[Federal Register Volume 60, Number 242 (Monday, December 18, 1995)]
[Notices]
[Pages 65069-65071]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30654]



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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 94-32]


Richard M. Koenig, M.D., Revocation of Registration

    On March 2, 1994, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to Richard M. Koenig, M.D., (Respondent) of 
Riverhead, New York, notifying him of an opportunity to 

[[Page 65070]]
show cause as to why DEA should not revoke his DEA Certificate of 
Registration, AK6455237, under 21 U.S.C. 824(a), and deny any pending 
applications for renewal of such registration as a practitioner under 
21 U.S.C. 823(f), as being inconsistent with the public interest. 
Specifically, the Order to Show Cause alleged that the Respondent had 
been excluded from participation in a program pursuant to 42 U.S.C. 
1320a-7(a), as evidenced by, but not limited to the following:

    (a) Between March 1986 and January 1990, (the Respondent) 
submitted false or fraudulent medical services claims to the New 
York State Medical Assistance Program, commonly known as Medicaid, 
and as a result of such submissions (he) obtained approximately 
$150,000.00 in funds to which (he) was not entitled.
    (b) On or about April 19, 1991, (the Respondent) was convicted 
in the County of Rockland, State of New York, of twenty counts of 
offering a false instrument for filing, in violation of New York 
Penal Code, Section 175.35. On or about June 28, 1991, (the 
Respondent) was sentenced to five years probation with the 
conditions that, inter alia, (he) serve six months in jail and pay a 
$25,000.00 fine.
    (c) Effective on or about March 5, 1992, the Office of the 
Inspector General, United States Department of Health and Human 
Services, excluded (the Respondent) from participating in the 
Medicare program and any State health care program for a period of 
five years.

