[Federal Register Volume 64, Number 56 (Wednesday, March 24, 1999)]
[Notices]
[Pages 14267-14269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7122]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Drug Enforcement Administration
[Docket No. 97-36]
Anthony D. Funches; Grant of Registration With Condition
On July 31, 1997, the Deputy Assistant Administrator, Office of
Diversion Control, Drug Enforcement Administration (DEA) issued an
Order to Show Cause to Anthony Delano Funches (Respondent) of Denver,
Colorado, notifying him of an opportunity to show cause as to why DEA
should not deny his application for registration as a retail
distributor of list I chemicals pursuant to 21 U.S.C. 823(h), for
reason that his registration would be inconsistent with the public
interest.
Respondent filed a request for a hearing on the issues raised by
the Order to Show Cause. Following prehearing procedures, a hearing was
held in Denver, Colorado on April 8, 1998, before Administrative Law
Judge Mary Ellen Bittner. At the hearing both parties called witnesses
to testify and introduced documentary evidence. After the hearing,
counsel for the Government submitted proposed findings of fact,
conclusions of law and argument. On September 9, 1998, Judge Bittner
issued her Opinion and Recommended Ruling, Findings of Fact,
Conclusions of Law and Decision, recommending that Respondent's
application for registration be granted. Neither party filed exceptions
to her recommended decision, and on October 13, 1998, Judge Bittner
transmitted the record of these proceedings to the then-Acting Deputy
Administrator.
The Deputy Administrator has considered the record in its entirety,
and pursuant to 21 CFR 1316.67, hereby issues his final order based
upon findings of fact and conclusions of law as hereinafter set forth.
The Deputy Administrator adopts, except as specifically noted, the
Opinion and Recommended Ruling, Findings of Fact, Conclusions of Law
and Decision of the Administrative Law Judge, and his adoption is in no
manner diminished by any recitation of facts, issues and conclusions
herein, or of any failure to mention a matter of fact or law.
The Deputy Administrator finds that in 1991 Respondent moved back
to Colorado and renewed his acquaintance with a married couple who
owned and operated a store called ``The Connection'' located at 4811
East Colfax Avenue, Denver, Colorado. Approximately three years later,
the husband died and his widow inherited The Connection. Respondent
assisted her in the management of the business and at some print, they
married. They eventually separated and his wife abandoned the store at
4811 East Colfax. Respondent obtained a retail business license and
registered the store under the trade name ``The Other Connection.'' The
Other Connection sells ephedrine products, as well as items such as
sunglasses and jewelry, and also provides services such as fax machines
and notary.
On August 25, 1995, Respondent applied for a DEA registration as a
retail distributor of ephedrine and pseudoephedrine \1\ and listed 4811
East Colfax as the proposed registered location. However in light of
his divorce settlement, Respondent ultimately moved the business to
4815 East Colfax.\2\ In his application, Respondent answered ``no'' to
the question which asks, ``Has the applicant ever been convicted of a
crime in connection with controlled substances/listed chemicals under
State or Federal law, or ever surrendered or had a Federal registration
revoked, suspended, restricted or denied, or ever had a State
professional license or registration revoked, suspended, denied,
restricted or placed on probation?''
---------------------------------------------------------------------------
\1\ The parties stipulated that a DEA registration is not
required for the retail distribution of pseudoephedrine, and
therefore the only chemical relevant to this application is
ephedrine.
\2\ The Order to Show Cause listed the proposed registered
location as 4811 East Colfax Avenue, however by letter dated July
16, 1996, Respondent submitted a request to modify the address on
his application to reflect 4815 East Colfax Avenue. Since
Respondent's request to modify his application was submitted prior
to the issuance of the Order to Show Clause in this matter,
Respondent was not required to obtain permission from DEA to modify
his application. See 21 CFR 1309.36(a).
---------------------------------------------------------------------------
On February 6, 1996, a DEA investigator visited The Other
Connection as part of a preregistration investigation. The investigator
testified at the hearing in this matter that his inspection revealed
that Respondent's recordkeeping and security procedures were adequate
and that Respondent's transactions were ``well documented.'' In
addition to the on-site visit, the investigator conducted a criminal
history of Respondent which revealed that on June 1, 1978, Respondent
and a co-defendant were charged in the District Court in the County of
Denver, Colorado, with Conspiracy to Sell Narcotic Drugs, Sale of
Narcotic Drugs, and Possession of a Dangerous Drug in violation of
Colorado law. On January 17, 1979, Respondent pled guilty to the
misdemeanor charge of possession of marijuana and the other counts
against him were dismissed. Respondent was sentenced to 12 months
imprisonment with the sentence suspended provided that he not be
``convicted of any state or Federal law, city ordinance other than
traffic'' and was fined $250.00.
