[Federal Register Volume 87, Number 113 (Monday, June 13, 2022)]
[Notices]
[Pages 35795-35797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12612]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 19-24]


Gary A. Matusow, D.O.; Decision and Order

    An official of the Drug Enforcement Administration (``Government'') 
issued an Order to Show Cause (OSC) seeking to deny the pending 
application for a Drug Enforcement Administration (DEA) Certificate of 
Registration of Gary Matusow, D.O. (``Respondent'').\1\ After a 
hearing, the Administrative Law Judge (ALJ) recommended that 
Respondent's application be denied.\2\ The Agency agrees with the ALJ's 
conclusion, and, for the reasons explained below, denies Respondent's 
application as inconsistent with the public interest under 21 U.S.C. 
823(f).
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    \1\ Administrative Law Judge Exhibit (ALJX) 1 (OSC).
    \2\ See Recommended Rulings, Findings of Fact, Conclusions of 
Law, and Decision of the Administrative Law Judge (``Recommended 
Decision'' or ``RD''). Respondent filed Exceptions, but later asked 
to withdraw them. Resp Notice to Dismiss, at 2-3. The Agency is 
granting Respondent's request to withdraw his Exceptions, but 
declining Respondent's request to adopt the Recommended Decision and 
instead issuing a Final Order based on consideration of the record 
in its entirety.
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I. Findings of Fact

    On November 14, 2018, Respondent submitted an application for a DEA 
Certificate of Registration. GX 1. Respondent was previously registered 
with DEA to handle controlled substances but voluntarily surrendered 
this registration for cause. GX 9.
    The Government and Respondent have agreed to fifty-eight 
stipulations, which are hereby incorporated into the record. See RD, at 
41-47.
    Respondent was previously employed as an osteopathic physician 
partner at a practice in New Jersey that he shared with a partner, Dr. 
M.\3\ Between August 9, 2015, and January 8, 2017, Respondent filled 
(or refilled) prescriptions for controlled substances that were issued 
with Dr. M's DEA registration. Stip. 17-18. Respondent issued each of 
the prescriptions to himself by calling them into a pharmacy with Dr. 
M's name. Stip. 19. Respondent picked up each of the prescriptions from 
the pharmacy. Stip. 20. Respondent is not a patient of Dr. M and was 
not a patient of his when the prescriptions were issued. Stip. 21.
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    \3\ Stip. 14. Respondent's partner's name has been replaced with 
his initial.
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A. Allegations

    The Government argues that Respondent's application for a new DEA 
registration should be denied because he displayed dishonesty in a 
number of ways and violated the law.\4\ The Government has shown that 
Respondent obtained controlled substances for his personal use in 
violation of state law, but the Government's other allegations are not 
sustained.
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    \4\ Govt Posthearing, at 3. In its Posthearing Brief, the 
Government also alleged that Respondent issued a prescription for 
phentermine, a controlled substance, in violation of N.J. Admin. 
Code Sec.  13.35-7.5A(b) and 21 CFR 1306.04. This allegation is not 
sustained because its legal grounds were not properly noticed.
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1. Respondent Obtained Controlled Substances Without a Valid 
Prescription in Violation of State Law
    The Government has alleged that Respondent violated N.J. Stat. Ann. 
Sec.  2C:35-10 when he filled the controlled substance prescriptions 
issued under Dr. M's name and DEA registration number. Under N.J. Stat. 
Ann. Sec.  2C:35-10, it is ``unlawful for any person, knowingly or 
purposely, to obtain . . . a controlled dangerous substance . . . 
unless the substance was obtained directly, or pursuant to a valid 
prescription or order form from a practitioner, while acting in the 
course of his professional practice . . . .''
    Respondent admits that he obtained controlled substances pursuant 
to prescriptions authorized by Dr. M and under Dr. M's DEA registration 
despite not being a patient of Dr. M. See Stip. 21. Respondent 
testified that when he asked Dr. M for authorization to call in the 
prescriptions under Dr. M's name, Respondent knew he should have been a 
patient of the practice and that the discussion between Respondent and 
Dr. M about his health issues should have been documented in a patient 
chart. Tr. 358-59; see N.J. Admin. Code Sec.  13:35-7.1A (``[A] 
practitioner shall not dispense drugs or issue a prescriptions to an 
individual . . . without first having conducted an examination, which 
shall be properly documented in the patient record.''). Respondent also 
admitted that he knew the prescriptions did not comply with state and 
federal regulations. See Tr. 456-59. When asked if he believed Dr. M 
had taken ``those steps that you have to take before you prescribe 
controlled substances,'' Respondent responded that he did not and that 
he thought that he and Dr. M were both negligent. Id. at 456. He also 
testified that he knew the Dr. M prescriptions were ``off the books'' 
and that they exposed Dr. M to professional and potential criminal 
liability. Id. at 456-57.
    Based on Respondent's admissions during the administrative hearing, 
the Agency finds that he knew the subject prescriptions were not valid 
prescriptions issued in the usual course of Dr. M's professional 
practice. Accordingly, the Agency finds that Respondent violated N.J. 
Stat. Ann. Sec.  2C:35-10.
2. Allegation That Respondent Used Dr. M's DEA Registration To 
Fraudulently Obtain Controlled Substances
    The Government has alleged that Respondent fraudulently obtained 
controlled substances by using Dr. M's DEA registration number without 
Dr. M's authorization in violation of federal law (21 U.S.C. 843(a)(3)) 
and state law (N.J. Stat. Ann. Sec.  2C:35-10). Dr. M and Respondent 
gave conflicting testimony as to whether Dr. M authorized Respondent's 
use of Dr. M's registration to obtain these controlled substances. The 
ALJ was in the best position to observe the demeanor of the witnesses, 
and having considered his credibility determinations in light of the 
``consistency and inherent probability of the testimony,'' the Agency 
adopts the ALJ's findings regarding Dr. M's and Respondent's testimony 
on this issue. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 496 
(1951); see also Tr. 242-43; RD, at 77-78, 85-88. Accordingly, the 
Agency finds no violation of these laws.\5\
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    \5\ The Government has also alleged that Respondent's conduct 
violated 21 U.S.C. 843(a)(2). Govt Posthearing, at 27. This 
provision was not fully briefed until after the RD. See Resp 
Exceptions, at 13-15; Govt Response to Resp Exceptions, at 11-15. 
The Agency declines to make a finding on this criminal violation 
because the factual record in this case has not been developed 
sufficiently to determine how section 843(a)(2) applies.

