Aseel, Incorporated, Wholesale Division; Denial of Application

On or about May 8, 2000, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration (DEA), issued an Order to Show Cause (OTSC) by certified mail to Aseel Incorporated, Wholesale Division (Aseel), located in Dallas, Texas, notifying it of an opportunity to show cause as to why the DEA should not deny its application, dated July 7, 1998, for a DEA Certificate of Registration as a distributor of the List I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine, pursuant to 21 U.S.C. 823(h), as being inconsistent with the public interest. The order also notified Aseel that, should no request for hearing be filed within 30 days, the right to hearing would be waived.

The DEA mailed the show cause order on May 11, 2000, to Aseel at the proposed registered location in Dallas, Texas by certified mail. At the same time, a copy of the show cause order was sent by regular first class mail to the Murphy, Texas home address of Aseel's President, Mr. Husham Awadelkariem. The certified letter was returned to DEA by the U.S. Postal Service, marked “moved, left no address.” The copy sent by first class mail was not returned, and presumably was delivered.

Subsequently, on May 25, 2000, a DEA Diversion Investigator in the Dallas, Texas office, received a telephone call from Mr. Awadelkariem, who stated he received the show cause order and inquired whether he could limit his distribution of chemicals to convenience stores without a DEA registration. Since that time, no response has been received from the applicant nor any person purporting to represent the applicant. Therefore, the Administrator of the DEA, finding that (1) thirty days have passed since receipt of the Order to Show Cause, and (2) no request for a hearing having been received, concludes that Aseel is deemed to have waived its right to a hearing. After considering relevant material from the investigative file in this matter, the Administrator now enters his final order without a hearing pursuant to 21 CFR 1301.43(d) and (e) and 1301.46 (1999).

The Administrator finds that on August 3, 1998, an application dated July 7, 1998, was received by the DEA Chemical Operations Registration Section on behalf of Aseel for DEA registration as a distributor of the List I chemicals pseudoephedrine, phenylpropanolamine, and ephedrine. Aseel did not file this application in time to qualify for temporary exemption from registration pursuant to 21 CFR 1310.09. Accordingly, Aseel was not authorized to distribute these chemicals before approval of the application for registration.

The Administrator finds that during the period from February 24, 1998 to June 1, 1998, Aseel sold over 122,767 bottles of List I chemicals to an unregistered distributor when Aseel was not listed to do so, in violation of 21 U.S.C. 843(a)(9).

The Administrator also finds that during the period from May 25, 1998, to July 14, 1998, Aseel sold over 21,748 bottles of List I chemicals when Aseel was not licensed to do so, in violation of 21 U.S.C. 843(a)(9).

The Administrator further finds that during the period from January 1998 to May 1998, Aseel purchased in excess of 164,012 bottles of List I chemicals while not registered with DEA, in violation of 21 USC 822(a)(1), which requires inter alia that every person who distributes a List I chemical “shall obtain annually a registration issued by the Attorney General” and also in violation of the registration requirements set forth at 21 CFR 1309.21(a) and 1310.09.

Finally, the Administrator finds that on November 19, 1999, DEA investigators learned that Aseel was no longer located at the proposed registered location and had been evicted due to non-payment of rent. Aseel subsequently requested that DEA amend Aseel's application to include two prospective storage sites in Dallas. DEA investigators were unable to inspect these sites. The investigation further revealed Aseel no longer has valid state permits to distribute list chemicals.

While Mr. Awadelkariem stated that at one point he had two employees other than himself at Aseel, the Administrator finds that with regard to all the incidents described herein, Mr. Awadelkariem acted as the sole agent for Aseel.

Pursuant to 21 U.S.C. 823(h), the Administrator may deny an application for a DEA Certificate of Registration if he determines that granting the registration would be inconsistent with the public interest. Section 823(h) requires 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.

Like the public interest analysis for practitioners and pharmacies pursuant to subsection (f) of section 823, these factors are to be considered in the disjunctive; the Administrator may rely on any one or combination of factors and may give each factor the weight he deems appropriate in determining whether a registration should be revoked or an application for registration be denied. See, e.g. Energy Outlet, FR 14,269 (DEA 1999). See also Henry J. Schwartz, Jr., M.D., 54 FR 16,422 (DEA 1989).

Regarding factor one, the maintenance of effective controls against the diversion of listed chemicals, the Administrator finds that Aseel's proposed registered address has been vacated, and that Aseel has failed to provide the addresses for the two storage buildings where it allegedly currently conducts business. Therefore, no pre-registration inspection has been performed at Aseel's places of business. The Administrator consequently finds no evidence that Aseel has any controls whatsoever against diversion. Furthermore, and as set forth more fully below, the DEA investigation revealed that Aseel failed to exercise discretion in selling list chemicals, and routinely sold list chemicals to individuals and entities it should have known presented diversion risks.

