AML Corporation, d/b/a G & O Pharmacy, and G & O Pharmacy Revocation of Registration

DEPARTMENT OF JUSTICE

Drug Enforcement Administration

[Docket No. 94-34 and 92-78]

AML Corporation, d/b/a G & O Pharmacy, and G & O Pharmacy

Revocation of Registration

On July 23, 1992, the Deputy Assistant Administrator, Office of

Diversion Control, Drug Enforcement Administration (DEA), issued an

Order to Show Cause to G & O Pharmacy (Respondent), DEA Registration,

AG2999691, of Paducah, Kentucky, notifying it of an opportunity to show

cause as to why DEA should not revoke its DEA Certificate of

Registration, and deny any pending applications, under 21 U.S.C. 823(f)

and 824(a)(4), as being inconsistent with the public interest.

Specifically, the Order to Show Cause alleged in substance, that: (1)

in July 1990, an individual had overdosed on Demerol received from the

owner-manager pharmacist of the Respondent, Randall Lockhart, without

benefit of prescription; (2) accountability audits conducted of the

Respondent by DEA investigators in 1990 revealed shortages of Schedules

II and III controlled substances; (3) the Respondent had filled at

least 217 call-in prescriptions not authorized by the physicians whose

names appeared on the Respondent's records; and (4) at least one

individual, on multiple occasions, had received controlled substances

from Mr. Lockhart without seeing the physician listed on the call-in

prescriptions.

Respondent, through counsel, filed a timely request for a hearing,

and the case was docketed as G & O Pharmacy, Docket No. 92-78.

Following prehearing procedures, a hearing was held in Louisville,

Kentucky, on March 10 and 11, 1993. At the hearing, both parties called

witnesses to testify and introduced documentary evidence. After the

hearing, counsel for both parties submitted proposed findings of fact,

conclusions of law and argument.

Subsequently, on December 16, 1993, counsel for the Government

filed a motion to reopen the proceedings. The motion alleged that Mr.

Lockhart had transferred the ownership of Respondent G & O Pharmacy to

AML Corporation (AML). Further, the motion alleged that AML had applied

for and received a DEA registration, BA3838553, to operate the

Respondent, and that DEA had not been notified, pursuant to 21 CFR

1301.62 and 1307.14(b), that G & O Pharmacy had ceased doing business

under the previous ownership or that Mr. Lockhart had transferred

ownership to another entity. The Respondent did not answer the motion,

and on January 12, 1994, Administrative Law Judge Mary Ellen Bittner

issued an order reopening the proceedings in Docket No. 92-78.

On March 11, 1994, an Order to Show Cause was issued to AML d/b/a/

G & O Pharmacy, alleging that the Respondent's continued registration

was inconsistent with the public interest on the same basis as stated

in the July 1992 order in Docket No. 92-78, with the addition of the

allegation that Mr. Lockhart had improperly transferred ownership of

Respondent without notifying the DEA as required. The Respondent

requested a hearing, and on June 1, 1994, Judge Bittner issued an order

consolidating the two cases. On November 17, 1994, Judge Bittner

conducted a hearing in the consolidated proceedings in Louisville,

Kentucky. At this hearing, AML was represented by counsel, and both

parties called witnesses to testify and introduced documentary

evidence. Following the hearing, both the Government and the

Respondent, AML, filed further proposed findings of fact, conclusions

of law and argument.

On May 31, 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. AML and G & O Pharmacy

filed exceptions to her opinion, and on July 17, 1995, the Government

filed a response to these exceptions. On July 19, 1995, Judge Bittner

transmitted the record of these proceedings and the

[[Page 8974]]

parties' filings to the Deputy Administrator.

