, 55472-73 (2015) 
(citing Green Acre Farms, Inc., 72 FR 24607, 24608 (2007); ALRA Labs., 
Inc., 59 FR 50620, 50621 (1994)). Moreover, the Agency is ``not 
required to make findings as to all of the factors.'' Masters Pharm., 
Inc., 80 FR at 55473 (quoting Hoxie, 419 F.3d at 482).

Factor One: Maintenance of Effective Controls Against Diversion of 
Particular Controlled Substances Into Other Than Legitimate Medical, 
Scientific, and Industrial Channels

    Evidence properly considered under Factor One of the public 
interest analysis for a distributor registrant includes the adequacy of 
the registrant's recordkeeping. CBS Wholesale Distrib., 74 FR 36746, 
36749 (2009) (citing Holloway Distrib., Inc., 72 FR 42118, 42123 
(2007); Rick's Picks, L.L.C., 72 FR 18275, 18278 (2007); John J. 
Fotinopoulos, 72 FR 24602, 24605 (2007)). Although the Government 
failed to allege a specific public interest factor for this allegation, 
I find that the commingling of records allegation should be analyzed 
under Factor One.
    21 CFR 1304.21(c) requires that ``[s]eparate records shall be 
maintained by a registrant for each independent activity and collection 
activity for which he/she is registered or authorized, except as 
provided in Sec.  1304.22(d).'' Therefore, as OakmontScript possesses 
both an exporter and distributor registration, it must maintain 
separate records for each registration. 21 CFR 1304.21(c). 
``Recordkeeping, reporting and security requirements are also more 
rigorous for those who manufacture and distribute controlled 
substances.'' Wedgewood Vill. Pharmacy, 71 FR 16593, 16594 (2006).
    On September 16, 2016, DI 1 conducted an on-site inspection of 
OakmontScript with a Senior Investigator with the Massachusetts 
Department of Health regarding OakmontScript's distributor 
registration. Tr. 44-45. At this time, DI 1 instructed Dr. Shi that 
OakmontScript needed to ensure it did not commingle records from its 
distributor registration with any future exporter registration. Tr. 51.
    On July 26, 2018, a second DI, DI 2, conducted an inspection of 
OakmontScript's distributor registration and noted that OakmontScript 
was commingling records by keeping some of its distributor records with 
its exporter records. Tr. 129-33, 135-36. After she identified this 
issue, she discussed it with Dr. Shi, who indicated that she understood 
and stated that OakmontScript would not commingle records in the 
future. Tr. 133. DI 2 did not ``believe [Dr. Shi] knew about the 
commingling but once corrected, she understood.'' Tr. 133.
    A third DI, DI 3 noted that there were issues with recordkeeping as 
OakmontScript had commingled records. Tr. 739. For instance, 
OakmontScript was keeping inventories for both its distributor 
registration and its exporter registration on the same document and it 
was difficult for DI 3 to discern under which registration each 
transaction had occurred. Tr. 743-48, 782; Gov't Ex. 12. DI 3 
specifically noted that it was difficult to discern if the Lunesta 
invoice OKS-00650 was a distribution or export as the spreadsheet 
provided by OakmontScript had both CORs listed on the spreadsheet. Tr. 
746-47; Gov't Ex. 12 at 17.
    As discussed, prior to DI 3's most recent inspections, 
OakmontScript had been told by two DI investigators that it needed to 
maintain separate inventories for its distributor and exporter 
registrations. Tr. 51, 131-36. Despite this, when DI 3 performed her 
initial inspection on March 29, 2019, the only records OakmontScript 
provided for the biennial inventory included commingled records that 
contained information for both its distributor and exporter 
registrations. Tr. 351, 739, 744-49; Gov't Ex. 12. In fact, DI 3 was 
only able to discern invoice OKS-00243 was an export after reviewing 
the license transfer document for this export. Tr. 747-48; Gov't Ex. 26 
at 21. However, another spreadsheet provided for this export at the 
March 29, 2019, inspection did not indicate this was an export or that 
the diazepam had been transferred from OakmontScript's distributor 
license to its exporter license. Tr. 747; Gov't Ex. 12 at 14.
    I therefore find that OakmontScript commingled records that were 
provided to DI 3 at the March 29, 2019 inspection, after being put on 
notice of this not once, but twice. This commingling of OakmontScript's 
distributor and exporter records makes it difficult, if not at times 
impossible, to discern whether a particular controlled substance was 
distributed or exported.\71\
---------------------------------------------------------------------------

    \71\ Although it appears that OakmontScript attempted to rectify 
this issue, any attempts to do so were made after the March 29, 2019 
inspection. See Gov't Ex. 28 at 83-97 (several of these inventory 
forms indicate that the forms were recreated on April 25, 2019). Dr. 
Shi provided these documents to DI 3 via email on May 10, 2019. Tr. 
781. See Gov't Ex. 28.
---------------------------------------------------------------------------

    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegation 21.b is sustained. [Based 
on Respondent's failure to maintain complete, accurate, and separate 
records, in accordance with federal law, I find that Factor One weighs 
against Respondent.]

Factor Five: Such Other Factors as May Be Relevant to and Consistent 
With the Public Health and Safety

    The Government has alleged that Factor Five is relevant to the 
public interest analysis regarding the Respondent's distributor COR. 
ALJ Ex. 1 at 4, 5 ] 13.\72\ Although the Government failed to explain 
under which factor the lack of candor allegation falls, the tribunal 
finds that the allegations regarding the Respondent's lack of candor 
fall squarely within the purview of Factor Five. See John V. Scalera, 
78 FR 12092, 12093, 12100 (2013) (considering under Factor Five, the 
respondent's lack of candor based on lies made to DEA investigators and 
false testimony under oath at the hearing). Further, the DEA has 
consistently held that ``[c]andor during DEA investigations, regardless 
of the severity of the violations alleged, is considered by the DEA to 
be an important factor when assessing whether a . . . registration is 
consistent with the public interest'' and that a registrant's ``lack of 
candor and failure to take responsibility for his [or her] past legal 
troubles . . . provide substantial evidence that his

[[Page 21533]]

registration is inconsistent with the public interest.'' Jeri Hassman, 
M.D., 75 FR 8194, 8236 (2010) (quoting Hoxie, 419 F.3d at 483); see 
also Mark P. Koch, D.O., 79 FR 18714, 18736 (2014) (assessing the 
respondent's candor); Ronald Lynch, M.D., 75 FR 78745, 78754 (2010) 
(same); Prince George Daniels, D.D.S., 60 FR 62884, 62887 (1995) 
(same).
---------------------------------------------------------------------------

    \72\ The Government alleged that Factor Five applied to the 
Respondent's violation of 21 U.S.C. 843(a)(3), but did not provide 
its reasoning as to why this violation should be reviewed under 
Factor Five. ALJ Ex. 1 at 4-5 ] 13.
---------------------------------------------------------------------------

    A lack of candor may properly be considered by the DEA as something 
that threatens public health and safety. Annicol Marrocco, M.D., 80 FR 
28695, 28705 (2015). ``Because of the authority conveyed by a 
registration and the extraordinary potential for harm caused by those 
who misuse their registrations, DEA places significant weight on an 
applicant/registrant's candor in the proceeding.'' Alan H. Olefsky, 
M.D., 76 FR 20025, 20031 (2011). A registrant's dishonesty under oath 
downplays the registrant's acceptance of responsibility and shows that 
the registrant ``cannot be entrusted with a registration.'' Rose Mary 
Jacinta Lewis, M.D., 72 FR 4035, 4042 (2007). The degree of candor 
displayed by a registrant during a hearing is ``an important factor to 
be considered in determining . . . whether [the registrant] has 
accepted responsibility'' and in formulating an appropriate sanction. 
Hills Pharmacy, LLC, 81 FR 49815, 49845 (2016) (citing Michael S. 
Moore, 76 FR 45867, 45868 (2011)).
    Additionally, the Respondent's falsification of its COR should be 
considered under Factor Five. For example, in another case where the 
registrant was put on notice that her registration was being improperly 
used to order controlled substances, her failure to take prompt and 
reasonable action to investigate the misuse constituted additional 
conduct that threatened public health and safety. Lewis, 72 FR at 4041-
42 (citing 21 CFR 1301.71(a)). Further, DEA can consider under Factor 
Five evidence that a registrant was aware that his DEA registration was 
being improperly used and took no action to stop its improper use. 
Kevin Dennis, M.D., 78 FR 52787, 52800 (2013). Even if the ``Respondent 
did not obtain possession of the controlled substances . . . misconduct 
can still be actionable as an attempt to obtain controlled substances 
by fraud or misrepresentation.'' Jana Marjenhoff, D.O., 80 FR 29067, 
29068, 29069. See 21 U.S.C. 843(a)(3), 846.
    Finally, the Respondent's domestic distribution of Lunesta to a 
non-registrant should be considered under Factor Five. In a similar 
situation, a previous Acting Administrator examined a pharmacy's 
distribution of a controlled substance to a non-registered location 
under Factor Four of 21 U.S.C. 823(f). Sewanee Pharmacy, 55 FR 29279, 
29281 (1990). Section 823(f)(4), defines Factor Four as ``[c]ompliance 
with applicable State, Federal, or local laws relating to controlled 
substances'' and roughly corresponds with section 823(e) Factor Two, 
except that section 823(e)(2) omits ``Federal'' and only includes 
``compliance with applicable State and local law.'' As distribution of 
a controlled substance to a non-registered location is a violation of 
Federal law, it does not fit within the parameters of Factor Two. Nor 
does it fit within the definitions of Factors One, Three, or Four of 
section 823(e). Thus, it is properly considered under Factor Five. See 
Perry County Food & Drug, 80 FR 70083, 70112 (2015) (where DEA applied 
the analogous Factor Five ``such other conduct'' in the context of a 
pharmacy registrant where the violations at issue were ``not covered by 
application of the other four public interest factors.'').

Falsified Registration Certificate

    The Government alleges that the Respondent violated 21 U.S.C. 
843(a)(3), which states that ``[i]t shall be unlawful for any person 
knowingly or intentionally . . . to acquire or obtain possession of a 
controlled substance by misrepresentation, fraud, forgery, deception, 
or subterfuge.'' 21 U.S.C. 843(a)(3). The Government alleges that the 
Respondent violated 21 U.S.C. 846 which states, ``[a]ny person who 
attempts or conspires to commit any offense defined in this subchapter 
shall be subject to the same penalties as those prescribed for the 
offense, the commission of which was the object of the attempt or 
conspiracy.'' The Government alleges that OakmontScript violated these 
statutes and that such conduct constitutes conduct that is inconsistent 
with the public health and safety, in violation of 21 U.S.C. 823(b)(5) 
and (e)(5).\73\ ALJ Ex. 1 at 4-5 ] 13.
---------------------------------------------------------------------------

    \73\ Although the Government failed to provide why the Factor 
Five, ``catch-all'' provision applies in this instance, I agree that 
this allegation would fall under a Factor Five Analysis as the 
Respondent has violated Federal law.
---------------------------------------------------------------------------

    Dr. Shi met the intern through the intern's grandmother, who was 
also Dr. Shi's former teacher. Tr. 1395. The intern started working for 
OakmontScript as Dr. Shi's intern in January 2017 and her 
responsibilities included establishing relationships with 
OakmontScript's competitors to determine how they conduct business. Tr. 
293-94, 1395. Dr. Shi hoped to create an account with PBA so 
OakmontScript could purchase drugs from PBA. Tr. 1411-12. Dr. Shi told 
the intern to ``do whatever is needed'' and to ``[g]ive [PBA], 
basically, whatever they want in order to establish this . . . client 
relationship with them.'' Tr. 303. When Dr. Shi conducted business with 
companies, including PBA, these companies would sometimes request 
OakmontScript to submit a copy of a pharmacy license as some 
distributors will only work with pharmacies. Tr. 275, 1409. Dr. Shi was 
``too busy'' to help the intern so she told the intern to ask Mr. L.U. 
what letter to send to PBA. Tr. 1414.
    After PBA requested that OakmontScript submit a pharmacy 
registration, the intern altered OakmontScript's distributor COR No. 
RO0504680 by using Adobe Shop on her personal laptop. Tr. 1405-06; 
Gov't Ex. 14. Without being told to do so, she modified the business 
activity of the distributor registration to indicate it was a pharmacy 
registration. Tr. 1414-15. Even though Dr. Shi was ``on the email chain 
being cc'ed'' regarding this application to PBA, she testified that she 
did not notice the altered registration document which was an 
attachment. Tr. 1415. During the tribunal's questioning of Dr. Shi, Dr. 
Shi agreed that the intern had changed the business activity from 
``distributor'' to ``pharmacy'' and this altered registration was sent 
to PBA in order to open an account with PBA. Tr. 1396.
    While DI 3 was reviewing OakmontScript's case files, she discovered 
a report filed by the Kansas City District Office of the DEA, naming 
OakmontScript as fraudulently creating a DEA registration. Tr. 275. PBA 
holds its own DEA registration and DI 3 spoke to one of PBA's 
Regulatory Compliance Team Leaders, B.W., via email correspondence that 
noted PBA ``only sell[s] to pharmacies'' and it does not ``sell to 
other distributors.'' Tr. 275-78; Gov't Ex. 55. PBA also requires 
potential customers to send a copy of their State pharmacy licenses and 
a copy of their DEA registrations when they submit their account 
application. Tr. 278; Gov't Ex. 55. B.W. further noted that 
OakmontScript sent PBA a DEA registration indicating it was a pharmacy 
and after PBA performed its due diligence, PBA discovered that the 
document had been altered. Tr. 278; Gov't Ex. 55. PBA reported 
OakmontScript and denied OakmontScript's request to open an account. 
Tr. 278; Gov't Ex. 55.
    On April 23, 2019, DI 3 and Dr. Shi discussed this issue on the 
phone. Tr. 293. DI 3 learned that after PBA initially refused to 
establish a relationship with OakmontScript, the intern altered the

