Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Notices 57655 

1On October 20, 2004, the Deputy Assistant 

Administrator issued the initial Order to Show 

Cause to Respondent; the Order proposed the 

revocation of its registration at its Forest Park 

location and the denial of its pending application 

for a registration at its Decatur, Georgia location. 

ALJ Ex. 1. Each of the allegations of the initial Show 

Cause Order was repeated verbatim in the 

subsequent Order to Show Cause and Immediate 

Suspension of Registration. On November 19, 2004, 

Respondent, through its counsel, requested a 

hearing on the allegations of the first Show Cause 

Order. ALJ Ex. 2. 

2The Order also alleged that in July 2005, DEA 

DIs discovered that Respondent ‘‘was also selling 

one-ounce bottles of liquid iodine to several 

convenience stores,’’ another chemical used in the 

illicit manufacture of methamphetamine. Show 

Cause Order at 6. The Order further alleged that 

‘‘[i]odine * * * has miniscule sales for use as an 

antiseptic, even in pharmacies,’’ that ‘‘[t]he 

likelihood of sales of iodine to customers in 

convenience stores approaches zero,’’ and that 

while Respondent ‘‘sold between 48 and as many 

as 240 bottles of iodine to individual convenience 

stores,’’ it ‘‘never reported these transactions * * * 

as extraordinary sales or suspicious transactions.’’ 

Id. 

comments relating to the Consent 

Decree. Comments should be addressed 

to the Assistant Attorney General, 

Environment and Natural Resources 

Division, and either emailed to 

pubcomment-ees.enrd@usdoj.gov, or 

mailed to: P.O. Box 7611, U.S. 

Department of Justice, Washington, D.C. 

20044–7611, and should refer to: U.S. v. 

Temrac Company, Inc., DJ. Ref. 90–11– 

2-07484/3. 

The Consent Decree may be examined 

at U.S. EPA Region III, Office of 

Regional Counsel, 1650 Arch Street, 

Philadelphia, PA 19103–2029, c/o Gail 

Wilson, Esq. During the public comment 

period, the Consent Decree may also be 

examined at the following Department 

of Justice Web site: 

http://www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Settlement Agreement may also be 

obtained by mail from the Consent 

Decree Library, P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611 or by faxing or e-mailing a 

request to Tonia Fleetwood 

(tonia.fleetwood@usdoj.gov), fax no. 

(202) 514–0097, phone confirmation 

number (202) 514–1547. In requesting a 

copy from the Consent Decree Library, 

please enclose a check in the amount of 

$5.25 (25 cents per page reproduction 

cost), or $ 6.50 for the Consent Decree 

and the attached exhibits, payable to the 

U.S. Treasury or, if by e-mail or fax, 

forward a check in that amount to the 

Consent Decree Library at the stated 

address. 

Robert Brook, 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. E8–23399 Filed 10–2–08; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

[Docket Nos. 05–13 and 05–45] 

Sunny Wholesale, Inc.; Revocation of 

Registration and Denial of Application 

On August 24, 2005, I, the Deputy 

Administrator of the Drug Enforcement 

Administration, issued an Order to 

Show Cause and Immediate Suspension 

of Registration to Sunny Wholesale, Inc. 

(Respondent), of Forest Park, Georgia. 

ALJ Ex. 6. The Order immediately 

suspended Respondent’s DEA 

Certificate of Registration, No. 

004550SLY, which authorizes it to 

distribute the list I chemicals ephedrine 

and pseudoephedrine, on the ground 

that it was selling ‘‘excessive amounts’’ 

of these chemicals to convenience 

stores, id. at 6, which are the ‘‘primary 

source’’ for the diversion of these 

chemicals into the illicit manufacture of 

methamphetamine, a schedule II 

controlled substance.1 Id. at 4. 

More specifically, the Show Cause 

Order alleged that in July 2005, DEA 

Diversion Investigators (DIs) learned 

that records seized from various north 

Georgia convenience stores which were 

‘‘suspected of illegally distributing 

listed chemical precursors,’’ had 

‘‘indicated that [Respondent] had been 

distributing 60 count bottles of’’ Max 

Brand pseudoephedrine, a product 

which has been repeatedly found at 

illicit methamphetamine labs ‘‘in full 

case and double case lots.’’ Id. at 6. The 

Show Cause Order alleged that ‘‘law 

enforcement officials [in Tennessee and 

Georgia] have observed that an 

overwhelming proportion of precursors 

found at illicit methamphetamine sites 

has involved non-traditional brands 

sold through convenience stores,’’ id. at 

4, that DEA had retained an expert in 

retail marketing and statistics who had 

concluded that sales of 

pseudoephedrine products at 

convenience stores in Tennessee and 

Georgia ‘‘averaged between $15.00 and 

$60.00 per month’’ per store and that 

sales of combination ephedrine 

products were even lower, Id. at 5, and 

that ‘‘[c]onvenience store purchases of 

case quantities of high count/high 

strength pseudoephedrine products [are] 

consistent with diversion of the 

products into the illicit manufacture of 

methamphetamine.’’ Id. at 6. The Show 

Cause Order further alleged that 

Respondent had continued selling large 

amounts of pseudoephedrine ‘‘to 

convenience stores and gas stations,’’ 

notwithstanding that it had been ‘‘put 

on notice of the potential illegal 

character of its activities with the 

issuance of the original Order to Show 

Cause’’ which was served in October 

2004. Id. ‘‘[B]ecause of the substantial 

likelihood that [Respondent would] 

continue to divert listed chemical 

products,’’ I thus concluded that 

Respondent’s ‘‘continued registration, 

during the pendency of these 

proceedings, would constitute an 

immediate danger to the public health 

and safety.’’ Id. at 7.2

In addition to the above, the Show 

Cause Order alleged that during a July 

2001 inspection, DEA DIs audited 

Respondent’s handling of listed 

chemical products and determined that 

it had ‘‘various overages and shortages, 

including an unexplained shortage of 

approximately 10,000 bottles of Max 

Brand, and (another non-traditional 

brand) Heads Up 60 count bottles.’’ Id. 

at 5. The Show Cause Order alleged that 

while inventorying Respondent’s listed 

chemical products, it had ‘‘no 

traditional brand * * * products but 

only ‘grey market’ brands of 

pseudoephedrine and combination 

ephedrine products’’ which are not sold 

at drug stores or supermarkets, but ‘‘are 

typically only sold in locations where 

goods of these types are not expected to 

be sold, such as liquor stores, head 

shops, gas stations, and other small 

retail stores.’’ Id. 

The Show Cause Order further alleged 

that following the inspection, DEA DIs 

conducted verifications of Respondent’s 

customers; the DIs allegedly found that 

some of the locations were ‘‘nonexistent,’’ some were residences, and 

others included such establishments as 

‘‘liquor stores, gift shops, a Blimpie 

restaurant * * * and a magazine store.’’ 

Id. Relatedly, the Order alleged that in 

seeking a registration for its Decatur 

location, Respondent provided a list of 

its proposed list I chemical customers 

which included ‘‘liquor stores, a lotto 

store, a clothing store, a newsstand, and 

another distributor.’’ Id. at 3. 

The Show Cause Order also alleged 

that Respondent would not maintain 

proper security of listed chemical 

products at its new proposed location 

because while its owner, Mr. Shaukat 

Sayani, had represented that his 

customers would place their orders ‘‘in 

person’’ and that Respondent would 

deliver the products by van, the DIs had 

previously determined that Respondent 

did not conduct business in this 

‘‘manner at [its] Forest Park’’ location. 

Id. The Show Cause Order further 

alleged that Respondent ‘‘intended to 

co-mingle listed chemical products with 

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3The ALJ also noted that there was no evidence 

that supported Respondent’s contention that it is 

being discriminated against because its owner ‘‘is 

a legal alien who is attempting to operate a business 

in this country in accordance with its laws.’’ ALJ 

at 37 (quoting Res. Br. 24). 

4The ALJ noted, however, that ‘‘even using this 

larger number * * *. Respondent repeatedly sold 

list I chemical products in excess of $173.25 per 

month.’’ ALJ at 24. 

non-regulated products on the 

warehouse floor,’’ that it ‘‘had no 

procedure in place to detect theft or loss 

at the warehouse,’’ that its ‘‘proposed 

method of sales recordkeeping * * * 

was inadequate to comply with 21 CFR 

1310.06,’’ and that it had no means of 

‘‘compar[ing] sales between its two 

* * * locations in order to determine if 

excessive or suspicious transactions 

were being encountered.’’ Id. Relatedly, 

the Show Cause Order alleged that 

warehouse security at the Forest Park 

location was inadequate. Id. at 5. 

On September 13, 2005, Respondent 

requested a hearing on the allegations of 

the Order to Show Cause and Immediate 

Suspension and moved to consolidate 

the two proceedings. ALJ Ex. 7. While 

the hearing on the original Show Cause 

Order had been scheduled to begin on 

September 20, 2005, Respondent’s 

counsel sought a continuance to obtain 

additional time to prepare. Accordingly, 

the ALJ ordered that the original hearing 

be cancelled. On December 14, 2005, the 

ALJ conducted a pre-hearing conference 

and set the hearing for March 21, 2006. 

ALJ Decision (ALJ) at 2–3. 

Thereafter, on February 27, 2006, 

Respondent’s counsel filed an 

emergency motion for a continuance. 

The ALJ granted the motion and 

subsequently rescheduled the hearing to 

begin on August 15, 2006. Id. at 3. 

A hearing was held on August 15 

through 18, 2006, at which both parties 

called witnesses to testify and submitted 

documentary evidence. At the hearing, 

Respondent also submitted a motion for 

summary judgment. Id. (citing RX 26). 

Following the hearing, both parties 

submitted briefs containing their 

proposed findings of fact, conclusions of 

law, and argument. 

On May 4, 2007, the ALJ ordered the 

parties to file a joint status report 

regarding Respondent’s Forest Park 

registration. On June 11, 2007, the 

parties filed the report; the report stated 

that ‘‘it is the position of the agency and 

Respondent that [it] currently has a 

pending application for renewal of its 

currently suspended registration.’’ Joint 

Status Report at 2. 

On August 17, 2007, the ALJ issued 

her recommended decision. In her 

decision, the ALJ concluded that 

Respondent did not maintain effective 

controls against diversion because it did 

not ‘‘verify the legitimacy of its 

customers,’’ sold ‘‘suspiciously high 

quantities of iodine products to some 

customers’’ even though its owner ‘‘was 

repeatedly made aware of iodine’s role 

as a methamphetamine precursor,’’ had 

‘‘inadequate inventory procedures [and] 

poor recordkeeping,’’ and failed ‘‘to 

report suspicious transactions.’’ Id. at 

29–30. 

The ALJ also concluded that 

Respondent was not in compliance with 

federal law because it ‘‘could not 

account for large quantities of missing 

bottles of product,’’ and ‘‘did not keep 

adequate records’’ of its sales which 

‘‘hindered [its] ability to ascertain 

whether a customer had purchased an 

amount above the regulated threshold.’’ 

Id. at 31. The ALJ further found that 

‘‘Respondent has distributed large, case 

quantities of pseudoephedrine and 

ephedrine products,’’ as well as ‘‘large 

amounts of 2% iodine,’’ and that ‘‘even 

[its] witness concurred that some of [its] 

sales were in excess of what would be 

expected.’’ Id. at 32–33. Finally, the ALJ 

noted that ‘‘[m]any of the ‘businesses’ to 

which Respondent sold list I chemical 

products operated within the * * * 

non-traditional market for such 

products,’’ that sales to the nontraditional market create an 

‘‘unacceptable risk of diversion,’’ and 

that ‘‘[s]ome of [Respondent’s 

customers] did not even appear to be 

tangentially related to the legitimate sale 

of pseudoephedrine and ephedrine 

products.’’ Id. at 34. 

The ALJ did note that Respondent had 

improved its security and had 

‘‘conduct[ed] some investigations into 

some of its customers’ business 

identities.’’ Id. at 34. The ALJ 

concluded, however, that Respondent’s 

‘‘cooperation is dwarfed by the 

significant risk of diversion posed [by 

its] continued sales of listed chemical 

products to [non-traditional] customers 

without adequate sales records or 

customer verification,’’ and that it ‘‘has 

not provided sufficient evidence * * * 

that its future conduct would change to 

the degree necessary to eliminate the 

threat to the public interest.’’ Id. at 35. 

The ALJ further rejected Respondent’s 

arguments that the Government was 

denying it equal protection of the laws 

under the Due Process Clause of the 

Fifth Amendment. More specifically, 

Respondent argued that it was being 

held ‘‘ ‘to a different standard than [the 

Government’s] published rules 

dictate,’ ’’ id. (quoting Resp. Br. at 16), 

that the Agency had not ‘‘put 

Respondent on notice as to what 

specific action would be a violation [of 

its] rules and regulations,’’ id. (quoting 

Resp. Br. at 17), and that ‘‘the agency 

[was] ‘exercising uncontrolled 

discretion.’ ’’ Id. (quoting Resp. Br. at 

20). 

