By Christine Duhaime, B.A., J.D., Financial Crime and Certified Anti-Money Laundering Specialist
FedEx Corp. has been indicted over allegations of money laundering in connection with five shipments it made of alleged illegal prescription drugs from online pharmacies in which several persons are alleged to have died. According to ABC News, FedEx faces a $1.6 billion fine if found guilty.
According to the indictment, online pharmacies sent controlled drugs without legal prescriptions to consumers and used proceeds of crime (from their illegal drug sales) to pay their FedEx bills. The money laundering charges were added to an existing indictment against the company in respect of the shipment of drugs and controlled substances that was the result of a nine-year investigation. The original indictment charged FedEx with conspiracy to distribute controlled substances and distribution of controlled substances.
The FedEx case is unlikely to be settled because the larger issues of the liability of federal carriers in respect of the carriage of illegal substances and acceptance of proceeds of crime (all as alleged) for payment won’t be resolved by settlement. It raises numerous parallel issues for Internet and other carriers in similar circumstances. FedEx is not an industry subject to the BSA and yet the charges in the revised indictment in some respects may suggest that it is being held to anti-money laundering CDD standards applicable to industries that do report under the BSA.