The Deputy Administrator has considered the record and the filings

by the parties in their entirety, and pursuant to 21 CFR 1316.67,

hereby issues his final order based upon findings of fact and

conclusions of law as hereinafter set forth. The Deputy Administrator

adopts the Opinion and Recommended Ruling, Findings of Fact,

Conclusions of Law and Decision of the Administrative Law Judge, with

noted exceptions, 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 pharmacy in

Paducah, Kentucky. Randall Lockhart is a registered pharmacist in the

Commonwealth of Kentucky, and he has practiced pharmacy since 1959. His

wife, Cynthia Lockhart, is a registered nurse who worked at the

Respondent's location. In March or April of 1989, Mr. Lockhart bought a

50% ownership in Oehlschlaeger Corporation (Oehlschlaeger), owner of

the Respondent pharmacy, and in February of 1990, he bought the

remaining 50% ownership interest. Mr. Lockhart continued to work as the

pharmacist at G & O Pharmacy.

At the hearing before Judge Bittner, Mr. Lockhart testified that in

July 1990, he had received a telephone call from a local dentist

(Dentist), requesting injectable Demerol for a planned surgical

procedure he was to perform with the assistance of another dentist, Dr.

Heine. Mr. Lockhart further testified that he had told the calling

Dentist that he had twenty-four vials of Demerol on hand, but that he

would either have to write a prescription if the Demerol was for the

use of a single patient, or provide a DEA order form, if he wanted the

substance for general office use. Demerol is the brand name for

meperidine hydrochloride, a Schedule II controlled substance.

Although in dispute, Mr. Lockhart testified that the Dentist then

appeared at the pharmacy, gave Mrs. Lockhart what appeared to be a

prescription for Demerol, and obtained all twenty-four vials from the

pharmacy, telling Mrs. Lockhart that he would return the next day with

the requisite DEA order form. The next day, Mr. Lockhart called Dr.

Heine and requested that either he or the Dentist provide the required

paperwork for the transfer of the Demerol, and that Dr. Heine told him

that the Dentist was a drug addict, and that ``he wouldn't do a

surgical procedure with him in a 100 years.'' Mr. Lockhart testified

that that was the first time he had ever heard the Dentist referred to

as a drug addict. Mr. Lockhart then testified that, upon further

investigation, he found out that the Dentist was in a hospital

emergency room following an overdose.

Mr. Lockhart testified that he subsequently contacted the Inspector

of the Kentucky Board of Pharmacy (Kentucky Board) for advice, and that

the Inspector advised him to contact the DEA office in Louisville. Mr.

Lockhart wrote to the DEA, and following the DEA's advice, also wrote

to the Board of Dentistry concerning these events.

Paducah Police Department Officers (Officers) interviewed the

Dentist, who stated that he had not written the prescription Mr.

Lockhart had for the Demerol. The Dentist also stated that on fifteen

to twenty previous occasions he had received controlled substances from

Mr. Lockhart merely by asking, and that he had obtained ``basically

whatever I wanted [a]s long as it wasn't Schedule II.'' He also stated

that he had taken fictitious prescriptions for Percocet to Mr.

Lockhart, which he had filled. Percocet contains oxycodone, a Schedule

II controlled substance.

The Dentist also told the Officers that he had been a substance

abuser since 1985, and that he was sure Mr. Lockhart knew what he

intended to do with the drugs he obtained from the Respondent, although

he later stated that he had assumed Mr. Lockhart knew of his substance

abuse problem. However, at the hearing before Judge Bittner, Mr.

Lockhart denied knowing that the Dentist was a substance abuser at the

time of this incident.

A DEA diversion investigator (Investigator) testified that the

Paducah Police Department had advised him in September of 1990, of the

incident with the Dentist, and that on October 10, 1990, a DEA special

agent served a federal search warrant on the Respondent. Pursuant to

this warrant, DEA personnel seized controlled substance prescriptions

and other records.

The Investigator testified that he had used the seized records to

conduct an accountability audit of the Respondent's Schedule II

controlled substances for the period May 28, 1989, to October 10, 1990,

and for various Schedule III through V controlled substances for the

period May 1, 1989, through October 10, 1990. In her opinion, Judge

Bittner summarized the significant audit results, and the summaries

demonstrate that Mr.Lockhart had significant shortages of Dilaudid 4

mg., Meperidine, Mepergan Fortis, Valium 10 mg., APAP #3, Tylenol #3,

Lortab 5 mg. and 7.5 mg., and Didrex 50 mg., as well as a significant

overage of Demerol 100 mg.

