A San Francisco federal jury has indicted FedEx Corp. on charges that it helped illegal online pharmacies ship Xanax, Valium, Ambien and other drugs without prescriptions despite repeated warnings from regulators. This practice by FedEx allowed it to gross at least $820 million over a decade according to reports. The indictment charged the shipping company on 15 counts relating to trafficking controlled substances and misbranded drugs. FedEx could be forced to return its gross proceeds and be fined up to twice that amount, according to prosecutors.
Prosecutors said FedEx dealt with two major online pharmacies, the Chhabra-Smoley Organization and Superior Drugs, between 2000 and 2010 and knowingly aided illegal shipments. FedEx was told as early as 2004 by law enforcement, members of Congress and the U.S. Food and Drug Administration (FDA) that the pharmacies were using the shipping giant to violate federal and state law.
It appears FedEx knew exactly what it was doing. The indictment said that FedEx set up a separate credit check system just for online pharmacies after it was repeatedly unable to collect unpaid bills from pharmacies that were shut down by law enforcement. Prosecutors said, because of the constant risk that the pharmacies would go out of business, FedEx made sure pharmacy accounts were not tied to specific salespeople in order to avoid harming sales targets. The indictment said further:
FedEx departed from its usual business practices to participate in and facilitate [the organizations’] unlawful sale of controlled substances.
Another company, United Parcel Service Inc. (UPS) agreed last year to forfeit $40 million it had received from illegal online pharmacies as part of a deal to avoid criminal charges. UPS also said it would bolster its compliance policy to avoid shipping packages for illegal online pharmacies.
FedEx was to appear in court on July 29. It will be interesting to see what happened. Not only does it appear that the company violated the law, but it allowed the online pharmacies to put folks at risk for adverse health events since it appears no doctors were involved. I don’t recommend buying drugs from online pharmacies for that very reason.
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