Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 69407

Respondent denied that he engaged in some 

of the conduct for which he was convicted, 

including providing addictive medications to 

patients who abused them, and also testified 

that he felt that the patients needed the 

diagnostic examinations he ordered for them. 

I also note that in his resume Respondent 

‘‘steadfastly assert[s]’’ his innocence, and that 

he testified that although he was guilty, he 

had no ‘‘criminal intent to commit a crime.’’

Based on the record, Judge Bittner 

could not ‘‘find that Respondent 

recognizes his own misconduct, or that 

he is yet in a position to accept the 

responsibilities inherent in a DEA 

registration.’’ She therefore concluded 

that granting Respondent’s application 

for DEA registration would not be 

consistent with the public interest and 

recommended that the application be 

denied. The Deputy Administrator 

agrees. 

Respondent filed exceptions to the 

Opinion and Recommended Ruling. 

First, he asserted the ruling was 

arbitrary and capricious in comparison 

to prior decisions in which grants of 

restricted registration were 

recommended by the Administrative 

Law Judge and approved by the agency. 

However the facts and circumstances of 

the five cases cited by Respondent are 

distinguishable from the facts and 

circumstances of this matter. See, Mark 

Binette, M.D., 64 FR 42977 (1999); 

Michael Alan Patterson, M.D., 65 FR 

5682; Robert M. Golden, M.D., 65 FR 

5663; Nick M. Higgins, D.D.S., 54 FR 

53388 (1989); Jane W. Wuchinich, M.D.,

56 FR 4081 (1991). 

As opposed to several cases cited by 

Respondent, he engaged in his criminal 

misconduct for pecuniary gain, not 

because he suffered from an addiction 

or dependency which was later 

demonstrated to have been successfully 

mitigated by rehabilitation, therapy or 

careful monitoring. While neither is 

desirable, depending on the facts, greed 

can be viewed as a more serious 

personal motivator for criminal activity 

than addiction or dependency. 

Respondent’s reasons for violating the 

law and risking reputation and his 

growing livelihood also reflect a cavalier 

attitude toward his responsibilities as a 

physician and DEA registrant. 

As opposed to other cases relied upon 

by Respondent, he has also failed to 

adequately acknowledge personal 

responsibility for the actions leading to 

his convictions and lengthy prison 

sentence. He also knowingly made 

material misrepresentations on his DEA 

application and was excluded from 

participating in Federal health care 

programs for 15 years, both of which are 

additional independent grounds for 

denying registration. 

Finally, DEA has previously revoked 

registrants for actions and on grounds 

comparable to Respondent’s. See, 

Johnnie Melvin Turner, M.D., 67 FR 

71203 (2002) (revocation based on 

exclusion from Medicare program after 

Federal fraud conviction); Stanley 

Dubin, D.D.S., 61 FR 60727 (1996) 

(revocation for exclusion from Federal 

health programs after State fraud 

conviction).

In sum, the facts of this matter are 

unique and the cases cited by 

Respondent simply do not demonstrate 

that the recommended action is a 

departure from agency practice and 

policy or was rendered either arbitrarily 

or capriciously. 

Respondent also contends in 

numerous exceptions that the 

Administrative Law Judge’s ruling 

‘‘failed to take into account’’ or 

‘‘ignores’’ or ‘‘disregards’’ or 

‘‘erroneously discounted’’ or ‘‘failed to 

credit’’ or ‘‘refused to consider’’ or 

‘‘placed improper emphasis’’ on certain 

evidence in reaching her findings and 

recommendations. These include: 

Respondent’s degree of contrition and 

acceptance of responsibility; the 

opinions of several witnesses as to 

Respondent’s prescribing activities; his 

monitoring of the physician assistant at 

the secondary clinic; his postincarceration medical education; his 

value to the local, humanitarian efforts 

and opinions of charter witnesses; his 

professed intended limited use of the 

registration were it to be granted; the 

nature of his current and intended 

medical practice; and the adverse 

impact denying registration will have 

upon Respondent and his practice. 

The Opinion and Recommended 

Ruling clearly demonstrates that the 

Administrative Law Judge admitted and 

carefully considered Respondent’s 

evidence on all of the foregoing issues. 

While Respondent would prefer Judge 

Bittner arrived at a different outcome, 

his objectives are really just a reargument as to the weight which should 

be assigned certain testimony and 

documentary evidence introduced 

during the hearing and the credibility 

which the fact finder should give 

Respondent’s explanations for his 

misrepresentations, the extent and 

sincerity of his remorse and his 

acceptance of personal responsibility. 

Given the record supporting Judge 

Bittner’s conclusions, these arguments 

are insufficient to alter the outcome. 

Finally, in the letter received by the 

Deputy Administrator after the Opinion 

and Recommended Ruling was 

transmitted to this office by Judge 

Bittner, Respondent notes recent 

changes in TennCare Products which 

will have the effect of limiting his 

ability to prescribe even non-controlled 

substances for TennCare patients, 

should DEA registration be denied. He 

submits this ‘‘hardship could neither 

have been intended, nor anticipated by 

Judge Bittner’s Report.’’

However, while this particular 

consequence was not addressed at the 

hearing, when Judge Bittner 

recommended denial she was well 

aware of the multiple hardships 

befalling any physician denied DEA 

registration. She was also aware of 

numerous specific hardships that would 

impact Respondent and practice, were 

the application denied. Nevertheless, 

these consequences were insufficient for 

Judge Bittner to warrant recommending 

the application be granted and the 

Deputy Administrator does not consider 

the additional information on adverse 

collateral consequences sufficient to 

alter the conclusion that registration 

would not be in the public interest. 