Mr. Lockhart testified before Judge Bittner that he did not think

that the DEA audit accurately reflected shortages and overages, but

that he was unable to verify the numbers. He also testified that he had

not conducted an inventory when he had purchased an interest in the

Respondent pharmacy, and that there could have been shortages at that

time. The Inspector testified that Mr. Lockhart's records had been

seized in a search conducted by the Paducah police officers prior to

the DEA search, and that the Officers had not returned them. It is

undisputed that the Paducah police executed a search warrant for the

Respondent's controlled substance records in August 1990. However, Mr.

Lockhart did not indicate that he ever advised the DEA Investigator, at

either the time of the DEA search or audit, that G&O's records may have

been incomplete.

The Investigator testified that during the October 1990 search, he

had noticed that the Respondent had filled disproportionately more

call-in prescriptions than other pharmacies. Therefore, he obtained

copies of these prescriptions from the Respondent pharmacy. The

Investigator then interviewed the physicians (or their office

personnel) listed on the prescriptions to verify the authorization for

each prescription under review. In ten cases,the physician or office

personnel working for the physician, indicated that the person named on

the prescription was not his or her patient, and that patient records

were not maintained for that named individual. In total, the

Investigator testified that he was unable to verify approximately 198

prescriptions purportedly authorized by twenty different doctors. Many

of the prescriptions were dated after the time Mr. Lockhart became the

100 percent owner of the pharmacy. All of these prescriptions were

dispensed by either Mr. Lockhart or Mr. Oehlschlaeger, another

pharmacist and co-owner working at the Respondent pharmacy prior to Mr.

Lockhart's becoming the sole owner. Judge Bittner found the

Investigator's testimony credible.

However, Mr. Lockhart testified that all of the allegedly

unauthorized prescriptions were authorized, and that ``almost all [of

these unauthorized prescriptions were] what [amounted] to refill

prescriptions.'' He also testified that he had routinely received oral

prescriptions from the physicians who had denied authorizing the

prescriptions under review.

[[Page 8975]]

While the G&O Pharmacy case was pending, Mrs. Lockhart called the

Diversion Group Supervisor (Supervisor) at DEA's Louisville office to

express her concern about the Respondent's Certificate of Registration.

The Certificate was due to expire, and because of the pending

proceedings, a renewal certificate had not been issued. Mrs. Lockhart

feared suppliers would not fill orders because of the expired

certificate. The Supervisor advised Mrs. Lockhart that the registration

remained active on a day-to-day basis until a final order was issued by

the DEA. The Supervisor also offered to call the Respondent's suppliers

to explain the situation. Subsequently, the Investigator, a subordinate

of the Supervisor's, did call a supplier and an insurance company and

explained that the Respondent remained authorized to handle controlled

substances on a day-to-day basis.

On May 31, 1993, Mr. Lockhart executed a renewal application for

the respondent's Kentucky pharmacy license, listing Respondent's owner

as Oehlschlaeger with himself as the president, and Mrs. Lockhart as

the vice president, secretary, and treasurer. On August 11, 1993, Mr.

Lockhart executed a renewal application for the Respondent's DEA

registration. However, on October 4, 1993, Mrs. Lockhart executed

articles of incorporation for AML, listing its business address as the

same as the Respondent's, with herself as the incorporator. By letter

dated October 13, 1993, Mr. Lockhart advised the Pharmacy Board of the

transfer of ownership to AML with Mrs. Lockhart as the sole owner of

AML's stock.

Before Judge Bittner, Mrs. Lockhart testified that she and her

husband had talked about this transfer of ownership as early as in

1990, and that the primary reason for the transfer of ownership was Mr.

Lockhart's health. He had had coronary bypass surgery approximately 9

years prior, and they had both agreed that he should taper his

involvement in the business. However, Mr. Lockhart remained the primary

pharmacist. Mrs. Lockhart testified that she intended to hire another

pharmacist, but due to the uncertainty generated by these proceedings,

she had waited to add additional staff until she could provide

assurances of long-term employment. Mrs. Lockhart further testified

that she had formed a new corporation, rather than merely having her

husband transfer his stock from the prior corporation to her, because

she wanted a corporate name of her own. The record contains no

indication of how much money, if any, AML paid for the business.