[[Page 21534]]

DEA registration to list OakmontScript as a pharmacy. Tr. 294; Gov't 
Ex. 14. During this phone call, Dr. Shi indicated that she ``could have 
fired'' the intern, but thought this would be ``a little bit too much'' 
because it was only the intnern's ``first week she ever entered the 
job.'' Tr. 1399-1400. In an email that Dr. Shi sent to DI 3 on April 
24, 2019, Dr. Shi indicated that the intern's employment dates were 
January 1, 2017 to February 2018 and that the intern had moved back to 
China. Tr. 297; Gov't Ex. 20 at 13. Dr. Shi also texted information 
regarding this incident to DI 3 in May 2019 and she said if the 
incident regarding the falsified registration ``constitutes any 
offensive sort, `I' should take responsibility. If any actions taken 
toward, please address to me directly.'' Tr. 300-01; Gov't Ex. 29 at 3. 
OakmontScript ``does not contest that this incident occurred'' and, in 
fact, the parties have stipulated to the basic facts. ALJ Ex. 26 at 2; 
ALJ Ex. 7 at 3, Stipulation 10.
    It was DI 3's understanding from the April 23, 2019, phone call 
that the intern had been fired. Tr. 294-95. Therefore, when on the 
following day DI 3 received the email from Dr. Shi that the intern had 
indeed not been fired for falsifying the registration, she 
understandably viewed her phone conversation with Dr. Shi on April 23 
and the email from Dr. Shi on April 24 to be in ``direct conflict.'' 
Tr. 297-98.
    Because Dr. Shi had ties with the intern's family, she felt 
pressure to keep the intern employed. Tr. 302. The intern left 
OakmontScript in February 2018 for multiple reasons, including that her 
visa expired. Tr. 1398. DI 3 was never able to contact the intern to 
discuss the registration falsification incident with her. Tr. 304.
    As the Government noted in its post-hearing brief, although 
OakmontScript was not able to establish a customer relationship with 
PBA and therefore was unable to purchase any controlled substances, 
``had [OakmontScript] been successful'' in opening an account, (ALJ Ex. 
27 at 17), ``OakmontScript [would] have had the capacity to order 
controlled substances'' from PBA. Tr. 304. In its post-hearing brief, 
the Respondent asserts that ``[t]his concern . . . is misplaced'' 
because OakmontScript has established ``multiple accounts with other 
trading partners'' and ``in its five years of operation, never suffered 
any losses, theft, inventory discrepancies, or other incidents relating 
to controlled substances'' and therefore OakmontScript ``has proven 
itself to be a trustworthy DEA registrant and true to its professional 
obligations.'' ALJ Ex. 26 at 2-3. To the contrary, OakmontScript's 
falsification of a DEA registration displays the antithesis of 
trustworthiness. As DI 3 testified, ``DEA registrants hold a public 
trust position'' and because controlled substances that are used 
improperly can be dangerous, ``DEA registrants have to be licensed and 
registered with the proper authorities.'' Tr. 305. See 21 U.S.C. 
822(a).
    Furthermore, the fact that the ``Respondent did not obtain 
possession of [any] controlled substances'' is irrelevant and her 
misconduct is still ``actionable as an attempt to obtain controlled 
substances by fraud or deception.'' Marjenhoff, 80 FR at 29069.
    As both parties stipulated to the registration being falsified, and 
based on Dr. Shi's own admission that she was aware that the intern had 
altered OakmontScript's distributor registration to reflect that it was 
a pharmacy, it is uncontroverted that OakmontScript falsified a copy of 
its DEA registration. I therefore find that the intern working for 
OakmontScript, altered OakmontScript's distributor COR by using a 
computer program to change the registration so that the word 
``Distributor'' was replaced with ``Pharmacy'' under the ``Business 
Activity'' section of the registration. I further find that this 
registration was altered in an attempt for OakmontScript to establish a 
relationship with PBA to ultimately obtain controlled substances from 
PBA, which is in violation of Federal law, specifically 21 U.S.C. 846.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties,\74\ [I find that Respondent's submission 
of a falsified registration to PBA represented an attempt to obtain 
controlled substances outside of the CSA's closed regulatory system, 
and as such, is conduct that is not ``consistent with the public health 
and safety'' under Factor Five.] *\F\
---------------------------------------------------------------------------

    \74\ See Stips. 10 and 11.
    *\F\ I agree with the ALJ that there was evidence on the record 
to support the conclusion that Respondent violated 21 U.S.C. 846 by 
attempting to establish a relationship with PBA in order to obtain 
controlled substances by fraud. However, because there is 
considerable other evidence on the record that demonstrates that 
Respondent's registration is inconsistent with the public interest, 
I do not find that it is necessary for me to determine whether 
Respondent has violated 21 U.S.C. 846. I may consider this conduct 
under Factor Five without finding a violation of this statute.
---------------------------------------------------------------------------

Lack of Candor

    The Government alleges that Dr. Shi exhibited a lack of candor as 
it relates to this allegation. When Dr. Shi learned that the intern had 
altered OakmontScript's registration to list its business activity as a 
pharmacy, Dr. Shi ``analyzed the situation.'' Tr. 1397. Dr. Shi 
believed that the intern made this error because she was ``a new 
intern'' and due to her ``lack of experience.'' Tr. 1410-11. Because 
this was ``not all her fault,'' Dr. Shi did not fire the intern and 
instead ``changed her to a different position'' and moved her to a 
``more straightforward job.'' Tr. 1397.
    During her testimony, DI 3 indicated that during the April 23, 
2019, phone call Dr. Shi had informed her that she had fired the 
intern, but DI 3 later learned that the intern remained employed at 
OakmontScript for an additional thirteen months after this incident. 
ALJ Ex. 1 at 5 ] 14; Tr. 297-98, 307, 788. Dr. Shi sent an email the 
next day, on April 24, 2021, to DI 3 indicating that the intern was 
employed from January 1, 2017 through February 2018 and left the United 
States because her work visa expired. Tr. 297.
    Based on the testimony of the parties, I do not find that Dr. Shi 
exhibited a lack of candor. I do not find that DI 3 was being 
disingenuous regarding her testimony that ``it was [her] understanding 
that [the intern] had been fired due to the fraudulent DEA 
registration'' in January 2017 and that she had been ``led . . . to 
believe that [the intern] had been fired'' based on this incident. Tr. 
295, 297-98, 793. Rather, I find that it is more likely there was a 
miscommunication between DI 3 and Dr. Shi as opposed to a lack of 
candor.
    As discussed supra, only one day after DI 3's and Dr. Shi's phone 
conversation regarding this incident, Dr. Shi sent an email to DI 3 
responding to DI 3's request for more information regarding the intern 
and stating that the intern was employed until February 2018, when her 
visa expired. It does not make sense that Dr. Shi would claim to have 
fired the intern, and the very next day, put in writing that she 
continued the intern's employment for over another year, until the 
intern's visa expired. Moreover, DI 3's email does not reference any 
conversation she had with Dr. Shi from the previous day that the intern 
was fired. Dr. Shi was consistent in her testimony regarding this 
allegation and admitted she may have stated that she ``could have 
fired'' the intern while speaking with DI 3. Tr. 1399. Dr. Shi was also 
adamant and consistent in her testimony that the intern had ``made that 
mistake'' and instead of firing the intern, which Dr. Shi believed 
would be ``a little bit too much,'' she was using this as a ``training 
opportunity'' and despite this being a ``huge risk,'' Dr. Shi kept the 
intern as a staff member and instead moved her

[[Page 21535]]

to a different part of OakmontScript. Tr. 1397, 1400-01. Based on these 
circumstances, I do not find a lack of candor by Dr. Shi regarding 
statements she made about how the intern's employment with 
OakmontScript came to an end.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegation 14 is not sustained to the 
extent that Dr. Shi exhibited a lack of candor in her statements made 
to DI 3 on April 23, 2019.*\G\
---------------------------------------------------------------------------

    *\G\ The ALJ stated that OSC Allegation 14 was ``SUSTAINED IN 
PART to the extent that Dr. Shi maintained the intern's employment 
for an additional thirteen months after the falsification occurred 
and the intern left OakmontScript because her work visa expired, 
rather than being fired.'' RD, at 58. However, it is unclear what 
allegation the ALJ is sustaining. Paragraph 14 of the OSC alleges 
that Respondent exhibited a lack of candor during the investigation 
by initially indicating that the intern was fired. The ALJ found 
that there was no lack of candor related to this charge. Based on 
the ALJ's interpretation of the evidence and testimony, I do not 
find any additional allegations in paragraph 14 to sustain.
---------------------------------------------------------------------------

Distribution of a Controlled Substance to a Non-Registrant 
<SUP>75</SUP>
---------------------------------------------------------------------------

    \75\ Although the Government failed to allege a specific public 
interest factor, I find that this best fits under Factor Five as it 
is a violation of Federal law.
---------------------------------------------------------------------------

    The CSA's general criminal provision is contained in 21 U.S.C. 
841(a), and in relevant part states: ``Except as authorized by this 
subchapter, it shall be unlawful for any person knowingly or 
intentionally . . . (1) to manufacture, distribute, or dispense, or 
possess with intent to manufacture, distribute, or dispense, a 
controlled substance . . . .'' 21 U.S.C. 841(a)(1). ``Congress devised 
a closed regulatory system making it unlawful to manufacture, 
distribute, dispense, or possess any controlled substance except in a 
manner authorized by the CSA'' to prevent abuse and diversion of 
controlled substances. Gonzales v. Raich, 545 U.S. 1, 13 (2005). A 
vital component of the CSA's closed regulatory system requires that any 
person who handles controlled substances must obtain a registration 
from the DEA. Wedgewood Vill. Pharmacy, 71 FR at 16594 (citing 21 
U.S.C. 822).
    ``Distribute'' is defined as ``to deliver (other than by 
administering or dispensing) a controlled substance or a listed 
chemical.'' 21 U.S.C. 802(11). ``The term `distributor' means a person 
who so delivers a controlled substance or a listed chemical.'' 21 
U.S.C. 802(11). A distributor can only distribute to another DEA 
registrant who holds the appropriate authority to handle that 
controlled substance. 21 U.S.C. 822(a). A distributor is not permitted 
to distribute controlled substances to an ultimate user and there is no 
coincidental activity that permits a distributor to provide controlled 
substances to non-DEA individuals or persons or companies. See 21 CFR 
1301.13(e)(1) (distributing to a non-registered person is not listed as 
a coincident activity).
    Although OakmontScript's records have inconsistent information 
regarding the Lunesta invoice OKS-00650 shipment, I find that the most 
likely scenario is that OakmontScript received Lunesta in May 2018 and 
shipped the Lunesta to Mr. Z.Y. at an address in the United States of 
[omitted for privacy], Kearny, New Jersey [ ] in May 2018. Tr. 499-535, 
1455; Gov't Exs. 12 at 17, 17 at 3, 18 at 3, 22 at 10-11.
    Dr. Shi also indicated the following in an email dated April 30, 
2021:

    Lunesta was shipped on May 21, 2018 to Mr. [Z.Y.] at his USA 
address. Mr. [Z.Y.] is an executive member of the company. At the 
time of this purchase request, he still in US division while he was 
planning to move to China Disha Pharmaceutical group. The shipping 
logistics was arranged such: OakmontScript shipped his US address, 
and then his China Disha Pharma carried out the rest of shipping 
from NJ to China. Disha pharma is a manufacturer, they are not 
required to have DEA license, and they are the end user.

    Lunesta is not controlled drug in China.
    Mr. [Z.Y.] now in China Disha Pharma Group, as a director.
    Gov't Ex. 22 at 10 (emphasis in original).
    After reviewing OakmontScript's records, DI 3 initially believed 
this transaction was an export, but upon further investigation, 
realized that this was a domestic distribution or a distribution to a 
registrant in the United States. Tr. 508, 510, 529, 533-34; Gov't Exs. 
22 at 10-11, 26 at 88, 89, 92, 27 at 3, 28 at 66, 67, 68.
    DI 3 discussed this invoice with Dr. Shi on May 8, 2019, when she 
conducted another inspection of OakmontScript. Tr. 513-14. Dr. Shi 
stated that L.Y., a colleague Dr. Shi had met at a conference, 
requested that Dr. Shi send the Lunesta to Mr. Z.Y. prior to Mr. Z.Y. 
going to China as Dr. Yu was not able to acquire it. Tr. 515-16. Mr. 
Z.Y. then provided her a business card showing that he was an employee 
of Disha Pharmaceutical Group, a pharmaceutical company in China. Tr. 
534. Mr. Z.Y. was planning to move to China, and asked that the Lunesta 
be shipped to his home address in New Jersey, and paid via personal 
payment. Tr. 514, 516, 531, 534-35. This invoice indicates that the 
``bill to'' party was Disha Pharmaceutical Group. Tr. 530-31; Gov't Ex. 
28 at 44. At some time in May 2019, DI 3 discussed with Dr. Shi that 
this was improper. Tr. 518.
    OakmontScript purchased this Lunesta with its distributor 
registration and then mailed it to Mr. Z.Y. at his home address in New 
Jersey. Tr. 517-18. Disha was not the end user or ultimate user because 
it was seeking the Lunesta in order to conduct research as opposed to 
using it for personal use. Tr. 518-19, 772-73. See 21 U.S.C. 802(27) 
(defining ``ultimate user'' as ``a person who has lawfully obtained, 
and who possesses, a controlled substance for his own use or for the 
use of a member of his household or for an animal owned by him or by a 
member of his household.'').
    DI 3 conducted a search of the DEA registration database for Mr. 
Z.Y., Disha Pharmaceutical Group, and the address in Kearny, New Jersey 
and discovered that none of them have any active or inactive DEA 
registrations. Tr. 545-54. There is also no indication that the Kearny, 
New Jersey, address could be a freight forwarding facility.\76\ Tr. 
555-56, 558.
---------------------------------------------------------------------------

    \76\ A freight forwarding facility is defined as:
    A separate facility operated by a distributing registrant 
through which sealed, packaged controlled substances in unmarked 
shipping containers (i.e., the containers do not indicate that the 
contents include controlled substances) are, in the course of 
delivery to, or return from, customers, transferred in less than 24 
hours. A distributing registrant who operates a freight forwarding 
facility may use the facility to transfer controlled substances from 
any location the distributing registrant operates that is registered 
with the Administration to manufacture, distribute, or import 
controlled substances, or, with respect to returns, registered to 
dispense controlled substances, provided that the notice required by 
Sec.  1301.12(b)(4) of Part 1301 of this chapter has been submitted 
and approved. For purposes of this definition, a distributing 
registrant is a person who is registered with the Administration as 
a manufacturer, distributor (excluding reverse distributor), and/or 
importer.
    21 CFR 1300.01(b).
---------------------------------------------------------------------------

    Dr. Shi testified that this transaction was an export and not a 
domestic distribution as claimed by the Government, because Mr. Z.Y. 
was taking this prescription to a company in China, Disha 
Pharmaceutical, which was the end-user. Tr. 1180-82, 1359. Dr. Shi also 
asserts that an end-user or ultimate user \77\ is the person who signed 
the end-user statement to give OakmontScript a certificate. Tr. 1183. 
In fact, OakmontScript created a license transfer document, 
transferring the Lunesta from OakmontScript's distributor license to 
its exporter license. Gov't Ex. 26 at 93.

