CHEMICAL SUPPLIER ADMITS TO FELONIES AIDING METH LABS

Placentia Company's Three Owners Agree To Plea Bargains On Charges
Linked To More Than 100 Drug Makers. Firm's Assets Will Be Sold To
Pay $100,000 Fine.

An Orange County chemical supply company linked to more than 100
illegal drug labs in Southern California, Arizona and Nevada has
pleaded guilty to felony charges, and a judge authorized the sale of
its assets to pay a $100,000 fine, federal prosecutors said Tuesday.

ChemLab Supplies Inc. in Placentia, through its attorney, pleaded
guilty Monday to knowingly distributing chemicals and glassware for
manufacturing methamphetamine. Its three owners have agreed to plea
bargains that admit their roles in illegally supplying the products,
prosecutors said.

ChemLab was a major supplier of illicit chemicals and equipment to
small and large methamphetamine labs for more than a decade, and its
bust is a major blow to meth producers across Southern California,
federal and state authorities said.

Indeed, they said, after ChemLab was raided last August, state
narcotics officials reported a 60% decline in the number of
methamphetamine labs found in the county.

"We can take down labs all day long all over the place, but it makes
a major impact when we take down a place like this," said Walt Allen,
who heads the Orange County branch of the state Bureau of Narcotics
Enforcement.

"This outfit was just a known shopping center for people who wanted
to manufacture methamphetamines," he said.

Prosecutors on Tuesday filed plea bargains in which the company's
three owners each agree to plead guilty to one drug felony charge.

David Vander Hakes, 44, of Corona, is expected to be sentenced later
to a 15-month term, said Assistant U.S. Atty. Gail J. Standish.
Matthew William Insley, 41, of Huntington Beach, who ran ChemLab's
Hawthorne store, is expected to get 10 months in custody. There was
no stipulated sentence for Kevin Scott Miller, 36, of Anaheim. Hakes
and Insley each own 40% of the company, and Miller owns the rest.

Authorities said the three-year probe was triggered after
investigators noticed that the company's drugs kept surfacing at meth
labs raided by police. The company admitted that more than a quarter
of its 1999 revenue--an amount exceeding $400,000--resulted from the
illegal sale of chemicals and supplies. In the first six months last
year, more than 40% of its revenue came from illegal sales.

ChemLab is among several businesses that have come under federal
scrutiny recently for suspicious sales of so-called precursor
substances used to manufacture methamphetamine, said U.S. attorney
spokesman Thom Mrozek in Los Angeles.

"These are people who sell products that have legitimate uses: Freon,
iodine, [the decongestant] pseudoephedrine," Mrozek said. "By selling
large quantities of these substances, they just make it easy for
[drug manufacturers] to circumvent the law."

Southern California has long been known as a hotbed for manufacturers
of methamphetamine. Although the Inland Empire is considered to be
the center of the illicit trade, hundreds of labs have been found
throughout the region, Mrozek said.

Federal, state and local officials, working in a task force, have
been helped by a 1998 law that requires merchants to log detailed
information, including driver and vehicle license numbers, on all
buyers of products needed for meth manufacturing.

Last year, an Anza pharmacist was arrested on charges of illicit
sales of pseudoephedrine. In 1999, the owner of a Torrance plastics
company, arrested with 17 others, was charged with aiding and
abetting the manufacture of methamphetamine for supplying large
amounts of Freon to meth manufacturers.

Three women at a Lancaster feed store are awaiting trial on charges
they failed to record sales of iodine crystals properly. The store
had been selling crystals for 40 years to treat horses' ailing hoofs.
Authorities said ChemLab sold drug manufacturers red phosphorus,
iodine and specialized glassware--all key components in manufacturing
methamphetamine, the stimulant also known as speed, crank and crystal
meth.

In their plea agreements, the owners acknowledged coaching employees
on how to conduct sales of the substances and fill out paperwork to
make any illegal sales look legitimate. Federal authorities, tipped
to the case by Brea police, arranged for electronic surveillance that
helped show the company knew the sales were illicit, Standish said.

"They were one of the rogue companies that skates around the law,"
she said. "They didn't sell 20 pounds of red phosphorus out the side
door in the middle of the night. This was a harder case--a case of
them turning a blind eye."