FedEx loses attempt to throw out US drug shipping charges

FedEx loses attempt to throw out US drug shipping charges

FedEx Corp will continue to face charges in court that it knowingly helped online pharmacies ship illegal prescription drugs in the United States, after a judge refused to throw out the case on Thursday. The Memphis-based express shipping giant was indicted last summer following a nine-year investigation into the sale of prescription drugs without prescriptions via online websites.

FedEx is facing a possible fine of up to $1.64bn in the criminal case being heard in the Northern District of California, over allegations that it knew it was shipping painkillers, sedatives and sleeping tablets from rogue online pharmacies.

The pharmacies sold drugs to customers who had only filled out a questionnaire about their symptoms, rather than seeing a doctor to get hold of a proper prescription, as US drug laws require.

FedEx pleaded not guilty last July to charges of knowingly shipping such medicines, and continues to state that it could not possibly police all the contents in packages it ships. August saw three counts of money laundering added to the original charges.

On Thursday the company failed to persuade Judge Charles Breyer that its shipping activities fall under an exemption in federal drug laws designed for carriers.

FedEx had argued that under the exemption it could not be held accountable for drugs it carried as part of the “usual course of business”.

The judge described FedEx’s argument as an “impossible battle”, and said if it was allowed the exemption the federal authorities would not be able to pursue rogue carriers who might work with criminals.


Following the hearing, FedEx spokesman Patrick Fitzgerald said his company was innocent of all charges and described the latest ruling as an “attack on the integrity of FedEx”.

However, one positive for FedEx in Thursday was that the judge allowed the company to subpoena Federal and state records, which the carrier claims confirms it was assisting authorities in pursuing online pharmacies for prosecution.

Last February the federal Drug Enforcement Agency were ordered by Judge Breyer to hand over records of its communications with FedEx to the defendant.

FedEx rivals UPS were investigated under similar circumstances but ultimately settled out of court, paying a $40m fine in 2013.

FedEx decided to contest the charges, and prosecutors said fines could reach double the estimate for the revenue they claim FedEx made from the shipment of illegal prescription drugs — estimates were put at $820m for the money made by the carrier in the activity.

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