Federal authorities on Thursday charged FedEx with assisting illegal pharmacies by knowingly delivering painkillers and other dangerous drugs to customers without prescriptions.
The 15-count indictment was filed in federal court in San Francisco, and the Department of Justice announced the charges in Washington, D.C. The indictment alleges that FedEx Corp. conspired with two related online pharmacies for 10 years ending in 2010.
The Memphis, Tennessee-based delivery company is accused of shipping powerful sleeping aid Ambien, anti-anxiety medications Valium and Xanax, and other drugs to customers who had no legitimate medical need and lacked valid prescriptions.
FedEx insists it did nothing wrong.
"We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees," company spokesman Patrick Fitzgerald said in a written statement. "FedEx transports more than 10 million packages a day. The privacy of our customers is essential to the core of our business. This privacy is now at risk."
Beginning in 2004, FedEx was warned "on no less than six different occasions" that illegal Internet pharmacies were using its services to distribute prescription drugs, the indictment said. Those warnings extended to senior management at the company, the filing said.
In one instance, FedEx knew the Drug Enforcement Administration shut down one pharmacy, but continued to ship packages from its affiliates.
FedEx's Fitzgerald said U.S. prosecutors are asking that the company assume responsibility for the legality of millions of packages a day.
"We are a transportation company. We are not law enforcement," he said.
FedEx first disclosed the federal investigation in a regulatory filing in November 2012. The company said at that time it had done nothing wrong and intended to fight any charges.
Rival shipping company UPS Inc. paid $40 million last year to resolve similar allegations, and the Atlanta-based company said it would "take steps" to block illicit online drug dealers from using its delivery service.
Both companies said in regulatory filings that they were served with grand jury subpoenas between 2007 and 2009.
The investigation of the country's two largest shippers stems from a blitz against online pharmacies that was launched in 2005 in San Francisco. 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.
Google Inc. agreed to pay $500 million to settle allegations by the Justice Department that it profited from ads for illegal online pharmacies.
A federal jury in 2012 convicted three men of operating illegal pharmacies that used FedEx and UPS to deliver drugs without proper prescriptions. Seven others were convicted in San Francisco previously.