Finally, the ALJ rejected Respondent’s 

contention that it was entitled to 

judgment as a matter of law because its 

sales did not exceed the 1,000 gram 

monthly threshold (which triggers 

various reporting and recordkeeping) 

requirements. Id. at 37. Citing several 

DEA decisions, the ALJ explained that 

‘‘Respondent need not exceed the 

Government’s threshold of allowed sales 

in order to [be deemed to have] act[ed] 

in a manner inconsistent with the 

public interest.’’ Id. (citations omitted).3

While the ALJ did not make an 

express finding that Respondent’s 

continued registration is inconsistent 

with the public interest, such a finding 

is implicit in her recommended 

sanction that Respondent’s registration 

at its Forest Park location should be 

revoked and its pending application for 

a registration at its Decatur location 

should be denied. ALJ at 38. Thereafter, 

both parties filed exceptions to the ALJ’s 

decision. 

The Government’s exception noted 

that while it concurred with the ALJ’s 

recommendation, it was ‘‘not apparent 

whether the ALJ actually made a finding 

that Respondent’s continued registration 

would not be in the public interest.’’ 

Gov. Exceptions at 1. The Government 

thus requested that I ‘‘make a finding 

that Respondent’s continued registration 

and pending application for registration 

are not in the public interest as that 

term is used’’ in the applicable 

provisions of the Controlled Substances 

Act. Id. 

The Government also took exception 

to three of the ALJ’s factual findings 

(FOFs 52, 57, 58), pertaining to the 

testimony of the Government’s expert 

on the expected sale range of listed 

chemical products at convenience stores 

and other non-traditional retailers of 

these products. Id. at 2. More 

specifically, the Government took 

exception to the ALJ’s findings that 

Respondent’s expert had credibly 

testified that the Government’s expert 

had made several ‘‘flawed assumptions’’ 

including ‘‘that everybody sells 

everything in’’ the product category, and 

that as a result, ‘‘the average 

convenience store might sell $173.25 of 

list I chemical products per month,’’ 

and that ‘‘this number [is] more credible 

than the $82 value’’ given by the 

Government’s expert.4 ALJ at 23–24; 

Gov. Exceptions at 2. 

Because ‘‘Respondent sold in excess 

of both experts’ figures,’’ the 

Government declined to ‘‘opine’’ as to 

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5Respondent’s owner testified that it delivers, but 

that the customer must ‘‘buy more than $1000’’ to 

justify the expenses of paying for the driver, 

gasoline and the truck. Tr. 731. 

6 In July 2005, the Food and Drug Administration 

issued a notice of proposed rulemaking which 

proposes to remove combination ephedrine/ 

guaifenesin products from the OTC monograph on 

the ground that these drugs are not safe and 

effective for OTC use. 70 FR 40232 (2005). 

7Between 1999 and 2004, the States adjacent to 

Georgia also experienced large increases in the 

number of meth. lab seizures. In Alabama, the 

number of seizures increased from 27 to 369; in 

Tennessee, the number increased from 106 to 1251; 

and in South Carolina, the number increased from 

5 to 153. See GXs 9 & 35. 

whose expert’s sales figures were 

‘‘exactly correct’’ or whether ‘‘there is a 

more precise figure somewhere between 

their numbers.’’ Gov. Exceptions at 2–3. 

The Government nonetheless urged that 

I not adopt the ALJ’s finding because 

Respondent’s expert’s ‘‘analysis of this 

case was not in detail, but quite 

limited,’’ and the expert ‘‘did not 

perform his own independent analysis 

of the data, but only compared end data 

from two different parts of [the 

Government expert’s] report.’’ Id. at 3. 

In its exceptions, Respondent also 

noted that the ALJ had not made a 

finding as to whether its continued 

registration would be in the public 

interest and argued that ‘‘no such ruling 

would be appropriate in this matter.’’ 

Resp. Exceptions at 2. More specifically, 

Respondent contends that it has 

‘‘complied with every request that was 

given to it by the DEA, repeatedly 

requested of DEA what they wanted it 

to do and was willing to do anything the 

DEA wanted.’’ Id. at 3. It further 

contends that the Show Cause Orders 

were based on Respondent’s exceeding 

sales levels, but that the Government’s 

evidence on the expected sales was ‘‘not 

credible,’’ and that therefore, the 

Government has not carried its burden 

of showing that its registration would be 

inconsistent with the public interest. Id. 

at 4. 

Respondent also takes exception to 

the ALJ’s finding that it has ‘‘inadequate 

inventory procedures.’’ Id. at 4 (citing 

ALJ at 30). More specifically, 

Respondent contends that ‘‘there is no 

requirement under any of the DEA rules 

to have an inventory system, and [that 

it] is once again being asked to comply 

with something that is not in the DEA 

rules.’’ Id. at 5. Respondent thus 

contends that it is ‘‘being held to [a] 

previously unspecified and unpublished 

* * * guideline[ ],’’ and that in doing 

so, the Agency is violating its 

constitutional rights to due process and 

equal protection. Id. at 5. Finally, 

Respondent contends that the ALJ 

‘‘ignore[d] the substantial remedial 

actions that [it] had taken to correct 

problems of which the DEA had notified 

it.’’ Id. 

Thereafter, the record was forwarded 

to me for final agency action. Having 

considered the record as a whole, as 

well as the exceptions of both parties, I 

adopt the ALJ findings of fact except as 

expressly noted herein. I further 

conclude that the Government has made 

out a prima facie case that Respondent’s 

registration would be inconsistent with 

the public interest and that Respondent 

has failed to present sufficient evidence 

to establish that it will maintain 

effective controls against diversion in 

the future. I also reject Respondent’s 

constitutional claims and its motion for 

judgment as a matter of law. I therefore 

also adopt the ALJ’s recommended 

sanction that Respondent’s Forest Park 

registration be revoked and its 

applications for renewal of the latter 

registration and for a registration at its 

Decatur location be denied. I make the 

following findings. 

Findings 

Respondent is a corporation which 

engages in the wholesale distribution of 

assorted products to gas stations, 

convenience stores, dollar stores, beauty 

stores, and other establishments. Tr. 

701. Respondent is owned by Mr. Sunny 

Sayani, id., and operates two 

warehouses which are located in Forest 

Park and Decatur, Georgia. Id. at 702. 

According to the record, Respondent 

operates ‘‘a cash and carry’’ business in 

which its customers come to the 

warehouse to purchase the products 

they need. RX 25a, Tr. 731.5

Respondent currently holds DEA 

Certificate of Registration, # 004550SLY, 

which authorizes it to distribute the list 

I chemicals ephedrine and 

pseudoephedrine out of its Forest Park 

warehouse. Tr. 245; GX 1. While 

Respondent’s registration expired on 

February 28, 2005, it filed a renewal 

application and paid the requisite fee at 

some point in January 2005. See Joint 

Status Report at 1–2. Accordingly, 

Respondent has a registration, albeit one 

that has been suspended, at its Forest 

Park location. 

Methamphetamine and the Market for 

List I Chemicals 

Both pseudoephedrine and ephedrine 

have therapeutic uses and are lawfully 

marketed as non-prescription (OTC) 

drug products under the Federal Food, 

Drug and Cosmetic Act. GX 15, at 3. 

Pseudoephedrine is approved for 

marketing as a decongestant; ephedrine 

(in combination with guaifenesin) is 

approved for marketing as a 

bronchodilator.6 Id. at 4. Both 

pseudoephedrine and ephedrine are, 

however, regulated as list I chemicals 

under the Controlled Substances Act 

because they are precursor chemicals 

that are easily extracted from OTC 

products and used in the illicit 

manufacture of methamphetamine, a 

schedule II controlled substance. See 21 

U.S.C. 802(34); 21 CFR 1308.12(d); GX 

15, at 8 (noting that ‘‘the production of 

methamphetamine from ephedrine or 

pseudoephedrine can be accomplished 

via a simple one step reaction and can 

be accomplished with little or no 

chemistry expertise’’). 

Methamphetamine is a highly 

addictive and abused central-nervous 

system stimulant. GX 15, at 9. 

Methamphetamine abuse has destroyed 

numerous lives and families and 

ravaged communities. Id.; see also 

Rick’s Picks, L.L.C., 72 FR 18275, 18276 

(2007). Moreover, because of the toxic 

nature of the chemicals used to make 

the drug, its illicit manufacture causes 

serious environmental harms. Id.; GX 

14, at 10. 

A DEA Special Agent from the Atlanta 

Field Division testified regarding the 

rapid growth of illicit manufacturing of 

methamphetamine during his tenure in 

Atlanta. Tr. 29. According to the S/A’s 

testimony, over ‘‘a short period of time’’ 

the number of meth. lab seizures by 

DEA and local law enforcement had 

‘‘multiplied by ten times.’’ Id. Other 

evidence showed that between 1999 and 

2004, the number of seizures in the 

State of Georgia had increased from 34 

to 229.7 See GXs 9 & 35. 

The Special Agent, who had debriefed 

over 200 individuals involved in the 

illicit manufacture of 

methamphetamine, Tr. 39, also testified 

that convenience stores, gas stations, 

and other small retailers were the 

primary source of the ephedrine and 

pseudoephedrine which was used by 

‘‘mom-and-pop’’ meth. labs. Id. at 56 & 

59. The Agent further testified that 

meth. cooks use individuals known as 

‘‘runners’’ who would travel to different 

stores and purchase small amounts each 

day to avoid detection. Id. at 62. 

Moreover, runners generally avoided 

larger retailers such as chain stores 

because these establishments have ‘‘too 

much security’’ and ‘‘too much video 

surveillance,’’ id. at 56, and have ‘‘been 

very militant on * * * limit[ing] sales’’ 

of the drugs. Id. at 102; see also id. at 

100. 

The S/A also testified that in some 

instances, meth. cooks recruited 

multiple persons to go to smaller stores 

and buy the maximum amount of 

product the store would sell them. Id. at 

63. Moreover, in some instances, either 

the owner or an employee of a smaller 

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8Mr. Robbin holds degrees from Harvard College 

and Columbia University and is an expert in 

multivariate statistical analysis and the processing 

of economic census and population data. See GX 

25, at 1–2. He also founded Claritas, Inc., a 

company which is now the largest producer and 

seller of census-based consumer marketing 

information products, systems and services. Id. at 

1. 

9According to this report, convenience stores 

selling gasoline account for 1.75% of the nonprescription drug market; convenience stores that 

do not sell gasoline account for .95% of the market. 

GX 24, at 3. All other establishments combined 

account for only .21%. Id. 

10While the text accompanying table 3 uses the 

figure of 5.59% as the percentage of nonprescription drug buyers who purchase 

pseudoephedrine at convenience stores, the 

previous table makes clear that the actual percent 

is 4.59%. Compare GX 24, at 5, with id. at 4. 

11Mr. Robbin noted that data from the 2002 

Economic Census for Florida (a neighboring State) 

indicated that the expected sales were 21% lower 

than the data from the 1997 Economic Census 

suggested. GX 26, at 1–2. Mr. Robbin thus stated 

that ‘‘using the same factor as encountered in 

Florida would produce an updated estimate of 

$65.’’ Id. at 2. 

12With respect to the number of convenience 

store shoppers who would purchase Sudafed, Dr. 

Bellenger testified that ‘‘[t]he numbers which I’ve 

computed actually says its 2.7 [out of 1,000], but 

* * * that’s a relatively minor difference.’’ Tr. 523. 

Dr. Bellenger testified that he used ‘‘the data that 

was in [Mr. Robbin’s] report, and [did] exactly the 

computations [Mr. Robbin] did * * * and came out 

with * * * 2.7 customers in 1,000.’’ Id. at 581. In 

his testimony, Dr. Bellenger did not specifically 

identify which figures he used, and as explained 

above, it appears that one of Mr. Robbins’ reports 

contains a transcription error. See supra n. 10. 

13Notably, Dr. Bellenger used the figure which 

appears to be based on a transcription error in one 

of Mr. Robbin’s reports. If, however, the .0021 (or 

2.1 shoppers out of 1,000) figure is used, see GX 24, 

at 5; the average monthly sale is $134.75. 

14 Dr. Bellenger also testified that one of Mr. 

Robbin’s reports assumed that all stores were 

‘‘expected to sell the same amount,’’ and that this 

requires the assumption that the stores are ‘‘all the 

same size’’ and ignores the stores’ locations. Tr. 

529. As Dr. Bellenger further testified, ‘‘[i]f you’ve 

got a very large store attached to a gasoline station 

selling on the interstate, the mix of products is not 

going to be the same as a small rural store.’’ Id. at 

530. I note, however, that in one of the reports, Mr. 

Robbin estimated a sales range which was based on 

‘‘differences in sales occurring as a consequence of 

store size, location, hours, advertising expenditures 

and management practices.’’ GX 25, at 7. This 

would appear to address Dr. Bellenger’s testimony 

on this point. 

store would sell a case quantity of a 

listed chemical product to a person 

affiliated with a lab. Id. 

The Government also established that 

the overwhelming majority of commerce 

in non-prescription drug products 

occurs in drug stores, supermarkets, 

large discount merchandisers and 

electronic shopping/mail order houses. 

GX 25. According to the declaration of 

Jonathan Robbin,8 who has testified in 

numerous DEA and federal court 

proceedings as an expert witness on the 

market for list I chemical products 

containing pseudoephedrine and 

ephedrine, ‘‘over 97% of all sales of 

non-prescription drug products occur in 

drug stores and pharmacies, 

supermarkets, large discount 

merchandisers and electronic shopping 

and mail order houses.’’ Id. at 4; see also 

GX 24, at 3.9 According to Mr. Robbin, 

these retailers ‘‘constitute the traditional 

marketplace where [nonprescription 

drugs for coughs, cold, nasal congestion, 

and asthma] are purchased by ordinary 

consumers.’’ GX 25, at 4. 

