ALJDEC

99F-12678-MDX · Board of Medical Examiners · 1999-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 27, 1999

APPEARANCES: The State of Arizona was represented by Gordon S. Bueler, Assistant Attorney General; Joseph R. Gottesman, M. D. was represented by attorney Kirk A. McCarville.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

This is a disciplinary action referred to the Office of Administrative Hearings by the Arizona Board of Medical Examiners (Board) because Licensee Joseph R. Gottesman, M.D., pleaded guilty to and was convicted of three federal felony offenses. The parties presented evidence and testimony at the hearing and, based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding a violation and recommending terms of suspension and probation. FINDINGS OF FACT 1. Licensee is holder of License 8308 for the practice of medicine in Arizona. He is a sole practitioner in physical medicine and rehabilitation, involving non-surgical treatment of bone and muscle problems as well as pain control. He practices as Joseph R. Gottesman, M.D., Ltd., a professional corporation that is part of Arizona Physical Medicine & Rehabilitation Specialists (“APMRS”). The record shows that Licensee has practiced medicine in Arizona throughout the 1980’s and 1990’s. 2. In April 1999, Licensee pleaded guilty to three counts of attempted tax evasion in federal court. (Exhibit 2.) These offenses are federal felonies punishable by a maximum fine of $250,000, or imprisonment up to five years, or both, and a three-year term of probation. The basis for the convictions starts with Licensee’s failure to pay approximately $239,000 in individual federal income taxes and approximately $44,000 in corporate federal income taxes. These payments were for the years 1983, 1986 through 1989, and 1991 through 1995. Licensee committed the offenses by concealing his ownership interest in residential real estate and hiding his interest in APMRS. Licensee also withdrew a substantial amount of money from his professional corporation in the form of “loans” to himself. Licensee admitted that he did these acts “knowingly and willfully” to escape his tax obligations. (Id.) 3. On July 1, 1999, Licensee was found guilty and sentenced to one year in federal prison in Tucson, Arizona. (Exhibit 3.) Upon his release, he will be on probation (“supervised release”) for three years. In addition to the standard terms of probation, Licensee must do the following: perform 200 hours of community service, pay all outstanding tax liabilities including Arizona tax liability, not make any major purchases or incur new financial obligations without approval of the probation officer, and provide all financial information to the probation officer. (Id.) 4. Licensee testified at the hearing. He stated that he had financial problems in the 1980’s, filed bankruptcy in 1988, but withdrew from bankruptcy in 1992 because the bankruptcy court would not accept his proposed plan. He had what he described as a “mountain of financial debt.” He filed accurate tax returns, but continued to accumulate tax liability because he was not paying the taxes that he owed. He stated that he agrees to the description of the facts in the Plea Agreement, Exhibit 2, that he tried to hide assets so that taxes and other debts could not be collected. He owes approximately $283,000 in taxes and penalties to the IRS, about $100,000 in taxes to the State of Arizona, and close to $1 million to commercial lenders. CONCLUSIONS OF LAW 1. The State bears the burden of showing, by a preponderance of the evidence, that a licensee has violated the statutes regulating the licensee’s practice. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). The State has met that burden. 2. The Board has jurisdiction to investigate licensees and send cases to formal hearing pursuant to Arizona Revised Statutes (A.R.S.) § 32-1451. The Office of Administrative Hearings has jurisdiction to conduct hearings and make findings of fact, conclusions of law and recommendations pursuant to A.R.S. §§ 41-1092 through 41-1092.12. 3. Upon finding that a licensee has committed unprofessional conduct as defined in A.R.S. § 32-1401(25), the Board may impose censure, probation, civil penalties, suspension, revocation, or any combination of those penalties, as well as other restrictions necessary to protect the health, safety, and welfare of the public. A.R.S. § 32-1451. 4. Relevant to Licensee’s case, unprofessional conduct is defined as “[c]ommitting a felony, whether or not involving moral turpitude, or a misdemeanor involving moral turpitude.” A.R.S. § 32-1401(25)(d). 5. The evidence unquestionably shows that Licensee has committed unprofessional conduct by committing three federal felonies when he attempted to evade paying taxes. Licensee has not disputed that. The remaining issue is determining appropriate discipline. 6. The record contains some evidence in aggravation. Licensee let his personal and corporate finances get out of control and then willfully tried to hide assets. This was more than just sloppy bookkeeping or negligent money management. It was a pattern of conduct over several years and in various forms. The seriousness of it is seen by the fact that Licensee will spend a year in federal prison beginning August 30, 1999. 7. The record also contains evidence in mitigation. Foremost, the criminal conduct is not related to patient care. There is no evidence that any of Licensee’s patients have been in any danger or have been neglected. There is no evidence that Licensee has had any other disciplinary actions taken against him. Licensee accepted responsibility for his conduct and pleaded guilty. Although he continues to maintain that he thought his actions were legal at the time, he now acknowledges that they were illegal. 8. The evidence does not support a determination that revocation is the appropriate discipline because, although his actions constitute serious misconduct, Licensee does not present a danger to his patients. Furthermore, Licensee will have a better chance of paying his debts if he is allowed to practice medicine. Weighing the aggravating and mitigating factors, the appropriate discipline is five years of probation that includes an initial 18-month suspension, followed by terms designed to make sure that Licensee repays his debts and keeps control of his finances. It is important to note that while Licensee did try to hide assets by making questionable transactions, he did not file false returns with the tax authorities. Therefore, he has retained some measure of trust and will likely follow through on probationary requirements. The Board may consider imposing, in addition to the standard probationary terms recommended below, terms that it feels are necessary to address Licensee’s specific circumstances, including requirements for additional continuing medical education after Licensee’s suspension, and personal financial training and education. RECOMMENDED ORDER IT IS RECOMMENDED that license 8308, issued to Joseph R. Gottesman, M.D., to practice medicine in the State of Arizona, be suspended for a period of eighteen (18) months, commencing upon the effective date of the Board’s order and tolling during any period in which Licensee does not practice within the borders of the State of Arizona. IT IS FURTHER RECOMMENDED that license 8308 be placed on probation for a period of five (5) years, commencing upon the effective date of the Board’s order and tolling during any period in which Licensee does not practice within the borders of the State of Arizona, and that terms of probation include the following: 1. Licensee shall strictly comply with the statutes and rules governing the practice of medicine in the State of Arizona. In the event Licensee violates, during the probationary period, any provision of the law regulating medicine, the Board shall take Licensee’s probationary status into account when determining an appropriate sanction.

2. Licensee shall allow Board staff or a Board investigator immediate and unannounced access to his Arizona office(s) and his files, including patient and billing files. A complaint against Licensee shall not be a prerequisite for the Board to investigate his files or office during the probationary period.

3. Upon the expiration of the probationary period and his successful completion of its terms, Licensee shall petition the Board for an order ending the probation and placing his license back to regular status. Until such an order is issued by the Board, Licensee’s probation shall continue.

Done this 31st day of August 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of August 1999, to:

Claudia Foutz, Executive Director Arizona Board of Medical Examiners 1651 East Morten, #210 Phoenix, AZ 85020 ATTN: Jack Confer

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826