On October 15, 1993, Mrs. Lockhart applied for a Kentucky pharmacy

license for the Respondent, noting the change of ownership, listing a

proposed acquisition date of October 26, 1993, and showing the

corporate owner as ``AML Corp. DBA G&O Pharmacy.'' She also listed

herself a President, Vice President, And Secretary/Treasurer, and her

husband as Pharmacist in Charge.

That same day, Mrs. Lockhart executed an application for a DEA

registration, listing herself as president of ``AML Corporation, doing

business as G&O Pharmacy,'' located at the same address as the

Respondent. AML was issued a Certificate of Registration, number

BA3838553, effective November 15, 1993, with an expiration date of June

30, 1996.

The Investigator testified before Judge Bittner that he had first

learned about the AML transaction on or about December 1, 1993, when

the Louisville DEA office received copies of DEA order forms dated

November 22, 1993, transferring Schedule II controlled substances from

``G&O Pharmarcy'' to AML. Mrs. Lockhart testified that she had mailed

the DEA order forms. She also testified that her husband had mailed to

the DEA the prior corporation's unused DEA order forms and the

Respondent's expired DEA Certificate of Registration. Although Mrs.

Lockhart testified that she had retrained possession of the return mail

receipts for both sets of documents, such receipts were not offered

into evidence and are not a part of the record. Further, the

Investigator testified that he have not personally received any unused

order forms from the Respondent, and that there was no record in his

office that the forms had been received. Further, the record contains

no other evidence to evidence to show that the unused order forms had

been received by the DEA or that the DEA has been advised of the

transfer of ownership of the Respondent as required by DEA regulations.

The Pharmacy Board Inspector testified that he had inspected the

Respondent approximately two to four times per year, and that after Mr.

Lockhart had become associated with the pharmacy, it had a ``clearner

and neater appearance,'' and its recordkeeping had improved. The

Inspector also testified that he had inspected the Respondent after AML

had become its owner, and that as far as he knew it was not cited for

any violations of Kentucky regulation and remained in good standing

with the Pharmacy Board. Further, Mrs. Lockart testified before Judge

Bittner, stating that the Respondent was an independent pharmacy, that

it was the only pharmacy in the area that compound medications, and

that physicians from a nearby hospital routinely called her husband to

obtain advice on how to prepare pediatric medications.

Pursuant to 21 CFR 1301.62 and 1301.63, the cessation of business

terminates a DEA registration, and a registrant is required to notify

the agency promptly and in writing if it ceases doing business. The

regulations also require a registrant intending to transfer its

business interests to another business entity to provide specified

information to the appropriate DEA Special Agency in Charge at least

fourteen days in advance of the proposed transfer. Also, pursuant to 21

CFR 1307.14(b), an inventory of all controlled substances must be taken

on the date of the transfer, but the regulation does not require filing

of the inventory with the DEA.

Further, pursuant to 21 U.S.C. 823(f) and 824(a)(4), the Deputy

Administrator may revoke a DEA Certificate of 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 appplicant'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 an application for registration

denied. See Henry J. Schwarz, Jr., M.D., Docket No 88-42, 54 FR 16422

(1989)

In this case, the Deputy Administrator finds factors one, two,

four, and five relevant in determining whether the Respondent's

continued registration would be inconsistent with the public interest.

As to factor one, ``recommendation of the appropriate State licensing

board,'' per the Inspector's testimony, the Respondent AML's state

licenses are in order, and no adverse actions are pending.

[[Page 8976]]

As to factor two, the Respondent's ``experience in dispensing * * *

controlled substances,'' it has previously been found that the improper

filling of prescriptions by a pharmacist working in a pharmacy could

serve as a basis for revoking the DEA Certificate of Registration for

that pharmacy. See, e.g., Medic-Aid Pharmacy, Docket No, 89-12, 55 FR

30043 (1990). Also, the regulations implementing the Controlled

Substances Act specify that a prescription for a controlled substance

``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). Also, a pharmacist may dispense directly a Schedule II

controlled substance ``only pursuant to a written prescription signed

by the prescribing individual practitioner. * * *'' 21 CFR 1306.11(a).

