For years the DEA has known that drug traffickers and online pharmacies used shipping companies such as Federal Express (FedEx) and even the post office as mules for their drug shipments. These shipments would contain anything from prescription drugs to marijuana.
Last year the Justice Department set out to target shipping companies and cut off a major trafficking option for drug traffickers.
In July, the U.S. Attorney for the Northern District of North Carolina indicted Federal Express on 15 counts for shipping prescription drugs for under ground online pharmacies after conducting a 9-year investigation.
If convicted, Federal Express could be forced to fork over 1.6 billion dollars.
The DOJ charged FedEx for violating the Substance Abuse Act by conspiring to distribute prescription drugs. Internet Pharmacies are regulated by the DEA, but many are fly by night operations.
In 2003, Vincent Chhabra was arrested and charged with trafficking illegal prescription pills. Although Chhabra was imprisoned, his business partners continued the operation under other affiliate companies, which has been a normal practice by online pharmacies. Every time the DEA shuts down one of these pharmacies another pops up under a different name.
The U.S. District Attorney alleges that FedEx employees knew they were trafficking illegal prescription drugs and understood the connection between the RXNetwork and it’s affiliates.
The indictment claims that FedEx “conspired” with internet pharmacies to traffic the prescription drugs that were sold in violation of the Controlled Substances Act.
Internet pharmacies are a legitimate business regulated by the Drug Enforcement Administration (DEA) and the states. But the DEA has been playing whack-a-mole with online pharmacies that fill orders without valid prescriptions according to the Wall Street Journal.
The DEA has shut down dozens of illegally operating pharmacies and drug fulfillment centers.
The U.S. Attorney alleges that FedEx employees knew that the “Chhabra-Smoley Organization,” which operated the RxNetwork and its affiliates, were illegally selling prescription drugs and understood there was a connection between fulfillment pharmacies and the RxNetwork. The Wall Street Journal stated in the article: Chhabra as demonstrated by the principals, company names, shipping addresses and billing addresses that were initially connected to Chhabra and RxNetwork.”
Translation: FedEx employees should have connected the dots. But if it’s so easy, why didn’t the DEA do it? The truth is that unmasking the bad guys would have required an extensive metadata analysis of customer data that is not FedEx’s job.
The DOJ alleges that FedEx workers even went as far as to visit the operation centers and observed it’s operations but they fail to say that these places would look like a regular pharmacy operation. The main difference being that the prescriptions were invalid.
The indictment makes an argument that FedEx knew who the bad guys were and continued doing business with them because it placed strict credit terms on the online pharmacies knowing that they were shady operations.
The WSJ also asks the important question: Would FedEx knowingly risk doing business with illegal operators that might not pay their bills?
Federal Express has requested the government give a list of these pharmacies so it can cease from doing business with them.
The article goes on to explain how UPS was the target of a similar prosecution, which they signed a “nonprosecution deal” and were forced to fork over 40 million dollars. This indicates the DOJ’s real motive is to have the shipping companies help police this issue.
FedEx is not the only company used by these entities. The Post Office, UPS and DHL are also used for drug shipments. This has been known in the street and by the DEA, which spurred this investigation.
Article Reference by the Wall Street Journal