It may be tough for people to accept that one of the
world’s most respected companies faces criminal charges
for its alleged role in a multiyear conspiracy to illegally
fulfill and distribute pharmaceuticals ordered online.
Yet it may be hard even for the most ardent FedEx Corp.
supporter to read the 26-page federal indictment without arching an eyebrow.
The 15-count indictment, returned on July 17 by a
grand jury in San Francisco, was breathtaking in the
scope and severity of its allegations against Memphis,
Tenn.-based FedEx; its largest unit, FedEx Express; and
its FedEx Services division. The indictment charges that
over a period starting no later than January 2000 and
running through 2010, FedEx shipped drugs on behalf
of two online pharmacies despite being repeatedly noti-
fied beginning in early 2004 that the pharmacies were
breaking the law. The government has asked for either a
maximum potential fine of $1.6 billion, a figure reached
by doubling the government’s estimate of FedEx’s gross
gains from the alleged practices, or having FedEx placed
on a five-year probation and paying a lesser finan-
cial penalty. FedEx was to be arraigned July 29 in San
Francisco, after DC VELOCITY went to press.
The pharmacies cited in the indictment, Chhabra-Smoley Organization and Superior Drugs, regularly
filled and distributed prescription drugs and controlled
substances without a doctor’s valid prescription or without the recipient’s having a physical exam or diagnosis
or visiting a physician, according to the indictment.
Recipients only had to complete an online questionnaire,
an illegal means of obtaining prescription drugs or controlled substances, the indictment read.
In the case of Chhabra-Smoley, which operated as
an illegal Internet pharmacy and fulfilled orders for
illegal pharmacies, FedEx continued to distribute drugs
and controlled substances even after Vincent Chhabra,
one of the principals, was arrested in
December 2003 and the company’s main
fulfillment pharmacy was shut down,
according to the indictment. FedEx
employees were aware as far back as
July 2002 that state and local officials
had closed various online and fulfillment pharmacies operated by Chhabra-Smoley. Yet FedEx continued to ship for
the account as it apparently reconstituted
itself with Robert Smoley at the helm
over the next four to five years, according
to the indictment.
In the case of Superior, an illegal fulfillment pharmacy that filled orders for illegal Internet pharmacies, FedEx knew the
nature of its operations yet still opened
50 accounts for Superior and its pharmacy customers that enabled Superior
to fill orders, the indictment read. FedEx
employees would help prepare Superior’s
packages for shipment even though they
were aware the company was operating
illegally, according to the indictment.
FedEx’s credit policies toward Internet
pharmacies played a key part in the conspiracy, according to the indictment. In
June 2004, FedEx established an online
credit policy dedicated to online pharmacies. During the 2004–2006 period,
FedEx criminal indictment: An ant on an elephant,
or a gorilla in the room?
Russ Meller, vice president of research and development at Fortna,
was named a “Physical Internet Pioneer” at the inaugural International
Physical Internet Conference. … The GT Nexus Shipper Council has
recognized Ceva Logistics for its work in delivering consistent and
high-quality data for air shipments across multiple companies on the
GT Nexus supply chain platform. … USA Truck, a transportation and
logistics service provider, has earned the Peak Performance Award
from FedEx SmartPost for the 2014 fiscal year. …
Christopher Murphy, vice president of software and
control engineering at Jervis B. Webb Co., earned a
U.S. patent as sole inventor of an automated guided
vehicle system that allows for synchronized travel. …
Consulting firm Frost & Sullivan has conferred its 2014
Technology Innovation Leadership Award on Tecsys
for its warehouse management software. … The
Kennedy Group, a labeling and packaging specialist,
was recognized by the Association of Postconsumer
Plastic Recyclers (APR) for creating and designing products that do
not disrupt or contaminate plastic recycling streams. … Svenska
Retursystem, a Swedish company that develops packaging for the food
industry, and Full Belly Farm, an organic farm in California, were recognized with the Reusable Packaging Association’s Excellence in Reusable
Packaging Award. … For the fourth consecutive year, Ingram’s, Kansas
City’s business magazine, has named MIQ Logistics one of the Kansas
City area’s top 100 privately held companies.
accolades
MURPHY