[[Page 21536]]

OakmontScript did this even before it likely received the Lunesta 
shipment. See Gov't Ex. 26 at 89, 90 (The packing slip from McKesson 
for the distribution to OakmontScript is dated May 9, 2018, while the 
license transfer document is dated May 7, 2018.)
---------------------------------------------------------------------------

    \77\ DI 3 explained that these terms are synonymous. Tr. 773.
---------------------------------------------------------------------------

    Although Dr. Shi indicates that OakmontScript no longer uses this 
``informal logistical arrangement,'' Dr. Shi continues to believe this 
was a proper way to export controlled substances. ALJ Ex. 26 at 12. 
OakmontScript references 21 U.S.C. 822(c)(2) \78\ as an exception that 
allowed Mr. Z.Y. to transport the Lunesta to China. Id. As Dr. Shi 
noted in her testimony, Mr. Z.Y. is an employee of Disha, Tr. 1180-82, 
not of a ``common or contract carrier or warehouse.'' 21 U.S.C. 
822(c)(2). Therefore, OakmontScript would not meet this exception. 
Furthermore, OakmontScript did not provide any documentation to DI 3 
that indicated Mr. Z.Y. had actually delivered the Lunesta to Disha 
Pharmaceutical in China. Tr. 1455-56.
---------------------------------------------------------------------------

    \78\ 21 U.S.C. 822:
    (c) Exceptions
    The following persons shall not be required to register and may 
lawfully possess any controlled substance or list I chemical under 
this subchapter:
    (2) A common or contract carrier or warehouseman, or an employee 
thereof, whose possession of the controlled substance or list I 
chemical is in the usual course of his business or employment.
---------------------------------------------------------------------------

    I find that OakmontScript shipped Lunesta to an address in Kearny, 
New Jersey, United States, which makes this a domestic distribution as 
opposed to an export. I also find that the Lunesta was shipped to Mr. 
Z.Y. at his home address in Kearny, New Jersey, Mr. Z.Y. did not 
possess a DEA registration, and this transaction did not meet any 
exceptions provided by the regulations.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegations 16 and 17 are sustained. 
[Additionally, I consider this violation under Factor Five to weigh 
against Respondent's continued distributor registration based on 
Respondent's unlawful domestic distribution of a controlled substance.]

[Summary of the Public Interest Factors for Respondent's Distributor 
Registration

    I find that the Government has proven that Respondent failed to 
maintain complete, accurate, and separate records for its distributor 
registration; that Respondent submitted a falsified pharmacy 
registration to PBA in an attempt to obtain controlled substances 
outside of the CSA's closed regulatory system; and that Respondent 
unlawfully distributed a controlled substance domestically. 
Accordingly, I find that Factors One and Five weigh strongly in favor 
of revoking Respondent's distributor registration.]

Exporter Registration

    As to its exporter COR, the Government alleges that the Respondent 
violated the CSA and its implementing regulations by: (1) Exporting 
controlled substances prior to obtaining its exporter COR, (2) 
exporting controlled substances it was not approved to export, (3) 
exporting controlled substances to fill prescriptions for underage 
patients, and (4) commingling its exporter records with records 
pertaining to its distributor registration and otherwise failing to 
keep complete and accurate records of controlled substances it 
exported. The Government seeks the revocation of the Respondent's 
exporter COR based on its allegations that the Respondent's continued 
registration would be inconsistent with the public interest as that 
term is defined in 21 U.S.C. 958.
    The CSA, as codified at 21 U.S.C. 958, provides that ``[t]he 
Attorney General may . . . revoke or suspend a registration under 
subsection (a) or (c) of this section,\79\ if he determines that such 
registration is inconsistent with the public interest . . . .'' 21 
U.S.C. 958(d)(2).
---------------------------------------------------------------------------

    \79\ Subsection (c) applies to exporters of schedule III, IV, or 
V controlled substances and states that ``[i]n determining the 
public interest, the factors enumerated in paragraphs (1) through 
(6) of section 823(d) of this title shall be considered.'' 21 U.S.C. 
958(c)(1).
    Subsection (a) applies to exporters of schedule I or II 
controlled substances and states that ``[i]n determining the public 
interest, the factors enumerated in paragraph (1) through (6) of 
section 823(a) of this title shall be considered.'' Although the 
Respondent is registered to export schedule II controlled 
substances, the Government made no allegations regarding the 
Respondent's exporter registration and schedule II controlled 
substances, thus sections 958(a) and 823(a) are not relevant to the 
instant proceedings.
---------------------------------------------------------------------------

    Congress has provided the following factors to be considered in the 
public interest analysis, as set forth in 21 U.S.C. 823(d), which 
relates to exporters of schedule III, IV, and V controlled substances 
pursuant to 21 U.S.C. 958(c)(1):

    (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.

21 U.S.C. 823(d).

    As with the public interest factors applicable to the Respondent's 
distributor registration, these factors are considered in the 
disjunctive, and the Agency may give each factor the weight it deems 
appropriate in determining whether to revoke a registrant's 
registration. Edmund Chein, M.D., 72 FR 6580, 6593-94 (2007) (quoting 
ALRA Labs., Inc., 59 FR at 50,621). Moreover, and also in alignment 
with determinations applicable to other categories of registrants, the 
Agency is ``not required to make findings as to all of the factors.'' 
Chein, 72 FR at 6594 (quoting Hoxie, 419 F.3d at 482).

Factors One and Five: Maintenance of Effective Controls Against 
Diversion and the Existence in the Establishment of Effective Controls 
Against Diversion

    In engaging in the public interest analysis regarding an exporter, 
the Deputy Administrator has noted that, ``[b]oth factors one and five 
inquire into whether [a registrant] has effective controls against 
diversion.'' Chein, 72 FR at 6594. At issue in Chein, and considered 
under these factors, was the Respondent's failure to provide compliant 
initial and biennial inventories, an essential recordkeeping 
responsibility. Id. Likewise, other recordkeeping requirements are at 
issue in the instant case, namely accurate recording of documentation 
regarding dates of transfer, dates of export and the identity of 
purchasers. Finally, as discussed in the portion of this Recommended 
Decision dealing with the Respondent's distributor registration, the 
commingling of records is a recordkeeping issue that falls within the 
maintenance of effective controls factor. See supra at 50.
    DEA registrants are required to keep complete and accurate records 
related to controlled substances. 21 U.S.C. 827(a) and (b); 21 CFR 
1304.21(a). The Deputy Administrator has stated, including in the 
context of an exporter, that ``[a]ccurate inventories are essential to 
conduct accountability audits and to determine whether diversion has 
occurred.'' Chein at 72 FR at 6594. Registrants must ensure that 
inventories

[[Page 21537]]

of controlled substances in Schedules III, IV, and V are ``readily 
retrievable.'' 21 CFR 1304.04(f)(2). ``DEA regulations define the term 
`readily retrievable' to mean `that certain records are kept by 
automatic data processing systems or other electronic or mechanized 
recordkeeping systems in such a manner that they can be separated out 
from all other records in a reasonable time.' '' Chein, 72 FR at 6593 
(emphasis in original)(citations omitted). ``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.'' Id.
    OakmontScript failed to keep complete and accurate records, did not 
record an initial inventory for its exporter registration, and did not 
keep separate records for its exporter and distributor license.\80\ [I 
find that Factors One and Five weigh against Respondent's continued 
exporter registration based on these recordkeeping violations.]
---------------------------------------------------------------------------

    \80\ The analysis regarding the commingling of records is the 
same as discussed above. See supra at 50-51.
---------------------------------------------------------------------------

Inaccurate Records <SUP>81</SUP>
---------------------------------------------------------------------------

    \81\ On the last day of the hearing Dr. Shi indicated that she 
``want[ed] to see if we can submit our record, which I'll look at in 
the app.'' Tr. 1429. She further stated that she needed ``to check 
back because some of the things that happened three or four years 
ago, if I can retrieve it'' and that ``[a]t this point, I don't have 
any evidence ready to present and I didn't prepare additional.'' Tr. 
1429. To be clear, Dr. Shi had several opportunities to submit any 
additional records that had not previously been provided to DI 3 at 
the February 19, 2019 inspection, including the inspections DI 3 
conducted in March 29, 2019, May 8, 2019, May 13, 2019, and February 
28, 2020. OakmontScript also could have provided these records as an 
exhibit with its Prehearing Statement, Amended Prehearing Statement, 
Supplemental Prehearing Statement, Hearing Exhibits, or even offered 
them during the hearing, if it could have demonstrated good cause. 
As noted by Dr. Shi, she ``has the records'' but decided not to give 
them to DI 3 and also did not prepare them for the hearing.
---------------------------------------------------------------------------

Invoice OKS-00243 (Diazepam)
    OakmontScript received diazepam, 10 milligram gel on May 16, 2017 
from McKesson. Tr. 356-57; Gov't Ex. 18 at 3. OakmontScript provided 
documentation to DI 3 that indicates this diazepam was exported on both 
May 18, 2017 and June 10, 2017. Tr. 352-53, 366. Tr. 356, 1448; Gov't 
Exs. 17 at 3, 18 at 3.\82\ OakmontScript provided documentation to DI 3 
that indicates Par Pharmaceutical, an Endo International Company, was 
the recipient. Tr. 356, 1448; Gov't Ex. 17 at 3. In other 
documentation, the recipient is listed as Cangzhou People's Hospital in 
China. Tr. 357, 1449; Gov't Ex. 18 at 3.
---------------------------------------------------------------------------

    \82\ As noted supra, this McKesson invoice listed 
OakmontScript's address as 15 New England Executive Park. Dr. Shi 
explained that this address and the 1500 District Avenue address 
(OakmontScript's current address) are the same address. Tr. 367. Dr. 
Shi stated that the area where OakmontScript is located got 
``reorganized'' and although OakmontScript's address changed, its 
physical location never changed.
---------------------------------------------------------------------------

    When questioned regarding the exact export date of the diazepam, 
Dr. Shi sent an email to DI 3 on April 23, 2019 indicating that she did 
not know the exact date of export because the ``shipping label was not 
retrievable due to USPS system update'' and Ms. Liu has ``made edit in 
the date multiple times and she thought the proper date is on the date 
of payment . . . .'' Tr. 358-59, 386, 1449; Gov't Exs. 20 at 8, 28 at 
22. In this response email, the ``ship to name'' is listed as H.H. at 
Cangzhou People's Hospital in China and Dr. Shi's guess of the ``best 
possible date'' of shipment was the date of payment on May 18, 2017. 
Tr. 361-63, 1449-50; Gov't Ex. 21 at 9. In other documentation provided 
by Dr. Shi at the May 8, 2019 inspection, the use was listed as ``for 
research'' and the ``bill to'' party was H.X.Z. at Par Pharmaceutical 
and the ship to party was Dr. H.H. at Cangzhou People's Hospital in 
China. Tr. 365; Gov't Ex. 26 at 19.
    One of the license transfer documents for this export indicates 
that the diazepam was transferred from OakmontScript's distributor 
registration to its exporter registration on May 7, 2018. Tr. 371-72, 
435; Gov't Exs. 26 at 21, 28 at 77. A different license transfer 
document indicates that the date of transfer was May 20, 2017. Tr. 371-
72, 436; Gov't Ex. 26 at 22. Other documentation provided by 
OakmontScript states that the diazepam prescription was made based on a 
request from a family in China for Patient S.Z. and was shipped 
sometime in May 2019. Tr. 407-09; Gov't Ex. 44 at 1-2. OakmontScript 
was unable to complete a DEA Form 236 for this export.\83\ Tr. 352-53; 
Gov't Exs. 12 at 14, 16 at 2.\84\
---------------------------------------------------------------------------

