Feds Accuse FedEx of Being in the Drug Trafficking Business

FedEx has allegedly made more than $820 million trafficking drugs around America on behalf of dodgy online pharmacies handing out phony prescriptions.

Indicted by a federal grand jury in San Francisco on Thursday, the courier company is accused of illegally transporting Schedule III and IV prescription drugs such as Xanax and Ambien from online pharmacies to customers without prescriptions, or legitimate medical need. FedEx did so knowingly and after it had been warned repeatedly by government agencies and elected officials, according to the indictment.

The charges against FedEx span 10 years of deliveries, beginning in 2000, and involved narcotics from websites operated by Superior Drugs, RX Networks, and USA Prescriptions.

The US Attorney's office declined to comment for this report.

FedEx vigorously denies the charges. Patrick Fitzgerald, senior vice president marketing and communications, issued a statement in which he explained that the company plans to plead not guilty when ordered to appear in federal court later this month. He called the indictment an “attack on the integrity and good name of FedEx and its employees.”

“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,” Fitzgerald wrote. “We are a transportation company — we are not law enforcement. We have no interest in violating the privacy of our customers.”

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Despite the company’s denial of criminal involvement, on six occasions FedEx was told by the DEA, FDA, and members of Congress and their staff that the drug trafficking was going on and to put a stop to it, the indictment said.

Online pharmacies began to crop up beginning in 1998, hawking prescription drugs to anyone with a credit card, including addicts and drug dealers. FedEx, among other shipping companies — UPS was investigated too and ultimately reached a $40 million settlement with the DOJ — knew about the illegal pharmacies, but engaged in a conspiracy to ship the narcotics anyway.

The online pharmacies ignored laws requiring a doctor’s examination or prescription, instead asking their customers to fill out a web form, the indictment alleges. Once an order came in from an online shop, it would be sent to a fulfillment pharmacy, which in turn shipped the drugs via FedEx.

As early as 2004, several FedEx employees in Kentucky, Tennessee, and Virginia warned higher-ups that pharmacy customers were stopping delivery trucks, and threatening the drivers. According to the indictment, one employee even told management that people receiving the drugs were known dealers and users, and “some of the recipients have overdosed and died."

In some instances, delivery addresses were vacant homes where carloads of people were lying in wait for the prescription drugs.

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Unsurprisingly, moving weight via FedEx or other shipping services is a common method of transport. For example, in the Northern California High Intensity Drug Trafficking Area (a federal designation that diverts enforcement funding) package inspections accounted for 448 of the 859 drug seizures in 2013, according to DEA documents obtained by a Freedom of Information Act request.

Drugs seized by the DEA during enforcement are incinerated, according to a spokeswoman.

The drugs named in the indictment — including Phendimetrazine, Ambien, Phentermine, Diazepam, and Alprazolam — are a combination of anxiety medications and stimulants, and are Schedule III and IV narcotics, substances that the feds believe have a low potential for abuse and low risk of addiction.

All of the drugs named in the indictment are widely available on the street, according to sources in law enforcement familiar with narcotics trafficking.

Although drug consumption statistics are notoriously difficult to obtain — most people who use illegal narcotics don’t want to talk about it — the American consumption is off the charts. During a single four-hour nationwide prescription drug take-back day in April, where law enforcement anonymously takes and disposes of drugs, the public handed over 390 tons of pills.

If FedEx is found guilty it faces a possible penalty of double the $820 million it is said to have made from these shipments, or a fine of $1 to $2.5 million. The sentencing also includes the possibility of five years of probation.

Photo via Flickr