July 18, 2014
Indictment Accuses FedEx Of Knowingly Transporting Drugs For Illegal Online Pharmacies
redOrbit Staff & Wire Reports - Your Universe Online
A federal grand jury in San Francisco has indicted FedEx on charges of drug trafficking, accusing the shipping company of knowingly delivering prescription drugs for illegal online pharmacies for more than a decade.
According to USA Today’s Donna Leinwand Leger, the indictment claims that the Memphis, Tennessee-based courier service willfully ignored multiple warnings from the US Congress, the Drug Enforcement Administration (DEA), the Food and Drug Administration (FDA) and other federal agencies.
FedEx allegedly departed from regular business practices to allow the shipments to continue, and is accused of being aware that two of the largest illegal online pharmacies – the Chhabra-Smoley Organization and Superior Drugs – used the service to ship products between 2000 and 2010. In addition, Time.com reporter Eliana Dockterman said that top FedEx brass were aware of and approved of such practices.
Furthermore, the court claims FedEx even established special credit policies that would prevent it from losing money if the drug-selling websites were shut down by law enforcement. No individual FedEx officials were charged, but prosecutors have summoned the company to appear in San Francisco for a July 29 hearing.
In a statement released by the US Attorney’s Office for the Northern District of California on Thursday, FedEx knew as early as 2004 that it was delivering the drugs, as employees in Kentucky, Tennessee and Virginia expressed concerns to senior management that their trucks were being stopped by online pharmacy customers demanding packages, as well as people threatening them if they did not hand over packages to those demanding them.
The employees also reported delivering pills to parking lots, schools or vacant homes, where they were met by several vehicles full of individuals waiting for such deliveries. In response to those concerns, the courier reportedly instituted a procedure whereby Internet pharmacy packages originating from “problematic shippers” were held for pick up at specific stations instead of being delivered to the recipient’s address.
Patrick Fitzgerald, FedEx’s senior vice president of marketing and communications, denied the charges, telling reporters in a statement that the company was “innocent” and would “defend against this attack on the integrity and good name of FedEx and its employees.”
In addition, according to Justin Moyer of The Washington Post, Fitzgerald emphasized that it was not the company’s job to know what was being shipped in its packages: “We are a transportation company – we are not law enforcement.”
That defense might not work, as similar allegations were brought against FedEx rival UPS last year, forcing that shipping company to settle with the government for a sum of $40 million, according to Zach Honig of Engadget.
FedEx plans to plead not guilty to the charges and insists they “stand ready and willing to support and assist law enforcement.” If found guilty, it would have to surrender more than $820 million it allegedly earned for transporting drugs such as oxycodone and hydrocodone for the illegal online distributors, Honing added.
“Illegal Internet pharmacies rely on illicit Internet shipping and distribution practices. Without intermediaries, the online pharmacies that sell counterfeit and other illegal drugs are limited in the harm they can do to consumers,” said Philip J. Walsky, Acting Director of the FDA’s Office of Criminal Investigations. “The FDA is hopeful that today’s action will continue to reinforce the message that the public’s health takes priority over a company’s profits.”