Joey Enterprises, Inc. d/b/a/ NorthStar Wholesale Denial of Application, 76866-76868 [05-24496]
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Federal Register / Vol. 70, No. 248 / Wednesday, December 28, 2005 / Notices
The Burke Museum is responsible for
notifying the Confederated Tribes of the
Umatilla Reservation, Oregon that this
notice has been published.
Dated: December 6, 2005.
Sherry Hutt,
Manager, National NAGPRA Program.
[FR Doc. 05–24509 Filed 12–27–05; 8:45 am]
BILLING CODE 4312–50–M
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 04–31]
wwhite on PROD1PC65 with NOTICES
Joey Enterprises, Inc. d/b/a/ NorthStar
Wholesale Denial of Application
On March 2, 2004, the Deputy
Assistant Administrator, Office of
Diversion Control, Drug Enforcement
Administration (DEA), issued an Order
to Show Cause to Joey Enterprises, Inc.,
d/b/a NorthStar Wholesale (hereinafter
referred to as ‘‘Respondent’’) of
Birmingham, Alabama. The show cause
order proposed to deny the
Respondent’s February 10, 2003,
application for DEA Certificate of
Registration as a distributor of list I
chemicals. The Order to Show Cause
alleged in substance that granting the
application of the Respondent would be
inconsistent with the public interest as
that term is used in 21 U.S.C. 823(h).
According to the DEA investigative
file, on or about March 30, 2004, the
Respondent, through its President Feroz
Jiwani (Mr. Jiwani), requested a hearing
in response to the show cause order. On
April 22, 2004, the presiding
Administrative Law Judge issued an
Order for Pre-hearing Statements. As
part of that Order, the Administrative
Law Judge directed the Government to
file its Pre-hearing Statement on or
before May 14, 2004, and that the
Respondent was to file its Pre-hearing
Statement on or before June 4, 2004.
Following pre-hearing motions
extending the above scheduled filing
dates, the Government filed its Prehearing Statement on July 21, 2004.
However, the Respondent did not file its
Pre-hearing Statement by the August 16,
2004 deadline.
On September 2, 2004, the
Administrative Law Judge issued an
order extending the filing date of the
Respondent’s Pre-hearing Statement to
September 15, 2004. The Administrative
Law Judge’s Order also notified the
Respondent that if it again failed to meet
the deadline for filing a Pre-hearing
Statement, such inaction would be
deemed a waiver of its hearing
entitlement. Nevertheless, the
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17:37 Dec 27, 2005
Jkt 208001
Respondent again failed to meet the new
deadline and did not file its Pre-hearing
Statement. Accordingly, on September
29, 2004, the Administrative Law Judge
issued her Order Terminating the
Proceedings.
The Deputy Administrator adopts the
ruling of the Administrative Law Judge’s
termination order that the Respondent
has waived its hearing right. See, Aqui
Enterprises, 67 FR 12576 (2002). After
considering relevant material from the
investigative file in this matter, the
Deputy Administrator now enters her
final order without a hearing pursuant
to 21 CFR 1309.53(b) and (d). The
Deputy Administrator finds as follows:
List I chemicals are those 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). As noted in previous
DEA final orders, pseudoephedrine and
ephedrine are list I chemicals
commonly used to illegally manufacture
methamphetamine, a Schedule II
controlled substance.
Methamphetamine is an extremely
potent central nervous system stimulant
and its illicit manufacture and abuse are
ongoing public health concerns in the
United States. See e.g., Direct
Wholesale, 69 FR 11654 (2004); Yemen
Wholesale Tobacco and Candy Supply,
Inc., 67 FR 9997 (2002); Denver
Wholesale, 67 FR 99986 (2002).
The investigative file contains a
printed news release article from the
DEA Web site regarding federal drug
seizures and the abuse of
methamphetamine in the State of
Alabama. https://www.dea.gov/pubs/
states/alabama.html. According to the
article, methamphetamine has become
the number one abused drug in
Alabama. The article also tracked the
‘‘dramatic increase’’ in the number of
methamphetamine laboratory seizures
in the state from 1997 to 2003.
