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U.S. government dismisses FedEx charges

MEMPHIS: June 17, 2016. FedEx Corp. has reported revenue of US$50.4 billion and net income of US$1.82 billion for its latest financial year endng May 31.

“Fiscal 2016 was a successful year for FedEx in many ways,” said Fred Smith, FedEx Corp. chairman, president and CEO. “Our May 25 acquisition of TNT Express capped a historic year of significant accomplishments that benefited shareowners, team members and customers, and strongly positions FedEx for long-term profitable growth,” he added.

The announcement follows a decision by the U.S. Department of Justice (DoJ) to withdraw all charges alleging the company was involved in money laundering when providing shipping services to illegal Internet pharmacies.

In 2014 FedEx denied charges by then DoJ attorney for Northern California Melinda Haag - an Obama political appointee - that it had been involved in drug trafficking by carrying shipments on behalf of the pharmacies.

FedEx 767At the time Haag declared: "This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior."

Responding to Haag's charges FedEx senior vice president Marketing & Communications Patrick Fitzgerald said: "We want to be clear what's at stake here: the government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day.

"We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves."

Haag's prosecution was based on a campaign begun in 2005 to shut down illegal Internet-based pharmacies. In 2014 her office obtained convictions against nine people for distributing controlled substances. Most received prison terms in addition to forfeiting US$94 million.

In 2013 UPS paid US$40 million and signed a "Non-Prosecution Agreement" to avoid charges for allegedly similar behavior.

Commenting on the DoJ action to now dismiss all charges Fitzgerald said: “FedEx is and has always been innocent. The case should never have been brought. The government should take a very hard look at how they made the tremendously poor decision to file these charges.

He added that many companies would not have had the courage or the resources to defend themselves: “The power of the government was greatly misused when the case was initiated, but the government’s integrity was redeemed by the decision to dismiss the charges today,” he declared.

FedEx said it remains committed to its long-standing cooperation with law enforcement to prevent misuse of its transportation networks.

Earlier this year Haag rejoined the San Franciso-based Orrick law firm where she worked in 2003. She left her position with the DoJ in September 2015.

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