[Federal Register: April 9, 2003 (Volume 68, Number 68)]
[Notices]
[Page 17406-17407]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ap03-87]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 02-27]
Island Wholesale, Inc., Denial of Application
On October 5, 2001, the Deputy Assistant Administrator, Office of
Division Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Island Wholesale, Incorporated (Respondent),
proposing to deny its application, executed on March 31, 2000, for DEA
Certificate of Registration as a distributor of the list I chemicals
ephedrine and pseudoephedrine. The Order to Show Cause alleged that
granting the Respondent's application would be inconsistent with the
public interest as that term is used in 21 U.S.C. 823(h).
The Order to Show Cause was delivered to the Respondent by
certified mail, and the Respondent timely requested a hearing. However,
after the matter was docketed before Administrative Law Judge Gail A.
Randall (Judge Randall), and the Government submitted its Prehearing
Statement, the Respondent, through its legal counsel, withdrew its
opposition to the denial of its DEA application for registration. In
response to the Respondent's request, Judge Randall also found that the
Respondent had likewise withdrawn its request for hearing. Accordingly,
on April 18, 2002, Judge Randall issued a Termination Order terminating
all matters before her and the matter was subsequently transmitted to
the Deputy Administrator for Final Agency Decision.
In light of the withdrawal of its request for hearing, the Deputy
Administrator finds that the Respondent has waived its hearing right.
Aqui Enterprises, 67 FR 12576 (2002). After considering relevant
material from the investigative file in this matter, the Deputy
Administrator now enters his final order without a hearing pursuant to
21 CFR 1301.43(d) and (e) and 1301.46. The Deputy Administrator finds
as follows:
List I chemicals are those that may be used in the manufacture of a
controlled substance in violation of the Controlled Substances Act. 21
U.S.C. 802(34); 21 CFR 1310.02(a). Pseudoephedrine and ephedrine are
list I chemicals that are commonly used to illegally manufacture
methamphetamine, a Schedule II controlled substance. Methamphetamine is
an extremely potent central nervous system stimulant, and its abuse is
a growing problem in the United States.
[[Page 17407]]
The Deputy Administrator's review of the investigative file reveals
that the Respondent is a small candy distributor located in Brooklyn,
New York. The Respondent is owned by Fouad Twaiti, and his brother, Ali
Twaiti serves as its manager. As part of a pre-registration
investigation, DEA Division Investigators met with Fouad and Ali Twaiti
on May 12, 2000. Fouad Twaiti informed investigators that his firm had
been in operation since early 2000, and further added that his firm had
been approached by some of its customers who ask for list I chemical
products. Upon request, Fouad Twaiti furnished DEA investigators with a
customer list consisting of four business establishments.
DEA investigators subsequently interviewed each of the owners and/
or managers comprising the customer list provided by Fouad Twaiti. Each
of the listed establishments denied requesting list I chemical products
from Fouad Twaiti, and three of the establishments denied engaging in
the sale of any pseudoephedrine products.
The investigative file further reveals that as part of its ongoing
investigation of the Respondent, DEA investigators obtained bank
records of an individual hereinafter referred to as ``M.A.'' In or
around March 2000, M.A. was criminally charged in Newark, New Jersey,
with unlawful distribution of a listed chemical, and in January 2001,
M.A. purportedly signed a plea agreement on the charge. According to
DEA's review of bank records, Ali Twaiti engaged in a transaction with
MA for $54,000 on December 20, 1999. When M.A. was asked by law
enforcement officials about the above transaction with Ali Twaiti, M.A.
replied, ``that was for a candy deal.''
Pursuant to 21 U.S.C. 823(h), the Deputy Administrator may deny an
application for DEA Certificate of Registration if he determines that
granting the registration would be inconsistent with the public
interest as determined under that section. Section 823(h) requires the
following factors be considered in determining the public interest:
(1) Maintenance of effective controls against diversion of listed
chemicals into other than legitimate channels;
(2) Compliance with applicable Federal, State, and local law;
(3) Any prior conviction record under Federal or State laws
relating to controlled substances or to chemicals controlled under
Federal or State law;
(4) Any past experience in the manufacture and distribution of
chemicals; and
(5) Such other factors as are relevant to and consistent with the
public health and safety.
As with the public interest analysis for practitioners and
pharmacies pursuant to subsection (f) of section 823, these factors are
to be considered in the disjunctive; the Deputy Administrator may rely
on any one or combination of factors 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, e.g. Energy Outlet, 64 FR 14269 (1999). See also Henry J.
Schwartz, Jr., M.D. 54 FR 16422 (1989).
The Deputy Administrator finds factors one, four, and five relevant
to the Respondent's pending application.
With respect to factor one, maintenance of effective controls
against diversion, the Deputy Administrator finds evidence in the
investigative file that the Respondent provided customer information to
DEA investigators that later proved to be false. With the ever-present
problem of listed chemical diversion, it is incumbent upon a potential
registrant to provide reliable and accurate information regarding the
immediate destination of these products, and thereby, reduce the
opportunity for diversion. The Deputy Administrator finds the
uncertainty surrounding Respondent's customers is relevant under factor
one and supports denial of Respondent's pending application for DEA
registration.
Regarding factor four, past experience in the manufacture and
distribution of chemicals, the Deputy Administrator can find no
evidence in the investigative file that Respondent, a small candy
distributor, has any previous experience related to handling or
distributing listed chemicals. This factor also weighs against the
granting of Respondent's pending application. See, CHM Wholesale Co.,
67 FR 9985 (2002).
With respect to factor five, such other factors relevant to and
consistent with the public safety, the Deputy Administrator finds
relevant that Respondent provided false information to DEA
investigators when it provided a list of its purported customers. The
Deputy Administrator finds this lack of candor makes questionable the
Respondent and its owners' commitment to the DEA statutory and
regulatory requirements designed to protect the public from the
diversion of listed chemicals. Seaside Pharmaceutical Co., 67 FR 12580
(2002); Aseel, Incorporated, Wholesale Division, 66 FR 35459 (2001);
Terrence E. Murphy, M.D., 61 FR 2841 (1996).
On a related note, it is also unclear whether Fouad Twaiti provided
a false statement to DEA investigators when he stated that the firm had
been approached by customers requesting listed chemical products. Even
if the statement regarding customer inquiries was true, there is
insufficient information before the Deputy Administrator regarding the
type of customers that requested these products, their identity and
location, and whether they had a legitimate business interest in
seeking the purchase of listed chemical products.
The Deputy Administrator also finds relevant under factor five, the
fact that Ali Twaiti engaged in a significant financial transaction
with a purported diverter of list I chemicals. The apparent business
connection between Respondent's ownership and an individual purportedly
convicted of unlawful distribution of list I chemicals is troubling
when one considers that the Respondent seeks a DEA Certificate of
Registration to distribute these same products.
The Deputy Administrator concludes that the Respondent cannot be
entrusted with the responsibilities of a DEA registration. In light of
the above, the Deputy Administrator further concludes that it would be
inconsistent with the public interest to grant the application of the
Respondent.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 28 CFR 0.100(b) and 0.104, hereby orders that the pending
application for DEA Certificate of Registration, previously submitted
by Island Wholesale, Incorporated be, and it hereby is, denied. This
order is effective May 9, 2003.
Dated: March 26, 2003.
John B. Brown, III,
Deputy Administrator.
[FR Doc. 03-8591 Filed 4-8-03; 8:45 am]
BILLING CODE 4410-09-M