Texas Defense Attorneys

DEA Defense Attorneys

The attorneys at Lype, Dest & Smith Lawyers combine years of experience successfully defending clients before the Drug Enforcement Administration (DEA). Any healthcare entity or practitioner whose business or practice involves controlled substances is subject to the DEA’s jurisdiction. When a pharmacy, physician, or distributor becomes the subject of a DEA investigation or enforcement action, the stakes can be high and should not be faced alone. It is crucial to obtain representation from seasoned healthcare advocates familiar with the DEA’s procedures and different enforcement mechanisms.

Some of the most common allegations investigated by the DEA include:

• Inventory shortages and discrepancies;
• Inadequate recordkeeping;
• The loss or diversion of controlled medications;
• Dispensing or prescribing a controlled substance without a valid medical purpose;
• Dispensing or prescribing a controlled substance outside a valid physician-patient relationship;
• Failure to resolve “red flags” of possible abuse, diversion, or non-therapeutic prescribing;
• Dispensing or selling controlled substances for in-office use;
• Issuing or dispensing fraudulent prescriptions;

The DEA is an aggressive agency and this posture has only increased in response to the national opioid epidemic. The DEA mission focuses on safeguarding “the closed circle of distribution” for controlled substances. At its core this concept means ensuring controlled substances never leave the possession of authorized persons and are used for a legitimate purpose. This closed chain of distributions begins with the manufacturer, continues through the distributor, prescriber, pharmacy, and terminates with the patient.

The DEA has multiple enforcement mechanisms. The DEA can seek to revoke or limit the client’s controlled substances registration. Alternatively, it could demand substantial civil penalties or ask that the registrant enter into a Memorandum of Agreement. These different types of actions are not mutually exclusive and can be pursued in tandem.

The attorneys at Lype, Dest & Smith have successfully defended clients in all types of DEA actions. Our clients benefit from this accumulated experience and our pre-existing relationships with the DEA field offices and government attorneys.

Defense in DEA Civil Penalty Cases

When the DEA believes a pharmacy, practitioner, or distributor has violated the Controlled Substances Act, it may move to assess civil penalties against the registrant holder. In most cases, if the DEA decides to impose civil penalties, it will not seek to criminal prosecute the registrant or revoke their controlled substances registration. This is not a legal limitation, however, and the DEA can pursue multiple types of sanctions at the same time.

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These cases typically begin with the inspection of the client by one or more DEA agents. The inspection could be routine and prescheduled with the registrant holder. Alternatively, the DEA can obtain an administrative inspection warrant and show up at the client’s business unannounced. During the inspection the DEA will review and collect records including prescriptions, DEA 222 Forms, purchase invoices, and dispensing data. They will conduct an accountability audit to ensure there are no unexplained discrepancies with the controlled substances inventory. The DEA will also interview the registrant’s owner, pharmacist-in-charge, practitioners, and employees.

If the DEA concludes the registrant holder has violated the Controlled Substances Act and decides to seek civil penalties, the case is assigned to an attorney at the Department of Justice. The DOJ attorney will usually send the registrant a letter stating the DEA intends to impose civil penalties. Sometimes the DOJ will also include the maximum allowable penalty based on the alleged violations. This letter will conclude by asking the registrant or their attorney to contact the DOJ to discuss possible settlement.

The initial settlement number quoted by the DEA is often in the millions of dollars and completely out of proportion to the alleged violations. This is generated by the DEA counting as many individual violations as possible and multiplying them by the maximum penalty amount allowed under the Controlled Substances Act for each violation.

Shock and frustration are common emotions that accompany receipt of the demand letter. The good news is that many cases can be resolved for only a small fraction of the money originally demanded by the DEA and DOJ. There are also some cases that can be dismissed without the client paying any civil penalties. The attorneys at Lype, Dest & Smith have represented numerous clients before the DEA and DOJ in civil penalty cases. This background allows us to accurately and quickly assess the strength, or lack thereof, of the alleged violations. When it is not possible to obtain a full dismissal, our attorneys have experience negotiating settlement amounts that are far below the DEA and DOJ’s initial demand.

Representation Concerning Memorandums of Agreement

Another enforcement tool available to the DEA is to demand that a pharmacy or physician enter into a non-monetary settlement agreement. This is called a Memorandum of Agreement or Memorandum of Understanding depending on the DEA field division in which a case occurs. A memorandum is a written settlement agreement between the DEA and the pharmacy, physician, or other registrant.

The memorandum will list the violations the DEA believes they can prove and state that the DEA has decided to forgo revoking the registrant’s controlled substances registration in exchange for entry of the agreement. It will set conditions under which the DEA is allowing the registrant to keep their registration This will include both general terms mandating that the registrant comply with the normal requirements applicable to all registration holders, plus extra requirements based on the circumstances of their case.

For example, a pharmacy accused of recordkeeping violations may be required to send their controlled substances dispensing information to the local DEA field division office every quarter. For a physician accused of an impairment issue, a memorandum could require them to provide regular compliance updates from the Physician Health Program. In particularly serious cases, the agreement could restrict the physician’s registration such that they could not prescribe or order certain schedules of controlled substances.

