$420,000 in Penalties for Chemical Manufacturer That Repeatedly and Improperly Exported “List 1” Chemicals
APR 06 - (New York) — Wilbert L. Plummer, the Acting Special Agent-in-Charge of the New York Field Division of the DEA and Preet Bharara, the United States Attorney for the Southern District of New York announced today that the United States has filed and simultaneously settled a civil lawsuit against FLEURCHEM, INC., (“FLEURCHEM”) a chemical manufacturing company in Middletown, New York, for repeated violations of the Controlled Substances Act. The Government’s Complaint alleges that FLEURCHEM manufactured chemicals that can be used to manufacture illegal drugs and repeatedly exported them to destinations in foreign countries without notifying the DEA, as required by the Controlled Substances Act.
In the settlement agreement, FLEURCHEM admitted that it exported these “List 1” chemicals without notifying the DEA on “dozens” of occasions between June 2008 and May 2011. FLUERCHEM also admitted that the violations were wrongful and agreed to pay $420,000 in civil penalties to the United States. It is one of the highest penalties ever obtained by the United States for violations of the Controlled Substances Act by a chemical exporter. FLUERCHEM will also implement enhanced compliance procedures, including the retention of a permanent Compliance Manager, and the creation of a permanent Compliance Committee. The settlement agreement, in the form of a consent order, was approved today in White Plains federal court by United States District Judge Edgardo Ramos.
Acting DEA Special Agent-in-Charge Wilbert L. Plummer said: “These charges demonstrate the DEA’s mission to identify those who violate the Controlled Substance Act and to uphold the standards of conduct to which all chemical exporters are legally bound.”
Manhattan U.S. Attorney Preet Bharara stated: “U.S. companies that are licensed to engage in the sale and exportation of dangerous chemicals have an important responsibility to track those sales for the federal government. These reporting requirements are a vital tool in our nation’s fight to keep listed, restricted chemicals out of the hands of drug dealers, drug cartels, and narco-terrorists. Today’s settlement puts companies that fail to report the sale or export of these chemicals on notice that they will be penalized for their conduct.”
According to the allegations in the Complaint and the Consent Order:
The federal Controlled Substances Act establishes mandatory reporting requirements for List I chemicals, which have legitimate uses as components in a variety of flavorings or aromas in household products (such as in carbonated cola beverages), but can also be used to manufacture illegal drugs like methamphetamines. To combat the potential for abuse of List I chemicals, the Controlled Substances Act mandates strict adherence to a number of requirements by any person or entity that exports these chemicals, including strict reporting requirements to the Attorney General of the United States and the DEA.
The Complaint alleges that, on dozens of occasions between June 1, 2008 and May 19, 2011, FLEURCHEM failed to report to the Attorney General the export of List I chemicals – such as Methyl Anthranilic Acid, Benzaldehyde, Phenylacetic Acid, Gamma-Butyrolactone, and Piperonal – to destinations in foreign countries including Israel, Chile, Australia, Canada, Germany, France, Singapore, Switzerland, Greece, and the Netherlands.
In the settlement, FLEURCHEM agreed to pay $420,000 in civil penalties to the United States. FLEURCHEM also admitted the wrongfulness of its actions, and agreed to hire a Compliance Manager within 30 days and to establish a Compliance Committee. Additionally, FLERUCHEM will be subject to certain enhanced reporting requirements, and will allow DEA access to its premises during regular business hours without the need to obtain a warrant for a period of two years. Mr. Bharara praised DEA for its invaluable work on this case.
The case is being handled by the Office’s Civil Division. Assistant U.S. Attorney Louis A. Pellegrino is in charge of the case.