The investigator testified that further investigation of
Respondent's conviction revealed a report of a DEA task force officer
which stated that in August 1977, Respondent and his co-defendant made
arrangements to sell 56.65 grams of cocaine for $4,000.00 to the
undercover officer. According to the report, the three met at a
designated location; the undercover officer presented the other two
with $4,000.00 in exchange for a package; Respondent opened the package
so that the undercover officer could sample its contents; and
respondent requested that he and the co-defendant be allowed to keep
the remnants of the sample for their own use. According to a laboratory
analysis report the substance was cocaine and was purchased by the
undercover officer from the co-defendant on August 4, 1977.
Respondent's name is not mentioned anywhere in this laboratory analysis
report.
Respondent admitted at the hearing in this matter that he was
present during the alleged cocaine transaction in 1977, but denied
handling either the money or the package of cocaine. He explained that
at the time of the transaction he was a professional bodyguard and was
present during the transaction to provide protection for the co-
defendant. Regarding the marijuana, Respondent conceded that although
he cannot recall specifically having marijuana in his possession on
that occasion over 20 years ago, it was possible since ``[i]n those
years, I was known to have a drink here and there, or a smoke.''
However, Respondent testified that he no longer uses illegal drugs.
In explaining why he indicated on his DEA application that he had
never been convicted of a crime related to controlled substances,
Respondent testified that he did not believe that he still had a
marijuana conviction on his record. It was his understanding that the
misdemeanor marijuana charge to which he pled guilty would be
``erased'' from his record after one year. Respondent testified that in
the 20 years since his conviction, he has undergone the screening
processes required to
[[Page 14268]]
become a notary public, to redeem weapons out of pawn, and to purchase
property, and at no time has he ever been informed that there is a
marijuana conviction on his record.
In arguing against Respondent's registration, the Government
concedes that Respondent maintains good records, however it contends
that Respondent's 1977 misdemeanor conviction, his failure to report
this conviction on his application for registration, and his failure to
take responsibility for his role in the alleged 1977 sale of cocaine to
an undercover officer indicate that Respondent ``does not possess a
sense of the high responsibilities required of a registrant.''
Respondent argues that he did not intend to mislead DEA on his
application, that he believed that he no longer had a conviction on his
record, that whatever happened over 20 years ago is not an accurate
measure of his trustworthiness today, and that DEA's own inspection of
his store revealed that he is responsible in his security and
recordkeeping procedures.
Pursuant to 21 U.S.C. 823(h), the Deputy 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 that the following factors be
considered in determining the public interest:
(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;
(5) such other factors as are relevant to and consistent with the
public health and safety. Like with the factors found in 21 U.S.C.
823(f) relating to the registration of practitioners to handle
controlled substances, these factors are to be considered in the
disjunctive; the Deputy Administrator may properly rely on any one or a
combination of these factors, and give each factor the weight he deems
appropriate in determining whether an application should be denied. See
Henry J. Schwarz, Jr., M.D., 54 F.R. 16,422 (1989).
Regarding factor one, the DEA investigator who conducted the
preregistration inspection testified that Respondent's security
procedures at his store are adequate and that transactions are well
documented. The Government conceded that Respondent is a ``scrupulous
recordkeeper as well as attentive to proper controls.''
As to factor two, the Government alleged that Respondent
participated in the sale of cocaine to an undercover officer in 1977.
Judge Bittner found Respondent's testimony credible that he was
present, but did not participate in the transaction. However, the
Deputy Administrator finds the DEA task force officer's report
compelling since it was written at the time of the cocaine transaction.
The report indicates that Respondent was not only present, but
participated in the transaction by opening the package so the officer
could sample its contents and by requesting that he and his co-
defendant be allowed to keep the remnants of the sample for their own
use. Therefore unlike Judge Bittner, the Deputy Administrator concludes
that Respondent was involved in the unlawful distribution of cocaine in
violation of 21 U.S.C. 841(a)(1). The Deputy Administrator also finds
that Respondent violated Colorado law by being in possession of
marijuana at the time of his arrest in 1977.
