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UPS Agrees To Give Up $40M Made From Illegal Online Pharmacies

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SAN FRANCISCO (CBS / AP) — Shipping company UPS has agreed to pay $40 million to end a federal criminal probe connected to its work for online pharmacies.

The U.S. Department of Justice announced Friday that the company would also “take steps” to block illicit online drug dealers from using their delivery service.

The DOJ said the fine amount is the money UPS collected from suspect online pharmacies.

UPS won’t be charged with any crimes. Its biggest rival, FedEx Corp., has also been a target of the federal investigation.

The investigation of the two companies stems from a global campaign to shutter illicit online pharmacies launched in 2005. Since then, dozens of arrests have been made and thousands of websites closed worldwide as investigators continue to broaden the probe beyond the operators.

FedEx said it received subpoenas from a federal grand jury in San Francisco in 2008 and 2009. The San Francisco U.S. Attorney’s office has played a central role in a nationwide crackdown on online pharmacies. Ten people with ties to online pharmacies have been convicted over the last two years.

“It is unclear what federal laws UPS may have violated,” FedEx said in statement Friday. “We remain confident that we are in compliance with federal law.”

The DOJ said some UPS employees knew the company was making deliveries between 2003 and 2010 for pharmacies that filled orders for dangerous drugs without proper prescriptions from doctors.

“Despite being on notice that this activity was occurring, UPS did not implement procedures to close the shipping accounts of Internet,” the DOJ said in a prepared statement.

FedEx said federal investigators have declined to supply it with a list of suspect pharmacies. The company said it “can immediately shut off shipping services to those pharmacies” if given such a list.

A DOJ spokesman declined to comment about the FedEx investigation.

In a prepared statement announcing the UPS settlement, Food and Drug Administration criminal chief John Roth said the “FDA is hopeful that the positive actions taken by UPS in this case will send a message to other shipping firms to put public health and safety above profits.”

Earlier this week, a federal judge in San Francisco sentenced Chris Napoli to four years in prison and ordered to forfeit $24 million his illicit pharmacy Safescripts Online earned between 2004 and 2006. Two other men were sentenced to prison along with Napoli. Receipts from UPS and FedEx were used as evidence in the trio’s trial last year.

In 2011, Google Inc. agreed to pay $500 million to settle allegations by the Justice Department that it profited from ads for illegal online pharmacies.

(Copyright 2013 by CBS San Francisco. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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