UPS To Pay $40 Million As Part Of NPA To Resolve Claims It Aided Illegal Online Pharmacies

Posted On Tuesday, April 2, 2013
By: John A. Schwab

At the close of last week, it was announced that United Parcel Service (“UPS”) would forfeit $40 million to the United States under a non-prosecution agreement with DOJ to resolve allegations that the company knowingly failed to halt shipments from illegal internet pharmacies.  The investigation and resulting agreement are part of wider government efforts to stop or interrupt the delivery of illegal drugs by online pharmacies. The non-prosecution agreement requires UPS to maintain a compliance program to ensure that the company no longer knowingly delivers illegal drugs and medications and that any relevant information is provided to law enforcement.  It also requires that $40 million forfeiture – termed a monetary payment in the agreement – be paid to the United States within five business days.

The Agreed Statement of Facts portion of the non-prosecution agreement (found here) indicates that UPS’s Corporate Security Manager and a UPS Public Affairs Vice President met with DEA and other law enforcement agencies on five separate occasions from January 2004 to May 2006 to discuss UPS’s role in assisting law enforcement’s efforts against illegal internet pharmacies.  For example, in a meeting on June 23, 2005, law enforcement representatives discussed the problem of elicit pharmaceutical sales over the internet and traffickers’ reliance on express personal carriers for the delivery of packages to customers.  The Statement of Facts also details UPS’s marketing to online pharmacies despite testimony to the contrary before Congress by UPS’s Corporate Security Manager regarding the problem posed by online pharmacies.  Despite being on notice that these pharmacies were using UPS’s services, UPS admits that it “did not implement procedures to close the accounts of those pharmacies, permitting them to ship controlled substances and prescription drugs from 2003 to 2010.”

The full text of the Non-Prosecution Agreement can be found here.