69400 Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 

DEA approval to modify here registered 

address. She also indicated that she had 

been invited to resume work as a 

physician at CCPMC and it was alleged 

that she had continued her prescribing 

practices, even after becoming aware of 

DEA’s investigation into those practices. 

On July 3, 2001, counsel for Dr. 

Bordeaux requested a hearing and 

following prehearing procedures, 

Presiding Administrative Law Judge 

Mary Ellen Bittner (Judge Bittner) 

scheduled the hearing to begin on July 

16, 2002. On July 10, 2002, counsel for 

Dr. Bordeaux filed a Motion to Defer 

Hearing as a result of her indictment by 

a Federal grant jury on charges 

stemming from the conduct alleged in 

the Order to Show Cause/Immediate 

Suspension of Registration. That motion 

was granted on July 10, 2002. 

On February 27, 2004, counsel for the 

Government filed a Motion for 

Summary Judgment. It alleged that on 

February 10, 2003, Dr. Bordeaux had 

been convicted in United States District 

Court for the District of South Carolina, 

of Conspiracy to Unlawfully Distribute 

Controlled Substances, in violation of 

21 U.S.C. 846. Further, the motion 

alleged that March 10, 2003, the State 

Board of Medical Examiners of South 

Carolina (Medical Board) issued an 

Order of Temporary Suspension of Dr. 

Bordeaux’s license to practice medicine 

in South Carolina and that she was no 

longer authorized to handle controlled 

substances in the State in which she 

maintained her DEA registration. 

The Government attached to its 

motion an affidavit from a Medical 

Board investigator documenting the 

Federal conviction, a copy of the Order 

of Temporary Suspension and a 

February 20, 2004, letter from the 

Medical Board, indicating that as of that 

date, Dr. Bordeaux’s medical license 

was still suspended. While given the 

opportunity, Dr. Bordeaux did not file a 

response to the Government’s motion. 

On May 4, 2004, Judge Bittner issued 

the Opinion and Recommended 

Decision of the Administrative Law 

Judge (Opinion and Recommended 

Decision). As part of her recommended 

ruling, Judge Bittner granted the 

Government’s Motion for Summary 

Judgment, finding Dr. Bordeaux lacked 

authorization handle controlled 

substances in South Carolina, the 

jurisdiction in which she is registered 

with DEA. 

In granting the Government’s motion, 

Judge Bittner further recommended that 

Dr. Bordeaux’s DEA registration be 

revoked and that any pending 

applications for modification or renewal 

be denied. No exceptions to the Opinion 

and Recommended Decision were filed. 

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 

Adminstrator adopts, in full, the 

Opinion and Recommended Decision of 

the Administrative Law Judge.

The Deputy Administrator finds that 

Dr. Bordeaux currently possesses DEA 

Certificate of Registration BB3869370 

and is registered to handle controlled 

substances in the State of South 

Carolina. The Deputy Administrator 

further finds that in response to her 

Federal conviction, on March 10, 2003, 

the State Board issued an Order of 

Temporary Suspension immediately 

suspending Dr. Bordeaux’s license to 

practice medicine in South Carolina. 

There is no evidence before the Deputy 

Administrator that the State Board’s 

Order has been lifted, stayed or 

modified. Therefore, the Deputy 

Administrator finds that Dr. Bordeaux is 

currently not licensed to practice 

medicine in South Carolina and as a 

result, it is reasonable to infer she is also 

without authorization to handle 

controlled substances in that State. 

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 she 

conducts business. See 21 U.S.C. 

802(21), 823(f) and 824(a)(3). This 

prerequisite has been consistently 

upheld. See Stephen J. Graham, M.D.,

69 FR 11661 (2004); Dominick A. Ricci, 

M.D., 58 FR 51104 (1993); Bobby Watts, 

M.D., 53 FR 11919 (1988). Revocation is 

also appropriate when a State license 

has been suspended, but with the 

possibility of future reinstatement. See 

Alton E. Ingram, Jr., M.D., 69 FR 22562 

(2004); Anne Lazar Thorn, M.D., 62 FR 

847 (1997). 

