FOR IMMEDIATE RELEASE                                         CIV
TUESDAY, JULY 2, 1996                              (202) 616-2765
                                               TDD (202) 514-1888


     WASHINGTON, D.C. -- The United States has sued an Oakland,
California, chemical supply company for failing to report to the
federal government thousands of sales of two chemicals commonly
used to make illegal drugs, the Department of Justice announced.
     Assistant Attorney General Frank W. Hunger of the Civil
Division said the civil suit filed Monday in U.S. District Court
in San Francisco charged the company, Chemicals for Research and
Industry, with more than 4,000 violations of the record keeping
and reporting requirements of the Controlled Substances Act, 21
U.S.C.  801, et seq., as amended by the Chemical Diversion and
Trafficking Act of 1988.  
     "The company's repeated violations of the act has hampered
the efforts of the Drug Enforcement Administration to control the
illicit manufacture of methamphetamine and phencyclidine in
California," said Hunger.  "Drug trafficking is a serious crime
problem in the United States and to combat it we need
cooperation, not opposition, to laws Congress has passed to deal
with this issue."   
     The Controlled Substances Act regulates the sale and
distribution of certain "listed chemicals," sometimes called
"precursors" or "essentials," which are commonly used in the
illicit manufacture of controlled substances.  Among other
things, the act requires that persons or companies that sell
threshold amounts of the listed chemicals maintain records of
such sales.  Sellers of such chemicals also are required to
report any sale of a suspicious character to the Drug Enforcement
     According to the suit, CFRI, since July 1, 1991, made more
than 4,000 sales of two chemicals--hydriodic acid and ethyl
ether--which are commonly used in the illicit manufacture of
methamphetamine and phencyclidine (PCP), under circumstances in
which a report of a suspicious sale to DEA was required.  CFRI,
however, reported only 24 sales.  Methamphetamine and PCP are
controlled substances manufactured predominantly in California.   
     The DEA says evidence of the suspicious sale of listed
chemicals includes: sales to individuals not connected to a
business entity; sales to customers who pay by cash, cashier's
check or money order; sales to customers who purchase on a will-
call or pick-up basis; sales to customers who travel an unusually
long distance to purchase listed chemicals; and sales of listed
chemicals made in combination with other chemicals used to
manufacture controlled substances.
     DEA said a review of CFRI's invoices and customer receipts
indicated that most or all of these factors applied to the
company's sales that are the subject of the suit.
     The suit, which also charged CFRI with other violations of
the record keeping and reporting requirements of the Controlled
Substances Act, asked the court for a permanent injunction
ordering  CFRI to make the reports to DEA and civil penalties. 
Under the act, the company is liable to maximum civil penalties
of $25,000 for each violation.