According to data obtained by DEA’s El
Paso Intelligence Center (also known as
‘‘EPIC’’), in 1997, methamphetamine
laboratory seizures in Alabama totaled
six; by 2002, the total number of
laboratory seizures climbed to 201.
The above-referenced registration
application of the Respondent was
initially submitted under the business
name ‘‘Joey Enterprises, Inc.,’’ and was
later amended to include the caption,
‘‘d.b.a. Northstar Wholesale.’’ The
Respondent sought DEA registration as
a distributor of the list I chemicals
ephedrine, pseudoephedrine and
phenylpropanolamine. There is no
evidence in the investigative file that
Respondent, or anyone purporting to
represent the Respondent has sought to
further modify its pending application.
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
The Deputy Administrator’s review of
the investigative file reveals that on
September 3, 2003, DEA Diversion
Investigators conducted an on-site preregistration inspection at Respondent’s
proposed registered location in
Birmingham. DEA’s investigation
revealed that Mr. Jiwani is the owner
and President of the Respondent, his
wife, Amynah, is the company’s
assistant manager, and the company
also employs a part-time employee by
the first name of Christopher. When
asked by DEA investigators, neither Mr.
nor Mrs. Jiwani knew the part-time
employee’s last name.
The Respondent is a cash and carry
establishment that distributes typical
convenience store items including
tobacco products, candy, drinks and
health and beauty products. The
Respondent’s customers consist of
approximately 150 convenience stores
and gas stations located in the
Birmingham area, as well as Northern
Alabama, Georgia and Fort Lauderdale,
Florida.
DEA investigators asked Mr. Jiwani to
provide information on list I chemical
products the firm intended to carry. In
response to the request, Mr. Jiwani
provided a list of chemical products the
firm would distribute, including: Max
Brand 25/200 mg—60 count bottles;
Mini Thins 25/200 mg—60 count
bottles; Ephedrine 25/200 mg—60 count
bottles; Bio Tech Ephedrine 25/200
mg—60 count bottles; Ephedrine 25/200
mg Black—12 count packets; Tylenol
Cold, Tylenol Sinus and Tylenol Allergy
(no sizes listed); Advil Cold and Sinus
and Aleve Cold and Sinus (no sizes
listed); and Vicks Dayquil and Nyquil
(no sizes listed). Mr. Jiwani estimated
that these products would make up ten
to fifteen percent of Respondent’s total
sales.
Max Brand products have previously
been identified by DEA as the
‘‘precursor product predominantly
encountered and seized at clandestine
methamphetamine laboratories.’’ See
Express Wholesale, 69 FR 62086, 62087
(2004); see also, RAM, Inc. d/b/a
American Wholesale Distribution Corp.,
70 FR 11693 (2005). Convenience stores
are the ‘‘primary source’’ for the
purchase of Max Brand products, which
are the preferred brand for use by illicit
methamphetamine producers. See Elk
International, Inc., d/b/a Tri-City
Wholesale, 70 FR 24615 (2005).
Mr. Jiwani also informed DEA
investigators that he had no experience
handling list I chemical products. He
further stated that Respondent had no
procedure in place for identifying
suspicious or unusual purchases of list
I chemical products.
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Federal Register / Vol. 70, No. 248 / Wednesday, December 28, 2005 / Notices
According to the investigative file, on
September 3 and 4, 2003, DEA
investigators conducted random
verifications of the ten of Respondent’s
proposed customers for list I chemical
products. At least seven of the
customers informed DEA personnel that
they didn’t carry listed chemical
products or were already purchasing
them from other suppliers. Another
customer was already in possession of
listed chemical products which were on
display at the establishment. The
customer insisted to DEA investigators
that he purchased the products from
Respondent, even when told that
Respondent did not carry such
products.
Mr. Jiwani further advised DEA
investigators he requires new customers
to provide tax exempt ID numbers
before selling them anything. DEA
investigators found however, that Mr.
Jiwani could not confirm the existence
of his customers because he did not visit
the location of these stores prior to their
becoming customers.
DEA has previously found that small,
illicit laboratories operate with listed
chemical products often procured,
legally or illegally, from non-traditional
retailers of over-the-counter drug
products, such as gas stations and small
retail markets. Some retailers acquire
products from multiple distributors to
mask their acquisition of large
quantities of listed chemicals. See, A–1
Distribution Wholesale, 70 FR 28573
(2005).
