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FedEx Indicted By US DOJ For Conspiracy In Trafficking Illegal Drugs

Jul 17 2014, 11:12pm CDT | by , in News | Latest Business News

FedEx Indicted By US DOJ For Conspiracy In Trafficking Illegal Drugs
Photo Credit: Getty Images
 
 

FedEx's been indicted in conspiracy to traffic drugs after ignoring federal warnings for a decade.


International courier service FedEx Corporation, FedEx Express, Inc. and FedEx Corporate Services Inc has been indicted for knowingly distributing illegal drugs. Or so says a federal grand jury in San Francisco.

According to San Francisco CBS affiliate KCBS, the indictment concludes the delivery giant conspired "to traffic in controlled substances and misbranded prescription drugs for its role in distributing controlled substances and prescription drugs for illegal Internet pharmacies."

Since 1998, buying drugs online hasn't been terribly difficult. Instead of going to a local pill mill, where a questionable doctor writes unneeded prescriptions, buyers find illegal pill distributors online without even needing a prescription.


"FedEx Faces Federal Indictment Over Role In Distributing Controlled Substances, Prescription Drugs" points out that questionable "internet pharmacies filled orders based solely on the completion of an online questionnaire, without a physical examination, diagnosis, or face-to-face meeting with a physician." And that's pretty much illegal in both federal and state sectors because the distribution violates prescription drugs and controlled substance laws. The company's federally violating the "Controlled Substances Act (CSA)" and "Food, Drug and Cosmetic Act (FDCA)" by distributing "Phendimetrazine (Schedule III); Ambien, Phentermine, Diazepam, and Alprazolam (Schedule IV)" to a customer without medical need.

For the past decade, the FDA, DEA, and various members of Congress have warned FedEx that egregious violations would result in some form of indictment. FedEx didn't believe them. However, they did cover their assets in some manner.


"In 2004, FedEx established an Online Pharmacy Credit Policy requiring that all online pharmacy shippers be approved by the Credit Department prior to opening a new account." And why do that? "Many Internet pharmacies operated outside federal and state regulations over the sale of controlled drugs and many sites had been shut down by the government without warning, leaving a large balance owed to FedEx." So it's basically a bank account balance reasoning.

And the company knew about the questionable buyers since drivers in Kentucky, Tennessee, and Virginia have expressed safety concerns since 2004 when reports of being stopped in the streets by customers, delivering to unoccupied spaces like lots and schools, threats of violence if not delivered right at that moment. In response to safety concerns, FedEx created a new protocol for some companies packages were "held for pick up at specific stations, rather than delivered to the recipient’s address."


And those procedures helped to establish prior knowledge of questionable clients. The two internet pharmacies that FedEx supposedly delivered drugs for are the Chhabra-Smoley Organization (2000 through 2008) and Superior Drugs (2002 through 2010), each with 8 year working relationships.

Vincent Chhabra was arrested and convicted of illegal distribution in 2003, when Robert Smoley continued the same business and shut down 5 years later. So the carrier company can't claim innocence there. Meanwhile for Superior Drugs, the Department of Justice contends FedEx employes knowingly "filled orders for online pharmacies that sold controlled substances and prescription drugs to consumers without the need for a face-to-face meeting with, or physical examination or laboratory tests by, a physician."


Not exactly good when trying to maintain innocence. But the flying giant is trying.

Senior Vice President of Marketing and Communications at FedEx, Patrick Fitzgerald, issued a statement where he offered some censure to the government's complaints. "We will defend against this attack on the integrity and good name of FedEx and its employees."

And reminding the public that the Memphis, Tenn.-based business has spent 42-year working "with the FBI, the Department of Homeland Security, DEA, and other federal, state and local law enforcement teams around the world to help stop illegal drug activity and bring criminals to justice." Not so cut and dry anymore.


Fitzgerald declares FedEx's intent of good faith as well. Repeatedly requesting the DEA send a list of companies to avoid and stop courier service has fallen on deaf ears. "FedEx transports more than 10 million packages a day. The privacy of our customers is essential to the core of our business." That's a lot of package checking for some poor soul.

Breaking down the chargers further, he plainly says,"the government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day." Doing so would put many companies at risk if the DOJ wins the case. Even trying to help has limitations, given the rigorous laws and procedures outside the scope of the company. "We cannot, however, do the job of law enforcement ourselves.” Not exactly able to draft up a warrant.


 

As the Department of Justice goes after select giant corporations, more sit in the courthouse wondering when their turn will happen. And such fear makes for contentious relationships. Governments have to overnight documents and one of the largest international firms may be a little peeved and refuse service now. Complicated matters for capitalism.

A July 29 summons to the federal court in San Francision has been issued to FedEx.

Source: KCBS

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