Here, it is clear Dr. Bordeaux is not 

currently licensed to handle controlled 

substances in South Carolina, where she 

is registered with DEA. Therefore, she is 

not entitled to maintain that 

registration. Because Dr. Bordeaux is not 

entitled to a DEA registration in South 

Carolina due to lack of State 

authorization to handle controlled 

substances, the Deputy Administrator 

concludes it is unnecessary to address 

whether Dr. Bordeaux’s registration 

should be revoked based upon the 

remaining public interest grounds 

asserted in the Order to Show Cause/

Immediate Suspension of Registration. 

See Fereida Walker-Graham, M.D., 68 

FR 24761 (2003); Nathaniel-AikensAfful, M.D., 62 FR 16871 (1997); Sam F. 

Moore, D.V.M., 58 FR 14428 (1993). 

Accordingly, the Deputy 

Administrator 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, BB3869370, issued to 

Deborah Bordeaux, M.D., be, and it 

hereby is, revoked. The Deputy 

Administrator further orders that any 

pending applications for renewal or 

modification of such registration be, and 

they hereby are, denied. This order is 

effective December 29, 2004.

Dated: November 10, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–26306 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

CWK Enterprises, Inc.; Denial of 

Registration 

On July 23, 2004, the Deputy 

Assistant Administrator, Office of 

Diversion Control, Drug Enforcement 

Administration (DEA), issued an Order 

to Show Cause to CWK Enterprises, Inc. 

(CWK) proposing to deny its March 1, 

2003, application for DEA Certificate of 

Registration as a distributor of list I 

chemicals. The Order to Show Cause 

alleged that granting CWK’s application 

would be inconsistent with the public 

interest, as that term is used in 21 U.S.C. 

823(h). The order also notified CWK 

that should not 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 CWK at its proposed 

registered location at 3065 McCall 

Drive, Suite 10, Atlanta, Georgia 30224. 

It was received on August 5, 2004, and 

DEA has not received a request for a 

hearing or any other reply from CWK 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 CWK has waived its hearing right. 

See Aqui Enterprises, 67 FR 12576 

(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 

Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 69401

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. 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 9997 (2002); 

Denver Wholesale, 67 FR 99986 (2002). 

The Deputy Administrator’s review of 

the investigative file reveals that on or 

about March 1, 2003, an application was 

submitted by the President of CWK, Mr. 

Charles In Kim, seeking registration to 

distribute ephedrine and 

pseudoephedrine list I chemical 

products. The application originally 

included phenylpropanolamine, but 

that listed chemical product was 

eventually deleted from the request. 

In connection with the pending 

application, an on-site pre-registration 

investigation was conducted at the 

proposed premises. Investigators were 

advised that CWK, which was 

incorporated in 2001, was a wholesale 

distributor of general merchandise to 

convenience stores and gas stations. 

CWK was proposing to sell MiniThins and traditional single entity and 

combination pseudoephedrine products. 

Investigators noted that CWK had no 

products list, but the company officer 

referred to a catalogue produced by a 

national wholesaler.

At the initial investigation, Mr. Chul 

Kim, CWK’s Vice-President, also failed 

to provide DEA investigators an updated 

customer list for listed chemical 

products. Subsequently, a list of 

fourteen customers was provided to the 

investigators. A customer verification 

revealed that seven of these purported 

customers either did not know, or did 

not intend to do listed chemical 

business with CWK. 

DEA is aware 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 

product from multiple distributors to 

mask their acquisition of large amounts 

of listed chemicals. In addition, some 

individuals utilize sham corporations or 

fraudulent records to establish a 

commercial identity in order to acquire 

listed chemicals. 

The illegal production of 

methamphetamine continues unabated 

within the DEA Atlanta region. The 

adjacent State of Tennessee leads the 

region in the number of clandestine 

laboratories seized, accounting for 

approximately 50 percent of the 

clandestine laboratories seized during 

the second quarter of 2002. When 

compared with the third quarter of 

2001, the increase in clandestine 

laboratory seizures is notable. 

According to later records for the 

Atlanta region, 360 clandestine 

laboratories were seized during the third 

quarter of 2002. Of the 360 laboratories 

seized during that reporting period, 207 

were located in Tennessee, 103 in 

Georgia, 35 in South Carolina and 15 in 

North Carolina. 

In the State of Georgia, there has been 

a consistent increase in the number of 

illicit laboratories and enforcement 

teams continue to note a trend toward 

smaller capacity laboratories. This is 

likely due to the ease of concealment 

associated with smaller laboratories, 

which continue to dominate seizures 

and cleanup responses. 

