[Federal Register Volume 66, Number 129 (Thursday, July 5, 2001)]
[Notices]
[Pages 35459-35461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16728]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Aseel, Incorporated, Wholesale Division; Denial of Application

    On or about May 8, 2000, the Deputy Assistant Administrator, Office 
of Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause (OTSC) by certified mail to Aseel Incorporated, 
Wholesale Division (Aseel), located in Dallas, Texas, notifying it of 
an opportunity to show cause as to why the DEA should not deny its 
application, dated July 7, 1998, for a DEA Certificate of Registration 
as a distributor of the List I chemicals ephedrine, pseudoephedrine, 
and phenylpropanolamine, pursuant to 21 U.S.C. 823(h), as being 
inconsistent with the public interest. The order also notified Aseel 
that, should no request for hearing be filed within 30 days, the right 
to hearing would be waived.
    The DEA mailed the show cause order on May 11, 2000, to Aseel at 
the proposed registered location in Dallas, Texas by certified mail. At 
the same time, a copy of the show cause order was sent by regular first 
class mail to the Murphy, Texas home address of Aseel's President, Mr. 
Husham Awadelkariem. The certified letter was returned to DEA by the 
U.S. Postal Service, marked ``moved, left no address.'' The copy sent 
by first class mail was not returned, and presumably was delivered.
    Subsequently, on May 25, 2000, a DEA Diversion Investigator in the 
Dallas, Texas office, received a telephone call from Mr. Awadelkariem, 
who stated he received the show cause order and inquired whether he 
could limit his distribution of chemicals to convenience stores without 
a DEA registration. Since that time, no response has been received from 
the applicant nor any person purporting to represent the applicant. 
Therefore, the Administrator of the DEA, finding that (1) thirty days 
have passed since receipt

[[Page 35460]]

of the Order to Show Cause, and (2) no request for a hearing having 
been received, concludes that Aseel is deemed to have waived its right 
to a hearing. After considering relevant material from the 
investigative file in this matter, the Administrator now enters his 
final order without a hearing pursuant to 21 CFR 1301.43(d) and (e) and 
1301.46 (1999).
    The Administrator finds that on August 3, 1998, an application 
dated July 7, 1998, was received by the DEA Chemical Operations 
Registration Section on behalf of Aseel for DEA registration as a 
distributor of the List I chemicals pseudoephedrine, 
phenylpropanolamine, and ephedrine. Aseel did not file this application 
in time to qualify for temporary exemption from registration pursuant 
to 21 CFR 1310.09. Accordingly, Aseel was not authorized to distribute 
these chemicals before approval of the application for registration.
    The Administrator finds that during the period from February 24, 
1998 to June 1, 1998, Aseel sold over 122,767 bottles of List I 
chemicals to an unregistered distributor when Aseel was not listed to 
do so, in violation of 21 U.S.C. 843(a)(9).
    The Administrator also finds that during the period from May 25, 
1998, to July 14, 1998, Aseel sold over 21,748 bottles of List I 
chemicals when Aseel was not licensed to do so, in violation of 21 
U.S.C. 843(a)(9).
    The Administrator further finds that during the period from January 
1998 to May 1998, Aseel purchased in excess of 164,012 bottles of List 
I chemicals while not registered with DEA, in violation of 21 USC 
822(a)(1), which requires inter alia that every person who distributes 
a List I chemical ``shall obtain annually a registration issued by the 
Attorney General'' and also in violation of the registration 
requirements set forth at 21 CFR 1309.21(a) and 1310.09.
    Finally, the Administrator finds that on November 19, 1999, DEA 
investigators learned that Aseel was no longer located at the proposed 
registered location and had been evicted due to non-payment of rent. 
Aseel subsequently requested that DEA amend Aseel's application to 
include two prospective storage sites in Dallas. DEA investigators were 
unable to inspect these sites. The investigation further revealed Aseel 
no longer has valid state permits to distribute list chemicals.
    While Mr. Awadelkariem stated that at one point he had two 
employees other than himself at Aseel, the Administrator finds that 
with regard to all the incidents described herein, Mr. Awadelkariem 
acted as the sole agent for Aseel.
    Pursuant to 21 U.S.C. 823(h), the Administrator may deny an 
application for a DEA Certificate of Registration if he determines that 
granting the registration would be inconsistent with the public 
interest. Section 823(h) requires the following factors be considered:
    (1) Maintenance by the applicant of effective controls against 
diversion of listed chemicals into other than legitimate channels;
    (2) Compliance by the applicant with applicable Federal, State, and 
local law;
    (3) Any prior conviction record of the applicant 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.
    Like 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 Administrator may rely on any one or 
combination 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 be denied. See, e.g. Energy Outlet, FR 
14,269 (DEA 1999). See also Henry J. Schwartz, Jr., M.D., 54 FR 16,422 
(DEA 1989).
    Regarding factor one, the maintenance of effective controls against 
the diversion of listed chemicals, the Administrator finds that Aseel's 
proposed registered address has been vacated, and that Aseel has failed 
to provide the addresses for the two storage buildings where it 
allegedly currently conducts business. Therefore, no pre-registration 
inspection has been performed at Aseel's places of business. The 
Administrator consequently finds no evidence that Aseel has any 
controls whatsoever against diversion. Furthermore, and as set forth 
more fully below, the DEA investigation revealed that Aseel failed to 
exercise discretion in selling list chemicals, and routinely sold list 
chemicals to individuals and entities it should have known presented 
diversion risks.
    Regarding factor two, the applicant's compliance with applicable 
law, the Administrator finds that the evidence shows Aseel 
significantly violated applicable law by distributing over 164,012 
bottles of List I chemicals from February 24, 1998 through July 14, 
1998, when not licensed to do so, in violation of 21 U.S.C. 843(a)(9).
    Regarding factor three, there is no evidence that Aseel or Mr. 
Awadelkariem has a record of convictions related to controlled 
substances or to chemicals controlled under Federal or State law.
    Regarding factor four, the applicant's past experience in the 
distribution of chemicals, the Administrator finds that the DEA 
investigation revealed that during late 1996, Aseel had distributed 94 
cases of a List I chemical to an individual who came from California to 
Dallas to make the purchase. This individual provided no 
identification, nor any addresses, business or otherwise. The only way 
Mr. Awadelkariem could contact this individual was via pager. During 
the interview with DEA investigators that elicited this information, 
and after the investigators explained the illicit uses of List I 
chemicals, presented Mr. Awadelkariem with the DEA ``Red Notice'', and 
explained the applicable laws regarding List I chemicals, Mr. 
Awadelkariem stated he would no longer purchase this List I chemical 
product again. In April 1997, DEA investigators from the Dallas 
Diversion Group contacted Mr. Awadelkariem, who voluntarily agreed to 
stop conducting business regarding List I chemicals.
    Subsequently, DEA investigators received documents indicating sales 
of List I chemicals totaling 132 cases to Aseel during September 9, 
1997, to October 1, 1997. When Aseel's sales and purchases records 
covering this time period were subpoenaed, DEA investigators discovered 
through sales records that List I chemicals were being sold by Aseel to 
two companies and that both recipient companies were suspect, having 
been linked to the diversion of List I chemicals to clandestine 
laboratories in California. In addition, one of the recipient companies 
was owned by the same previously mentioned individual from California 
to whom Aseel had distributed the 94 cases of List I chemicals during 
the latter part of 1996, and the other recipient company was 
effectively controlled by this same individual. The Administrator 
further finds that Mr. Awadelkariem knew this individual truly owned 
and controlled these two companies by at least May or June 1997. The 
subpoenaed records further revealed that Aseel had sold a total of 376 
cases of List I chemicals to these two suspect companies during the 
period from July 1997 to September 1997. Follow up investigation 
revealed that the addresses provided by these

