Remarks by Deputy Attorney General Jeffrey A. Rosen on the Resolution of Civil and Criminal Investigations into Purdue Pharma and the Sackler Family

Remarks as Prepared for Delivery

Good morning.  I am pleased to be joined today by Vermont’s U.S. Attorney Christina Nolan, New Jersey’s First Assistant U.S. Attorney Rachael Honig, Acting Assistant Attorney General for the Civil Division Jeff Clark, and Eastern Texas U.S. Attorney Steve Cox.

This morning, subject to court approval, the Department of Justice is announcing a global resolution of our criminal and civil investigations into the opioid manufacturer Purdue Pharma, as well as a civil resolution with members of the Sackler family who comprise the shareholders of the company. 

Before we address the specific terms, I want to provide some context of how today’s announcement fits into Department of Justice’s wider efforts to address the opioids crisis.

Department of Justice obviously has many longstanding and ongoing drug enforcement activities.  But during this administration we have augmented those with a series of new initiatives targeted at both illicit opioids like heroin and fentanyl, and at the diversion and abuse of prescription opioids as well.  These are shown on the chart we have today: JCODE and Operation SOS on the illicit side, and PIL Task Force, ARPO, OFADU, and Health Care Fraud Strike Forces on the prescription side.  By these efforts, we have targeted unlawful activity involving opioids at every level of the supply chains.  On the prescription side, that means any unlawful actions by manufacturers, distributors, pharmacy dispensers, or physician prescribers, for example.

So today’s announcement involves one of the most important participants in the supply chain of prescription opioids, at the manufacturer level.  And a resolution which, if approved by the court, will redress past wrongs, and will also provide extraordinary new resources for treatment and care of those affected by opioids addiction.

The global settlement announced today involves the company pleading guilty to three felony counts for defrauding the United States and violating the Anti-Kickback Statute from 2009 to 2017.  In addition to agreeing to plead guilty to these three felony counts, the company has agreed to a $3.544 billion criminal fine and a $2 billion criminal forfeiture amount.  Further, to resolve its civil liability, Purdue Pharma has agreed to $2.8 billion in damages to the United States.  The company is in bankruptcy, so the corporate resolution is subject to the bankruptcy court’s approval.  If approved, this will be a corporate settlement totaling more than $8.3 billion.  Additionally, members of the Sackler family have agreed to pay $225 million in a civil settlement that will provide civil releases only. 

It is important to note that this resolution does not prohibit future criminal or civil penalties against Purdue Pharma’s executives or employees. 

This resolution must be understood against two larger contexts: first, the company’s bankruptcy, and, second, as I’ve referenced, the department’s overarching work addressing the opioids crisis.

The company’s bankruptcy in the Southern District of New York involves many creditors, from private creditors to Federal, state, and local creditors.  In general, the creditors are aiming to ensure that nearly all of the proceeds of the bankruptcy go to opioid abatement programs, and the Department of Justice supports that goal. 

To that end, a key piece of today’s resolution is based on the future of Purdue Pharma.  The agreed resolution, if approved, will require that the company must dissolve and no longer exist in its present form, the Sacklers must relinquish all ownership and control of the company (and its successors), and the assets must be transferred to a new public benefit company or PBC owned by a trust for the benefit the American public.  The PBC would be charged with providing its medicines in a manner as safe as possible, without diversions, while providing millions of doses of medicines to treat opioids addiction and reverse overdoses and otherwise taking into account long-term public health interests.  And, to be clear, the Sackler family will have no role in creating or controlling the PBC.

 If the bankruptcy court approves this, the department will credit the company for the value conferred through the PBC against the criminal forfeiture amount, except for $225 million that will be paid to the United States on the bankruptcy effective date.  (The criminal fines and civil damages would not be affected by this.)

This global resolution builds on the department’s other recent opioid successes.  Just as the Department prosecutes illicit drug traffickers, the department is committed to doing the same with respect to abuse and diversion of prescription opioids.  We have prosecuted medical professionals who have contributed to overdose deaths, run “pill mills,” or defrauded the federal government’s health care programs.  We have also prosecuted opioid distributors like McKesson, Miami-Luken, and Rochester Drug Cooperative.  We reached substantial settlement resolutions with other manufacturers, such as RB Group and Indivior, as well as Insys.

These are all examples of the department’s unwavering commitment to turn the tide of the opioid crisis ravaging this country.  Today’s announcement focuses on the problems from wrongful activities in the prescription opioids realm, so let me note that our efforts there appear to be making a difference.  The CDC reports that since 2017, prescription opioid overdose deaths have decreased–by over 18 percent in the first two years.  And there has been a 47 percent decline in prescription opioids being dispensed. 

But we will continue all of our efforts, including building on the record 8,136 opioids prosecutions in 2019.  And not only through enforcement: for example, the department’s Office of Justice Programs awarded grants totaling more than $341 million to help fight the addiction crisis looming over the United States.

Today’s announcement is very much a success story in the close coordination between the U.S. Attorney’s Office in New Jersey, the U.S. Attorney’s Office in Vermont, the Civil Division’s Consumer Protection Branch and its Civil Frauds Section, and I also want to thank the important contributions of law enforcement, including the FBI, DEA and HHS-OIG, who would normally be with us but because of the pandemic we’ve limited the number of people on the stage today.  I want to thank this entire team for their relentless work in bringing about this resolution.

Today’s announcement is particularly timely given that October is National Substance Abuse Prevention Month, and a few days from now, October 24, is DEA’s National Prescription Drug Take Back Day, which allows for a safe, convenient, and responsible means of disposing of unneeded prescription drugs that are sitting in medicine cabinets at homes.  Keeping the American people safe is the Department of Justice’s highest priority.  As today’s announcement re-affirms, the department will not relent in our efforts to combat the opioids crisis.

