11 ms·

New York Uncovers $1B in Sackler Family Wire Transfers

193 points by SREinSF 7y ago

stefan_ 7y ago
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 7y ago
  [deleted]
- loeg 7y ago
  Wiring money to yourself isn't fraud.
  - stefan_ 7y ago
    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.
    - jjeaff 7y ago
      Piercing the veil isn't fraud either. But it can make you personally liable for the financial liabilities of your company.
      - hn_throwaway_99 7y ago
        The term for this is literally "fraudulent conveyance": https://en.wikipedia.org/wiki/Fraudulent_conveyance#United_States https://en.wikipedia.org/wiki/Fraudulent_conveyance#United_S...
        malandrew 7y ago
        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?
        jjeaff 7y ago
        Fraudulent conveyence is not the same thing as "piercing the veil". Although it is a subset of it.
    - loeg 7y ago
      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.
      - Aloha 7y ago
        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.
        ethbro 7y ago
        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.
        Aloha 7y ago
        Virtually any behavior might lead to future litigation - you operate within the bounds of the law, and worry about the rest later.
        loeg 7y ago
        > 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 https://www.ncbi.nlm.nih.gov/pubmed/25785523 [2]: https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdose-crisis https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdos... [3]: https://www.drugabuse.gov/related-topics/trends-statistics/overdose-death-rates https://www.drugabuse.gov/related-topics/trends-statistics/o...
  - munk-a 7y ago
    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.
    - loeg 7y ago
      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.
      - cptskippy 7y ago
        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.
        loeg 7y ago
        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.
  - killface 7y ago
    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.
    - loeg 7y ago
      > 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.
simplecomplex 7y ago
So? Some companies make medicine. Those companies earn money. What is the news here? Earning billions from owning and operating a business is not a crime.
- wbronitsky 7y ago
  The article addresses what the news is. it is quite notable that anyone would move $1bb out of the US while facing the possibility of HUGE civil judgements. Moreover, my reading is that this money was routed in such a way that it looks like obfuscation, a key component of money laundering. More concisely, here is a quote, directly from the article: "But the attorneys general of a majority of states, including New York and Massachusetts, are balking at the proposed deal, contending that the Sackler family has siphoned off company profits that should be used to pay for the billions of dollars in damage caused by opioids."
  - dmix 7y ago
    Are they not able to pay the fines?
    - wbronitsky 7y ago
      From the article: "It was unclear whether Ms. James’s initial findings of new Sackler funds would influence the parties that have agreed to the settlement. "
  - loeg 7y ago
    The article suggests but does not claim that the money movement was any kind of laundering (and unlikely to be structuring, just in terms of the sheer number of transactions required to send $1 Bil at 9,999$/pop).
    - wbronitsky 7y ago
      You are correct, and I should have clarified. There is not enough evidence here for the New York Times to suggest laundering, that is my coloring of the situation.
slyrus 7y ago
Maybe now we know who bought that $1B BTC the other day.
- ethbro 7y ago
  "Bought" is inaccurate.
  - burnte 7y ago
    We don't know why that much BTC was moved, or by who. It could have been a sale.
    - ipince 7y ago
      Exactly, it could have been one. Claiming that it was is inaccurate. /pedantry
      - burnte 7y ago
        And saying it wasn't one is equally inaccurate. :D
        ipince 7y ago
        Indeed, we agree on this. But I never claimed there wasn't one...
    - Railsify 7y ago
      It was probably an exchange move funds between cold wallets. OpSec would dictate you need to move wallets as employees leave, leaks happen, any number of reasons.
      - burnte 7y ago
        Indeed, but we don't /know/.
save_ferris 7y ago
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.
- state_less 7y ago
  A financial punishment is all? Pushing that much narcotics on people normally lands you in jail.
  - cmurf 7y ago
    Prison is for serfs and peasants. Lords pay fines to the sovereign. Why be wealthy if you can't buy justice as a product?
    - deleted 7y ago
      [deleted]
    - 8ytecoder 7y ago
      Hammurabi’s code [1]. “For example, if a doctor killed a rich patient, he would have his hands cut off, but if he killed a slave, only financial restitution was required“ [1] https://en.wikipedia.org/wiki/Code_of_Hammurabi https://en.wikipedia.org/wiki/Code_of_Hammurabi
      - munk-a 7y ago
        It is a bit depressing that things are so similar today - it highlights some of the larger hidden failures of egalitarianism even while it is being celebrated.
    - jacobush 7y ago
      Incredible this is downvoted.
hogFeast 7y ago
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.
- adrr 7y ago
  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.
  - hogFeast 7y ago
    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.
  - loeg 7y ago
    > 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.
jdkee 7y ago
They should be absolutely bankrupted. And criminally prosecuted.
- dillondoyle 7y ago
  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.
  - scottlocklin 7y ago
    Someone tell Jeff Dean he should be ashamed of himself. https://twitter.com/JeffDean/status/1093953731756867584 https://twitter.com/JeffDean/status/1093953731756867584
    - arthurcolle 7y ago
      "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
      - scottlocklin 7y ago
        OK I guess you were just following orders, Jeff.
- simplecomplex 7y ago
  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.
impeachTheIdiot 7y ago
Put a bullet in each of their heads and be done with it.
encoderer 7y ago
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)
- nerdponx 7y ago
  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.
- adventured 7y ago
  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).