Mr. Robbin has further concluded that 

sales of non-prescription drugs at 

convenience stores ‘‘account for only 

2.2% of the overall sales of all 

convenience stores that handle the 

line.’’ Id. Moreover, only 4.87% of 

convenience store shoppers purchase a 

non-prescription drug product, GX 24, 

at 5; and only 4.59% of these shoppers 

purchase a pseudoephedrine 

product.10 Id. at 4. Mr. Robbin thus 

concluded that .21% of convenience 

store shoppers purchased a 

pseudoephedrine product. Id. at 5. In 

another document, Mr. Robbin 

explained that by extrapolating data 

from the 1997 U.S. Economic Census 

data and information obtained from 

surveys of the National Association of 

Convenience Stores, he had estimated 

that during 2005, ‘‘[t]he expected 

average monthly convenience store sales 

of nonprescription drug products 

containing pseudoephedrine (hcl) in 

Georgia were * * * $82.’’ GX 26 at 2.11

Respondent called as an expert 

witness, Dr. Danny N. Bellenger. Dr. 

Bellenger holds a PhD in Business 

Administration and is a Professor and 

Marketing Research Fellow at the 

Robinson College of Business at Georgia 

State University. RX 31, at 2. Dr. 

Bellenger previously served as chairman 

of the Department of Marketing at 

Robinson, and was the Dean of the 

College of Business at Auburn 

University. Id. 

Dr. Bellenger disputed Mr. Robbin’s 

figures for the expected monthly sales 

range of pseudoephedrine at 

convenience stores. Dr. Bellenger 

testified that he did not agree with the 

conclusions of Mr. Robbin’s reports and 

that reports did not ‘‘agree with each 

other.’’ Tr. 521. More specifically, Dr. 

Bellenger noted that one of Mr. Robbin’s 

reports stated that ‘‘two in 1,000 * * * 

convenience store shoppers would be 

expected to buy Sudafed,’’ but in 

another report, Mr. Robbin had stated 

‘‘that there’s 120,000 purchasers or 

customers [who] come into a 

convenience store.’’ Id. at 523; see also 

GX 25, at 11 (stating that ‘‘[t]he average 

annual number of shoppers in a 

convenience store (excluding gasoline 

purchases) is about 120,000’’).12

Dr. Bellenger explained that if two out 

of a 1,000 customers purchased 

pseudoephedrine and a convenience 

store has 120,000 customers, at least 240 

of these persons would buy the product 

over the course of a year or ‘‘twenty per 

month for an average convenience 

store.’’ Tr. 523. Dr. Bellenger testified 

that multiplying this number ‘‘times the 

average retail price of * * * Sudafed’’ 

gives an ‘‘estimate of about $170 * * * 

based on the numbers that are in the 

reports.’’ Id. 

Dr. Bellenger subsequently testified 

that he determined the average price of 

Sudafed by ‘‘looking at the wholesale 

prices and assuming a markup,’’ and 

that he ‘‘also looked in Kroger to see 

what it cost, but [the price] would vary 

a lot * * * by store.’’ Id. at 662–63. 

However, Dr. Bellenger did not ‘‘recall 

the actual figure’’ he used for the retail 

price. Id. at 663. Nor did he explain 

what source he used for the wholesale 

price figure, or what price he used. 

Dr. Bellenger also testified that he 

confirmed his estimate by multiplying 

the percentage of convenience store 

shoppers who purchase 

pseudoephedrine (.0027) times the 

average annual merchandise sales of 

convenience stores ($770,000). Dividing 

this figure by twelve results in a 

monthly sales figure of $173.25, which 

is ‘‘a similar number’’ to the sales figure 

obtained in the first method. Id. at 

524.13

Dr. Bellenger further testified that Mr. 

Robbin’s methodology was based on 

several assumptions which he 

contended ‘‘are not consistent with 

reality.’’ Id. at 527. More specifically, he 

contended that one of Mr. Robbin’s 

assumptions was that ‘‘all retailers 

[including] convenience stores carry a 

full line of all’’ non-prescription 

medicinal products that are reported in 

the Economic Census’s merchandise 

line, and that this is ‘‘not consistent 

with the common practice’’ because ‘‘a 

convenience store * * * carries a much 

narrower line of most products.’’ Id. at 

526; see also id. at 583, 664. According 

to Dr. Bellenger, ‘‘when the 

conveniences stores sell less than a full 

line and the supermarkets and 

drugstores sell the full line, * * * it 

distorts the numbers,’’ by ‘‘caus[ing] the 

estimate for Sudafed for the 

convenience store to be lower than it 

actually should be.’’ Id. at 664.14

While the ALJ credited Dr. Bellenger’s 

testimony that the monthly expected 

sales figure of pseudoephedrine 

products at convenience stores was 

$173.25, see ALJ at 24, I decline to 

adopt this finding. While Dr. Bellenger’s 

testimony that approximately 240 

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15Accordingly, I agree with the Government’s 

exception and decline to adopt the ALJ’s finding. 

16 Dr. Bellenger added that he was not ‘‘sure how 

much of this is stuff is required to make the illicit 

drugs in question,’’ and that he was ‘‘not sure if 144 

[bottles] will make enough to matter or not.’’ Id. at 

571. The Government’s evidence showed, however, 

that Georgia and the adjacent States had 

experienced a proliferation in smaller 

methamphetamine labs which typically produced a 

quarter to a half ounce. Id. at 35. The evidence also 

showed that ‘‘even unskilled persons can obtain a 

50–70% yield of methamphetamine.’’ GX 15, at 8. 

Contrary to Dr. Bellenger’s understanding, four 

sixty-count bottles of 60 mg. pseudoephedrine 

would provide enough material for even an 

unskilled person to manufacture a quarter ounce of 

the drug; 144 bottles would provide enough 

material to make nine ounces. 

17Each case sold for $1006.56. 

18The record indicates that on this date, 

Respondent sold 96 bottles for a total sale of 

$671.04. RX 12, at 91. 

persons would purchase 

pseudoephedrine at a convenience store 

over the course of a year calls into 

question the validity of the 

Government’s figure, he did not 

establish the source of the wholesale 

price information (and the price) that he 

relied upon or the amount of markup he 

used. As for his testimony regarding 

pricing at Kroger, he did not testify as 

to what that price was, what size 

package it was, and stated that the price 

would vary a lot by store. Finally, while 

Dr. Bellenger ‘‘confirmed’’ his estimate 

by multiplying the percentage of 

convenience store shoppers who 

purchase pseudoephedrine by the 

average store’s sales volume, this 

methodology seems to require a major 

assumption in its own right—that the 

average amount spent by a customer in 

purchasing pseudoephedrine is the 

same as the average purchase of those 

convenience store customers who buy 

other products. 

Accordingly, I conclude that neither 

the Government’s nor Respondent’s 

evidence reliably establishes the 

monthly expected sales range.15 For 

purposes of this case, I assume without 

deciding that Dr. Bellenger’s figures are 

accurate. 

Dr. Bellenger also testified regarding 

several other matters. With respect to 

the size of a retailer’s purchases, Dr. 

Bellenger testified that buying a case 

quantity may be a legitimate business 

decision ‘‘to invest in more inventory so 

as to lower [its labor] cost of taking 

inventory and processing order forms.’’ 

Tr. 549. According to Dr. Bellenger: 

The simple fact that someone, in * * * 

their business model, decides to order in 

large quantities is not necessarily suspicious 

in and of itself. What would be suspicious to 

me is if someone repeatedly ordered in large 

quantities. So I would think that looking for 

repeated large quantity orders by the same 

store or a combination of products which go 

into the production and ordering in large 

quantities * * * of a group of products 

which are involved in the manufacture of 

some illicit substance would be important for 

determining suspicious orders. 

Id. at 549–50. 

Amplifying this testimony, Dr. 

Bellenger added that to purchase a case 

quantity (144 bottles) is ‘‘one of two 

things. It’s a conscious business 

decision where a store owner has 

decided it’s more efficient to order in 

large quantities, put it in the stockroom, 

and make fewer orders, and have less 

labor involved.’’ Id. at 570. Dr. Bellenger 

than allowed that ‘‘maybe there’s some 

nefarious practice involved here,’’ but 

that if this was so, ‘‘you would see 

repeat purchases of large 

quantities.’’ 16 Id. at 570–71. 

The ALJ also credited Dr. Bellenger’s 

testimony that in reviewing the various 

exhibits, he noted that while ‘‘some of 

[Respondent’s customers] were buying 

by case lot,’’ he did not find a pattern 

of the customers ‘‘buying [ten] 144s.’’ 

Tr. 571 (cited at ALJ at 25). 

Respondent’s own evidence shows, 

however, that there were multiple 

instances in which Respondent sold 

case quantities that suggest that the 

sales were for an illicit purpose. See RX 

12. 

For example, during the year 2004, 

Respondent sold cases (144 bottles) of 

Max Brand Pseudo to the Coastal Food 

Mart of Rockmart, Georgia, on eight 

occasions: January 21, February 2, 

March 4, April 19, June 3, July 14, 

August 2, and September 5.17 Id. at 52, 

82, 86, 91, 93, 97, 99. On crossexamination, Dr. Bellenger 

acknowledged that the store was 

‘‘probably * * * buying in excess of 

what would be expected,’’ that ‘‘a case 

over a six-month period is rational,’’ but 

this store’s purchases ‘‘would raise [his] 

suspicions.’’ Tr. 619–20. Moreover, 

when asked whether this store’s retail 

sales would be ‘‘many standard 

distributions beyond’’ the $175 figure he 

calculated for average monthly sales, Dr. 

Bellenger answered: ‘‘Right.’’ Id. at 620. 

Dr. Bellenger also acknowledged that it 

would not be logical for a store to ‘‘order 

additional inventory on a regular basis 

unless they were selling it.’’ Id. at 642. 

On re-direct, Dr. Bellenger opined that 

‘‘it would be highly unlikely in the 

normal course of business’’ for an entity 

like Sunny Wholesale to detect these 

transactions. Id. at 646. According to Dr. 

Bellenger, ‘‘you’ve got to be looking real, 

real, real close’’ to find these 

transactions ‘‘given the scope of 

[Respondent’s] business,’’ and the fact 

that the product category was ‘‘less than 

two percent of the total business and 

these instances would account for a 

fraction of that.’’ Id. at 647. 

The Coastal Food Mart was not, 

however, the only store to which 

Respondent repeatedly sold large 

quantities of pseudoephedrine. During 

the same year, it sold a case quantity to 

Chitra Inc.’s Quick Stop of Rome, 

Georgia, on eight separate dates: January 

4, April 8, June 14, July 5, August 2, 

August 20, September 14, and October 

11. See RX 12, at 80, 91, 94, 95, 97, 98, 

100, & 101. It sold a case to the Phillips 

66 Mart of Hapeville on eight occasions: 

January 5, February 5, March 22, April 

1, May 5, June 3, August 17, and 

September 12. See id. at 80, 84, 88, 89, 

92, 93, 98 & 99. 

It sold a case to the R & S Grocery of 

Columbus on nine dates: January 21, 

February 2, March 2, April 1, May 5, 

June 21, July 7, August 30, and 

September 29. See id. at 82, 86, 89, 92, 

95, 96, 98, & 100. It sold a case to the 

Stop In of Bremen on nine occasions: 

January 5, February 3, March 2, April 1, 

May 5, June 1, July 27, August 20, and 

September 14. See id. at 52, 80, 83, 86, 

89, 92, 93, 98, 100. 

Moreover, the record shows that there 

were instances in which Respondent 

sold to two customers who used the 

same address. For example, Respondent 

sold case quantities to the P & K Mini 

Mart, with an address of 461 Columbia 

Drive, Carrollton, on January 6, 

February 10, March 4, April 8, and May 

5. See id. at 53, 81, 84, 86, 89. Yet it also 

sold a case to a customer it listed as the 

‘‘Quick Stop/Tushar/BP’’ with the same 

461 Columbia Drive, Carrollton address, 

on February 2, March 4, April 8,18 May 

5, July 22, and August 1. See id. at 54, 

83, 86, 91, 96, 97. Moreover, 

Respondent sold a case to the DJ Food 

Mart, with an address of 15582 HWY 27, 

Trion, on January 6, February 10, March 

4, April 8, May 5, and June 15. See id. 

at 54, 81, 85, 87, 90, 94. It also sold a 

case to a customer it listed as ‘‘BJ’s Food 

Market # 1’’ with the address of 15582 

HWY 27 North, Trion, on February 10, 

March 4, April 8, May 5, June 4, July 27, 

July 22, August 18, and September 5. 

See id. at 54, 84, 87, 90, 93, 96, 98, 99. 

Relatedly, Dr. Bellenger testified that 

‘‘unusual orders become very 

challenging if there’s a relatively small 

number of * * * those orders * * * 

given the large numbers of people [a 

business is] dealing with.’’ Id. at 556. 

Dr. Bellenger acknowledged, however, 

that ‘‘you could create a computer 

program which would create an 

exceptions report.’’ Id. at 648. Dr. 

Bellenger nonetheless maintained that it 

would be difficult to track these 

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19Mr. Sayani made the same representation 

during the pre-registration investigation of 

Respondent’s application for the Decatur location. 

Tr. 323. 

