New York Uncovers $1B in Sackler Family Wire Transfers(nytimes.com)
nytimes.com
New York Uncovers $1B in Sackler Family Wire Transfers
https://www.nytimes.com/2019/09/13/health/sacklers-purdue-opioids.html
8 comments
Maybe now we know who bought that $1B BTC the other day.
"Bought" is inaccurate.
We don't know why that much BTC was moved, or by who. It could have been a sale.
Sounds like the kinda fraud that makes for no-knock raids in the early morning. Of course it is difficult to make a case if you never use the laughable barrier that is judicial consent to search.
[deleted]
Wiring money to yourself isn't fraud.
Wiring money to yourself right before declaring bankruptcy and telling the creditors "Oh darn, I don't have any money" is absolutely a form of fraud.
Purdue is going to declare bankruptcy eminently, that is one reason the settlements here are so soft - the government is trying to get what it can before they offshore everything.
Purdue is going to declare bankruptcy eminently, that is one reason the settlements here are so soft - the government is trying to get what it can before they offshore everything.
Were the transfers right before? The article mentions a transfer in 2009.
I agree that what you describe is fraud, but I don't believe that's what the article is talking about.
To elaborate, I don't see where the article states they wired money from their company to their private accounts right before declaring bankrupcy. The article instead seems to be describing shuffling of their personal assets between accounts.
To elaborate, I don't see where the article states they wired money from their company to their private accounts right before declaring bankrupcy. The article instead seems to be describing shuffling of their personal assets between accounts.
Originally the State's Attornies were fighting for a significant portion of the settlement to come from their personal wealth and not the company. Family's offer was just company assets and none of their personal wealth.
I don't believe your comment is responsive to the thread.
My contention is that nothing in this article shows or even purports that the Sacklers committed a corporate accounting crime. Apparently people disagree with the position but I haven't seen any greatly articulated arguments why I'm mistaken.
Wiring around your own lawfully obtained money isn't a crime. Taking profits from your private company that isn't facing bankrupcy (2008-2016) broadly isn't a crime.
Negotiating a different deal with State's Attornies than the highest offering bid by the SA's also isn't a crime. It's not the family's lowest offer; it's the mutually-agreed settlement.
There's a lot of reason not to like the Sacklers or Purdue Pharma! And there's a lot of reasons they should maybe lose some money or go to jail! Those reasons are just unrelated to the contents of this article — which is stirring up shit that looks bad to laypeople but isn't criminal.
My contention is that nothing in this article shows or even purports that the Sacklers committed a corporate accounting crime. Apparently people disagree with the position but I haven't seen any greatly articulated arguments why I'm mistaken.
Wiring around your own lawfully obtained money isn't a crime. Taking profits from your private company that isn't facing bankrupcy (2008-2016) broadly isn't a crime.
Negotiating a different deal with State's Attornies than the highest offering bid by the SA's also isn't a crime. It's not the family's lowest offer; it's the mutually-agreed settlement.
There's a lot of reason not to like the Sacklers or Purdue Pharma! And there's a lot of reasons they should maybe lose some money or go to jail! Those reasons are just unrelated to the contents of this article — which is stirring up shit that looks bad to laypeople but isn't criminal.
My comment was adding context and presenting motive as to why they might be moving money around. The Sacklers were/are potentially facing fines against their personal wealth, not just the company's wealth.
So the potential exists for them to commit a crime should they face personal fines. It's not uncommon for people to hide assets during legal proceedings to reduce their liability.
There's a reason, when someone is under investigation, that they're not allowed to leave the country because it's easy to just not come back if they're charged. The same applies to money, it's easy to make money inaccessible which is why assets are often frozen during criminal probes.
So the potential exists for them to commit a crime should they face personal fines. It's not uncommon for people to hide assets during legal proceedings to reduce their liability.
There's a reason, when someone is under investigation, that they're not allowed to leave the country because it's easy to just not come back if they're charged. The same applies to money, it's easy to make money inaccessible which is why assets are often frozen during criminal probes.
In every country in the world, transferring money out of a company when you are aware of future financial liabilities that put it into bankruptcy many times over trivially pierces the veil.
Purdue would immediately declare insolvency with just any one settlement. These transfers are the first big-item ticket you would be looking at.
Purdue would immediately declare insolvency with just any one settlement. These transfers are the first big-item ticket you would be looking at.
In which year was Purdue supposed to be aware of future financial liabilities that put it into bankrupcy? The deal was reached last Wednesday and yes, maybe it has been in the making for a while, but how long? The best I can deduce from Wikipedia is that a few states filed suit in May 2018 and another 30 jumped on by Jan 2019, and the earliest mention of the settlement was that it was in-progress in August 2019.
The Sacklers' biggest self-payments were in 2008-2011 per the article's figure and actually got smaller in later years, with data only through 2016.
It's not clear that at any point for which we have data, the Sacklers "knew" their company was facing future financial liabilities that put it into bankrupcy. Did they make self-payments from August 2019 on? I don't think the article says either way.
The Sacklers' biggest self-payments were in 2008-2011 per the article's figure and actually got smaller in later years, with data only through 2016.
It's not clear that at any point for which we have data, the Sacklers "knew" their company was facing future financial liabilities that put it into bankrupcy. Did they make self-payments from August 2019 on? I don't think the article says either way.
Those states didn't just say "oh hi, BTW, we are suing you today". Suits were filled as the result of years upon years of failed attempts to minimize the harm of over enthusiastic opiate prescription, etc. And it is fairly well documented that Purdue's "self policing" system was an absolute sham intended only to keep the lawyers away as long as possible. In fact most of their "efforts" consisted of identifying problem physicians, documenting them, and then -sitting on the files- until the doctor was arrested/subjected to licensing hearings and -then- turning them over so it looked like they were trying to do the right thing all along when in reality they were just doing this for show. And documentation exists going back a decade or more of the Sacklers direct involvement in designing and overseeing the implementation of all this in a very hands on manner.
stefan_'s comment suggests that the the wire transfers were (a) from the company and (b) after the Sacklers were aware the company was facing bankrupcy. But the article makes neither of these claims.
