OxyContin maker's story shows there's no substitute for old-fashioned digging

I’ve (Senior Director Amanda Marigliano) just finished reading Patrick Radden Keefe’s Empire of Pain, an account of the Sackler family’s ownership of Purdue Pharma, which created the highly addictive pain medication OxyContin. The book details the heartbreaking and devastating reality of what happens when people and corporate interests put greed before compassion. The exhaustive research and writing that went into this book is remarkable, as evidenced by the 50-plus pages of endnotes. 

So many parts of this book reminded me of my own work as an investigator. I read with interest how the Sacklers used complex corporate structures and shell companies to hide the flow of funds and shield just how far the family’s influence extended. Keefe writes, “The Sackler family fortune was dispersed in a vast global web of hundreds of shell companies and trusts and LLCs, many of them established in tax havens and jurisdictions with powerful bank secrecy laws. The structure of their financial arrangements could seem deliberately obscure, with an infinity of anonymous corporate entities, all nested like Matryoshka dolls.”

In the U.S., the family created Rhodes Pharmaceuticals after Purdue pled guilty to federal criminal charges of misbranding OxyContin. Rhodes “was set up as a ‘landing pad’ for the family…in case they needed a fresh start following the crisis over OxyContin.” I pulled corporate information readily available online for Rhodes and found that the company was registered as a limited partnership in November 2007 in Delaware, a state known for not requiring the public disclosure of officers and directors. About six months later, Rhodes was registered to do business in Rhode Island. The Rhode Island filing did not name Purdue or any Sackler family members as a partner, but its address was the same as that for Purdue Pharma. (I should point out that Rhodes finally disclosed Purdue as a general partner in Rhode Island corporate records….in August 2019, one month before Purdue filed for bankruptcy protection to fend off massive liability claims in connection with OxyContin.)

In our asset investigations, we often see the use of shell companies, and this is a great example of why we expand our research to include all known identifiers of an individual or entity we are researching – including address history. Rhodes grew to be one of the largest opioids manufactures in the United States and the Financial Times later exposed its ties to the Sacklers.

In many cases, trained investigators can trace assets through tangled webs of public records. Through detailed investigation – including taking note of all details recorded across public information repositories – we may uncover new corporate affiliations with new details….thus continuing the methodic asset search theme of following breadcrumbs and going down rabbit holes.

Throughout the book, there are myriad examples of Keefe’s tenacity and diligence in his research, much of which we also do at 221B Partners. Rather than relying only on online public records (including corporate filings, court records, depositions and previous reporting) Keefe also conducted extensive research of archived records. Keefe interviewed more than 200 people for the book. He highlights the importance of interviews – as he put it, “this was the first project I’ve ever undertaken in which there were really too many documents.”