20On its product list, Respondent also indicated 

that he would be distributing four products from 

BDI Marketing, Inc., another firm whose products 

have been found at numerous illicit 

methamphetamine labs. GX 4. However, according 

to the DI, none of these products contained a list 

I chemical. Tr. 250. 

Respondent also listed three other suppliers; the 

listed chemical products he listed under these 

suppliers were nationally recognized brands such 

as Tylenol, Advil, Nyquil, Contac, and Vicks 44. 

See GX 27. 

21The DI also obtained information that 

Respondent had a single employee who was ‘‘his 

delivery guy.’’ Tr. 324. The position was vacant for 

some unspecified period of time. Id. at 324–25. 

22At some point between 2002 and 2005, 

Respondent built a cage at its Forest Park 

warehouse in which it stored its list I chemical 

products and installed several security cameras. RX 

25a. The cage had a separate cash register and 

window at which the products were paid for and 

delivered to the customer. Id. 

23The DIs provided Mr. Sayani with a copy of the 

count. Tr. 362. 

24At the hearing, a DI testified that DEA’s 

regulations do not require that a list I chemical 

distributor keep an inventory. Id. at 261. 

25Assigning an opening value of zero will also 

result in an undercount of a shortage if any product 

had actually been on hand on the opening date of 

the audit. 

purchases and that finding a high 

volume purchase ‘‘in the normal course 

of business would be an accident.’’ Id. 

at 647. 

I reject Dr. Bellenger’s testimony 

regarding the difficulty of detecting 

excessive purchases. As noted below, 

during an earlier meeting with DEA 

investigators, Mr. Sayani stated that ‘‘a 

typical sale’’ of listed] chemicals ‘‘was 

two to three boxes,’’ with each ‘‘box 

contain[ing] twelve bottles of 60-count 

tablets.’’ Id. at 331. Notably, during this 

meeting, the DI specifically told Mr. 

Sayani that an order of ‘‘ten boxes [or 

120 bottles] would be suspicious,’’ and 

that if a customer ‘‘requested cases 

quantities’’ or 144 bottles, ‘‘he was to 

notify DEA.’’ Id. at 336. 

Moreover, Respondent’s records show 

that many of these customers were not 

trying to hide the size of their purchases 

by purchasing smaller quantities on 

different dates. Rather, they were openly 

ordering case quantities, see RX 12, at 

79–101; and as found above, several of 

these customers did so with disturbing 

frequency. Finally, even crediting Dr. 

Bellenger’s testimony that in some 

instances, a convenience store owner 

could make a legitimate business 

decision to purchase a case quantity, it 

does not require that much effort to call 

up a customer’s account history to 

determine how frequently the customer 

was purchasing the products. 

Respondent’s History as a Registrant 

In September 1999, Respondent 

applied for a DEA registration to handle 

list I chemicals at its Forest Park 

warehouse. Tr. 703. Prior to being 

granted the registration, DEA DIs 

conducted a pre-registration inspection. 

Id.; see also id. at 323. During the 

inspection, a DI provided Mr. Sayani 

with a copy of the DEA Chemical 

Handler’s Manual and a document 

which listed the thresholds for 

pseudoephedrine and ephedrine (which 

trigger additional reporting and 

recordkeeping obligations). Id. at 726– 

27. Moreover, Mr. Sayani told the DI 

that ‘‘he would deliver [the listed 

chemical products] to his customers.’’ 

Id. at 323.19 Shortly after the inspection, 

Respondent obtained a registration for 

this location. 

On January 31, 2001, Respondent 

applied for a registration to handle 

pseudoephedrine, ephedrine, and 

phenylpropanolamine, at its Decatur 

warehouse. GX 2. Accordingly, on 

March 31, 2001, DEA DIs went to 

Respondent’s Decatur facility to conduct 

a pre-registration inspection. Tr. 246. 

During the inspection, the DIs met with 

Mr. Sayani and provided him with 

another copy of the Chemical Handler’s 

Manual, as well as notices stating that 

drug products containing 

phenylpropanolamine were being used 

by drug traffickers to manufacture 

amphetamine, GX 5, and combination 

ephedrine and pseudoephedrine were 

being used to by traffickers to 

manufacture amphetamine and 

methamphetamine. GX 6, Tr. 249. The 

DIs also provided Mr. Sayani with 

notices pertaining to recordkeeping and 

reporting of theft and losses of listed 

chemical products. Tr. 249. 

The DI had previously requested that 

Mr. Sayani provide her with lists of his 

suppliers, the products he intended to 

carry, and his proposed customers. Id. 

246–47. On the list of suppliers and 

products, Mr. Sayani indicated that he 

intended to sell products distributed by 

Compare Generics of Hauppauge, New 

York, including Max Brand and Heads 

Up, two brands of products which ‘‘are 

notoriously popular [with] 

methamphetamine traffickers.’’ 20 GX 

34, at 11; GX 27. 

During the inspection, the DIs 

reviewed the Chemical Handler’s 

Manual with Mr. Sayani, placing special 

emphasis on its provisions pertinent to 

record keeping, security, the need to 

know his customers, and requiring proof 

of identity from his customers. Tr. 321. 

The DIs also discussed with Mr. Sayani 

the listed chemical thresholds and the 

requirement to report suspicious orders. 

Id. Mr. Sayani again represented that the 

listed chemical products ‘‘would be 

delivered just like they were at his 

Forest Park location.’’ Id. at 323. The DI 

observed, however, that Respondent did 

not ‘‘deliver most of the time’’ as ‘‘[t]he 

majority of the time the customers were 

coming’’ to the warehouse. Id. at 324.21

Based on Mr. Sayani’s list of proposed 

customers, one of the DIs checked to see 

if DEA’s computer system held 

information regarding the customers. Id. 

at 255. The DI also visited several of the 

customers’ addresses to verify whether 

there was a business at the location. Id. 

Moreover, the DIs’ supervisor decided 

that before sending the report on the 

Decatur application to DEA 

Headquarters, the DIs needed to inspect 

Respondent’s practices at its Forest Park 

warehouse because the location had 

‘‘never been audited.’’ Id. at 370. 

Accordingly, on June 30, 2001, several 

DIs went to the Forest Park warehouse 

and conducted an inspection. Id. at 255. 

Upon their arrival, the DIs met with 

Mr. Sayani and asked him to provide 

them with an inventory and a list of the 

listed chemical products Respondent 

distributed. Id. at 256. One of the DIs 

also asked him for a list of his customers 

and suppliers and provided him with 

another copy of the Chemical Handler’s 

Manual and several DEA notices. Id. 

During the inspection, the DIs observed 

that Respondent’s list I products were 

co-mingled with other products in the 

warehouse and were not stored in a 

secure area.22

The DIs then proceeded to conduct an 

audit of Respondent’s handling of list I 

products for the period January 1, 2001, 

through the close of business on June 

30, 2001. GX 31. The DIs selected eleven 

non-traditional products to audit; with 

the assistance of Mr. Sayani, they 

counted the actual number on hand of 

each of the selected products. Tr. 264 & 

275; GX 30.23 Because Mr. Sayani did 

not have a previous inventory of the 

products,24 id. at 260, the DIs assigned 

an opening value of zero for each of the 

products. Id. at 377; GX 31. Assigning 

an opening value of zero for a product 

should result in an overage if, in fact, 

there was any of the product on hand on 

the beginning date of the audit and the 

distributor is keeping (and provides) 

complete records of its purchases and 

distributions.25 Tr. 269 & 377. 

To complete the audit, the DIs 

requested that Mr. Sayani provide them 

with his purchase invoices and sales 

invoices. Id. at 266. The sales invoices 

did not, however, clearly indicate the 

package size (e.g., whether it was a six 

count packet or 60 count bottle). Id. at 

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26As the DI explained, the audit was conducted 

by adding Respondent’s purchases to the opening 

inventory figure and comparing that figure with the 

total of the ending inventory plus the amounts 

which Respondent distributed to its customers. Tr. 

268, GX 31. 

27Mr. Sayani did not state which products were 

included in his 2069 figure. According to GX 31, 

the physical count found 1584 Max Brand (60 

count) bottles, 36 Mini 2-Way (48-count) and 428 

(60-count) bottles, and 18 Mini Twins (60 count 

bottles). These products would total 2066 bottles. I 

further note the testimony that Mr. Sayani agreed 

with the results of the inventory. Tr. 266. 

28According to the record, Mr. Sayani provided 

two separate customer lists. One was a list which 

Mr. Sayani represented as being his actual Forest 

Park warehouse list I customers; the other was a list 

of his potential list I customers for his Decatur 

warehouse. Tr. 373–74. 

267. The DI therefore contacted Mr. 

Sayani and requested additional 

information. Id. at 266–67. While Mr. 

Sayani then provided his sales tracking 

reports, even these were sometimes 

lacking the necessary information. Id. at 

267. 

The audit found that there were 

shortages with respect to six of the 

eleven products.26 See GX 31. Most 

significantly, Respondent was short 

7640 sixty-count bottles of Heads Up 

and 3656 sixty-count bottles of Max 

Brand. Id. Moreover, Respondent was 

short 284 sixty-count bottles of Mini 2- 

Way Action. Id. Respondent was also 

short 180 six-count packets of Max 

Brand, 154 six-count packets of Mini 2- 

Way Action, and 262 packets of Max 

Brand Pseudo (24-count). Id. 

Regarding the audit, Mr. Sayani 

testified that upon being served with the 

Show Cause Order, which had alleged 

that he was short approximately 10,000 

bottles of Max Brand and Heads Up, he 

checked his July 2001 inventory and 

had 2069 bottles on hand and did not 

‘‘know where this 10,000 figure came 

from.’’ Tr. 715. Mr. Sayani further 

testified that because 10,000 bottles is a 

large amount, he ‘‘would know where 

[it] is going.’’ Id. at 716. 

The ALJ did not make ‘‘precise 

findings’’ on the amount of the 

shortages. ALJ Dec. 30 at n.6. I do. 

Notably, Mr. Sayani’s testimony that 

he had 2069 bottles on hand according 

to his July 2001 inventory is consistent 

with the total amount of product that he 

and the DIs physically counted.27

Moreover, the DIs found that the largest 

shortage was in the Heads Up 60-count 

bottles, yet none of this product was on 

hand when the physical count was on 

hand. See GX 31. The audit of this 

product was thus based entirely on 

Respondent’s records of its purchases 

and distributions; if the amount was 

incorrect, Respondent could have 

produced his records to show that. 

Moreover, for each of the audited 

products, the amount of the shortages 

(11,296 60-count bottles of Max Brand 

and Heads Up) was determined based 

on the discrepancy between the amount 

of these products which Respondent 

obtained from his suppliers during the 

audit period and the sum of the amount 

it had on hand on June 30 and the 

amount its sales records showed it had 

distributed during the audit period. Mr. 

Sayani’s assertion aside, he offered no 

credible evidence that gives me reason 

to reject the audit’s finding. 

Accordingly, I adopt as findings, the 

audit results as listed in GX 31. 

As found above, during the visit, the 

DIs also discussed with Mr. Sayani the 

size of a normal monthly sale to a single 

store of non-traditional products. Id. at 

330. Mr. Sayani told the DIs that ‘‘[a] 

typical sale was two to three boxes,’’ 

with each ‘‘box contain[ing] twelve 

bottles of 60-count tablets.’’ Id. at 331. 

As found above, however, Respondent 

frequently sold listed chemical products 

in far larger quantities and did so 

notwithstanding that the DIs had 

informed him that sales of case 

quantities were suspicious and should 

be reported to DEA. See RX 12; Tr. 336. 

Following the inspection, several DIs 

were assigned to conduct customer 

verifications.28 ALJ at 15–17. The 

verifications serve several purposes 

including determining whether the 

customer actually exists, the nature of 

its business and whether it is legitimate, 

and whether the customer has a 

business relationship with the 

distributor. Tr. 139, 145, 187, 202, 355– 

56. As the ALJ found, the verifications 

produced ‘‘mixed results.’’ ALJ at 15. 

One DI, who was assigned twelve 

verifications, found that several of the 

businesses were convenience stores, gas 

stations, and a liquor store. Tr. 142–45. 

Moreover, upon visiting the addresses of 

three of the customers, two of which 

were listed as businesses (Pamela’s 

Unique Clothing and Reliance 

Wholesale Supply), and one which was 

listed as an individual (M.S.), the DI 

found that they were residences and 

that there were no signs of businesses. 

Tr. 142 & 144. The DI further found that 

the R.S. Corporation was a Blimpie 

restaurant, id. at 142, and that Artistic 

Sales was a gift shop which did not sell 

list I chemicals. Id. at 143. 

Another DI testified that when she 

and her partner went looking for 

Ashley’s Boutique, they could neither 

find the store nor the address that Mr. 

Sayani had given for it. Id. at 202–03, 

233. The DIs further found that the 

Atlanta Cleaners Plus ‘‘was closed 

down.’’ Id. at 203. While the DIs found 

that the Matierra Mexicana #3 was a 

supermarket, the store did not purchase 

items from Respondent. Id. at 203–04. 

Moreover, one of the establishments was 

a liquor and check cashing store. Id. at 

204. 

Another customer (BDI Inc.) was a 

Shell gas station whose manager stated 

that while he had purchased products 

from Respondent nine months earlier, 

he no longer did so. Id. at 205. 

Moreover, the manager told the DIs that 

Respondent ‘‘did not deliver’’ and that 

‘‘he had to drive to [Respondent’s] 

facility to pick up his products.’’ Id. 

