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FedEx charged with money laundering in a new lawsuit

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New York City, New York – (StockNewsDesk) – 08/18/2014 — FedEx (NYSE:FDX) is facing a lawsuit for delivering drugs for illegal online pharmacies. The U.S. government has charged the company with money laundering.

A new indictment was filed against the company in a federal court in San Francisco, and the charge of money laundering was included in that indictment.

According to the allegation, FedEx and some illegal pharmacies “knowingly and intentionally” conspired to launder more than $630,000 in shipping transactions through the sale of drugs.

The government said that if FedEx and the other conspirators lost the case, then they could be fined twice the amount gained from the shipping of drugs. The fine is estimated to be about $820 million.

CVS Caremark Corp and Walgreen Co had to pay a total amount of more than $150 million as fines for knowingly selling unapproved drugs.

When the first indictment was brought against Tennessee based FedEx, the company pleaded not guilty saying that it can’t be held responsible for the contents of 10 million shipments it transports every day.

fedex

Patrick Fitzgerald, senior vice president for marketing at Memphis, wrote in an email, “FedEx is innocent of these and all of the charges filed in this matter… We will plead not guilty. We will continue to defend against this attack on the integrity of FedEx. We continue to ask for a list of all Internet pharmacies engaging in illegal activity so we can turn off shipping for those companies immediately. We have asked for a list, and they have sent us indictments.”

The government said that the drugs delivered to patients were not examined by any physicians, and the pharmacies knew well that what they were doing was illegal. According to the U.S., FedEx knew about this illegal act and yet it delivered the shipments. Drugs were delivered to patients after they filled out online questionnaires about their diseases.

The prosecutors said that the addresses of some of the deliveries were empty houses or parking lots. FedEx had previously said that its policy is to respect the privacy of its customers, and if it opened packages to see the contents, it would be a violation of that policy. Therefore, the company should not be held responsible for illegal shipments.

The company had also said that revenue from the shipment of drugs is only a small part of its overall revenue. FedEx’s revenue for fiscal 2013 was $44.3 billion.

In a regulatory filing on February 18, the company stated that a conviction could be “material”

The U.S. Controlled Substances Act authorises a shipping company to transport medicines “in the lawful and usual course of its business”. According to the act, a shipping company does not need to register with drug regulation authorities if its shipments are legal.

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