DEA has further determined that there
exists a ‘‘gray market’’ in which certain
high strength, high quantity
pseudoephedrine and ephedrine
products are distributed only to
convenience stores and gas stations,
from where they have a high incidence
of diversion. A–1 distribution, supra, at
28573. These gray market products are
not sold in large discount stores, retail
pharmacies or grocery stores, where sale
of therapeutic over-the-counter drugs
predominate. ‘‘Two-way’’ ephedrine
and single entity pseudoephedrine
products are prime products in this gray
market industry and are rarely found in
any retail store serving the traditional
therapeutic market.
DEA has also credited industry data,
market studies and statistical analysis
which has shown that over 90% of overthe-counter drug remedies are sold in
drug stores, supermarket chains and
‘‘big box’’ discount retailers. Less than
one percent of cough and cold remedies
are sold in gas stations or convenience
stores. Studies have indicated that most
convenience stores could not be
expected to sell more than $20.00 or
$40.00 worth of products containing
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17:37 Dec 27, 2005
Jkt 208001
pseudoephedrine per month. Jay
Enterprises of Spartansburg, Inc., 70 FR
24620 (2005).
Pursuant to 21 U.S.C. 823(h), the
Deputy Administrator may deny an
application for Certificate of
Registration if she determines that
granting the registration would be
inconsistent with the public interest as
determined under that section. Section
823(h) requires the following factors be
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.
As with 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 Deputy Administrator
may rely on any one or combination of
factors, and may give each factor the
weight she deems appropriate in
determining whether a registration
should be revoked or an application for
registration denied. See, e.g., ANM
Wholesale, 69 FR 11652 (2004); Energy
Outlet, 64 FR 14269 (1999). See also
Henry J. Schwartz, Jr., M.D., 54 FR
16422 (1989).
The Deputy Administrator finds
factors four and five relevant to
Respondent’s pending registration
application.
With regard to factor four, the
applicant’s past experience in the
distribution of chemicals, the Deputy
Administrator finds this factor relevant
to Mr. Jiwani’s lack of experience in the
handling of list I chemical products. In
prior DEA decisions, the lack of
experience in the handling list I
chemicals was a factor in a
determination to deny a pending
application for DEA registration. See,
e.g., CWK Enterprises, Inc. (CWK), 69 FR
69400 (2004); Prachi Enterprises, Inc.
(Prachi), 69 FR 69407 (2004); Matthew
D. Graham, 67 FR 10229 (2002); Xtreme
Enterprises, Inc., 67 FR 76195 (2002).
Therefore, this factor similarly weighs
against the granting of Respondent’s
pending application.
With respect to factor five, other
factors relevant to and consistent with
the public safety, the Deputy
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76867
Administrator finds this factor also
weighs heavily against granting the
Respondent’s application.
Methamphetamine abuse is one of the
top public health threats facing the
country. While there have been various
state legislative initiatives enacted
around the United States that seek to
address the illicit production and use of
methamphetamine, the growing menace
of this drug remains a grave public
health and safety concern. Ephedrine
and pseudoephedrine are precursor
products needed to manufacture
methamphetamine and operators of
illicit laboratories regularly acquire the
precursor products needed to
manufacture the drug.
Many of these illicit transactions arise
from listed chemical products acquired
from convenience stores and gas
stations. It is apparent that the
Respondent intends on being a
participant in this market with most of
its proposed customers made up of
convenience stores and gas stations.
While there are no specific prohibitions
under the Controlled Substance Act
regarding the sale of listed chemical
products to these entities, DEA has
nevertheless found that gas stations and
convenience stores constitute sources
for the diversion of listed chemical
products. See, e.g., ANM Wholesale, 69
FR 11652 (2004); K.V.M. Enterprises, 67
FR 70968 (2002) (denial of application
based in part upon information
developed by DEA that the applicant
proposed to sell listed chemicals to gas
stations, and the fact that these
establishments in turn have sold listed
chemical products to individuals
engaged in the illicit manufacture of
methamphetamine); Xtreme Enterprises,
Inc., supra. Therefore, to Respondent’s
proposed sale of listed chemical
products convenience store and gas
stations weighs against granting its
pending registration application.