The adjacent State of Tennessee has a 

substantial methamphetamine abuse 

problem in the Chattanooga and Eastern 

Tennessee areas and DEA is aware of a 

past history of trafficking in precursors 

in these locations. Distributors or 

retailers serving the illicit 

methamphetamine trade observe no 

borders and trade across State lines. In 

fact, where precursor laws are stringent, 

out-of-state distributors often make 

direct shipments to retailers without 

observing State requirements. 

DEA knows by experience 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. These gray market 

products are not sold in large discount 

stores, retail pharmacies or grocery 

stores, where sales of therapeutic overthe-counter drugs predominate. MiniThins and other ‘‘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 also knows from industry data, 

market studies and statistical analysis 

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 to 

$40.00 worth of products containing 

pseudoephedrine per month. The 

expected sales of ephedrine products 

are known to be even smaller. Most 

convenience stores handling gray 

market products often order more 

product than what is required for the 

legitimate market and obtain chemical 

products from multiple distributors. 

Pursuant to 21 U.S.C. 823(h), the 

Deputy Administrator may deny an 

application for a Certificate of 

Registration if she determines that 

granting the registration would be 

inconsistent with the public interest. 

Section 823(h) requires that 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 to be considered in the 

disjunctive; the Deputy Administrator 

may rely 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 14269 (1999). See also, 

Henry J. Schwartz, Jr., M.D., 54 FR 

16422 (1989). 

The Deputy Administrator finds 

factors four and five relevant to the 

pending application for registration.

With regard to factor four, the 

applicant’s past experience in the 

distribution of chemicals, the Deputy 

Administrator finds this factor relevant 

based on CWK’s lack of knowledge and 

experience regarding the laws and 

regulations governing handling of list I 

chemical products. In prior DEA 

decisions, this lack of experience in 

handling list I chemical products has 

been a factor in denying pending 

applications for registration. See, e.g., 

Direct Wholesale, supra, 69 FR 11654; 

ANM Wholesale, 69 FR 11652 (2004); 

69402 Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 

Xtreme Enterprises, Inc., 67 FR 76195 

(2002). 

With regard to factor five, other 

factors relevant to and consistent with 

the public safety, the Deputy 

Administrator finds this factor weighs 

heavily against granting the application. 

Unlawful methamphetamine use is a 

growing public health and safety 

concern throughout the United States 

and Southeast. Ephedrine and 

pseudoephedrine are precursor products 

needed to manufacture 

methamphetamine and operators of 

illicit methamphetamine laboratories 

regularly acquire the precursor products 

needed to manufacture the drug from 

convenience stores and gas stations 

which, in prior DEA decisions, have 

been identified as constituting the grey 

market for list I chemical products. It is 

apparent that CWK intends on being a 

participant in this market. 

While there are no specific 

prohibitions under the Controlled 

Substances Act regarding the sale of 

listed chemical products to these 

entities, DEA has nevertheless found 

these establishments serve as sources for 

the diversion of large amounts of listed 

chemical products. See, e.g., ANM 

Whilesale, supra, 69 FR 11652; Xtreme 

Enterprises, Inc., supra, 67 FR 76195; 

Sinbad Distributing, 67 FR 10232 

(2002); K.V.M. Enterprises, 67 FR 70968 

(2002). 

The Deputy Administrator has 

previously found that many 

considerations weighed heavily against 

registering a distributor of list I 

chemicals because, ‘‘[v]irtually all of the 

Respondent’s customers, consisting of 

gas station and convenience stores, are 

considered part of the grey market, in 

which large amounts of listed chemicals 

are diverted to the illicit manufacture of 

amphetamine and methamphetamine.’’

Xtreme Enterprises, Inc., supra, 67 FR at 

76197. As in Xtreme Enterprises, Inc.,

lack of a criminal record and intent to 

comply with the law and regulations are 

far outweighed by CWK’s lack of 

experience and the company’s intent to 

sell ephedrine and pseudoephedrine 

exclusively to the gray market. The 

Deputy Administrator is further 

troubled by CWK’s providing DEA 

investigators misleading information, 

indicating the company cannot be 

trusted to handle the responsibilities of 

a registrant. 

