As reported by CNBC:
“The shipping company is accused of delivering controlled substances and prescription drugs from illegal Internet pharmacies despite multiple warnings from government authorities, according to a 15-count indictment filed earlier this month. Instead of closing the pharmacies’ accounts, FedEx is accused of changing the shipping account classification.” says the article.
For insiders, the possibility of government doesn’t surprise anymore, since UPS got under similar scrutiny last year. The general public probably is surprised, and needs to learn more about the underlying legislation and regulations.
However unlike FedEx going for a fight, UPS preferred a settlement, and UPS’ CFO Kurt Kuehn explains why their preferred solution was a settlement:
“Our responsibility isn’t to inspect packages, but if there is a suspicion that comes up that there may be an illegal activity happening, we need to communicate that and be somewhat diligent in making sure that our network is being used for legal purposes,” Kuehn said.
Based on recent enforcement history and level of sanctions, I tend to agree with him, that settlement was the least painful way to go.