    \83\ This is noted as ``no XFER'' in the spreadsheets, which 
indicates that OakmontScript was not able to fill out a DEA Form 236 
for a particular drug. Tr. 202.
    \84\ Although the OSC did not include any allegations regarding 
the Respondent's failure to complete DEA Form 236 for controlled 
substances that it exported, the Government did include these 
allegations in its Prehearing Statement. See ALJ Ex. 5 at 43. Where 
an allegation is not included in the OSC, but the Government 
includes the allegation in its Prehearing Statements, adequate 
notice is provided to a respondent. Jose G. Zavaleta, M.D., 78 FR 
27431, 27439 (2013) (Where the Government did not allege material 
falsification on the respondent's application in the OSC, but did 
raise the issue in its Supplemental Prehearing Statement, the 
respondent was on notice that the issue would be considered at the 
hearing); Treasure Coast Specialty Pharmacy, 76 FR 66965, 66967 
(2011) (The respondent's argument that it was denied due process 
because the Government had not alleged lack of state authority in 
the OSC was rejected, because the scope of the proceedings before 
the Administrative Law Judge was not defined by the OSC ``but rather 
by the Government's prehearing disclosures'' as well); John Stafford 
Noell, 59 FR 47359, 47361 (1994) (Notice of allegations were 
adequate where they were not included in the OSC, but they were 
contained in the Government's Prehearing Statement).
---------------------------------------------------------------------------

    DI 3 confronted Dr. Shi regarding this conflicting information at 
the on-site inspection on May 8, 2019. Tr. 363. Dr. Shi recalled that 
this diazepam had been shipped for direct patient use in China. Tr. 
363-64. Dr. Shi stated that OakmontScript had to label the reason for 
export as ``research'' in order to get the shipment past Chinese Custom 
Officials and that the actual intended use of the diazepam was for 
direct patient use. Tr. 366, 1446.
    DI 3 was also confused by documents provided by Dr. Shi because 
although they appeared to be the exact same documents--a prescription 
written in Chinese, a hospital's government licenses, and a doctor's 
medical license--these documents were provided in stacks for two 
different invoices. Tr. 380-83; Gov't Ex. 26 at 12-14, 30-32. Based on 
a translation that DI 3 ultimately obtained for these documents, DI 3 
learned that both prescriptions were for diazepam. Tr. 383.
Invoice OKS-00753 (Briviact)
    OakmontScript provided DI 3 with documents that indicated that 
Briviact 50 milligram and 100 milligram, was received on October 22, 
2018, the shipping label was created on October 25, 2018, and was 
shipped on November 2, 2018. Tr. 579-96; Gov't Exs. 12 at 8, 20 at 10, 
26 at 103, 105, 28 at 16. Other documentation provided by OakmontScript 
indicated that this Briviact was shipped on October 26, 2018. Gov't 
Exs. 17 at 2, 18 at 4. In other documentation provided by 
OakmontScript, no shipping date is provided. Gov't Ex. 27 at 3-4. 
OakmontScript did not fill out a DEA Form 236 for this controlled 
substance. Tr. 596, 1435-36; See Gov't Ex. 48.\85\
---------------------------------------------------------------------------

    \85\ The allegation specific to this invoice was made on page 29 
of the Government Prehearing Statement (``GPHS''). ALJ Ex. 5 at 29.
---------------------------------------------------------------------------

Invoice OKS-00315-2 (Lyrica)
    OakmontScript provided documentation to DI 3 indicating that a 
variety of Lyrica strengths were shipped on November 21, 2018, to J.F. 
at YaoPharma. Tr. 558-72; Gov't Ex. 31 at

[[Page 21538]]

1-2, 27 at 3, 31 at 1, 4. However, other documentation provided by Dr. 
Shi indicates that this Lyrica was exported on November 21, 2019. Gov't 
Ex. 12 at 12.\86\ Dr. Shi also sent an email stating that the label for 
the Lyrica was created on November 21, 2018, and the drop-off date was 
December 4, 2018. Gov't Ex. 20 at 10. Other documents list the date as 
March 29, 2019. Gov't Ex. 31 at 3. Other documents list an invoice date 
of May 8, 2019. Gov't Ex. 26 at 102.\87\ The date of the invoice was 
also listed as August 8, 2018. Gov't Ex. 28 at 48. OakmontScript did 
not file a DEA Form 236 for this export. Tr. 572-73.\88\
---------------------------------------------------------------------------

    \86\ DI 3 discussed these issues with Dr. Shi on April 23, 2019, 
and Dr. Shi indicated that this was an incorrect date and the date 
should be listed as November 21, 2018. Tr. 564.
    \87\ This incorrect date could be related to the macro issue, 
but regardless, having these incorrect dates caused confusion for DI 
3. Tr. 576-77.
    \88\ The allegation specific to this invoice was made on page 22 
of the GPHS. ALJ Ex. 5 at 22.
---------------------------------------------------------------------------

    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegations 20.a.a, 20.a.b, 20.a.c, 
20.a.d, 20.b, 20.c.e, and 20.c.f \89\ [related to Respondent's failure 
to keep complete and accurate records] are sustained. [I find that 
Factors One and Five weigh against Respondent's continued exporter 
registration based on these recordkeeping violations.]
---------------------------------------------------------------------------

    \89\ It appears that the Government had formatting issues when 
identifying various paragraphs of the OSC.
---------------------------------------------------------------------------

Lack of Initial Inventory

    Pursuant to 21 CFR 1304.11, ``[e]very person required to keep 
records shall take an inventory of all stocks of controlled substances 
on hand on the date he/she first engages in the manufacture, 
distribution, or dispensing of controlled substances, in accordance 
with paragraph (e) of this section as applicable'' and ``[i]n the event 
a person commences business with no controlled substances on hand, he/
she shall record this fact as the initial inventory.'' 21 CFR 
1304.11(b).
    On September 16, 2016, DI 1 conducted an on-site inspection of 
OakmontScript with a Senior Investigator with the Massachusetts 
Department of Health. Tr. 44-45. DI 1 explained that OakmontScript was 
required to create an initial inventory of controlled substances 
OakmontScript has on site. Tr. 50. DI 1 and the Senior Investigator 
conducted a pre-registration inspection of OakmontScript for its 
exporter application on June 22, 2017. Tr. 69-71. They discussed with 
Dr. Shi that OakmontScript was required to create an initial inventory 
and maintain records for at least two years. Tr. 71-72.
    DI 3, DI 4, and DI 1 conducted an inspection of OakmontScript on 
February 19, 2019. Tr. 156-58. They discussed recordkeeping and the DIs 
explained that they would be conducting a controlled substance 
accountability audit. Tr. 159. Although the closing inventory for the 
accountability audit was good because ``it tied out to zero,'' there 
were issues with OakmontScript's recordkeeping, including a failure to 
take an initial inventory, which OakmontScript was unable to produce. 
Tr. 190, 736, 763. Specifically, during the February 19, 2019 
inspection, OakmontScript informed DI 3 ``that they had forgotten to 
take the initial inventory when they received the export 
registration.'' Tr. 735-36. DI 3 discussed these issues with her group 
supervisor and her group supervisor asked her to return to conduct an 
expanded controlled substance accountability audit going back to 
December 5, 2017, when OakmontScript first received its DEA exporter 
registration. Tr. 192-93.
    I find that OakmontScript failed to record an initial inventory for 
its exporter registration, which is a violation of 21 CFR 1304.11(b). 
This is also particularly concerning because OakmontScript has a 
distributor license and was aware of these requirements. Furthermore, 
both DI 1 and DI 2 had explained to Dr. Shi that an initial inventory 
was required once OakmontScript's exporter application was approved.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegation 21.a is sustained. [I find 
that Factors One and Five weigh against Respondent's continued exporter 
registration based on Respondent's failure to conduct an initial 
inventory.]

Factor Six: Such Other Factors as May Be Relevant to and Consistent 
With the Public Health and Safety

    The Government alleges that Factor Six is relevant to the public 
interest analysis regarding the Respondent's exporter COR. ALJ Ex. 1 at 
7.\90\
---------------------------------------------------------------------------

    \90\ The Government failed to state why Factor Six is applicable 
and only specifically stated that Factor Six applied to the 
allegation that OakmontScript filled prescriptions for underage 
patients in China.
---------------------------------------------------------------------------

    The Respondent's exporting of controlled substances prior to having 
an exporter COR, its exporting of controlled substances for which it 
did not have approved drug codes and its exporting to fill individual 
prescriptions do not fall under any of the first five factors that are 
to be considered in determining the public interest for an exporter and 
thus are appropriately addressed under Factor Six. See Perry County 
Food & Drug, 80 FR at 70,112 (DEA applied the analogous Factor Five 
``such other conduct'' in the context of a pharmacy registrant where 
the violations at issue were ``not covered by application of the other 
four public interest factors.'').
    Additionally, as discussed in the portion of this Recommended 
Decision dealing with the Respondent's distributor registration, the 
lack of candor is an issue that falls within the category of ``such 
other factors as may be relevant to and consistent with the public 
health and safety.'' \91\ See supra at 52-53.
---------------------------------------------------------------------------

    \91\ For other categories of registrants, the ``such other 
factors'' or ``such other conduct'' is listed as Factor Five. See, 
e.g., 21 U.S.C. 823(b) & (e) (applicable to distributors) and 21 
U.S.C. 823(f) (applicable to practitioners).
---------------------------------------------------------------------------

Pre-Registration Exports

    The CSA requires that in order to export a controlled substance a 
person must be properly registered to do so. 21 U.S.C. 957(a) 
specifically states: ``No 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 . . .'' Further, DEA regulations 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). These 
requirements have been applied in DEA decisions. Chein, 72 FR at 6592 
(citing 21 U.S.C. 957(b), and 21 CFR 1301.13(a)). Additionally, another 
regulation applying specifically to exports states that ``[n]o person 
shall in any manner export, or cause to be exported from the United 
States any controlled substance . . . unless and until such person is 
properly registered under the Act . . .'' 21 CFR 1312.21(a).
    The parties stipulated that the Respondent's exporter COR was first 
issued on December 5, 2017. Stipulation 2. Moreover, it is established 
by the Certification of Registration History for the Respondent's 
exporter registration that the COR number was assigned on December 5, 
2017. Gov't Ex. 1B. Therefore, there is no dispute that the Respondent 
first had DEA authority to export controlled substances on December 5, 
2017.
Invoice OKS-00243 (Diazepam)
    The testimony by both DI 3 and Dr. Shi, as well as the 
documentation

[[Page 21539]]

admitted at the hearing, provided conflicting dates for the export of 
this diazepam. The dates in the documentation and discussed by both 
witnesses are May 18, 2017 and June 10, 2017. Tr. 352-53, 356, 357, 
366, 424-25, 432, 1311-12, 1313, 1448, 1449; Gov't Exs. 12 at 14, 17 at 
3; 18 at 3; 26 at 20. Dr. Shi admitted she did not know the date of 
export because of a USPS system update that resulted in the loss of 
shipment information for this invoice. Tr. 358-59, 386, 1449; Gov't 
Exs. 20 at 8, 28 at 22. However, there was no testimony or other 
documentation that suggested an export date other than May 18, 2017 or 
June 10, 2017. Indeed, at the hearing, Dr. Shi offered testimony that 
``the best possible date'' of shipment was May 18, 2017, despite 
telling DI 1 during her June 22, 2017, pre-registration inspection that 
she had not exported any drugs. Tr. 361-63, 1313, 1368-69, 1449-50; 
Gov't Ex. 21 at 9.
    Based on the testimony and admitted exhibits, it is evident that 
this diazepam was exported on either May 18, 2017, or June 10, 2017. 
Regardless of which date the diazepam was actually shipped, both dates 
are approximately six to seven months before the Respondent's 
registration as an exporter was issued on December 5, 2017.
    I therefore find that the Respondent exported this controlled 
substance when it was not properly registered to do so in violation of 
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00301 (Briviact)
    DI 3 testified that this Briviact was shipped on August 2, 2017. 
Tr. 440. The documentation that DI 3 received from the Respondent also 
indicates an export date of August 2, 2017. Gov't Ex. 12 at 7, 26 at 
36, 27 at 2. Furthermore, correspondence from Dr. Shi states the 
shipping label was created on August 2, 2017. Gov't Ex. 20 at 8. Dr. 
Shi confirmed the August 2, 2017 date in her testimony at the hearing. 
Tr. 1313-14.
    Based on the testimony and admitted exhibits, this Briviact was 
exported on August 2, 2017. This date is approximately four months 
before the Respondent's registration as an exporter was issued on 
December 5, 2017.
    I therefore find that the Respondent exported this controlled 
substance when it was not properly registered to do so in violation of 
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00315 (Belviq)
    DI 3 testified that this Belviq was shipped on November 1, 2017. 
Tr. 459. The documentation that DI 3 received from the Respondent also 
indicates an export date of November 1, 2017. Gov't Ex. 12 at 3, 26 at 
38-39, 27 at 2. In her testimony, Dr. Shi confirmed the November 1, 
2017 date in the documentation she provided to the Government as 
reflected in Government Exhibits 12 and 27, but also testified it was 
an estimated date.\92\ Tr. 1318-20.
---------------------------------------------------------------------------

    \92\ Dr. Shi did not offer an alternative date in her testimony.
---------------------------------------------------------------------------

    Based on the testimony and admitted exhibits, this Belviq was 
exported on November 1, 2017. This date is approximately one month 
before the Respondent's registration as an exporter was issued on 
December 5, 2017.
    I therefore find that the Respondent exported this controlled 
substance when it was not properly registered to do so in violation of 
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00315/OKS-00315-2 (Lyrica)
    DI 3 testified that this Lyrica was shipped on November 20, 2017. 
Tr. 471. Some documentation that DI 3 received from the Respondent also 
indicates an export date of November 20, 2017. Gov't Ex. 12 at 9-10. 
Other documentation that DI 3 received from the Respondent provides a 
date of November 17, 2017 (Gov't Ex. 28 at 32), November 19, 2017 
(Gov't Ex. 28 at 78), or November 21, 2017 (Gov't Ex. 27 at 2). Dr. Shi 
acknowledged the date on Government Exhibit 12, but stated that 
``[i]t's just the date we entered'' before later agreeing that her 
employees enter the dates on which events actually occurred.\93\ Tr. 
1330, 1331.
---------------------------------------------------------------------------