Your comment does not help make that case for corporate accounting fraud, because none of that context suggests to any reasonable person that an immensely profitable company is facing imminent bankrupcy.
The Sacklers's aggressive sales tactics were awful and I get that people hate them and don't like seeing them "get away with it." But this article does not illustrate a crime.
Your comment does not help make that case for corporate accounting fraud, because none of that context suggests to any reasonable person that an immensely profitable company is facing imminent bankrupcy.
The Sacklers's aggressive sales tactics were awful and I get that people hate them and don't like seeing them "get away with it." But this article does not illustrate a crime.
I get your point, but I don't see where conversation is intrinsically limited to "this specific article" and not the topic in general.
> that an immensely profitable company is facing imminent bankrupcy.
An immensely profitable company with multiple states and individuals lined up to sue it, whose principals know that they engaged in repeated (many already known) acts of deception and fraud to earn a non-negligible portion of profits, who were at the highest levels and thereby cannot claim ignorance is entirely likely to realize that should an adverse judgment be entered into, the damages may well approach a level that threatens solvency.
Realize that we're not just talking awful, aggressive sales tactics. We're talking willful deception and active hiding, obfuscating of research that showed increased levels of addiction that were instead being marketed as less addictive, more beneficial, in the context of a medical product. Aggressive sales tactics are what car dealers do. Wilful, fraudulent misrepresentation of the benefits and side effects of a prescription drug, to the detriment of individuals and societies, is a whole other level.
> that an immensely profitable company is facing imminent bankrupcy.
An immensely profitable company with multiple states and individuals lined up to sue it, whose principals know that they engaged in repeated (many already known) acts of deception and fraud to earn a non-negligible portion of profits, who were at the highest levels and thereby cannot claim ignorance is entirely likely to realize that should an adverse judgment be entered into, the damages may well approach a level that threatens solvency.
Realize that we're not just talking awful, aggressive sales tactics. We're talking willful deception and active hiding, obfuscating of research that showed increased levels of addiction that were instead being marketed as less addictive, more beneficial, in the context of a medical product. Aggressive sales tactics are what car dealers do. Wilful, fraudulent misrepresentation of the benefits and side effects of a prescription drug, to the detriment of individuals and societies, is a whole other level.
I'm in agreement with you.
While they might be rich, reprehensible people who made money by selling legal, but highly addictive drugs - its not as if they tried to pull money out just before a huge liability came up.
While they might be rich, reprehensible people who made money by selling legal, but highly addictive drugs - its not as if they tried to pull money out just before a huge liability came up.
I feel like pulling money out while you're engaged in behavior a reasonable person would assume might lead to future litigation... stretches the "We didn't know!" defense.
They and others were engaged in massive production and sale of opiates, even as the news reported increasing number of opiate deaths.
I'm not in favor of pinning everything on the last unlucky bastard standing around, but taking profits now when you can expect future corporate liabilities should be illegal.
They and others were engaged in massive production and sale of opiates, even as the news reported increasing number of opiate deaths.
I'm not in favor of pinning everything on the last unlucky bastard standing around, but taking profits now when you can expect future corporate liabilities should be illegal.
> I feel like pulling money out while you're engaged in behavior a reasonable person would assume might lead to future litigation... stretches the "We didn't know!" defense.
As the sibling comment says, anyone or any corporation with assets is a target for potential future litigation, with or without merit. That cannot be the basis for what makes profit-taking fraudulent, or companies could never pay owners a dividend.
> They and others were engaged in massive production and sale of opiates, even as the news reported increasing number of opiate deaths.
I basically disagree with this premise. The media reporting on opiate deaths is misleading.
* IMO, production and sale of opiates is broadly a public good. To the extent that people are suffering, and opiates are an effective treatment for that pain, having opiates available is a boon. Some of the recent restrictions on prescribing due to the "crisis" are overbearing for the majority of doctors and patients, and probably cause net increase in suffering in the country.
* Rate of conversion from on-label opioid prescription to addiction ("opioid use disorder") is lowish; this metastudy[1] claims 8-12% on average, but the 95% CI is anywhere from 3-17% and I'm not sure what they're measuring the percentage of (i.e., long-term prescriptions might both be more represented in the data and have higher conversion rates) — I doubt 8-12% of people who get 3 days of vicodin for their wisdom teeth extraction develop an opiate use disorder. They also point out that some studies showed misuse rates below 1% and "significant variability remains in this literature." We should expect these rates to fall as tighter prescription quantities from the last several years impact "leftover" pill rates.
* The rate of conversion from prescription opioid addiction to heroin is low; 4-6% per the government.[2]
* Overall opioid-involved overdose annual deaths in the US rose from 8000 in 1999 to 47600 in 2017; of those, the prescription-involved number rose by 13600 deaths (+300%), from 3400. Conversely, the non-prescription-involved deaths rose from by 26000 deaths (+465%), from 4600.[3](Figs 3-4) 26000/39600 = ~66%. (The population has also grown about 17% over that period, but that doesn't change the calculus too much.)
* Therefore: the overall growth pattern in opioid deaths in the last two decades is largely accounted for by heroin and other non-Rx use, which are a tiny population with a very high (and rising) death rate. The rising death rate is mostly due to the surge in black market sale of fentanyl as "heroin."[3] (esp. figures 4-5 and associated text) (Perhaps as a result of DEA and other restriction on the supply of the relatively safer, but less dense, heroin, and restriction on supply of the vastly safer prescription opioids.)
