Left Menu
Development News Edition

In emails, Sacklers fret over wealth, opioid business

Still, in settlement papers, prosecutors called some of the money movements "fraudulent transfers." On Wednesday, Sackler family members associated with Purdue agreed to pay a $225 million penalty to resolve a Justice Department civil probe alleging they caused false claims for OxyContin to be submitted to federal healthcare programs.

Reuters | Updated: 22-10-2020 05:27 IST | Created: 22-10-2020 05:27 IST
In emails, Sacklers fret over wealth, opioid business

Soon after a Purdue Pharma LP affiliate pleaded guilty to misbranding its addictive opioid painkiller OxyContin in 2007, the company's Sackler family owners fretted about possible threats to their wealth. On May 17, 2007, Jonathan Sackler, who has since passed away, emailed relatives and a financial advisor, triggering an anxious discussion, according to settlement documents U.S. prosecutors disclosed on Wednesday.

He told them an investment banker had once told him that his family "is already rich, the one thing you don’t want to do is to become poor.” David Sackler responded the same day: " hat do you think is going on in all of these courtrooms right now? We’re rich? For how long? Until which suits get through to the family?" Between 2008 and 2019, Purdue transferred more than $10 billion, including roughly $4 billion in cash to Sackler-controlled entities, according to filings.

Family members on Wednesday said the transfers were proper and that documents scheduled to be released in the future would support that claim. As part of a separate plea deal https://www.reuters.com/article/us-purdue-pharma-opioids-investigations/oxycontin-maker-purdue-to-plead-guilty-over-opioid-practices-deal-sparks-opposition-idUSKBN276236 Purdue agreed to, certain documents produced to the Justice Department and related to criminal and civil settlements unveiled Wednesday will become publicly available through an online repository. Still, in settlement papers, prosecutors called some of the money movements "fraudulent transfers."

On Wednesday, Sackler family members associated with Purdue agreed to pay a $225 million penalty to resolve a Justice Department civil probe alleging they caused false claims for OxyContin to be submitted to federal healthcare programs. They were not criminally charged. The family denied the civil allegations and said that when they previously served on Purdue's board, they relied on management assertions the company was acting lawfully. They decided to resolve the investigation to facilitate a broader settlement of widespread opioid litigation against themselves and Purdue, they said. They have proposed contributing a separate $3 billion to resolving those lawsuits and ceding control of Purdue, which would dissolve and shift assets to a "public benefit company" steering money to U.S. communities suffering from the opioid crisis that have sued the company and family.

The family members said they were not involved in conduct described in Purdue's agreement, disclosed Wednesday, to plead guilty to criminal charges. The Sacklers associated with Purdue are longtime philanthropists worth billions of dollars whose name has adorned museum wings. But museums began shunning donations and distancing themselves from the family after they surfaced in opioid lawsuits.

In settlement documents, prosecutors detailed email exchanges among Sackler relatives expressing concerns about the state of Purdue's business, their own finances and the ability to take money out of their company. U.S. officials said their settlement with the Sacklers did not release them from fraudulent transfer claims Purdue's estate could bring. David Sackler, in the 2007 email exchange, suggested the family "lever up" in case access to money dried up when lawsuits surfaced.

"My thought is to lever up where we can, and try to generate some additional income," he wrote, roughly five years before he joined Purdue's board. "We may well need it ... Even if we have to keep it in cash, it’s better to have the leverage now while we can get it than thinking it will be there for us when we get sued." Purdue eventually filed for bankruptcy last year amid thousands of lawsuits from states, cities, counties and other plaintiffs alleging the company and its Sackler family owners aggressively marketed opioids while minimizing their potential for abuse and overdosing. The company and family have denied the allegations.

In 2010 and 2011, Purdue attributed 40% of OxyContin prescription declines to so-called "Region Zero" doctors, so named because company sales representatives were instructed to avoid them since an internal company system flagged the physicians as suspected of writing improper prescriptions. Those controls failed, prosecutors said. In a September 2014 email, Mortimer D.A. Sackler said Purdue was in "a death spiral," noting that the company's bottom line had declined, and "more importantly shareholder value," over the past several years.

Jonathan Sackler responded that "when the business has more cash flow than is required, I've supported distributions, and we've taken a fantastic amount of money out of the business." A Sackler family spokesman said: "The full email, when it's eventually made public, will clearly show that Jonathan advocated keeping more money in the company and not taking further distributions."

About a month after the message, in an email to relatives, Jonathan Sackler described Purdue's business "as more of a smart milking program than a growth program." (Editing by Edward Tobin)



Turbulence surrounding tobacco control in Ghana

... ...

Refugee compassion and response: Ideas to mitigate disasters now and in their future

Their homeland becomes a forbidden territory for them and more likely than not, their journey to foreign soil is no less traumatizing, not to say deadly. It is crucial to help refugees live a life of dignity and purpose....

Inadequate water infrastructure causes a tidal wave of coronavirus in rural Alaska

... ...


Latest News

Americans face new COVID-19 restrictions after Thanksgiving

Americans returning home from Thanksgiving break faced strict new coronavirus measures around the country Monday as health officials brace for a disastrous worsening of the out-of-control surge because of holiday gatherings over the long we...

Conservative justices wary of blocking Trump immigrant census plan

Conservative U.S. Supreme Court justices on Monday appeared reluctant to block a vaguely defined plan by President Donald Trumps administration to exclude immigrants living in the United States illegally from the population totals used to a...

UN human rights office worried by killings in Indonesian provinces of Papua and West Papua

We are disturbed by escalating violence over the past weeks and months in the Indonesian provinces of Papua and West Papua and the increased risk of renewed tension and violence, Ravina Shamdasani, spokesperson for the Office of the High ...

Deforestation in Brazil's Amazon skyrockets to 12-year high under Bolsonaro

Deforestation in Brazils Amazon rainforest surged to a 12-year high in 2020, official government data showed on Monday, with destruction soaring since President Jair Bolsonaro took office and weakened environmental enforcement. In 2020, des...

Give Feedback