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United States v. Ahuja

United States District Court, D. Connecticut

May 5, 2017

UNITED STATES OF AMERICA, Petitioner,
v.
AJAY S. AHUJA, M.D., Defendant.

          RULING ON PENALTIES

          Janet C. Hall United States District Judge

         I. INTRODUCTION

         On November 22, 2016, Dr. Ajay S. Ahuja, M.D. (“Dr. Ahuja”), the defendant, admitted liability for twenty-three counts of civil violations of the Controlled Substances Act (“CSA”), 21 U.S.C. § 801 et. seq.[1] See Minute Entry (Doc. No. 126) (“Dr. Ahuja admitted each of Counts 1-23.”); Am. Compl. (Doc. No. 106) (alleging twenty-three CSA violations). The plaintiff, the United States (“the Government”), asks the court to assess civil penalties against Dr. Ahuja of $496, 500, [2] see March 7, 2017 Hearing Transcript (“Tr.”) (Doc. No. 153) at 143, and asks the court to order Dr. Ahuja “to comply with all federal laws and regulations pertaining to receipts, dispensations, and inventories of controlled substances” in the future, Am. Compl. at 8. Dr. Ahuja argues that the amount of penalties should be $28, 462.16. See Tr. at 155.

         The court accepted written affidavits in lieu of direct testimony and held an evidentiary hearing to hear cross-examination in order to then determine the amount of penalties.[3]

         For the reasons that follow, the court ORDERS Dr. Ahuja to pay $200, 000 and to comply with all federal laws and regulations pertaining to receipts, dispensations, and inventories of controlled substances in the future.

         II. ADMITTED VIOLATIONS

         Dr. Ahuja is a practitioner registered with the Drug Enforcement Administration and authorized to handle controlled substances. See Am. Compl. at 1. The counts, all of which Dr. Ahuja admits, set forth the following violations:

         Counts One through Eight set forth violations of section 842(a)(5) of title 21 of the United States Code[4] and section 1304.04(a) of title 21 of the Code of Federal Regulations, [5] based on failure to maintain controlled substance receipt records for (1) seventeen shipments of Alprazolam, see Am. Compl. Count I, (2) eight shipments of Hydrocodone Bitartrate with Acetaminophen, see id. Count II, (3) seven shipments of Guaifenesin with Codeine Phosphate, see id. Count III, (4) one shipment of Testosterone Cypionate, see id. Count IV, (5) one shipment of Zolpidem Tartrate, see id. Count V, (6) ten shipments of 75-milligram Lyrica tablets, see id. Count VI, (7) eight shipments of 50-milligram Lyrica tablets, see id. Count VII, and (8) one partially-used vial of Depo-Testosterone, see id. Count VIII.

         Count Nine sets forth a violation of section 1304.04(f)(2) of title 21 of the Code of Federal Regulations[6] for failure to separate controlled substance records for Schedule III, IV, and V substances from records for non-controlled substances. See Am. Compl. Count IX.

         Count Ten sets forth a violation of section 827(a)(1) of title 21 of the United States Code[7] and section 1304.11(c) of title 21 of the Code of Federal Regulations[8]based on failure “to perform and maintain a biennial inventory of controlled substances.” Am. Compl. Count X.

         Counts Eleven and Twelve set forth violations of section 827(a)(3) of title 21 of the United States Code, [9] and either section 1304.21(a)[10] or 1304.22(c)[11] of title 21 of the Code of Federal Regulations, for failures (11) “to maintain accurate dispensing records for” Alprazolam, resulting in failure to account for 59 bottles, Am. Compl. Count XI, and (12) to properly complete a dispensation log for 517 bottles of this drug, see Id. Count XII.

         Counts Thirteen and Fourteen set forth violations of section 827(a)(3), and either section 1304.21(a) or 1304.22(c), for failures (13) “to maintain accurate dispensing records for” Hydrocodone Bitartrate with Acetaminophen, resulting in failure to account for 21 bottles, Am. Compl. Count XIII, and (14) to properly complete a dispensation log for 92 bottles of this drug, see id. Count XIV.