As noted above, there is no evidence
in the investigative file that the
Respondent ever sought to modify its
pending application with respect to
listed chemical products it intends to
distribute. Among the listed chemical
products the firm seeks to distribute is
phenylpropanolamine. DEA has
previously determined that an
applicant’s request to distribute
phenylpropanolamine constitutes a
ground under factor five for denial of an
application for registration because of
the apparent lack of safety associated
with the use of this product. See e.g.,
William E. ‘‘Bill’’ Smith d/b/a B &B
Wholesale, 69 FR 2259 (2004); J &S
Distributors, 69 FR 62089 (2004); Shani
Distributors, 68 FR 62324 (2003). The
Deputy Administrator also finds factor
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Federal Register / Vol. 70, No. 248 / Wednesday, December 28, 2005 / Notices
five relevant to the results of DEA’s
random customer verifications where
several of Respondent’s proposed
customers informed investigators that
listed chemicals products likely would
not be purchased from Respondent.
Factor five is also relevant to
Respondent’s lack of procedure for
identifying suspicious or unusual
purchases of list I chemical products.
Factor five is further relevant to DEA’s
investigative findings regarding
Respondent’s inability to confirm the
existence of its customers. The Deputy
Administrator is also somewhat
concerned by the Jiwani’s inability to
identify a part-time employee. It is
unknown whether any knowledge of the
individual’s identity would favorably or
unfavorably impact DEA’s
determination with regard to
Respondent’s application for
registration. Therefore, the unresolved
nature of this event is also given
consideration under factor five. Based
on the foregoing, the Deputy
Administrator concludes that granting
the pending application of the
Respondent would be inconsistent with
the public interest.
Accordingly, the Deputy
Administrator of the Drug Enforcement
Administration, pursuant to the
authority vested in her by 21 U.S.C. 823
and 28 CFR 0.100(b) and 0.104, hereby
orders that the pending application for
DEA Certificate of Registration,
previously submitted by Joey
Enterprises, Inc., d/b/a NorthStar
Wholesale be, and it hereby is denied.
This order is effective January 27, 2006.
Dated: December 15, 2005.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05–24496 Filed 12–27–05; 8:45am]
BILLING CODE 4410–09–M
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 04–63]
wwhite on PROD1PC65 with NOTICES
Donley D. Siddall, M.D.; Revocation of
Registration
On June 28, 2004, the Deputy
Administrator of the Drug Enforcement
Administration (DEA) issued an Order
to Show Cause to Donley D. Siddall,
M.D. (Respondent) of Collegedale,
Tennessee. The Order to Show Cause
notified the Respondent of an
opportunity to show cause as to why
DEA should not revoke his DEA
Certificate of Registration, AS691100,
under 21 U.S.C. 824(a)(3), and deny any
pending application for renewal of that
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17:37 Dec 27, 2005
Jkt 208001
registration pursuant to 21 U.S.C. 823(f).
The Order to Show Cause further
informed the Respondent of the
immediate suspension of his
registration, alleging that his continued
registration would constitute an
imminent danger to the public health
and safety, pursuant to 21 U.S.C 824(d).
Specifically, the Order to Show Cause
alleged in relevant part that effective
January 7, 2004 the Tennessee Board of
Medical Examiners (Tennessee Board)
revoked Respondent’s license to
practice medicine in that state and as a
result, he is not currently authorized to
handle controlled substances in
Tennessee.
By letter dated August 6, 2004, the
Respondent, through his legal counsel,
timely requested a hearing in this
matter. As part of his hearing request,
the Respondent asserted that ‘‘* * *
[t]he Tennessee Board * * * wrongly
revoked [his] medical license * * *.’’
On August 26, 2004, the presiding
Administrative Law Judge Gail A.
Randall (Judge Randall) issued to
counsel for DEA as well as the
Respondent on Order for Prehearing
Statements.
