[Federal Register Volume 67, Number 44 (Wednesday, March 6, 2002)]
[Notices]
[Pages 10230-10231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5241]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Hadid International, Inc.; Denial of Application

    On or about July 27, 2000, the Deputy Assistant Administrator, 
Office of Diversion Control, Drug Enforcement Administration (DEA), 
issued an Order to Show Cause (OTSC) by certified mail to Hadid 
International, Inc. (Hadid), located in Orlando, Florida, notifying it 
of an opportunity to show cause as to why the DEA should not deny its 
application, dated November 12, 1999, for a DEA Certification of 
Registration as a distributor of the List I chemicals pseudoephedrine, 
norpseudoephedrine, and phenylpropanolamine, pursuant to 21 U.S.C. 
823(h) as being inconsistent with the public interest. The order also 
notified Hadid 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--Unclaimed.'' In 
addition, on August 2, 2000, DEA investigators from the Orlando, 
Florida District Office traveled to Hadid's business premises and, when 
there was no answer to repeated knocking, affixed a copy of the OTSC to 
the front door. 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 Hadid 
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 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, ephedrine, and phenylpropanolamine are 
List I chemicals that are commonly used to illegally manufacture 
methamphetamine, a Schedule II controlled substance. Methamphetamine is 
an extremely

[[Page 10231]]

potent central nervous system stimulant, and its abuse is a growing 
problem in the United States.
    The Administrator finds that on or above November 12, 1999, an 
application was received by the DEA Chemical Operations Registration 
section on behalf of Hadid for DEA registration as distributor of the 
three above-mentioned List I chemicals. The DEA pre-registration 
inspection revealed that Hadid had no prior experience in distributing 
List I chemical products, and appeared unprepared to accept the 
responsibilities of a DEA registrant. The inspection noted deficiencies 
in Hadid's recordkeeping system that threw doubt the firm's ability to 
comply with DEA's recordkeeping requirements. The DEA investigation 
also revealed a number of Hadid's proposed customers and suppliers were 
being investigated for violations related to the distribution of List I 
chemicals.
    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)
    Regarding factor one, the maintenance of effective controls against 
the diversion of listed chemicals, the DEA pre-registration inspection 
documented inadequate warehouse security, in that the side walls 
separating Hadid from the businesses on either side appeared to be 
drywall, and there was no separate secure enclosure wherein the List I 
chemical products would be stored. The inspection also revealed 
inadequate recordkeeping arrangements, in that only generic receipts/
invoices with carbon copies were being generated, and there was no 
computerized data whatsoever.
    Also relevant to this factor, on various weekdays, and at various 
times during Hadid's stated business hours, investigators drove by 
Hadid's business premises and did not see any sign of its sole officer/
employee Khaled Salem's (Salem) presence at the business.
    Regarding factor two, the applicant's compliance with appliance 
law, the Administrator finds that Salem apparently falsified Hadid's 
application for DEA registration. During the pre-registration 
inspection, Salem provided two telephone numbers, each different than 
the one provided in Hadid's application.
    Regarding factor three, there is no evidence that Hadid nor Salem 
has any 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 DEA investigation revealed that neither 
Hadid nor Salem has 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 Salem's 
citizenship status is in question, as he stated he had only been in the 
United States for approximately one and a half years. At the time of 
the pre-registration inspection, he was unable to provide DEA 
investigators with any documentation concerning his citizenship status.
    When asked about his proposed supply and distribution network 
during the pre-registration inspection, Salem stated to investigators 
that he did not know who would be his supplier, nor did he know which 
of his customers would be interested in List I chemical products. Salem 
also did not know what quantities of List I chemical products he would 
be handling.
    Hadid provided a customer list subsequent to the inspection. The 
list was in a computer-generated format, despite Salem having stated to 
investigators that he did not keep any computer records. The list 
provided appears identical to that provided to DEA by a List I chemical 
distributor whose registration was subject to an immediate suspension 
for diversion of List I chemicals two days following the issuance of 
the OTSC to Hadid. The proposed customer and supplier list provided by 
Hadid further contained a number of firms and individuals that are 
currently under investigation for alleged diversion of List I 
chemicals.
    The DEA investigation also revealed information from a reliable 
Confidential Source that Salem is currently involved in the diversion 
of List I chemicals to be manufacture of methamphetamine, and that he 
plans to use his DEA registration to continue these activities, by 
serving as a front for the above-referenced distributor whose DEA 
registration was subject to an immediate suspension. The Confidential 
Source further revealed that Salem recently had left the United States 
for Germany ``to avoid arrest by law enforcement authorities,'' in the 
context of his involvement in List I chemical diversion activities.
    Therefore, for the above-stated reasons, the Administrator 
concludes that it would be inconsistent with the public interest to 
grant the application of Hadid.
    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 Hadid International, 
Inc. be denied. This order is effective April 5, 2002.

    Dated: February 22, 2002.
Asa Hutchinson,
Administrator.
[FR Doc. 02-5241 Filed 3-5-02; 8:45 am]
BILLING CODE 4410-09-M