FedEx accused of trafficking illegal prescription drugs from online stores by US prosecutors

‘This drug courier should be treated in this court just like your honour would treat every other drug courier,’ says US prosecutor

Zlata Rodionova
Tuesday 14 June 2016 13:00
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The FedEx trial could last until August
The FedEx trial could last until August

FedEx, the US shipping giant, conspired with online pharmacies to ship illegal prescription drugs such as anxiety pills, painkillers and diet pills, prosecutors alleged in a drug trafficking trial on Monday.

John Hemann, the assistant US attorney from the US Drug Enforcement Administration (DEA) said the government will rely on internal emails to prove the company was turning a blind eye to pharmacies that employees referred to as “shady” and “on the run”.

“This drug courier should be treated in this court just like your honour would treat every other drug courier,” Mr Hemann said.

“They faced a choice, and the choice is to stop or go, and time and time again, they went,” he added at the trial in San Francisco.

To win the case and prove FedEx is guilty on charges of conspiracy and money laundering, prosecutors need to demonstrate that the company knew the drugs were illicit and distributed them illegally.

If found guilty, the company could be fined as much as $1.6bn (£1.3bn), but none of the executives will face a prison sentence.

FedEx denies the charges, stating that it helped the US government to crack down on two online drugstores.

It maintained that it only delivered what it believed to be legal drugs from licensed pharmacies registered with the Drug Enforcement Agency.

FedEx at one point had been told by the DEA that one of the pharmacies had shipped drugs to a woman who committed suicide.

Cristina Arguedas, the company’s lawyer, argued that a DEA agent who emailed FedEx in 2006 about the suicide did not want the company to do anything, citing an ongoing investigation of the business.

Since the indictment, FedEx has stated that the firm will gladly stop dealing with illegal businesses if the DEA would just give them a list of illegitimate recipients.

The trial opened two years after prosecutors charged FedEx with being criminally complicit in the transporting of illegal prescription drugs from internet pharmacies.

FedEx employees claim to have raised concerns with management after incidents where its trucks were being stopped on the road by online pharmacy customers asking for pills, indicating that customers did not reside at the delivery address, according to the US attorney's office.

“The advent of internet pharmacies allowed the cheap and easy distribution of massive amounts of illegal prescription drugs to every corner of the United States, while allowing perpetrators to conceal their identities through the anonymity the internet provides,” lawyer Melida Haad said at the time of the indictement.

“This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behaviour,” she added.

The case is unsual because of the government’s decision to bring drug charges against a package delivery company.

“It is incredibly rare for there to be any trial in the prosecution of a corporation. In fact, many large corporations such as FedEx have received deferred or non-prosecuted deals in which they avoid indictment all together,” Brandon Garret, a professor of law at the University of Virginia who studies corporate crime.

In a similar case, FedEx competitor UPS paid up $40m to resolve a similar allegation in 2013.

The FedEx trial could last until August.

Additional reporting by AP

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