[Federal Register Volume 67, Number 43 (Tuesday, March 5, 2002)]
[Notices]
[Pages 9985-9986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5224]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


CHM Wholesale Co.; Denial of Application

    On or about April 11, 2001, the Deputy Assistant Administrator, 
Office of Diversion Control, Drug Enforcement Administration (DEA), 
issued an Order to Show Cause (OTSC) by certified mail to CHM Wholesale 
Company (CHM), located in Chicago, Illinois, notifying it of an 
opportunity to show cause as to why the DEA should not deny its 
application, dated June 8, 2000, for a DEA Certificate of Registration 
as a distributor of the List I chemicals ephedrine and 
pseudoeophedrine, pursuant to 21 U.S.C. 823(h), as being inconsistent 
with the public interest. The order also notified CHM that, should no 
request for hearing be filed within 30 days, the right to a hearing 
would be waived.
    The OTSC was returned, marked ``Return to Sender--Moved, Left No 
Address.'' The OTSC subsequently was sent by certified mail to the 
residential address of CHM's owner, Hyun Jin Kim (Kim), where it was 
received, June 4, 2001, as indicated by the signed postal return 
receipt. Since that time, no further 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 
having passed since receipt of the Order to Show Cause, and (2) no 
request for a hearing having been received, concludes that CHM 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 that on or about June 8, 2000, an 
application was received by the DEA Chemical Operations Registration 
section on behalf of CHM for DEA registration as a distributor of the 
two above-mentioned List I chemicals. The DEA pre-registration 
inspection on September 7, 2000, revealed that Kim and CHM had no prior 
experience in distributing List I chemical products. Kim further stated 
that he had lived in Chicago only three months. He stated he previously 
had lived in Houston, Texas, where he had operated a number of 
different retail businesses.
    CHM provided a supplier list in response to DEA's request. The DEA 
investigation revealed both of CHM's proposed suppliers were the 
recipients of 15 Warning Letters between them. These letters notified 
the recipients that List I chemicals distributed by them were being 
diverted and were being discovered in various illicit settings 
consistent with the clandestine manufacture of methamphetamine. CHM was 
unable to provide a list of proposed customers.
    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, 64 
FR 14,269 (1999). See also Henry J. Schwartz, Jr., M.D., 54 FR 16,422 
(1989).
    The Administrator finds factors one, four, and five relevant to 
this application.
    Regarding factor one, the maintenance of effective controls against 
the diversion of listed chemicals, the DEA pre-registration inspection 
documented inadequate security arrangements, in that there was no 
separate secure enclosure at the proposed business location wherein the 
List I chemical products would be stored. The inspection also revealed 
inadequate recordkeeping arrangements, in that CHM failed to provide 
information regarding planned controls to prevent diversion.
    Also relevant to this factor, Kim stated to DEA investigators that 
he planned to relocate CHM's business premises. No further information 
has been received by DEA regarding the relocation, however, and 
therefore DEA has been unable to inspect the new proposed business 
location.
    Regarding factor four, the applicant's past experience in the 
distribution of chemicals, the DEA investigation revealed that Kim 
could provide no verifiable evidence of previous experience related to 
handling or distributing listed chemicals.
    Regarding factor five, other factors relevant to and consistent 
with the public safety, the Administrator finds that both of CHM's 
proposed suppliers were the recipients of 15 Warning Letters between 
them; one of the proposed suppliers was the subject of a current DEA 
investigation regarding the diversion of listed chemicals. CHM could 
not provide a customer list, so DEA investigators could not verify a 
legitimate customer base for the distribution of List I chemical 
products. The investigation further showed CHM had inadequate security 
and no apparent recordkeeping arrangements for listed chemical 
products. The Administrator concludes that CHM is not prepared to be 
entrusted with the responsibilities of a DEA registration.
    Therefore, for the above-stated reasons, the Administrator 
concludes that it would be inconsistent with the public interest to 
grant the application of CHM.
    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 CHM Wholesale 
Company be 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 Robert Walker, Esq., Office of Chief 
Counsel, Drug Enforcement Administration, Washington, DC 20537; and 
caused a copy to be mailed, postage prepaid registered return receipt 
to Mr. Hyun Jin Kim, CHM Wholesale

[[Page 9986]]

Company, 2428 W. Jarvis, Chicago, Illinois 60645.

Karen C. Grant.

[FR Doc. 02-5224 Filed 3-4-02; 8:45 am]
BILLING CODE 4410-09-M