FedEx Argues U.S. Law Bars Prosecution for Drug Shipments

FedEx Corp. said it shouldn’t be prosecuted for delivering drugs dispensed through Internet sales without prescription because its actions are protected under federal law.

The company is fighting money-laundering and drug-trafficking charges that it delivered drugs for online pharmacies, supplying pills to customers who were never examined by doctors. FedEx is also accused in an indictment of knowing its actions violated federal and state drug laws.

FedEx said it “cannot reasonably be expected to police whether any of the millions of packages tendered for shipment each day encloses a commodity that might somehow violate one among the thicket of federal, state and local laws.”

To avoid disrupting business, Congress exempted so-called common carriers that transport pharmaceutical shipments from regulatory and enforcement schemes, FedEx said Wednesday in a filing in San Francisco federal court. A hearing on FedEx’s bid to dismiss the case is set for May 13.

Representatives of the Justice Department didn’t immediately respond after regular business hours to a phone message seeking comment on the company’s filing.

Facing similar allegations, United Parcel Service Inc. agreed in 2013 to forfeit $40 million in payments from illicit online pharmacies under a non-prosecution agreement with the U.S. Justice Department. Walgreen Co. and CVS Caremark Corp. have paid a total of more than $150 million in civil fines over claims they sold medications knowing they weren’t for legitimate medical use.

FedEx and its alleged co-conspirators could face a fine of twice the gains from the illegal conduct, alleged to be at least $820 million. A revised indictment filed in August said FedEx, along with others, ran the illicit pharmacies “knowingly and intentionally” and schemed to launder more than $630,000 in shipping payments that were derived from drug sales.

The case is U.S. v. FedEx Corp., 14-cr-00380, U.S. District Court, Northern District of California (San Francisco).

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