If you see a FedEx delivery truck on the road today, I advise you do the following:
1. Wish the company well in its new federal criminal case; and,
2. Don’t ask the driver if she’s delivering prescriptions from illegal online pharmacies. (If she answers “yes,” you’ll be a witness.)
That’s right. FedEx as a corporate entity is under federal indictment in San Francisco, for alleged drug distribution conspiracy. According to the US Attorney’s Office, which brought the case, FedEx knowingly and after being warned by the DEA continued to do business with illegal online pharmacies and made a ton of money shipping invalid prescriptions from the pharmacies to patients nationwide. According to FedEx, the drugs were legal, the pharmacies were DEA-licensed, and the government failed to give FedEx guidance sufficient to stay within the law.
However the case shapes up in court, it is instructive to note that FedEx took a very different approach to a 2012 government inquiry than did FedEx competitor UPS. Both companies were subjects of the DEA/DOJ inquiry into shipping of drugs via illegal online pharmacies. But where UPS soon stopped giving discounts to online pharmacies and beefed up its due diligence and compliance programs, FedEx apparently focused on increasing revenue by more aggressive pricing and marketing to pharmacies already under DEA investigation. This, after FedEx learned some of the pharmacies’ licenses had been suspended. UPS entered into a settlement with the government last year, agreeing to be under DEA monitoring for two years, and signing a statement of facts in which UPS admitted it had been lax, at best, in dealing with these online pharmacies. FedEx opted to go a different way. Today, UPS claims it lost no significant income by curtailing this line of business – and FedEx is under indictment.
This doesn’t mean citizens or corporate boards should roll over and cower just because the government says they did wrong; what if the government is mistaken, and a person’s or company’s only choice is to either sacrifice their principles and integrity, or fight? Sometimes, you have no choice but to fight. None the less, if the facts of the case show that FedEx’s aggressive stance was more about making money than an authentic dispute over the merits of the government’s position, it’ll be the US government that “delivers” the heaviest blow here.