New York Sues Sackler Family, Purdue Pharma, Alleging Fraud

New York Sues Sackler Family, Purdue Pharma, Alleging Fraud

The New York State attorney general's office has filed suit against Purdue Pharma, maker of the opioid OxyContin, as well as members of the Sackler family, which owns the company, alleging that the company fraudulently transferred funds to members of the family despite knowing it faced major legal liabilities that, in effect, rendered it insolvent, Reuters and the New York Times report.

In a revised suit that added members of the Sackler family and other drug manufacturers and distributors as defendants to a suit already pending against Purdue, New York attorney general Letitia James alleges that Purdue and other manufacturers and distributors engaged in deceptive marketing practices that downplayed the dangers of the addictive painkillers and accused the distributors of failing to monitor the diversion of the drugs for illicit purposes. Through the suit, the state seeks to claw back funds it alleges were transferred by the company to private or offshore accounts held by members of the Sackler family, force the Sacklers to return any transferred assets, and keep the family from disposing of any property.

The suit also accuses Purdue of seeking to "intimidate" states pursuing lawsuits against it by threatening bankruptcy, which would hinder their cases and limit their ability to recover damages. According to the suit, Purdue has continued to pay millions of dollars to the Sacklers while fighting nearly two thousand lawsuits, including those filed by nearly three dozen states. In her suit, James argues that Purdue was either insolvent or nearing insolvency when it transferred funds, making the transfers illegal under New York law. Earlier this week, Purdue reached a $270 million settlement with Oklahoma to resolve similar allegations.

While the Sacklers are famous for their arts philanthropy, over the past several weeks a number of cultural institutions in the United States and abroad have said they will no longer accept gifts from the family. On Monday, the London-based Sackler Trust and the Dr. Mortimer and Theresa Sackler Foundation, a separate charitable organization controlled by other members of the family, announced that they were suspending their grantmaking in the UK. In a statement, the Sackler family called the New York lawsuit "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."

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