193 points by SREinSF 7y ago

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 7y ago
[deleted]
loeg 7y ago
Wiring money to yourself isn't fraud.
- stefan_ 7y ago
  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.
  - jjeaff 7y ago
    Piercing the veil isn't fraud either. But it can make you personally liable for the financial liabilities of your company.
    - hn_throwaway_99 7y ago
      The term for this is literally "fraudulent conveyance": https://en.wikipedia.org/wiki/Fraudulent_conveyance#United_States https://en.wikipedia.org/wiki/Fraudulent_conveyance#United_S...
      - malandrew 7y ago
        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?
      - jjeaff 7y ago
        Fraudulent conveyence is not the same thing as "piercing the veil". Although it is a subset of it.
  - loeg 7y ago
    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.
    - Aloha 7y ago
      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.
      - ethbro 7y ago
        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.
        Aloha 7y ago
        Virtually any behavior might lead to future litigation - you operate within the bounds of the law, and worry about the rest later.
        loeg 7y ago
        > 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 https://www.ncbi.nlm.nih.gov/pubmed/25785523 [2]: https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdose-crisis https://www.drugabuse.gov/drugs-abuse/opioids/opioid-overdos... [3]: https://www.drugabuse.gov/related-topics/trends-statistics/overdose-death-rates https://www.drugabuse.gov/related-topics/trends-statistics/o...
- munk-a 7y ago
  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.
  - loeg 7y ago
    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.
    - cptskippy 7y ago
      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.
      - loeg 7y ago
        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.
- killface 7y ago
  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.
  - loeg 7y ago
    > 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.

simplecomplex 7y ago

So? Some companies make medicine. Those companies earn money. What is the news here? Earning billions from owning and operating a business is not a crime.

wbronitsky 7y ago
The article addresses what the news is. it is quite notable that anyone would move $1bb out of the US while facing the possibility of HUGE civil judgements. Moreover, my reading is that this money was routed in such a way that it looks like obfuscation, a key component of money laundering. More concisely, here is a quote, directly from the article: "But the attorneys general of a majority of states, including New York and Massachusetts, are balking at the proposed deal, contending that the Sackler family has siphoned off company profits that should be used to pay for the billions of dollars in damage caused by opioids."
- dmix 7y ago
  Are they not able to pay the fines?
  - wbronitsky 7y ago
    From the article: "It was unclear whether Ms. James’s initial findings of new Sackler funds would influence the parties that have agreed to the settlement. "
- loeg 7y ago
  The article suggests but does not claim that the money movement was any kind of laundering (and unlikely to be structuring, just in terms of the sheer number of transactions required to send $1 Bil at 9,999$/pop).
  - wbronitsky 7y ago
    You are correct, and I should have clarified. There is not enough evidence here for the New York Times to suggest laundering, that is my coloring of the situation.

slyrus 7y ago

Maybe now we know who bought that $1B BTC the other day.

ethbro 7y ago
"Bought" is inaccurate.
- burnte 7y ago
  We don't know why that much BTC was moved, or by who. It could have been a sale.
  - ipince 7y ago
    Exactly, it could have been one. Claiming that it was is inaccurate. /pedantry
    - burnte 7y ago
      And saying it wasn't one is equally inaccurate. :D
      - ipince 7y ago
        Indeed, we agree on this. But I never claimed there wasn't one...
  - Railsify 7y ago
    It was probably an exchange move funds between cold wallets. OpSec would dictate you need to move wallets as employees leave, leaks happen, any number of reasons.
    - burnte 7y ago
      Indeed, but we don't /know/.

save_ferris 7y ago

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.

state_less 7y ago
A financial punishment is all? Pushing that much narcotics on people normally lands you in jail.
- cmurf 7y ago
  Prison is for serfs and peasants. Lords pay fines to the sovereign. Why be wealthy if you can't buy justice as a product?
  - deleted 7y ago
    [deleted]
  - 8ytecoder 7y ago
    Hammurabi’s code [1]. “For example, if a doctor killed a rich patient, he would have his hands cut off, but if he killed a slave, only financial restitution was required“ [1] https://en.wikipedia.org/wiki/Code_of_Hammurabi https://en.wikipedia.org/wiki/Code_of_Hammurabi
    - munk-a 7y ago
      It is a bit depressing that things are so similar today - it highlights some of the larger hidden failures of egalitarianism even while it is being celebrated.
  - jacobush 7y ago
    Incredible this is downvoted.

hogFeast 7y ago

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.

adrr 7y ago
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.
- hogFeast 7y ago
  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.
- loeg 7y ago
  > 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.

jdkee 7y ago

They should be absolutely bankrupted. And criminally prosecuted.

dillondoyle 7y ago
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.
- scottlocklin 7y ago
  Someone tell Jeff Dean he should be ashamed of himself. https://twitter.com/JeffDean/status/1093953731756867584 https://twitter.com/JeffDean/status/1093953731756867584
  - arthurcolle 7y ago
    "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
    - scottlocklin 7y ago
      OK I guess you were just following orders, Jeff.
simplecomplex 7y ago
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.

impeachTheIdiot 7y ago

Put a bullet in each of their heads and be done with it.

encoderer 7y ago

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)

nerdponx 7y ago
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.
adventured 7y ago
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).