Finally, the DIs determined that another 

customer (Golden Dealers) ‘‘was a house 

that was located in a cul-de-sac’’ and 

there was no store on the premises. Id. 

at 206. 

Following the customer verifications, 

one of the DIs and her supervisor met 

with Mr. Sayani and his attorney Henry 

D. Frantz, Esq., to discuss their concerns 

that some of Respondent’s customers 

were not legitimate. Id. at 254. More 

specifically, the DI told Mr. Sayani that 

the DI had ‘‘found numerous suspect 

customers that normally would not be 

selling these type of products.’’ Id. at 

372. The DI also expressed her concern 

that some of Respondent’s customers 

were engaged in wholesale distribution 

out of their homes and were therefore 

required to be registered under 21 

U.S.C. § 823(h), but were not. Id. at 259. 

Upon being informed by the DIs that 

‘‘some of the customers were 

suspicious,’’ Mr. Sayani stated that he 

had ‘‘provided * * * a list of the 

customers he thought * * * would 

purchase from him, whether it was list 

I chemicals or other products that he 

handled.’’ Id. at 254. At the meeting, the 

DIs also provided Mr. Sayani and his 

attorney with a list of 147 customers 

who they deemed suspicious and 

instructed him to investigate them. Id. at 

687. 

Several weeks thereafter, 

Respondent’s attorney wrote a letter to 

the DIs reporting that 119 of the 

customers owned either a convenience 

store or grocery. RX 8, at 1. 

Respondent’s attorney further reported 

that 14 of the customers had ‘‘never 

purchased a list I’’ product and that 

three of them ‘‘have a DEA license.’’ Id. 

As for the remaining suspicious 

customers, the letter stated that 

Respondent could not contact eight of 

the customers and that three of them 

were jobbers who had purchased small 

amounts. Id. 

Respondent’s attorney further wrote 

that it ‘‘had tightened up * * * his 

business with regard to checking out the 

customer on all sales pertaining to list 

I chemicals.’’ Id. More specifically, the 

letter stated Respondent ‘‘currently asks 

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29The letter also stated that Respondent would 

‘‘cross-check * * * all customers purchasing list I 

items between’’ its two warehouses, and that it was 

maintaining ‘‘an updated inventory.’’ RX 8, at 2. 

30Respondent had also sold $1509.84 of the 

products to the Modern Kwik Stop on November 

14, 2004. RX 12, at 53. 

31The address of Discount Tobacco # 2 is listed 

as 137 N. Lee St; the address of Discount Tobacco 

is listed as 107 South Lee St. RX 12, at 111. 

for a tax identification number, business 

license[,] as well as a DEA permit if the 

customer does not have a store.’’ Id. at 

2.29

At the hearing, Mr. Sayani testified 

that he did not go to a new customer’s 

store to verify whether it was legitimate 

‘‘because at the time of opening the 

account, we get enough proof from them 

that they’re legitimate * * * or that 

they’re who they say’’ they are. Tr. 768. 

Mr. Sayani acknowledged, however, 

that anyone who applied for a state or 

local tax identification number would 

be issued one. Id. at 769. 

At the hearing, Mr. Sayani further 

testified that upon being served with the 

Show Cause Order, which referred to 

Max Brand and Heads Up as nontraditional products, he stopped selling 

the products. Id. at 714. As found above, 

the first Show Cause Order was dated 

October 20, 2004, and served on 

Respondent no later than November 19, 

2004, when his counsel requested a 

hearing. 

Contrary to Mr. Sayani’s testimony, 

Respondent’s ‘‘Sales Tracking Report’’ 

indicates that it repeatedly sold Max 

Brand after the first Show Cause Order 

was served and frequently did so in 

large quantities. Moreover, there is 

evidence that it made multiple large 

sales to several stores. 

For example, on November 30, 2004, 

it sold $504 of Max Brand 2–Way to the 

Lucky Star of Brookfield, Georgia. RX 

12, at 67. This was followed by two 

December 12, 2004 sales, each totaling 

$1509.84, to the Dixie Stop of Twion 

and the Modern Kwik Shop of 

Summerville, id. at 101, and a December 

19, 2004 sale of $504 to Jay 

Swaminarayan, Inc., of Tifton, Georgia. 

Id. at 74. On February 13, 2005, it sold 

an additional $861.12 of the products to 

both the Dixie Stop and the Modern 

Kwik Shop.30 Id. at 104. 

On both November 29, 2004, and 

January 3, 2005, it sold $1006.56 of the 

products to ABJ Ashburn, Inc., of 

Ashburn. Id. at 106 & 101. Respondent 

made further sales of the products to 

this store on January 27, February 17, 

and February 25, when it sold $430.56 

worth on each date, and on both March 

20 and April 2, when it sold $861.12 of 

the products to this store. Id. at 101–2, 

105–6. 

Moreover, on January 8, 2005, it sold 

$861.12 of Max Brand pseudoephedrine 

to Priya Nidhi, Inc., of Calhoun, 

Georgia. Id. at 53. Notably, it has 

previously sold this establishment 

$1006.56 on October 15, 2004. Id. at 52. 

On February 5, 2005, it made two 

separate sales of the products (one 

totaling $504, the other totaling $430.56) 

to the West Gray BP of Gray, Georgia, id. 

at 78 & 112; on February 18, 2005, it 

sold $504 of the product to the Razk, 

Inc., Marathon of Douglasville. Id. at 64. 

And on February 20, 2005, it made two 

separate sales (one worth $504, and one 

worth $430.56 of the products) to 

Krishna Corp. of Huntsville, Alabama. 

Id. at 72 & 107. 

On January 13, February 6, March 1, 

and April 1, 2005, it sold $430.56 worth 

of the products to the Texaco 10 Opelika 

of Phenix City, Alabama; on January 13, 

it also sold an additional $576 of the 

products to this store. Id. at 102, 104– 

06, 113. Moreover, on both February 20 

and April 2, it sold $861.12 of the 

products to USA Trading Inc., of 

Pheonex (sic) City, Alabama. Id. at 102 

& 104. It also sold $861.12 of the 

products to Thakurs Fuel, Inc., of 

Pinehurst, Georgia, on each of these 

dates: February 25, March 20, and April 

8, 2005. Id. at 103, 105 & 109. 

The evidence further shows numerous 

other instances in which Respondent 

sold large quantities of Max Brand as 

late as April 2005. Id. at 110–12. More 

specifically, on April 3, 2005, 

Respondent sold $861.12 of the product 

to each of the following stores: Amin 

Enterprises, Inc. of Lithonia, the Coastal 

Food Mart of Rockmart, and the Hill 

Top Gas Station of Bremen. Id. at 110– 

11. Moreover, on April 6, it sold $861.12 

worth of the products to Wendel’s JKF, 

Inc., Discount Tobacco #2, and Discount 

Tobacco; all three stores were located in 

Americus, Georgia.31 Id. at 111. Finally, 

between April 10 and 16, 2005, it sold 

$504 worth of the products to eleven 

establishments (the DM Cotton Patch of 

Richland, DM Shopper Stop # 334 of 

Cusetta, OM Traders #271, DM Shopper 

Stops #s 442 and 451, all of Cataula; 

KDC Inv. and RDSP, both of Columbus; 

Hyaat Groceries of Covington; Jai 

Bhrahmani, Inc., of Buchanan; 

Gainesville BP of Gainesville; all in 

Georgia, and Prem, Inc., of Alexander 

City, Alabama. Id. at 111–12. 

The ALJ specifically found—based on 

Mr. Sayani’s testimony—that 

‘‘Respondent stopped selling Heads Up 

and Max Brand products because they 

were identified as ‘non-traditional’ 

items by the DEA in the October 2004 

Order to Show Cause.’’ ALJ at 21. To the 

extent this finding implies that Mr. 

Sayani stopped selling the products 

shortly after service of the Order, it is 

inconsistent with the evidence which 

shows that for approximately five 

months after the Order was served, 

Respondent continued to sell these 

products. Indeed, Mr. Sayani’s 

testimony begs the question of why, if 

the products were identified in the 

Show Cause Order, it took five months 

to stop selling them. 

The Government also produced 

evidence showing that Respondent had 

distributed iodine tincture to several of 

its customers. See GX 46, at 1, 2, 3, 15, 

& 16. Moreover, Respondent’s evidence 

shows that it distributed 2,852 (1 oz.) 

units of this product to a single store 

between June 8, 2003, and November 6, 

2004. RX 16, at 5. 

Regarding the allegation that 

Respondent sold excessive quantities of 

iodine to convenience stores, the 

Government offered anecdotal evidence 

in the form of a DI’s testimony that she 

had visited more than 100 convenience 

stores in both the course of her official 

duties and as a consumer and had never 

been able to find tincture of iodine. Tr. 

396. But in contrast to the extensive 

evidence the Government introduced 

regarding the expected sales range of 

pseudoephedrine and ephedrine at 

convenience stores, it produced no such 

evidence with respect to iodine tincture. 

The Government also introduced into 

evidence several documents indicating 

that iodine was used in manufacturing 

methamphetamine. The first of these 

was a blue notice, which was reprinted 

in the Chemical Handler’s Manual, a 

copy of which was provided to Mr. 

Sayani at both the pre-registration 

inspection and the schedule regulatory 

inspection. Tr. 307. The notice stated 

that ‘‘iodine became a federally 

regulated List II chemical on 10/3/96,’’ 

and that it was being provided to 

‘‘[m]ake you aware that iodine is being 

used to clandestinely produce 

methamphetamine.’’ GX 36a. 

The Government also introduced into 

evidence an ‘‘Information Brief’’ 

published by the National Drug 

Intelligence Center entitled: Iodine in 

Methamphetamine Production. GX 36B; 

Tr. 308. The document stated that 

‘‘[s]mall-scale methamphetamine 

producers who are unable to obtain 

iodine crystals occasionally produce 

them from iodine tincture by mixing 

iodine tincture with hydrogen 

peroxide.’’ GX 36B, at 2. This document 

further explained that ‘‘[t]his is a timeconsuming process that yields a very 

small amount of iodine crystals in 

relation to the amount of tincture and 

hydrogen peroxide use,’’ and also noted 

that ‘‘[i]odine tincture is not regulated 

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by law.’’ Id. Putting aside the statement 

that iodine tincture was not regulated, 

the Government produced no evidence 

that this document was ever provided to 

Mr. Sayani. 

To counter the Government, 

Respondent introduced a copy of a 

Notice of Proposed Rulemaking (NPRM) 

in which the Agency proposed ‘‘the 

control of chemical mixtures containing 

greater than 2.2 percent iodine.’’ DEA, 

Changes in the Regulation of Iodine 

Crystals and Chemical Mixtures 

Containing Over 2.2 Percent Iodine, 71 

FR 46144, 46145 (Aug. 11, 2006); RX 28. 

The NPRM expressly stated that 

‘‘[i]odine two percent tincture and 

solution U.S.P. are sold at a wide variety 

of retail outlets and have household 

application as antiseptic and 

antimicrobial products. These products 

will not become regulated under the 

proposed regulation.’’ 71 FR at 46146. 

The NPRM further noted that ‘‘[w]hile 

the regulatory controls placed on iodine 

apply to iodine crystals, they have not 

pertained to iodine tinctures (which are 

considered chemical mixtures).’’ Id. 

(emphasis added). 

In discussing the rationale for the 

proposed rule, the NPRM further 

explained that because ‘‘seven percent 

iodine tincture and solutions are the 

predominant iodine-containing 

chemical mixtures diverted by 

traffickers * * * these chemical 

mixtures should be subject to CSA 

chemical regulatory controls.’’ Id. at 

46149. The NPRM then noted that 

‘‘[t]wo percent iodine tincture and 

solutions are also diverted, but DEA has 

not documented the frequent diversion 

of these materials at clandestine 

laboratories. Therefore, DEA does not 

intend to regulate the two percent 

iodine tincture or solution at this time.’’ 

Id. 

Respondent also called as a witness a 

sales representative for the company 

which supplied him with iodine 

tincture. The sales rep. testified that he 

had sold Respondent iodine tincture 

with an iodine concentration of only 

one to two percent, Tr. 437–38, and 

there is no evidence refuting this. See 

RX 11a & b. The sales rep. further 

testified that it was his understanding 

that a DEA registration was not required 

to sell these products, and that while he 

had been selling the products for eight 

to nine years, he had ‘‘no idea’’ that 

iodine tincture was being diverted into 

the illicit manufacture of 

methamphetamine. Tr. 439 & 442. 

Discussion 

Section 304(a) of the Controlled 

Substances Act provides that a 

registration to distribute a list I chemical 

‘‘may be suspended or revoked * * * 

upon a finding that the registrant * * * 

has committed such acts as would 

render [its] registration under section 

823 of this title inconsistent with the 

public interest as determined under 

such section.’’ 21 U.S.C. 824(a)(4). 

Moreover, under section 303(h), ‘‘[t]he 

Attorney General shall register an 

applicant to distribute a list I chemical 

unless the Attorney General determines 

that registration of the applicant is 

inconsistent with the public interest.’’ 

21 U.S.C. 823(h). In making the public 

interest determination, Congress 

directed that the following factors be 

considered: 

(1) Maintenance by the applicant of 

effective controls against diversion of 

listed chemicals into other than 

legitimate channels; 

(2) Compliance by the applicant with 

applicable Federal, State, and local law; 

(3) Any prior conviction record of the 

applicant 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. 