Regarding factor two, the applicant's compliance with applicable law, the Administrator finds that the evidence shows Aseel significantly violated applicable law by distributing over 164,012 bottles of List I chemicals from February 24, 1998 through July 14, 1998, when not licensed to do so, in violation of 21 U.S.C. 843(a)(9).

Regarding factor three, there is no evidence that Aseel or Mr. Awadelkariem has a record of convictions related to controlled substances or to chemicals controlled under Federal or State law.

Regarding factor four, the applicant's past experience in the distribution of chemicals, the Administrator finds that the DEA investigation revealed that during late 1996, Aseel had distributed 94 cases of a List I chemical to an individual who came from California to Dallas to make the purchase. This individual provided no identification, nor any addresses, business or otherwise. The only way Mr. Awadelkariem could contact this individual was via pager. During the interview with DEA investigators that elicited this information, and after the investigators explained the illicit uses of List I chemicals, presented Mr. Awadelkariem with the DEA “Red Notice”, and explained the applicable laws regarding List I chemicals, Mr. Awadelkariem stated he would no longer purchase this List I chemical product again. In April 1997, DEA investigators from the Dallas Diversion Group contacted Mr. Awadelkariem, who voluntarily agreed to stop conducting business regarding List I chemicals.

Subsequently, DEA investigators received documents indicating sales of List I chemicals totaling 132 cases to Aseel during September 9, 1997, to October 1, 1997. When Aseel's sales and purchases records covering this time period were subpoenaed, DEA investigators discovered through sales records that List I chemicals were being sold by Aseel to two companies and that both recipient companies were suspect, having been linked to the diversion of List I chemicals to clandestine laboratories in California. In addition, one of the recipient companies was owned by the same previously mentioned individual from California to whom Aseel had distributed the 94 cases of List I chemicals during the latter part of 1996, and the other recipient company was effectively controlled by this same individual. The Administrator further finds that Mr. Awadelkariem knew this individual truly owned and controlled these two companies by at least May or June 1997. The subpoenaed records further revealed that Aseel had sold a total of 376 cases of List I chemicals to these two suspect companies during the period from July 1997 to September 1997. Follow up investigation revealed that the addresses provided by these two companies were false. One of the addresses was a used car lot. Interviews with the owner of the car lot revealed that Mr. Awadelkariem would meet with the previously mentioned individual from California at the car lot to consummate business deals for List I chemicals. Shortly after this interview, Mr. Awadelkariem called a DEA investigator and stated that he had received a call from the individual from California, who stated to Mr. Awadelkariem that he was upset with DEA's inquiries, and further that he already had two List I chemical shipments seized by DEA in the past.

In November 1997, Mr. Awadelkariem contacted DEA regarding an alleged suspicious order by an unknown female from California, but the deal was never consummated. Also in November 1997, Mr. Awadelkariem assisted DEA in the seizure of 100 cases of a List I chemical that were eventually forfeited to the United States.

The Administrator further finds that from January 1, 1998, to July 31, 1998, Aseel purchased and distributed over 164,012 bottles of List I chemicals, as determined from subpoenaed documents. Over 100,800 bottles of List I chemicals were shipped by Aseel to a company that had neither a pending nor an approved DEA registration.

Regarding factor five, other factors relevant to and consistent with the public safety, the Administrator finds that, when confronted with his earlier statements that he would stop doing business in List I chemicals, Mr. Awadelkariem stated the he meant “at the time, he was not going to deal in these products because he had no customers for them.” The Administrator finds this lack of candor, especially taken together with Aseel's demonstrated cavalier disregard of law and regulations concerning registration and distribution of List I chemicals, makes questionable Aseel's commitment to the DEA regulatory requirements designed to protect the public from diversion of controlled substances and listed chemicals. See Terrence E. Murphy, 61 FR 2841 (DEA 1996).

Therefore, for the above-stated reasons, the Administrator concludes that it would be inconsistent with the public interest to grant the application of Aseel. The applicant has failed to demonstrate that it has effective controls against the diversion of listed chemicals. Additionally, as described above, the evidence indicates that Aseel has violated applicable law regarding the distribution of List I chemicals on several occasions by distributing List I chemicals while not registered with DEA, and by distributing List I chemicals to companies who also were not registered with DEA. Aseel's lack of effective controls against diversion and its lack of commitment to comply with the laws and regulations designed to prevent diversion, exemplified by its failure to exercise discretion in distributing List I chemicals when it knew or should have known such chemicals were being diverted into other than legitimate channels, present a grave risk of future diversion.

Accordingly, the Administrator of the Drug Enforcement Administration, pursuant to the authority vested in him by 21 U.S.C. 823 and 28 CFR 0.100(b) and 0.104, hereby orders that the application for a DEA Certificate of Registration submitted by Aseel be denied. This order is effective August 6, 2001.

Certificate of Service

This is to certify that the undersigned, on June 25, 2001, caused a copy of the Final Order to be mailed, postage prepaid, registered return receipt to Respondent Husham Awadelkariem, 401 Hawthorne Drive, Murphy, Texas 75094-3598.

Karen C. Grant