FedEx finds itself in the unusual position of facing drug trafficking charges, after a San Francisco federal grand jury indicted the firm. The jury accused the company of conspiring to provide prescription drugs from illegal online pharmacies.
The indictment noted that FedEx was aware for 10 years that illegal online pharmacies used its services. FedEX has taken steps to protect its profits from these businesses by establishing special credit standards for Internet pharmacies, in case those businesses were shut down.
FedEx ignored over 10 years of warnings from the DEA and FDA, according to the indictment.
The Department of Justice blasted FedEx in a press release, noting that the company knew it was delivering illegal drugs to addicts and drug dealers.
Federal prosecutors have sent a summons to FedEx to appear in San Francisco for a hearing in late July.
FedEx officers have not been charged with a crime, and a VP for the company noted that FedEx is innocent of the crimes. He noted that FedEx has worked with the federal government for years. to stop any illegal drugs from being shipped.
FedEx noted that the company has asked the federal government to provide them with a list of online pharmacies that were doing anything illegal. Any time the DEA gives the firm a list of illegal pharmacies, FedEx stops delivering for that company. But FedEx stated that the US government has not provided that type of list yet.
The company stated that it is not reasonable to expect FedEx to be able to know whether the contents of the 10 million packages it delivers every day are legal or not.
Some of the couriers for the company in KY, TN and VA have told managers that they were worried about where they had to deliver some packages. Some of the delivery addresses included vacant homes and schools where a large group of people would be waiting for the drugs.
These illegal companies first started to appear online in 1998, and many patients just need to fill out a simple questionnaire to get a prescription online.
Federal prosecutors stated that DEA and FDA officials have warned the company several times that illegal pharmacies were shipping drugs by FedEx.
The federal indictment states that the company knew it was shipping drugs from two illegal online pharmacies. One of those companies was shut down in 2003, and the founder of the company was arrested for violations of the Controlled Substances Act.
The federal government criticized the flexible credit policy used by FedEx for these illegal companies. An internal memo from 2006 stated that many of these online pharmacies operate outside state and federal laws regarding controlled drugs. It noted that the drugs may be counterfeit or diluted, and several of the firms may be shut down by the government and leave FedEx with a huge unpaid balance.
If FedEx is convicted, it is not clear what the sentence will be. No one has been personally charged with drug trafficking. What could happen is that FedEx could receive a large fine and plenty of negative publicity. This could indicate the company may reach a settlement with the government before the case goes to trial.