Id. § 823(h). 

‘‘These factors are considered in the 

disjunctive.’’ Joy’s Ideas, 70 FR 33195, 

33197 (2005). I may rely on any one or 

a combination of factors, and may give 

each factor the weight I deem 

appropriate in determining whether a 

registration should be revoked or an 

application for a registration should be 

denied. See, e.g., David M. Starr, 71 FR 

39367, 39368 (2006); Energy Outlet, 64 

FR 14269 (1999). Moreover, I am ‘‘not 

required to make findings as to all of the 

factors.’’ Hoxie v. DEA, 419 F.3d 477, 

482 (6th Cir. 2005); Morall v. DEA, 412 

F.3d 165, 173–74 (D.C. Cir. 2005). 

While I reject the Government’s 

allegations based on Respondent’s sales 

of iodine tincture, I nonetheless 

conclude that the evidence under 

factors one, four, and five make out as 

prima facie case that Respondent’s 

continued registration would be 

‘‘inconsistent with the public interest.’’ 

21 U.S.C. 823(h). Moreover, while I 

acknowledge that Respondent has 

improved its physical security, it has 

otherwise failed to demonstrate that it 

has adequate procedures in place to 

protect the public from the diversion of 

listed chemical products. Finally, I find 

especially disturbing Respondent’s 

conduct in continuing to sell large 

quantities of listed chemical products 

even after the service of the initial Show 

Cause Order. 

Finally, I reject Respondent’s 

argument that revoking his registration 

would violate its constitutional right to 

due process because it has not sold 

listed chemicals ‘‘in excess of the 

quantities authorized in the published 

rules * * * of the DEA.’’ Resp. Prop. 

Findings at 16. I also find unavailing his 

claim—based on the ALJ’s finding that 

his inventory procedures were 

inadequate—that it ‘‘is once again being 

asked to comply with something that is 

not in the DEA rules,’’ and that this is 

another violation of its right to due 

process. Resp. Exceptions at 6. 

Accordingly, Respondent’s Forest Park 

registration will be revoked; its pending 

renewal application for its Forest Park 

facility and its application for a 

registration at its Decatur facility will 

also be denied. 

Factor One—Maintenance of Effective 

Controls Against Diversion 

Under DEA precedent and 

regulations, this factor encompasses a 

variety of considerations and is not 

limited to whether the registrant 

maintains adequate physical security of 

listed chemical products. ALJ at 29–30. 

A DEA regulation requires the 

consideration of the adequacy of a 

registrant’s ‘‘systems for monitoring the 

receipt, distribution, and disposition of 

List I chemicals in its operations.’’ 21 

CFR 1309.71(b)(8). Relatedly, a 

registrant must exercise a high degree of 

care in monitoring its customer’s 

purchases. Rick’s Picks, 72 FR 18275, 

18278 (2007), John J. Fotinopoulos, 72 

FR 24602, 24605 (2007), D & S Sales, 71 

FR 37607, 37610 (2006); Joy’s Ideas, 70 

FR 33195, 33197–98 (2005). 

It is undisputed that Respondent 

upgraded its physical security by 

building storage cages, installing video 

cameras, and assigning a person to 

distribute the products from the cage. 

This, however, is only one part of a 

registrant’s obligation to maintain 

effective controls against diversion. 

Here, the record shows that 

Respondent’s procedures for verifying 

the legitimacy of its listed chemical 

customers were wholly inadequate to 

prevent diversion. Moreover, those 

procedures remain so. While following 

the meeting in which agency 

investigators notified Respondent of 

their concerns regarding the legitimacy 

of its customers, Respondent’s counsel 

stated that it had ‘‘tightened up’’ its 

procedures and was requiring that its 

customers produce a tax identification 

number and business license, RX 8, at 

1–2 2, these documents can be easily 

obtained by anyone. While Mr. Sayani 

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32Respondent also had substantial shortages of 

three other products. GX 31. 

33Typically, this requires no more than 

maintaining the records that a registrant keeps in 

the normal course of business. See, e.g. , DEA, 

Implementation of the Domestic Chemical 

Diversion Control Act of 1993, 60 FR 32447, 32451 

(1995) (noting ‘‘that most of the information 

required by the regulations is already maintained in 

general business records for all transactions’’). 

testified that this provided ‘‘enough 

proof’’ that his customers were 

‘‘legitimate,’’ he did not have an 

employee personally visit a new 

customer to determine whether it was a 

legitimate business with a need for 

listed chemical products. 

Moreover, Respondent generally 

operated as a ‘‘cash and carry’’ business 

and only delivered if a customer 

ordered at least $ 1,000 worth of the 

items and requested that it do so. Thus, 

a customer could be obtaining listed 

chemical products from multiple 

sources and Respondent would have no 

knowledge of this. See Holloway 

Distributing, 72 FR 42118, 42124 (2007) 

(noting a registrant’s obligation to 

determine whether a customer is 

receiving listed chemical products from 

other suppliers). 

As the results of the customer 

verifications demonstrate, Respondent 

was indifferent to its obligation to 

determine whether a potential list I 

customer had a legitimate need for the 

products. Moreover, Mr. Sayani’s 

testimony indicates that Respondent did 

not change its practices. Indeed, 

Respondent’s practices are 

fundamentally inconsistent with its 

obligations as a registrant, and are a 

prescription for wide-spread diversion. 

Id., see also D & S Sales, 71 FR at 37610. 

Respondent’s unwillingness to reform 

them provides reason alone to conclude 

that it does not—and will not—maintain 

effective controls against diversion and 

that its registration would be 

‘‘inconsistent with the public interest.’’ 

21 U.S.C. 823(h). 

Buttressing this finding is the 

evidence pertaining to the audit. As 

found above, the audit, which covered 

a six-month period, found that 

Respondent had massive shortages of 

several listed chemical products 

including 7640 sixty-count bottles of 

Head Up, 3656 sixty-count bottles of 

Max Brand, and 284 sixty-count bottles 

of Mini 2-Way Action.32 See GX 31. In 

total, Respondent was short 11,580 

sixty-count bottles of pseudoephedrine 

and combination ephedrine products, or 

nearly 695,000 dosage units. This was 

so notwithstanding that the DIs used 0 

as the opening inventory for each of the 

products (the consequence of this is that 

if any product had, in fact, been on 

hand on the opening date of the audit, 

the audit would result in an undercount 

of the shortage), and that the time 

period was of limited duration. 

Based on the ALJ’s finding that its 

‘‘lack of an inventory system, alone, 

provides persuasive weight against 

Respondent’s continued registration,’’ 

ALJ at 30 n.6, Respondent argues that 

‘‘there is no requirement under any of 

the DEA rules to have an inventory 

system, and [that it] is * * * being 

asked to comply with something that is 

not in the DEA rules.’’ Resp. Exceptions 

at 6. Respondent contends that it is 

‘‘being held to * * * unpublished DEA 

guidelines,’’ and that this is ‘‘a violation 

of due process * * * and equal 

protection guarantees.’’ Id. 

Respondent is correct that there is no 

regulation which explicitly requires that 

it maintain an inventory system. 

However, in enacting section 303(h), 

Congress made plain that in 

determining the public interest, the 

Attorney General was to consider the 

applicant’s (and in a revocation/ 

suspension proceeding, the registrant’s) 

‘‘maintenance * * * of effective 

controls against diversion of listed 

chemicals into other than legitimate 

channels.’’ 21 U.S.C. 823(h). 

Moreover, in 1995, DEA promulgated 

21 CFR 1309.71(a), which directed that 

‘‘[a]ll applicants and registrants shall 

provide effective controls and 

procedures to guard against theft and 

diversion of List I chemicals.’’ This 

regulation, which remains in effect, 

further explained that ‘‘[i]n evaluating 

the effectiveness of security controls 

and procedures, the Administrator shall 

consider * * * [t]he adequacy of the 

registrant’s or applicant’s systems for 

monitoring the receipt, distribution, and 

disposition of List I chemicals in its 

operations.’’ 21 CFR 1309.71(b)(8). 

Federal law further requires that a 

registrant report ‘‘any regulated 

transaction involving an extraordinary 

quantity of a listed chemical,’’ 21 U.S.C. 

830(b)(1)(A), and a ‘‘regulated 

transaction’’ is based on ‘‘the 

quantitative threshold or the cumulative 

amount for multiple transactions within 

a calendar month.’’ 21 CFR 1310.04(f). 

Federal law also requires a distributor to 

report to this Agency ‘‘any unusual or 

excessive loss or disappearance of a 

listed chemical under the control of the 

regulated person.’’ 21 U.S.C. 

830(b)(1)(C). Accordingly, to satisfy 21 

CFR 1309.71(b)(8), a registrant’s 

recordkeeping must be sufficient so as 

to enable it to comply with its reporting 

obligations under Federal law.33 See 

Fotinopoulos, 72 FR at 24605. 

Here, Respondent has no satisfactory 

explanation as to the disposition of 

approximately 11,580 sixty-count 

bottles or 695,000 dosage units of listed 

chemical products. Whether the 

shortages are due to poor recordkeeping, 

theft, or some other reason, the 

magnitude of these shortages provides a 

further reason to conclude that 

Respondent does not maintain effective 

controls against diversion and that its 

continued registration would be 

‘‘inconsistent with the public interest.’’ 

21 U.S.C. 823(h). 

Factor Four—Respondent’s Past 

Experience in Distributing Listed 

Chemicals 

Under this factor, the ALJ further 

concluded that Respondent made 

‘‘excessive sales of both list one 

chemical products and iodine’’ that 

‘‘pose a risk to the public interest.’’ ALJ 

at 32. While the ALJ found the 

testimony of Respondent’s expert ‘‘more 

persuasive’’ than the Government’s 

evidence on the expected sales level of 

list I chemical products, as she further 

explained, even the Respondent’s expert 

witness ‘‘concurred that some of the 

[sales of] Respondent’s List I chemical 

products * * * were in excess of what 

would be expected.’’ Id. at 33. While I 

adopt the ALJ’s conclusions with 

respect to list I chemicals, I reject them 

with respect to iodine. 

With respect to its distributions of 

iodine, the ALJ found that ‘‘Respondent 

has knowingly distributed large 

amounts of 2% iodine, another 

methamphetamine precursor.’’ ALJ at 

32. In support of her conclusion, the 

ALJ relied on the testimony of 

Respondent’s expert that there were 

‘‘five instances where the quantity [of 

iodine] purchased might be suspiciously 

high,’’ Tr. 571, as well as on Mr. 

Sayani’s testimony that he was aware 

that one of his customers was 

purchasing hundreds of bottles but that 

he thought the customer was 

distributing to other small retailers. Id. 

at 744; see also ALJ at 32. 

The Government’s own evidence 

establishes, however, that the 2% iodine 

product which Respondent sold ‘‘is not 

regulated by law,’’ GX 36B at 2, and the 

NPRM which announced the Agency’s 

intent to regulated iodine tinctures 

containing more than 2.2 percent iodine 

noted that 2% iodine tincture products 

‘‘are sold at a wide variety of retail 

outlets and have household application 

as antiseptic and antimicrobial 

products.’’ 71 FR 46146. The same 

NPRM also explained that the ‘‘frequent 

diversion’’ of two percent iodine 

tincture at clandestine laboratories ‘‘has 

not [been] documented.’’ Id. at 46149. 

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34Because 2% iodine tincture is not regulated, 

the Government’s allegation that it engaged in 

regulated transactions which it failed to report as 

suspicious transactions is also rejected. 

35As DEA has found in numerous other cases, 

where there is a pattern of distributions which are 

so large as to be statistically improbable to meet 

legitimate demand, a finding that the products have 

been diverted is warranted. See Holloway 

Distributing, 72 FR at 42125; T. Young Associates, 

Inc., 71 FR 60567, 60572 (2006); D & S Sales, 71 

FR at 37611; Joy’s Ideas, 70 FR at 33198. 

Furthermore, DEA’s regulations 

provide that two conditions must be met 

for a chemical mixture to be exempted 

from regulation. 21 CFR 1310.13(a). 

First, ‘‘[t]he mixture [must be] 

formulated in such a way that it cannot 

be easily used in the illicit production 

of a controlled substance.’’ Id. 

§ 1310.13(a). Second, ‘‘[t]he listed 

chemical or chemicals contained in the 

chemical mixture cannot be readily 

recovered.’’ Id. § 1310.13(b). Given the 

criteria for exempting a chemical 

mixture from regulation, neither the ALJ 

nor the Government explained why 

large sales of 2% iodine tincture are, by 

themselves, enough to give rise to a 

reasonable belief that the chemical 

contained therein is likely to be 

diverted. 

Here, there is no evidence that 

Respondent sold these products with 

knowledge that they would be diverted 

for use in the illicit manufacture of 

methamphetamine, and in any event, 

the Government’s allegation that 

Respondent was selling excessive 

amounts of iodine tincture is not 

supported by substantial evidence. The 

Government’s evidence is limited to the 

testimony of a diversion investigator 

that she had visited 100 convenience 

stores and had never found iodine 

tincture. Yet the Agency’s NPRM noted 

that these products, which have several 

legitimate uses, are sold at ‘‘a wide 

variety of retail outlets.’’ 71 FR at 46146. 

