[Federal Register Volume 87, Number 69 (Monday, April 11, 2022)]
[Notices]
[Pages 21139-21145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-07717]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 21-17]
Gilbert Y. Kim, D.D.S.; Decision and Order
On May 26, 2021, 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
Gilbert Y. Kim, D.D.S. (hereinafter, Respondent) of Oakland Gardens,
New York. Administrative Law Judge Exhibit (hereinafter, ALJX) 1 (OSC),
at 1 and 3. The OSC proposed the denial of Respondent's application for
DEA Certificate of Registration No. W20055916C (hereinafter, COR or
registration) and the denial of any applications for any other DEA
registrations pursuant to 21 U.S.C. 824(a)(5) because Respondent has
been excluded from participation in Medicare, Medicaid, and all federal
health care programs pursuant to 42 U.S.C. 1320a-7(a). Id. at 1.
On June 7, 2021, Respondent timely requested a hearing, which
commenced (and ended) on August 17, 2021, at the DEA Hearing Facility
in Arlington, Virginia with the parties, counsel, and witnesses
participating via video teleconference (VTC). On October 12, 2021,
Administrative Law Judge Teresa A. Wallbaum (hereinafter, the ALJ)
issued her Recommended Rulings, Findings of Fact, Conclusions of Law,
and Decision of the Administrative Law Judge (hereinafter, Recommended
Decision or RD). By letter dated November 8, 2021, the ALJ certified
and transmitted the record to me for final Agency action. In the
letter, the ALJ advised that neither party filed exceptions. Having
reviewed the entire record, I adopt the ALJ's rulings, findings of
fact, as modified, conclusions of law, and recommended sanction with
minor modifications, where noted herein.*\A\
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*\A\ I have made minor modifications to the RD. I have
substituted initials or titles for the names of witnesses and
patients to protect their privacy and I have made minor,
nonsubstantive, grammatical changes 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 with an asterisk, and I have
included specific descriptions of the modifications in brackets
following the asterisk or in footnotes marked with a letter and an
asterisk. Within those brackets and footnotes, the use of the
personal pronoun ``I'' refers to myself--the Administrator.
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Recommended Rulings, Findings of Fact, Conclusions of Law, and Decision
of the Administrative Law Judge
Teresa A. Wallbaum, Administrative Law Judge, October 12, 2021
*\B\ Respondent proceeded pro se throughout the entire case.\1\
Respondent timely filed a Request for Hearing. ALJ Ex. 2 at 1. A
Prehearing Conference was conducted on July 13, 2021, by video
teleconference (VTC). A Merits Hearing of the OSC allegations was
conducted on August 17, 2021, via VTC at the DEA Hearing Facility in
Arlington, Virginia. The Government filed a Post-Hearing Brief on
October 6, 2021.
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*\B\ I have omitted a section of the RD's discussion of the
procedural history to avoid repetition with my introduction.
\1\ Respondent was advised during the Prehearing Conference
that, under 21 CFR 1316.50, he had the right to seek representation
by a qualified attorney at his own expense. Respondent was also
advised that, if he continued to represent himself, he would be held
to the same standards and procedural requirements of an attorney,
including adherence to the procedural orders and rulings of this
tribunal and to the procedural rules set forth in 21 CFR 1316.41-
1316.68. ALJ Ex. 6 at 1, n.1. During the merits hearing, Respondent
acknowledged that he had been so advised and confirmed that he
wanted to proceed pro se. Tr. 8-9.
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The ultimate issue in these proceedings is whether Respondent's
application should be denied pursuant to 21 U.S.C. 823 and 824(a)(5)
based upon his exclusion from participation in Medicare, Medicaid, and
all federal health care programs pursuant to 42 U.S.C. 1320a-7(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.
I. Findings of Fact
A. Allegations
The Government alleges that the denial of Respondent's application
is supported by incontrovertible record evidence that he has been
excluded from participation in Medicare, Medicaid, and all federal
health care programs. ALJ Ex. 1 at 1. Specifically, the Government
alleges that judgment was entered against Respondent in the United
States District Court for the Eastern District of New York (the
District Court) after pleading guilty to one count of Conspiracy to
Commit Health Care Fraud in violation of 18 U.S.C. 1349. Id. at 1-2
(citing United States v. Gilbert Kim, No. 1:11-CR-073 (E.D.N.Y. May 12,
2014)). The Government alleges that, due to this conviction, the U.S.
Department of Health and Human Services, Office of Inspector General
(HHS/OIG) mandatorily excluded Respondent from participation in
Medicare, Medicaid, and all federal health care programs pursuant to 42
U.S.C. 1320a-7(a).\2\ ALJ Ex. 1 at 2. According to the Government, this
exclusion was effective as of August 29, 2014,\3\ and runs for a period
of ten years.\4\ ALJ Ex. 1 at 2.
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\2\ Respondent has stipulated to the factual basis underlying
this allegation. See Stip. 6.
\3\ The OSC states that the exclusion was effective on August
29, 2014; however, per the HHS/OIG letter, the exclusion was
effective on September 18, 2014. See Gov. Ex. 6.
\4\ Respondent has stipulated to the factual basis underlying
this allegation. See Stip. 7.
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B. Stipulations
The parties mutually agreed upon the following stipulations, and
they were conclusively accepted as fact in the proceedings:
1. On or about June 9, 2020, Respondent applied to DEA for
registration as a practitioner in Schedules II through V with a
proposed registered address of 22902 Horace Harding Expressway, Fl.
2, Oakland Gardens, New York 11364.
2. Respondent's Application was assigned Control Number
W20055916C.
3. Respondent was previously registered with DEA as a
practitioner under DEA Certificate of Registration No. AK2569284.
4. DEA Certificate of Registration No. AK2569284 was surrendered
for cause on or about August 15, 2018.