In lieu of filing a Pre-hearing
Statement, counsel for DEA filed
Government’s Request for Stay of
Proceedings and Motion for Summary
Disposition on September 9, 2004. In its
motion, the Government recited the
primary allegation raised in the Order to
Show Cause regarding the January 7,
2004 revocation of the Respondent’s
Tennessee medical license. In support
of its motions, the Government attached
a copy of the aforementioned revocation
order of the Tennessee Board.
Accordingly, the Government argued
that a motion for summary disposition
is appropriate in this matter and
Respondent’s DEA Certificate of
Registration should be revoked.
On September 29, 2004, counsel for
the Respondent filed a Response In
Opposition to the Government’s Motion
for Summary Disposition. In his reply
brief, the Respondent argued in relevant
part that any action by DEA to dismiss
Respondent’s right to a hearing would
be ‘‘premature’’ since the matter
involving the appropriateness of the
Tennessee Board’s revocation action
was being reviewed in state courts. The
Respondent also requested that DEA
stay the current administrative action
until the Tennessee state courts have
reached a final decision regarding his
state medical license. While he further
argued in his reply brief that the
Tennessee Board’s revocation action
was conducted ‘‘* * * in an arbitrary
and capricious manner’’, and that the
matter was pending review before the
PO 00000
Frm 00134
Fmt 4703
Sfmt 4703
Tennessee courts, the Respondent
nevertheless did not deny that he is
currently without authorization to
handle controlled substances in
Tennessee, the state in which he
currently holds a DEA registration.
On November 4, 2004, Judge Randall
issued her Order, Opinion and
Recommended Decision of the
Administrative Law Judge (Opinion and
Recommended Decision). As part of her
recommended ruling, Judge Randall
granted the Government’s Motion for
Summary Disposition and found that
the Respondent lacked authorization to
handle controlled substances in
Tennessee. In granting the
Government’s motion, Judge Randall
also recommended that the
Respondent’s DEA registration be
revoked. No exceptions were filed by
either party to Judge Randall’s Opinion
and Recommended Decision, and on
December 7, 2004, the record of these
proceedings was transmitted to the
Office of the DEA Deputy
Administrator.
The Deputy Administrator has
considered the record in its entirety and
pursuant to 21 CFR 1316.67, hereby
issues her final order based upon
findings of fact and conclusions of law
as hereinafter set forth. The Deputy
Administrator adopts, in full, the
Opinion and Recommended Decision of
the Administrative Law Judge.
The Deputy Administrator finds that
the Respondent currently possesses
DEA Certificate of Registration
AS6911007, and is registered to handle
controlled substances at a location in
Collegedale, Tennessee. As outlined
above, the Respondent is currently
without authorization to practice
medicine in Tennessee following the
January 7, 2004, revocation of his state
medical license. Notwithstanding the
Respondent’s request that the DEA
administrative matter be stayed pending
a resolution of his appeal of the
Tennessee Board’s revocation order,
there is no evidence before the Deputy
Administrator that the Respondent has
been granted reinstatement of his
Tennessee medical license. Therefore, it
is reasonable to conclude that without
the ability to practice medicine, the
Respondent also lacks authorization to
handle controlled substances in
Tennessee.
DEA does not have statutory authority
under the Controlled Substances Act to
issue or maintain a registration if the
applicant or registrant is without state
authority to handle controlled
substances in the state in which he
conducts business. See 21 U.S.C.
802(21), 823(f) and 824(a)(3). This
prerequisite has been consistently
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]]>Agencies
[Federal Register Volume 70, Number 248 (Wednesday, December 28, 2005)]
[Notices]
[Pages 76866-76868]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-24496]
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DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 04-31]
Joey Enterprises, Inc. d/b/a/ NorthStar Wholesale Denial of
Application
On March 2, 2004, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an
Order to Show Cause to Joey Enterprises, Inc., d/b/a NorthStar
Wholesale (hereinafter referred to as ``Respondent'') of Birmingham,
Alabama. The show cause order proposed to deny the Respondent's
February 10, 2003, application for DEA Certificate of Registration as a
distributor of list I chemicals. The Order to Show Cause alleged in
substance that granting the application of the Respondent would be
inconsistent with the public interest as that term is used in 21 U.S.C.
823(h).