At this point, my colleagues will tell you more about these cases and the terms of the global resolution.

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    In Crime News
    Former Tennessee Department of Corrections (TDOC) Corporal Tommy Morris, 29, pleaded guilty to conspiring to cover up the beating of an inmate and to encouraging other officers to provide false information to investigators, the Justice Department announced today.
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  • National Security: DOD and State Have Processes for Formal and Informal Challenges to the Classification of Information
    In U.S GAO News
    What GAO Found The Department of Defense (DOD) and the Department of State (State) have similar processes for formal challenges to the classification of information. For example, if there is reason to believe that information is improperly classified, authorized holders—including executive branch agency or contractor personnel with relevant clearances—can submit a formal classification challenge in writing (see figure). Officials will then review the classification challenge and make a determination. If a formal challenge is denied, the authorized holder can then appeal to senior officials within the agency, and if the agency denies the appeal, the authorized holder can appeal directly to the Interagency Security Classification Appeals Panel (ISCAP). ISCAP, established by Executive Order, then issues a decision that is final unless the head of the agency appeals ISCAP's decision to the President. Processes for Formal Challenges to the Classification of Information aIndividual refers to an authorized holder with access to classified information. Both DOD and State encourage authorized holders to resolve classification challenges informally before pursuing a formal classification challenge. According to DOD and State officials, informal challenges can be done in person, by phone, or by email. For example, officials told GAO that authorized holders can contact the relevant information security office about whether classified documents are marked properly. According to DOD and State officials, Members of Congress (Members) may use their existing processes to formally and informally challenge the classification of information. However, according to officials from the Information Security Oversight Office (ISOO), which provides support to ISCAP, Members cannot appeal a decision to ISCAP. Instead, Members can appeal to the Public Interest Declassification Board (PIDB), a statutory body that makes recommendations to the President in response to certain congressional requests to evaluate the proper classification of records. DOD officials stated that they do not have any knowledge of ever receiving a formal classification challenge from Members. State officials stated that they did not receive any formal classification challenges from Members in 2017 through 2020. ISOO officials also stated that the panel received its first formal classification challenge from a Member in 2020. ISCAP subsequently denied the challenge and directed the Member to the PIDB. Why GAO Did This Study Classified national security information is vital to U.S. national interests. The appropriate protection and handling of this information is a top priority for the executive branch and Congress. Based on guidance, such as Executive Order 13526, Classified National Security Information, authorized holders with access to classified information may submit a classification challenge if there are reasons to believe information is improperly classified. According to DOD and State officials, Members may also submit a classification challenge. GAO was asked to review the processes for challenging the classification of national security information. This report describes (1) the processes to challenge the classification of information at DOD and State; and (2) the processes that Members of Congress can use to challenge the classification of information at DOD and State. GAO reviewed applicable laws and regulations, and DOD, State, and other guidance related to the classification of information and classification challenge processes. GAO also interviewed DOD, State and ISOO officials. For more information, contact Joe Kirschbaum at (202) 512-9971 or Kirschbaumj@gao.gov.
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  • Priority Open Recommendations: Department of Justice
    In U.S GAO News
    What GAO Found In April 2020, GAO identified 18 priority recommendations for the Department of Justice (DOJ). Since then, DOJ has implemented nine of those recommendations by, among other things, improving the accuracy of the Federal Bureau of Investigation's (FBI) face recognition capabilities and the public's understanding of how the FBI uses and protects personal information, assessing its progress in its efforts to more efficiently handle FBI whistleblower retaliation complaints, developing better ways to assess its ability to combat illicit opioids, better addressing immigration judge staffing needs, and overseeing implementation of an electronic-filing system for immigration courts. In June 2021, GAO identified three additional priority recommendations for DOJ, bringing the total number to 12. The 12 recommendations fall into the following areas: Efforts to combat illicit opioid abuse. Federal prison system. FBI whistleblower retaliation complaints. Immigration courts. Cybersecurity. Improper payments. DOJ's continued attention to these issues could lead to significant improvements in government operations. Why GAO Did This Study Priority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Since 2015, GAO has sent letters to selected agencies to highlight the importance of implementing such recommendations. For more information, contact Charles M. Johnson, Jr. at (202) 512-8777 or johnsoncm@gao.gov.
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  • Indictment Charges Alaska Man for Threatening a California Synagogue
    In Crime News
    A federal grand jury in Alaska, returned an indictment charging William Alexander, 49, for threatening to kill the congregants of a California synagogue, the Justice Department announced today.
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    In Crime News
    The Justice Department today announced the filing of a complaint to forfeit two shipments of Iranian missiles that the U.S. Navy seized in transit from Iran’s Islamic Revolutionary Guard Corps (IRGC) to militant groups in Yemen, as well as the sale of approximately 1.1 million barrels of Iranian petroleum that the United States previously obtained from four foreign-flagged oil tankers bound for Venezuela. 
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  • Department of Justice Publishes Proposed Regulations Articulating the Registration Requirements for Sex Offenders under the Sex Offender Registration and Notification Act
    In Crime News
    The Department of Justice has published proposed regulations that provide a clear and comprehensive statement of sex offenders’ registration requirements under the federal Sex Offender Registration and Notification Act (SORNA).  SORNA requires convicted sex offenders to register in the states in which they live, work, or attend school, and it directs the Attorney General to issue regulations and guidelines to implement SORNA. 
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  • Former Blue Bell Creameries President Charged In Connection With 2015 Ice Cream Listeria Contamination
    In Crime News
    A Texas grand jury charged the former president of ice cream manufacturer Blue Bell Creameries L.P. with wire fraud and conspiracy in connection with an alleged scheme to cover up the company’s sales of Listeria-tainted ice cream in 2015, the Justice Department announced today. 
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