FedEx Corporation (NYSE:FDX) is facing criminal charges on allegations that it is shipping controlled and prescription drugs from illegal online pharmacies to consumers despite repeated warnings from U.S. drug enforcement officials, according to a court filing.
Details of the indictment
A federal grand jury in San Francisco indicted FedEx Corporation (NYSE:FDX) with conspiracy to distribute controlled substances and misbranded prescription drugs from illegal internet pharmacies—the Chhabra-Smoley Organization and Superior Drugs
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The indictment indicated that FedEx Corporation (NYSE:FDX) knowingly and intentionally conspired with Chhabra-Smoley Organization from 2000 through 2008 and Superior Drugs from 2002 to 2010.
Some of the controlled and prescription drugs distributed by the two illegal online pharmacies include Phendimetrazine (Schedule III); Ambien, Phentermine, Diazepam, and Alprazolam (Schedule IV). These medicines have been sold and distributed through FedEx Corporation (NYSE:FDX) to customers without a valid prescription from doctors.
FedEx Corporation (NYSE:FDX) allegedly gained at least $820 million from the conspiracy, according to the court filing. The shipping company could face a penalty twice that amount.
The indictment emphasized that authorities warned FedEx Corporation (NYSE:FDX) “on no less than six different occasions” that its services were used by illegal online pharmacies to distribute prescription drugs.
FDA and DEA led the investigation
The U.S. Food and Drug Administration (FDA) and Drug Enforcement Administration (DEA led the investigation and worked closely with the U.S. Attorney’s Office to prevent the illegal online pharmacies from distributing controlled and prescription drugs.
According to the statement of the FDA, “Illegal internet pharmacies rely on overnight couriers to facilitate the illegal distribution of prescription drugs. The FDA is hopeful that today’s actions will continue to reinforce the message that the public’s health takes priority over the company’s profits.”
FedEx to plead not guilty
FedEx Corporation (NYSE:DX) denied the accusations that it conspired with the two illegal online pharmacies to distribute controlled and prescription drugs. Its senior vice president, Patrick Fitgerald said the company is innocent and will plead not guilty.
“FedEx is innocent of the charges brought today by the Department of Justice. We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees,” said Fitzgerald.
He added that FedEx Corporation (NYSE:FDX) repeatedly requested a list of online pharmacies that are engaged in illegal activity, but the government declined to provide such list.
FedEx says customers privacy now at risk
Fitzgerald said FedEx Corporation (NYSE:FDX) transports more than 10 million packages a day, and the privacy of its customers is essential to its core business. According to him, the customers’ privacy is now at risk because of the charges related to the shipping of prescription drugs.
Furthermore, Fitzgerald emphasized, “We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves.”