* Notably, the number of non-fentanyl-involved prescription opioid-involved deaths has actually been in decline since 2011![3] (fig. 4.), despite a rising population. Let me echo that since it's really important: prescription opioid-involved overdose, ex fentanyl, both in number and per capita rate, HAS BEEN IN DECLINE SINCE 2011! Why doesn't any news story on opioids in the US headline with that? The primary reason the overall prescription opiate-involved death rate hasn't tracked that decline is rising co-(ab)use with illicit fentanyl, and its relatively higher death rate.
If we could wave a magic wand and wipe (illicit) fentanyl off the earth, our annual opioid death rate would fall by something like half.
Given we don't have a magic wand, what can we do? Obviously we can't stop fentanyl from entering our borders or being synthesized illicitly here. We can (and have) leaned on illicit fentanyl-producing countries like China and Mexico to make those businesses less lucrative. We can do harm reduction things for the vulnerable population — which is mostly heroin users. We could legalize heroin with a prescription for existing addicts?
Harm reduction stuff: Provide free/cheap testing for fentanyl adulteration? Make naloxone available without prescription, on the shelf, for cheap or free, and encourage businesses and residents to keep some around, even if they aren't users and don't know any users? Maybe provide monitored, safe injection sites where addicts overdosing can be assisted immediately if needed but are not arrested or forced into any overbearing programs. Maybe even supply quality- and quantity-controlled heroin to these addicts for use on-site to reduce likelihood of overdose and even allow people to taper off if they want to.
/rant, sorry. Finally:
> I'm not in favor of pinning everything on the last unlucky bastard standing around, but taking profits now when you can expect future corporate liabilities should be illegal.
(Emphasis added.) Totally agree. The article does not say anything about taking profits now; its last figures on taking profits are from 2016.
[1]: https://www.ncbi.nlm.nih.gov/pubmed/25785523
[2]: https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdos...
[3]: https://www.drugabuse.gov/related-topics/trends-statistics/o...
As the sibling comment says, anyone or any corporation with assets is a target for potential future litigation, with or without merit. That cannot be the basis for what makes profit-taking fraudulent, or companies could never pay owners a dividend.
> They and others were engaged in massive production and sale of opiates, even as the news reported increasing number of opiate deaths.
I basically disagree with this premise. The media reporting on opiate deaths is misleading.
* IMO, production and sale of opiates is broadly a public good. To the extent that people are suffering, and opiates are an effective treatment for that pain, having opiates available is a boon. Some of the recent restrictions on prescribing due to the "crisis" are overbearing for the majority of doctors and patients, and probably cause net increase in suffering in the country.
* Rate of conversion from on-label opioid prescription to addiction ("opioid use disorder") is lowish; this metastudy[1] claims 8-12% on average, but the 95% CI is anywhere from 3-17% and I'm not sure what they're measuring the percentage of (i.e., long-term prescriptions might both be more represented in the data and have higher conversion rates) — I doubt 8-12% of people who get 3 days of vicodin for their wisdom teeth extraction develop an opiate use disorder. They also point out that some studies showed misuse rates below 1% and "significant variability remains in this literature." We should expect these rates to fall as tighter prescription quantities from the last several years impact "leftover" pill rates.
* The rate of conversion from prescription opioid addiction to heroin is low; 4-6% per the government.[2]
* Overall opioid-involved overdose annual deaths in the US rose from 8000 in 1999 to 47600 in 2017; of those, the prescription-involved number rose by 13600 deaths (+300%), from 3400. Conversely, the non-prescription-involved deaths rose from by 26000 deaths (+465%), from 4600.[3](Figs 3-4) 26000/39600 = ~66%. (The population has also grown about 17% over that period, but that doesn't change the calculus too much.)
* Therefore: the overall growth pattern in opioid deaths in the last two decades is largely accounted for by heroin and other non-Rx use, which are a tiny population with a very high (and rising) death rate. The rising death rate is mostly due to the surge in black market sale of fentanyl as "heroin."[3] (esp. figures 4-5 and associated text) (Perhaps as a result of DEA and other restriction on the supply of the relatively safer, but less dense, heroin, and restriction on supply of the vastly safer prescription opioids.)
* Notably, the number of non-fentanyl-involved prescription opioid-involved deaths has actually been in decline since 2011![3] (fig. 4.), despite a rising population. Let me echo that since it's really important: prescription opioid-involved overdose, ex fentanyl, both in number and per capita rate, HAS BEEN IN DECLINE SINCE 2011! Why doesn't any news story on opioids in the US headline with that? The primary reason the overall prescription opiate-involved death rate hasn't tracked that decline is rising co-(ab)use with illicit fentanyl, and its relatively higher death rate.
If we could wave a magic wand and wipe (illicit) fentanyl off the earth, our annual opioid death rate would fall by something like half.
Given we don't have a magic wand, what can we do? Obviously we can't stop fentanyl from entering our borders or being synthesized illicitly here. We can (and have) leaned on illicit fentanyl-producing countries like China and Mexico to make those businesses less lucrative. We can do harm reduction things for the vulnerable population — which is mostly heroin users. We could legalize heroin with a prescription for existing addicts?
Harm reduction stuff: Provide free/cheap testing for fentanyl adulteration? Make naloxone available without prescription, on the shelf, for cheap or free, and encourage businesses and residents to keep some around, even if they aren't users and don't know any users? Maybe provide monitored, safe injection sites where addicts overdosing can be assisted immediately if needed but are not arrested or forced into any overbearing programs. Maybe even supply quality- and quantity-controlled heroin to these addicts for use on-site to reduce likelihood of overdose and even allow people to taper off if they want to.