On April 11, 1994, the Respondent, through counsel, filed a timely 
request for a hearing, and following prehearing procedures, a hearing 
was held in Arlington, Virginia, on October 4, 1994, before 
Administrative Law Judge Mary Ellen Bittner. At the hearing, both 
parties called witnesses to testify and introduced documentary 
evidence, and after the hearing, counsel for both sides submitted 
proposed findings of fact, conclusions of law and argument. On February 
2, 1995, Judge Bittner issued her Opinion and Recommended Ruling, 
recommending that the Respondent's DEA registration be revoked and that 
any pending applications be denied. Neither party filed exceptions to 
her decision, and on March 6, 1995, Judge Bittner transmitted the 
record of these proceedings to the Deputy Administrator.
    The Deputy Administrator has considered the record in its entirety 
and the filings of the parties, and pursuant to 21 CFR 1316.67, hereby 
issues his final order based upon findings of fact and conclusions of 
law as hereinafter set forth. The Deputy Administrator adopts, in full, 
the Opinion and Recommended Ruling, Findings of Fact, Conclusions of 
Law and Decision of the Administrative Law Judge, and his adoption is 
in no manner diminished by any recitation of facts, issues and 
conclusions herein, or of any failure to mention a matter of fact or 
law.
    The Deputy Administrator finds that the Respondent is a Board-
certified psychiatrist in private practice in Riverhead, New York, and 
is also a part-time consultant for North Fork Counseling, a mental 
health clinic in Mattituck, New York. On June 28, 1991, the Respondent 
was sentenced in a New York state court to six months imprisonment, 
fines totalling $25,000, and probation for five years as a result of a 
jury verdict of guilty to 20 counts of offering a false instrument for 
filing. Specifically, the Respondent was convicted of filing, with the 
intent to defraud the State of New York, written instruments containing 
false statements and false information that he had provided services to 
certain Medicaid recipients, and that he had not been paid for such 
services, when in fact he was paid a salary to render such services. On 
January 24, 1994, the Respondent was discharged from probation.
    On February 13, 1992, the Director of the U.S. Department of Health 
and Human Services Health Care Administrative Sanctions Office of 
Investigations advised the Respondent that, pursuant to 42 U.S.C. 
1320a-7(a), he was mandatorily excluded from Medicare and state health 
care programs because of his conviction for a criminal offense related 
to the delivery of an item or service under the Medicaid Program. The 
letter also advised the Respondent that the exclusion would be in 
effect for five years. The Respondent did not appeal this revocation.
    Pursuant to a Notice of Hearing and Statement of Charges dated 
December 9, 1992, a hearing was held before a Hearing Committee of the 
New York State Board For Professional Medical Conduct (Medical Board) 
on January 20, 1993. By order dated February 5, 1993, the Medical Board 
found that the Respondent had knowingly submitted invoices to Medicaid 
representing that he had provided certain services that, in fact, he 
had not rendered as represented on the invoice. The Medical Board 
suspended the Respondent's medical license for four months and ordered 
him to perform one hundred hours of community service.
    At the hearing before Judge Bittner, the Respondent testified that 
the conviction he received concerning ``false instruments'' or Medicaid 
billings, resulted from ``errors in judgment on (his) part,'' based 
upon his performing a service on one day and billing for that service 
as if it had been performed on another day. He also stated that ``I 
can't tell you how much I regret them,'' but that ``(i)t was an error 
in thinking. It was a reflection that people would understand and it's 
not a system that understands and that was at the worst, pathological 
naivete on my part.'' He further testified that he needed a DEA 
registration in order to prescribe benzodiazapines as tranquilizers, 
and Dexedrine and Cylert for attention deficit disorder. 
Benzodiazepines and Cylert (trade name for pemoline) are Schedule IV 
controlled substances, and Dexedrine (trade name for 
dextroamphetamine), is a Schedule II controlled substance. The 
Respondent further testified that without a DEA registration, he would 
feel obliged to leave North Fork because of his inability to render 
appropriate treatment.
    Karen Malcolmsen, Ph.D., the Clinical Director of Family Service 
League, North Fork Counseling (North Fork), testified that North Fork 
is the only licensed mental health clinic within a forty-mile radius 
and is located in a very rural community. Further, North Fork provides 
counseling and psychiatric services primarily to the poor and working 
poor in the local community, many of whom are migrant farm workers who 
cannot afford to pay substantial sums for mental health care.
    Dr. Malcolmsen testified that she had known the Respondent for six 
years, for he had performed his community service at North Fork, plus 
an additional hundred hours of service, and she had supervised him, 
worked with him on the treatment team, and referred clients to him when 
they needed medication or if therapists sought a second opinion. Dr. 
Malcolmsen stated that the Respondent is still a consulting 
psychiatrist for North Fork, that he is paid a ``very small salary'' by 
the clinic based on his working seven hours per week, when in fact he 
actually provided ten to thirteen hours per week of services to the 
clinic. Dr. Malcolmsen opined that the Respondent's work was excellent, 
that clients always reported positively about him, and that she found 
him very caring and honest. Dr. Malcolmsen also testified that the 
Respondent had told her about the charges against him before the 
indictment was handed down, that he had told her that he had never 
intentionally done anything illegal but had made some errors, and that 
several times in meetings with her he had expressed remorse for his 
actions and had taken responsibility for them. Finally, Dr. Malcolmsen 
testified that the Respondent had never abused his authority to handle 
controlled 

[[Page 65071]]
substances. She explained that if the Respondent's DEA registration 
were revoked or suspended, the clinic would not be able to function in 
emergency situations because the Respondent would be unable to 
prescribe the appropriate controlled medications needed by the 
patients. However, since the Respondent's exclusion from Medicare or 
Medicaid, North Forks has the services of another psychiatrist who 
works three hours a week and sees the Medicare patients.
    Pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy 
Administrator may revoke a DEA Certificate of Registration and deny any 
pending application for such registration, if he determines that the 
continued registration would be inconsistent with the public interest. 
Section 823(f) requires that the following factors be 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 or 
safety.
    These factors are to be considered in the disjunctive; the Deputy 
Administrator may rely on any one or a combination of factors and may 
give each factor the weight he deems appropriate in determining whether 
a registration should be revoked or a pending application for 
registration denied. See Henry J. Schwarz, Jr., M.D. Docket No. 88-42, 
54 FR 16,422 (1989). In addition, 21 U.S.C. 824(a)(5) specifies that a 
DEA registration may be revoked or suspended if the registrant ``has 
been excluded * * * from participation in a program pursuant to (42 
U.S.C. 1320a-7(a)).'' Here, the record demonstrates that the Respondent 
has been so excluded. Although the Respondent attempted to contest 
elements of this exclusion in these proceedings, the Deputy 
Administrator agrees with Judge Bittner's findings that:

    The letter advising Respondent of his exclusion from Medicare 
and state health programs specified that his exclusion was mandated 
by 1320a-7(a), and Respondent did not appeal that ruling. He is 
therefore precluded from attacking that finding collaterally in this 
proceeding. In light of the above, I conclude that Respondent was 
excluded from programs pursuant to 1320a-7(a) and that the exclusion 
constitutes grounds to revoke Respondent's DEA registration pursuant 
to 42 U.S.C. 824(a)(5).