5. On or about May 12, 2014, judgment was entered against
Respondent in the United States District Court for the Eastern
District of New York based on his conviction on one count of
``Conspiracy to Commit Health Care Fraud,'' in violation of 18
U.S.C. 1349.
6. By letter dated August 29, 2014, the U.S. Department of
Health and Human Services, Office of Inspector General (HHS/OIG),
mandatorily excluded Respondent from participation in Medicare,
Medicaid, and all federal health care programs pursuant to 42 U.S.C.
1320a-7(a).
7. Respondent's exclusion under 42 U.S.C. 1320a-7(a) was
effective on September 18, 2014, and runs for a period of ten years.
8. Respondent is currently excluded from participation in a
program pursuant to 42 U.S.C. 1320a-7(a).
9. By letter dated March 23, 2020, the Office of Professional
Discipline of the New York State Education Department informed
Respondent that he may resume the practice of Dentistry in the State
of New York no earlier than March 29, 2020.
[[Page 21140]]
C. Government's Case-in-Chief
The Government's case-in-chief consisted of the testimony of a
single witness, a DEA Diversion Group Supervisor (hereinafter, the GS).
The GS testified that her duty station is the New York Field Division,
located in New York City, where she has served in her capacity as a
Group Supervisor for approximately one year. Tr. 24-25. Before the GS
became a Group Supervisor, she was a Diversion Investigator for
approximately six-and-a-half years. Id. at 25. As a Diversion
Investigator, the GS's responsibilities included preventing and
detecting the diversion of controlled substances through
administrative, civil, and criminal investigations. Id. at 26.
Additionally, the GS conducted scheduled investigations of DEA
registrants. Id.
Respondent came to the GS's attention when a Diversion Investigator
under her supervision was assigned his application for DEA
registration. Id. at 29. Through the GS's testimony, the Government
laid the foundation for introducing multiple exhibits in support of its
allegations.\5\ The parties agree, and the evidence demonstrates, that
on April 25, 2014, Respondent pleaded guilty to one count of Conspiracy
to Commit Health Care Fraud in violation of 18 U.S.C. 1349. Gov. Ex. 5;
Stip. 5; Tr. 68. The HHS/OIG sent Respondent a letter informing him
that he had been excluded from Medicare, Medicaid, and all federal
health care programs for a period beginning on September 18, 2014 and
lasting a minimum of ten years. Gov. Ex. 6; Tr. 31.
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\5\ Specifically, the GS's testimony laid the foundation for
Government Exhibits 2 and 4-7. Id. at 26-28, 34-36, 36-38, 31-33,
38-40. Prior to the GS's testimony, the Government moved for the
admission of Government Exhibits 1 and 3 as self-authenticating
documents certifying the accuracy of DEA records regarding
Respondent's DEA registration status and history. Id. at 17.
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The GS testified that, on June 16, 2021, she ran a new search on a
web page of the HHS/OIG and confirmed through that search that
Respondent was excluded from Medicare, Medicaid, and all federal health
care programs. Gov. Ex. 7; Tr. 38-39. The GS again searched the
database the morning before her testimony and confirmed that Respondent
was still excluded from Medicare, Medicaid, and all federal health care
programs. Tr. 39.
The GS presented as an objective investigator, with no discernable
motive to mislead, fabricate, or exaggerate. The testimony of this
witness was primarily focused on the uncontroversial and unopposed
introduction of documentary evidence and her contact with this case.\6\
Her testimony was sufficiently detailed, plausible, and internally
consistent to be afforded full credibility.
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\6\ Respondent did not object to the admission of any exhibit
offered by the Government. Tr. 20-21, 28, 33, 36-37, 40.
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D. Respondent's Case
Respondent, proceeding pro se, presented his own testimony and
offered eight exhibits in support of his case.\7\ According to
Respondent, he graduated from the University of Illinois College of
Dentistry in 1983. Id. at 55. He obtained a license to practice
dentistry in Illinois in 1983 and then a license in New York on or
around 1986; however, Respondent only ever practiced in New York City.
Id. at 55-56. Respondent practiced general dentistry and primarily did
so in a solo practice. Id. at 57. Respondent is not board-certified.
Id.
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\7\ Respondent's exhibits 1, 3, and 4-7 were admitted. Tr. 77-
93. Respondent's exhibits 2 and 8 were excluded. Id. at 82 and 93.
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Respondent testified that prior to 2014, he had no criminal
convictions. Id. Additionally, prior to 2014, Respondent had no
disciplinary proceedings for his Illinois license, but he was
disciplined once in New York. Id. Specifically, Respondent was
disciplined in or around 1993 for using a dirty cup while doing mobile
dentistry for a nonprofit. Id. at 57-58. Respondent blamed the incident
on a child and explained that the child had taken a dirty cup from the
garbage and returned it to the cuspidor. Id. Respondent received one
year of probation and twenty-five hours of community service as
discipline. Id. at 58.
Respondent admitted that he pleaded guilty to one count of
Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. 1349.
Kim, No. 1:11-CR-073; Stip. 5. Respondent was sentenced to one year of
home confinement, three years of supervised release, and 300 hours of
community service and ordered to pay $5,991,417.13 in restitution. Tr.
71-73; Gov. Ex. 5 at 2-5. Respondent's New York Dentistry license was
suspended for three years and was reinstated on March 29, 2020. Stip.
9; Resp't Ex. 1 at 2.
According to Respondent's own exhibits from his criminal case,
Respondent was a manager in the conspiracy. Prior to Respondent's
sentencing, he was described as ``an active manager at the clinics with
deep involvement in the planning and execution of the scheme.'' Resp't
Ex. 3 at 4.\8\ ``For example, [Respondent] was present at a meeting
with other managers at the clinic where they discussed how to bill
Medicare for lesion removals, when, in fact, they would only provide
cosmetic facial services that would entice beneficiaries to come to the
clinic.'' Id.; see also Resp't Ex. 4 at 8. Additionally, Respondent's
Presentence Report (PSR) stated that he was a manager of the clinics
and that he managed employees involved in the conspiracy. Resp't. Ex. 4
at 7. During his criminal proceedings, Respondent did not object to
these statements in his PSR. Id.
