FedEx reaches $35 million settlement to resolve charges of shipping untaxed cigarettes to New Yorkers

By Marian Johns | Jan 24, 2019

NEW YORK (Legal Newsline) — FedEX Ground Package System Inc. has reached a $35 million settlement with New York State and New York City to resolve three lawsuits claiming the company shipped hundreds of thousands of untaxed cigarettes. 

According to the New York State Attorney General's Office, FedEx worked with "cigarette trafficking" companies to illegally ship the cigarettes over a 10-year span.

“For years, FedEx knowingly engaged in illegal and harmful behavior at the expense of New Yorkers’ health,” said New York State's Attorney General Letitia James. “Not only did FedEx violate laws created to protect the public from the serious health risks associated with cigarettes, but they also swindled New York City and State out of millions of dollars in tax revenue. Let this serve as a message that we will never allow companies - however large or small - to cheat or harm New Yorkers.”

“This settlement forces FedEx into compliance with state and city laws enacted to discourage smoking through the imposition of cigarette taxes," New York City Corporate Council Zachary Cater added. "For the worst of reasons – profit – FedEx shipped millions of untaxed cigarettes to residents throughout the state, cheating the city out of millions of dollars in tax revenue and with apparent indifference to the impact on public health."

The settlement also includes FedEx instituting internal reforms including hiring an independent consultant to insure compliance and to submit reports to the state and city of New York, according to James' office.  

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City of New York FedEx Corporation

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