Money Laundering Charge Added to FedEx Drug Case

SAN FRANCISCO (AP) — Federal prosecutors say several addicts died soon after receiving shipments of illegal prescription drugs via FedEx (NYSE:FDX).

The deaths were included in a new indictment filed late Thursday against FedEx that adds money laundering to a list of charges the company is facing over allegations it knowingly shipped illegal prescription drugs from two online pharmacies.

The indictment alleges that on at least five dates, "FedEx delivered controlled substances and prescription drugs from online pharmacies to individuals who subsequently died or accidentally caused the death of others."

The Memphis, Tennessee-based shipping giant is not charged with any of the deaths. No executives have been named in the indictment. The company faces a $1.6 billion fine if found guilty.

The three money laundering charges allege the online pharmacies paid their FedEx bills with money obtained illegally.

FedEx Corp. already was facing 15 conspiracy and drug charges that were filed last month for allegedly shipping powerful sleep aids, sedatives, pain killers and other drugs needing prescriptions to use. Rival UPS Inc. paid $40 million last year to resolve similar allegations.

The accusations against the two shipping companies arise from a nearly decade-long crackdown on Internet pharmacies that ship prescription drugs to customers lacking medical clearance.

In settling its case, UPS said it overhauled it procedures and worked with investigators to detect suspicious activity.

FedEx, on the other hand, said it's not a law enforcement agency and to work with authorities in the manner they demand would require invading the privacy of their customers.

"FedEx is innocent of these and all of the charges filed in this matter," spokesman Patrick Fitzgerald said. "We will plead not guilty. We will continue to defend against this attack on the integrity of FedEx."

Fitzgerald said FedEx will stop serving any online pharmacies that federal authorities tell it are operating illegally. "We have asked for a list, and they have sent us indictments," he said.