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[[Page 35796]]

3. Allegation That Respondent Prescribed Controlled Substances After 
Agreeing To Cease Medical Practice
    Respondent entered into a Consent Order with the New Jersey State 
Board of Medical Examiners (BME). See Stip. 32; GX 5. The Government 
alleges that Respondent prescribed in violation of this Consent Order, 
illustrating a lack of candor. Govt Posthearing, at 34; OSC, at 4-5. 
The Agency is not sustaining this allegation: the Government has not 
proven that Respondent had reached an agreement to cease the practice 
of medicine when he issued the prescriptions or that Respondent was 
less than candid with the BME regarding the prescriptions. GX 5, at 2; 
see also RD, at 95-96, 99-100.
4. Allegation That Respondent's Answers to Questions in his Application 
for Registration Displayed a Lack of Candor
    The Government alleges that, on his application to DEA for a new 
registration, Respondent failed to fully explain the circumstances 
behind his voluntary surrender for cause of his previous registration, 
demonstrating an alleged lack of candor. OSC, at 4. After a review of 
Respondent's written statements in his application, the Agency agrees 
with the ALJ that the information Respondent disclosed was truthful. 
See RD, at 112-114. The lack of the omitted information does not make 
his response deceptively incomplete, and the Government's allegation 
thus is not sustained.\6\
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    \6\ The Government also alleged that Respondent's answers on his 
registration application displayed a failure to accept 
responsibility for fraudulent use of Dr. M's registration, but, as 
explained, the record does not support a finding that Respondent 
fraudulently used Dr. M's registration to obtain controlled 
substances.
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II. Discussion

    ``The Attorney General shall register practitioners . . . to 
dispense . . . controlled substances . . . if the applicant is 
authorized to dispense . . . controlled substances under the laws of 
the State in which he practices.'' 21 U.S.C. 823(f). An application for 
a practitioner's registration may be denied if ``the issuance of such 
registration . . . would be inconsistent with the public interest.'' 
Id. In making this determination, the following factors are considered:

    (1) The recommendation of the appropriate State licensing board 
or professional disciplinary authority.
    (2) The applicant's experience in dispensing, or conducting 
research with respect to controlled substances.
    (3) The applicant's conviction record under Federal or State 
laws relating to the manufacture, distribution, or dispensing of 
controlled substances.
    (4) Compliance with applicable State, Federal, or local laws 
relating to controlled substances.
    (5) Such other conduct which may threaten the public health and 
safety.

    Id. These factors are considered separately. Robert A. Leslie, 
M.D., 68 FR 15,227, 15,230 (2003). Each factor is weighed on a case-by-
case basis. Morall v. Drug Enf't Admin., 412 F.3d 165, 173-74 (D.C. 
Cir. 2005). Any one factor, or combination of factors, may be decisive. 
David H. Gillis, M.D., 58 FR 37,507, 37,508 (1993).

