[Federal Register Volume 67, Number 53 (Tuesday, March 19, 2002)]
[Notices]
[Pages 12583-12584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6570]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


Southern Illinois Wholesale, Inc.; Denial of Application

    On or about June 27, 2001, the Deputy Assistant Administrator, 
Office of Diversion Control, Drug Enforcement Administration (DEA), 
issued an Order to Show Cause (OTSC) by certified mail to Southern 
Illinois Wholesale, Inc. (SIW), located in Dongola, Illinois, notifying 
it of an opportunity to show cause as to why the DEA should not deny 
its application, dated December 3, 2000, for a DEA Certificate of 
Registration as a distributor of the List 1 chemicals ephedrine, 
pseudoephedrine, and phenylpropanolamine, pursuant to 21 U.S.C. 823(h), 
as being inconsistent with the public interest. The order also notified 
SIW that, should no request for hearing be filed within 30 days, the 
right to a hearing would be waived.
    The OTSC was received July 16, 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 SIW 
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, ephedrine, and phenylpropanolamine are 
List I chemicals that are commonly used to illegally manufacture 
methamphetamine, a Schedule II controlled substance, or amphetamine, a 
Schedule III controlled substance. Methamphetamine is an extremely 
potent central nervous system stimulant, and its abuse is a growing 
problem in the United States.
    The Administrator finds that on or about December 3, 2000, an 
application was submitted by and on behalf of SIW, by George W. Howard 
(Howard) for DEA registration as a distributor of the above-referenced 
List I chemicals.
    During the February 23, 2001, pre-registration inspection, Howard 
informed DEA investigators that he proposed to sell various products 
from his parent's home, including List I chemical products. Howard 
states he had started out two yeas before, operating bubble gum vending 
machines, and had recently arranged through an internet consulting 
company to sell novelty items to retailers. He further stated that some 
small retail stores in the Southern Illinois and Cape Girardeau, 
Missouri, area would buy his other products only if he could provide 
List I chemical products. Howard alleged to DEA investigators that 
retailers in general would only do business with him if he could 
provide listed chemical products. He stated he wished to compete in the 
market that Four Seasons and Heartland held. Both of these distributors 
previously held DEA registrations that were surrendered during DEA 
actions against the companies. The DEA investigations into those 
companies revealed the markets they served had histories or ordering 
listed chemical products in quantities far greater than legitimate 
demand would require. DEA took action against the registrations of 
those two companies because the investigations showed a substantial 
amount of this pseudoephedrine was being diverted to the illicit 
manufacture of methamphetamine.
    During the pre-registration inspection, Howard was unclear 
regarding what licenses he needed to conduct business in either 
Illinois or Missouri. He further stated he was using his parent's 
basement for storage of his products. DEA investigators noted that 
Howard had a tendency to delete telephone messages left for him before 
listening to the entire message; this resulted in a number of 
miscommunications between Howard and the local DEA office. In addition, 
at the preregistration inspection Howard was unable to locate 
information previously sent to him by DEA investigators concerning the 
responsibilities of a listed chemical registrant. He admitted that he 
had not been taking the registration process very seriously. Howard 
stated he wanted to handle List I chemical products because his 
competition does; and also because he wanted to recoup the cost of 
obtaining a DEA registration.
    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 he considered:
    (1) Maintenance by the applicant of effective controls against 
diversion of

[[Page 12584]]

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 14269 (1999). See also Henry J. Schwartz, Jr., M.D., 54 FR 16422 
(1989).
    The Administrator finds factors four and five relevant to this 
application.
    Regarding factor four, the applicant's past experience in the 
distribution of chemicals, the DEA investigation revealed that Howard 
has no previous experience in handling listed chemicals or distributing 
listed chemical products. Moreover, he has limited experience in the 
retailing business, having begun his business about two years 
previously to his application.
    Regarding factor five, other factors relevant to and consistent 
with the public safety, the Administrator finds that due to the 
applicant's lack of experience in handling listed chemicals, his desire 
to distribute to a market that prior DEA investigations show has a 
history of excessive distributions, his desire to distribute to 
customers who's primary interests appear to be List I chemical 
products, and his apparent unpreparedness to take on the 
responsibilities of a listed chemical registrant, the Administrator 
concludes it would be inconsistent with the public interest to grant 
this application.
    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 Southern Illinois 
Wholesale be denied. This order is effective April 18, 2002.

    Dated: March 11, 2002.
Asa Hutchinson,
Administrator.
[FR Doc. 02-6570 Filed 3-18-02; 8:45 am]
BILLING CODE 4410-09-M