Highlights International — 22 July 2014 — by Adele Ramos
FedEx faces Federal indictment over shipments for online pharmacies

The indictment alleges that the company had grossed US$820 billion in the course of the activities cited in the indictment. The company may also face forfeiture of its assets, believed to be derived from such activities.

The internationally-famous courier, FedEx, the Memphis, Tennessee corporation which also provides services to Belize, is facing a major federal indictment on allegations that it facilitated online pharmacies in packaging and distributing drugs, allegedly in violation of US laws.

Fox Business quotes a FedEx spokesperson as saying: “We want to be clear what’s at stake here: 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. 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.”

The United States District Court for the Northern District of California issued the indictment on Thursday, July 17, 2014, against the FedEx group of companies (FedEx Corporation, FedEx Express Inc., and FedEx Corporate Services Inc.) alleging, among other things, a conspiracy to distribute controlled substances and a conspiracy to distribute mis-branded substances, charges which could, if the company is ruled to be guilty, attract over a billion dollars in penalties.

The indictment alleges that the company had grossed US$820 billion in the course of the activities cited in the indictment. The company may also face forfeiture of its assets, believed to be derived from such activities.

The indictment alleges that since 1998, numerous online pharmacies began offering customers prescription drugs, including controlled substances, via the Internet. While some companies have required purchasers to provide prescriptions, others acted illegally by not doing so. The indictment alleged that one of the distribution companies used by such online pharmacies was FedEx.

 

It goes on to say that on at least six occasions since 2004, the DEA, the FDA and members of Congress and their staff “informed FedEx that illegal Internet pharmacies were using its shipping services to distribute controlled substances and prescription drugs in violation of the Controlled Substances Act (CSA) and the Food Drug and Cosmetic Act (FDCA)…”

The court indictment identified Chhabra-Smoley Organization and Superior Drugs as two of the companies which required online customers to fill out a questionnaire rather than provide a prescription.

The indictment said that in 2003, the DEA shut down RxNetwork and Chhabra-Smoley Organization’s pharmacies and Chhabra was arrested for violating the CSA.

“FedEx learned of these events promptly after they occurred, but FedEx continued to distribute controlled substances and prescription drugs from the Chhabra-Smoley Organization through Internet and fulfillment pharmacies that were controlled by and affiliated with Smoley and other members of the Chhabra-Smoley Organization,” the indictment stated.

It continued to detail further allegations of conspiracy, including allegations that FedEx employees watched representatives of the companies prepare drugs for shipment and helped to package them for distribution, even though they knew that Federal agents had shut these companies down. The indictment covers activities spanning 2000 to 2008.

FedEx’s Patrick Fitzgerald, senior vice president marketing and communications, said in a statement that this is a privacy issue. Fox Business quoted Fitzgerald as saying that, “The privacy of our customers is essential to the core of our business. This privacy is now at risk, based on the charges by the Department of Justice related to the transportation of prescription medications.”

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