FedEx Accused of Drug Trafficking

Posted by: DeepDotWeb

July 19, 2014

From a news item published in Courthousenews service, may have some relevance to DNM users, as such cases might encourage shipping providers to deploy better screening procedures:

SAN FRANCISCO (CN) – FedEx conspired to distribute controlled drugs and did deliver them, for illegal Internet pharmacies, a federal grand jury said Thursday in a 15-count indictment.
The indictment, signed by U.S. Attorney Melinda Haag, says federal law enforcement officials warned FedEx at least six times since 2004 that illegal pharmacies were using its package delivery service to ship prescription drugs and other controlled substances to customers without doctors’ prescriptions.
By using FedEx and other delivery services, the illegal pharmacies, with FedEx’s help, violated the U.S. Controlled Substance Act and the Food, Drug and Cosmetic Act, Haag says in the 27-page indictment.

Internet-based pharmacies in 1998 started selling prescription drugs to consumers with many of the online pharmacies owned and run by known pharmacy chains that required and checked doctor’s prescriptions. But many online pharmacies simply required the “provision of information” and not actual doctors’ prescriptions to sell prescription drugs and controlled substances, the U.S. Attorney’s Office said in a statement.

“The advent of Internet pharmacies allowed the cheap and easy distribution of massive amounts of illegal prescription drugs to every corner of the United States while allowing perpetrators to conceal their identities through the anonymity the Internet provides,” Haag said in the statement. “This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior.”

FedEx entities are the only defendants in the indictment, but it names others with whom FedEx is accused of conspiring, among them, the Chhabra-Smoley Organization and Superior Drugs.

Chhabra-Smoley ran a network of illegal Internet and fulfillment pharmacies, and Superior Drugs acts as an illegal fulfillment pharmacy filling orders for the online pharmacies, according to the indictment.

“FedEx knew that the Chhabra-Smoley Organization and Superior Drugs were each distributing controlled substances and prescription drugs based solely on a customer’s completion of an online questionnaire and that these organizations were distributing drugs outside of the usual course of professional practice and not for a legitimate medical purpose,” Haag said. “Nevertheless, FedEx continued to ship controlled substances and prescription drugs for the Chhabra-Smoley Organization and Superior Drugs.”

Citing the indictment, the U.S. attorney’s statement adds: “(A)s early as 2004, FedEx knew that it was delivering drugs to dealers and addicts. FedEx’s couriers in Kentucky, Tennessee, and Virginia expressed safety concerns that were circulated to FedEx Senior management, including that FedEx trucks were stopped on the road by online pharmacy customers demanding packages of pills, that the delivery address was a parking lot, school, or vacant home where several car loads of people were waiting for the FedEx driver to arrive with their drugs, that customers were jumping on the FedEx trucks and demanding online pharmacy packages, and that FedEx drivers were threatened if they insisted on delivering packages to the addresses instead of giving the packages to customers who demanded them.”

Haag adds that FedEx officials were aware that in 2003 the DEA closed the Chhabra-Smoley Organization’s primary fulfillment pharmacy and arrested Chhabra and charged him with violating the Controlled Substance Act. But FedEx continued making illegal deliveries for the organization through its other illegal pharmacies despite knowing the relationships of various fulfillment pharmacies to the Chhabra-Smoley Organization and Superior Drugs, the prosecutor said.

When the pharmacies were closed, prosecutors said, FedEx could not collect outstanding accounts from them, so it modified billing policies for online pharmacies, creating an “Online Pharmacy Credit Policy” and eventually requiring a security deposit to continue making the illegal deliveries.

The indictment indicates that federal law enforcement officials placed several orders for drugs through the illegal online pharmacies and received them via FedEx deliveries.

Among the drugs FedEx delivered were Ambien, Diazepam, Alprazolam (Xanax), and Clonazepam, according to the indictment, all of them controlled substances.

Named as defendants are FedEx Corp., FedEx Express and FedEx Corporate Services.

They are accused of conspiring to distribute controlled substances, distributing controlled substance, conspiring to distribute misbranded drugs, and misbranding drugs.

If convicted of all charges, FedEx could be fined as much as $820 million.

The indictment can be found here:

Article Source: http://www.courthousenews.com/2014/07/18/69617.htm

Updated: 2014-07-19