A settlement tentatively reached this week between scores of municipal and state governments and Purdue Pharma over the nation’s opioid crisis hit another snag on Friday when New York’s attorney general announced the discovery of $1 billion the company’s family owners allegedly transferred to offshore accounts.
Last month, New York Attorney General Letitia James subpoenaed 33 financial institutions with ties to the Sackler family, owners of Purdue Pharma, the maker of OxyContin. The subpoenas are tied to James’ effort to track billions of dollars the family allegedly transferred out of Purdue Pharma to hide profits before the company declares bankruptcy, The New York Times and other media reported.
The findings announced on Friday come from only one of the financial institutions that responded to the subpoenas, the Times said.
The attorney general’s office said it found about $1 billion in wire transfers by the Sackler family, some of which went through Swiss bank accounts.
“While the Sacklers continue to lowball victims and skirt a responsible settlement, we refuse to allow the family to misuse the courts in an effort to shield their financial misconduct. The limited number of documents provided to us so far underscore the necessity for compliance with every subpoena,” James said in a statement.
Earlier this week, Purdue Pharma had offered to settle more than 2,000 lawsuits brought against the company for its role in the opioid crisis, which killed more than 400,000 people nationwide between 1999 and 2017, as Splinter’s Naomi LaChance previously reported.
The New York attorney general’s office also said that Mortimer Sackler, a former Purdue board member, hid ownership of a Manhattan townhouse and other real estate through shell corporations, which was not disclosed in current litigation, according to NBC News.
Referring to the new discovery, the Associated Press wrote:
They point to $20 million shifted from a Purdue parent company to Sackler, who then redirected substantial amounts to shell companies that own family homes in Manhattan and the Hamptons. Another $64 million in transfers to Sackler came from a previously unknown family trust, using a Swiss account, prosecutors said in their filing.
The filing, made in a New York court, follows decisions by that state and others to reject a tentative settlement with Stamford, Connecticut-based Purdue, announced this week, arguing it does not do enough to make amends for the company’s and family’s alleged roles in flooding U.S. communities with prescription painkillers.
A firm representing Mortimer Sackler told the Times that James’ announcement is a “cynical attempt by a hostile A.G.’s office to generate defamatory headlines to try to torpedo a mutually beneficial settlement that is supported by so many other states and would result in billions of dollars going to communities and individuals across the country that need help.”
But as NBC News pointed out, support for the settlement is split mostly along party lines. Republican attorneys general support the settlement, while Democrats reject it. One exception is Idaho’s Republican Attorney General Lawrence Wasden, who opposes a deal.
Purdue Pharma is expected to file for bankruptcy in coming days.