A Post With No Title

Looks like the Man is going to throw FedEx in jail.

FedEx Corp. (FDX:US) was accused in a federal indictment of delivering prescription pain pills, sedatives, anti-anxiety drugs and other controlled substances for illegal Internet pharmacies. A conviction could be “material,” the company said today in a regulatory filing.

The operator of the world’s largest (FDX:US) cargo airline was indicted on 15 counts of conspiracy to distribute controlled substances and misbranded drugs and drug trafficking that carry a potential fine of twice the gains from the illegal conduct, alleged to be at least $820 million for it and co-conspirators. FedEx delivered drugs to Internet pharmacies that supplied pills to customers who filled out online questionnaires and were never examined by doctors, knowing these practices violated federal and state drug laws, according to the federal indictment.

The company vowed to fight the charges, saying it can’t be responsible for the contents of the 10 million packages it transports daily and that policing customers would violate their privacy.

“FedEx is innocent of the charges,” Patrick Fitzgerald, a spokesman for the Memphis, Tennessee-based company, said yesterday in an e-mailed statement. “We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees.”

Well, FedEx is not getting a free pass because they tried to protect the privacy of criminals engaged in criminal behavior. That’s called aiding and abetting. That said, it is unreasonable to hold a shipping company responsible for the packages. Unless there’s proof FedEx knew about it or should have known about it, the Feds are spinning their wheels.

FedEx said yesterday it repeatedly asked the government for a list of illegal pharmacies so it would know which ones not to do business with. The U.S. never gave it such a list, it said.

The company knew it was delivering drugs to dealers and addicts, with couriers in Kentucky, Tennessee and Virginia expressing concerns circulated to senior managers that FedEx trucks were stopped on the road by online pharmacy customers demanding packages of pills, according to the indictment. Some delivery addresses were parking lots or vacant homes, prosecutors said.

“This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior,” U.S. Attorney Melinda Haag in San Francisco said in a statement.

The illegal deliveries began in 2000, Haag said, and FedEx continued to do business with one Internet pharmacy whose manager had been arrested for violating drug laws. She said the company also served a fulfillment pharmacy that supplied Internet pharmacies that were shut by law enforcement, with their owners and doctors convicted of illegally distributing drugs.

OK, that sounds bad. If the Feds can back it up with proof, then it is clear the company engaged in illegal conduct that they knew to be illegal. But, there’s a problem. The “company” did not do anything. People working for the company made these decisions. Why are the Feds going after the share holders? Surely, they could press the employees to dime out the people who made the decision to commit these crimes. Conspiracy to distribute class A narcotics is a big crime carrying big time.

It is the fundamental problem we face as a country. We no longer arrest and prosecute rich people. In the 80’s, the S&L crooks went to the can in big numbers. Even Michael Milken did time. In the Clinton years that stopped and the law no longer applies to the ruling class. Exactly one guy from the Enron scandal went to jail. No one from the dot-com scam went to jail. No one from the mortgage meltdown went to jail.

If we get back to sending rich people to the can when they screw up, a lot of what ails us will fix itself. Want to see the ruling class get religion? Send a few of them to Angola State Prison. They get serious about the law in a hurry.

7 thoughts on “A Post With No Title

  1. They fined UPS around $40M with this same type of scam and they paid up. “I know, lets sue Craig from Craigslist next…” -Hag

  2. And by “stop” I mean UH, if these folks were “found guilty” in a timely manner, how did they conduct commerce?
    ” “This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior,” U.S. Attorney Melinda Haag in San Francisco said in a statement.”

    Uh oh…doesn’t look good for the Justice Department, IRS, or Department of State.

  3. So “da gub’mint”, made arrests, based on “doing business with”,(or “failure to stop”) folks that “da gub’mint”, just can’t be bothered to make their case as illegal enough to “stop”(arrest)?
    Fed Ex. A neutral shipping company. Apparently with money, and a fixed address.
    Illegal Alien drug mules? Untouchable!
    But you see…..”It’s for the children.”

  4. Fed-Ex founder Fred Smith, current CEO James Barksdale. Anybody want to guess their political affiliations? Yup. Barksdale in particular is a hard core conservative. Maybe they need to get in touch with Gibson Guitar on how to deal with it.

  5. hmmm Looking at Yahoo finance, it appears the stock has not been adversely affected. FedEX is a huge business and as bad as this may seem on the outside, it’s probably going to have much impact which is why the stock hasn’t fallen. It’s like the Mc Donald’s coffee spill lawsuit, pay small fine and some bad press and move on.

  6. Well, not Angola. That would be bad. Cruel and unusual. Maybe Huntsville, TX or San Quentin, CA.

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