According to the DEA investigative file, on or about March 30,
2004, the Respondent, through its President Feroz Jiwani (Mr. Jiwani),
requested a hearing in response to the show cause order. On April 22,
2004, the presiding Administrative Law Judge issued an Order for Pre-
hearing Statements. As part of that Order, the Administrative Law Judge
directed the Government to file its Pre-hearing Statement on or before
May 14, 2004, and that the Respondent was to file its Pre-hearing
Statement on or before June 4, 2004. Following pre-hearing motions
extending the above scheduled filing dates, the Government filed its
Pre-hearing Statement on July 21, 2004. However, the Respondent did not
file its Pre-hearing Statement by the August 16, 2004 deadline.
On September 2, 2004, the Administrative Law Judge issued an order
extending the filing date of the Respondent's Pre-hearing Statement to
September 15, 2004. The Administrative Law Judge's Order also notified
the Respondent that if it again failed to meet the deadline for filing
a Pre-hearing Statement, such inaction would be deemed a waiver of its
hearing entitlement. Nevertheless, the Respondent again failed to meet
the new deadline and did not file its Pre-hearing Statement.
Accordingly, on September 29, 2004, the Administrative Law Judge issued
her Order Terminating the Proceedings.
The Deputy Administrator adopts the ruling of the Administrative
Law Judge's termination order that the Respondent has waived its
hearing right. See, Aqui Enterprises, 67 FR 12576 (2002). After
considering relevant material from the investigative file in this
matter, the Deputy Administrator now enters her final order without a
hearing pursuant to 21 CFR 1309.53(b) and (d). The Deputy Administrator
finds as follows:
List I chemicals are those 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). As noted in previous DEA final
orders, pseudoephedrine and ephedrine are list I chemicals commonly
used to illegally manufacture methamphetamine, a Schedule II controlled
substance. Methamphetamine is an extremely potent central nervous
system stimulant and its illicit manufacture and abuse are ongoing
public health concerns in the United States. See e.g., Direct
Wholesale, 69 FR 11654 (2004); Yemen Wholesale Tobacco and Candy
Supply, Inc., 67 FR 9997 (2002); Denver Wholesale, 67 FR 99986 (2002).
The investigative file contains a printed news release article from
the DEA Web site regarding federal drug seizures and the abuse of
methamphetamine in the State of Alabama. https://www.dea.gov/pubs/
states/alabama.html. According to the article, methamphetamine has
become the number one abused drug in Alabama. The article also tracked
the ``dramatic increase'' in the number of methamphetamine laboratory
seizures in the state from 1997 to 2003. According to data obtained by
DEA's El Paso Intelligence Center (also known as ``EPIC''), in 1997,
methamphetamine laboratory seizures in Alabama totaled six; by 2002,
the total number of laboratory seizures climbed to 201.
The above-referenced registration application of the Respondent was
initially submitted under the business name ``Joey Enterprises, Inc.,''
and was later amended to include the caption, ``d.b.a. Northstar
Wholesale.'' The Respondent sought DEA registration as a distributor of
the list I chemicals ephedrine, pseudoephedrine and
phenylpropanolamine. There is no evidence in the investigative file
that Respondent, or anyone purporting to represent the Respondent has
sought to further modify its pending application.
The Deputy Administrator's review of the investigative file reveals
that on September 3, 2003, DEA Diversion Investigators conducted an on-
site pre-registration inspection at Respondent's proposed registered
location in Birmingham. DEA's investigation revealed that Mr. Jiwani is
the owner and President of the Respondent, his wife, Amynah, is the
company's assistant manager, and the company also employs a part-time
employee by the first name of Christopher. When asked by DEA
investigators, neither Mr. nor Mrs. Jiwani knew the part-time
employee's last name.
The Respondent is a cash and carry establishment that distributes
typical convenience store items including tobacco products, candy,
drinks and health and beauty products. The Respondent's customers
consist of approximately 150 convenience stores and gas stations
located in the Birmingham area, as well as Northern Alabama, Georgia
and Fort Lauderdale, Florida.