Based on the foregoing, the Deputy 

Administrator concludes that granting 

the pending application 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 824 and 28 CFR 0.100(b) and 0.104, 

hereby orders the pending application 

for DEA Certification of Registration, 

previously submitted by CWK 

Enterprises, Inc., be, and it hereby is, 

denied. This order is effective December 

29, 2004.

Dated: November 10, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–26309 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

[Docket No. 02–40] 

Dan E. Hale, D.O., Denial of 

Registration 

On March 21, 2002, the Deputy 

Assistant Administrator, Office of 

Diversion Control, Drug Enforcement 

Administration (DEA), issued an Order 

to Show Cause to Dan E. Hale, D.O. 

(Respondent) notifying Respondent of 

an opportunity to show cause as to why 

DEA should not deny his application for 

a DEA Certificate of Registration as a 

practitioner pursuant to 21 U.S.C. 

824(a)(1) and (a)(5) and on grounds that 

his registration would be inconsistent 

with the public interest as that term is 

used in 21 U.S.C. 823(f). 

The Order to Show Cause alleged in 

sum that on March 21, 1995, 

Respondent had been convicted by a 

jury in United States District Court, 

Eastern District of Kentucky, of 21 

felony counts related to wrongful billing 

under Medicaid, Medicare and 

TennCare programs from 1980 to 1993. 

On June 20, 1995, Respondent 

surrendered his DEA Certificate of 

Registration AH7753709 and was 

subsequently sentenced to a total of 57 

months confinement, followed by two 

years of supervised release. 

It was also alleged that on March 18, 

1994, the Tennessee Department of 

Health, Board of Osteopathic Medicine 

(Board), issued a Notice of Charges 

alleging, among other things, that 

Respondent improperly allowed a 

physician assistant to dispense and 

prescribe controlled substances without 

supervision and that in several 

instances Respondent and the physician 

assistant, dispensed and prescribed 

controlled substances in violation of 

established treatment protocols. On 

November 8, 1995, he entered into an 

Agreed Order with the Board, whereby 

the Board ordered that he surrender his 

osteopathic medical license and in the 

event his conviction was upheld on 

appeal, his license would be 

automatically revoked. After the 

conviction was affirmed by the Sixth 

Circuit Court of Appeal on January 28, 

1997, the Board revoked Respondent’s 

medical license. That license was 

subsequently reinstated on May 25, 

2001. 

It was further alleged that on January 

26, 1996, as a result of Respondent’s 

convictions, the United States 

Department of Health and Human 

Services notified him that he was 

mandatorily excluded from the 

Medicare program pursuant to 42 U.S.C. 

1320a–7(a). 

Finally, it was alleged that on June 18, 

2001, Respondent materially falsified an 

application for DEA registration by 

failing to disclose the voluntary 

surrender of his previous DEA 

registration and the revocation of his 

State osteopathic medical license. 

Respondent requested a hearing on 

the issues raised by the Order to Show 

Cause and following pre-hearing 

procedures, a hearing was held in 

Arlington, Virginia, on January 7 and 8, 

2003. At the hearing, both parties called 

witnesses to testify and introduced 

documentary evidence. After the 

hearing, both parties submitted written 

proposed findings of fact, conclusions of 

law, and argument. 

On November 26, 2003, Presiding 

Administrative Law Judge Mary Ellen 

Bittner (Judge Bittner) issued her 

Opinion and Recommended Ruling, 

Findings of Fact, Conclusions of Law 

and Decision of the Administrative Law 

Judge (Opinion and Recommended 

Ruling) in which she concluded that 

grounds existed to deny Respondent’s 

application for DEA registration and 

recommended the application be 

denied. On January 14, 2004, 

Respondent filed exceptions to Judge 

Bittner’s Opinion and Recommended 

Ruling and on January 15, 2004, Judge 

Bittner transmitted the record of these 

proceedings to the then-Acting Deputy 

Administrator of DEA. 

By his counsel’s letter dated March 

22, 2004, Respondent asked the Deputy 

Administrator to consider the impact of 

recent changes implemented by the 

State of Tennessee, Bureau of TennCare. 

Counsel for the Government had no 

objection and the submission has been 

considered as a part of the 

administrative record. 

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. As set forth 

below, the Deputy Administrator adopts 

in whole, the recommended findings of