DRUG DISTRIBUTION COMPANY, 2 EXECUTIVES PLEAD GUILTY

Courts: The Men Face Up To Four Years In Prison And Fines Of $250,000 For
Selling A Chemical Found In 35 Methamphetamine Labs Nationwide.

A major U.S. distributor of pseudoephedrine--a chemical that can be
used to make illicit methamphetamine--has pleaded guilty to federal
drug charges in Los Angeles, prosecutors said Tuesday.

Spectrum International Inc. of Billings, Mont., will pay $2 million in
fines and penalties under the terms of a plea agreement negotiated
with prosecutors.

Charles Gene Eisele, 43, the company's president, and his brother,
Richard Dean Eisele, 42, vice president, also pleaded guilty Monday.
They face up to four years in prison and fines of $250,000. The
company and the two brothers were charged with distributing a chemical
while having reason to believe it would be used to make a controlled
substance. Pseudoephedrine is popularly used in over-the-counter
medications to relieve symptoms of the common cold and hay fever.

The U.S. attorney's office said pseudoephedrine distributed by
Spectrum was found in 35 methamphetamine labs across the nation.

>From June 1996 to January 1998, prosecutors said, the company sold
about 1.1 billion pseudoephedrine tablets, mostly to companies and
individuals in California, the center of illegal methamphetamine
production in the nation.

"We're fairly confident that most of those pills wound up in the wrong
hands," said Assistant U.S. Atty. R. Michael Bullotta, co-prosecutor
in the case.

Bullotta said Spectrum's actions were particularly egregious because
it continued to sell large quantities of pseudoephedrine to one
customer after receiving a subpoena indicating that the client was
under investigation.

"They had every reason to know better," Bullotta said.

Defense attorney Donald Re, who represented Charles Eisele, disagreed.
He denied that the brothers knew the shipments were destined for meth
labs.

"If the DEA had come to them and said explicitly that some customer
was diverting their pseudoephedrine for illegal use, they would have
dropped that customer, but they were never told," he said. "As the
plea agreement makes clear, this is not a case where the defendants
had actual knowledge of a crime. It only says they should have known."

Re said the Eiseles are no longer distributing pharmaceutical
drugs.

The case against them was an outgrowth of a four-year investigation by
the Drug Enforcement Administration and the Internal Revenue Service.
To date, 34 people have been charged with crimes, 27 of whom have been
convicted. The others are either awaiting trial or being sought.

The federal government has tried for years to choke off the supply of
chemicals to meth lab operators. In 1988, authorities began regulating
bulk sales of ephedrine and pseudoephedrine because they were being
used as precursors in the production of methamphetamine. Under
pressure from pharmaceutical companies, however, an exemption was
created for over-the-counter products containing those chemicals.

According to the DEA, meth labs wasted no time and began acquiring
ephedrine and pseudoephedrine from rogue pharmaceutical distributors.
In 1993, Congress plugged the loophole for ephedrine, but
pseudoephedrine remained largely unregulated.