    Next, as to the public interest issue, factors one and five are 
relevant in determining whether the Respondent's continued registration 
would be inconsistent with the public interest. Specifically, as to 
factor one, ``(t)he recommendation of the appropriate state licensing 
board,'' the Medical Board, after conducting a hearing and reviewing 
the evidence submitted, found that the Respondent had knowingly 
submitted false invoices for payment by the State. Accordingly, the 
Medical Board sanctioned the Respondent by suspending his medical 
license and ordering him to perform community service.
    Further, as to factor five, ``(s)uch other conduct which may 
threaten the public health or safety,'' the Respondent's conduct of 
submitting false invoices placed into question his trustworthiness and 
credibility. Also, Judge Bittner found that the Respondent's testimony 
before her lacked credibility: ``I note at the outset that I did not 
find Respondent to be a credible witness. He seemed more interested in 
tailoring his testimony to his defenses than in accurately portraying 
relevant events.'' Such lack of credibility in 1994 causes concern as 
to the Respondent's future conduct if entrusted with protecting the 
public interest in administering controlled substances. The Respondent 
argued that since his conviction did not involve controlled substances, 
the Government had not shown that his continued registration would be 
inconsistent with the public interest. However, the Deputy 
Administrator agrees with Judge Bittner who wrote ``(i)t is well 
established that misconduct involving controlled substances is not a 
sine qua non for revocation of a DEA registration * * *.'' See also 
Gilbert L. Franklin, D.D.S., 57 FR 3441 (1992).
    Yet the Respondent has submitted evidence concerning his 
rehabilitation. Specifically, Dr. Malcolmsen testified extensively 
about the Respondent's excellent, honest and caring work, often 
voluntarily provided to the patients at North Fork, and about the 
Respondent's statements of remorse for his actions. Dr. Malcolmsen also 
testified that she believed the Respondent had taken responsibility for 
his past misconduct, and that she had never observed the Respondent 
abuse his authority to handle controlled substances. She further 
explained that if the Respondent's DEA registration was revoked, the 
clinic would suffer a loss of services because the Respondent would be 
unable to prescribe controlled substances needed by many of North 
Fork's patients.
    The Respondent also testified about his remorse for his misconduct 
and his need for his DEA Certificate of Registration. However, Judge 
Bittner, directly observing the Respondent's testimony, noted that 
``(a)lthough counsel for Respondent asserts that Respondent has 
expressed remorse for his conduct, * * * Respondent's only testimony to 
that effect in this proceeding was his comment that `I'm extremely 
remorseful about it and I've said that.' However, the thrust of his 
testimony in this proceeding appeared to be that having to go through 
`another trial' was unfair and tiring. In these circumstances, I 
conclude that his purported expressions of remorse are less than 
reliable.''
    Given Judge Bittner's doubts as to the Respondent's credibility and 
sincerity, and the egregious nature of his conduct in intentionally 
filing false documents with the State, the Deputy Administrator finds 
that the public interest is best served by revoking the Respondent's 
DEA Certificate of Registration and denying and pending registration 
application at the present time. See Sokoloff v. Saxbe, 501 F.2d 571, 
576 (2 Cir. 1974) (stating that ``permanent revocation'' of a DEA 
Certificate of Registration may be ``unduly harsh''). Like Judge 
Bittner, after reviewing the record in total, the Deputy Administrator 
questions whether the Respondent is currently willing or able to meet 
the responsibilities inherent in a DEA registration.
    Accordingly, the Deputy Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
823 and 824, and 28 CFR 0.100(b) and 0.104, hereby orders that DEA 
Certificate of Registration AK6455237, issued to Richard M. Koenig, 
M.D., be, and it hereby is, revoked, and any pending application 
submitted by the Respondent is denied. This order is effective January 
18, 1996.

    Dated: December 11, 1995.
Stephen H. Green,
Deputy Administrator.
[FR Doc. 95-30654 Filed 12-15-95; 8:45 am]
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