A six-week criminal trial of FedEx Corp. began in federal court in San Francisco Monday with a prosecutor accusing the company of acting as a “prolific drug courier” in delivering millions of packages of illegal drugs between 2000 and 2010.
Prosecutor John Hemann told U.S. District Judge Charles Breyer:
“We are very confident that we will prove beyond a reasonable doubt that FedEx had knowledge of exactly what online pharmacies were doing — that is, selling drugs without legitimate prescriptions. … The motive of FedEx was to make money. … It wanted to get its money before the U.S. Drug Enforcement Administration shut down the pharmacies.”
Breyer will decide the case without a jury. Both sides agreed last week on the eve of jury selection to give up their right to a jury.
The Memphis-based shipping company was indicted by a federal grand jury in San Francisco in 2014.
It is charged with conspiring with two now-closed Internet pharmacies to distribute controlled substances, distributing controlled substances, conspiring to distribute misbranded drugs and conspiring to launder money.
If convicted, the company could face a fine of up to $1.6 billion.
Prosecutors from the U.S. Attorney’s Office for Northern California allege the illegally shipped drugs included sleep aids, painkillers, anti-anxiety pills and Viagra, among others.
They claim in some cases, doctors illegally prescribed the drugs on the basis of an online questionnaire from customers, instead of meeting with the patient face-to-face, providing a diagnosis or getting the results of lab tests.
That approach allegedly violated federal requirements that drugs must be prescribed for a legitimate medical reason and within the usual course of professional practice.
In other cases, drugs were shipped without a prescription, prosecutors contend.
FedEx claims it is innocent, that it shipped drugs only from licensed pharmacies and that it had no way to know whether customers’ prescriptions were valid.
Defense attorney Cristina Arguedas told Breyer:
“FedEx only picked up packages from pharmacies that were licensed by the state and registered with the DEA.”
The DEA has the authority and duty to revoke the registrations of pharmacies that violate the law, she said.
“Fedex continuously worked with law enforcement” to investigate pharmacies and “had no participation whatsoever” in any crimes that may have been carried out by the prescribing doctors, Arguedas declared.
Breyer has said that in order to prove their case, prosecutors must show that FedEx intentionally shipped illegal drugs.
Hemann said prosecutors expect to prove FedEx officials either knew or deliberately ignored information about illegal shipments.
The opening statements were completed today and testimony will begin in Breyer’s Federal Building courtroom on Tuesday.
FedEx has 400,000 employees worldwide and ships 3.5 million packages per day, Arguedas said.
United Parcel Service Inc., the world’s largest package shipping company, agreed in 2013 to a $40 million settlement with the government to avoid prosecution on similar charges.