    \93\ Again, Dr. Shi did not offer any alternative date for a 
shipment of the drugs for this invoice.
---------------------------------------------------------------------------

    Based on the testimony and admitted exhibits, this Lyrica was 
exported sometime between November 17 and 21, 2017. November 21, 2017, 
is approximately two weeks before the Respondent's registration as an 
exporter was issued on December 5, 2017.
    I therefore find that the Respondent exported this controlled 
substance when it was not properly registered to do so in violation of 
21 U.S.C. 957(a) and 21 CFR 1312.21.
Invoice OKS-00108 (Belviq XR)
    DI 3 testified that this Belviq was shipped on December 1, 2017. 
Tr. 484. The documentation that DI 3 received from the Respondent also 
indicates an export date of December 1, 2017. Gov't Ex. 12 at 3, 26 at 
47, 27 at 2. Dr. Shi confirmed the December 1, 2017, shipping date for 
this Belviq in Government Exhibits 12 and 27 in her testimony at the 
hearing. Tr. 1351-52.
    Based on the testimony and admitted exhibits, this Belviq was 
exported on December 1, 2017. This date is four days before the 
Respondent's registration as an exporter was issued on December 5, 
2017. I therefore find that the Respondent exported this controlled 
substance when it was not properly registered to do so in violation of 
21 U.S.C. 957(a) and 21 CFR 1312.21.
    Faced with the fact that the Respondent exported controlled 
substances pursuant to the above-referenced invoices prior to being 
registered as an exporter, the Respondent makes the argument that it 
had applied for the registration, had been inspected by DEA, passed the 
security measures, and that the registration would be forthcoming at 
any time.\94\ Tr. 1303. It should be noted that in her testimony, Dr. 
Shi emphasized numerous times that she felt her registration would be 
coming ``any minute.'' Tr. 1095:4-5, 1096:8, 1097:4, 23, 1303:20-21, 
23. Also, tellingly, Dr. Shi admitted that she ``misled my people, say 
this export license on the way.'' Tr. 1097. Dr. Shi then went on to 
admit that she ``prepared my business, say that license should be 
coming'' which led to ``schedule 3, 4, 5 being processed and we started 
taking order.'' Tr. 1097-98. Dr. Shi further admitted ``I didn't do my 
part.'' Tr. 1098.
---------------------------------------------------------------------------

    \94\ The Respondent also argued that DEA had ``neglected'' and 
``mistreated'' its application with the result that its exporter 
registration ``didn't come in on time.'' Tr. 1093-94, 1493. To the 
extent that the Respondent is making an argument that its exporter 
application was mishandled, [which was not supported by any record 
evidence], there is no exemption from registration because one has 
submitted an application which was subsequently mishandled. Chein 72 
FR at 6589 (quoting Dennis Robert Howard, M.D., 62 FR 32658, 32661 
(1997) (``there is no `good faith' exemption from liability in 
administrative proceedings'' under the CSA)).
---------------------------------------------------------------------------

    In Chein, the Deputy Administrator stated the following:

    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,'
    . . . 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. Howard is therefore properly understood as a case 
involving reliance on an affirmative act of the government.


[[Page 21540]]


Chein, 72 FR at 6589 (alterations in original).\95\
---------------------------------------------------------------------------

    \95\ In a footnote, the Deputy Administrator declined to extend 
the good faith defense, citing a threat to public safety. Chein, 72 
FR at 6589, n.16.
---------------------------------------------------------------------------

    Neither of the mitigating factors discussed in Chein is present in 
this case. First, the Respondent had never previously held a valid 
exporter registration. Second, the Respondent did not receive 
documentation regarding a new registration number and, in fact, Dr. Shi 
admitted that although she thought ``the registration would be coming 
any day,'' she did not receive the registration. Furthermore, the 
Respondent's expectation that she would shortly receive her 
registration or that she had met all the requirements for the 
registration are not a substitute for having actually been issued a 
valid registration by DEA.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegations 7.a, 7.b, 7.c, 7.d, and 
7.e are sustained. [I find that Factor Six weighs against Respondent's 
continued exporter registration based on Respondent's repeated 
exporting of controlled substances prior to obtaining a registration.]

Exporting Without the Required Drug Code

    In addition to the requirement in 21 U.S.C. 957 that a registrant 
have a registration to export controlled substances, the CSA also 
requires that a registrant shall not ``export controlled substances 
other than those specified in the registration.'' 21 U.S.C. 958(b). DEA 
has explained that ``[t]he mechanism by which a controlled substance is 
specified in a registration is through the use of its Administration 
Controlled Substance Code Number.'' \96\ Changes in Administration 
Controlled Substances Code Numbers, Final Rule, 52 FR 5951 (1987); 
Gov't Ex. 53. As DI 1 further explained in her testimony, these ``drug 
codes'' are used for ``identification purposes'' for certain types of 
registrants, including exporters. Tr. 86. The regulations also require 
that ``[a]pplicants for import and export permits must include the 
appropriate code number on the application . . . .'' 21 CFR 1308.03(a).
---------------------------------------------------------------------------

    \96\ The DEA Controlled Substances Code Numbers (``drug codes'') 
assigned to each controlled substance are listed in the regulations 
at 21 CFR 1308.11-.15. The tribunal also admitted Government Exhibit 
10, which lists the drug codes for each controlled substance and 
according to DI 3 is the ``DEA drug code book'' that is arranged by 
DEA Drug Code Number. Tr. 181-82.
---------------------------------------------------------------------------

    Both DI 1 and DI 3 explained the use of the drug codes to Dr. Shi 
and assisted her in having the appropriate drug codes associated with 
the Respondent's exporter registration. Tr. 86-89, 96-97, 100, 175-76, 
183, 597. However, the Respondent later expanded the types of 
controlled substances it was exporting and Dr. Shi testified that the 
Respondent lacked the necessary drug codes. Tr. 1130-31.
    The CSA also requires that appropriate export documentation be 
completed. For nonnarcotic controlled substances in schedule III or IV 
and controlled substances in schedule V, 21 U.S.C. 953(e) requires 
certain documents, including ``such export permit, notification, or 
declaration as the Attorney General may by regulation prescribe.'' 21 
U.S.C. 953(e)(2). Regulations implementing this section require that 
the registrant complete and file a DEA Form 236. 21 CFR 1312.21(b), 
1312.27(a), 1312.28(a); Tr. 996, 1025, 1028; See Gov't Ex. 47.
    As to DEA Form 236 requirements, Dr. Shi testified that DI 1 
covered the DEA-236 requirements at the June 22, 2017 inspection. Tr. 
1298-99. Dr. Yu testified that DI 3 provided the Respondent with 
instructions regarding the DEA Form 236 during the February 19, 2019 
inspection. Tr. 996, 1025. However, Dr. Shi acknowledged in her 
testimony that the Respondent's DEA-236 forms ``didn't get filled 
because lack of drug code.'' Tr. 1131.
Invoice OKS-00753 (Briviact)
    The Respondent shipped Briviact to China under this invoice on 
either October 26, 2018 or November 2, 2018. Tr. 579-96; Compare Gov't 
Exs. 17 at 2 and 18 at 4 with Gov't Ex. 20 at 10.
    DI 3 testified that the drug code for Briviact is 2710. Tr. 581; 
Gov't Ex. 10 at 3. DI 3 testified that the Respondent was not 
authorized to handle Briviact under its exporter registration because 
it did not have drug code 2710 associated with that registration. Tr. 
581, 1434-35; Gov't Ex. 11. On cross-examination, Dr. Yu agreed that on 
the date of shipment for this controlled substance, the Respondent did 
not have a drug code for Briviact. Tr. 1052. Therefore, the uncontested 
evidence is that the Respondent exported this controlled substance 
without having the required drug code for its exporter registration, in 
violation of 21 U.S.C. 958(b).
    Furthermore, DI 3 testified that the Respondent did not fill out a 
DEA Form 236 for this controlled substance.\97\ Tr. 596-97, 1435-36. 
There is also no record of the Respondent completing a DEA-236 in the 
documentary evidence that DI 3 obtained, which lists the DEA-236 forms 
that the Respondent filed with DEA. Gov't Ex. 48. In response to the 
Government's allegations, the Respondent provided no evidence that it 
successfully completed a DEA Form 236 for this export. Therefore, the 
evidence leads to the inescapable conclusion that the Respondent did 
not complete the required DEA Form 236, in violation of 21 U.S.C. 
953(e) and 21 CFR 1312.21, 1312.27 and 1312.28.
---------------------------------------------------------------------------

    \97\ Although the OSC did not include any allegations regarding 
the Respondent's failure to complete DEA Form 236s for controlled 
substances that it exported, the Government did include these 
allegations in the GPHS. ALJ Ex. 5 at 9, 11-12. The allegation 
specific to this invoice was made on page 29 of the GPHS. ALJ Ex. 9 
at 29.
---------------------------------------------------------------------------

Invoice OKS-00902 (Belviq)
    The Respondent shipped Belviq to China under this invoice and, 
according to most of the evidence, the date of shipment was February 
15, 2019. Tr. 602-13; Govt. Exs. 18 at 4, 26 at 121, 27 at 4, 28 at 60.
    DI 3 testified that the drug code for Belviq is 1625. Tr. 602; 
Gov't Ex. 10 at 2. DI 3 testified that the Respondent was not 
authorized to handle Belviq under its exporter registration because it 
did not have drug code 1625 associated with that registration. Tr. 612, 
1435; Gov't Ex. 11. On cross-examination, Dr. Yu agreed that on the 
date of shipment for this controlled substance, the Respondent did not 
have a drug code for Belviq. Tr. 1049. Therefore, the uncontested 
evidence is that the Respondent exported this controlled substance 
without having the required drug code for its exporter registration, in 
violation of 21 U.S.C. 958(b).
    Furthermore, DI 3 testified that the Respondent did not fill out a 
DEA Form 236 for this controlled substance.\98\ Tr. 609. There is also 
no record of the Respondent completing a DEA-236 in the documentary 
evidence that DI 3 obtained, which lists the DEA-236 forms that the 
Respondent filed with DEA. Gov't Ex. 48. In response to the 
Government's allegations, the Respondent provided no evidence that it 
successfully completed a DEA Form 236 for this export. Therefore, the 
evidence leads to the inescapable conclusion that the Respondent did 
not complete the required DEA Form 236, in violation of 21 U.S.C. 
953(e) and 21 CFR 1312.21, 1312.27 and 1312.28.
---------------------------------------------------------------------------

    \98\ The allegation regarding the Respondent's failure to 
complete a DEA Form 236 that is specific to this invoice was made on 
page 30 of the GPHS. ALJ Ex. 9 at 30.
---------------------------------------------------------------------------

Invoice DIW-0019 and NEEC-0019 (Clobazam)
    The Respondent shipped clobazam to China on March 5, 2019. Tr. 613-
41, 673-723, 727-33, 907, 912; Gov't Exs. 26 at 15-16, 27 at 4, 28 at 
65.

[[Page 21541]]

    DI 3 testified that the drug code for clobazam is 2751. Tr. 614; 
Gov't Ex. 10 at 4. DI 3 testified that the Respondent was not 
authorized to handle clobazam under its exporter registration because 
it did not have drug code 2751 associated with that registration. Tr. 
615, 1435; Gov't Ex. 11. On cross-examination, Dr. Yu agreed that on 
the date of shipment for this controlled substance, the Respondent did 
not have a drug code for clobazam. Tr. 1049-50. Therefore, the 
uncontested evidence is that the Respondent exported this controlled 
substance without having the required drug code for its exporter 
registration, in violation of 21 U.S.C. 958(b).
    Furthermore, DI 3 testified that the Respondent did not fill out a 
DEA Form 236 for this controlled substance.\99\ Tr. 615, 1435-36. There 
is also no record of the Respondent completing a DEA-236 in the 
documentary evidence that DI 3 obtained which lists the DEA-236 forms 
that the Respondent filed with DEA. Gov't Ex. 48. In response to the 
Government's allegations, the Respondent provided no evidence that it 
successfully completed a DEA Form 236 for this export. Therefore, the 
evidence leads to the inescapable conclusion that the Respondent did 
not complete the required DEA Form 236, in violation of 21 U.S.C. 
953(e) and 21 CFRSec.  1312.21, 1312.27 and 1312.28.
---------------------------------------------------------------------------

    \99\ The allegation regarding the Respondent's failure to 
complete a DEA Form 236 that is specific to this invoice was made on 
page 37 of the GPHS. ALJ Ex. 9 at 37.
---------------------------------------------------------------------------

    Based on my review of the testimony by DI 3 and by the Respondent's 
witnesses, as well as the documentary evidence, the Respondent did not 
have the required drug codes for the Briviact (Invoice OKS-00753), 
Belviq (Invoice OKS-00902), and clobazam (Invoice OKS-DIW-0019/NEEC-
0019) listed under these invoices and consequently did not have the 
authority to export them. Accordingly, in review of the evidence of 
record, including stipulations of the parties, OSC Allegations 9.a, 
9.b, and 9.c are sustained.
    In addition, I find that the Respondent did not complete the 
required DEA Form 236 for any of these three exports. Accordingly, in 
review of the evidence of record, including stipulations of the 
parties, the additional allegations from the GPHS (ALJ Ex. 5 at 9, 29, 
30, 37) that the Respondent failed to file DEA-236 forms regarding 
invoices OKS-00753, OKS-00902, and DIW-0019/NEEC-0019 are sustained. [I 
find that Factor Six weighs against Respondent's continued exporter 
registration based on Respondent's repeated exporting of controlled 
substances that it was not authorized to export and Respondent's 
repeated failure to fill out required DEA forms.]