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\8\ Respondent's Exhibit 3 is the letter submitted by the
prosecutor in his criminal case pursuant to Sec. 5K1.1 of the
United States Sentencing Guidelines. While Respondent did not sign
the letter, he accepted the benefit of the letter, which was a
sentence reduction for providing substantial assistance to the
government. Moreover, the Sec. 5K1.1 letter is based upon, and
repeatedly cites, ] 20 of the Presentence Report, to which
Respondent did not object during his sentencing proceedings. Resp't.
Ex. 4 at 7.
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During these administrative proceedings, Respondent's description
of the events behind his conviction was unclear and, at times,
internally inconsistent and inconsistent with his own exhibits.
Respondent stated that he had to help his father with the clinic, so he
assisted with signing checks for rent and electrical bills, while also
contributing his own money to keep the business solvent. Tr. 60-62; see
also Resp't Ex. 4 at 10 (``[There] was a shortage of money. I had to
give the money to the operating'' expenses) (cleaned up). Despite the
record from his criminal trial, however, Respondent maintained that he
was not a manager at the clinic. Tr. 60 (denying prosecutor's unopposed
claim at sentencing that Kim was a manager--``I had no idea'') and 61-
62 (``I was not in payroll on management, so called management'').
Respondent explained the discrepancy between his trial documents and
his hearing testimony by stating that he ``was not 100 percent truthful
on [being a manager],'' when he pleaded guilty. Id. at 100. Respondent
further stated that he was practicing dentistry outside of the clinic
while his wife, E.K., and sister, M.L., were responsible for the
management work at the clinic. Id. at 61.
While acknowledging his guilty plea, Respondent nonetheless denied
any direct role in the conspiracy. Rather, when asked about his
culpability, he responded: ``I don't know what conspiracy meant, but I
think I was a--you know, I hear it, what's going on. I didn't stop
them.'' Id. at 70; see also id. at 64 (``I was aware what's going on,
but I was not actively involved at meetings.''); but see id. at 68
(``I'm not an attorney, but I'm assuming that I was a manager, on that
indictment, I was a
[[Page 21141]]
manager.''). He repeatedly denied understanding the Medicare fraud. Id.
at 53 (``I was not involved in the billing. I don't know what the
medical billing was.''); 60 (``And then also the Medicare billing. And
that, I have no idea.''); 62-66 (``I don't know completely'' about
billing practices of other members at the clinic); 69 (``to this day, I
don't know what Medicare, you know, medical billing is about'')
(``still I--scratching my head'' about the billing); 101 (``Again, I
said, you know, even medical billing, I, to this day I have no idea
what, you know, the billing code is, I have no idea.''); 109 (``. . .
but Medicare billing, and you know, that part, I have no idea up to
this point'').
When asked whether he was ``present during management meetings
where the scheme was discussed,'' Respondent answered: ``I have to say
no, little bit yes.'' Id. at 64. When asked to clarify that answer,
Respondent testified that he ``knew what's going on.'' Id. at 65.
Specifically, he testified that he learned about the fraud from
conversations with his wife and sister. Id. at 66. Later in his
testimony, however, Respondent stated that he had pleaded guilty
because at ``the early meeting, I was a participant, fully participant
on that.'' Id. at 69.
Respondent pleaded guilty to health care fraud involving luring
Medicare beneficiaries to the clinics for massages, facials, lunches,
dancing classes, and other services, inducing those beneficiaries to
provide their Medicare numbers, and billing Medicare for services that
were not provided or medically necessary (Gov. Ex. 4 at 5); however, at
the hearing, Respondent defined the fraud as narrowly involving a
decision to save money by not hiring enough physical therapists to
justify the treatment. Tr. 63-67. He testified that he tried to
convince his family members to do the billing correctly but they
refused. Id. at 66-67 (``I said do it correctly, you know . . . That's
what I was trying to tell them, but they did not listen. So I did not
stop them.''). Because he was ``very concerned,'' Respondent also spoke
to his father about the billing practices and suggested the clinic use
a third-party billing company. Id. at 67-68. According to Respondent,
his wife and sister--the managers of the clinic--``never listened to
[his] advice.'' Id. at 68.
Respondent repeatedly explained that he pleaded guilty because of
his family. Id. at 19 (``I had to plead guilty to minimize any
trauma.'') (cleaned up); 53 (``I should have stopped the business' so-
called rehab. However, you know, I have to admit that I'm part of it,
because if I had not done that I would have pointed out my wife, my
sister, and would traumatize all the family. So I had to plead
guilty.''); 54 (``I pled guilty to minimize the financial and
emotional, you know, trauma to my family. And I decided that I, you
know, needed to avoid a costly and lengthy trial.''). The only
wrongdoing to which Respondent admitted throughout his testimony was
that he should have stopped his family, not that he was a manager in
the clinic, consistent with his guilty plea. Id. at 63 (``I was trying
to stop them''); 65 (``I knew what's going on. I couldn't stop them'');
71-72 (``I don't know what conspiracy meant, but I think I was a--you
know, I hear it, what's going on. I didn't stop them . . . I should
have stopped them, but I didn't--I couldn't stop them, you know. That
was my involvement'').