More importantly, even assuming that 

the investigator was specifically looking 

for iodine tincture at the convenience 

stores she visited, the testimony 

amounts to nothing more than anecdotal 

evidence. As such, it does not 

conclusively establish the extent to 

which these products are sold at 

convenience stores and the statistical 

improbability that Respondent’s sales of 

these products were to meet legitimate 

demand. Indeed, the evidence stands in 

contrast to the quantum of the evidence 

the Government introduced regarding 

the expected sales levels of list I 

chemical products at convenience 

stores.34 Accordingly, I conclude that 

Respondent’s sales of iodine do not 

support a finding that its continued 

registration is inconsistent with the 

public interest. 

On the other hand, Respondent’s sales 

of list I chemical products clearly were 

excessive and support a finding that its 

continued registration is inconsistent 

with the public interest. Even assuming 

that the monthly expected sales figure of 

$173 for pseudoephedrine given by 

Respondent’s expert is accurate, and 

that some stores might make a legitimate 

business decision to purchase a case 

quantity to reduce their costs, the 

evidence shows that Respondent 

repeatedly sold case quantities to 

multiple customers including the 

Coastal Food Mart, Chitra Inc.’s Quick 

Stop, the Phillips 66 Mart, the R & S 

Grocery, and the Stop In. 

The evidence also shows that 

Respondent sold case quantities to two 

customers which gave the same address. 

For example, between January 6 and 

August 1, 2004, Respondent sold a total 

of eleven cases to the P & K Mini Mart 

and the Quick Stop/Tushar/BP, both of 

which used the same address. Moreover, 

between January 6 and September 5, 

2004, it sold a total of fifteen cases to 

the DJ Food Mart and BJ Food Market 

#1, which gave their respective 

addresses as 15582 HWY 27 and 15582 

HWY 27 North in Trion, Georgia. 

With respect to the Coastal Food Mart, 

which purchased eight cases between 

January 21 and September 5, 2004, even 

Respondent’s expert acknowledged that 

this store’s purchases were many times 

the expected norm. Tr. 619–20. And as 

found above, several of Respondent’s 

customers purchased even larger 

amounts of list I chemical products than 

did the Coastal Food Mart. As 

Respondent’s expert allowed with 

respect to those customers who were 

repeatedly purchasing large quantities, 

‘‘maybe there’s some nefarious practice 

involved here’’ and the customers are 

‘‘doing something that * * * they 

shouldn’t be doing.’’ Id. 570.35

Respondent raises two arguments in 

response to the allegations that it sold 

excessive quantities of list I chemical 

products. First, it argues that given the 

nature and size of its business, it would 

be ‘‘almost impossible to find’’ the 

excessive sales. Resp. Prop. Findings at 

15. 

Second, it argues that is ‘‘has not sold 

any restricted item in excess of the 

quantities authorized in the published 

rules and regulations * * * which show 

the threshold quantities of restricted 

items the wholesalers * * * are allowed 

to sell without * * * putting their DEA 

license at risk.’’ Id. at 16. Relatedly, 

Respondent raises again a due process 

argument that ‘‘[i]f the Government is 

proceeding on any basis other than 

Respondent having exceeded the sale 

quantity thresholds which the 

Government has specifically published 

(such as ‘not in the public interest’), 

then the Government is proceeding 

under a rule or statute which is void for 

vagueness as it does not put Respondent 

on notice as to what specific action 

would be violative of [its] rules and 

regulations.’’ Id. at 17–18. 

As for the argument that it would be 

nearly impossible to detect excessive 

purchases, Respondent’s expert 

acknowledged that a computer program 

could be written to detect such 

purchases. Tr. 648. Nor would it require 

more than minimal effort to call up a 

customer’s account to determine the 

frequency and amounts of its purchases 

before selling additional amounts of the 

products to it. 

Also unavailing is Respondent’s 

contention that because it did not sell 

more than the threshold quantities, its 

registration cannot be revoked. Contrary 

to Respondent’s understanding, selling 

under threshold amounts does not 

relieve a registrant from its obligation to 

taking necessary measures ‘‘to 

determine the ultimate disposition of 

[its] products.’’ Rick’s Picks, 72 FR at 

18278. The thresholds simply trigger 

additional recordkeeping and reporting 

requirements. As I explained in Rick’s 

Picks: 

Congress’s imposition of recordkeeping 

and reporting requirements for regulated 

transactions does not mean that one can 

engage in below-threshold transactions 

without any further obligation to determine 

whether the products are likely to be 

diverted. Indeed, DEA has found that 

products which have been distributed to nontraditional retailers in sub-threshold 

transactions are routinely diverted. Contrary 

to Respondent’s view, the threshold 

provisions pertaining to regulated 

transactions do not create a safe harbor 

which allows a registrant to sell list I 

chemicals without any further duty to 

investigate how the products are being used. 

Id. Cf. United States v. Kim, 449 F.3d 

933, 944 (9th Cir. 2006) (‘‘[T]he 

recording and reporting statutes 

establish no safe harbor from 

prosecution under [21 U.S.C.] 

841(c)(2).’’). I therefore reject 

Respondent’s contention (as raised in 

both its Exceptions and Motion for 

Judgment as a Matter of Law) that this 

proceeding should be dismissed because 

it did not sell in excess of the 

thresholds. 

Finally, there is no merit to 

Respondent’s related contention that it 

has been denied fair ‘‘notice as to what 

specific action would be violative of 

[DEA’s] rules and regulations.’’ Resp. 

Prop. Findings at 18. Contrary to 

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36The Branex decision was published in the 

Federal Register on February 25, 2004, before 

Respondent made many of the case quantity 

distributions. 

37 In addition, in publications such as the 

Chemical Handler’s Manual, DEA explained that 

‘‘[i]t is fundamental for sound operations that 

handlers take reasonable measures to identify their 

customers, understand the normal and expected 

transactions typically conducted by those 

customers, and, consequently, identify those 

transactions conducted by their customers that are 

suspicious in nature.’’Chemical Handler’s Manual 

15 (2002). 

The Chemical Handler’s Manual also sets forth 

numerous criteria for recognizing suspicious 

transactions including ‘‘resell[ing] to nontraditional outlets for regulated OTC products, e.g., 

hair salons, head shops, drug paraphernalia stores, 

liquor stores, record stores, video shops, auto parts 

stores,’’ and ‘‘resell[ing] large volumes into the 

‘independent convenience store’ market.’’ Id. at 42. 

The manual also listed as relevant criterion ‘‘[a]ny 

customer who asks for large bottle sizes, 60 count 

or higher,’’ or ‘‘buy[s] only the largest size 

available.’’ Id. 

38Relatedly, Mr. Sayani told the DI during one of 

the 2001 inspections that ‘‘a typical sale’’ would be 

two to three boxes containing 12 bottles; in the 

same conversation, the DI told Mr. Sayani that a 

sale of a case quantity would be suspicious. Tr. 

330–31. Many of Respondent’s sales were well in 

excess of a typical sale. Respondent thus not only 

ignored the DI’s instruction, it also ignored its own 

understanding of the market. Moreover, at the 

various visits, Respondent was provided with a 

copy of several notices which explained that 

pseudoephedrine and combination ephedrine were 

being diverted into the illicit manufacture of 

methamphetamine. 

39As found above, methamphetamine trafficking 

has increased substantially in Georgia and the 

adjacent States. 

Respondent’s view, the standards, 

which it was expected to conform to, 

were identifiable ‘‘with ascertainable 

certainty’’ by reviewing DEA’s public 

pronouncements. Trinity Broadcasting, 

Inc., v. FCC, 211 F.3d 618, 628 (D.C. Cir. 

2000). 

In section 304(a), Congress made clear 

that a registration is subject to 

revocation where a registrant ‘‘has 

committed such acts as would render 

his registration * * * inconsistent with 

the public interest as determined 

under’’ under section 303. 21 U.S.C. 

824(a)(4). And in section 303(h), 

Congress clearly provided that one of 

the criteria for determining the public 

interest is whether a registrant 

maintains ‘‘effective controls against 

diversion of listed chemicals into other 

than legitimate channels.’’ Id. 

§ 823(h)(1). The statute itself thus 

provides fair warning to a registrant that 

is must not sell to diverters. 

Moreover, in several decisions which 

pre-dated nearly all of the listed 

chemical distributions discussed above, 

this Agency made clear that selling in 

quantities that greatly exceed legitimate 

demand for these products supports a 

finding of diversion and that such 

conduct can be the basis for the 

revocation of a registration. See, e.g., 

Branex, Inc., 69 FR 8682, 8690–94 

(2004) 36 (revoking registration noting 

that distributor’s sales of 

pseudoephedrine to convenience stores 

greatly exceeded the expected sales 

range at such stores and supported a 

finding that the pseudoephedrine was 

likely diverted); MDI Pharmaceuticals, 

68 FR 4233, 4238 (2003) (revoking 

registration on ground that ‘‘firm 

distributed large quantities of 

pseudoephedrine tablets to smoke shops 

and * * * convenience stores in 

quantities that apparently exceeded 

legitimate demand for these products’’); 

Ace Wholesale & Trading Co., 67 FR 

12574, 12576 (2002) (revoking 

registration on grounds that registrant 

‘‘was distributing large quantities of 

pseudoephedrine to [a convenience 

store] and other establishments that 

appeared far in excess of legitimate 

demand’’).37 In these decisions, all of 

which were also published on the 

Agency’s Web site as well as in the 

Federal Register, DEA provided fair 

warning that Respondent’s conduct in 

selling large quantities of listed 

chemicals could result in the revocation 

of its registration. 

Respondent’s argument rings hollow 

for another reason. In the first Show 

Cause Order, Respondent was put on 

notice that ‘‘Max Brand products have 

been found on numerous occasions in 

situations related to the illicit 

manufacture of methamphetamine,’’ 

Show Cause Order I, at 3; that the 

monthly expected sales range of 

pseudoephedrine products at 

convenience stores in Georgia ‘‘averaged 

between $15 and $60,’’ id. at 4; and that 

its sales of listed chemical products 

were ‘‘wildly inconsistent with the 

expectation of sales’’ by convenience 

stores. Id. at 5. Mr. Sayani even testified 

under oath that at the ‘‘end of 2004, 

starting of 2005,’’ and after receiving the 

Show Cause Order, he had stopped 

selling Max Brand products. Tr. 713. 

Respondent’s records establish, 

however, that it continued to sell the 

products for months past the date when 

Mr. Sayani claimed it had stopped; it 

also shows numerous instances in 

which Respondent sold half-case 

quantities or larger for several months 

thereafter.38 I thus reject Respondent’s 

contention that it lacked fair warning 

that its excessive sales could be grounds 

for the revocation of its registration. 

Accordingly, while Respondent was 

authorized to distribute list I chemicals 

for approximately six years, its 

experience is characterized by its 

frequent disregard of its obligation to 

protect against the diversion of these 

products. This conclusion provides an 

additional basis, which is sufficient by 

itself, to find that Respondent’s 

continued registration is ‘‘inconsistent 

with the public interest.’’ 21 U.S.C. 

823(h). 

Factor Five—Such Other Factors as Are 

Relevant to and Consistent With Public 

Health and Safety 

As found above, the illicit 

manufacture and abuse of 

methamphetamine have had pernicious 

effects on families and communities 

throughout the nation.39 Cutting off the 

supply sources of methamphetamine 

traffickers is of critical importance in 

protecting the public from the 

devastation wreaked by this drug. 

While listed chemical products 

containing both ephedrine and 

pseudoephedrine have legitimate 

medical uses, DEA orders have 

established that convenience stores, gasstations, and other small retailers, 

constitute the non-traditional retail 

market for legitimate consumers of 

products containing these chemicals. 

See, e.g., Tri-County Bait Distributors, 

71 FR 52160, 52161–62 (2006); D & S 

Sales, 71 FR at 37609; Branex, Inc., 69 

FR 8682, 8690–92 (2004). DEA has 

further found that there is a substantial 

risk of diversion of list I chemicals into 

the illicit manufacture of 

methamphetamine when these products 

are sold by non-traditional retailers. See, 

e.g., Joy’s Ideas, 70 FR at 33199 (finding 

that the risk of diversion was ‘‘real’’ and 

‘‘substantial’’); Jay Enterprises, Inc., 70 

FR 24620, 24621 (2005) (noting 

‘‘heightened risk of diversion’’ if 

application to distribute to nontraditional retailers was granted). For 

this reason, DEA has repeatedly revoked 

the registrations and denied an 

application for registration when a 

registrant distributes (or an applicant 

proposes to distribute) listed chemicals 

to non-traditional retailers and other 

evidence (such as excessive sales, 

inadequate diversion controls, previous 

violations/criminal convictions or a lack 

of adequate experience) confirm that the 

registrant/applicant is unlikely to 

responsibly handle the products. See 

Rick’s Picks, 72 FR at 18278–80; John J. 

Fotinopoulos, 72 FR at 24605–07; TriCounty Bait Distributors, 71 FR at 

52163–64; D & S Sales, 71 FR at 37610– 

12; Joy’s Ideas, 70 FR at 33197–99; 

Xtreme Enterprises, 67 FR 76195, 

76197–98 (2002). 

The record here likewise establishes a 

substantial nexus between the sale of 

non-traditional list I chemicals products 

and the diversion of these products into 

the illicit manufacture of 

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40There was also evidence that on one occasion, 

Respondent’s attorney reported an incident 

involving an individual who, in attempting to 

purchase products, admitted to Mr. Sayani that he 

did not have a store, and then showed Mr. Sayani 

a van full of products which he had purchased from 

a competitor of Respondent. RX 29. While the letter 

provided information regarding the practices of 

Respondent’s competition, it did not report the 

name of the individual or give the license plate 

number (or a description) of the van. See id. 