/rant, sorry. Finally:
> I'm not in favor of pinning everything on the last unlucky bastard standing around, but taking profits now when you can expect future corporate liabilities should be illegal.
(Emphasis added.) Totally agree. The article does not say anything about taking profits now; its last figures on taking profits are from 2016.
[1]: https://www.ncbi.nlm.nih.gov/pubmed/25785523
[2]: https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdos...
[3]: https://www.drugabuse.gov/related-topics/trends-statistics/o...
Virtually any behavior might lead to future litigation - you operate within the bounds of the law, and worry about the rest later.
As soon as they saw their names associated with the opioid crisis, they knew this day was coming.
Piercing the veil isn't fraud either. But it can make you personally liable for the financial liabilities of your company.
The term for this is literally "fraudulent conveyance": https://en.wikipedia.org/wiki/Fraudulent_conveyance#United_S...
Fraudulent conveyence is not the same thing as "piercing the veil". Although it is a subset of it.
Doesn't fraudulent conveyance only apply if there are creditors to the debtors.
In this situation, who is the creditor that was defrauded by the conveyances in question at the time of conveyance?
In this situation, who is the creditor that was defrauded by the conveyances in question at the time of conveyance?
but attempting to understate your wealth for purposes of liability is a huge crime. this article is basically telling us that they're dramatically understating their wealth to minimize the settlement damage.
> attempting to understate your wealth for purposes of liability is a huge crime.
Is it? Does being more wealthy increase your liability in some way? Is the huge crime a federal or state crime, and can you point me to any reference? (I'm sure claiming to be insolvent and unable to pay a civil suit when you have hidden assets is a type of fraud. But, that is not what happened here. Forbes estimates the family's worth at about $13 billion; no one is making the claim that they are bankrupt or unable to pay settlements / judgments.)
In general, in the US, wealth is private information between you and the IRS. There are judicial exceptions, certainly — you can't lie about your wealth in sworn testimony at trial, for example. But the Sacklers' suits did not go to trial — they settled outside of court.
> this article is basically telling us that they're dramatically understating their wealth to minimize the settlement damage.
$1 billion over a period of 10 years is not a huge chunk of $13 billion, IMO; and that's just the amounts moved a decade ago. It isn't clear all of it ended up "hidden." I'm also not sure of the mechanism by which understating your wealth minimizes settlement damage unless you actually claim insolvency.
Is it? Does being more wealthy increase your liability in some way? Is the huge crime a federal or state crime, and can you point me to any reference? (I'm sure claiming to be insolvent and unable to pay a civil suit when you have hidden assets is a type of fraud. But, that is not what happened here. Forbes estimates the family's worth at about $13 billion; no one is making the claim that they are bankrupt or unable to pay settlements / judgments.)
In general, in the US, wealth is private information between you and the IRS. There are judicial exceptions, certainly — you can't lie about your wealth in sworn testimony at trial, for example. But the Sacklers' suits did not go to trial — they settled outside of court.
> this article is basically telling us that they're dramatically understating their wealth to minimize the settlement damage.
$1 billion over a period of 10 years is not a huge chunk of $13 billion, IMO; and that's just the amounts moved a decade ago. It isn't clear all of it ended up "hidden." I'm also not sure of the mechanism by which understating your wealth minimizes settlement damage unless you actually claim insolvency.
When I first heard that states were looking to confiscate $5B from the Sackler family, I was pleasantly surprised, only to find out that they’re worth more than $13B.
As long as the financial punishment don’t outpace this kind of behavior among the wealthy, it’s really just a tax on them.
As long as the financial punishment don’t outpace this kind of behavior among the wealthy, it’s really just a tax on them.
A financial punishment is all?
Pushing that much narcotics on people normally lands you in jail.
Pushing that much narcotics on people normally lands you in jail.
cmurf(3)
While I totally agree that the Sacklers should be considered like a criminal organization conspiring to kill people and would deserve long jail time, there is another goal to this confiscation than punishment.
It is a way to change incentives. I don't know what part of their $13B wealth comes from opioids, but this tax made it suddenly far, far less profitable. They will make their calculation of what would have been a better course of action, but if they had found a way to stay within the law and only lost $3B in revenues, it would have been profitable.
Fines are an efficient way to regulate companies and always welcomed, even if insufficient.
Not only this is like a tax, but there is a randomness factor it: it depends on a court decision. A lot of companies are risk-adverse so such a fine can have a chilling multiplier.
It is a way to change incentives. I don't know what part of their $13B wealth comes from opioids, but this tax made it suddenly far, far less profitable. They will make their calculation of what would have been a better course of action, but if they had found a way to stay within the law and only lost $3B in revenues, it would have been profitable.
Fines are an efficient way to regulate companies and always welcomed, even if insufficient.
Not only this is like a tax, but there is a randomness factor it: it depends on a court decision. A lot of companies are risk-adverse so such a fine can have a chilling multiplier.
I think the argument of the comment you're replying to is that it was profitable and they did make the calculation. They're left with $7B, which is a lot. It's hard to make $7B.
And the multiplier works in the other way. Because of the non-deterministic chance of whether you get caught and whether you get punished and whether all of this happens before you donate all your money to charitable causes and die, the expected value of your loss is a fraction of the fine. A truly effective penalty would fine them many times the illegal profit to account for that.
And the multiplier works in the other way. Because of the non-deterministic chance of whether you get caught and whether you get punished and whether all of this happens before you donate all your money to charitable causes and die, the expected value of your loss is a fraction of the fine. A truly effective penalty would fine them many times the illegal profit to account for that.
They also did not end up giving up any of their personal wealth in the settlement. $5B was just the starting bid.
> A truly effective penalty would fine them many times the illegal profit to account for that.
How much of the profit was illegal and how would you go about quantifying that?