On cross-examination, Respondent admitted that he failed to
disclose that the New York State Dental Board placed him on probation
in 1993 on two of his DEA applications for registration. Id. at 106-
108. Respondent confirmed that he submitted an application in 2016 and
in 2020 for DEA registration and that he did not disclose his probation
in 1993 in response to the following question on both applications:
``Has the applicant ever surrendered (for cause) or had a state
professional license or controlled substance registration revoked,
suspended, denied, restricted, or placed on probation, or is any such
action pending?'' Id.; Gov. Ex. 1 at 1; Gov. Ex. 3 at 2. Respondent
acknowledged that he provided false responses on both applications and
attempted to excuse his responses by stating that he misunderstood the
question. Tr. 107-108.
Additionally, Respondent admitted that he did not object to being
classified as a manager in his PSR and during his sentencing hearing.
Id. at 109-110. Respondent insisted that he was telling the truth now,
i.e., that he was not actually a manager at the clinic. Id. at 110-111.
He explained that he was classified as a manager and given a role
enhancement as a part of his sentence because he was ``not 100 percent
truthful'' during his sentencing hearing. Id.; Resp't Ex. 4 at 9.
According to Respondent, he has been practicing dentistry part-time
and seeing many pro-bono patients since his dentistry license was
reinstated in March 2020. Tr. 77. While he acknowledged that it is
possible to continue practicing without a DEA registration, he compared
it to sending a solider to war without any bullets. Id. at 104.\9\
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\9\ Respondent also suggested that he was being denied a COR
because of his race. Respondent's claim was premised on two
arguments. First, Respondent offered a motion filed by a co-
defendant alleging selective prosecution based on race. Resp't Ex. 8
for identification. That motion--which was not accepted into
evidence--did not relate to Respondent and was apparently never
ruled upon by the court handling the criminal proceedings. Second,
Respondent referenced an unnamed ``Caucasian'' dentist who he
claimed was banned for life from participation in Medicare and
Medicaid but was able to obtain a new DEA registration number. Tr.
90. This claim had no relationship to Respondent's Exhibit 8 for
identification, which did not reference the unnamed dentist, nor was
Respondent able to identify the unnamed dentist or provide any
documentary evidence to support his claim.
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As for remedial measures, Respondent testified that his wife and
family are not involved in his dental practice since they were ``the
biggest issue.'' Tr. 101. He is the sole manager and is ``in total
control'' of the finances and billing practices. Id. at 101-102. He
stated that if it were not for his family at the clinic, he would have
done the billing 100 percent correctly,\10\ so his sole remedial
measure is not working with his family. Id.
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\10\ As previously discussed, Respondent testified multiple
times that he has no understanding of medical billing. Tr. 60, 69,
101, 109.
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II. Discussion
The Government opposes Respondent's COR application on the ground
that he has been excluded from participating in Medicare, Medicaid, and
all federal health care programs. ALJ Ex. 1 at 1. *\C\ [In its OSC, the
Government relies upon grounds Congress provided to support revocation/
suspension, not denial of an application. Prior Agency decisions have
addressed whether it is appropriate to consider a provision of 21
U.S.C. 824(a) when determining whether or not to grant a practitioner
registration application. For over forty-five years, Agency decisions
have concluded that it is. Robert Wayne Locklear, M.D., 86 FR at 33744-
45 (collecting cases); see also, William Ralph Kincaid. In Robert Wayne
Locklear, M.D., the former Acting Administrator stated his agreement
with the results of these past decisions and reaffirmed that a
provision of section 824 may be the basis for the denial of a
practitioner registration application. 86 FR at 33745. He also
clarified that allegations related to section 823 remain relevant to
the adjudication of a practitioner registration application when a
provision of section 824 is involved. Id.
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*\C\ I have substituted the RD's language assessing the
application of the revocation grounds to my assessment of an
application under 21 U.S.C. 823(f) in accordance with recent
decisions.
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Accordingly, when considering an application for a registration, I
will
[[Page 21142]]
consider any actionable allegations related to the grounds for denial
of an application under 823 and will also consider any allegations that
the applicant meets one of the five grounds for revocation or
suspension of a registration under section 824. Id. See also Dinorah
Drug Store, Inc., 61 FR 15972, 15973-74 (1996).
A. 21 U.S.C. 823(f): The Five Public Interest Factors
Pursuant to section 303(f) of the Controlled Substances Act
(hereinafter, CSA), ``[t]he 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).
Section 303(f) further provides that an application for a
practitioner's registration may be denied upon a determination that
``the issuance of such registration . . . would be inconsistent with
the public interest.'' Id. In making the public interest determination,
the CSA requires consideration of the following factors:
(1) The recommendation of the appropriate State licensing board
or professional disciplinary authority.
(2) The applicant's experience in dispensing, 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.
21 U.S.C. 823(f).
In this case, it is undisputed that Respondent holds a valid state
dentistry license and is authorized to dispense controlled substances
in the State of New York where he practices.
Because the Government has not alleged that Respondent's
registration is inconsistent with the public interest under section
823, and although I have considered 823, I will not analyze
Respondent's application under the public interest factors. Therefore,
in accordance with prior agency decisions, I will move to assess
whether the Government has proven by substantial evidence that a ground
for revocation exists under 21 U.S.C. 824(a).
Regarding the revocation/suspension grounds alleged in the OSC, the
CSA provides, in pertinent part: ``A registration pursuant to section
824 of this title to . . . dispense a controlled substance . . . may be
suspended or revoked by the Attorney General upon a finding that the
registrant: . . . (5) has been excluded (or directed to be excluded)
from participation in a program pursuant to section 1320a-7(a) of Title
42.'' 21 U.S.C. 824(a)(5).]\11\
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\11\ [To avoid repetition, I have omitted the RD's footnote
which briefly discussed how, in accordance with prior Agency
decisions, analysis of the public interest factors is unnecessary
when the Government has not alleged that Respondent's registration
is inconsistent with the public interest under section 823.]
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B. Exclusion From Participation in a Federal Health Care Program
The CSA grants the Agency discretion to [revoke a respondent's
registration] if he ``has been excluded (or directed to be excluded)
from participation in a program pursuant to [42 U.S.C. 1320a-7(a)].''
