[Federal Register Volume 67, Number 43 (Tuesday, March 5, 2002)]
[Notices]
[Pages 9995-9997]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5220]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Transtar Distributors, Inc.; Revocation of Registration

    On July 29, 2000, the Administrator of the Drug Enforcement 
Administration (DEA), issued an Order to Show Cause (OTSC) by certified 
mail to Transtar Distributors, Inc. (Transtar), located in Orlando, 
Florida, notifying it of a preliminary finding that, pursuant to 
evidence set forth therein, it was responsible for the diversion of 
large quantities of List I chemicals into other than legitimate 
channels. Based on these preliminary findings, and pursuant to 21 
U.S.C. 824(d) and 28 CFR 0.100 and 0.104, the OTSC suspended Transtar's 
DEA Certificate of Registration, effective immediately, with such 
suspension to remain in effect until a final determination is reached 
in these proceedings. The OTSC informed Transtar and its owner/
president, Nabil Maswadeh (Maswadeh) of an opportunity to request a 
hearing to show cause as to why the DEA should not revoke its DEA 
Certificate of Registration, 004662TIY, and deny any pending 
applications for renewal or modification of such registration, for 
reason that such registration is inconsistent with the public interest, 
as determined by 21 U.S.C. 823(h). The OTSC also notified Transtar 
that, should no request for hearing be filed within 30 days, its right 
to a hearing would be considered waived.
    On August 16, 2000, the OTSC was returned to DEA, marked ``Return 
To Sender--Unclaimed.'' No request for a hearing or any other response 
was received by DEA from Transtar or Maswadeh nor anyone purporting to 
represent the registrant in this matter. Therefore, the Administrator 
of the DEA, finding that (1) thirty days having passed since receipt of 
the Order to Show Cause, and (2) no request for a hearing having been 
received, concludes Transtar 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.
    The Administrator finds as follows. List I chemicals are chemicals 
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 is a List I chemical that is 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.
    A ``regulated person'' is a person who manufactures, distributes, 
imports, or exports inter alia a listed chemical. 21 U.S.C. 802(38). A 
``regulated transaction'' is inter alia a distribution, receipt, sale, 
importation, or exportation of a threshold amount of a listed chemical. 
21 U.S.C. 802(39). The Administrator finds all parties mentioned herein 
to be regulated, and all transactions mentioned herein to be regulated 
transactions, unless otherwise noted.
    The DEA investigation shows that at the time of Transtar's pre-
registration investigation on December 17, 1999, Maswadeh was 
personally served with the DEA notices informing him that ephedrine and 
pseudoephedrine are diverted for use in clandestine methamphetamine 
laboratories, as well as the notice of informing him that possession or 
distribution of a listed chemical knowing or having reasonable cause to 
believe that the listed chemical will be used to manufacture a 
controlled substance is a violation of the Controlled Substances Act.
    The DEA investigation shows that by March, 2000, Transtar was 
amassing a large quantity of pseudoephedrine. On March 20, 2000, DEA 
investigators observed 19 large boxes containing approximately 100 
cases of pseudoephedrine being delivered to Transtar. The shipment was 
received by a business associate of Maswadeh, who used a fictitious 
name when signing for the shipment. Maswadeh was present when this 
shipment was received.
    Between March 20 and March 24, 2000, DEA investigators observed 
Maswadeh and his associate remove numerous large cardboard boxes from 
Transtar and place them into a storage unit. On March 24, 2000, DEA 
investigators observed Maswadeh ship three large boxes to California. A 
subsequent search of the boxes revealed approximately 3,036 bottles of 
pseudoephedrine, each bottle containing 120 tablets, for a total of 
364,320 dosage units. The manufacturer's lot numbers and expiration 
dates had been scraped off of the bottles. The shipping label bore 
fictitious names for both the shipper and receiver, and also bore a 
fictitious address for the shipper.
    During this same time period, DEA investigators on several 
occasions observed Maswadeh and his associate place items in a dumpster 
located near Transtar. A search of the dumpster revealed 24 large 
cardboard boxes bearing inscriptions indicating that the boxes had 
contained pseudoephedrine. A subsequent search of the dumpster revealed 
numerous labels containing lot numbers that had been scraped off 
pseudoephedrine bottles. Additional items recovered from the dumpster 
included: receipts and shipping documents indicating Transtar was 
receiving large amounts of pseudoephedrine from numerous suppliers; 
five sealed bottles of ephedrine with their lot numbers and expiration 
dates removed; and a Federal Express Airbill indicating that a 90 pound 
shipment was sent to California on March 3, 2000. The Airbill showed 
address information consistent with the California address to which 
Maswadeh had sent shipments of pseudoephedrine. The Airbill bore a 
fictitious name and address for the shipper.
    On March 25 and 26, 2000, DEA investigators observed Maswadeh 
removing boxes of pseudoephedrine from the above-referenced storage 
unit. Also during this time, Maswadeh was observed placing items into a 
common

