Feds Put FedEx on Trial for Illegal Drug Delivery

FedEx is on trial in federal court in California for delivering drugs, among other charges. The delivery giant is accused of knowingly dropping off millions of packages from illicit internet pharmacies, and the prosecution in its opening statement likened the package distributor to a part-time drug dealing operation.

Of course, FedEx can't be held responsible for what people mailed if it did not know that internet pharmacies were delivering illegal items. But federal prosecutors say that they have evidence that FedEx not only knew about the illegal drug deliveries, but worked to keep this type of business and to ensure customers did not switch to the competition, according to Courthouse News Service.

Relax, It's FedEx

The shipping giant was indicted in 2014 on controlled substance charges and for conspiring to distribute misbranded drugs and launder money. This week, prosecutors are proceeding with a bench trial that is expected to last two months and will be heard and decided by Senior US District Court Judge Charles Breyer in federal court in San Francisco.

Assistant U.S. Attorney John Hemann opened the trial with a statement, saying, "This case is about a prolific drug courier that delivered millions and millions of packages over a 10-year period that contained illegal drugs. It is surprising because of the defendants' single-minded effort to make sure that they were paid before their customers were arrested."

FedEx executives reportedly knew that the internet pharmacies were under federal scrutiny and facing criminal accusations. Nonetheless, they worked with these entities and even squeezed them for payment before arrest. Emails of FedEx employees will prove that the shipping giant knew it was dealing with entities engaged in illegal activity, the prosecution said.

UPS Faced Similar Charges

UPS, another delivery giant, faced similar allegations in 2013 and settled with the feds. Reportedly, UPS paid $40 million to settle claims that it delivered drugs for internet pharmacies that ship to customers without valid prescriptions. But FedEx has chosen to go to trial on these charges, which is a risk considering how much is at stake financially and in terms of the company reputation.

It is facing up to $1.6 billion in fines, which is also a good reason to fight at trial. The company's attorney, Cristina Arguedas, argued in her opening statement that FedEx helped investigators crack down on illegal pharmacies, and was never told by the US Drug Enforcement Agency not to ship for a customer. Any pharmacy it dealt with had DEA registrations, even if it was shut down and then re-opened, she said. FedEx denies all charges.

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