By Emma Vickers
Graphics by Christopher Cannon and Mark Glassman
As the U.S. bumbles its way through the coronavirus pandemic, it can be easy to overlook the opioid epidemic that’s shattered so many lives. But a trove of documents that Bloomberg Businessweek has spent months analyzing helps explain how the company at the center of the crisis moved money around in the years prior to declaring bankruptcy.
Purdue Pharma LP faced its first court challenge in 2007, pleading guilty to misleading the public about the addictive potential of its flagship painkiller, OxyContin. By 2019 more than 130 people were dying daily from opioid overdoses in the U.S., and Purdue faced thousands of lawsuits for its role in the epidemic. The company, owned by the Sackler family, declared bankruptcy in September of that year to short-circuit the lawsuits.
But in the years prior to the bankruptcy, Purdue and its subsidiaries moved billions to companies ultimately registered in Luxembourg, the British Virgin Islands, and Delaware. The trail that traces those billions is labyrinthine, but here’s what we know about their maneuvering based on hundreds of pages of publicly available information. (In a statement, Purdue said it had “provided the company’s stakeholders and the American public with an extraordinary amount of detailed financial information.” A spokesperson for the family said in a statement, “All of the Sackler family members, including those who served on Purdue’s board, have always conducted themselves properly.”)
The Family Business
From 2007 to 2019, 10 Sacklers were Purdue directors
Raymond Sackler
Co-owner,
board member
Beverly Sackler
Board member
Mortimer Sackler
Co-owner,
board member
Theresa Sackler
Board member
Richard Sackler
President,
board member
Mortimer D.A.
Sackler
Board member
Ilene Sackler
Lefcourt
Board member
Kathe Sackler
Board member
Jonathan Sackler
Board member
(died in June)
David Alex Sackler
Board member
Raymond Sackler
Co-owner,
board member
Beverly Sackler
Board member
Jonathan Sackler
Board member
(died in June)
Richard Sackler
President,
board member
David Alex Sackler
Board member
Mortimer Sackler
Co-owner,
board member
Theresa Sackler
Board member
Mortimer D.A.
Sackler
Board member
Ilene Sackler
Lefcourt
Board member
Kathe Sackler
Board member
Mortimer Sackler
Co-owner, board member
Theresa Sackler
Board member
Raymond Sackler
Co-owner, board member
Beverly Sackler
Board member
Mortimer D.A.
Sackler
Board member
Ilene Sackler
Lefcourt
Board member
Kathe Sackler
Board member
Jonathan Sackler
Board member
(died in June)
Richard Sackler
President,
board member
David Alex Sackler
Board member
Raymond Sackler
Co-owner,
board member
Beverly Sackler
Board member
Mortimer Sackler
Co-owner, board member
Theresa Sackler
Board member
Jonathan Sackler
Board member
(died in June)
Richard Sackler
President,
board member
Mortimer D.A.
Sackler
Board member
Ilene Sackler
Lefcourt
Board member
Kathe Sackler
Board member
David Alex Sackler
Board member
From 2008 through 2017, $10.8 billion flowed out of Purdue in hundreds of transactions through numerous subsidiaries. (A small percentage of this sum was reinvested in Purdue or lent to and fully repaid by an affiliated company.) After tax bills were settled, the bulk of the cash landed in two Delaware companies, Rosebay Medical Co. and Beacon Co.
Moving Billions
Breaking down how the funds flowed
$10.8b
Taken out of Purdue
$4.6b
Tax payments
$4.4b
Two U.S. companies registered in Delaware
$1.7b
Other companies
Money from the companies moves through trusts to the two sides of the family. Richard and the late Jonathan’s estate benefit from Rosebay; Mortimer D.A. and Mortimer Sr.’s other family members benefit from Beacon.
$10.8b
$4.4b
Two U.S. companies registered in Delaware
Trusts for the benefit of the Sackler family
Rosebay
Beacon
$10.8b
Taken out of Purdue
Money from the companies moves through trusts to the two sides of the family. Richard and the late Jonathan’s estate benefit from Rosebay; Mortimer D.A. and Mortimer Sr.’s other family members benefit from Beacon.