[[Page 9996]]

dumpster in his residential community. These items included the 
following: shipping documents and labels indicating Transtar received 
pseudoephedrine shipments from several manufacturers, and also hundreds 
of lot numbers that had been scraped off of pseudoephedrine bottles.
    On April 19, 2000, DEA received information that Transtar was 
attempting to place an order with a pharmaceutical manufacturer in New 
York for 300,000 bottles of pseudoephedrine per month.
    On June 1, 2000, DEA Confidential Source information revealed 
Maswadeh was willing to sell 240 cases of pseudoephedrine for the 
purpose of illegally manufacturing methamphetamine.
    On June 7, 2000, a search warrant was served upon the above-
referenced storage unit. DEA investigators seized approximately 240 
cases of pseudoephedrine tablets. Some of the pseudoephedrine was still 
in bottles, and some was loose in plastic bags.
    On June 10, 2000, Maswadeh met with an undercover DEA agent and 
agreed to transport the 240 cases of pseudoephedrine in a rented van.
    Confidential Source information acquired by DEA indicates Maswadeh 
and his associates were selling pseudoephedrine to individuals on the 
West Coast knowing that the chemical was to be used in the illicit 
manufacture of methamphetamine.
    Therefore, pursuant to 21 U.S.C. 824(d), the Administrator of the 
DEA issued an immediate suspension of Transtar's DEA Certificate of 
Registration. While the above-cited evidence provides ample grounds for 
an immediate suspension pursuant to Sec. 824(d), these grounds also 
provide the basis for the revocation of Transtar's DEA Certificate of 
Registration.
    Pursuant to 21 U.S.C. 824(a), the Administrator may revoke a 
registration to distribute List I chemicals upon a finding that the 
registrant has committed such acts as would render his registration 
under section 823 inconsistent with the public interest as determined 
under that section. Pursuant to 21 U.S.C. 823(h), the following factors 
are 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.
    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, 64 
FR 14,269 (1999). See also Henry J. Schwartz, Jr., MD., 54 FR 16,422 
(1989).
    Regarding the first factor, maintenance of effective controls 
against diversion, the Administrator finds substantial evidence in the 
investigative file that Transtar and Maswadeh actively participated in 
the illegal diversion of pseudoephedrine knowing it would be used to 
manufacture methamphetamine.
    Regarding the second floor, compliance with applicable Federal, 
State, and local law, the investigative file in this matter reveals 
substantial evidence indicating that Transtar and Maswadeh 
significantly violated applicable law. In shipping substantial 
quantities of pseudoephedrine using fictitious names and addresses and 
in removing or otherwise destroying labels and lot numbers, Maswadeh 
clearly was attempting to conceal his activities from law enforcement. 
In addition, Confidential Source information showed that Maswadeh was 
willing to sell 240 cases of pseudoephedrine for the stated purpose of 
illicit manufacture of methamphetamine, and even stated to a DEA 
undercover agent that he was willing to deliver the 240 cases of 
chemicals in a rented van he would provide. The Administrator finds 
these facts support the following violations of applicable law: 
Transtar and Maswadeh violated 21 U.S.C. 841(d)(1) (possession of a 
listed chemical with intent to manufacture a controlled substance); 
841(d)(2) (possession/distribution of a listed chemical knowing or 
having reasonable cause to believe that the listed chemical will be 
used to manufacture a controlled substance); 841(g)(1) (knowing 
distribution of a listed chemical in violation of the Controlled 
Substances Act); 841(g)(2) (possession of a listed chemical with 
knowledge that recordkeeping or reporting requirements not adhered to); 
842(a)(5) and (10) (failure to keep required records); and 830(b)(1)(a) 
(failure to report any regulated transaction involving an extraordinary 
quantity of a listed chemical, an uncommon method of payment or 
delivery, or any other circumstance the regulated person believes may 
indicate that the listed chemical will be used in violation of this 
subchapter). (Note: subparagraphs (d) and (g) of 841 have been 
redesignated as (c) and (f)).
    Regarding the third factor, any prior conviction record under 
Federal or State laws relating to controlled substances or chemicals, 
there is no evidence in the investigative file that Transtar or 
Maswadeh has any record of convictions under Federal or State laws 
relating to controlled substances or chemicals.
    Regarding the fourth factor, past experience in the manufacture and 
distribution of chemicals, the Administrator finds substantial evidence 
in the investigative file that Maswadeh actively participated in the 
illegal trafficking of pseudoephedrine, knowing that it was being 
diverted to the manufacture of methamphetamine, as set forth in factor 
two, above.
    Regarding the fifth factor, such other factors relevant to and 
consistent with the public safety, the Administrator finds substantial 
evidence that Transtar and Maswadeh significantly violated applicable 
law by illegally trafficking substantial quantities of pseudoephedrine 
knowing it was being diverted to the manufacture of methamphetamine and 
further by failing to keep and maintain required records and failure to 
report suspicious listed chemical transactions.
    Accordingly, the Administrator of the Drug Enforcement 
Administration, pursuant to the authority vested in him by 21 U.S.C. 
823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that DEA 
Certificate of Registration 004662TTY, previously issued to Transtar 
Distributors, Inc., be, and it hereby is, revoked; and any pending 
applications for renewal or modification of said registration be, and 
hereby are, denied. This order is effective April 4, 2002.

    Dated: February 22, 2002.
Asa Hutchinson,
Administrator.

Certificate of Service

    This is to certify that the undersigned, on February 25, 2002, 
placed a copy of the Final Order referenced in the enclosed letter in 
the interoffice mail addressed to Linden Barber, Esq., Office of Chief 
Counsel, Drug Enforcement Administration, Washington, DC 20537; and 
caused a copy to be mailed, postage

[[Page 9997]]

prepaid, registered return receipt to Mr. Nabil Maswadeh, Transtar 
Distributors, Inc., 6130 Edgewater Drive, Unit D, Orlando, Florida 
32810.

Karen C. Grant.

[FR Doc. 02-5220 Filed 3-4-02; 8:45 am]
BILLING CODE 4410-09-M