Justice Department Drops Charge That FedEx Shipped For Illegal Pharmacies

By Rebecca Hersher / NPR

Published June 17, 2016 at 3:45 PM PDT

This story was published more than 8 years ago.

A federal judge has agreed to end a trial of FedEx which started Monday in San Francisco. The firm had been accused of shipping packages from illegal online pharmacies. Prosecutors did not specify why they abruptly moved to drop the case.

The Department of Justice asked a federal judge to end an ongoing trial of FedEx in San Francisco, but didn't specify a reason. The Associated Press reports the judge halted the trial which began on Monday. A grand jury indicted the company in 2014, for allegedly shipping packages from illegal online pharmacies.

NPR's Carrie Johnson reported in 2014 that FedEx was, "accused of conspiring to distribute prescription drugs to people who never met with doctors — a violation of the Controlled Substances Act."

FedEx has maintained its innocence, and in a statement after the charges were dropped, spokesman Patrick Fitzgerald said:

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"FedEx is and has always been innocent. The case should never have been brought. The government should take a very hard look at how they made the tremendously poor decision to file these charges. Many companies would not have had the courage or the resources to defend themselves against false charges. The power of the government was greatly misused when the case was initiated, but the government's integrity was redeemed by the decision to dismiss the charges today."

Prosecutors had alleged that the shipping company knew such pharmacies were sending packages through FedEx, and said it had evidence that FedEx took steps to protect itself from losing money if the police shut down the pharmacy sites, according to USA Today.

The AP reports:

"In court on Friday, [U.S. District Court Judge Charles] Breyer said FedEx was 'factually innocent.' He said the company repeatedly asked the U.S. Drug Enforcement Administration to give it the name of a customer that was shipping illegal drugs so it could stop working with the person, but the agency was either unwilling or unable to do so. " 'The dismissal is an act, in the court's view, entirely consistent with the government's overarching obligation to seek justice even at the expense of some embarrassment,' he said, according to a transcript of the hearing."

This is not the first legal scuffle between the federal government and companies that ship online purchases. NPR's Yuki Noguchi reports that in 2013, UPS paid a $40 million fine to settle similar charges.