Trusts for the benefit of the Sackler family
Rosebay
Medical
Beacon
Jonathan
Mortimer D.A.
Richard
$10.8b
Taken out of Purdue
$4.4b
Two U.S. companies registered in Delaware
$4.6b
Tax payments
$1.7b
Other companies
Money from the companies moves through trusts to the two sides of the family. Richard and the late Jonathan’s estate benefit from Rosebay; Mortimer D.A. and Mortimer Sr.’s other family members benefit from Beacon.
Trusts for the benefit of the Sackler family
Rosebay
Medical
Beacon
Mortimer D.A.
Jonathan
Richard
Jonathan
Mortimer D.A.
Richard
New York State Attorney General Letitia James’s office has said the Sacklers hid billions of dollars. She’s subpoenaed at least 10 financial institutions connected to the family “in an effort to establish the Sacklers’ fraud,” according to a filing. The subpoenas allege that a portion of the $4.4 billion was used for multimillion-dollar real estate transactions.
In one example, Beacon
made 137 transfers totaling almost
$20m
via...
an
unnamed bank (“institution A,” per James)
to...
Mortimer D.A.
...who redirected this money and more from unknown sources through the same bank to two LLCs...
New York State Attorney General Letitia James’s office has said the Sacklers hid billions of dollars. She’s subpoenaed at least 10 financial institutions connected to the family “in an effort to establish the Sacklers’ fraud,” according to a filing. The subpoenas allege that a portion of the $4.4 billion was used for multimillion-dollar real estate transactions.
In one example, Beacon
made 137 transfers totaling almost
$20m
via...
an
unnamed bank (“institution A,” per James)
to...
Mortimer D.A.
...who redirected this money and more from unknown sources through the same bank to two LLCs...
New York State Attorney General Letitia James’s office has said the Sacklers hid billions of dollars. She’s subpoenaed at least 10 financial institutions connected to the family “in an effort to establish the Sacklers’ fraud,” according to a filing. The subpoenas allege that a portion of the $4.4 billion was used for multimillion-dollar real estate transactions.
In one example, Beacon
made 137 transfers totaling almost
$20m
via...
an
unnamed bank (“institution A,” per James)
to...
Mortimer D.A.
...who redirected this money and more from unknown sources through the same bank to two LLCs...
477 wire transfers worth
$40m
to...
272 wire transfers worth
$4m
to...
Central
Eight
Realty
LLC
Cherry
Tree
Holdings
LLC
...which, on behalf of Mortimer, bought...
A
$16m
Upper East Side townhouse
(in 2004) and sold it in January for
$38m
A
$3m
house in
Amagansett, N.Y.
$10.8b
$4.6b
Tax payments
477 wire transfers worth
$40m
to...
272 wire transfers worth
$4m
to...
Central
Eight
Realty
LLC
Cherry
Tree
Holdings
LLC
...which, on behalf of Mortimer, bought ...
A
$3m
house in
Amagansett, N.Y.
A
$16m
Upper East Side townhouse
(in 2004) and sold it in January for
$38m
477 wire transfers worth
$40m
to...
272 wire transfers worth
$4m
to...
Cherry
Tree
Holdings
LLC
Central
Eight
Realty
LLC
...which, on behalf of Mortimer, bought ...
A
$3m
house in
Amagansett, N.Y.
A
$16m
Upper East Side townhouse
(in 2004) and sold it in January for
$38m
$2.3b
Federal taxes
$2.0b
Beacon’s
and Rosebay’s
tax bills
$306m
State and local taxes
More than $1 billion ended up in independent associated entities registered in Luxembourg and the British Virgin Islands. An additional $570 million was sent to Mundipharma International Ltd., the Sacklers’ global pharmaceutical arm. The family is weighing the sale of the business, which could fetch as much as $5 billion.
$10.8b
$1.7b
Other companies
$893m
Luxembourg
companies
$572m
Mundipharma
International Ltd.
$140m
BVI companies
$88m
Companies
registered in
unknown
locations
$4.6b
Tax payments
$2.3b
Federal taxes
$2.0b
Beacon’s and
Rosebay’s tax bills
$306m
State and local taxes
More than $1 billion ended up in independent associated entities registered in Luxembourg and the British Virgin Islands. An additional $570 million was sent to Mundipharma International Ltd., the Sacklers’ global pharmaceutical arm. The family is weighing the sale of the business, which could fetch as much as $5 billion.
