[Federal Register Volume 67, Number 229 (Wednesday, November 27, 2002)]
[Notices]
[Pages 70968-70969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30021]


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DEPARTMENT OF JUSTICE

Drug Enforcement Administration


K.V.M. Enterprises; Denial of Registration

    On February 25, 2002, the Deputy Assistant Administrator, Office of 
Diversion Control, Drug Enforcement Administration (DEA), issued an 
Order to Show Cause to K.V.M. Enterprises (KVM) of Detroit, Michigan, 
notifying it of an opportunity to show cause as to why DEA should not 
deny its application for DEA registration as a distributor of list 1 
chemicals. As a basis for the denial, the Order to Show Cause alleged 
that KVM's registration would not be in the public interest. The order 
also notified KVM that should not a request for a hearing be filed 
within 30 days, its hearing right would be deemed waived.
    The Order to Show Cause was sent by certified mail to KVM to the 
address included on the application for registration. DEA received a 
signed receipt indicating that the Order to Show Cause was received on 
KVM's behalf on March 4, 2002. DEA has not received a request for 
hearing or any

[[Page 70969]]

other reply from KVM or anyone purporting to represent it in this 
matter. Therefore, the Deputy Administrator, finding that (1) 30 days 
have passed since the receipt of the Order to Show Cause, and (2) no 
request for a hearing having been received, concludes that KVM is 
deemed to have waived its hearing right. After considering material 
from the investigative file in this matter, the Deputy Administrator 
now enters his final order without a hearing pursuant to 21 CFR 
1301.43(d) and (e) and 1301.46.
    The Deputy Administrator finds that on January 23, 2001, KVM 
submitted an application for DEA registration as a distributor of the 
list I chemical ephedrine (DEA chemical code number 8113). The 
application was submitted by Kwana McBurrows (Ms. McBurrows), owner of 
KVM.
    Ephedrine is a legitimately imported and distributed product used 
in the production of bronchial dilators and asthma relief medication. 
Ephedrine is also a precursor chemical used in the illicit manufacture 
of methamphetamine. DEA has developed information which demonstrates a 
recent increase in the use of ephedrine in the illicit manufacture of 
methamphetamine: in 1998, DEA was directly involved in the seizure of 
1,626 clandestine methamphetamine laboratories. Of these laboratories, 
there were 135 instances where ephedrine was positively identified as a 
precursor chemical for methamphetamine (8.3 percent of total 
clandestine laboratory seizures). In 1999, DEA was directly involved in 
the seizure of 2,025 clandestine methamphetamine laboratories. Of these 
laboratory seizures, there were 269 instances where ephedrine was 
positively identified as a precursor chemical for methamphetamine (13.3 
percent of total clandestine laboratory seizures). In 2000, the number 
of total DEA clandestine seizures dropped to 1,815, however, those 
involving ephedrine products (249) remained consistent.
    During a March 16, 2001, pre-registration investigation, DEA 
learned that KVM is a distributor of products containing Ginseng. DEA 
also learned that prior to submitting an application for DEA 
registration, Ms. McBurrows worked as a beauty consultant, and sold 
``Mary Kay'' health and beauty products. DEA's investigation further 
revealed that Ms. McBurrows had no prior experience in handling list I 
chemicals.
    DEA's investigation also revealed that KVM does not presently have 
any customers, but proposes to sell its products exclusively to gas 
stations. DEA has developed information that certain list I chemicals 
such as pseudoephedrine and ephedrine are often purchased in large 
quantities by non-traditional retail outlets such as gas station 
retailers who are not typically engaged in the sale of these products. 
These establishments in turn have sold these listed chemicals to 
individuals engaged in the illicit manufacture of methamphetamine.
    DEA also requested information regarding proposed suppliers of list 
I chemicals to KVM. Ms. McBurrows informed DEA that the Hammer 
Corporation (Hammer) of Atlanta, Georgia is one of its potential 
suppliers. Hammer has been the recipient of 16 Warning Letters from DEA 
between October 1997 and January 2001. These letters notified Hammer 
that list I chemicals distributed by the firm have been associated with 
the illicit manufacture of methamphetamine.
    Accordingly, the Deputy 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 KVM's 
application for DEA registration be denied, on the ground that 
registration of KVM would not be in the public interest. 21 U.S.C. 
824(a)(4). This order is effective December 27, 2002.

    Dated: November 4, 2002.
John B. Brown, III,
Deputy Administrator.
[FR Doc. 02-30021 Filed 11-26-02; 8:45 am]
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