Atlanta-Based UPS Fined $40M in Federal Probe

1:46 PM, Mar 29, 2013   |    comments
The United Parcel Service logo is emblazoned on the side of a delivery truck April 23, 2009 in New York City. United Parcel Service reported first-quarter earnings dropped sharply admist the global economic downturn and a dwindling shipping demand. (Photo by Chris Hondros/Getty Images)
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By Donna Leinwand Leger, USA Today

STORY HIGHLIGHTS

  • UPS payment of $40 million will end federal criminal probe
  • Rival FedEx was also a target of the Justice Department investigation
  • Probe stems from global campaign to shut down illicit online pharmacies


UPS will halt deliveries for illegal online pharmacies and pay $40 million to end a federal criminal probe into its shipping practices, the Justice Department said Friday.

Atlanta-based UPS agreed to create a compliance program to identify the rogue pharmacies and close their shipping accounts, cutting off at least one route for the pharmacies to get their products to consumers, FDA Criminal Investigations Director 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," Roth said in a statement

Stock markets in the U.S. and Europe are closed today. UPS stock is listed at $85.90 a share.

The $40 million fine is the money UPS received in fees from the online drug dealers, the Justice Department said.

Internet pharmacies selling controlled substances without valid prescriptions were using UPS services to ship the illegal drugs, the Justice Department said in a press release. The pharmacies either sell the drugs without a valid prescription or allow customers to fill out a questionnaire with their medical complaint for an online "evaluation."

Drug Enforcement Administration agents and compliance officials met five times with UPS executives between 2004 and 2006 to discuss the shipper's responsibility to avoid business with the illegal drug dealers, the agreement signed by UPS said.

UPS employees also repeatedly advised corporate executives that the company should discontinue pursuing online pharmacy business, the agreement said.

The Justice Department said UPS failed to close the shipping accounts of the Internet pharmacies.

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