DEA investigators asked Mr. Jiwani to provide information on list I
chemical products the firm intended to carry. In response to the
request, Mr. Jiwani provided a list of chemical products the firm would
distribute, including: Max Brand 25/200 mg--60 count bottles; Mini
Thins 25/200 mg--60 count bottles; Ephedrine 25/200 mg--60 count
bottles; Bio Tech Ephedrine 25/200 mg--60 count bottles; Ephedrine 25/
200 mg Black--12 count packets; Tylenol Cold, Tylenol Sinus and Tylenol
Allergy (no sizes listed); Advil Cold and Sinus and Aleve Cold and
Sinus (no sizes listed); and Vicks Dayquil and Nyquil (no sizes
listed). Mr. Jiwani estimated that these products would make up ten to
fifteen percent of Respondent's total sales.
Max Brand products have previously been identified by DEA as the
``precursor product predominantly encountered and seized at clandestine
methamphetamine laboratories.'' See Express Wholesale, 69 FR 62086,
62087 (2004); see also, RAM, Inc. d/b/a American Wholesale Distribution
Corp., 70 FR 11693 (2005). Convenience stores are the ``primary
source'' for the purchase of Max Brand products, which are the
preferred brand for use by illicit methamphetamine producers. See Elk
International, Inc., d/b/a Tri-City Wholesale, 70 FR 24615 (2005).
Mr. Jiwani also informed DEA investigators that he had no
experience handling list I chemical products. He further stated that
Respondent had no procedure in place for identifying suspicious or
unusual purchases of list I chemical products.
[[Page 76867]]
According to the investigative file, on September 3 and 4, 2003,
DEA investigators conducted random verifications of the ten of
Respondent's proposed customers for list I chemical products. At least
seven of the customers informed DEA personnel that they didn't carry
listed chemical products or were already purchasing them from other
suppliers. Another customer was already in possession of listed
chemical products which were on display at the establishment. The
customer insisted to DEA investigators that he purchased the products
from Respondent, even when told that Respondent did not carry such
products.
Mr. Jiwani further advised DEA investigators he requires new
customers to provide tax exempt ID numbers before selling them
anything. DEA investigators found however, that Mr. Jiwani could not
confirm the existence of his customers because he did not visit the
location of these stores prior to their becoming customers.
DEA has previously found that small, illicit laboratories operate
with listed chemical products often procured, legally or illegally,
from non-traditional retailers of over-the-counter drug products, such
as gas stations and small retail markets. Some retailers acquire
products from multiple distributors to mask their acquisition of large
quantities of listed chemicals. See, A-1 Distribution Wholesale, 70 FR
28573 (2005).
DEA has further determined that there exists a ``gray market'' in
which certain high strength, high quantity pseudoephedrine and
ephedrine products are distributed only to convenience stores and gas
stations, from where they have a high incidence of diversion. A-1
distribution, supra, at 28573. These gray market products are not sold
in large discount stores, retail pharmacies or grocery stores, where
sale of therapeutic over-the-counter drugs predominate. ``Two-way''
ephedrine and single entity pseudoephedrine products are prime products
in this gray market industry and are rarely found in any retail store
serving the traditional therapeutic market.
DEA has also credited industry data, market studies and statistical
analysis which has shown that over 90% of over-the-counter drug
remedies are sold in drug stores, supermarket chains and ``big box''
discount retailers. Less than one percent of cough and cold remedies
are sold in gas stations or convenience stores. Studies have indicated
that most convenience stores could not be expected to sell more than
$20.00 or $40.00 worth of products containing pseudoephedrine per
month. Jay Enterprises of Spartansburg, Inc., 70 FR 24620 (2005).
Pursuant to 21 U.S.C. 823(h), the Deputy Administrator may deny an
application for Certificate of Registration if she determines that
granting the registration would be inconsistent with the public
interest as determined under that section. Section 823(h) requires the
following factors be 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.
As with 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 Deputy Administrator may rely
on any one or combination of factors, and may give each factor the
weight she deems appropriate in determining whether a registration
should be revoked or an application for registration denied. See, e.g.,
ANM Wholesale, 69 FR 11652 (2004); Energy Outlet, 64 FR 14269 (1999).
See also Henry J. Schwartz, Jr., M.D., 54 FR 16422 (1989).
The Deputy Administrator finds factors four and five relevant to
Respondent's pending registration application.
