Tuesday, December 24, 2019

Sackler family behind Purdue Pharma and OxyContin funneled more than $10 billion of corporate funds into overseas trusts and holding companies, in apparent effort to hide assets from opioid litigation

The family behind Purdue Pharma, makers of OxyContin, funneled more than $10 billion in corporate funds to overseas trusts and holding companies as it faced heightened scrutiny for its role in the opioid crisis, according to a New York Times report. Luther Strange, former U.S. senator and Alabama attorney general, might be in the middle of this, considering reports that he is working with the Sackler family to encourage hasty settlements of opioid litigation.

Have the Sacklers been trying to hide their assets from plaintiffs' attorneys, who have filed lawsuits across the country? That seems to be the primary question, according to a report at The Week:

A new audit commissioned by Purdue Pharma found that during a time when more lawsuits were being filed against Purdue in connection with the opioid crisis, the Sackler family withdrew more than $10 billion from the company.

Members of the Sackler family have owned the company since the 1950s. Purdue's signature product, the opioid OxyContin, was approved in 1995, and the audit shows from 1995 to 2007, the company made $1.32 billion in payments to the family. From 2008 to 2017, when the company was under intense scrutiny for its alleged role in the opioid crisis, Purdue made $10.7 billion in payments. The audit shows that some of the money was moved to trusts and overseas holding companies, The New York Times reports.

More than 2,800 lawsuits have been filed against Purdue, and the Sackler family has said it will give at least $3 billion in cash as part of a settlement to resolve some of the suits filed by state and local governments. Purdue is going through a chapter 11 restructuring, and the report was filed in a New York bankruptcy court . . . .  In a statement, New York Attorney General Letitia James said investigators "must see detailed financial records showing how much the Sacklers profited from the nation's deadly opioid epidemic. We need full transparency into their total assets and must know whether they sheltered them in an effort to protect against creditors and victims."

Here are other compelling questions regarding the Sacklers and opioid litigation: Has the family engaged in tax evasion and bankruptcy fraud? How deeply is Luther Strange involved in possible subterfuge? And is an audit that Purdue Pharma commissioned be believed? We do not yet have clear answers to those questions, but we do have insights from an article at U.S. News:

The Sackler family - owners of Purdue Pharma - transferred more than $10 billion in a decade from the OxyContin maker to its trusts and holding companies, the New York Times reported, citing a new audit commissioned by the drugmaker.

The audit, which was prepared by consulting firm Alix Partners, is likely to add further scrutiny on how much the Sackler family should pay to resolve lawsuits that Purdue Pharma face regarding the U.S. opioid epidemic, The New York Times added.

Lawsuits filed by state and local governments allege Purdue and the Sacklers contributed to a public health crisis that has claimed the lives of nearly 400,000 people since 1999 by aggressively marketing opioids while downplaying their addiction and overdose risks.

The audit showed that from 2008 through 2017, Purdue's payouts to the Sackler family totaled $10.7 billion, the report said. The auditors reported that they did not know how much cash distributed to the Sacklers was actually used to pay taxes.

If the Sacklers are trying to pull a con game, it looks like New York AG Letitia James will not be an easy mark:
Purdue reaped up to $13 billion in profits to the Sackler family, the U.S. states said in October, opposing efforts to halt lawsuits alleging the company and its owners helped fuel the epidemic.

"We are committed to holding the Sacklers responsible for the role they played in fueling the opioid crisis and will not stop fighting until we have achieved justice for victims," James said.

The drugmaker had filed for bankruptcy protection in September to pause thousands of lawsuits while it tries to build support for a proposed settlement it estimates is worth $10 billion. 

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