Purdue family made $1B illegal fund transfer

Protesters honor those who died during the opioid epidemic as Purdue Pharma stood trial in a Boston Court in August. (Getty Images)

The billionaire family that owns Oxycontin-maker Purdue Pharma LP made about $1 billion in transfers among themselves and their shell companies while they were “draining Purdue of its opioids proceeds,” New York Attorney General Letitia James told a judge in a letter.

The transfers, some through Swiss bank accounts, were revealed in documents provided by an unspecified financial institution in response to a subpoena, one of at least 10 banks facing demands for information in New York’s lawsuit against Purdue and the Sackler family, the state said in a court filing Friday.

James said she wrote the letter to show the judge the importance of the subpoenas, as Purdue seeks to quash them before the other banks respond. In a statement Friday, the attorney general accused the Sacklers of misusing the court 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.

New York’s lawsuit is separate from about 2,000 lawsuits by cities, counties and Native American tribes accusing opioid makers and distributors of causing a massive public-health crisis that’s led to the deaths of more than 400,000 Americans.

The dispute over the subpoenas comes as Purdue is seeking approval of a tentative $12 billion settlement to resolve most of the claims consolidated before a judge in Cleveland, Ohio – a proposal that James and several of her colleagues scoffed at this week.

Friday’s filing lists several examples of transfers, such as $64 million transferred by a “newly discovered entity” called Purdue Pharma Trust MDAS to Mortimer D.A. Sackler in 2009.

Representatives for the Sacklers didn’t immediately respond to messages seeking comment on the attorney general’s letter.

The opioid epidemic can be understood in three waves. In the first wave, starting in the late 1990s and early 2000s, doctors prescribed a lot of opioid painkillers. That caused the drugs to proliferate to widespread misuse and addiction, among not just patients but also friends and family of patients, teens who took the drugs from their parents’ medicine cabinets, and people who bought excess pills from the black market.

A second wave of drug overdoses took off in the 2000s when heroin flooded the illicit market, as drug dealers and traffickers took advantage of a new population of people who used opioids but either lost access to painkillers or simply sought a better, cheaper high.

In recent years, the US has seen a third wave, as fentanyls offer an even more potent, cheaper—and deadlier—alternative to heroin.