21 U.S.C. 824(a)(5) (2012). See supra. Section 1320a-7 comprises the
exclusion of individuals or entities by the Secretary of the U.S.
Department of Health and Human Services HHS from participating in
federal health care programs. 42 U.S.C. 1320a-7 (2012). A federal
health care program is (1) a plan or program providing health benefits
and which is funded in some way by the U.S. Government (42 U.S.C.
1320a-7b(f)); or (2) a state health care program or plan receiving
certain approval or funding from the U.S. Government (42 U.S.C. 1320a-
7(h)). Under clear DEA precedent, Medicare and Medicaid programs
qualify as ``federal health care programs,'' exclusion from which can
constitute a basis for revocation of a registration. See, e.g., Daniel
Ortiz-Vargas, M.D., 69 FR 62095, 62095-96 (2004); Joseph M. Piacentile,
M.D., 62 FR 35527, 35527-28 (1997); Anibal P. Herrera, M.D., 61 FR
65075, 65077 (1996); Suresh Gandotra, M.D., 58 FR 64781, 64782 (1993);
George D. Osafo, M.D., 58 FR 37508, 37509 (1993).
Specifically, subsection (a) of Sec. 1320a-7, the part of the
statute referenced by 21 U.S.C. 824(a)(5), dictates when HHS is
required to exclude individuals or entities.\12\ Id. Sec. 1320a-7(a)
(``The Secretary shall exclude the following individuals and entities
from participation in any [f]ederal health care program . . . .'')
(emphasis added). There are four instances requiring mandatory
exclusion: (1) Conviction of a criminal offense ``related to the
delivery of an item or services under [42 U.S.C. 1395 et seq.] or under
any [s]tate health care program''; (2) conviction, ``under [f]ederal or
[s]tate law,'' related to patient ``neglect or abuse'' connected ``with
the delivery of a health care item or service[;] (3) [f]elony
conviction related to health care fraud''; and ``(4) [f]elony
conviction related to . . . the unlawful manufacture, distribution,
prescription, or dispensing of a controlled substance.'' Id. The
unambiguous words of the CSA in 21 U.S.C. 824(a)(5) provide that a
practitioner's registration ``may be suspended or revoked'' if the
practitioner ``has been excluded'' from participating in a program
pursuant to 42 U.S.C. 1320a-7(a). 21 U.S.C. 824(a)(5). DEA has strictly
interpreted this provision and acknowledged that the Administrator has
discretionary power to suspend or revoke a registration only when the
practitioner has been mandatorily excluded from a federal health care
program under subsection (a) of 42 U.S.C. 1320a-7. See, e.g., Terese,
Inc., d/b/a Peach Orchard Drugs, 76 FR 46843, 46847 (2011); Herrera, 61
FR at 65077; Gandotra, 58 FR at 64782; Nelson Ramirez-Gonzalez, M.D.,
58 FR 52787, 52788 (1993). [The Agency has consistently found that] the
misconduct mandating exclusion need not relate to controlled substances
in order to provide the Administrator with the power to suspend or
revoke (or in this case deny an application for) a COR. Ibrahim Al-
Qawaqneh, D.D.S., 86 FR 10354, 10356 (2021) (registrant excluded due to
a conviction for illegal remuneration); Jeffrey Stein, M.D., 84 FR
46968, 46973 (2019) (registrant excluded due to a conviction for tax
evasion); Melvin N. Seglin, M.D., 63 FR 70431, 70433 (1998) (registrant
excluded due to a conviction for vendor fraud); Osafo, 58 FR at 37508
(registrant excluded due to conviction for second degree larceny).
Additionally, the Agency is generally unwilling to consider the impact
of revocation or suspension on the community when exercising the
discretionary authority to grant/deny/revoke/suspend a practitioner COR
under the CSA. Linda Sue Cheek, M.D., 76 FR 66972, 66972 (2011); see
also, Gregory D. Owens, D.D.S., 74 FR 36751, 36757 (2009).
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\12\ In contrast to subsection (a), subsection (b) of 42 U.S.C.
1320a-7 provides sixteen discretionary grounds of exclusion from
health care programs. 42 U.S.C. 1320a-7(b) (2012).
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When DEA alleges that a practitioner has been mandatorily excluded
from a federal health care program under 42 U.S.C. 1320a-7a, and thus
seeks to impose a COR sanction, the Government bears the burden to
prove that such an exclusion occurred. Jin, 77 FR at 35023; see also,
21 CFR 1301.44(d) (2018) (``At [a] hearing for the denial of a [COR],
the [Government] shall have the burden of proving that the requirements
for such registration . . . are not satisfied.''). A mandatory
exclusion, however, does not mandate revocation/suspension or denial of
an application; the Agency
[[Page 21143]]
retains authority to independently weigh the evidence presented and
exercise discretion. Stein, 84 FR at 46970 [ ]. Accordingly, DEA is not
required to deny Respondent's COR application merely because he is
subject to a mandatory exclusion. Id.
In the instant case, it is undisputed that Respondent was excluded
from participation in Medicare, Medicaid, and all federal health care
programs under the mandatory authority of 42 U.S.C. 1320a-7a. Stip. 6;
Gov. Ex. 6. Consequently, under Sec. 824(a)(5), it is within the
discretion of the Agency to determine, based on the entire record, [the
consequence of] his exclusion from federal health care programs [on his
registration or application for a registration]. See Narcisco A. Reyes,
M.D., 83 FR 61678, 61681 (2018) (holding that where the Government has
demonstrated the requisite mandatory federal health care program
exclusion(s), it has satisfied its prima facie case, shifting the
burden to the respondent).