         Counts Fifteen and Sixteen set forth violations of section 827(a)(3), and either section 1304.21(a) or 1304.22(c), for failures (15) “to maintain accurate dispensing records for” Guaifenesin with Codeine Phosphate, resulting in failure to account for 58 bottles, Am. Compl. Count XV and (16) to properly complete dispensation logs for 154 bottles of this drug, see id. Count XVI.

         Counts Seventeen and Eighteen set forth violations of section 827(a)(3) and section 1304.21(a) for failure “to maintain accurate dispensing records for” (17) Testosterone Cypionate, resulting in failure to account for two vials, Am. Compl. Count XVII, and (18) Zolpidem Tartrate, resulting in failure to account for three bottles, id. Count XVIII.

         Counts Nineteen and Twenty set forth violations of sections 842(a)(1)[12] and 842(c)(1)(A)[13] of title 21 of the United States Code, and section 1306.04(a) of title 21 of the Code of Federal Regulations, [14] for dispensing “controlled substances outside of the usual course of [Dr. Ahuja's] professional practice, ” namely, (19) to Dr. Ahuja's ex-wife, Gurpreet Ahuja (“Gurpreet”), either Hydrocodone with Acetaminophen, or Alprazolam, on a total of four different occasions, Am. Compl. Count XIX; see also Dr. Ahuja Aff. (Def. Ex. A) ¶ 7(1) (clarifying that “Jane Doe #1, ” referred to in this Count, is Gurpreet), and (20) to his son, Sunny Ahuja, Guaifenesin with Codeine, on two different occasions, id. Count XX; see also Sunny Ahuja (“Sunny”) Aff. (Def. Ex. C) ¶ 5 (clarifying that “John Doe #1, ” referred to in this Count, is Sunny).

         Counts Twenty-One and Twenty-Two set forth violations of sections 842(a)(1) and 842(c)(1)(A), [15] and section 1306.04(a) of title 21 of the Code of Federal Regulations, for prescribing “controlled substances outside of the usual course of [Dr. Ahuja's] professional practice, ” namely, (21) to his son, Nicholas Ahuja (“Nicholas”), Zolpidem, on five different occasions, Am. Compl. Count XXI; see also Nicholas Aff. (Def. Ex. B) ¶ 5 (clarifying that “John Doe #2” listed in this Count is Nicholas), and (22) to his brother, Uttam Ahuja (“Uttam”), either Cheratussin AC, Hydrocodone Bitartrate, or Hydrocodone Chlorpheniramine, on a total of three different occasions, id. Count XXII; see also Uttam Aff. (Def. Ex. D) ¶ 5 (clarifying that “John Doe #3” listed in this Count is Uttam).

         Count Twenty-Three sets forth violations of section 842(a)(1) and 842(c)(1)(A) of title 21 of the United States Code[16] for illegal possession of two (full or partial) bottles of Alprazolam which had previously been dispensed to Nicholas or Uttam. See Am. Compl. Count XXIII.

         III. LEGAL STANDARD

         Maximum penalties for the various violations of law by Dr. Ahuja are set out in the statutes. “[A]ny person who violates” section 842(a)(1), “shall, with respect to any such violation, be subject to a civil penalty of not more than $25, 000.” 21 U.S.C. § 842(c)(1)(A). “In the case of a violation of” section 842(a)(5), “the civil penalty shall not exceed $10, 000.” 21 U.S.C. § 842(c)(1)(B).

         The parties agree that the Second Circuit's decision in Advance Pharmaceutical, Inc. v. United States, 391 F.3d 377 (2d Cir. 2004), provides the standard for determining the size of a reasonable penalty. See Pl.'s Mem. (Doc. No. 134) at 1; Def.'s Mem. (Doc. No. 135) at 1. According to Advance Pharmaceutical, a

district court may properly consider a number of factors in determining the size of a civil penalty, including the good or bad faith of the defendants, the injury to the public, and the defendant['s] ability to pay. Thus, in determining monetary penalties under § 842(c), district courts have frequently considered four factors: (1) the level of defendant's culpability, (2) the public harm caused by the violations, (3) defendant's profits from the violations, and (4) defendant's ability to pay a penalty.

