UPDATE 1-FedEx faces U.S. criminal charges over online pharmacies

Thu Jul 17, 2014 7:08pm EDT

(Adds FedEx statement, details from indictment))

By Dan Levine

SAN FRANCISCO, July 17 (Reuters) - FedEx Corp was indicted on Thursday for shipping packages from illegal online pharmacies despite repeated warnings from U.S. drug enforcement officials, according to a court filing.

The 15-count indictment, handed down by a federal grand jury in San Francisco, includes charges for conspiracy to distribute controlled substances.

In a statement, FedEx Senior Vice President Patrick Fitzgerald said the company is innocent and will plead not guilty.

"FedEx transports more than 10 million packages a day," Fitzgerald said. "The privacy of our customers is essential to the core of our business. This privacy is now at risk."

Beginning in 2004, FedEx was warned "on no less than six different occasions" that illegal Internet pharmacies were using its services to distribute prescription drugs, the indictment said. Those warnings extended to senior management at the company, the filing said.

In one instance, FedEx knew the Drug Enforcement Administration shut down one pharmacy, but continued to ship packages from its affiliates.

FedEx's Fitzgerald said U.S. prosecutors are asking that the company assume responsibility for the legality of millions of packages a day.

"We are a transportation company. We are not law enforcement," he said.

The case in U.S. District Court, Northern District of California is United States of America vs. FedEx Corporation, FedEx Express Inc and FedEx Corporate Services Inc, 14-cr-380. (Reporting by Dan Levine; Editing by Chris Reese)

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