With regard to factor four, the applicant's past experience in the
distribution of chemicals, the Deputy Administrator finds this factor
relevant to Mr. Jiwani's lack of experience in the handling of list I
chemical products. In prior DEA decisions, the lack of experience in
the handling list I chemicals was a factor in a determination to deny a
pending application for DEA registration. See, e.g., CWK Enterprises,
Inc. (CWK), 69 FR 69400 (2004); Prachi Enterprises, Inc. (Prachi), 69
FR 69407 (2004); Matthew D. Graham, 67 FR 10229 (2002); Xtreme
Enterprises, Inc., 67 FR 76195 (2002). Therefore, this factor similarly
weighs against the granting of Respondent's pending application.
With respect to factor five, other factors relevant to and
consistent with the public safety, the Deputy Administrator finds this
factor also weighs heavily against granting the Respondent's
application. Methamphetamine abuse is one of the top public health
threats facing the country. While there have been various state
legislative initiatives enacted around the United States that seek to
address the illicit production and use of methamphetamine, the growing
menace of this drug remains a grave public health and safety concern.
Ephedrine and pseudoephedrine are precursor products needed to
manufacture methamphetamine and operators of illicit laboratories
regularly acquire the precursor products needed to manufacture the
drug.
Many of these illicit transactions arise from listed chemical
products acquired from convenience stores and gas stations. It is
apparent that the Respondent intends on being a participant in this
market with most of its proposed customers made up of convenience
stores and gas stations. While there are no specific prohibitions under
the Controlled Substance Act regarding the sale of listed chemical
products to these entities, DEA has nevertheless found that gas
stations and convenience stores constitute sources for the diversion of
listed chemical products. See, e.g., ANM Wholesale, 69 FR 11652 (2004);
K.V.M. Enterprises, 67 FR 70968 (2002) (denial of application based in
part upon information developed by DEA that the applicant proposed to
sell listed chemicals to gas stations, and the fact that these
establishments in turn have sold listed chemical products to
individuals engaged in the illicit manufacture of methamphetamine);
Xtreme Enterprises, Inc., supra. Therefore, to Respondent's proposed
sale of listed chemical products convenience store and gas stations
weighs against granting its pending registration application.
As noted above, there is no evidence in the investigative file that
the Respondent ever sought to modify its pending application with
respect to listed chemical products it intends to distribute. Among the
listed chemical products the firm seeks to distribute is
phenylpropanolamine. DEA has previously determined that an applicant's
request to distribute phenylpropanolamine constitutes a ground under
factor five for denial of an application for registration because of
the apparent lack of safety associated with the use of this product.
See e.g., William E. ``Bill'' Smith d/b/a B &B Wholesale, 69 FR 2259
(2004); J &S Distributors, 69 FR 62089 (2004); Shani Distributors, 68
FR 62324 (2003). The Deputy Administrator also finds factor
[[Page 76868]]
five relevant to the results of DEA's random customer verifications
where several of Respondent's proposed customers informed investigators
that listed chemicals products likely would not be purchased from
Respondent.
Factor five is also relevant to Respondent's lack of procedure for
identifying suspicious or unusual purchases of list I chemical
products. Factor five is further relevant to DEA's investigative
findings regarding Respondent's inability to confirm the existence of
its customers. The Deputy Administrator is also somewhat concerned by
the Jiwani's inability to identify a part-time employee. It is unknown
whether any knowledge of the individual's identity would favorably or
unfavorably impact DEA's determination with regard to Respondent's
application for registration. Therefore, the unresolved nature of this
event is also given consideration under factor five. Based on the
foregoing, the Deputy Administrator concludes that granting the pending
application of the Respondent would be inconsistent with the public
interest.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in her by 21 U.S.C.
823 and 28 CFR 0.100(b) and 0.104, hereby orders that the pending
application for DEA Certificate of Registration, previously submitted
by Joey Enterprises, Inc., d/b/a NorthStar Wholesale be, and it hereby
is denied. This order is effective January 27, 2006.
Dated: December 15, 2005.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05-24496 Filed 12-27-05; 8:45am]
BILLING CODE 4410-09-M
