The FedEx Corporation has been indicted with charges relating to conspiracies with two separate but related online pharmacy organizations to distribute misbranded prescription drugs and controlled substances to U.S. consumers without requiring a valid prescription.

The indictment states that as early as 2004, the Drug Enforcement Administration (DEA), the FDA, and members of Congress informed FedEx that their shipping services were being used to distribute controlled substances and prescription drugs by illegal internet pharmacies in violation of the Controlled Substances Act (CSA), Food, Drug, and Cosmetic Act (FDCA), and various state laws. That same year, FedEx established an Online Pharmacy Credit Policy which mandated that all online pharmacy shippers receive approval by the FedEx Credit Department prior to opening a new account due to sites being shut down by the government without warning and leaving FedEx with a significant balance owed. The indictment also reports that FedEx created a Sales policy by which all online pharmacies were designed to a “catchall” classification to protect its sales professionals’ commission-based compensation from the volatility caused by online pharmacies frequently moving shipping locations to avoid DEA detection. After safety concerns from couriers were expressed regarding the delivering of drugs to dealers and addicts, FedEx adopted a process by which internet pharmacy packages from problematic shippers were held for pick-up at specific stations instead of the recipient’s address, states the indictment.

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FedEx is charged in the indictment with conspiring with the Chhabra-Smoley Organization from 2000–2008 and Superior Drugs from 2002–2010 and is alleged to have knowingly and intentionally conspired to distribute controlled substances and prescription drugs that included phendimetrazine (Schedule III); zolpidem tartrate, phentermine, diazepam, and alprazolam (Schedule IV) to customers who had no legitimate medical need for them based on invalid prescriptions issued by doctors who were acting outside the usual course of professional practice or without a face-to-face meeting with, or physical examination or laboratory tests by, a physician. FedEx has also been accused on continuing to deliver controlled substances and prescription drugs for these companies even after they were shut down by state and federal law enforcement agencies.

If convicted, FedEx could face a maximum sentence of five years of probation, and a fine of between $1–2.5 million, or twice the gross gain derived from the offense, alleged in the indictment to be at least $820 million. The defendants are also liable for restitution to victims of the crime, as well as forfeiture of the gross proceeds of the offense and any facilitating property.

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