391 F.3d at 399 (internal quotation marks and citation omitted); Pl.'s Mem. at 1-2; Def.'s Mem. at 1-2.

         IV. FINDINGS OF FACT

         A. Culpability

         The court finds that Dr. Ahuja engaged in the following conduct, or lack of conduct: (1) Dr. Ahuja dispensed controlled substances directly from his practice, despite the fact that most physicians choose instead to only “write prescriptions” and have “pharmacies dispense the medicines, ” see, e.g., Marcie L. Johnson (“Johnson”) Aff. (Gov. Ex. 39) ¶ 14, (2) Dr. Ahuja prescribed controlled substances to family members, see, e.g., id. ¶ 11; Dr. Ahuja Aff. ¶ 7(1), (3) Dr. Ahuja failed to make proper notations in family members' patient charts when prescribing controlled substances to them, see, e.g., Tr. at 61-62, (4) Dr. Ahuja failed to properly record dispensations in his dispensation log, see Dr. Ahuja Aff. ¶ 7(e), (g), (i), (5) Dr. Ahuja failed to conduct a biennial inventory of the controlled substances he had on hand, for three to four years in a row, see Am. Compl. Count X; Johnson Aff. ¶ 28; Dr. Ahuja Aff. ¶ 7(d); Tr. at 112; and, as a result of this failure to conduct a biennial inventory, Dr. Ahuja lacked a method of noting whether controlled substances had gone missing, see Tr. at 112, (6) Dr. Ahuja cannot account for certain medications, see, e.g., Dr. Ahuja Aff. ¶ 7(d), (f), (h), (j), (m), (k), (7) Dr. Ahuja consistently failed to upload information to the Connecticut Prescription Monitoring and Reporting System (CPMRS) regarding his dispensations of controlled substances to patients, thus preventing other doctors from knowing whether their patients may have been receiving controlled substances from more than one source, see Rodrick J. Marriott (“Marriott”) Aff. (Gov. Ex. 37) ¶ 8; Tr. at 103, and, (8) if Dr. Ahuja's own theory were to be credited (which it is not), [17] due to his insufficient security measures and failure to properly keep track of his medication, Dr. Ahuja allowed controlled substances to be stolen by his former secretary, who presumably used the substances for an illicit purpose; and Dr. Ahuja then failed to report this diversion to law enforcement officials, see Tr. at 95-96, 110-12, 115-16, 121-23.

         The court credits and agrees with the opinion of University of Connecticut School of Medicine Assistant Clinical Professor in Family Medicine, Dr. Adam Perrin, M.D. (“Dr. Perrin”), that Dr. Ahuja's behavior reflects “a blatant disregard for the rigor and careful oversight required for the safe and proper dispensing and prescribing of controlled substances.” Dr. Perrin Expert Report at 8. While Dr. Ahuja testified that he “was making an attempt to keep the required records, ” Dr. Ahuja Aff. ¶ 7, the court views those efforts as essentially non-existent.

         B. Public Harm

         The court finds that, with regard to Dr. Ahuja's family members who were given controlled substances, (1) the medications were given to treat bona fide illnesses, (2) Dr. Ahuja checked up with them regarding the medications and the illnesses, and (3) the medications were effective. See Nicholas Aff. ¶ 5, Sunny Ahuja Aff. ¶ 5, Uttam Aff. ¶ 6.

         However, the court finds that approximately $28, 500 worth of drugs were diverted for non-medical purposes due to Dr. Ahuja's violations. Dr. Ahuja-in an apparent attempt to buttress his argument that he had not taken drugs from his own supply-presented a theory that his former secretary had stolen the missing medications from him, under circumstances that lead to the conclusion that the secretary would have used or sold the drugs for non-medical purposes. See Tr. at 95- 96; see also Tr. at 111 (clarifying that Dr. Ahuja believes the secretary took all his missing medication). According to DEA Diversion Group Supervisor Leonard Levin (“Levin”), the total street value for all the unaccounted-for medications is $28, 462.18. See Levin Aff. ¶ 27. The court notes that, if Dr. Ahuja invented his theory about the secretary stealing his drugs to deflect attention from his own malfeasance, the court can only assume that the truth is something worse than the secretary stealing the drugs- such as Dr. Ahuja directly diverting this $28, 500 worth of controlled substances by consuming them himself or distributing them for non-medical purposes at a price of $4 per Alprazolam pill, $7 per Hydrocodone pill, $13.50 per bottle of Guaifenesin with Codeine, $84.89 per vial of Testosterone Cypionate, and $20.67 per bottle of Zolpidem tartrate. See id. ¶¶ 25-26.

