On Thursday, federal authorities charged FedEx with helping illegal pharmacies due to knowingly delivering their painkillers as well as other drugs to customers that did not have prescriptions.
The indictment was filed in San Francisco federal court. The Justice Department announced the different charges in Washington. The indictment alleged that FedEx conspired with two online pharmacies that were related for a ten-year period between 2001 and 2010.
The delivery company, based in Memphis, Tennessee has been accused of shipping Ambien the strong sleeping aid, Xanax and Valium to anti-anxiety medications and other types of drugs to different customers who did not have legitimate medical needs and did not possess prescriptions.
FedEx however insists nothing wrong was done. A spokesperson for the delivery company said it would plead not guilty. The spokesperson called the charges an attack against the good name and integrity of FedEx and all its employees.
The federal investigation was first disclosed by Fed Ex in November of 2012 during a regulatory filing. The company announced at that time nothing had been done wrong and would fight all charges against them.
UPS, a rival delivery company, paid over $40 million in 2013 to resolve allegations that were similar and the company, based in Atlanta, said it would be taking steps to stop illicit drug dealers online from using their service.
Both delivery companies said in their regulatory filings they had been served with subpoenas from a grand jury sometime during 2007 and 2009.
This investigation of the two largest shippers in the U.S. stems from law enforcement’s blitz against the online pharmacies that was launched in San Francisco in 2005.
Since that time, dozens of people have been arrested, thousands of online sites have been closed and millions of dollars as well as pills have been seized across the globe.
Google agreed it would pay a settlement of $500 million for allegations made by the Department of Justice that the search giants profited from the ads made by online pharmacies that were illegal.
In 2012, a federal jury convicted three of operating pharmacies that were illegal that used UPS and FedEx to deliver their drugs without prescription.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.