Accordingly, in review of the evidence of record, including the
stipulations of the parties, OSC Allegations 1, 2, and 3 are
sustained.*\D\
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*\D\ Moved conclusion and added headings.
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III. Sanction
Because the Government has met its prima facie burden, the
Respondent now has the burden to show that registration should be
granted as a matter of discretion, i.e., he must show that he can be
entrusted with a registration due to his unequivocal acceptance of
responsibility and remedial measures to ensure the misconduct will not
recur. See, e.g., Salvatore Cavaliere, D.O., 85 FR 45657, 45666 (2020);
Al-Qawaqneh, 86 FR at 10356; George Pursley, M.D., 85 FR 80162, 80187
(2020); Garrett Howard Smith, M.D., 83 FR 18882, 18910 (2018); Heavenly
Care Pharmacy, 85 FR 53402, 53420 (2020); Suntree Pharmacy and Suntree
Medical Equipment, LLC, 85 FR 73753, 73776 (2020); Stein, 84 FR at
49972; Fred Samimi, M.D., 79 FR 18698, 18713 (2014). He must do so by
unequivocally acknowledging his misconduct and accepting
responsibility. Al-Qawaqneh, 86 FR at 10356 (collecting cases); Stein,
84 FR at 49972-73; Mohammed Asgar, M.D., 83 FR 29569, 29572 (2018); Lon
F. Alexander, M.D., 82 FR 49704, 49728 (2017) (collecting cases);
Jeffery M. Freesemann, M.D., 76 FR 60873, 60888 (2011) (collecting
cases); Ronald Lynch, M.D., 75 FR 78745, 78749 (2010); Medicine Shoppe-
Jonesborough, 73 FR 364, 387 (2008).
``The degree of acceptance of responsibility that is required does
not hinge on the respondent uttering `magic words' of repentance, but
rather on whether the respondent has credibly and candidly demonstrated
that he will not repeat the same behavior and endanger the public in a
manner that instills confidence in the Administrator.'' Stein, 84 FR at
49973. Mere stipulation to facts without admitting to misconduct does
not amount to an acceptance of responsibility. Ajay S. Ahuja, M.D., 84
FR 5479, 5498 n.32 (2019); see also Kaniz F. Khan-Jaffery, M.D., FR
45667, 45690 (2020) (holding that it was not enough for the respondent
to simply acknowledge that she ``should have written more'').
Minimization of misconduct undermines any acceptance of responsibility.
See Pursley, 85 FR at 80188 (registrant acknowledged his unfamiliarity
with governing regulations, but stated ``I don't think I left a lot of
dead bodies laying around.''); Arvinder Singh, M.D., 81 FR 8247, 8249-
51 (2016) (registrant minimized conduct when he claimed he overbilled
patients only 15 to 20 times, but District Court ordered him to pay
more than $227,000 in restitution to approximately 250 payees); Stein,
84 FR at 46972-73 (respondent's assertion that his misdeeds had no
effect on his patients held to indicate a minimization of his
acceptance of responsibility rendering it less than unequivocal);
Lynch, 75 FR at 78749 (Respondent's attempts to minimize misconduct
held to undermine acceptance of responsibility); Rose Mary Jacinta
Lewis, M.D., 72 FR 4035, 4042 (2007) (registrant's dishonesty under
oath undermined registrant's acceptance of responsibility). Blaming
others for misconduct does not constitute acceptance of responsibility.
The Pharmacy Place, 86 FR 21008, 21016 (2021) (no acceptance when
registrant blamed computer software for her inability to have ``readily
retrievable documents'' and failed to correct her conduct ``by
providing DEA with accurate and complete log within a reasonable time
following the inspection''); Michael W. Carlton, M.D., 86 FR 10337,
10353 (2021) (no acceptance of responsibility when registrant blamed
another member of the practice); Hamada Makarita, D.D.S., 85 FR 45691,
45699 (2020) (no acceptance of responsibility when registrant blamed
his conviction on false testimony of his former office manager and
denied he ever wrote a prescription without a valid dental purpose).
But see Michele L. Martinho, M.D., 86 FR 24012, 24014, 24019-20 (2021)
(Respondent met burden when she testified she accepted responsibility
100%, always referred to herself as a felon, repaid the bribes, amended
her tax returns, paid the taxes on the money she took, and embarked
upon an effort of ``restorative justice'' by engaging in 69 speaking
engagements focused on real-world ethical decisions).
A. Acceptance of Responsibility
In the instant case, Respondent's testimony was not candid on the
key issue of culpability.\13\ His testimony was, at times, non-
responsive, internally inconsistent, and inconsistent with his own
exhibits. Importantly, this tribunal cannot ignore that Respondent
pleaded guilty to conspiracy to commit health fraud that included a
scheme to submit false and fraudulent claims to Medicare. In his
criminal proceedings, Respondent did not object to his PSR's
description of the fraudulent scheme, which was broader than merely
hiring insufficient physical therapists. Resp't Ex. 3 at 3-4 (no
physical therapy provided at the clinic; rather, patients were
``lured'' to the clinic and would ``receive medically unnecessary
chiropractic services,'' facial treatments, free lunches, and classes).
In these proceedings, however, he cast the scheme as merely a desire to
save money by not hiring physical therapists. See Tr. 63 (``they were
not doing all the fraud, but I think for the rehab, I think it was some
of them were doing--bypassing--you know, trying to save money.''); id.
(``I said to do it correctly, . . . you have to hire more physical
therapists to justify the treatment.''). I may treat Respondent's
failure to dispute these facts at a sentencing hearing as an admission
of those specific facts. See Uvienome Linda Sakor, N.P., 86 FR 50173,
50176 (2021).
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\13\ During his testimony, Respondent also acknowledged that he
had twice failed to disclose a 1993 disciplinary action in New York
that resulted in his license being placed on probation.