Lack of Candor Regarding Exports

    Although the Government failed to explain under which factor the 
lack of candor allegation regarding the Respondent's exporter 
registration falls, as with the tribunal's previous discussion of the 
lack of candor allegation regarding the Respondent's distributor 
registration, the tribunal finds that the allegations regarding the 
Respondent's lack of candor appropriately fall under Factor Six. I 
incorporate by reference the discussion, supra at 52-53, regarding the 
legal standard that applies to a lack of candor finding.
    On February 19, 2019, DIs conducted an on-site investigation of the 
Respondent pertaining to its exporter registration. Tr. 156-57; See 
Gov't Ex. 7. DI 3 testified that as part of that inspection she 
reviewed the drugs that the Respondent was authorized to handle and 
inquired of Dr. Shi as to whether the Respondent was handling any other 
drug codes. Tr. 159, 169, 175-76. DI 3 testified that the drug codes 
that the Respondent was authorized to export as of February 19, 2019, 
are listed in Government Exhibit 11, which she created sometime after 
her inspection by using her notes from the inspection and the DEA 
registration system. Tr. 184-87. DI 3 testified that these are the drug 
codes that she asked Dr. Shi about during the February 19, 2019 
inspection. Tr. 188. DI 3 explained that she read through the list of 
drugs and stated the controlled substance name and ``asked if there 
were any additional drug codes that OakmontScript was handling or 
exporting at the time'' and that Dr. Shi stated there were no other 
drug codes. Tr. 189, 597-98. In her testimony, Dr. Shi admits that she 
had a conversation with DI 3 about drug codes and that she showed DI 3 
two lists. Tr. 1172. The first list was a list for which the Respondent 
had drug codes.\100\ Tr. 1172. After DI 3 asked whether the Respondent 
was handling any other drugs, Dr. Shi showed DI 3 another list and 
explained ``I really have trouble with another, the list of the drugs 
which we don't have drug codes.'' \101\ Tr. 1172. Dr. Shi also raised 
these two lists in her cross-examination of DI 3. Tr. 888-89. After DI 
3 repeated her recollection that Dr. Shi stated she had not handled any 
other controlled substances, Dr. Shi asked whether DI 3 recalled 
whether she gave her a second list of drugs with which they were having 
difficulties.\102\ Tr. 889. DI 3 stated she did not recall this. Tr. 
889.
---------------------------------------------------------------------------

    \100\ Dr. Shi did not identify what drugs were on this list.
    \101\ Dr. Shi also did not identify what drugs were on this 
second list.
    \102\ Dr. Shi also references this second list in her 
``objection'' to DI 3's statement on direct examination that Dr. Shi 
stated OakmontScript had not handled any other controlled substances 
besides those that DI 3 had listed. Tr. 598-99.
---------------------------------------------------------------------------

    As to the Briviact that is the subject of Invoice OKS-00753, when 
this was the subject of the Government's questioning of DI 3 on direct, 
DI 3 testified that Dr. Shi stated OakmontScript was not handling any 
other controlled substances and that this demonstrated a lack of 
candor. Tr. 600. As to the Belviq that is the subject of Invoice OKS-
00902, DI 3 again testified that Dr. Shi did not advise her of the 
Respondent's recent export of this drug, which DI 3 believes 
demonstrates a lack of candor. Tr. 612-13. I find that there was more 
to this conversation than a simple denial by Dr. Shi. As described 
above, on at least three separate occasions during the hearing, Dr. Shi 
referenced a ``second list'' of drugs, with which she was having 
problems, that she gave to DI 3 as part of their conversation regarding 
drug codes and controlled substances that the Respondent was exporting. 
At a minimum, it seems that Dr. Shi wanted to continue the conversation 
regarding drug codes and drugs that the Respondent wanted to export, 
but had encountered difficulties. Based on this attempt by Dr. Shi at 
further communication on this issue, I cannot make a finding that Dr. 
Shi exhibited a ``lack of candor'' regarding the Briviact and Belviq.
    As to the clobazam that is the subject of invoice DIW-0019 and 
NEEC-0019, for the reasons I have just outlined I make the same finding 
that there was not a lack of candor. However, my finding that there was 
not a lack of candor is supported by additional facts. On direct 
examination, DI 3 was asked why Dr. Shi's failure to identify the 
clobazam as a drug that was being handled was not a true and accurate 
statement. Tr. 724. In responding, DI 3 admitted that the February 19, 
2019, inspection was prior to the Respondent's clobazam export, but 
maintained ``they're clearly handling other controlled substances that 
they were not allotted to or authorized to handle.'' Tr. 724. I find 
this statement to be troubling. First, in response to the specific 
question regarding clobazam, DI 3 did not specifically state that the 
Respondent was handling that drug, but instead made a generalized 
statement

[[Page 21542]]

about ``other controlled substances.'' Tr. 724. Second, the Government 
offered no evidence to show that any clobazam was associated with the 
Respondent's exporter registration on or before February 19, 2019. As 
previously discussed, the export of the clobazam did not occur until 
March 5, 2019. Furthermore, the invoice from McKesson indicated that 
the billing date for the clobazam was February 28, 2019. Gov't Ex. 26 
at 1. Based on this evidence, the clobazam would not have been 
transferred to the Respondent's exporter registration until after the 
time of the investigators' February 19, 2019 inspection. Thus, for 
these additional reasons, and based on the evidence before me, I find 
that the Government has not demonstrated a lack of candor by the 
Respondent regarding its allegation that Respondent failed to disclose 
it was handling clobazam at the time of the February 19, 2019 
inspection.
    Accordingly, in review of the evidence of record, OSC Allegations 
11.a, 11.b, and 11.c are not sustained.

Exporting To Fill Individual Chinese Prescriptions

    DEA regulations provide that ``[a] prescription for a controlled 
substance may only be filled by a pharmacist, acting in the usual 
course of his professional practice and either registered individually 
or employed in a registered pharmacy, a registered central fill 
pharmacy, or registered institutional practitioner. 21 CFR 1306.06. 
See, e.g., Margy Temponeras, M.D., 77 FR 45,675, 45,677 (2012).
    DEA regulations also provide that ``[a]ll prescriptions for 
controlled substances shall be dated as of, and signed on the day when 
issued and shall bear the full name and address of the patient, the 
drug name, strength, dosage form, quantity prescribed, directions for 
use, and the name, address and registration number of the 
practitioner.'' 21 CFR 1306.05(a).
    The Government alleges that the Respondent exported controlled 
substances on two occasions to fill individual prescriptions for 
``underage patients'' in China and that the Respondent could not 
legally fill these prescriptions because it is not a registered 
pharmacy. The Government further alleges that these ``prescriptions'' 
did not contain valid DEA numbers for the prescribers and did not 
include other required information to be valid prescriptions.
Invoice OKS-00243 (Diazepam)
    The Government's first allegation of improper exporting to fill a 
prescription for an individual in China involves the diazepam that the 
Respondent exported in May 2017. I have already found that this 
controlled substance was exported prior to DEA's issuance of an 
exporter COR to the Respondent, a violation of 21 U.S.C. 957(a) and 21 
CFR 1312.21. The testimony and documentation further demonstrate that 
this controlled substance was exported by the Respondent for the 
purpose of filling a prescription issued in China for a person in 
China. DI 3 testified that that during her inspection of May 8, 2019, 
Dr. Shi stated this diazepam had been shipped for direct patient use in 
China. Tr. 363-64. However, the Respondent's documentation stated the 
``Indicated Use'' as ``Research.'' \103\ Gov't Ex. 26 at 22. Dr. Shi 
further stated to DI 3 that OakmontScript had to label the reason for 
export as ``research'' in order to get the shipment past Chinese Custom 
Officials and that the actual intended use of the diazepam was for 
direct patient use. Tr. 366.\104\ The Respondent has also admitted, 
through counsel who was representing her at the time of DEA's 
investigation, that this export was for a Chinese patient. Tr. 407-08; 
Gov't Ex. 44 at 1. As DI 3 testified, the dispensing of controlled 
substances to fill prescriptions is not an allowed coincident activity 
for distributors and exporters. 21 CFR 1301.13(e)(1); Tr. 420.
---------------------------------------------------------------------------

    \103\ Dr. Shi testified at the hearing that her main purpose in 
starting her company was ``to support global research need.'' Tr. 
1078, 1086. Nevertheless, there was also testimony that the 
Respondent fills individual prescriptions. Tr. 363-64.
    \104\ Dr. Shi's false statement on the export documentation is 
relevant in assessing Dr. Shi's credibility. If Dr. Shi was willing 
to falsify official documentation to advance the Respondent's 
business interests, it is indicative of the Respondent's propensity 
to make other false statements in support of its business endeavors.
---------------------------------------------------------------------------

    In defense of its filling of foreign controlled substance 
prescriptions, the Respondent cited 21 U.S.C. 956 and 21 CFR 1301.26. 
These provisions exempt individuals who are traversing the United 
States border and possess no more than 50 dosage units of non-Schedule 
I controlled substances for personal medical use from the usual import/
export requirements. However, the Government argued that this exemption 
is limited to a personal use exemption for international travelers. See 
ALJ Ex. 9 at 8-9. See 21 U.S.C. 956; 21 CFR 1301.26. I agree that these 
exemption provisions by their plain language apply only to individuals 
who are travelling with controlled substances for their own personal 
use. I therefore reject the Respondent's reliance on these provisions 
as a justification for its export to an individual in China.
    The Respondent's other argument in its defense of exporting 
controlled substances to fill foreign prescriptions, is what it terms 
``buy and bill distribution'' or ``provider's solution distribution.'' 
Tr. 1209-10. However, the Respondent provides no authority for these 
models, much less authority that they are a legitimate way to fill 
foreign prescriptions. See ALJ Ex. 26 at 13. The Respondent also 
objects to what it calls DEA's ``hypothesis'' that only pharmacies can 
fill prescriptions, but the Respondent provides no discussion as to why 
the Government's position is wrong, other than to contend it ``has the 
right to serve clients, which include foreign entities, with legitimate 
clinical and scientific needs.'' ALJ Ex. 26 at 14.
    I find that the Respondent, which does not hold a pharmacy COR, 
unlawfully filled this prescription, in violation of 21 U.S.C. 
822(a)(2) and (b) and 21 CFR 1306.06.
    The tribunal admitted Government Exhibit 45, which included the 
prescription for the diazepam, as well as a declaration by a DEA 
linguist that included a translation of the prescription. Gov't Ex. 45. 
The translation shows that the prescription is for diazepam for a two-
year and six-month old male.\105\ Gov't Ex. 45 at 4. The prescription 
was issued by H.H. a practitioner in China. Tr. 365, 413, 435; Gov't 
Ex. 45 at 4. DI 3 could find no DEA registration associated with this 
person. Tr. 413-14. The prescription does not include a DEA 
number,\106\ I therefore find that the prescription was invalid for 
failing to comply with the requirements of 21 CFR 1306.05(a). Due to 
portions of the prescription that the linguist found to be illegible, 
resulting in an incomplete translation of the information on the 
prescription, I find that the Government has not shown that the 
prescription is missing any other information required by 21 CFR 
1306.05(a). Gov't Ex. 45 at 4.
---------------------------------------------------------------------------

    \105\ The translation states the name is ``ILLEGIBLE,'' but 
other evidence in the record identifies the patient as having the 
initials ``S.Z.'' Gov't Ex. 45 at 4; Tr. 408.
    \106\ The prescription in the original Chinese includes Arabic 
numerals which the linguist included on the English translation. 
Gov't Ex. 45 at 3, 4. Because none of these numbers correspond to a 
format for a DEA number, and based on the testimony, I find that no 
DEA number is present on the prescription. Gov't Ex. 45 at 4; Tr. 
430-31.
---------------------------------------------------------------------------

Invoice DIW-0019 and NEEC-0019 (Clobazam)
    The Government's second allegation of improper exporting to fill a 
prescription for an individual in China involves the clobazam that the 
Respondent exported on March 5, 2019. I have already found that the

[[Page 21543]]

Respondent exported this controlled substance without having the 
required drug code for its exporter registration, in violation of 21 
U.S.C. 958(b). The testimony and documentation further demonstrate that 
this controlled substance was exported by the Respondent to the 
patient's home address in China for the purpose of filling a 
prescription issued by a Chinese doctor. Tr. 613-41, 673-723, 727-33, 
907, 912; Gov't Exs. 12 at 21, 26 at 15-16, 27 at 4, 28 at 65.
    For the reasons stated above with respect to the prescription that 
the Respondent filled for diazepam, I find that the Respondent, which 
does not hold a pharmacy COR, unlawfully filled this prescription, in 
violation of 21 U.S.C. 822(a)(2) and (b) and 21 CFR 1306.06.
    The tribunal admitted Government Exhibit 46, which included a 
purported prescription for the clobazam, as well as a declaration by a 
DEA linguist with a translation of the prescription.\107\ Gov't Ex. 46. 
The translation shows that the prescription is for clobazam for a nine-
year old male with the initials ``J.L.'' Gov't Ex. 46 at 4. The 
prescription was issued by G.T., a practitioner in China. Tr. 710-11; 
Gov't Ex. 44 at 1. DI 3 could find no DEA registration associated with 
this person. Tr. 715-17, 722. The prescription does not include a DEA 
number.\108\ The prescription also does not include the address of the 
patient. For these reasons, I find that the prescription was invalid 
for failing to comply with the requirements of 21 CFR 1306.05(a).
---------------------------------------------------------------------------