> A truly effective penalty would fine them many times the illegal profit to account for that.
How much of the profit was illegal and how would you go about quantifying that?
> How much of the profit was illegal and how would you go about quantifying that?
I mean, I haven't done a criminal investigation of the Sacklers, so I'm the wrong person to ask.
But on general principle - if the goal is to use fines to disincentivize future criminal behavior (which seems reasonable to me, but it's not the only factor at play in setting fines), you should treat all profit that was related to the criminal behavior as criminal and not try to reverse-engineer "How much money would they have made if they hadn't done this crime." Otherwise you're still incentivized to try 10 different legally-questionable strategies and keep the profit from the 9 that were found to be on the other side of the line.
As a concrete example, if Google's copying of Java interfaces were ruled illegal (and to be clear I don't think it should be), then an appropriate fine is (some multiple of) all profit from Android, not some attempt at retconning how much money Google would have made if they had used something other than Java or waited for OpenJDK.
(That's a fine, to be clear, not damages. Oracle's damages should be calculated by retconning how much they would have gained had Google kept the laws, and nothing more.)
I mean, I haven't done a criminal investigation of the Sacklers, so I'm the wrong person to ask.
But on general principle - if the goal is to use fines to disincentivize future criminal behavior (which seems reasonable to me, but it's not the only factor at play in setting fines), you should treat all profit that was related to the criminal behavior as criminal and not try to reverse-engineer "How much money would they have made if they hadn't done this crime." Otherwise you're still incentivized to try 10 different legally-questionable strategies and keep the profit from the 9 that were found to be on the other side of the line.
As a concrete example, if Google's copying of Java interfaces were ruled illegal (and to be clear I don't think it should be), then an appropriate fine is (some multiple of) all profit from Android, not some attempt at retconning how much money Google would have made if they had used something other than Java or waited for OpenJDK.
(That's a fine, to be clear, not damages. Oracle's damages should be calculated by retconning how much they would have gained had Google kept the laws, and nothing more.)
I mean, the first step is establishing a second crime. What's the crime on which to say any profit since 2001 is related to a crime?
The company and some executives already plead guilty in 2007 to, essentially, false advertising, during the 1995-2001 period immediately after the drug was developed. During that time, "OxyContin brought in $2.8 billion in revenue for Purdue Pharma."[1] Double Jeopardy means that specific crime during that specific period is done and settled.
The company paid out $600 million in fines and the execs another ~$35 million. So that's 22% of revenue in fines in that instance. (I guess the courts didn't agree with your notion that fines should be 100+% of revenue.)
The New Yorker estimated in 2017 that OxyContin has brought in $35 billion in total revenue for Purdue[2]; if that's true, subtracting the 2.8 from earlier suggests that it produced $32 billion in revenue 2001-2017.
Did Purdue Pharma commit another crime (or the same mislabeling / false advertising kind of crime) after 2001?
[1]: https://www.nytimes.com/2007/05/10/business/11drug-web.html
[2]: https://www.newyorker.com/magazine/2017/10/30/the-family-tha...
The company and some executives already plead guilty in 2007 to, essentially, false advertising, during the 1995-2001 period immediately after the drug was developed. During that time, "OxyContin brought in $2.8 billion in revenue for Purdue Pharma."[1] Double Jeopardy means that specific crime during that specific period is done and settled.
The company paid out $600 million in fines and the execs another ~$35 million. So that's 22% of revenue in fines in that instance. (I guess the courts didn't agree with your notion that fines should be 100+% of revenue.)
The New Yorker estimated in 2017 that OxyContin has brought in $35 billion in total revenue for Purdue[2]; if that's true, subtracting the 2.8 from earlier suggests that it produced $32 billion in revenue 2001-2017.
Did Purdue Pharma commit another crime (or the same mislabeling / false advertising kind of crime) after 2001?
[1]: https://www.nytimes.com/2007/05/10/business/11drug-web.html
[2]: https://www.newyorker.com/magazine/2017/10/30/the-family-tha...
From what I can quickly find on the web, I'd estimate that they sold about $35 billion worth of Oxycontin. That doesn't include all of the other opioids they sold through Purdue and other affiliated companies. I'd say it's likely that the vast majority of the Sackler fortune is from Oxycontin.
If you rob a bank you can't just give the money back if you get caught, and you certainly can't just give half of it back.
If you rob a bank you can't just give the money back if you get caught, and you certainly can't just give half of it back.
> If you rob a bank you can't just give the money back if you get caught, and you certainly can't just give half of it back.
How much less oxycontin do you think they'd have sold if their advertising was less reprehensible?
Notably, Purdue produced some of the first extended-release opioid formulations on the market, which does have some real value even without exaggerated sales. It developed MS Contin (XR morphine) in 1984 and OxyContin (XR Oxycodone) in 1996. (CONTIN™ is Purdue's extended-release drug delivery system developed in the 70s.)
OxyContin was also the first "Abuse-deterrent Formulation" (ADF) approved by the FDA, for whatever value that has[1]. Today, ten such formulations are approved and of those, five are actually available.
So tl;dr, I don't think your metaphor is especially apt. They should be punished for their sales tactics, which were outrageous, but there seems to be this mentality that all opioid manufacture is evil, and I don't believe that.
[1]: https://anesthesiology.pubs.asahq.org/article.aspx?articleid...
How much less oxycontin do you think they'd have sold if their advertising was less reprehensible?
Notably, Purdue produced some of the first extended-release opioid formulations on the market, which does have some real value even without exaggerated sales. It developed MS Contin (XR morphine) in 1984 and OxyContin (XR Oxycodone) in 1996. (CONTIN™ is Purdue's extended-release drug delivery system developed in the 70s.)