A. Factor 1

    Respondent entered into a Consent Order with the BME. Supra I.A.3; 
GX 5. While this is not a direct recommendation for purposes of Factor 
1, it indicates a recommendation by the appropriate state entity on 
many of the allegations and evidence at issue here. John O. Dimowo, 85 
FR 15,800, 15,810 (2020). It makes clear that the Board knew Respondent 
had called in prescriptions for controlled substance for himself using 
Dr. M's name.\7\ It is not clear, however, what details regarding 
Respondent's self-prescribing were before the Board or the basis for 
the Board's disciplinary action in the Consent Order--although the 
multi-year requirement that Respondent be monitored by third parties 
does not indicate substantial trust in Respondent. For these reasons, 
the Consent Order is not dispositive of the public interest inquiry in 
this case, and although the Agency has considered the Order slightly in 
favor of Respondent, it is also minimized by the circumstances 
described above. See John O. Dimowo, 85 FR at 15,810-11.\8\
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    \7\ Additionally, an investigator for the Board was present 
during the interview the DI had with Respondent and his attorney 
regarding the DEA's investigation in May 2017. Tr. 97.
    \8\ There is no evidence on the record that Respondent has a 
criminal conviction related to controlled substances. Accordingly, 
Factor 3 does not weigh for or against a finding that his 
application for registration is in the public interest. See, e.g., 
Dewey C. MacKay, M.D., 75 FR 49,956, 49,973 (2010).
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B. Factors 2 and 4

    Evidence is considered under Public Interest Factors 2 and 4 when 
it reflects an applicant's compliance (or non-compliance) with laws 
related to controlled substances and experience dispensing them. 
Established violations of the Controlled Substances Act (CSA), DEA 
regulations, or other laws regulating controlled substances at the 
state or local level are cognizable when considering if a registration 
is consistent with the public interest. Here, Respondent violated N.J. 
Stat. Ann. Sec.  2C:35-10. Supra I.A.1. This violation is most 
appropriately considered under Factor 4 and weighs against a finding 
that Respondent's application for a DEA registration is in the public 
interest, because the Government has proven that Respondent failed to 
comply with a state law related to controlled substances.\9\
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    \9\ Respondent has demonstrated substantial experience as a 
gastroenterologist since 1988. The Agency assumes that Respondent 
has prescribed legally because the Agency has not sustained 
allegations related to Respondent's dispensing of controlled 
substances. Accordingly, the Agency finds that Factor 2 does not 
weigh against Respondent's application.
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C. Factor 5

    Respondent has admitted to conduct that may threaten the public 
health and safety and is properly considered under Factor 5. Respondent 
believed it to be illegal to prescribe controlled substances to 
himself, Tr. 355, so instead he obtained casual, non-specific 
permission from his partner to prescribe himself controlled substances 
under his partner's registration. He did this with the knowledge that 
he and his partner had not established a legitimate doctor-patient 
relationship under state law. Respondent's conduct clearly circumvented 
the closed regulatory system established by the CSA and ``makes 
questionable [the Respondent's] commitment to the DEA statutory and 
regulatory requirements designed to protect the public from diversion . 
. . .'' Net Wholesale, 70 FR 24,626, 24,627 (2005). Respondent's 
admitted conduct is inconsistent with the public interest under Factor 
Five. 21 U.S.C. 823(f)(5).

D. Balancing of the Public Interest Factors

    Respondent violated a state law related to controlled substances 
and committed other conduct that may threaten the public health and 
safety, weighing against finding that his registration would be in the 
public interest under Factors 4 and 5. The other public interest 
factors are inapplicable or do not weigh significantly for or against 
finding that Respondent's registration would be in the public interest. 
Thus, the Government established a prima facie case that Respondent's 
registration ``would be inconsistent with the public interest.'' 21 
U.S.C. 823(f).

III. Sanction

    Where, as here, the Government has established grounds to deny an

[[Page 35797]]

