FedEx to pay $35M settlement with New York over cigarette shipping
New York Attorney General Letitia James and City Corporation Counsel Zachary W. Carter announced a $35.3M settlement with FedEx Ground Package System to resolve claims over illegal cigarette deliveries to residents throughout New York City and State made by FedEx over a ten-year period. This settlement resolves three lawsuits against FedEx alleging that it partnered with cigarette trafficking businesses to illegally ship hundreds of thousands of untaxed cigarettes to New Yorkers. In addition to the payment, FedEx will implement internal reforms and hire an independent consultant that will oversee FedEx's compliance with the law and provide compliance reports to the City and State. The settlement follows the October 2018 ruling by federal district judge for the Southern District of New York, Edgardo Ramos, finding that FedEx's conduct over many years for customers with such names as "Cigarettes Direct To You" established without the need for a trial that FedEx had knowingly violated a federal anti-cigarette trafficking statute and a 2006 Assurance of Compliance with the New York Attorney General's Office in which, to avoid prosecution, FedEx expressly agreed to cease residential cigarette deliveries and comply with a New York law prohibiting those deliveries. Under the terms of the settlement, FedEx agreed to implement reforms to ensure compliance with various laws.