The regulations also prohibit practitioners from issuing prescriptions

in order ``to obtain controlled substances for supplying the individual

practitioner for the purpose of general dispensing to patients.'' 21

CFR 1306.04(b).

It is undisputed that the document left by the Dentist when he took

the Demerol in July of 1990, even if he had, in fact, signed it and

left it with Mrs. Lockhart, would not have been an adequate document to

record the transfer of 24 dosage units of Demerol for in-office use.

However, the Deputy Administrator agrees with Judge Bittner's

conclusions regarding this incident, when she wrote:

Assuming arguendo, that Mr. Lockhart did not examine the

``prescription,'' and that neither of the Lockharts anticipated that

[the Dentist] would take the Demerol without leaving proper

documentation, this incident standing alone might not warrant

revoking [the] Respondent's DEA registration.

However, this incident does not stand alone, for the record

contains other evidence of Mr. Lockhart's dispensing practices.

Although Mr. Lockhart testified about flaws in the DEA audit,

especially following the Paducah Police search, Judge Bittner noted

that ``Mr. Lockhart apparently did not think it necessary to advise the

DEA auditors that his records might be incomplete, which prompts the

inference, which I make, that he was not seriously concerned about the

matter.'' Further, Judge Bittner found that ``[the] Respondent adduced

no persuasive evidence to explain the shortages.'' Rather, she noted,

and the Deputy Administrator concurs, that the evidence demonstrated

that the shortages were substantial, for ``some shortages of Schedule

III through V controlled substances were in the thousands of dosage

units, amounting to more than fifty percent of the total for which

[the] Respondent was accountable.'' The Deputy Administrator also

concurs with Judge Bittner's conclusion, that ``these shortages

constitute a basis for revoking [the] Respondent's DEA registration.''

See Val Gene Tatum, d/b/a/ Val's Pharmacy, 56 FR 16117 (1991), aff'd

sub nom Val G. Tatum v. DEA, 9th Cir. No. 91-70328 (January 16, 1992;

unpublished).

As for the evidence of unauthorized dispensing, the Investigator

testified that approximately 198 prescriptions were unauthorized, and

in 10 cases, he had interviewed doctors or their office personnel, who

had stated that the individuals named on the prescriptions were not

their patients. Although the Investigator's testimony concerning his

conversations with these medical personnel was hearsay, the Deputy

Administrator concurs with Judge Bittner's findings and conclusions as

to the reliability of this evidence: ``I find that the hearsay evidence

introduced through [the] Investigator [ ] is more reliable than Mr.

Lockhart's testimony, and therefore conclude that [the] Respondent

filled controlled substance prescriptions without authorization from

physicians. This conduct is further grounds for revoking [the]

Respondent's DEA registration.'' Also significant, and as noted by

Judge Bittner, Mr. Lockhart ``proffered no explanation as to why

various doctors denied authorizing the prescriptions at issue.''

As to factor four, the Respondent's ``[c]ompliance with applicable

State, Federal, or local laws relating to controlled substances,'' the

Deputy Administrator finds significant the Government's evidence of

noncompliance with DEA regulations by Mr. Lockhart when he transferred

ownership of G & O Pharmacy to AML. Specifically, 21 CFR 1305.14

states, in relevant part: ``If the registration of any purchaser

terminates (because the purchaser * * * ceases legal existence * * *) *

* * he shall return all unused order forms for [Schedules I and II]

substance[s] to the nearest office of the Administration.'' Although

Mrs. Lockhart testified that she believed Mr. Lockhart had sent unused

DEA order forms to the DEA via registered mail, AML's counsel did not

introduce the registered mail receipt, and the DEA Investigator

testified that such forms were not received by the DEA.

Furthermore, in this case, 21 CFR 1307.14(b) required Mr. Lockhart

to provide the Special Agent in Charge in his area specific information

at least 14 days in advance of the date of the proposed transfer of his

ownership in the pharmacy. Unrefuted evidence exists to establish that

Mr. Lockhart had failed to inform the DEA of his transfer of ownership

in compliance with this regulation.

