FedEx (FDX) Accused of Moving Drugs for Illegal Online Pharmacies

FedEx Corporation (FDX) has been indicted by a federal grand jury in San Francisco for allegedly shipping controlled substances and prescription drugs from illegal online pharmacies to dealers and addicts, according to a 15-count indictment filed in a California Court on Thursday.

According to prosecutors, the package-delivery giant knew as early as 2004 that it was delivering dangerous drugs to anyone who filled out an online questionnaire. The indictment accuses FedEx for allegedly working with two online pharmacy companies — the Chhabra-Smoley Organization and Superior Drugs — from 2000 through 2010 to deliver drugs to people who did not have prescriptions.

“FedEx knew that it was delivering drugs to dealers and addicts,” said a press release from the U.S. Attorney’s Office of the Northern District of California.

FedEx rejected the charges, saying it can’t be responsible for the contents of the 10 million packages it transports daily and that while it stands “ready and willing to support and assist law enforcement…it cannot do the job of law enforcement [itself].”

Among the items FedEx is accused shipping are Ambien, Xanax and Valium, and other drugs to customers with no legitimate medical need and lacking valid prescriptions. The company said it would plead not guilty to all of the charges and accused the Justice Department of threatening to compromise its customers’ privacy.

“FedEx is innocent of the charges brought today,” Patrick Fitzgerald, senior VP of marketing and communications, said in a statement.

“We have repeatedly requested that the government provide us a list of online pharmacies engaging in illegal activity,” he said. “Whenever [the DEA] provides us a list of pharmacies engaging in illegal activity, we will turn off shipping for those companies immediately. So far the government has declined to provide such a list.”

FedEx has been summoned to appear in court July 29 in San Francisco. If found guilty, it faces a potential fine of at least $1.6 billion, along with restitution and forfeiture of profits.

FedEx shares are up 71 cents today, trading at $152.59 as of 12:24 PM ET.

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