[Federal Register: May 10, 2005 (Volume 70, Number 89)]
[Notices]
[Page 24626-24627]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10my05-110]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Net Wholesale; Revocation of Registration
On September 16, 2004, the Deputy Assistant Administrator, Office
of Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Net Wholesale (Net) proposing to revoke its DEA
Certificate of Registration 002918NOY as a distributor of List I
chemicals pursuant to 21 U.S.C. 824(a)(4), on the ground that Net's
continued registration would be inconsistent with the public interest,
as that term is used in 21 U.S.C. 823(h). The order also notified Net
that should no request for a hearing be filed within 30 days, its
hearing right would be deemed waived.
According to the DEA investigative file, the Order to Show Cause
was sent by certified mail to Net at its registered location at 3415
9th Avenue, Huntsville, Alabama 35805. That correspondence was returned
to DEA as ``Unclaimed,'' indicating the addressee had twice failed to
respond to postal service notices to pick up the letter. On November 4,
2004, the Order to Show Cause was re-mailed to Net at its registered
address by regular first class mail. That correspondence has not been
returned to DEA and is presumed to have been received. DEA has not
received a request for a hearing or any other reply from Net or anyone
purporting to represent the company in this matter.
Therefore, the Deputy Administrator of DEA, finding that (1) thirty
days have passed since delivery of the Order to Show Cause, and (2) no
request for a hearing having been received, concludes that Net has
waived its hearing right. See Aqui Enterprises, 67 FR 12,576 (2002).
After considering relevant material from the investigative file, the
Deputy Administrator now enters her final order without a hearing
pursuant to 21 CFR 1309.53(c) and (d) and 1316.67. 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 commonly used to illegally manufacture
methamphetamine, a Schedule II controlled substance.
Phenhylpropanolamine, also a List I chemical, is presently a
legitimately manufactured and distributed product used to provide
relief of the symptoms
[[Page 24627]]
resulting from irritation of the sinus, nasal and upper respiratory
tract tissues, and is also used for weight control. Phenylpropanolamine
is also a precursor chemical used in the illicit manufacture of
methamphetamine and amphetamine.
As noted in previous DEA final orders, methamphetamine is an
extremely potent central nervous system stimulant and its abuse is a
persistent and growing problem in the United States. See e.g., Direct
Wholesale, 69 FR 11,654 (2004); Branex, Inc., 69 FR 8,682 (2004); Yemen
Wholesale Tobacco and Candy Supply, Inc., 67 FR 9,997 (2002); Denver
Wholesale, 67 FR 99,986 (2002).
The Deputy Administrator's review of the investigative file reveals
that on May 6, 1998, Net was initially granted DEA registration to
distribute ephedrine, pseudoephedrine and phyenylpropanolamine List I
chemical products. The company's registered location was 3415 9th
Avenue, Huntsville, Alabama 35805 and its registration was last renewed
on October 29, 2002. On October 17, 2003, prior to expiration of the
current registration, the company's owner, Mr. Valiollah Geholamkhas,
submitted an application for renewal. On October 20, 2003, he filed an
application for modification of Net's registered location to 7000 North
Parkway, Huntsville, Alabama 35810.
At the time of initial DEA registration, Net held a permit issued
by the Alabama Board of Pharmacy (Alabama Board) as a distributor of
List I chemicals. Despite a state requirement to maintain the permit,
Net did not apply for renewal and its permit lapsed on December 31,
2001. Nevertheless, the company continued to operate and distribute
List I chemicals within Alabama for approximately two more years.
On Net's current application for renewal of DEA registration, by
checking ``N/A'' and failing to list a state license/permit number in
response to Question 1(a), Mr. Geholamkhas represented that Alabama did
not require a state license to distribute listed chemicals. This was a
material falsification of an application in violation of 21 U.S.C.
843(a)(4)(A).
On January 22, 2004, when DEA Diversion Investigators conducted an
inspection of Net's proposed new location at 7000 North Parkway, they
discovered the company was already conducting business there, without
notifying DEA and obtaining approval for the new and separate location,
as required by 21 CFR 1309.23. A record review revealed that over a
seven month period, during which Net lacked an Alabama permit and DEA
authorization to conduct business at its new location, Net purchased
over 45 million milligrams of combination ephedrine tablets. In
subsequent correspondence with the Alabama Board, Mr. Geholamkhas
admitted the company had distributed List I chemicals from its new
location, without DEA approval.
In May 2004, the Alabama Board, issued its Order finding Net had
sold and delivered List I chemical products during a period when it did
not hold a current Alabama distributor permit. The Alabama Board
imposed a $1000.00 fine and granted Net's application for a new state
permit, but placed it on probationary status for three years.
Pursuant to 21 U.S.C. 824(a)(4) and 823(h), the Deputy
Administrator may revoke a DEA Certificate of Registration and deny any
pending applications for renewal of such registration if she determines
that granting the registration would be inconsistent with the public
interest. 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 of the applicant 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
considered in the disjunctive; the Deputy Administrator may on any one
or a combination of factors and may give each factor the weight she
deems appropriate in determining whether a registration should be
revoked or an application for registration denied. See, e.g., Energy
Outlet, 64 FR 14,269 (1999); Henry J. Schwartz, Jr., M.D., 54 FR 16422
(1989).
The Deputy Administrator finds factors two and five relevant to
Net's continued registration and its aplication for renewal.
As to factor two, compliance with Federal, State and local law, the
record shows that for a two year period, Net distributed List I
chemicals without a state permit that is required to engage in that
activity. Further, for a period of at least seven months the company
also violated Federal law and regulations by distributing List I
chemicals from an unregistered location.
With regard to factor five, other factors relevant to and
consistent with the public health and safety, the Deputy Adminstrator
finds that in his application for renewal, Mr. Geholamkhas
intentionally misrepresented the status of his authority to distribute
List I chemicals under State law, when he falsely indicated that no
state license or registration was required for his company to
distribute those products in Alabama. This lack of candor, taken
together with the registrant's disregard of law and regulations
discussed above, makes questionable Net and its owner's commitment to
the statutory and regulatory requirements designed to protect the
public from diversion of listed chemicals. See e.g., Seaside
Pharmaceutical Co., 67 FR 35,459 (2001).
Finally, the Deputy Administrator also finds factor five relevant
to the company's request to continue distributing phenylpropanolamine
and the apparent lack of safety associated with the use of that
product. DEA has previously determined that an applicant's request to
distribute phenylpropanolamine constitutes a ground under factor five
for denial of an application for registration. See e.g., John E. McRae
d/b/a J & H Wholesale, 69 FR 51,480 (2004); Direct Wholesale, 69 FR
11,654 (2004); ANM Wholesale, 69 FR 11,652 (2004); Shani Distributors,
68 FR 62,324 (2003).
Accordingly, the Deputy Administration of the Drug Enforcement
Administration, pursuant to the authority vested in her by 21 U.S.C.
823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that DEA
Certificate of Registration 002918NOY, previously issued to Net
Wholesale, be, and it hereby is, revoked. The Deputy Administrator
further orders that the pending applications for renewal and
modification of the aforementioned registration be, and they hereby
are, denied. This order is effective June 9, 2005.
Dated: May 2, 2005.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05-9282 Filed 5-9-05; 8:45 am]
BILLING CODE 4410-09-M