    \107\ Although both parties referred to the document as a 
prescription, the document describes itself as an ``instruction 
page'' and it appears to be more akin to a hospital medication order 
than a prescription. Gov't Ex. 46 at 4. Nevertheless, in the absence 
of any other documentation purporting to be a prescription, and 
because both parties relied on it as a prescription, I am evaluating 
it as a prescription.
    \108\ The prescription in the original Chinese includes Arabic 
numerals which the linguist included on the English translation, 
however these numbers pertain to the ``Patient ID.'' Gov't Ex. 46 at 
3, 4.
---------------------------------------------------------------------------

    The Government also makes three additional allegations regarding 
the clobazam prescription.
    In paragraph 19.c.ii of the OSC, the Government alleges that the 
Respondent provided a Material Transfer document that showed the 
clobazam was transferred to Dr. W. at NEEC in Burlington, MA. This 
document is present in the record as Government Exhibit 26 at 16-18 and 
shows the invoice number of NEEC-0019 and a date of March 5, 2019.\109\ 
The Government alleges that this documentation is inconsistent with 
other documents and statements made by the Respondent that show the 
clobazam was exported to an address in Shandong, China. Tr. 622-23. For 
instance, a document provided by the Respondent that contains customer 
and shipping information shows clobazam under invoice NEEC-019 shipped 
to Shandong, China, on March 5, 2019. Gov't Ex. 27 at 4. A Customs 
Declaration dated March 5, 2019, also shows shipment of this clobazam 
to Shandong, China. Gov't Ex. 26 at 15.\110\ I find that the 
inconsistencies in the Respondent's records show that it failed to keep 
complete and accurate records in violation of 21 U.S.C Sec.  827(a) and 
(b) and 21 CFR 1304.21(a) with respect to clobazam invoice number NEEC-
0019.
---------------------------------------------------------------------------

    \109\ These three pages appear to be identical copies of the 
same one-page ``Material Transfer'' document. There is also a 
``Service Transfer'' document in the Government's exhibits that 
shows a transfer of the clobazam for invoice NEEC-0019 to Dr. W. on 
March 5, 2019. Gov't Ex. 28 at 76.
    \110\ Another copy of the identical Customs Declaration is 
located in Government Exhibit 28 at 75.
---------------------------------------------------------------------------

    In paragraph 19.c.i of the OSC, the Government alleges a lack of 
candor by Dr. Shi based on her representations on April 24, 2019, that 
the clobazam was transferred to NEEC which conflicts with her 
statements on May 8, 2019, that the clobazam was exported to the 
patient at a personal address in Shandong, China. As I have just found, 
there are inconsistencies in the Respondent's records as to whether 
this clobazam was transferred to Dr. W. or exported to China. 
Similarly, Dr. Shi provided DEA investigators with differing accounts 
as to whether the clobazam was transferred to Dr. W. or exported to 
China. In an April 24, 2019 email, Dr. Shi wrote that the clobazam 
``was NOT exported but transferred to Dr Office from New England 
Executive Care in MA of USA for a patient who used to be treated at 
Boston Children Hospital.'' Gov't Ex. 20 at 11; Tr. 616-17. However, on 
May 8, 2019, Dr. Shi told DI 3 that this clobazam was exported. Tr. 
623-24. I find that Dr. Shi made conflicting statements regarding 
whether this clobazam was transferred domestically to a doctor or 
whether it was exported and that these conflicting statements 
demonstrate a lack of candor.
    In paragraph 19.c.iii of the OSC, the Government alleges that Dr. 
Shi stated to DEA investigators that she pressured Dr. W. to write a 
clobazam prescription for Patient J.L. in order to legitimize the 
export of clobazam and that Dr. W. eventually did write a prescription. 
DI 3 testified in detail to her conversation with Dr. Shi regarding Dr. 
Shi's efforts to get Dr. W. to write a prescription for Patient J.L. 
Tr. 619-20, 1459. DI 3 never obtained any prescription written by Dr. 
W. for clobazam for Patient J.L. Tr. 621. In addition, DI 3 interviewed 
Dr. W. and he denied he ever wrote such a prescription. Tr. 681-82; 
Gov't Ex. 36. Dr. Shi testified at the hearing that, in his role with 
OakmontScript, Dr. W. does not write prescriptions ``but he know[s] the 
medical record.'' Tr. 1197-98. Dr. Shi did not specifically testify at 
the hearing regarding whether she asked Dr. W. to write a clobazam 
prescription for Patient J.L.
    Given the documentation, discussed above, that shows the Respondent 
transferred the clobazam to Dr. W., as well as the detailed testimony 
by DI 3 recalling specific conversations she had with Dr. Shi about Dr. 
Shi's efforts to get Dr. W. to write the prescription, and given that 
DI 3 felt the need to follow-up on her conversation with Dr. Shi by 
interviewing Dr. W. and issuing a subpoena to him regarding any 
prescription he wrote, I credit DI 3's testimony that Dr. Shi made 
statements during the investigation that Dr. W. issued a clobazam 
prescription for Patient J.L. Further, Dr. Shi's testimony at the 
hearing that Dr. W. does not write prescriptions conflicts with what 
she told DI 3. Finally, the fact that the Respondent produced a 
prescription issued in China for the clobazam, but did not produce any 
prescription issued by Dr. W., leads to the conclusion that the only 
prescription for clobazam for Patient J.L. was from China. Based on 
these facts, I find that Dr. Shi's statements that Dr. W. issued a 
prescription for clobazam for Patient J.L. demonstrate a lack of 
candor.
    Accordingly, in review of the evidence of record, including 
stipulations of the parties, OSC Allegations 18.a, 18.b, 19.a, 19.b, 
19.c.i, 19.c.ii, and 19.c.iii are sustained. [I find that Factor Six 
weighs against Respondent's continued exporter registration based on 
Respondent's exporting of controlled substances to fill individual 
prescriptions in China.

Summary of the Public Interest Factors for Respondent's Exporter 
Registration

    I find that the Government has proven that Respondent violated 
numerous federal laws by failing to maintain complete and accurate 
records, by exporting controlled substances prior to having an exporter 
COR, by exporting controlled substances for which it did not have 
approved drug codes, and by exporting to fill individual prescriptions. 
Accordingly, I find that Factors One, Five, and Six weigh strongly 
against Respondent, and I conclude that Respondent has engaged in 
misconduct which supports the

[[Page 21544]]

revocation of its distributor and exporter registrations.
    I therefore hold that the Government has established a prima facie 
case that continued registration of Respondent's exporter and 
distributor registrations ``would be inconsistent with the public 
interest.'' 21 U.S.C. 823(a), (b), (d), and (e); 824(a); and 958(a), 
(c), and (d).]

[Sanction] *<SUP>H</SUP>
---------------------------------------------------------------------------

    *\H\ I am replacing portions of the Sanction section in the RD 
with preferred language regarding prior Agency decisions; however, 
the substance is primarily the same.
---------------------------------------------------------------------------

Egregiousness, Deterrence, and Lack of Candor

    [Where, as here, the Government has met its prima facie burden of 
showing that the respondent's continued registration is inconsistent 
with the public interest, the burden shifts to the respondent to show 
why it can be entrusted with the responsibility carried by its 
registration. Garret Howard Smith, M.D., 83 FR 18,882, 18,910 (2018) 
(citing Samuel S. Jackson, 72 FR 23,848, 23,853 (2007)). DEA cases have 
repeatedly found that when a registrant has committed acts inconsistent 
with the public interest, ``the Respondent is required not only to 
accept responsibility for [the established] misconduct, but also to 
demonstrate what corrective measures [have been] undertaken to prevent 
the reoccurrence of similar acts.'' Holiday CVS, 77 FR at 62,339 
(internal quotations omitted). See, also, Hoxie v. Drug Enf't Admin., 
419 F.3d 477, 483 (6th Cir. 2005); Ronald Lynch, M.D., 75 FR 78,745, 
78,749, 78,754 (2010) (holding that respondent's attempts to minimize 
misconduct undermined acceptance of responsibility); Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008) (noting that the respondent did not 
acknowledge recordkeeping problems, let alone more serious violations 
of federal law, and concluding that revocation was warranted).
    The issue of trust is necessarily a fact-dependent determination 
based on the circumstances presented by the individual respondent; 
therefore, the Agency looks at factors, such as the acceptance of 
responsibility and the credibility of that acceptance as it relates to 
the probability of repeat violations. Jeffrey Stein, M.D., 84 FR 
46,968, 46,972 (2019). A registrant's candor during the investigation 
and hearing is an important factor in determining acceptance of 
responsibility and the appropriate sanction, Garret Howard Smith, M.D., 
83 FR at 18,910 (collecting cases); as is whether the registrant's 
acceptance of responsibility is unequivocal, Lon F. Alexander, M.D., 82 
FR 49,704, 49,728 (2017) (collecting cases). In determining whether and 
to what extent a sanction is appropriate, consideration must be given 
to both the egregiousness of the offense established by the 
Government's evidence and the Agency's interest in both specific and 
general deterrence. Wesley Pope, 82 FR 14,944, 14,985 (2017) (citing 
Joseph Gaudio, 74 FR 10,083, 10,095 (2009)); David A. Ruben, M.D., 78 
FR 38,363, 38,364 (2013). Cf. McCarthy v. SEC, 406 F.3d 179, 188-89 (2d 
Cir. 2005) (upholding SEC's express adoption of ``deterrence, both 
specific and general as a component in analyzing the remedial efficacy 
of sanctions.'').]
    Here, the egregiousness of the offense favors revocation. The 
Respondent exported controlled substances before even being issued its 
exporter COR and, after acquiring its exporter COR, repeatedly exported 
controlled substances when it did not have approved drug codes and 
found it could not complete the required DEA-236 forms. The Respondent 
distributed to a non-registrant and even altered its distributer COR to 
make it appear that it was a DEA-registered pharmacy.
    Considerations of specific and general deterrence in this case 
militate in favor of revocation. Through the testimony of its owner, 
the Respondent has made it clear that in some instances it feels it did 
nothing wrong, such as in the case of its exports to fill prescriptions 
in China, where the Respondent has ``a bundle of knowledge while [DEA 
investigators] obviously lack it.'' Tr. 1497. In other instances, it 
feels that its violations were not so serious because they did not 
result in ``somebody killed'' or ``some pandemic we caused.'' Tr. 1417. 
The Respondent's owner appeared to value her personal relationships 
with her employees and her friends and acquaintances in China, over her 
responsibilities as a DEA registrant to adhere to the CSA and its 
regulations. The Respondent filled prescriptions for patients in China 
who had personal relationships with those who worked at OakmontScript. 
Tr. 363-64, 624, 1195; Gov't Ex. 44 at 1. The Respondent also failed to 
take decisive action against the employee responsible for altering its 
distributor registration--and with whose family the Respondent's owner 
had ties. Tr. 302. The Respondent's owner's comments lead to the 
conclusion that she is unwilling or unable to effectively submit to DEA 
oversight and regulation of her controlled substances operations. She 
believes she is and has been correct, and it can be confidently assumed 
that the absence of a registration sanction will result in the 
continuation of operations that run afoul of the safeguards required by 
the CSA and its regulations. Thus, the interests of specific 
deterrence, even standing alone, motivate powerfully in favor of the 
revocation of the Respondent's CORs.
    The interests of general deterrence compel a like result. As the 
regulator in this field, the Agency bears the responsibility to deter 
similar misconduct on the part of others for the protection of the 
public at large. Ruben, 78 FR at 38,385. Where the record demonstrates 
that the Government has borne its burden and established that the 
Respondent has exported controlled substances from the United States 
without authority, failed to maintain the closed system of distribution 
with its distributor COR and levelled substantial blame for its 
violations against DEA investigators, rather than itself, the 
unmistakable message to the regulated community would be that such 
conduct can be overlooked with little or no consequence. Thus, on this 
record, the interests of general deterrence support the revocations 
sought by the Government.
    Another factor that weighs significantly in favor of the revocation 
sanction sought by the Government is the lack of candor demonstrated by 
the Respondent's owner during certain of her interactions with DEA 
investigators and at the hearing. In making the public interest 
determination, ``this Agency places great weight on [a respondent's] 
candor both, during an investigation and in a subsequent proceeding. 
Fred Samimi, M.D., 79 FR 18,698, 18,713 (2014) (quoting Robert F. Hunt, 
D.O., 75 FR 49,995, 50,004 (2010)).
    In regard to the investigation, I found the Respondent's owner 
demonstrated a lack of candor both in her representation that Dr. W. 
issued a prescription for Patient J.L., where she was unable to produce 
a copy of the prescription, Dr. W. denied to investigators that he 
issued a prescription, and a prescription from a Chinese practitioner 
was used as a basis for the export. Similarly, I found a lack of candor 
where the Respondent's owner made conflicting statements about whether 
the clobazam for invoice DIW-0019/NEEC-0019 was transferred 
domestically to NEEC or exported to China. Also disturbing was the 
Respondent's owner's creation of records for presentation to Chinese 
authorities that falsely stated the diazepam invoice OKS-00243 was for 
``research'' rather than direct patient use, so that the package would 
clear Chinese customs. Finally, there were

[[Page 21545]]

several instances during the hearing where the Respondent's owner was 
evasive when answering questions posed by Government counsel and this 
tribunal. See supra at 36 n.52, 37 n.55, 40 n.57, 44 n.63, 45 n.67. 
Hence, the Respondent's lack of candor undermines the confidence that 
the Agency can have in the Respondent's ability to be a responsible DEA 
registrant.
    For the above reasons, I find that the proven misconduct is 
egregious and that deterrence considerations weigh in favor of 
revocation.

