New York Files Charges Against Members of Sackler Family

March 28, 2019, 5:08 PM UTC

New York Attorney General Letitia James has added members of the Sackler family to a lawsuit against their company, opioid manufacturer Purdue Pharma, alleging financial chicanery.

On Thursday, James included eight members of the billionaire family as defendants, alleging they used a number of corporate entities to transfer money to themselves via private or offshore accounts. James has deemed the move fraudulent “on the basis the company was already insolvent, or close to it,” reports The Wall Street Journal.

The complaint alleges that in 2007 the Sacklers created a new company to sell opioids, called Rhodes, to serve as a “landing pad” for the family as Purdue was already under federal investigation. The family reportedly voted to pay themselves hundreds of millions of dollars a year and then transferred funds from both Purdue and Rhodes into entities they controlled.

The amended lawsuit says the Sackler family was aware judgments or settlements would follow the investigation, but nevertheless “continued to vote to have Purdue pay the Sackler Families significant distributions, and send money to offshore companies.” It seeks to take back these funds and to order the family to return any transferred assets.

A spokesperson for the Sackler family defendants issued the following statement:

Expanding this baseless lawsuit to include former directors of Purdue Pharma is a misguided attempt to place blame where it does not belong for a complex public health crisis,” “We strongly deny these allegations, which are inconsistent with the factual record, and will vigorously defend against them.

Purdue Pharma manufactures an FDA-approved medicine that represents a tiny portion of the opioid market – never more than four percent of nationwide opioid prescriptions and currently less than two percent – while providing life-changing relief for millions of pain patients who need it.

We have always acted properly and are committed to supporting solutions that save lives by preventing addiction and abuse of prescription medicines and treating those who are suffering from addiction. That is why we are voluntarily contributing $75 million to the ground-breaking National Center for Addiction Studies and Treatment, announced earlier this week in Oklahoma.

Solving this complex public health crisis will require collaboration and focus on the real problems our nation needs to address. Government data makes clear that the opioid crisis is growing rapidly because of illicit fentanyl smuggled in from China and Mexico – and headline-seeking lawsuits like this only distract from the important task of identifying real solutions to that crisis.

New York also added five other companies that produce opioid painkillers and four drug distributors as defendants in the lawsuit. The announcement comes just two days after Purdue and the Sacklers reached a $270 million settlement with the state of Oklahoma. The company currently faces thousands of lawsuits filed by state and local governments for putting profit over patient safety and fueling the opioid epidemic.

A number of cultural institutions, including the Guggenheim in the U.S. and National Portrait Gallery and Tate art galleries in the U.K. have announced in recent weeks that they will no longer accept donations from the Sackler family, which has long been their benefactors.