application for a registration, the burden shifts to the respondent to 
show why he can be entrusted with the responsibility carried by a 
registration. Garret Howard Smith, M.D., 83 FR 18,882, 18,910 (2018). 
When a registrant has committed acts inconsistent with the public 
interest, they must both accept responsibility and demonstrate they 
have undertaken corrective measures. Holiday CVS LLC dba CVS Pharmacy 
Nos 219 and 5195, 77 FR 62,316, 62,339 (2012) (internal quotations 
omitted). Trust is necessarily a fact-dependent determination based on 
individual circumstances; 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 or 
behavior and the nature of the misconduct that forms the basis for 
sanction, while also considering the Agency's interest in deterring 
similar acts. See, e.g., Robert Wayne Locklear, M.D., 86 FR 33,738, 
33,746 (2021). When a registrant fails to make the threshold showing of 
acceptance of responsibility, the Agency need not address the 
registrant's remedial measures.\10\ Daniel A. Glick, D.D.S., 80 FR 
74,800, 74,810 (2015).
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    \10\ Here, although Respondent's Continuing Medical Education 
efforts were in excess of what New Jersey required, RD, at 38 
(citing Tr. 414-15; RX 1), Respondent has not sufficiently convinced 
the Agency that he has accepted responsibility and can be entrusted 
with a registration.
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    The Agency adopts the ALJ's finding, that while Respondent 
testified that what he did was inappropriate and that he ``wouldn't do 
it again,'' Tr. 458, he has not accepted full responsibility for his 
misconduct. RD, at 116. When asked about Dr. M's responsibility, 
Respondent answered, ``I think we were both negligent'' and ``it was 
carelessness on my part to even ask him.'' Tr. 456, 459.\11\ The 
Respondent's characterizations of his misconduct minimized the 
seriousness of his actions. See Jeffrey Stein, M.D., 84 FR 46,968, 
46,972.\12\
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    \11\ Respondent is credited for declining to pass blame to his 
former partner, given the animosity between the two.
    \12\ Respondent's actions were not ``negligent,'' nor were they 
mere ``carelessness''--they constitute criminal misconduct under New 
Jersey law.
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    Respondent was not ignorant to his misdeeds. He knew self-
prescribing using his own DEA registration would raise suspicion at the 
pharmacy, Tr. 355, so he decided, based on his knowledge as a DEA 
registrant, to self-prescribe using Dr. M's registration, presumably to 
evade detection. Respondent's actions also do not reflect a momentary 
lapse in judgment. He used Dr. M's registration to self-prescribe for 
over a year and a half. See Noah David, P.A., 87 FR 21,165, 21,174 
(2022); see also Garrett Howard Smith, M.D., 83 FR 18,882, 18,910 
(2018) (collecting cases) (``The egregiousness and extent of the 
misconduct are significant factors in determining the appropriate 
sanction.'') Therefore, as the ALJ stated, ``Respondent has lost a 
significant amount of trust and has failed to overcome that loss and 
demonstrate to the Agency that he can now be entrusted to maintain his 
[registration] in a lawful fashion.'' RD, at 118.\13\
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    \13\ Respondent submitted letters and character testimony. RX 5-
18. The letters are of limited weight because the Agency has limited 
ability to assess their actual credibility. See Michael S. Moore, 
M.D., 76 FR 45,867, 45,873 (2011). They also do not appear to be 
written to recommend that Respondent be granted a registration and 
offer little value in assessing his suitability to discharge those 
duties. The character testimony is more relevant to the former 
partners' relationship and is viewed with caution given the ALJ's 
credibility findings. See RD, at 68-70. These references very 
minimally support Respondent's potential for rehabilitation.
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    Furthermore, specific and general deterrence weigh in favor of 
denial of Respondent's application. Daniel A. Glick, D.D.S., 80 FR at 
74,810. Given the egregious nature of Respondent's violations, a 
sanction less than denial would send a message to the current and 
prospective registrant community that compliance with core controlled-
substance legal principles is not a condition precedent to receiving 
and maintaining a DEA registration.
    As discussed above, to receive a registration when grounds for 
denial exist, a respondent must convince the Agency that his acceptance 
of responsibility and remorse are sufficiently credible to demonstrate 
that the misconduct will not reoccur and that he can be entrusted with 
a registration. Having reviewed the record in its entirety, the Agency 
finds that Respondent has not met this burden and orders the denial of 
the application for the certificate of registration at issue in this 
case, as contained in the Order below.
    However, in light of the passage of time since the surrender of his 
previous registration, if Respondent can demonstrate that he will 
reliably treat his controlled substances registration with the respect 
that such a responsibility deserves and requires under the law, the 
Agency is instructing the Government to consider such facts in 
assessing any new application.

Order

    Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21 
U.S.C. 823(f), I hereby deny DEA registration application No. 
W18122357C submitted by Gary Matusow, D.O. This Order is effective July 
13, 2022.

Signing Authority

    This document of the Drug Enforcement Administration was signed on 
June 6, 2022, by Administrator Anne Milgram. That document with the 
original signature and date is maintained by DEA. For administrative 
purposes only, and in compliance with requirements of the Office of the 
Federal Register, the undersigned DEA Federal Register Liaison Officer 
has been authorized to sign and submit the document in electronic 
format for publication, as an official document of DEA. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

Scott Brinks,
Federal Register Liaison Officer, Drug Enforcement Administration.
[FR Doc. 2022-12612 Filed 6-10-22; 8:45 am]
BILLING CODE 4410-09-P