A memorandum will have a set term, typically two to three years. The DEA will usually reinspect the registrant during the memorandum’s lifespan. To assist with this, most memorandums include a term allowing the DEA to enter the registrant’s premises at any time during normal business hours and without prior notice to verify compliance with the agreement. If the DEA determines the pharmacy or physician committed new violations while under a memorandum, they can use the existence of the memorandum to escalate their enforcement efforts. This could include imposing civil penalties and/or starting the process to revoke the registration.

 

“Your legal challenges deserve precise attention and dedicated advocacy. We’re committed to navigating the complexities of law, ensuring your rights are safeguarded and your objectives achieved. Trust our experienced team to stand by you every step of the way.”

Dan Lype

Founding Attorney

Defense Against Orders to Show Cause

Outside of criminal prosecution, the most severe enforcement action taken by the DEA is to revoke the pharmacy or physician’s registration. This process begins with the DEA Administrator issuing an order to show cause. This order demands that the registrant show cause why it should be allowed to keep its registration. The order will list the various violations the Administrator’s believes make it against the public interest for the pharmacy or physician to retain its registration.

If the pharmacy or physician wants to contest the Administrator’s determination, there are strict deadlines to request a hearing and file an answer. If a hearing is not timely requested, the order to show cause will become final by default and the registration will be revoked. If the registrant timely requests a hearing, the case will be assigned to an administrative law judge and set for a hearing. A government attorney will represent the DEA throughout this process.

In a show cause proceeding neither party is allowed to conduct discovery or take depositions. To make up for this, the registration holder and the DEA attorney must file a pre-hearing statement before trial. These statements are required to be very detailed and outline the entirety of the parties’ claims and defenses. They must also list the party’s witnesses and summarize in depth their expected testimony. A failure to include a claim, defense, or part of a witness’ expected testimony will usually lead to it being excluded at the hearing.

The hearing is a trial in front of the assigned administrative law judge. Both parties will present witnesses and seek to admit documents and other evidence into the record. The DEA will typically have one or more of the DEA agents involved in the case testify as well as an expert. Similarly, the registrant holder often needs to testify and find their own expert.

After the hearing and post-trial briefing, the judge will issue a decision containing findings of fact, conclusions of law, and a recommendation for resolution. The judge’s decision goes to the DEA Administrator who will subsequently enter their final decision. The DEA Administrator is not bound by the judge’s findings or recommendation and does not hesitate to depart from them if they disagree.

Representative Cases

The following are examples of the different types of DEA actions where the attorneys at Lype, Dest & Smith have successfully defended clients.

• The DEA alleged our client, an independent retail and compounding pharmacy, had sold controlled medications via invalid prescriptions and failed to keep records required under the Controlled Substances Act and Code of Federal Regulations. The DEA and DOJ demanded client pay $1.78 million in civil penalties. Through successful representation, the client’s case settled for a penalty of $45,000 payable over a period of time.
• The DEA alleged our client, an independent compounding pharmacy, committed numerous dispensing, distribution, and recordkeeping violations. This included allegations the client had dispensed a large number of controlled prescriptions that lacked a valid therapeutic purpose and were not issued in the normal course of professional practice. After demanding the client pay over $2 million in civil penalties, the DEA accepted a fraction of this as settlement.
• A physician client was alleged to have issued fraudulent controlled substances prescriptions to a third party so they could pick up the prescriptions and deliver them to the client. The DEA and DOJ demanded the client pay $250,000 in civil penalties and surrender their controlled substances registration. Through skilled representation, the case was settled for a fraction of the government’s demand and with the physician keeping their controlled substances registration.
• A physician client issued several fraudulent controlled substances prescriptions to a patient. The patient then picked up the prescriptions and gave them to the physician to use. When the client hired an attorney, the DEA was dead set on revoking the client’s registration. The case was later settled through a memorandum of agreement that allowed the physician to keep their registration.
• An anesthesiologist was alleged to have used a controlled anesthesia drug during a procedure causing them to pass out. The client’s medical license was then temporarily suspended by the Texas Medical Board. Through successful representation, the client’s medical license was unsuspended subject to their continued monitoring and participation in the Physician Health Program. The DEA was similarly convinced to allow the physician hold a controlled substances registration in exchange for the entry of a memorandum of agreement.
• Anesthesiologist had lost their DEA registration years before after being temporarily suspended by the Texas Medical Board for mental health issues. After successfully assisting client with having their medical license unsuspended, we applied for the reinstatement of their DEA registration. The DEA was ultimately convinced to issue the registration with no restrictions.

Experienced DEA Defense Attorneys:

If you have received a violation notice from the DEA or Department of Justice, don’t hesitate to contact experienced counsel. The stakes of a DEA action are high and can threaten your ability to stay in business or continue practicing your profession. Early intervention of defense counsel can often be the critical difference achieving a good outcome. Don’t wait to contact Lype, Dest & Smith for a consultation.

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A thorough and experienced lawyer. We are grateful to have Dan and his staff helped us with our case, dealing with Texas Medical Board. Dan is honest, experienced and very thorough. He was supportive throughout the proceedings. His caring and calm nature has made us feel at ease during the whole process. His office staff was professional and responsive. Dan responded to our phone calls and emails promptly. We wholeheartedly recommend Dan and his firm without any reservation.

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