$1.7b
$572m
Mundipharma
International Ltd.
$140m
BVI companies
$88m
Companies
registered in
unknown locations
$893m
Luxembourg
companies
$4.6b
Tax payments
$2.3b
Federal taxes
$2.0b
Beacon’s and
Rosebay’s tax bills
$306m
State and local taxes
More than $1 billion ended up in independent associated entities registered in Luxembourg and the British Virgin Islands. An additional $570 million was sent to Mundipharma International Ltd., the Sacklers’ global pharmaceutical arm. The family is weighing the sale of the business, which could fetch as much as $5 billion.
$1.7b
$572m
Mundipharma
International Ltd.
$140m
BVI companies
$88m
Companies
registered in
unknown locations
$893m
Luxembourg
companies
Rosebay and Beacon received the bulk of the Purdue cash, but even some of the smallest transactions made by the company can be traced back to the family. Three companies—Linarite, Perthlite, and Banela—were paid dividends of a few million each from Purdue in 2012.
$3m
$3m
$6m
Linarite
Holdings
LLC
Perthlite
Holdings
LLC
Banela
Corp.
Linarite, Perthlite, and Banela are each partially owned by Cornice, Data, and Millborne...
Cornice
Fiduciary
Mgmt.
LLC
Data
LLC
Millborne
Trust Co.
…and Cornice, Data, and Millborne are trustees of trusts tied to the Sacklers.
Trust for
Jonathan’s
children
Trust for
Richard’s
children
Hercules
Trust
(Beneficiaries
unknown)
Rosebay and Beacon received the bulk of the Purdue cash, but even some of the smallest transactions made by the company can be traced back to the family. Three companies—Linarite, Perthlite, and Banela—were paid dividends of a few million each from Purdue in 2012.
$3m
$3m
$6m
Linarite
Holdings
LLC
Perthlite
Holdings
LLC
Banela
Corp.
Linarite, Perthlite, and Banela are each partially owned by Cornice, Data, and Millborne...
Cornice
Fiduciary
Mgmt.
LLC
Data
LLC
Millborne
Trust Co.
…and Cornice, Data, and Millborne are trustees of trusts tied to the Sacklers.
Hercules
Trust
(Beneficiaries
unknown)
Trust for
Jonathan’s
children
Trust for
Richard’s
children
Rosebay and Beacon received the bulk of the Purdue cash, but even some of the smallest transactions made by the company can be traced back to the family. Three companies—Linarite, Perthlite, and Banela—were paid dividends of a few million each from Purdue in 2012.
$3m
$3m
$6m
Linarite
Holdings
LLC
Perthlite
Holdings
LLC
Banela
Corp.
Linarite, Perthlite, and Banela are each partially owned by Cornice, Data, and Millborne...
Cornice
Fiduciary
Mgmt.
LLC
Data
LLC
Millborne
Trust Co.
…and Cornice, Data, and Millborne are trustees of trusts tied to the Sacklers.
Hercules
Trust
(Beneficiaries
unknown)
Trust for
Jonathan’s
children
Trust for
Richard’s
children
Despite the scandal around the Sacklers’ role in marketing opioids, the family has continued to earn returns through investments across the U.S. economy. Kokino LLC, which manages the wealth of Jonathan’s family, made up about 20% of investor funds managed by hedge fund Sunriver and holds smaller stakes in tech and oil companies. Richard’s family office, Summer Road, is calculated to have made $60 million last year through its client Cap 1 LLC from the sale of a stake in ski company Peak Resorts.
The Family Offices
Here’s what’s known about the Sacklers’ holdings, according to SEC filings
$141.0m
Kokino
Jonathan
$114.0m
Sunriver Management LLC
$11.9m
Amtech Sys Inc.
$8.0m
Gulf Island
Fabrication
$3.0m
Autoweb
Inc.
$1.2m
Argan
Inc.
$0.9m
StoneX
Group
Inc.
$0.9m
Hill
Int’l Inc.
$1.1m
Evolving
Sys Inc.
