First Ex Drug Execs Indicted in Opioid Crisis
- Rochester Drug Co-Operative and two of its executives were charged for supplying drugs that they knew were likely being misused for the purpose of increasing their profits.
- These are the first charges filed against a company or executives in the opioid epidemic.
- RDC will pay a fine of 20 million dollars as a result.
What Are the Charges?
A major drug distribution company and two of its executives were indicted on Tuesday, marking the first criminal charges related to the opioid crisis for a company of this kind.
Rochester Drug Co-Operative (RDC), along with former C.E.O., Laurence Doud III, and former chief of compliance, William Pietruszewski, are being accused of supplying drugs they knew were likely being misused.
RDC is one of the top ten drug distributors in the United States. The company has an estimated annual revenue of one billion dollars.
According to the indictment against them, RDC allegedly “supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them.”
Both Doud and Pietruszewski are being charged with conspiracy to defraud the United States and conspiracy to distribute controlled substances. The latter of the charges carries a mandatory 10-year sentence and has a maximum life sentence.
Pietruszewski is also being charged with willfully failing to file suspicious order reports to the Drug Enforcement Administration. He has already pled guilty. Doud has surrendered to authorities, but entered a not guilty plea.
RDC is being charged with conspiracy to violate narcotics laws, conspiracy to defraud the United States, and willfully failing to file suspicious order reports. They are also being sued in a civil complaint related to underreporting suspicious orders.
Between 2012 and 2016, the company filled 1.5 million orders, and only reported four suspicious orders to the DEA. However, the complaint alleges that RDC failed to report 2,000 orders to the DEA.
According to the indictment, the company and its executives had the goal of maximizing RDC’s revenues, as well as their own salaries. Between 2012 and 2016, their sales of oxycodone tablets increased by 800 percent. Doud’s salary also more than doubled, landing him with an annual income of $1.5 million by 2016.
What Does this Mean for the Opioid Crisis?
A U.S. Attorney involved in the case, Geoffrey S. Berman, released a statement saying that this prosecution is the “first of its kind.”
“Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country,” he added. “ Our Office will do everything in its power to combat this epidemic.”
A DEA Special Agent, Ray Donovan, also said that these charges “should send shock waves throughout the pharmaceutical industry.”
“The distribution of life-saving medication is paramount to public health,” he said. “Similarly, so is identifying rogue members of the pharmaceutical and medical fields whose diversion contributes to the record-breaking drug overdoses in America.”
The epidemic and overdoses that Berman and Donovan reference are part of a serious problem in America. According to the National Institute on Drug Abuse, more than 130 people in the U.S. die every single day from an opioid overdose.
A spokesperson for RDC, Jeff Eller, released a statement acknowledging that the company “made mistakes.”
“RDC understands that these mistakes, directed by former management, have serious consequences,” said Elder. “One element of the opioid epidemic is a dramatic increase in the volume of prescriptions for opioids and all narcotics. From 2012 to 2017, we did not have adequate systems in place nor were our compliance team and practices rigorous enough to provide adequate controls and oversight.”
RDC has agreed to pay a fine of $20 million dollars. They will also be under independent compliance monitoring for three years.
See what others are saying: (Associated Press) (NPR) (Axios)
Survey and Census Data Shows Record Number of Americans are Struggling Financially
Americans are choosing not to pursue medical treatment more and more frequently as they encounter money troubles.
A recent federal survey shows that a record number of Americans were worse off financially in 2022 than a year prior.
Coupled with recent census data showing pervasive poverty across much of the country, Americans are forced to make difficult decisions, like foregoing expensive healthcare.
According to a recent Federal Reserve Bureau survey, 35% of adults say they were worse off in 2022 than 2021, which is the highest share ever recorded since the question was raised in 2014.
Additionally, half of adults reported their budget was majorly affected by rising prices across the country, and that number is even higher among minority communities and parents living with their children.
According to recent census data, more than 10% of the counties in the U.S. are experiencing persistent poverty, meaning the area has had a poverty rate of 20% or higher between 1989 and 2019.
16 states report at least 10% of their population living in persistent poverty. But most of the suffering counties were found in the South — which accounts for over half the people living in persistent poverty, despite making up less than 40% of the population.
These financial realities have placed many Americans in the unfortunate situation of choosing between medical treatment and survival. The Federal Reserve study found that the share of Americans who skipped medical treatment because of the cost has drastically increased since 2020.
The reflection of this can be found in the overall health of households in different income brackets. 75% of households with an income of $25,000 or less report being in good health – compared to the 91% of households with $100,000 or more income.
See what others are saying: (Axios) (The Hill) (Federal Reserve)
Montana Governor Signs TikTok Ban
The ban will likely face legal challenges before it is officially enacted next year.
First Statewide Ban of TikTok
Montana became the first state to ban TikTok on Wednesday after Gov. Greg Gianforte (R) signed legislation aimed at protecting “Montanans’ personal and private data from the Chinese Communist Party.”
