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Security firm might not meet e-liquid law's controversial requirements

July 5, 2016

The final e-liquid manufacturer approved under a new, controversial law that restricts the vaping industry is using a security firm that does not appear to meet stringent rules required by the state.

California-based e-liquid manufacturer Cali Co-Packing LLC—approved unanimously by the Indiana Alcohol and Tobacco Commission just one day before the law took effect—submitted along with its application to the state a document certifying that California-based Lock-Up Inc. held the three required credentials.

But the group that issues one of those credentials—the International Door Association and its certifying affiliate, the Institute of Door Education and Accreditation—says there is “no record of this individual or company having any IDEA certification.” And neither Lock-Up nor its owner is listed among certified or member companies by the other two organizations named on the state’s form.

International Door Association Managing Director Todd Thomas said its certifying affiliate has reached out to the security company and its owner, Frank Khonsari, about the issue. The group also considered sending the firm a cease-and-desist letter.

The group "does not permit, under any circumstances, for false claims to be made with regard to its credentials,” Thomas told IBJ.

Cali Co-Packing LLC owner Ivan Loochkartt could not immediately be reached by IBJ.  But Khonsari, reached by IBJ by phone Tuesday morning, said he did not falsify information to the state of Indiana. He said his company was “doing lock work” for Cali Co-Packing but he “did not submit anything” to the state.

“We’ll get to the bottom of it,” Khonsari told IBJ. "I was not aware of any of these things."

The security firm rules have been at the center of the debate surrounding the new vaping laws. Critics, including local and national e-liquid manufacturers, say the laws approved by the Indiana General Assembly this year and last year, which require manufacturers to sign a five-year agreement with a qualified security firm, were written to favor one firm.

That firm, Lafayette-based Mulhaupt’s, appeared to be the only security firm that held the certifications required by the law. In addition to having the IDEA credential—which was for a Rolling Steel Fire Door Technician—a security firm must have someone on staff who is an architectural hardware consultant as certified or accredited by the Door and Hardware Institute and someone who is a certified locksmith by the Associated Locksmiths of America.

Before last week, the ATC had only certified Mulhaupt’s as a security provider. And because no e-liquid manufacturer could apply for a permit without a qualified security firm, Mulhaupt’s essentially gained veto power over whose products could be sold in Indiana after the law took effect July 1.

In fact, the first six firms approved to have their e-liquid products sold in Indiana used Mulhaupt’s as their security firm.

Then last Thursday, the state approved Cali Co-Packing, which listed Lock-Up Inc. as its security firm. Critics said at the time they believed the state approved the application so that it would appear the law was not a monopoly in favor of Mulhaupt’s.

Before the application was approved, ATC Commissioner Dale Grubb said that “if [the application is] truthful, there’s no problem.”

“If it’s untruthful, they’re subject to penalty of perjury,” Grubb said.

The security firm form submitted by Cali Co-Packing lists Khonsari as the security firm staff member holding the required certifications. And it includes an illegible signature with Khonsari’s printed name beneath it.

But Khonsari is not listed as having certifications or accreditations on the websites of the Door and Hardware Institute or the Associated Locksmiths of America. IBJ also tried multiple searches using the company’s name, address, city and a doing-business-as name.

IBJ did not immediately receive a call back from the Associated Locksmiths of America. Laura Frye, director of certification for the Door and Hardware Institute, said she was not able to locate someone by the name of Frank Khonsari in the group's records of certified consultants.

The president-elect of the Door and Hardware Institute is Mulhaupt’s CEO Mike Gibson.

Previously, IBJ reported that Cali Co-Packing was initially working with California-based Bay Alarm Company, but Bay Alarm realized quickly that it did not meet the state’s stringent security firm rules.

Bay Alarm’s office manager said her company was encouraged by Cali Co-Packing to stretch the truth regarding its credentials on the application, but “we would not lie about it.”

Loochkartt denied to IBJ that it asked Bay misrepresent its qualifications and said he quickly found Lock-Up Inc., which he said met the rules.

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