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Net Wholesale; Revocation of Registration
FR Doc 05-9282 [Federal Register: May 10, 2005 (Volume 70, Number 89)]
[Notices] [Page 24626-24627] From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10my05-110]
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
Net Wholesale; Revocation of Registration
On September 16, 2004, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA), issued an Order to
Show Cause to Net Wholesale (Net) proposing to revoke its DEA Certificate of
Registration 002918NOY as a distributor of List I chemicals pursuant to 21
U.S.C. 824(a)(4), on the ground that Net's continued registration would be
inconsistent with the public interest, as that term is used in 21
U.S.C. 823(h). The order also notified Net that should no request for a
hearing be filed within 30 days, its hearing right would be deemed waived.
According to the DEA investigative file, the Order to Show Cause was sent by
certified mail to Net at its registered location at 3415 9th Avenue, Huntsville,
Alabama 35805. That correspondence was returned to DEA as ``Unclaimed,''
indicating the addressee had twice failed to respond to postal service notices
to pick up the letter. On November 4, 2004, the Order to Show Cause was
re-mailed to Net at its registered address by regular first class mail. That
correspondence has not been returned to DEA and is presumed to have been
received. DEA has not received a request for a hearing or any other reply from
Net or anyone purporting to represent the company in this matter.
Therefore, the Deputy Administrator of DEA, finding that (1) thirty days have
passed since delivery of the Order to Show Cause, and (2) no request for a
hearing having been received, concludes that Net has waived its hearing right.
See Aqui Enterprises, 67 FR 12,576 (2002). After considering relevant material
from the investigative file, the Deputy Administrator now enters her final order
without a hearing pursuant to 21
CFR 1309.53(c) and (d) and 1316.67.
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). Pseudoephedrine and ephedrine are List I chemicals commonly
used to illegally manufacture methamphetamine, a Schedule II controlled
substance.
Phenhylpropanolamine, also a List I chemical, is presently a legitimately
manufactured and distributed product used to provide relief of the symptoms
[[Page 24627]]
resulting from irritation of the sinus, nasal and upper respiratory tract
tissues, and is also used for weight control. Phenylpropanolamine is also a
precursor chemical used in the illicit manufacture of methamphetamine and
amphetamine.
As noted in previous DEA final orders, methamphetamine is an extremely potent
central nervous system stimulant and its abuse is a persistent and growing
problem in the United States. See e.g., Direct Wholesale, 69 FR 11,654 (2004);
Branex, Inc., 69 FR 8,682 (2004); Yemen Wholesale Tobacco and Candy Supply,
Inc., 67 FR 9,997 (2002); Denver Wholesale, 67 FR 99,986 (2002).
The Deputy Administrator's review of the investigative file reveals that on
May 6, 1998, Net was initially granted DEA registration to distribute ephedrine,
pseudoephedrine and phyenylpropanolamine List I chemical products. The company's
registered location was 3415 9th Avenue, Huntsville, Alabama 35805 and its
registration was last renewed on October 29, 2002. On October 17, 2003, prior to
expiration of the current registration, the company's owner, Mr. Valiollah
Geholamkhas, submitted an application for renewal. On October 20, 2003, he filed
an application for modification of Net's registered location to 7000 North
Parkway, Huntsville, Alabama 35810.
At the time of initial DEA registration, Net held a permit issued by the
Alabama Board of Pharmacy (Alabama Board) as a distributor of List I chemicals.
Despite a state requirement to maintain the permit, Net did not apply for
renewal and its permit lapsed on December 31, 2001. Nevertheless, the company
continued to operate and distribute List I chemicals within Alabama for
approximately two more years. On Net's current application for renewal of DEA
registration, by checking ``N/A'' and failing to list a state license/permit
number in response to Question 1(a), Mr. Geholamkhas represented that Alabama
did not require a state license to distribute listed chemicals. This was a
material falsification of an application in violation of 21
U.S.C. 843(a)(4)(A).
On January 22, 2004, when DEA Diversion Investigators conducted an inspection
of Net's proposed new location at 7000 North Parkway, they discovered the
company was already conducting business there, without notifying DEA and
obtaining approval for the new and separate location, as required by 21 CFR
1309.23. A record review revealed that over a seven month period, during which
Net lacked an Alabama permit and DEA authorization to conduct business at its
new location, Net purchased over 45 million milligrams of combination ephedrine
tablets. In subsequent correspondence with the Alabama Board, Mr. Geholamkhas
admitted the company had distributed List I chemicals from its new location,
without DEA approval.
In May 2004, the Alabama Board, issued its Order finding Net had sold and
delivered List I chemical products during a period when it did not hold a
current Alabama distributor permit. The Alabama Board imposed a $1000.00 fine
and granted Net's application for a new state permit, but placed it on
probationary status for three years.
Pursuant to 21 U.S.C.
824(a)(4) and 823(h),
the Deputy Administrator may revoke a DEA Certificate of Registration and deny
any pending applications for renewal of such registration if she determines that
granting the registration would be inconsistent with the public interest.
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 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.
As with the public interest analysis for practitioners and pharmacies
pursuant to subsection (f) of section 823, these factors are considered in the
disjunctive; the Deputy Administrator may on any one or a 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., Energy Outlet, 64 FR 14,269 (1999); Henry J. Schwartz, Jr., M.D., 54 FR
16422 (1989).
The Deputy Administrator finds factors two and five relevant to Net's
continued registration and its aplication for renewal.
As to factor two, compliance with Federal, State and local law, the record
shows that for a two year period, Net distributed List I chemicals without a
state permit that is required to engage in that activity. Further, for a period
of at least seven months the company also violated Federal law and regulations
by distributing List I chemicals from an unregistered location.
With regard to factor five, other factors relevant to and consistent with the
public health and safety, the Deputy Adminstrator finds that in his application
for renewal, Mr. Geholamkhas intentionally misrepresented the status of his
authority to distribute List I chemicals under State law, when he falsely
indicated that no state license or registration was required for his company to
distribute those products in Alabama. This lack of candor, taken together with
the registrant's disregard of law and regulations discussed above, makes
questionable Net and its owner's commitment to the statutory and regulatory
requirements designed to protect the public from diversion of listed chemicals.
See e.g., Seaside Pharmaceutical Co., 67 FR 35,459 (2001).
Finally, the Deputy Administrator also finds factor five relevant to the
company's request to continue distributing phenylpropanolamine and the apparent
lack of safety associated with the use of that product. 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. See e.g., John E. McRae d/b/a J & H Wholesale, 69 FR 51,480
(2004); Direct Wholesale, 69 FR 11,654 (2004); ANM Wholesale, 69 FR 11,652
(2004); Shani Distributors, 68 FR 62,324 (2003).
Accordingly, the Deputy Administration of the Drug Enforcement
Administration, pursuant to the authority vested in her by 21
U.S.C. 823 and 824
and 28 CFR 0.100(b) and 0.104, hereby orders that DEA Certificate of
Registration 002918NOY, previously issued to Net Wholesale, be, and it hereby
is, revoked. The Deputy Administrator further orders that the pending
applications for renewal and modification of the aforementioned registration be,
and they hereby are, denied. This order is effective June 9, 2005.
Dated: May 2, 2005.
Michele M. Leonhart,
Deputy Administrator.
[FR Doc. 05-9282 Filed 5-9-05; 8:45 am]
BILLING CODE 4410-09-M
NOTICE: This is an
unofficial version. An official version of these publications may be obtained
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