FedEx, the world’s largest cargo airline, has been hit with new money-laundering charges by the feds in an expansion of last month’s indictment accusing the firm of shipping prescription painkillers for illegal internet pharmacies.
The new charges were filed Friday in federal court in San Francisco, accusing the firm of “knowingly and intentionally” participating in the laundering of $630,000 in shiping payments from the drug sales.
FedEx is fighting the charges, unlike United Parcel Service, Walgreen Co and CVS Caremark, which agreed to settle federal allegations and pay fines for the sale of drugs the firms allegedly knew were illegitimate.
To emphasize the point, FedEx has hired Cris Arguedas, a high-profile criminal defense trial attorney who was part of the Barry Bonds perjury defense team and defended one of the accused kidnappers of Patty Hearst, as well as handling corporate clients from Enron, McKesson, Critical Path and Guidant.
In the government’s cases against other shippers for internet pharmacies, UPS agreed to pay $40 million last year, while Walgreen and CVS together paid $150 million in civil fines.
The indictment alleges Fed-Ex conspired to deliver pain pills and other drugs to internet pharmacies, which in turn sold them to customers based on online questionnaires that were not reviewed by doctors.
In 1998, internet pharmacies began selling prescription drugs online, some legitimate pharmacies requiring a doctor visit and prescription, while others did not, in alleged violation of federal drug law.
By 2004, on at least six different occasions the DEA, FDA or members of Congress told FedEx that illegal internet pharmacies were using its shipping services to distribute controlled substances and prescription drugs in violation of federal law, according to the indictment.
The case has been assigned to U.S. District Judge William Orrick.
Case: U.S. v. FedEx Corp., No. CR14-380