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FedEx, UPS investigated for online drug shipments

By Paul Elias

Associated Press

LAST UPDATED: 09:52 a.m. HST, Nov 16, 2012

SAN FRANCISCO » The nation's two largest shipping companies said they are targets of a criminal probe related to their dealings with online pharmacies at the center of an international crackdown on prescription drug abuse.

FedEx Corp. and UPS Inc. made the disclosures in regulatory filings over the last several weeks. FedEx spokesman Patrick Fitzgerald confirmed the probe in a prepared statement and a phone interview Thursday.

The federal investigation of the two shipping giants stems from a blitz against online pharmacies that was launched in 2005. Since then, dozens of arrests have been made, thousands of websites shuttered and tens of millions of dollars and pills seized worldwide as investigators continue to broaden the probe beyond the operators.

Last year, Google Inc. agreed to pay $500 million to settle allegations by the U.S. Justice Department that it profited from ads for illegal online pharmacies.

A federal jury on Thursday convicted three men of operating illegal pharmacies that used FedEx and UPS to deliver drugs without proper prescriptions. Seven others have been convicted in San Francisco this year.

Fitzgerald said he didn't know if the FedEx investigation was connected to the San Francisco cases, but U.S. Department of Justice investigators based in San Francisco are looking into issues "related to the transportation of packages for online pharmacies." He called the probe "absurd" and said the Memphis, Tenn., company denied any wrongdoing

A spokesman with the U.S. attorney's office in San Francisco declined to comment. A spokesman for Atlanta-based UPS couldn't be reached after business hours Thursday.

UPS disclosed the investigation Nov. 1 in a regulatory filing reporting its quarterly earnings.

"We have received requests for information from the DOJ in the Northern District of California in connection with a criminal investigation relating to the transportation of packages for online pharmacies that may have shipped pharmaceuticals in violation of federal law," the company stated. UPS said it was cooperating with the investigation and is "exploring the possibility of resolving this matter."

FedEx was more defiant. Fitzgerald said the company has no plans to plea bargain with federal officials.

"Settlement is not an option when there is no illegal activity," Fitzgerald said.

Both companies said they were served with grand jury subpoenas between 2007 and 2009. Fitzgerald declined to discuss why FedEx was now disclosing the investigation, but he confirmed that the company is under investigation for allegedly aiding and abetting online pharmacies that illegally ship prescription drugs.

Fitzgerald said the Drug Enforcement Agency has refused FedEx's request for a list of online pharmacies under investigation. Without such a list, Fitzgerald said it's impossible to know which companies are operating illegally.

"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," Fitzgerald said.

Associated Press writer Alicia A. Caldwell in Washington contributed to this report.

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DaMenace168 wrote:
It's not FEDEX or UPS' job to verify or enforce US drug laws. If the DEA wants to monitor the shipments for illegal activities, then THEY should place agents at FEDEX or UPS to examine the packages, as they do at US Postal offices. Another example of the US government blaming others for their inabilities to stop drugs!
on November 16,2012 | 06:34AM
pizza wrote:
Your response is spot on. Drug interdiction efforts in Hawaii are at an all-time low since the mid-eighties. It seems the Feds want everyone else to do their work. Tip-generated law enforcement... lazy lazy lazy...
on November 16,2012 | 10:32AM
hanoz808 wrote:
ridiculous to blame them
on November 16,2012 | 07:06AM
cojef wrote:
Aiding and abetting online pharmacies in shipping illegal drugs??? How can you aid or abet, not knowing if the nuances of the crime???
on November 16,2012 | 08:24AM
pizza wrote:
I think the Feds efforts related to the FedEx and UPS investigations is anexample of the U.S. medical community and pharmaceutical community protecting their profit margins by using Federal/State/Local law enforcement resources as their trained attack dogs.
on November 16,2012 | 10:35AM
nodaddynotthebelt wrote:
This is so messed up on all levels. How can FedEx or UPS be charged with aiding these illegal online pharmacies when they do not know which ones are illegal? What makes it even more messed up is that when they ask the DEA for a list of companies that are illegal they are denied. FedEx did what it could do within its powers. The DEA dropped the ball on this one. At a time when unemployment levels are high and businesses are folding due to high cost of doing business this could not happen at a worse time. If FedEx and UPS are fined, the costs will affect their cost of doing business and result in higher costs and possible reduction in their workforce. This is just an example of bureaucracy getting out of hand. The higher ups need to step in on this as the system has failed big time. This situation affects many other companies and will have a snowball effect unless someone steps in and corrects it.
on November 16,2012 | 10:53AM
mmcmssawnuc wrote:
Maybe they should also file suit against the big oil companies for providing the fuel to move the trucks that move the drugs...Really stupid waste of our tax dollars.
on November 16,2012 | 04:53PM
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