SAN FRANCISCO — FedEX has been indicted by a federal grand jury on charges of shipping powerful prescription drugs for illegal online pharmacies, the latest major company targeted by federal law enforcement for playing a part in the proliferation of such drugs on the black market.
The indictment charges the world’s largest cargo company with conspiracy to distribute controlled substances and distribution of misbranded drugs, and it moves to force the company to forfeit at least $820 million linked to the proceeds from such illicit shipments.
Federal prosecutors accused FedEx of ignoring warnings for nearly a decade from Congress, the DEA and other federal agencies that underground online pharmacies were using its shipping services to illegally distribute prescription drugs such as oxycodone and hydrocodone.
FedEx, the indictment alleges, “departed from its usual business practices” to accommodate the illegal online drug operations, despite pressure to reform.
The indictment is part of a growing campaign against prescription drug abuse, including a summit on the topic held in the Bay Area in May. In another case brought by San Francisco U.S. Attorney Melinda Haag, United Parcel Service last year settled similar allegations, agreeing to pay $40 million after being linked to the sales of shipping prescription drugs sold by illegal online pharmacies.
FedEx vowed to fight the charges.
“FedEx is innocent of the charges,” the company said in a statement. “We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees.”
FedEx has said in the past that it would not settle because the company does not believe it has committed any wrongdoing, arguing that it should not be held responsible for the contents of tens of millions of packages it regularly ships. FedEx has disclosed in regulatory filings that it has been a target of a grand jury investigation for at least the past four years.
The indictment, however, alleges that FedEx for years was aware that two major illegal online pharmacies, the Chhabra-Smoley organization and Superior Drugs, were using the company to ship prescription drugs illegally. Federal prosecutors allege FedEx approved the shipping policies at top management levels, including chief financial officer and the senior vice president of sales.
In fact, federal prosecutors allege that FedEx couriers in Kentucky, Tennessee and Virginia at different times expressed concern to executives, recounting instances of drivers being threatened and prescription drugs being shipped to addresses that included parking lots, schools and vacant homes.
The indictment did not charge any FedEx individuals with crimes.
“This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior,” Haag said.