The Government also alleged that Respondent violated 21 U.S.C.
843(a)(4)(A) by furnishing false material information in his
application for registration since he indicated that he had never been
convicted of a crime related to controlled substances. Respondent
testified that he did not intend to mislead DEA because he honestly
believed that his 1979 misdemeanor marijuana possession conviction no
longer remained on his record. Judge Bittner found Respondent's
testimony to be credible. The Deputy Administrator agrees with Judge
Bittner that Respondent did not violate 21 U.S.C. 843(a)(4)(A) because
he did not intentionally furnish false information on his application
for registration.
Regarding factor three, it is undisputed that Respondent was
convicted of one count of misdemeanor possession of marijuana on
January 17, 1979, in the District Court in the County of Denver,
Colorado.
As to factor four, the record shows that Respondent has been
involved in the distribution of chemicals since at least 1994, and
there is no evidence of any wrongdoing. In fact according to the DEA
investigator, Respondent's recordkeeping and security are adequate.
Finally regarding factor five, Judge Bittner noted that it is
appropriate to consider the grounds for revocation of a registration
found in 21 U.S.C. 824(a), when determining whether to deny an
application for registration. DEA has consistently held that ``the law
would not require an agency to indulge in the useless act of granting a
license on one day only to withdraw it on the next,'' and therefore the
bases for revocation found in 21 U.S.C. 824(a) are properly considered
under 21 U.S.C. 823(f)(5). See Alan R. Schankman, M.D., F.R. 45,260
(1998); Kuen H. Chen, M.D., 58 F.R. 65,401 (1993)). Judge Bittner
concluded that because of the similar statutory construction and
legislative intent between 21 U.S.C. 823(f) and 823(h), the grounds for
revocation found in 21 U.S.C. 824(a) are likewise incorporated into 21
U.S.C. 823(h)(5). Therefore, the Deputy Administrator agrees with Judge
Bittner that it is appropriate to consider whether Respondent's
application for DEA registration should be denied pursuant to 21 U.S.C.
823(h)(5) and 824(a)(1) on grounds that he materially falsified his
application.
There is no dispute that Respondent materially falsified his
application by indicating that he had never been convicted of a crime
related to controlled substances. However according to Respondent, he
believed that he no longer had a conviction on his record, and that
nothing has occurred in the 20 years since the conviction to alert him
otherwise. As Judge Bittner noted, a registration may still be revoked
based upon an unintentional falsification of an application, but a lack
of intent to deceive is a relevant consideration in determining whether
a registrant or applicant should possess a DEA registration. See Samuel
Arnold, D.D.S., 63 F.R. 8687 (1998); Martha Hernandez, M.D., 62 F.R.
61,145 (1997).
Here, Respondent's falsification was not based on intentional or
negligent behavior. Instead, Respondent believed that he no longer had
a conviction on his record and therefore he believed that he was
answering the question correctly when he filled out the application for
registration. The Deputy Administrator agrees with Judge Bittner that
under these circumstances it would be too sever a sanction to deny
Respondent's application for registration based upon his falsification
of his application.
Judge Bittner recommended that Respondent should be issued a DEA
Certification of Registration. While there is no dispute that
Respondent operated his business today in a responsible manner, the
Deputy Administrator is extremely troubled by Respondent's failure to
acknowledge the nature of his involvement in the 1977 cocaine
[[Page 14269]]
transaction. The Deputy Administrator agrees that it would not be in
the public interest to deny Respondent's application. However, given
Respondent's failure to accept responsibility for his past behavior,
Respondent should be subject to greater scrutiny. Therefore, the Deputy
Administrator concludes that for three years after issuance of the DEA
Certification of Registration, Respondent shall permit the inspection
of his premises without an administrative inspection warrant or other
means of entry.
Accordingly, the Deputy Administrator of the Drug Enforcement
Administration, pursuant to the authority vested in him by 21 U.S.C.
823 and 824 and 28 CFR 0.100(b) and 0.104, hereby orders that the
application for registration as a retail distributor of ephedrine,
submitted by Anthony Delano Funches, be, and it hereby is, granted
subject to the above described condition. This order is effective upon
issuance of the DEA Certification of Registration, but not later than
April 23, 1999.
Dated: March 17, 1999.
Donnie R. Marshall,
Deputy Administrator.
[FR Doc. 99-7122 Filed 3-23-99; 8:45 am]
BILLING CODE 4410-09-M