The ban will go into effect on Jan. 1, 2024, though the law will likely face a handful of legal challenges before that date.
Under the law, citizens of the state will not be held liable for using the app, but companies that offer the app on their platforms, like Apple and Google, will face a $10,000 fine per day of violations. TikTok would also be subject to the hefty daily fine.
Questions remain about how tech companies will practically enforce this law. During a hearing earlier this year, a representative from TechNet said that these platforms don’t have the ability to “geofence” apps by state.
Roger Entner, an analyst at Recon Analytics, told the Associated Press that app stores could have the capability to enforce the restriction, but it would be difficult to carry out and there would be a variety of loopholes by tools like VPNs.
Montana’s law comes as U.S. politicians have taken aim at TikTok over its alleged ties to the CCP. Earlier this year, the White House directed federal agencies to remove TikTok from government devices. Conservatives, in particular, have been increasingly working to restrict the app.
“The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented,” Gov. Gianforte said in a Wednesday statement.
Criticism of Montana Law
TikTok, however, has repeatedly denied that it gives user data to the government. The company released a statement claiming Montana’s law “infringes on the First Amendment rights of the people” in the state.
“We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana,” the company said.
The American Civil Liberties Union condemned Montana’s law for similar reasons.
“This law tramples on our free speech rights under the guise of national security and lays the groundwork for excessive government control over the internet,” the ACLU tweeted. “Elected officials do not have the right to selectively censor entire social media apps based on their country of origin.”
Per the AP, there are 200,000 TikTok users in Montana, and another 6,000 businesses use the platform as well. Lawsuits are expected to be filed against the law in the near future.
See what others are saying: (Associated Press) (Fast Company) (CBS News)
How a Disney-Loving Former Youth Pastor Landed on The FBI’s “Most Wanted” List
“Do what is best, not for yourself, for once. Think about everyone else,” Chris Burns’ 19-year-old son pleaded to his father via The Daily Beast.
Multi-Million Dollar Scheme
Former youth pastor turned financial advisor Chris Burns remains at large since going on the run in September of 2020 to avoid a Securities Exchange Commission investigation into his businesses.
Despite his fugitive status, the Justice Department recently indicted Burns with several more charges on top of the $12 million default judgment he received from the SEC.
Burns allegedly sold false promissory notes to investors across Georgia, North Carolina, and Florida. The SEC claims he told the investors they were participating in a “peer to peer” lending program where businesses that needed capital would borrow money and then repay it with interest as high as 20%. Burns allegedly also reassured investors that the businesses had collateral so the investment was low-risk.
The SEC says that Burns instead took that money for personal use.
Burns began his adult life as a youth pastor back in 2007 before transitioning into financial planning a few years later. By 2017, he launched his own radio show, The Chris Burns Show, which was funded by one of his companies, Dynamic Money – where every week Burns would “unpack how this week’s headlines practically impact your life, wallet, and future,” according to the description. He also frequently appeared on television and online, talking about finances and politics.
The SEC alleges that he used his public appearances to elevate his status as a financial advisor and maximize his reach to investors.
His family told The Daily Beast that he became obsessed with success and he reportedly bought hand-made clothes, a million-dollar lakehouse, a boat, several cars, and took his family on several trips to Disney World. His eldest son and wife said that Burns was paying thousands of dollars a day for VIP tours and once paid for the neighbors to come along.
Then in September 2020, he reportedly told his wife that he was being investigated by the Securities Exchange Commission but he told her not to worry.
The day that he was supposed to turn over his business documents to the SEC, he disappeared, telling his wife he was just going to take a trip to North Carolina to tell his parents about the investigation. Then, the car was found abandoned in a parking lot with several cashier’s checks totaling $78,000
FBI’s Most Wanted
The default judgment in the SEC complaint orders Burns, if he’s ever found, to pay $12 million to his victims, as well as over $650,000 in a civil penalty. Additionally, a federal criminal complaint charged him with mail fraud. Burns is currently on the FBI’s Most Wanted list.
Last week, the Justice Department indicted him on several other charges including 10 counts of wire fraud and two counts of mail fraud.
“Burns is charged for allegedly stealing millions of dollars from clients in an illegal investment fraud scheme,” Keri Farley, Special Agent in Charge of FBI Atlanta, said in a statement to The Daily Beast. “Financial crimes of this nature can cause significant disruptions to the lives of those who are victimized, and the FBI is dedicated to holding these criminals accountable.”
His family maintains that they knew nothing of Burns’ schemes. His wife reportedly returned over $300,000 that he had given to her.
She and their eldest son, who is now 19, told The Daily Beast they just want Burns to turn himself in, take responsibility for his actions, and try to help the people he hurt.
“Do what is best, not for yourself, for once. Think about everyone else,” Burns’ son said in a message to his father via The Daily Beast.