The New York attorney general’s office said Friday that it had tracked about $1 billion in wire transfers by the Sackler family, including through Swiss bank accounts, suggesting that the family tried to shield wealth as it faced a raft of litigation over its role in the opioid crisis.
Earlier this week, thousands of municipal governments and nearly two dozen states tentatively reached a settlement with the Sackler family and the company it owns, Purdue Pharma, maker of OxyContin. 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.
The wire transfers are part of a lawsuit against Purdue and individual Sacklers in New York. Letitia James, now the state’s attorney general, had issued subpoenas last month to 33 financial institutions and investment advisers with ties to the Sacklers in an effort to trace the full measure of the family’s wealth.
“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,” Ms. James said in a statement. “Records from one financial institution alone have shown approximately $1 billion in wire transfers between the Sacklers, entities they control, and different financial institutions, including those that have funneled funds into Swiss bank accounts,” she added.
Forbes has estimated that the family fortune is worth $13 billion, a figure the family has not disputed, but many state attorneys general believe that the family has far more hidden away, as a safeguard against the cascade of litigation.
In addition to the thousands of lawsuits in state and federal court aimed at Purdue itself, some 26 states have named the Sacklers individually, with more, most recently North Carolina, having announced they are about to pursue family members as well.
The Sacklers and Purdue have contested the legal actions.
“Purdue has already produced more than 51 million pages of documents to the state, including voluminous financial and business information,” a lawyer representing Purdue said in a filing in the New York case earlier this month. The company is seeking to quash subpoenas, calling them “premature, facially defective, overbroad” as well as “harassing, and an improper attempt to avoid the rules and procedures governing party discovery.”
New court documents filed by Ms. James’s office Friday afternoon presented only initial findings, from a single unnamed financial institution that has thus far responded to the subpoenas issued by her office.
A series of transfers involving Mortimer D.A. Sackler, a former Purdue board member, were highlighted in the filings. In one case, $64 million was transferred in 2009 from a previously unknown trust called Purdue Pharma Trust MDAS, through a Swiss bank account, and then to Mr. Sackler, the filing said.
Transfers to Mr. Sackler from another trust, called Heatheridge Trust Company Limited, were also routed through the same Swiss account, the filing said, while some transfers from a third trust, called Millborne Trust Company Limited, were routed through a different Swiss bank account.
Mr. Sackler also directed millions of dollars worth of the transfers to two real estate entities that owned a house in Amagansett on Long Island and a Manhattan townhouse.
Investigators believe that the initial records reviewed show that there is much more to be learned before a fair resolution can be reached.
In a letter to the court Friday, a lawyer in the attorney general’s office, David E. Nachman, wrote: “Already, these records have allowed the state to identify previously unknown shell companies that one of the Sackler defendants used to shift Purdue money through accounts around the world and then conceal it in at least two separate multimillion-dollar real estate investments back here in New York, sanitized (until now) of any readily detectable connections to the Sackler family.”
The tentative settlement announced earlier this week, involving nearly 2,300 cases in federal court and 23 states, included terms that Purdue Pharma would file for Chapter 11 bankruptcy imminently. Typically, when a company begins bankruptcy proceedings, all litigation against it is, at least temporarily, stayed.
Whether such bankruptcy protections would extend to individual Sacklers is in dispute. States like New York are seeking to find the sources of the Sackler fortune, hoping to reclaim portions of it, particularly in the event that a Purdue bankruptcy could constrain payouts to litigants.
It was unclear whether Ms. James’s initial findings of new Sackler funds would influence the parties that have agreed to the settlement.
Various Sacklers have, until 2018, been on the company’s board of directors; Dr. Richard Sackler is a former president and chairman of the company’s board. In many reported articles, books and legal papers, members of the family have been accused of encouraging aggressive sales tactics of OxyContin.
The family has long ties abroad. It still owns Mundipharma, a pharmaceutical company that sells drugs overseas, including OxyContin. In addition, it has familial ties in England and has made its philanthropic presence felt in museums in London and Paris.