FedEx Ducks Illicit Drug-Shipment Case

SAN FRANCISCO (CN) - The government dropped all criminal charges in its "novel prosecution" of FedEx on Friday.

U.S. District Judge Charles Breyer, who signed the order, noted the lack of evidence against the global courier, which was accused of conspiring with two online pharmacies to ship controlled substances over a ten-year period.

"FedEx is and has always been innocent. The case should never have been brought," lead FedEx defense attorney Cristina Arguedas said outside the courtroom on Friday. "The dismissal today is an acknowledgement that there was no wrongdoing by FedEx."

The government's motion comes after a day of blistering opening statements and two days of initial brief testimony involving a D.E.A. agent and a FedEx employee in its credit department, where Arguedas shredded the government's theory that FedEx knowingly and intentionally delivered millions of packages containing prescription drugs that had not been properly prescribed, in many cases to known drug addicts.

But FedEx had not conspired with the Internet pharmacies, Arguedas argued. In fact, it had actually helped the Drug Enforcement Administration in its investigation into the growing problem of shady Internet pill mills.

The bench trial was scheduled to extend into mid-August, though Breyer, skeptical of the prosecution from the beginning, said it would not last as long as projected.

Breyer thanked Arguedas and her team for their competence and professionalism, and commended Assistant U.S. Attorney John Hemann, who joined the case shortly before the trial began Monday, for seeking dismissal in the interest of justice "even at the expense of some embarrassment."

Addressing the court briefly, Breyer said, "I'm quite familiar with this industry. I'm deeply concerned by tragic consequences caused by sales of toxic substances to individuals, including children, who have not had a direct consultation with a licensed physician"

But this case was "entirely different," Breyer said. "The court has been asked to determine if defendant should be held criminally liable as a co-conspirator. As a result of detailed opening statements by the government and defense and accepting factual assertions as uncontested, the court concludes the defendants are factually innocent. They did not have criminal intent."

Breyer emphasized that FedEx repeatedly offered to help the government, asking officials to identify a particular customer shipping illegal substances, so that it might stop picking up its packages.

"The DEA was unwilling or incapable of providing that information to FedEx," Breyer said. "Rather the government decided to pursue this novel prosecution."

Arguedas told reporters Friday, "The government should take a very hard look at how they made the tremendously poor decision to file these charges. Many companies would not have the courage or the resources to defend themselves against these false charges. The power of the government was greatly misused when the case was brought. But the integrity of the government was redeemed with the decision to dismiss the charges today."

Before adjourning for the day, Breyer said, "I'm going to take the summer off. I advise you to do the same."

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