Acceptance of Responsibility and Rehabilitative Measures

    With the Government's prima facie burden having been met, an 
unequivocal acceptance of responsibility stands as a condition 
precedent for the Respondent to prevail. George Mathew, M.D., 75 FR 
66,138, 66,148 (2010). This feature of the Agency's interpretation of 
its statutory mandate on the exercise of its discretionary function 
under the CSA has been sustained on review. MacKay v. DEA, 664 F.3d 
808, 822 (10th Cir. 2011). Acceptance of responsibility and remedial 
measures are assessed in the context of the ``egregiousness of the 
violations and the [DEA's] interest in deterring similar misconduct by 
[the] Respondent in the future as well as on the part of others.'' 
Ruben, M.D., 78 FR at 38,364.
    Accordingly, the Respondent must present sufficient mitigating 
evidence to assure the Administrator that it can be entrusted with the 
responsibility incumbent with such registration. Medicine Shoppe-
Jonesborough, 73 FR 363, 387 (2008); Samuel S. Jackson, 72 FR 23,848, 
23,853 (2007). As past performance is the best predictor of future 
performance, DEA has repeatedly held that where an applicant has 
committed acts inconsistent with the public interest, the applicant 
must accept responsibility for his actions and demonstrate that it will 
not engage in future misconduct. ALRA Labs, Inc. v. DEA, 54 F.3d 450, 
452 (7th Cir.). See also Hoxie, 419 F.3d at 483 (``admitting fault'' is 
``properly consider[ed]'' by DEA to be an ``important factor[ ]'' in 
the public interest determination).
    Dr. Shi failed to take unequivocal acceptance of responsibility at 
any point during these proceedings. Although Dr. Shi made several 
references that an issue was her fault, such statements were 
immediately proceeded with a qualifying statement putting the onus on 
someone--or something--else. In fact, Dr. Shi put the blame on just 
about everyone else she has come into contact with, even going so far 
as to blame her printer,\111\ the United States Postal Service,\112\ 
and even her own clients.\113\
---------------------------------------------------------------------------

    \111\ Dr. Shi claimed that she did not provide some required 
documents to DI 3 because her printer did not have ink. Tr. 1260-61.
    \112\ Dr. Shi stated that OakmontScript was not able to provide 
the export date for diazepam because the USPS updated its online 
system sometime in 2017 and ``erased'' all the information during 
the upgrade. Tr. 1368-69.
    \113\ For instance, when discussing the export process, Dr. Shi 
noted that the custom ticket could ``tak[e] as fast as two to four 
weeks'' but if the client is a new employee, ``they might screwed up 
the whole process and taking years or something.'' Tr. 1130.
---------------------------------------------------------------------------

    In regards to receiving OakmontScript's exporter registration and 
exporting controlled substances prior to receiving its exporter 
registration, Dr. Shi consistently blamed DI 1 and/or the DEA for 
``mistreating'' and ``neglecting'' her exporter applications. Tr. 1094, 
1115. Dr. Shi later went on to state that she did not ``want to blame 
[DI 1] for neglect'' and that Dr. Shi should have ``check[ed] every 
step,'' but also stated that the she had ``put too much trust on [her] 
30-year pharmacist,'' L.U., who was also her former boss. Tr. 1096. She 
further stated that she ``shared in the responsibility,'' and believed 
that OakmontScript's exporter registration ``should be coming any 
time'' despite not receiving information to support such a belief. Tr. 
1095. Because of this belief, she assured and ``soothed [her] people'' 
by telling them that they could ``start preparing'' because the 
registration was coming ``any minute.'' Tr. 1096. She continued to 
believe that the registration ``should come any minute'' and that it 
would ``come in before May.'' Tr. 1097. Dr. Shi specifically taught her 
``people it's not to set up the date what is right. I teach my people 
say I just record what is things happen. I keep telling them I never 
allow them to assume what is the right date. They have to record what, 
how the things happen, right.'' Tr. 1130.
    Even more startling, in her post-hearing brief, Dr. Shi states that 
OakmontScript ``shares responsibility'' regarding the issue of 
exporting prior to receiving its registration, however, Dr. Shi does 
not claim she should have waited to export. ALJ Ex. 26 at 8. Instead, 
she claims that OakmontScript ``needed to do more than fulfill its 
bureaucratic obligations to fill an application, pay the fee, and pass 
a security inspection; they also should have more strongly advocated 
for their correct application. . . .'' Id. Dr. Shi goes on to explain 
that OakmontScript ``takes the position that [OakmontScript] has 
fulfilled their obligation for proper registration on April 27, 2017 
and should have been granted its license in June 2017 or prior.'' Id.
    It is evident that Dr. Shi does not comprehend the gravity of her 
many violations. In particular, when asked for clarification by 
Government counsel about the Lyrica, invoice OKS-00315-2 having a 
different shipping date listed in different records provided by 
OakmontScript, Dr. Shi initially indicated that she did not know which 
document was incorrect and claimed that regardless, it is ``one days 
apart. This is not like somebody get killed or something.'' Tr. 1340. 
Dr. Shi went on to say ``I know it's mistake. It's 20 or 21st.'' Tr. 
1340. But just moments later, Dr. Shi stated ``I can say both [dates] 
are correct, or I mean, both are incorrect . . . I also can say both 
are right. Because that's just the date.'' Tr. 1341. Dr. Shi stated 
OakmontScript did the best it could when entering these dates into the 
spreadsheets. Tr. 1341.
    When Dr. Shi discussed controlled substances that OakmontScript had 
exported despite not possessing the proper drug code, she stated that 
she was ``not blaming'' DI 3 and it was not ``her fault'' for Dr. Shi 
not getting the drug code. Tr. 1149-50. Furthermore, in regards to not 
being able to file the proper information on the DEA Form 236 for the 
diazepam, invoice OKS-00243, Dr. Shi blamed a USPS system update that 
``erase[d] all the information.'' Tr. 1368. According to Dr. Shi, the 
USPS maintained records on its website for up to ninety days, but 
sometime in 2017, the USPS performed an upgrade to its system and 
records during that time were ``not retrievable.'' Tr. 1369. Although 
she agreed that the departure date is information that OakmontScript 
would have, Dr. Shi failed to provide any reason why this information 
was not in OakmontScript's records that were provided to DI 3. Tr. 
1368-71.
    One of Dr. Shi's most shocking revelations occurred during her 
direct testimony when she declared that she had ``shared more than I 
should'' with DI 3. Tr. 1174, 1368 (Dr. Shi ``offer[ed] too much 
information.'') After being further prompted by the tribunal, Dr. Shi 
elaborated that she believed she had been ``too eager to share too 
much,'' or that there was a ``miscommunication'' between Dr. Shi and DI 
3. Tr. 1176. At some point, Dr. Shi decided that she would ``stop[ ] 
our oversharing with [DI 3]'' and took the liberty of deciding what 
exactly this oversharing entailed. Tr. 1381. For instance, despite 
OakmontScript ``hav[ing] the date'' and ``hav[ing] all the records,'' 
Dr. Shi decided that she would only ``provide a portion'' of certain 
invoices to DI 3,

[[Page 21546]]

including invoices written in Chinese or that included ``customer 
information.'' Tr. 1344-45, 1347, 1373, 1381.
    It is worth noting that although Dr. Shi may not have exhibited a 
lack of candor regarding the firing of her intern, what it is 
particularly disturbing in this instance is Dr. Shi's cavalier response 
to this incident. During cross-examination, Government counsel 
questioned Dr. Shi regarding the falsification of OakmontScript's 
distributor registration and the following exchange took place:

    Q Do you agree that falsifying a DEA registration in this manner 
is a serious issue?
    A I admit it. From, you know, when the DI 3 first time to--
    Q I know you admitted it. But do you--or at some point you 
admitted it. But do you agree that this is a serious issue?
    A Well, a serious issue to the consequences. And to the, you 
know, to what we're trying to do. And this is, I know if somebody 
killed, or if some pandemic we caused, or if something and it is a 
serious. But in our SOP we have layers, layers of the protection. So 
my explanation, just to try to alleviate some of your concern about 
our how dangerous this could be. Yes, I know that. We can be, 
imagine how serious it is. But we also, you know, need to be focused 
on how it happened and what have caused.

Tr. 1416-17 (emphasis added).
    Dr. Shi's apparent notion that for something to be deemed a 
dangerous issue it must culminate in a client's or bystander's demise 
or cause a pandemic is particularly startling. Dr. Shi further stated 
that ``the falsification of the DEA distributor and the pharmacy . . . 
is not a controlled-substance related issue'' and OakmontScript had 
done ``more than the minimum[,] . . . did 500 times more than what's 
required to address this incident.'' Tr. 1496.
    When questioned by the tribunal regarding this incident, Dr. Shi 
indicated that the intern had ``made that mistake,'' so she changed her 
to a different position instead of firing her. Tr. 1397. Dr. Shi also 
indicated that the reasons the intern had left OakmontScript were 
because her visa expired and it was a ``little far stretch'' for the 
intern, who had an interest in being a musician, to switch to 
pharmaceutical trading. Tr. 1398-99. Rather than leaving OakmontScript 
due to an employment termination for her misdeeds, the intern left of 
her own volition. Despite the ``huge risk'' that the intern's action 
imposed on OakmontScript's registration, Dr. Shi believed it would have 
been ``a little bit too much'' to fire her. Tr. 1400. Furthermore, not 
only did Dr. Shi decide not to terminate the intern's employment, but 
she also allowed the intern to continue bringing her personal computer 
into the office. Tr. 1407. Ultimately, it appears that Dr. Shi placed 
more value in her relationship with the intern and the intern's family 
in China than protecting the integrity of her business and its DEA 
registration.
    In light of the foregoing, it is bewildering that Dr. Shi proclaims 
that she has ``a better than ever understanding'' of the law. Tr. 1422. 
Dr. Shi even goes so far as to state in her closing argument that the 
DEA ``should limit their authority on the controlled substance 
matter.'' Tr. 1496. According to Dr. Shi, OakmontScript never tried to 
cut corners and made significant efforts to stay in compliance. Tr. 
1493. She also stated that OakmontScript encountered many difficulties 
while working with the DEA, including the DIs not having an 
understanding of how a drug code is different from a drug schedule and 
lacking a ``basic understanding about pharmaceutical industries.'' Tr. 
1494. Dr. Shi asserts that throughout this entire process, 
OakmontScript ``has . . . demonstrated and we've tried to please, we 
tried to cooperate, we tried to be respectful,'' but ``things have been 
misunderstood.'' Tr. 1495. Although Dr. Shi expresses that her 
``license is privilege, it's not my right,'' Tr. 1085, as the old adage 
goes, actions speak louder than words and Dr. Shi failed to take the 
proper actions.
    I therefore find that the Respondent has not unequivocally accepted 
responsibility.\114\
---------------------------------------------------------------------------

    \114\ Where a registrant has not accepted responsibility, it is 
not necessary to consider evidence of the registrant's remedial 
measures. Ajay S. Ahuja, M.D., 84 FR 5479, 5498 n.33 (2019) (citing 
1 Total Health Care Pharmacy, L.L.C. & SND Health Care, L.L.C., 81 
FR 79,188, 79,202-03 (2016)). However, there were a few times that 
OakmontScript's witnesses mentioned remedial steps taken since being 
served with the OSC. For instance, after learning of the macro issue 
populating the current date in OakmontScript's templates, Dr. Yu 
stated that she has ``corrected this template'' and employees are 
now instructed to input dates manually before converting and saving 
the document as a PDF file. Tr. 985-86. Dr. Shi admitted during her 
testimony that the shipping of Lunesta to Mr. Z.Y. at his home 
address for further transport to China was an ``informal channel'' 
of exporting and ``since this incident and since DI 3 have point 
this out, we no longer accept informal channel of delivery for any 
order.'' Tr. 1182, 1183. These few measures, however, certainly do 
not overcome OakmontScript's past violations, or allow me to find 
that OakmontScript should be entrusted with a DEA COR.
---------------------------------------------------------------------------

    Considering the entire record before me, the conduct of the 
hearing, and observation of the testimony of the witnesses presented, I 
find that the Government has met its burden of proof and has 
established a prima facie case for revocation. Furthermore, I find 
evidence that the Respondent poses an ongoing threat to the public 
health and safety. The Respondent also failed to take unequivocal 
responsibility for its conduct and it has not presented convincing 
evidence demonstrating that the Agency can entrust it to maintain its 
CORs.
    Accordingly, I recommend that the Respondent's DEA CORs RO0504680 
and RO0527082 be revoked, and any pending applications for renewal or 
modification of such registrations be denied.\115\
---------------------------------------------------------------------------

    \115\ As discussed at the conclusion of the hearing, pursuant to 
21 CFR 1316.66, the parties have twenty days from being served with 
this Recommended Decision to file any exceptions. Tr. 1507; 21 CFR 
1316.66(a).

---------------------------------------------------------------------------
    Dated: June 11, 2021.

Paul E. Soeffing,

U.S. Administrative Law Judge.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 824(a); 21 U.S.C. 958(a), (c), and (d); and 21 U.S.C. 823(a), 
(b), (d) and (e), I hereby revoke DEA Certificate of Registration Nos. 
RO0504680 and RO0527082 issued to OakmontScript. Pursuant to 28 CFR 
0.100(b) and the authority vested in me by 21 U.S.C. 824(a); 21 U.S.C. 
958(a), (c), and (d); and 21 U.S.C. 823(a), (b), (d) and (e), I further 
hereby deny any pending applications for renewal or modification of 
these registrations, as well as any other pending application of 
OakmontScript for additional registration in Massachusetts. This Order 
is effective May 11, 2022.

Anne Milgram,
Administrator.
[FR Doc. 2022-07719 Filed 4-8-22; 8:45 am]
BILLING CODE 4410-09-P