FedEx Pleads Not Guilty to Trafficking Drugs for Illegal Web Pharmacies

FedEx has plead not guilty to felony drug distribution charges related to accusations of working with illegal internet drug companies.

The transportation company entered it's plea Tuesday at a San Francisco federal courtroom and faces 15 felony counts of distribution and conspiracy to distribute controlled substances. FedEx could face a $1.6 billion fine if the government proves its case against the shipping company.

"FedEx is innocent of these charges," said Cris Arguedas, an attorney representing the company.  "FedEx will continue to defend its company, its conduct and its people."

The case dates back to the early 2000s, when online pharmacies began selling drugs over the internet.

Officials said during that time a handful of companies employed doctors who would prescribe drugs without thoroughly reviewing online forms. The prescriptions were then filled in a warehouse-like pharmacy and shipped out to customers by FedEx.

Vincent Chhabra was arrested in 2003 for allegedly running one of the illegal online drug companies. The indictment said when federal agents shut down one of his pharmacies, FedEx knew and continued to deliver orders from Chabbra's other so-called fulfillment pharmacies.

The government also claims FedEx even changed the way it did business in order to continue dealing with internet pharmacies.

Many internet pharmacies were popping up at the time and then being shut down by the feds, according to the indictment. The indictment then said FedEx began asking for advance letter of credit from internet drug suppliers to make sure they would get paid for shipments.

Meanwhile, Melissa Charbonneau, FedEx's chief of communications, issued the following statement in response to the government's claim of telling the company to stop working with online pharmacies:

"We stand ready to discontinue service immediately to any pharmacy the government identifies to us as engaging in illegal activities."

A judge on Tuesday said there are potentially millions of pages or prescriptions and other documents that could clog discovery and slow the proceedings. He urged attorneys on both sides to expedite the pretrial.

The next hearing in this case is scheduled for Sept. 24.

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