The Deputy Administrator has 

examined the record and finds that the 

facts and credibility determinations of 

Judge Bittner are well supported by the 

evidence. Respondent materially 

falsified his application for DEA 

registration and has been excluded from 

participating in Federal health care 

programs for fifteen years, both of which 

constitute independent grounds for 

denying registration. It has also been 

sufficiently established that 

Respondent’s registration would not be 

in the public’s 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 the Respondent’s pending 

application for registration be, and it 

hereby is, denied. This order is effective 

December 29, 2004.

Dated: November 10, 2004. 

Michele M. Leonhart, 

Deputy Administrator.

[FR Doc. 04–26310 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

Prachi 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 Prachi Enterprises, 

Inc. (Prachi) proposing to deny its 

September 9, 2003, application for DEA 

69408 Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 

Certificate of Registration as a 

distributor of list I chemicals. The Order 

to Show Cause alleged that granting 

Prachi’s application would be 

inconsistent with the public interest, as 

that term is used in 21 U.S.C. 823(h) and 

824(a). The order also notified Prachi 

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 Prachi at its 

proposed registered location at 1516 

Kalamazoo Drive, Suite 5A, Griffin, 

Georgia 30224. It was received on 

August 2, 2004, and DEA has not 

received a request for a hearing or any 

other reply from Prachi 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, 

concluded that Prachi 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 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 

11654 (2004); Branex, Inc., 69 FR 8682 

(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 September 9, 2003, an application 

was submitted by an officer of Prachi, 

Mr. Ashish Patel, seeking registration to 

distribute ephedrine, pseudoephedrine 

and phenylpropanolamine list I 

chemical products. Subsequently Mr. 

Patel notified DEA the company did not 

intend to sell any products containing 

phenylpropanolamine. 

In connection with the pending 

application, an on-site pre-registration 

investigation was conducted. Mr. Patel 

advised investigators that Prachi was a 

wholesale distributor of over-thecounter items to convenience stores, 

liquor stores, gas stations and grocery 

stores. He proposed to sell Mini-Thins 

and Max-Brand pseudoephedrine and 

Two-Way products, but was unable to 

articulate any other intended products 

containing listed chemicals the 

company might sell. He also failed to 

provide DEA with a requested list of 

intended products. He furthermore 

failed to provide DEA with a list of 

intended customers for the list I 

chemical products, although he had 350 

customers purportedly awaiting his 

registration. DEA was unable to conduct 

customer verifications without that 

information. 

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 Southwest 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 records for the DEA 

Atlanta region, 360 clandestine 

laboratories were seized during the third 

quarter of 2002. Of these, 207 were 

located in Tennessee, 103 in Georgia, 35 

in South Carolina and 15 in North 

Carolina. In 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 Florida has a 

substantial methamphetamine abuse 

problem in Northeast and Central 

Florida, and DEA is aware of a past 

history of trafficking in precursors in 

these areas. Distributors or retailers 

serving in the illicit methamphetamine 

trade observe no borders. 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 grey market 

products are not sold in large discount 

stores, retail pharmacies or grocery 

stores, where sales of therapeutic overthe-counter drugs predominate. MiniThins and Max Brand 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. 

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 

Federal Register / Vol. 69, No. 228 / Monday, November 29, 2004 / Notices 69409

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 Mr. Patel’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 regristration. See, e.g., 

Direct Wholesale, supra, 69 FR 11654; 

ANM Wholesale, 69 FR 11652 (2004); 

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 weights 

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 Prachi 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 

Wholesale, 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.,

Mr. Patel’s lack of a criminal record and 

stated intent to comply with the law and 

regulations are far outweighed by his 

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 Mr. Patel’s reticence to 

provide requested information to DEA, 

indicating his 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 823 and 28 CFR 0.100(b) and 0.104, 

hereby orders the pending application 

for DEA Certificate of Registration, 

previously submitted by Prachi 

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. 04–26311 Filed 11–26–04; 8:45 am] 

BILLING CODE 4410–09–M

DEPARTMENT OF JUSTICE

Drug Enforcement Administration 

Volusia Wholesale; 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 Volusia Wholesale 

(Volusia) proposing to deny its 

December 12, 2003, application for DEA 

Certificate of Registration as a 

distributor of list I chemicals. The Order 

to Show Cause alleged that granting 

Volusia’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 Volusia 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 Volusia at its thenproposed registered location at 917 

Daytona Avenue, Daytona Beach, 

Florida 32117. It was received on 

August 2, 2004, and DEA has not 

received a request for a hearing or any 

other reply from Volusia 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 Volusia 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 

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 

11654 (2004); Branex, Inc., 69 FR 8682 

(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 September 9, 2003, an application 

was submitted by the owner of Volusia, 

Mr. Anwar Khrino, seeking registration 

to distribute ephedrine and 

pseudoephedrine list I chemical 

products. The application initially listed 

the proposed registered location as Mr. 

Khrino’s then-residence, 1420 N. 

Grandview Avenue, Daytona Beach, 

Florida 32118. He subsequently moved 

to 917 Daytona Avenue, Daytona Beach, 

Florida 32117, which was to be 

Volusia’s registered address. 

In connection with the pending 

application, an on-site pre-registration 

investigation was conducted at the 

Daytona Avenue proposed premises. 

The location was Mr. Khrino’s 

residence. There were no security 

measures in place and his intent was to 

store the chemical products overnight in 

a locked delivery van in the driveway.

Mr. Khrino advised investigators 

Volusia is a sole proprietorship and 

wholesale distributor of approximately 

60 to 80 sundry and novelty items to 

convenience stores and gas stations. He 

proposed to distribute ‘‘two packs’’ of