Things keep getting worse for the government in its criminal money laundering prosecution of shipping company FedEx Corp.
In March, U.S. District Judge Charles Breyer dismissed a dozen of the 18 criminal counts against the company in which the government alleged FedEx knowingly shipping prescription drugs from illegal online pharmacies. Breyer accused prosecutors of “inattention” to detail for, in essence, charging not the parent company, FedEx Corp. but its subsidiaries FedEx Express Corp.
Now it is too late to bring new charges against the parent company under the statute of limitations.
In the latest blow to the case, on Thursday, Breyer asked the government to file papers identifying the number of cases prosecuted in the last 10 years that charge a defendant with both “promotional money laundering” and “drug distribution” as it has against FedEx.
The judge has called the prosecution “novel” and wanted to know if the government had ever done it before.
Promotional money laundering is generally considered an agreement by at least two people to launder illegal proceeds to help promote a fraud. The 11th Circuit Court of Appeals described it in a 2006 conviction in a securities fraud case, U.S. v. Johnson, 440 F.3d 1286. It is associated with profits and expenses of any illegal drug operation, rather than gross revenue, according to the Congressional Research Service. (Page 10)
FedEx was originally charged with a criminal conspiracy to transport prescription drugs dispensed by illegal online pharmacies to people with no, or improper, prescriptions. The company was also accused of misbranding and money laundering charges.
The company has maintained throughout the case it is innocent and would fight the charges. It pointed out that all common carriers, like FedEx, transport a wide array of goods, including those that may be misused or abused.
Case: US v. FedEx Corp., No. 14-CR-320