FedEx faces more charges over shipping of illegal prescription drugs

FedEx faces more charges over shipping of illegal prescription drugs

FedEx has had additional charges filed against it by the US federal government in connection to the shipping of illegal prescription drugs from online pharmacies. Charges filed on Thursday accused the Memphis-based express delivery giant of conspiracy to launder money, specifically with regard to the payment for shipping items on behalf of two groups of illegal online pharmacies.

The fresh indictment from a San Francisco grand jury superseded last month’s indictment, which was already threatening FedEx with fines of more than $1.6bn for its role in the distribution of prescription drugs to householders without prescriptions.

FedEx denies the fresh charges as it did the original indictment, and said on Friday that the fresh charges related simply to the way customers paid for its services.

Patrick Fitzgerald, the FedEx senior vice president for marketing and communications, said: “FedEx, of course, requires customers to pay for our services. The collect on delivery service referenced in the indictment is available to all of our millions of FedEx Express customers.”

Indictment

The case follows a nine-year investigation into the use of online pharmacies by householders buying prescription drugs without having prescriptions to do so.

The incidents stretch back to 1998, covering drugs including amphetamine-like diet pills and valium, but charges claim that FedEx was warned about the issue back in 2004.

FedEx has said its policy was to refuse to ship items on behalf of companies listed by US drug enforcement authorities as engaging in illegal activity, but that government officials had not provided such a list.

The shipping giant believes the lawsuit could test the entire concept of privacy within the business of shipping, leveling the carrier legal responsibility for the contents of packages being transported.

Rivals UPS were also investigated by the federal government over the issue of illegal online pharmacies, but settled with the Department of Justice in return for a $40m fine and admissions that its sales staff had sought business from illegal online pharmacies.

“Money laundering”

The money laundering charges relate to incidents from 2000 to 2008, where it is claimed FedEx conducted financial transactions involving the proceeds of unlawful activity. The grand jury asserts that the money the Internet pharmacies paid FedEx for the shipping activities came from the illegal sale of prescription drugs.

Some of the charges related to FedEx collecting payment for the packages from Internet pharmacies from the recipients of the packages through its cash-on-delivery service, claiming FedEx knew it was collecting money for prescription drugs without a prescribing physician being involved.

As with previous indictments, the money laundering charges see FedEx liable, potentially, to pay penalties worth twice what it is claimed the company made from the illegal online pharmacies, $820m.

“Not guilty”

Fitzgerald said FedEx was innocent of all of the charges filed in the case.

“We will plead not guilty,” he said on Friday in a statement to the media. “We will continue to defend against this attack on the integrity of FedEx. We continue to ask for a list of all internet pharmacies engaging in illegal activity so we can turn off shipping for those companies immediately. We have asked for a list, and they have sent us indictments.”

Fitzgerald added that the issue of illegal online pharmacies, and its role in prescription drug abuse, was a “problem that needs to be solved”.

He said FedEx was ready to work with law enforcement to tackle the issue, but insisted: “the responsibility to monitor, regulate or police the activities of doctors and pharmacists lies with licensing, regulatory and law enforcement authorities, not shipping companies.”

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