$46.8m
Summer Road
Richard
$46.8m
Ocular
Therapeutix Inc.
$26.3m
Stillwater
Mortimer D.A.
$26.3m
EMagin Corp.
$46.8m
Summer Road
Richard
$141.0m
Kokino
Jonathan
$114.0m
Sunriver Management LLC
$46.8m
Ocular
Therapeutix Inc.
$26.3m
Stillwater
Mortimer D.A.
$11.9m
Amtech Sys Inc.
$8.0m
Gulf Island
Fabrication
$26.3m
EMagin Corp.
$3.0m
Autoweb
Inc.
$1.2m
Argan
Inc.
$0.9m
StoneX
Group
Inc.
$0.9m
Hill
Int’l Inc.
$1.1m
Evolving
Sys Inc.
$141.0m
Kokino
Jonathan
$46.8m
Summer Road
Richard
$114.0m
Sunriver Management LLC
$46.8m
Ocular
Therapeutix Inc.
$26.3m
Stillwater
Mortimer D.A.
$11.9m
Amtech Sys Inc.
$8.0m
Gulf Island
Fabrication
$26.3m
EMagin Corp.
$3.0m
Autoweb
Inc.
$1.2m
Argan
Inc.
$1.1m
Evolving
Sys Inc.
$0.9m
StoneX
Group
Inc.
$0.9m
Hill
Int’l Inc.
The Sackler family and Purdue have proposed a settlement worth more than $10 billion with the 48 states suing for damages; they’re about split between rejecting and accepting it. Under the plan, the family would hand over the company to a trust controlled by the states and sell Mundipharma; the Sacklers themselves would foot $3 billion, though they continue to deny responsibility for the opioid crisis. James said New York would oppose “any deal that cheats Americans out of billions of dollars” and “allows the Sacklers to evade responsibility.” (“A critical mass of plaintiffs representing more than half of the U.S. population support the settlement framework,”Purdue said.) The bankruptcy judge in the case has paused other lawsuits against Purdue and the Sacklers until October while negotiations continue.
—Corrects information about the family’s affiliations with Rosebay and Beacon.
With assistance from Anders Melin and Jeremy Hill
Editors: Bret Begun and Yue Qiu
Photos: Taco van der Eb/Hollandse Hoogte/Redux. Alan Davidson/Shutterstock. David M. Benett/Getty Images (2). Sylvain Gaboury/Patrick McMullan/Getty Images. Purdue Pharma. Bill Cunningham/The New York Times/Redux. Ronda Churchill/Bloomberg
Methodology: The $10.8 billion figure is drawn from an audit report prepared by AlixPartners LLP and Purdue. According to the report, $247 million went to loans that were repaid in full.
The information on cash transfers—from Purdue into Rosebay, Beacon, Perthlite, Linarite, and Banela—and on tax payments is drawn from the AlixPartners and Purdue report (pages 27, 66).
Details on the ownership of Rosebay and Beacon, as described by the attorneys general of Arizona and New York, come from a July 31, 2019, filing, filing to the Arizona Supreme Court in State of Arizona v. Purdue and affiliates (page 5); and from a Sept. 13, 2019, filing to the Supreme Court of the State of New York, Suffolk County, in The People of the State of New York v. Purdue Pharma (page 6).
Particulars on the transfers from Beacon to Mortimer D.A., and the purchase of New York real estate as described by the New York state attorney general, can be found on page 7 of the Sept. 13 filing, in New York property records, and in Suffolk County property records.
The figures for the Luxembourg and BVI companies are derived from the AlixPartners and Purdue report (page 66), along with additional Bloomberg News reporting.
Specifics on the ownership of Banela, Perthlite, and Linarite as described by the New York state attorney general is on page 4 of the Sept. 13 filing.
Information on Kokino LLC’s holdings come from a November 2019 filing to the U.S. Securities and Exchange Commission. The Sunriver Management LLC figure is based on Bloomberg News reporting that 20% of assets managed by Sunriver are held by Kokino.
Details on Summer Road LLC’s holdings can be found in an August 2020 filing to the SEC.
Particulars on Stillwater Holdings LLC’s holdings are in an April 2020 filing to the SEC by EMagin Corp. The stake is valued as of Aug. 19.
