New York agrees $35m settlement with FedEx over illegal cigarettes

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FedEx Ground has agreed a $35.1m settlement with New York City Corporation and the attorney general over claims that it delivered illegal cigarettes to New York residents over a 10-year period.

The settlement resolves three lawsuits over an alleged cigarette trafficking business. FedEx has also pledged to carry out internal reforms and hire an independent consultant for compliance. The suits alleged that FedEx had worked with customers such as Cigarettes Direct To You, which sold untaxed goods.

“For years, FedEx knowingly engaged in illegal and harmful behaviour at the expense of New Yorkers’ health,” said 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.”