OxyContin was also the first "Abuse-deterrent Formulation" (ADF) approved by the FDA, for whatever value that has[1]. Today, ten such formulations are approved and of those, five are actually available.
So tl;dr, I don't think your metaphor is especially apt. They should be punished for their sales tactics, which were outrageous, but there seems to be this mentality that all opioid manufacture is evil, and I don't believe that.
[1]: https://anesthesiology.pubs.asahq.org/article.aspx?articleid...
The problem is that they used the XR aspect of it to argue (evidently without basis) that patients would not become addicted to it. There was loads of lobbying of the FDA/DEA, sending doctors to seminars in Hawaii, I even remember numerous op-eds in the NYT arguing that doctors were committing malpractice for undertreating pain. This led to the rise of the Pain Management Clinic, which primarily existed to prescribe opioids. Without the FDA/DEA lobbying by Purdue, these clinics would have been shut down by the DEA for prescribing too many opioids.
The message that this huge PR/Sales/Lobbying effort was sending was: XR opioids have a low addiction potential, and not prescribing them, or preventing them from being prescribed is malpractice and insensitive to patients that are in pain. I don't doubt that many fewer people are in significant pain now, but we also have something like 4% of the entire U.S. population addicted to opioids.
The message that this huge PR/Sales/Lobbying effort was sending was: XR opioids have a low addiction potential, and not prescribing them, or preventing them from being prescribed is malpractice and insensitive to patients that are in pain. I don't doubt that many fewer people are in significant pain now, but we also have something like 4% of the entire U.S. population addicted to opioids.
Did any of this happen after 2001? The advertising from 1995-2001 was already litigated and plead guilty and fined.
This is confusing as hell.
So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work?
And they went to the trouble of briefing against the Sacklers but don't explain what information they don't have already or aren't being given (i.e. why they believe something is being hidden). They just say: we have the records, boy there is a lot of them, we haven't gone through them all...but we know they aren't complete...the bois working hard there.
And why is the punishment related to individual wealth at all? Are limited liability companies not really limited when a state govt laywer changes their mind? If someone breaks the law then charge the person who breaks the law (the point here is a headline for a politican...which is unfortunate given that some people at the company were clearly acting improperly).
Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works. You need to move it to an account that won't report to the US authorities..this doesn't exist in Switzerland or anywhere in the world (a disadvantage of weak libel laws, I am pretty sure this would be actionable in Commonwealth law systems given how obviously erroneous and misleading the statement is).
The whole lawyer/politician thing in the US is entertaining as an outsider. It is utterly bizarre when considered using any kind of logic.
So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work?
And they went to the trouble of briefing against the Sacklers but don't explain what information they don't have already or aren't being given (i.e. why they believe something is being hidden). They just say: we have the records, boy there is a lot of them, we haven't gone through them all...but we know they aren't complete...the bois working hard there.
And why is the punishment related to individual wealth at all? Are limited liability companies not really limited when a state govt laywer changes their mind? If someone breaks the law then charge the person who breaks the law (the point here is a headline for a politican...which is unfortunate given that some people at the company were clearly acting improperly).
Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works. You need to move it to an account that won't report to the US authorities..this doesn't exist in Switzerland or anywhere in the world (a disadvantage of weak libel laws, I am pretty sure this would be actionable in Commonwealth law systems given how obviously erroneous and misleading the statement is).
The whole lawyer/politician thing in the US is entertaining as an outsider. It is utterly bizarre when considered using any kind of logic.
Also, transferring money to a Swiss bank account is not against the law. The lawyer quoted says it was moved offshore to "conceal" the source of money...that isn't how money laundering works.
Money laundering "works" through a chain of actions whose intent is to conceal the original source of said money. Some or all of those actions might be legal in themselves, it is the intent that counts - if you know the state is after your assets and you knowingly transfer those assets to a place the state can't find them (or even, would have trouble finding them, whether or not it could technically find them), then a pattern is fairly evident even if the transfer itself is legal.
Generally, playing games to make the state's job harder once it's investigating you is going to be a crime in the US (and many other places I believe). This is because the law has never been "blind" in the sense that it only considers actions - the law has always considered intentions and efforts to get results. Putting poison in a cup by itself isn't illegal, for example. Leaving that cup anywhere someone might drink from it on the other hand winds-up in crime.
Money laundering "works" through a chain of actions whose intent is to conceal the original source of said money. Some or all of those actions might be legal in themselves, it is the intent that counts - if you know the state is after your assets and you knowingly transfer those assets to a place the state can't find them (or even, would have trouble finding them, whether or not it could technically find them), then a pattern is fairly evident even if the transfer itself is legal.
Generally, playing games to make the state's job harder once it's investigating you is going to be a crime in the US (and many other places I believe). This is because the law has never been "blind" in the sense that it only considers actions - the law has always considered intentions and efforts to get results. Putting poison in a cup by itself isn't illegal, for example. Leaving that cup anywhere someone might drink from it on the other hand winds-up in crime.
E.g. see structuring, and the law related to
https://en.m.wikipedia.org/wiki/Structuring
Perfectly legal activities. Illegal as hell when performed with intent to evade reporting.
https://en.m.wikipedia.org/wiki/Structuring
Perfectly legal activities. Illegal as hell when performed with intent to evade reporting.
Note that we don't need particular laws against structuring. Those engaged in structuring are engaging in actions intended to evade the original law and that's enough (though there may be precedent and laws in this regard, they aren't necessary).
Also note similar laws in other countries are cited.
Also note similar laws in other countries are cited.
As implied in my original post: after FATCA you cannot evade reporting at all by transferring money to any Swiss bank (there are some countries that don't comply with FATCA but every large financial institution complies fully). That is why the bank reported it to the AG.