         The court finds, as Johnson testified, that “[t]he failure to report” the dispensation of controlled substances,

allows for the diversion of controlled substances. Specifically, the patient can be seeing another provider and the other provider would have no way of knowing that the patient is also receiving controlled substances from Dr. Ahuja. This exposes the patient and, if the patient is not personally using the controlled substances, the community, to harm.

         Johnson Aff. ¶ 63. The court further finds, based on Dr. Perrin's testimony, that, for a practitioner to have “controlled substances on site” involves an “inherent risk of theft and misuse, ” which “calls for strict policy and procedure in establishing a protocol to insure security, proper handling and appropriate dispensing practices.” Dr. Perrin Expert Report at 8. By failing to exercise proper vigilance, the court finds that Dr. Ahuja created a volatile situation that put his patients and family members at risk of harm from improper use of addictive substances. Id. at 8; see also Dr. Ahuja Aff. ¶ 11 (stating that Dr. Ahuja does “not dispute that wide spread abuse of controlled substances has reached crisis levels in the United States at this time”).

         C. Profit

         The court finds that Dr. Ahuja can be expected to have made a profit of approximately $3, 000 from his CSA violations. As detailed below, this profit estimation is based on the estimated retail value of the unaccounted-for drugs, subtracting the estimated cost Dr. Ahuja paid to buy these drugs. In making a profit finding, the court was required to decide between counting either (1) the retail value of the missing drugs, or (2) their street value. In deciding to use the retail value, the court does not simply rely on Dr. Ahuja's testimony that he sold the drugs at their retail value, see Dr. Ahuja Aff. ¶ 10, because the court does not find Dr. Ahuja to be credible. However, the Government has presented no evidence that Dr. Ahuja operated his medical office as a “pill factory” or “pill mill, ” meaning an illegal prescription drug dealing business disguised as a medical office, that exists solely to distribute controlled substances. See, e.g., United States v. Duprey, 652 F.App'x 107, 108-09 (3d Cir. 2016) (describing as “pill factory” doctor's office where numerous pseudo-patients received weekly, highly uniform, controlled substance prescriptions, for the purpose of giving their pills to the doctor's co-conspirator; and affirming conviction of co-conspirator, who drove pseudo-patients to the doctor's office and to the pharmacist-another co-conspirator-before collecting pills from pseudo-patients and reselling them); United States v. Guzman, 571 F.App'x 356, 357-58, 360 (6th Cir. 2014) (agreeing that use of term “pill mill” accurately described allegations, and affirming conviction, where defendant ran a purported pain management clinic, which “bore all the hallmarks of an illegal operation, ” such as an unusually high amount of customer traffic-including customers from several other states, and customers who arrived in large groups all to receive the same type of prescription-, drug deals occurring in the parking lot, customers lingering in cars outside the clinic in a semi-conscious state, people “sponsor[ing]” customers to buy drugs for them, “skyrocket[ting]” prescription drug use in the county after the business opened, an emphasis on speed rather than careful patient examinations, a refusal to accept insurance coupled with an unusually large amount of business done in cash, the fact that patients generally had no obvious symptoms, and the fact that patients often requested specific forms of drugs-such as drugs with particular markings). The Government has not argued that Dr. Ahuja's medical office was run as a pill factory or pill mill, and it has presented no evidence from which the court could infer that Dr. Ahuja's business was run in this way. For instance, the Government has presented no evidence (1) that every patient received controlled substances, rather than at least some patients receiving medical care that did not ...


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