The Deputy Administrator also takes into account Judge Bittner's

finding: ``Neither Mr. nor Mrs. Lockhart impressed me as credible

witnesses. Their testimony appeared tailored to suit [the] Respondent's

defenses rather than to accurately reflect relevant events. . . . In

contrast, Investigator [ ] appeared to be forthright and to exhibit

good recall, and I therefore credit [his] testimony.'' Thus, the Deputy

Administrator concludes that preponderating evidence exists to

establish that Mr. Lockhart failed to comply with the cited regulations

in effectuating the transfer of ownership of G & O Pharmacy.

As to factor five, ``[s]uch other conduct which may threaten the

public health or safety,'' the Deputy Administrator finds significant

the continued pattern of Mr. Lockhart's noncompliance with the

Controlled Substances Act and the implementing regulations.

Specifically, in neither hearing before Judge Bittner did Mr. Lockhart

present any evidence of his acknowledging past misconduct by taking

responsibility for (1) any of the documented shortages of controlled

substances; (2) his customer's having obtained controlled substances

without authorization from physicians; or (3) his failure to transfer

his ownership in the pharmacy in a manner which would have been in

compliance with DEA regulations. Mr. Lockhart's conduct fails to

reflect the acceptance of responsibility needed to continue as a

registered handler of controlled substances.

As for the transfer of ownership of the Respondent, Judge Bittner

wrote that ``the preponderance of the record establishes, and I find,

that the transfer * * * was not a bona fide transaction, but rather a

stratagem to obtain a new DEA registration.'' However, Mrs. Lockhart

testified about the efforts she made to insure AML was clearly a

distinct entity from Mr. Lockhart's corporation. Specifically, she

testified that on behalf of AML, she had opened a bank account,

obtained a federal employer tax identification number, procured

insurance for AML, and paid Mr. Lockhart a salary as an employee.

[[Page 8977]]

After reviewing this evidence, the Deputy Administrator has

determined that he need not make a finding as to the viability of this

ownership transaction. Even assuming, arguendo, that the transfer was a

bona fide transaction, revocation of AML's registration is still

appropriate. For, previously it has been found that revocation of the

DEA registration remained appropriate despite a transfer of ownership,

where there has been no change in the control exerted by the prior

pharmacist who had engaged in misconduct related to the dispensing of

controlled substances. Specifically, ``[t]he close connection between

the former and current owners leads the Administrator to believe that

the transfer has not, and will not, alter the way business is conducted

at the pharmacy.'' Absecon Pharmacy, Docket No. 88-76, 55 FR 9029

(1990). Here, the new owner, Mrs. Lockhart, is not a registered

pharmacist, is the wife of the former owner, and continues to employ

Mr. Lockhart as the ``Pharmacist in Charge.'' Mr. Lockhart continues to

hold unrestricted authorization to order and dispense controlled

substances. Further, AML did not provide any evidence to demonstrate

that any precautions had been taken to provide assurances that

controlled substances would not be improperly dispensed in the future

by Mr. Lockhart. The Deputy Administrator finds that the risk of

diversion by Mr. Lockhart remains, even though G & O Pharmacy is

currently under the ownership of AML. Since Mr. Lockhart remains the

primary pharmacist of the Respondent, his past misconduct continues to

justify the revocation of the Respondent's DEA Certificate of

Registration.

The Respondent AML raised several exceptions to Judge Bittner's

opinion. First, AML asserted that it was denied procedural due process

through the consolidation of the two cases, for AML argued that:

Due process requires that any denial, revocation, or suspension

of AML's registration be based upon the acts and omissions . . . of

AML, not a predecessor in interest to its business. Further,

fundamental due process requires that AML have notice and an

opportunity to confront witnesses and contest the grounds upon which

the government seeks to revoke its DEA certificate of registration.

4However, the Deputy Administrator notes that the Order to Show

Cause issued to AML Corporation on March 11, 1994, specifically set out

the allegations of Mr. Lockhart's acts of misconduct, mirroring the

notice given to G & O Pharmacy in July 0f 1992. By letter dated April

5, 1994, AML's counsel entered his appearance, requested a hearing, and

responded to the allegations in the show cause order paragraph by

paragraph. Thus, AML had notice of the acts which might constitute the

basis for revoking AML's registration.