Specifically, Respondent failed to answer the question on the
application form which asks: ``Has the applicant ever surrendered
(for cause) or had a state professional license or controlled
substance registration revoked, suspended, denied, restricted, or
placed on probation, or is any such action pending? '' Tr. 106; Gov.
Ex. 2 at 1. Respondent claimed that he did not understand the
question (Tr. 106), although he did correctly answer that same
question on his 2020 application. Gov. Ex. 2 at 1. While
Respondent's false answers are not the focus of this inquiry, his
failure to disclose the 1993 disciplinary proceeding [by his own
admission] certainly gives this tribunal pause when evaluating
whether he can be entrusted with a DEA registration.
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Nor, in his criminal proceedings, did Respondent object to the
assertion in the PSR that he was a manager who actively participated in
the scheme, which resulted in the application of a
[[Page 21144]]
sentencing enhancement based on that managerial role. See Resp't Ex. 3
at 4; Resp't Ex. 4 at 7-8; see also Tr. 96 (stating this assertion was
inaccurate). According to the PSR, that active participation included a
meeting with other managers ``where they discussed how to bill Medicare
for lesion removals, when, in fact, they would only provide cosmetic
facial services that would entice beneficiaries to come to the
clinic.'' Resp't Ex. 3 at 4 (citing PSR ] 20); see also Resp't Ex. 4 at
7 (sentencing transcript, noting Respondent had not objected to nor did
he object to PSR ] 20). But in these proceedings, Respondent repeatedly
denied being in any meetings (Tr. 64-66; 98-99), although he
subsequently admitted, at least obliquely, that he had participated in
the ``early meeting.'' Tr. 69. On this point, Respondent testified that
he was ``not 100 percent truthful'' in his criminal proceedings about
his managerial role. Id. at 100 and 110-111. That admission alone--that
he lied under oath in his criminal proceedings--strongly supports the
conclusion that the Agency cannot entrust Respondent with a DEA COR.
More generally, it is worth noting that, by pleading guilty,
Respondent obtained a benefit of acceptance of responsibility and,
ultimately, a sentence of one year of home confinement despite facing a
Guideline Sentence of 63 to 78 months. Tr. 71; Resp't Ex. 4 at 9. His
guilty plea in federal court saved him from significant prison time. In
these proceedings, however, Respondent has attempted to distance
himself from some of his admissions in the criminal proceedings--in
particular, his failure to object to the PSR's description of him as a
manager and active participant in the scheme. Tr. 110. Respondent's
approach is inconsistent with acceptance of responsibility.
Indeed, throughout his testimony, Respondent had ample opportunity
to take full and unequivocal responsibility for his misconduct. Yet
repeatedly, when pressed on the details of his conviction, Respondent
failed to do so and, instead, made excuses and blamed others. He
portrayed himself as simply a good son who was only trying to help his
family run the clinic and so he began signing checks. Tr. 52. He
claimed that he tried to stop his family when he realized they were
defrauding federal health care programs, but did little more than have
a few conversations with his family members and then gave up when they
failed to listen. Id. at 67. Finally, he pleaded guilty to spare his
family the emotional and financial trauma of a trial. Id. at 108-109.
Overall, Respondent has seriously minimized his role in the conspiracy,
portrayed himself as an innocent party who was protecting his family,
and blamed others, including his wife. Thus, Respondent's statements
fall far short of unequivocal acceptance of responsibility. See
Pursley, 85 FR at 80188; Singh, 81 FR at 8249-51; Stein, 84 FR at
46972-73; Lynch, 75 FR at 78749; Jacinta Lewis, 72 FR at 4042.\14\
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\14\ At the hearing, Respondent--for the first time and with no
prior notice--suggested that DEA had an improper racial motive for
denying his application for a COR. Tr. 90-92. Notably, Respondent
provided no evidence to support his accusation. Respondent's Exhibit
8 for Identification (which was not admitted), was simply a motion
filed by a co-defendant in Respondent's criminal case, alleging that
non-Asian clinic practitioners were not prosecuted while Asian
clinic practitioners were prosecuted. There is no court order
granting this motion. Thus, this exhibit, at best, is an unproven
allegation about the criminal case. Respondent's second claim--
unrelated to Respondent's Exhibit 8 for Identification--alleged that
there was a ``Caucasian'' registrant--whose name and specific
circumstances are unknown--who received a COR. This is not
admissible evidence. In any event, even if Respondent had presented
evidence that he was selectively prosecuted by the Government, which
he has not done, selective prosecution is not a defense on the
merits. See, e.g., United States v. Armstrong, 517 U.S. 456, 463
(1996) (``Our cases delineating the necessary elements to prove a
claim of selective prosecution have taken great pains to explain
that the standard is a demanding one.''); Wayte v. United States,
470 U.S. 598, 607 (1985) (``In our criminal justice system, the
Government retains `broad discretion' as to whom to prosecute.'');
Martex Farms, SE v. EPA, 559 F.3d 29, 32-33 (1st Cir. 2009)
(applying criminal law principles to reject selective prosecution
arguments in EPA enforcement action). Because I find that the Agency
met its prima facie case, and because Respondent has failed to
unequivocally accept responsibility, his unsupported claim cannot
alter the outcome here.
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Thus, based on the evidence as detailed supra, I find that, in the
face of the Government's prima facie case, Respondent has failed to
unequivocally accept responsibility for his past misconduct; therefore,
he cannot be trusted with a DEA COR. See Singh, 81 FR at 8250.
Having concluded that Respondent has failed to prove an unequivocal
acceptance of responsibility, I need not address remedial measures.
Ahuja, 84 FR at 5498 n.33; Daniel A. Glick, D.D.S., 80 FR 74800, 74801
(2015); Perry County Food & Drug, 80 FR 70084, 70090-91 (2015); Jones
Total Health Care Pharmacy, LLC v. DEA, 881 F.3d 823, 833 (2018).