The point of this is misdirection sometimes known as cooking the books, where you may have financial documents that say money exist, but they documents are separate from another set of books that says money doesn't exist.
You provide the cooked books to anyone who is suing you, Uncle Sam for taxes, and so on. Of course you have another set of documents that tells you where your money is, the point of having two set of books is to use one set to lie, misdirect, be non truthful in a court of law.
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And Limited Liability Corporations have good faith as part of their contract as a requirement. You commit purposeful fraud and the LLC will not shield you. The term for this is known as "Piercing the Veil" / "Piercing the Corporate Veil" and when the veil is pierced your assest away from the corporation can be seized for behavior you did as an agent of the corporation.
Now what are the rules of Piercing the Veil depends on your state for each state has different rules for Limited Liability Corporations, that said all 50 states have ways to pierce the veil for it is just a settled part of common law in the US.
You provide the cooked books to anyone who is suing you, Uncle Sam for taxes, and so on. Of course you have another set of documents that tells you where your money is, the point of having two set of books is to use one set to lie, misdirect, be non truthful in a court of law.
-----
And Limited Liability Corporations have good faith as part of their contract as a requirement. You commit purposeful fraud and the LLC will not shield you. The term for this is known as "Piercing the Veil" / "Piercing the Corporate Veil" and when the veil is pierced your assest away from the corporation can be seized for behavior you did as an agent of the corporation.
Now what are the rules of Piercing the Veil depends on your state for each state has different rules for Limited Liability Corporations, that said all 50 states have ways to pierce the veil for it is just a settled part of common law in the US.
This practice of different books has a nice phrase in Karnataka,India - "Ramana lekka, Krishnana lekka". Literally, "Rama's accounting and Krishna's accounting".
Rama is personification of righteousness and Krishna, while a God, is also considered mischievous.
Rama is personification of righteousness and Krishna, while a God, is also considered mischievous.
> So they are using financial records to claim that they are hiding assets...their evidence for this is...the financial records...that they have...already. How does that work?
Because they didn't get the financial records from the Sacklers. A Court would want a full financial disclosure as part of the settlement. Let's say the IRS audited a small business owner and settled with the owner for back taxes and fines. Well, the owner could have used some creative accounting to hide money, maybe contract out some work to an overseas company he controlled. This might not be illegal alone. But hiding his ownership of the overseas company could decrease the back taxes and fines he owned. So it's going to look bad for him if the IRS discovers his stake in the overseas company from his bank reporting a suspicious transaction.
Because they didn't get the financial records from the Sacklers. A Court would want a full financial disclosure as part of the settlement. Let's say the IRS audited a small business owner and settled with the owner for back taxes and fines. Well, the owner could have used some creative accounting to hide money, maybe contract out some work to an overseas company he controlled. This might not be illegal alone. But hiding his ownership of the overseas company could decrease the back taxes and fines he owned. So it's going to look bad for him if the IRS discovers his stake in the overseas company from his bank reporting a suspicious transaction.
Transferring assets to different entities prior to impending bankruptcy is clear cut fraud.
The company was charged and convicted of a felony which would pierce the corporate veil.
The company was charged and convicted of a felony which would pierce the corporate veil.
It isn't. It is called fraudulent conveyance, and it is well covered by existing law (it is not fraud, it is not a criminal act). And the issue, as the article repeatedly says, is about personal wealth.
> Transferring assets to different entities prior to impending bankruptcy is clear cut fraud.
No. The transfers were (a) personal wealth and (b) a decade ago.
No. The transfers were (a) personal wealth and (b) a decade ago.
They should be absolutely bankrupted. And criminally prosecuted.
I also hope society starts blacklisting: museums, society events, and NYC life. That will hurt them just as much as the money. The wife just tried to pay Courtney Love (yeah talk about drugs) 250k to attend her fashion show it's gross.
Provably false advertising = fraud. Paying DRs to prescribe and push false information = fraud/bribery. I am doubtful, but I hope the recent release of coordination comms on the Marino bill and response to block DEA enforcement of laws helps a RICO case. Imagine if all the big banks got together to figure out how to help each other get out of KYC.
And they are repeating the exact same playbook in India right as we speak. It makes me very angry.
Provably false advertising = fraud. Paying DRs to prescribe and push false information = fraud/bribery. I am doubtful, but I hope the recent release of coordination comms on the Marino bill and response to block DEA enforcement of laws helps a RICO case. Imagine if all the big banks got together to figure out how to help each other get out of KYC.
And they are repeating the exact same playbook in India right as we speak. It makes me very angry.
Someone tell Jeff Dean he should be ashamed of himself.
https://twitter.com/JeffDean/status/1093953731756867584
https://twitter.com/JeffDean/status/1093953731756867584
"I appreciate your thoughts. However, I'm not involved in organizing the colloquium, and don't know the origin of the name of the event." -Jeff Dean
OK I guess you were just following orders, Jeff.
Do you think doctors should be criminally prosecuted, along with the AMA? After all, they allow the prescription of OxyContin and physicians are the only ones who actually prescribe them. The FDA also regulates the sale of OxyContin.
If doctors prescribe harmful drugs without evaluating their efficacy and without questioning the marketing, aren’t they responsible ? They are ultimately the ones “pushing” OxyContin after all.
If doctors prescribe harmful drugs without evaluating their efficacy and without questioning the marketing, aren’t they responsible ? They are ultimately the ones “pushing” OxyContin after all.
> If doctors prescribe harmful drugs without evaluating their efficacy
Doctors are highly trained specialists with limited time, and no, their job isn't to evaluate drug efficacy and safety. That's the FDA's job, and yes, to some extent the FDA failed here.
Doctors are highly trained specialists with limited time, and no, their job isn't to evaluate drug efficacy and safety. That's the FDA's job, and yes, to some extent the FDA failed here.