Further, by order dated June 1, 1994, Judge Bittner ordered G & O's

counsel to provide AML's counsel copies of documents from the March

1993 hearing, and she ordered the Government to provide AML's counsel

exhibits and a copy of the transcript from that hearing. Judge Bittner,

concurrent with the June 1994 order, provided AML's counsel with copies

of the Administrative Law Judge's exhibits and the record to date in

the G & O case. Also, AML received a hearing, witnesses appeared, and

documentary evidence was received. AML thus received notice and had an

opportunity to confront witnesses and ``contest the grounds upon which

the government seeks to revoke its DEA Certificate of registration''.

The only reference in the record which even arguably could be

viewed as restricting AML's access to witnesses, was the following from

the hearing transcript of AML's proceedings:

[Judge Bittner]: My understanding is that we agreed this

morning, prior to the commencement of the hearing, that we weren't

going back into the prior case.

Mr. SHANNON: [AML's counsel] Yes, Judge. And I was just getting

ready to say I can probably obviate any of the objections. All I

want the record to reflect is that [the Investigator] conducted the

investigation of Oehlschlaeger, Inc., [.] AML Corporation was not

audited. They were not in existence.

The Deputy Administrator certainly is not conceding that AML was

denied an opportunity to confront and cross-examine witnesses from the

preceding hearing. However, even assuming arguendo, that AML's access

to witnesses was somehow restricted, on the record AML's counsel seems

to have affirmatively waived his right to ``go back into the prior

case,'' at the hearing before Judge Bittner. Thus, given the complete

record of AML's notice, opportunity and access to evidence, and AML's

own actions before Judge Bittner, the Deputy Administrator finds that

AML's procedural due process rights were not violated by the manner in

which these proceedings were conducted.

Further, AML objected to the fact that Judge Bittner did not

consider all factors listed in 21 U.S.C. 823(f). As has been previously

noted, the Deputy Administrator may review those factors in the

disjunctive, and he need not make a finding as to each factor. However,

as requested by AML, the Deputy Administrator notes that the record

contains no evidence to indicate that AML has been convicted of any

federal or state law violations. The remainder of AML's exceptions have

been previously addressed.

G & O Pharmacy also filed exceptions to Judge Bittner's opinion.

Specifically, G & O objected to Judge Bittner's placing reliance upon

the results of the DEA audit. The reliability of the audit results has

been addressed by the Deputy Administrator, and needs no further

comment here. Second, the Respondent G & O asserts that Judge Bittner

erred in admitting hearsay evidence during the administrative hearing.

However, since the Respondent's hearing was conducted in accordance

with applicable statutes and regulations, the Deputy Administrator

declines to adopt the Respondent's exceptions based upon his challenged

evidentiary rulings. See, e.g., Klinestiver v. Drug Enforcement

Administration, 606 F.2d 1128, 1129-30 (D.C. Cir. 1979); Gary E.

Stanford, M.D., No. 91-30, 58 Fed. Reg. 14,430 (1993). As to the

probative value, reliability, and ``fairness of its use,'' the Deputy

Administrator finds that Judge Bittner addressed these issues in her

opinion, that he concurs with her findings, and that no further comment

is required.

Therefore, after review of the entire record, the Deputy

Administrator finds that the public interest is best served by revoking

AML's Certificate of Registration. The Deputy Administrator notes that

pursuant to 21 CFR 1301.62, the transfer of ownership of G & O Pharmacy

to AML effectively terminated all authority granted under DEA

Certificate of Registration AG2999691, previously issued to G & O

Pharmacy. See 21 CFR 1301.62 and 1301.63. 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

BA3838553, previously issued to AML Corporation, is revoked and any

pending applications denied at this time. This order is effective April

5, 1996.

Dated: February 29, 1996.

Stephen H. Greene,

Deputy Administrator.

[FR Doc. 96-5141 Filed 3-5-96; 8:45 am]

BILLING CODE 4410-09-M