Conviction could cost FedEx $820 million in fines and penalties

Conviction could cost FedEx $820 million in fines and penalties
(Source: WMC Action News 5)
(Source: WMC Action News 5)

(WMC) - Shelby County's largest employer delivers 10 million packages around the world each day. But Thursday, FedEx itself was delivered a federal indictment.

A Grand Jury indicted the company for knowingly shipping prescription drugs to dealers and addicts from illegal online pharmacies. The charges come after a 9-year federal investigation.

A former U.S. attorney in Memphis suspects the case will end in a compromise.

"There are a lot of allegations in the indictment," former Western District of Tennessee U.S. Attorney David Kustoff said.

Kustoff says the allegations are the same as shipping giant UPS faced.

"In the end, they'll likely be some compromise between the government and FedEx with some money exchanging hands," he suggested.

According to the indictment, FedEx knew something shady was happening. For example, there were aggressive customers who would jump on trucks, threaten drivers, and demand their shipments immediately.

FedEx says it is innocent and will plead not guilty to the charges.

In a statement, the shipping giant said:

FedEx is innocent of the charges brought today by the Department of Justice. We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees.

FedEx has a 42-year history of close cooperation with law enforcement agencies. We're proud to say that we have partnered with the FBI, the Department of Homeland Security, DEA, and other federal, state and local law enforcement teams around the world to help stop illegal drug activity and bring criminals to justice. These efforts include providing assistance to the DEA in combating rogue Internet pharmacies. We have repeatedly requested that the government provide us a list of online pharmacies engaging in illegal activity. Whenever DEA provides us a list of pharmacies engaging in illegal activity, we will turn off shipping for those companies immediately. So far the government has declined to provide such a list.

FedEx transports more than 10 million packages a day. The privacy of our customers is essential to the core of our business. This privacy is now at risk, based on the charges by the Department of Justice related to the transportation of prescription medications.

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. We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves.

According to the government, the indictment "highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior."

A conviction could mean more than $820 million in fines and penalties.

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