[[Page 35461]]

two companies were false. One of the addresses was a used car lot. 
Interviews with the owner of the car lot revealed that Mr. Awadelkariem 
would meet with the previously mentioned individual from California at 
the car lot to consummate business deals for List I chemicals. Shortly 
after this interview, Mr. Awadelkariem called a DEA investigator and 
stated that he had received a call from the individual from California, 
who stated to Mr. Awadelkariem that he was upset with DEA's inquiries, 
and further that he already had two List I chemical shipments seized by 
DEA in the past.
    In November 1997, Mr. Awadelkariem contacted DEA regarding an 
alleged suspicious order by an unknown female from California, but the 
deal was never consummated. Also in November 1997, Mr. Awadelkariem 
assisted DEA in the seizure of 100 cases of a List I chemical that were 
eventually forfeited to the United States.
    The Administrator further finds that from January 1, 1998, to July 
31, 1998, Aseel purchased and distributed over 164,012 bottles of List 
I chemicals, as determined from subpoenaed documents. Over 100,800 
bottles of List I chemicals were shipped by Aseel to a company that had 
neither a pending nor an approved DEA registration.
    Regarding factor five, other factors relevant to and consistent 
with the public safety, the Administrator finds that, when confronted 
with his earlier statements that he would stop doing business in List I 
chemicals, Mr. Awadelkariem stated the he meant ``at the time, he was 
not going to deal in these products because he had no customers for 
them.'' The Administrator finds this lack of candor, especially taken 
together with Aseel's demonstrated cavalier disregard of law and 
regulations concerning registration and distribution of List I 
chemicals, makes questionable Aseel's commitment to the DEA regulatory 
requirements designed to protect the public from diversion of 
controlled substances and listed chemicals. See Terrence E. Murphy, 61 
FR 2841 (DEA 1996).
    Therefore, for the above-stated reasons, the Administrator 
concludes that it would be inconsistent with the public interest to 
grant the application of Aseel. The applicant has failed to demonstrate 
that it has effective controls against the diversion of listed 
chemicals. Additionally, as described above, the evidence indicates 
that Aseel has violated applicable law regarding the distribution of 
List I chemicals on several occasions by distributing List I chemicals 
while not registered with DEA, and by distributing List I chemicals to 
companies who also were not registered with DEA. Aseel's lack of 
effective controls against diversion and its lack of commitment to 
comply with the laws and regulations designed to prevent diversion, 
exemplified by its failure to exercise discretion in distributing List 
I chemicals when it knew or should have known such chemicals were being 
diverted into other than legitimate channels, present a grave risk of 
future diversion.
    Accordingly, the 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 application 
for a DEA Certificate of Registration submitted by Aseel be denied. 
This order is effective August 6, 2001.

    Dated: June 20, 2001.
Donnie R. Marshall,
Administrator.

Certificate of Service

    This is to certify that the undersigned, on June 25, 2001, caused a 
copy of the Final Order to be mailed, postage prepaid, registered 
return receipt to Respondent Husham Awadelkariem, 401 Hawthorne Drive, 
Murphy, Texas 75094-3598.

Karen C. Grant
[FR Doc. 01-16728 Filed 7-3-01; 8:45 am]
BILLING CODE 4410-09-M