41Respondent also contends that ‘‘the 

Government had no reasonable justification in 

summarily proceeding to seize his products and 

summarily revoke his license without affording him 

a due process right to a hearing.’’ Id. at 20. 

Respondent ignores, however, that section 304(d) of 

the CSA expressly authorizes the suspension of 

‘‘any registration simultaneously with the 

institution of proceedings under this section, in 

cases where he finds that there is an imminent 

danger to the public health and safety.’’ 21 U.S.C. 

824(d). 

Continued 

methamphetamine. According to the 

testimony of a DEA Special Agent, who 

had debriefed more than 200 

individuals involved in the illicit 

manufacture of methamphetamine, 

convenience stores, gas stations and 

other small retailers were the primary 

and preferred source of 

pseudoephedrine and ephedrine that 

was used by smaller meth. labs. Tr. 56 

& 59; see also TNT Distributors, 70 FR 

12729, 12730 (2005) (noting Special 

Agent’s testimony that ‘‘80 to 90 percent 

of ephedrine and pseudoephedrine 

being used [in Tennessee] to 

manufacture methamphetamine was 

being obtained from convenience 

stores’’). 

The record establishes that 

Respondent’s list I customer base was 

comprised primarily of the same type of 

establishments. More specifically, 

Respondent’s list I customers included 

gas stations, convenience stores, dollar 

stores, liquor stores, beauty stores, gift 

shops, and some customers (such as 

those located at private residences) 

whose business was not even clear. As 

the ALJ observed ‘‘[s]ome of these 

businesses did not even appear to be 

tangentially related to the legitimate sale 

of pseudoephedrine and ephedrine 

products.’’ ALJ at 34. As the ALJ further 

noted, notwithstanding the substantial 

risk of diversion present when 

distributing to these establishments, as 

well as the testimony that nontraditional retailers were the primary 

supply source for illicit meth. cooks, 

Respondent offered no evidence that it 

‘‘would cease dealing with’’ these 

establishments. Id. 

Moreover, while Respondent disputed 

the amount of monthly sales of 

pseudoephedrine at convenience stores 

to meet legitimate demand, it did not 

challenge the Government’s evidence 

that sales of non-prescription drugs 

account for only a small percentage of 

the total sales of convenience stores that 

handle the products. Nor did it offer any 

evidence to refute the Government’s 

evidence that only a small number 

(approximately two in one thousand) of 

convenience store customers purchase a 

pseudoephedrine product. And even 

using the monthly expected sales figures 

put forth by its expert, as found above, 

Respondent repeatedly sold to multiple 

non-traditional retailers quantities of list 

I chemical products that greatly 

exceeded legitimate demand for these 

products. 

Having concluded that the 

Government made out its prima facie 

case, the ALJ then turned to assessing 

whether Respondent had produced 

sufficient evidence that it would protect 

the public interest from the diversion of 

the products. Id. at 34. As the ALJ 

noted, Respondent did improve its 

physical security. Id. The ALJ also noted 

that Respondent had conducted ‘‘some 

investigations into some of its 

customer’s business identities.’’ Id. Yet 

at the hearing, Mr. Sayani testified that 

he did not go to a new customer’s store 

to verify whether it was a legitimate 

business and that a new customer’s 

presentation of a tax identification 

number and business license provided 

sufficient proof of the customer’s bona 

fides. Tr. 768–69. Mr. Sayani offered no 

testimony that Respondent was willing 

to change this practice.40

The ALJ nonetheless concluded that 

Respondent ‘‘does demonstrate a 

willingness to comply with DEA 

directions’’ because it did not handle 

list I chemical products at its Decatur 

location while its application was 

pending and at its Forest Park location 

after that registration was suspended. 

ALJ at 34–35. The ALJ also reasoned 

that Respondent ‘‘stopped selling nontraditional listed chemical products in 

2004, after the DEA served its first Order 

to Show Cause.’’ Id. at 35. 

Both the handling of a list I chemical 

product at an unregistered location and 

the distribution of a list I product out of 

a location with a suspended registration 

would, however, constitute felony 

offenses under Federal law. See 21 

U.S.C. 841(f)(1); id. § 843(a)(9); id. 

§ 844(a). Even if Respondent’s 

compliance with these provisions is 

probative of its willingness to cooperate 

(a debatable proposition given that its 

non-compliance would expose it to 

substantial criminal penalties), the 

remaining basis for the ALJ’s conclusion 

is not supported by the record. 

As found above, Respondent 

continued selling non-traditional 

products—and made numerous large 

quantity transactions—well into April 

2005, approximately five to six months 

after service of the first Show Cause 

Order. Indeed, Mr. Sayani’s testimony 

regarding when Respondent stopped 

selling the products is clearly refuted by 

the documentary evidence. The weight 

of the evidence thus does not support 

the ALJ’s conclusion that Respondent is 

willing to comply with DEA’s direction. 

In any event, notwithstanding her 

finding, the ALJ concluded that 

Respondent’s ‘‘cooperation is dwarfed 

by the significant risk of diversion 

posed to the public by * * * 

Respondent’s continued sales of listed 

chemical products to [non-traditional 

retailers] without adequate sales records 

or customer verification.’’ ALJ at 35. 

While Respondent contends that the 

ALJ ‘‘ignore[d] the substantial remedial 

actions that [it] had taken to correct 

[the] problems of which’’ it was 

notified, Resp. Exceptions at 6, the ALJ 

considered them and properly 

concluded that they only partially 

addressed the problems identified by 

the Agency. See ALJ at 35 (noting that 

Respondent has ‘‘not provided sufficient 

evidence to convince [the Agency] that 

its future conduct would change to the 

degree necessary to eliminate the threat 

to the public interest’’). 

In short, Respondent offered no 

evidence of its willingness to change its 

practices for determining whether its 

customers are legitimate. It offered no 

evidence that it has in place systems to 

accurately account for the products it 

handles and to properly identify those 

customers who are purchasing excessive 

quantities. 

Likewise, it has offered no credible 

evidence that it is willing to change its 

practices to limit its sales of these 

products. Its claim that it stopped 

selling the products shortly after service 

of the first Show Cause Order, is 

contradicted by the documentary 

evidence. Moreover, its argument that 

the thresholds establish the ‘‘quantities 

of restricted items the wholesalers 

* * * are allowed to sell without * * * 

putting their DEA license at risk, [and] 

are what both the Government and the 

public are bound to abide by,’’ Resp. 

Prop. Findings at 16—a theme which is 

repeated throughout its brief—makes 

plain its view that it can continue to sell 

up to the thresholds with no obligation 

to limit its distributions to those 

establishments at which there is only 

limited consumer demand for these 

products for their lawful use. Because 

this view is fundamentally inconsistent 

with a distributor’s obligation under the 

CSA, I conclude that Respondent’s 

registration ‘‘is inconsistent with the 

public interest.’’ 21 U.S.C. 823(h).41

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Respondent does not argue that the statute is 

unconstitutional. Nor could it, as the Supreme 

Court has repeatedly upheld the use of postdeprivation process in emergency situations. See, 

e.g., Gilbert v. Homar, 520 U.S. 924 (1997). 

Moreover, in this case, the evidence of 

Respondent’s continued large sales of listed 

chemical products, even after being served with the 

first Show Cause Order, supports the finding that 

Respondent’s continued registration during the 

pendency of the proceeding posed an imminent 

danger to public health and safety. Respondent 

could also have sought review of the suspension in 

a ‘‘court of competent jurisdiction.’’ 21 U.S.C. 

824(d). 

Finally, Respondent asserts that ‘‘the effect of the 

DEA’s arbitrary actions [in its] case [is] to 

discriminate against him because he is a legal 

alien’’ in violation of his right to equal protection 

of the laws. Resp. Prop. Findings at 25. Respondent 

does not, however, contend that the Agency is 

intentionally discriminating against its owner, see 

Hernandez v. New York, 500 U.S. 352, 359–60 

(1991), a requirement for stating a claim under the 

Equal Protection Clause, and in any event, it has 

produced no evidence to support its claim. 

Respondent is just one of many list I chemical 

distributors whose registrations have been revoked 

for committing acts inconsistent with the public 

interest. 

Order 

Pursuant to the authority vested in me 

by 21 U.S.C. 823(h) & 824(a), as well as 

28 CFR 0.100(b) & 0.104, I order that 

DEA Certificate of Registration, 

040450SLY, issued to Sunny Wholesale, 

Inc., 120 Forest Parkway, Forest Park, 

Georgia, be, and it hereby is, revoked, 

and that its application to renew this 

registration be, and it hereby is, denied. 

I further order that Sunny Wholesale, 

Inc.’s, application for a DEA Certificate 

Registration at 2935 N. Decatur Road, 

Suite C, Decatur, Georgia, be, and it 

hereby is, denied. These orders are 

effective November 3, 2008. 

Dated: September 26, 2008. 

Michele M. Leonhart, 

Deputy Administrator. 

[FR Doc. E8–23395 Filed 10–2–08; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF LABOR 

Office of the Secretary 

Submission for OMB Review: 

Comment Request 

September 26, 2008. 

The Department of Labor (DOL) 

hereby announces the submission of the 

following public information collection 

request (ICR) to the Office of 

Management and Budget (OMB) for 

review and approval in accordance with 

the Paperwork Reduction Act of 1995 

(Pub. L. 104–13, 44 U.S.C. chapter 35). 

A copy of this ICR, with applicable 

supporting documentation; including 

among other things a description of the 

likely respondents, proposed frequency 

of response, and estimated total burden 

may be obtained from the RegInfo.gov 

Web site at http://www.reginfo.gov/ 

public/do/PRAMain or by contacting 

Amy Hobby on 202–693–4553 (this is 

not a toll-free number)/email: 

DOL_PRA_PUBLIC@dol.gov. 

Interested parties are encouraged to 

send comments to the Office of 

Information and Regulatory Affairs, 

Attn: OMB Desk Officer for the 

Employment Standards Administration 

(ESA), Office of Management and 

Budget, Room 10235, Washington, DC 

20503, Telephone: 202–395–7316 / Fax: 

202–395–6974 (these are not toll-free 

numbers), E-mail: 

OIRA_submission@omb.eop.gov within 

30 days from the date of this publication 

in the Federal Register. In order to 

ensure the appropriate consideration, 

comments should reference the OMB 

Control Number (see below). 

The OMB is particularly interested in 

comments which: 

• Evaluate whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information will have 

practical utility; 

• Evaluate the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

Agency: Employment Standards 

Administration. 

Type of Review: Extension without 

change of an existing OMB Control 

Number. 

Title of Collection: Requirements of a 

Bona Fide Thrift or Savings Plan (29 

CFR Part 547) and Requirements of a 

Bona Fide Profit-Sharing Plan or Trust 

(29 CFR Part 549). 

OMB Control Number: 1215–0119. 

Affected Public: Businesses or other 

for-profits, Farms, Not-for-profit 

institutions. 

Total Estimated Number of 

Respondents: 844,000. 

Total Estimated Annual Burden 

Hours: 352. 

Total Estimated Annual Costs Burden: 

$0. 

Description: This information 

collection applies to employers claiming 

the overtime exemption available under 

section 7(e)(3)(b) of the Fair Labor 

Standards Act. Specifically, in 

calculating an employee’s regular rate of 

pay, an employer need not include 

contributions made to a bona fide thrift 

or savings plan or a bona fide profitsharing plan or trust—as defined in 29 

CFR Parts 547 and 549. Employers are 

required to communicate, or make 

available to the employees, the terms of 

the bona fide thrift or savings plan and 

bona fide profit-sharing plan or trust, 

and retain certain records. For 

additional information, see related 

notice published at 73 FR 39725 on July 

10, 2008. 

Darrin A. King, 

Departmental Clearance Officer. 

[FR Doc. E8–23101 Filed 10–2–08; 8:45 am] 

BILLING CODE 4510–27–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–62,583; TA–W–62,583A] 

PeopLoungers, Inc., Nettleton, MS, and 

PeopLoungers, Inc., Mantachie, MS; 

Amended Certification Regarding 

Eligibility To Apply for Worker 

Adjustment Assistance and Alternative 

Trade Adjustment Assistance 

In accordance with Section 223 of the 

Trade Act of 1974 (19 U.S.C. 2273), and 

Section 246 of the Trade Act of 1974 (26 

U.S.C. 2813), as amended, the 

Department of Labor issued a 

Certification of Eligibility to Apply for 

Worker Adjustment Assistance and 

Alternative Trade Adjustment 

Assistance on April 2, 2008, applicable 

to workers of PeopLoungers, Inc., 

Nettleton, Mississippi. The notice was 

published in the Federal Register on 

April 17, 2008 (73 FR 20954). 

At the request of a company official, 

the Department reviewed the 

certification for workers of the subject 

firm. The workers are engaged in the 

production of furniture. 

New information provided by the 

company official shows that after the 

worker group was certified eligible to 

apply for adjustment assistance, the 

subject firm relocated remaining 

workers and production from Nettleton, 

Mississippi to Mantachie, Mississippi. 

Based on this finding, the Department 

is amending the certification to include 

workers separated from the Mantachie, 

Mississippi location of PeopLoungers, 

Inc. 

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