Feds: FedEx may face charges on illegal drug shipments
NEW YORK — Federal authorities are considering filing criminal charges against FedEx, which is under investigation for shipping powerful prescription pills for illegal online pharmacies, according to federal law enforcement sources.
The case being built against FedEx, the world’s largest cargo airline, involves thousands of opioid pill shipments all over the country during the past decade, according to the two sources, who spoke on the condition of anonymity because they are not authorized to discuss the investigation publicly.
The U.S. attorney for the Northern District of California, which is spearheading the probe, has issued subpoenas and other requests for information and documents to FedEx to bolster the case, the sources said.
The company acknowledged in a July 2012 financial regulatory filing that it answered subpoenas from a federal grand jury investigating the shipments, but has not said whether any employees have testified before the panel.
United Parcel Service agreed in March to pay $40 million earned from shipment proceeds to settle the same Justice Department probe and acknowledged its role in knowingly making shipments for illegal online pharmacies. FedEx has declined to settle, and that’s why, the sources said, the probe is moving toward criminal charges.
FedEx has taken a starkly different view of the law than UPS, promising to fight any potential charges and accusing the government of trying to get it to invade customer privacy by opening packages containing medication.
“We want to be clear what’s at stake here: The government is suggesting that we assume responsibility for the legality and validity of the contents of the millions of sealed packages that we pick up and deliver every day,” Patrick Fitzgerald, senior vice president of integrated marketing and communications for Memphis, Tenn.-based FedEx, said in a statement. “This investigation … has now become absurd and deeply disturbing. We have no interest in violating the privacy of our customers by opening and inspecting their packages in an attempt to determine the legality of the contents. We stand ready and willing to support and assist law enforcement. We cannot, however, do their jobs for them.”
The sources said federal law supports the government’s theory that shipping companies are at least partially responsible for the contents of the packages they transport.
Nearly 40 million customers in the United States have purchased medication from online pharmacies despite never having obtained a prescription, the National Association of Chain Drug Stores said.
“These shipments are a problem they (FedEx) have the ability to solve, but haven’t yet done so,” said one federal source with knowledge of the probe. “A tremendous amount of information has been amassed” in the investigation.
The probe into FedEx involves shipments of prescription opioids — including oxycodone and hydrocodone — to customers who never met with a doctor, the two sources said.
Fitzgerald said FedEx is cooperating with the investigation.
The U.S. attorney’s office and the Drug Enforcement Administration in San Francisco both declined to comment on the case.
The probe is the latest in a series launched by the government aimed at curbing the nation’s prescription drug epidemic, which claims the lives of at least 15,000 overdose victims each year, according to government statistics.
The DEA initially launched a spate of criminal cases against pain doctors, clinics, addicts and online pharmacies. In recent years, it has focused on companies involved in the distribution of opioid drugs.
DEA officials brought an administrative action against Walgreen Co. last year, which paid $80 million in civil penalties to resolve claims it failed to uphold DEA distribution controls And Google paid a $500 million settlement in 2011 as part of a Justice Department probe, admitting it assisted advertising efforts by illicit online pharmacies.
Joni Kovacs, of Jericho, N.Y., whose 22-year-old son, Steven, died of a prescription opioid overdose in 2009, said shipping companies must be held responsible for the contents of packages.
“This has to stop,” said Kovacs, whose son obtained drugs from online pharmacies without seeing a doctor. “The government is taking steps to save lives.”
A 2008 study by the DEA found 85 percent of online pharmacies do not require a prescription and 95 percent of all prescription drug sales made through the Internet are for controlled substances such as oxycodone.
A separate review of more than 10,000 online pharmacies by the National Association of Boards of Pharmacy found that just 3 percent comply with current pharmacy laws.