Nevertheless, even if remedial measures were considered, they would not
change the result.
The burden is on Respondent to present sufficient evidence of his
remedial measures. See Scott D. Fedosky, M.D., 76 FR 71375, 71378
(2011) (declining to give weight to remedial measures where the
respondent testified about them but did not present any corroborating
evidence to support his claim). And even if Respondent does introduce
specific evidence of remedial measures, registration will not be
granted unless such measures demonstrate that he can be entrusted with
a COR. Jeri Hassman. M.D., 75 FR 8194, 8237 (2010) (denying a COR where
the Agency found that the respondent had learned nothing from the
remedial steps she had taken).
Here, Respondent's only claimed remedial measure is that he no
longer works with his family and he will handle his own billing as he
practices dentistry. But this is not a remedial measure; it is a
promise that Respondent will not work with his family. It is not a
particularly persuasive promise given Respondent's emphasis that his
wife and sister never listened to him and his past history--by his own
admission--that he simply acquiesces to them. See, e.g., Tr. 67.
Notably absent is any true remedial measure, such as hiring a third-
party billing company or taking courses to improve his understanding of
Medicare billing, to ensure he does not defraud federal health care
programs again. Tr. 101-103. Thus, his promise to not work with his
family again is unpersuasive and insufficient. Simply put, Respondent
has not made an adequate showing that he can be trusted with a COR.
B. Specific and General Deterrence
*\E\ In determining whether and to what extent imposing a sanction
is appropriate, the Agency considers specific and general deterrence as
well as the egregiousness of the offenses established by the
Government's evidence. David A. Ruben, 78 FR 38363, 38384, 38385
(2013). The Agency has previously found [based on specific
circumstances] that criminal convictions and sanctions by state
licensing authorities can sufficiently deter physicians from engaging
in misconduct, making the denial or of an application for, or
revocation of, a COR unnecessary to achieve the goal of general
deterrence. Kansky J. Delisma, M.D., 85 FR 23845, 23854 (2020).
Likewise, such punitive measures can suffice to deter the registrant or
applicant from future misconduct, making revocation or denial of an
application unnecessary to achieve specific deterrence. Id.
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*\E\ Language omitted.
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With respect to specific deterrence, Respondent failed in these
proceedings to accept responsibility for his role in a four-year health
care fraud conspiracy. He has minimized his responsibility,
[[Page 21145]]
blamed others, and has no concrete remedial plan. Given these facts,
the tribunal can only conclude that granting Respondent a COR would put
the public at risk of Respondent's previous fraudulent behavior.
Moreover, with respect to general deterrence, the Agency bears the
responsibility to deter conduct similar to Respondent's past
misconduct. Ruben, 78 FR at 38385. Granting a COR to an applicant who
has neither unequivocally taken responsibility for his misconduct, nor
demonstrated sufficient remedial measures to ensure such conduct will
not happen again, would send a message to all that there will be few
consequences to defrauding federal health care programs.
C. Egregiousness
Finally, this tribunal finds that Respondent's behavior was
egregious. While Respondent did not divert controlled substances,
defrauding federal health care programs is egregious. See Stein, 84 FR
at 46973 (finding that the respondent's actions were egregious because
he defrauded the government of taxes and misused his position of
trust); Ramirez-Gonzalez, 58 FR at 52788 (``fraud perpetrated by the
respondent casts doubt upon his integrity, and as such supports an
action against his registration''); Osafo, 58 FR at 37509
(``Respondent's submission of fraudulent medical claims and subsequent
convictions of larceny indicated that Respondent placed monetary gain
above the welfare of his patients, and in so doing, endangered the
public health and safety.''). Respondent engaged in a four-year
conspiracy to defraud federal health care programs and the cost of that
fraud, as reflected in the restitution amount imposed at his
sentencing, was $5,991,417.13. Tr. 71-73; Gov. Ex. 5 at 2-5.
Moreover, the Agency ``relies heavily on a registrant's honesty and
integrity `to complete its mission of preventing diversion within such
a large regulated population.' '' Michael Jones, M.D., 86 FR 20728,
20731 (2021) (quoting Stein, 84 FR at 46974). ``Because DEA depends on
the integrity of those it entrusts with controlled substance
privileges, it takes a close look at a registrant's fraudulent
activity.'' Jones, 86 FR at 20731 (citing Ramirez-Gonzalez, 58 FR at
52788). Even if the fraud does not involve controlled substances,
``fraudulent activity indicates that a registrant places monetary gain
above the welfare of his patients, and in so doing, endangers the
public health and safety.'' Jones, 86 FR at 20731-32 (internal
quotations omitted); see also Osafo, 58 FR at 37509. Respondent's
behavior demonstrates that he lacks integrity and cannot be trusted. In
particular, his admission that he ``was not 100 percent truthful on
[being a manager]'' when he pleaded guilty under oath (Tr. 100) is
stark proof that the Agency cannot rely on Respondent's honesty as a
registrant. His lack of remorse and acceptance of responsibility
further shows that he does not recognize the seriousness of his
actions, so he should not be entrusted with a COR.
Accordingly, it is herein respectfully recommended that
Respondent's application for a DEA registration be denied.
Dated: October 12, 2021.
Teresa A. Wallbaum,
Administrative Law Judge.
Order
Pursuant to 28 CFR 0.100(b) and the authority vested in me by 21
U.S.C. 824 and 823(f), I hereby deny the pending application for a
Certificate of Registration, Control Number W20055916C, submitted by
Gilbert Y. Kim, D.D.S. as well as any other pending application of
Gilbert Y. Kim, D.D.S. for additional registration in New York. This
Order is effective May 9, 2022.
Anne Milgram,
Administrator.
[FR Doc. 2022-07717 Filed 4-8-22; 8:45 am]
BILLING CODE 4410-09-P