Doctors have been and should be prosecuted.
And the AMA? The FDA?
Should doctors not be allowed to prescribe OxyContin?
Very weird to me that the focus is on the people least responsible. Doctors, FDA, AMA all have to approve the prescription of OxyContin. The whole point of the FDA is to evaluate drugs using science instead of marketing.
If one accepts that Purdue is the party most responsible for the opioid crisis then one must consider doctors, the AMA, and the FDA all incompetent idiots, right?
Should doctors not be allowed to prescribe OxyContin?
Very weird to me that the focus is on the people least responsible. Doctors, FDA, AMA all have to approve the prescription of OxyContin. The whole point of the FDA is to evaluate drugs using science instead of marketing.
If one accepts that Purdue is the party most responsible for the opioid crisis then one must consider doctors, the AMA, and the FDA all incompetent idiots, right?
This really isn't a hard concept.
OxyContin is a perfectly legitimate drug and it is reasonable for the FDA and AMA to sign off on its use. What isn't legitimate is doctors and pharmacists prescribing the drug over and over again when there was no reason to.
OxyContin is a perfectly legitimate drug and it is reasonable for the FDA and AMA to sign off on its use. What isn't legitimate is doctors and pharmacists prescribing the drug over and over again when there was no reason to.
> What isn't legitimate is doctors and pharmacists prescribing the drug over and over again when there was no reason to.
I.e., "pill mills."
I.e., "pill mills."
Is it really possible that from Me Too to Purdue to tech anti trust that we are really at the beginning of a true populist backlash against entrenched power?
I am skeptical but there are many threads spinning here.
(Also, to be clear, I think the current Warren tech-are-utilities thing is bozo)
I am skeptical but there are many threads spinning here.
(Also, to be clear, I think the current Warren tech-are-utilities thing is bozo)
No. These high profile "takedowns" keeps hubris in check, and also keep the rabble happy while the rest of entrenched power carries on being entrenched and powerful.
No, being wealthy means that the Sacklers belong to a class that our system is designed to protect. They will not face prison time, and they will remain billionaires even after the lawsuits and settlements. The only time someone who belongs to their class goes to prison is if they fuck with another rich person's money.
We're in the second inning actually, not at the beginning.
It started with the post great recession, Occupy Wall Street movement. That was the first major populist movement in the US in the 21st century. Even though that largely failed to result in anything draconian (fortunately), the US banking system was brought under far stricter control. The Fed with the Treasury is capable of dictating almost everything about the businesses of the large financial institutions. Today the US financial system is by far the strongest and safest financial system of any major economy. It's due in part to that populist response after the crash.
Trump's election was in fact also a massive populist backlash, against electing more of the same political dynasties (Clinton / Bush) that had come to rule the US. Trump defeated powerful, massively well-funded representatives of both entrenched dynasties to win the Presidency (which tells you just how dramatically voters were willing to reject a continuation of the old). Trump is the first populist President that the US has had in a century. Nearly every organization and individual that was part of the entrenched establishment was against Trump and he won regardless. And no matter what people think of Trump, his election will represent a permanent split with the past when it comes to the US political system. Things will never be the same, to put it mildly. AOC, as one example, is in Congress solely due to this cultural shift, new outcomes are possible (variations of Democratic Socialists were exceptionally rare in the past; they won't be rare in the near future). Obama was also partially responsible for and representative of this process that is underway; it's no coincidence he won immediately following the great recession crash, as the backlash and desire for a different direction is part of what made him possible (Hillary Clinton or McCain win that election otherwise).
It started with the post great recession, Occupy Wall Street movement. That was the first major populist movement in the US in the 21st century. Even though that largely failed to result in anything draconian (fortunately), the US banking system was brought under far stricter control. The Fed with the Treasury is capable of dictating almost everything about the businesses of the large financial institutions. Today the US financial system is by far the strongest and safest financial system of any major economy. It's due in part to that populist response after the crash.
Trump's election was in fact also a massive populist backlash, against electing more of the same political dynasties (Clinton / Bush) that had come to rule the US. Trump defeated powerful, massively well-funded representatives of both entrenched dynasties to win the Presidency (which tells you just how dramatically voters were willing to reject a continuation of the old). Trump is the first populist President that the US has had in a century. Nearly every organization and individual that was part of the entrenched establishment was against Trump and he won regardless. And no matter what people think of Trump, his election will represent a permanent split with the past when it comes to the US political system. Things will never be the same, to put it mildly. AOC, as one example, is in Congress solely due to this cultural shift, new outcomes are possible (variations of Democratic Socialists were exceptionally rare in the past; they won't be rare in the near future). Obama was also partially responsible for and representative of this process that is underway; it's no coincidence he won immediately following the great recession crash, as the backlash and desire for a different direction is part of what made him possible (Hillary Clinton or McCain win that election otherwise).
One thing missing from this narrative is that Trump lost the popular vote and that barely half of eligible voters even participated. That said, the seven faithless electoral votes do underscore a theme of disapproval during the 2016 election.
Obama was also very populist. (I suspect at first he drank his own koolaid but that he was ground down from within.)
Trump is the kind of populist you get when the first one fails. Trump has many former Obama voters.
Trump is the kind of populist you get when the first one fails. Trump has many former Obama voters.
Obama promised Change but it was the same old machine. Trump is actually delivering Change (whether you see it as good or bad).
> Trump's election was in fact also a massive populist backlash
Trump lost the popular vote. It wasn't a populist backlash, it was a broken system.
Trump lost the popular vote. It wasn't a populist backlash, it was a broken system.
The system is broken, yes. But I think the point being made is that Trump received many millions of votes in spite of all Democrat and Republican contenders against him because of a 'populist backlash' against the status quo.