FedEx charged with delivering illegal prescription drugs

Company accuses prosecutors of unfairly assigning it with law enforcement responsibilities


July 18--FedEx Corp. was charged Thursday with conspiring with Internet pharmacies over a decade to deliver drugs that were illegally bought online without a prescription, transactions that federal prosecutors said brought the package-shipping company at least $820 million in revenues.

A federal grand jury in San Francisco indicted FedEx and two affiliated companies on charges of plotting with two pharmacy groups to distribute medications, including narcotics, to customers who had no legitimate medical need or valid prescription for the substances. If the company is convicted, penalties could include a fine of twice the ill-gotten gains.

"FedEx knew that it was delivering drugs to dealers and addicts," U.S. Attorney Melinda Haag's office said in announcing the indictment.

The company said it was innocent and accused prosecutors of unfairly assigning law enforcement responsibilities to the deliverer of more than 10 million packages a day. FedEx also said it has cooperated closely with federal and state law enforcement agencies for 42 years, and has assisted the Drug Enforcement Administration in "combatting rogue Internet pharmacies."

But Jay Fitzpatrick, a DEA agent in San Francisco, said the indictment "should send a strong message that corporations that participate in illegal activity risk investigation and prosecution."

In a similar case, United Parcel Service agreed in March 2013 to forfeit to the government $40 million that it had collected from online pharmacies for delivering drugs without a prescription from 2003 to 2010.

The charges against FedEx involve deliveries between 2000 and 2010 of medications from pharmacies that required their customers only to fill out an online form, without any need for a doctor's examination, diagnosis or prescription. The indictment said federal officials had informed FedEx by 2004 that illegal online pharmacies were using its services for illicit drug deliveries.

The grand jury also said FedEx couriers in Kentucky, Tennessee and Virginia had warned the company as early as 2004 that their trucks were being stopped by pharmacy customers demanding packages of pills and threatening them with harm, and that some of the listed delivery addresses were vacant homes where carloads of people were waiting for their drugs.

In response, the indictment said, FedEx began separating drug deliveries from problematic Internet pharmacies and holding them for pickup at company stations.

But the indictment said FedEx continued to knowingly make illegal deliveries for two pharmacy groups, Superior Drugs and an organization that managed RX Network and USA Prescriptions.

Bob Egelko is a San Francisco Chronicle staff writer. E-mail: begelko@sfchronicle.com. Twitter: @egelko

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