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In the Gold Room at the Utah State Capitol, Governor Spencer J. Cox thanked Utah Attorney General Sean D. Reyes for over a decade of service to the people of Utah.

Surrounded by family and friends, Governor Cox, Attorney General Reyes, and Auditor John Dougall reflected on their years of overlapping service.

After the tribute, Attorney General Reyes retuned to the AG’s office with family and friends to partake in his portrait unveiling ceremony. After over a decade of service to the people of Utah, Attorney General Sean D. Reyes’ portrait officially joined his predecessors on the wall.

An internal investigation called “Project Meramec” shows TikTok executives knew the company was profiting from children being sexually exploited on its platform.

Salt Lake City, UT—The Utah Department of Commerce’s Division of Consumer Protections, represented by the Utah Attorney General’s Office, announced today the release of previously redacted information related to its most recent complaint filed against TikTok Inc. (TikTok). The previously redacted allegations include details from TikTok’s internal investigation, what the company called “Project Meramec,” which revealed that TikTok knew that hundreds of thousands of minors were accessing their LIVE product and its age restrictions were ineffective. Additionally, the Division alleges the company’s investigation recognized that children were being sexually exploited, and TikTok decided not to stop anything because of the financial profits it was raking in.

The less-redacted complaint, which is being filed with permission of Judge Coral Sanchez of the Utah Third District Court, reveals allegations that highlight concerns that TikTok operates an open-door policy allowing predators and criminals to exploit users, especially children. Additionally, it alleges that TikTok pockets as much as half of every money exchange it brokers on its LIVE platform. Through the coins and gifts, some of which take the form of plush toys targeted to very young minors, TikTok reaps exorbitant profits.

The updated complaint, initially filed in June 2024, now shows the Division and the Attorney General’s Office had enough evidence to allege that TikTok coupled its livestream feature with monetization to create an environment built on exchanging TikTok’s virtual currency for sexual and illegal acts. TikTok’s internal “Project Meramec” investigation and the admissions of its employees document how TikTok LIVE allows adults to pay young users to strip, pose, and dance provocatively for “diamonds,” which can be cashed out for real money. 

“Utah’s unredacted complaint demonstrates how clearly depraved TikTok’s business model is. Such a blatant disregard for the safety of our children on the platform, not to mention profiting from their exploitation, shocks the conscience and proves that TikTok harms children,” said Utah Governor Spencer Cox.

TikTok’s alleged profiteering extends beyond child sexual exploitation. The complaint alleges TikTok performed another internal investigation called “Project Jupiter” that concluded that its livestream feature, along with its virtual currency, has enabled criminals to launder money, sell drugs, and fund terrorist groups, such as the Islamic State of Iraq and Levant (ISIL).

“For my 11 years in office, Utah has led nationally to protect our children from violence and victimization in all forms but particularly from online predators. Sadly, social media is too often the tool for exploiting America’s young people. Online exploitation of minors has exploded, leading to depression, isolation, and other tragedies such as suicide, addiction, and trafficking. It would be outrageous enough to endanger our kids the way TikTok has—even if it was unintended. But the fact that it serves up minors on ‘TikTokLive,’ knowing the danger, understanding the damage, and still monetizing the exploitation of our kids is unconscionable. And that doesn’t even address the money laundering aspects of our case,” said Attorney General Reyes. 

“This last complaint I file as AG is symbolic of my years standing watch over this great state. We punch hard and don’t stop, no matter how powerful our opposition. We refuse to back down when our cause is just. We’re a smaller population state, but we play a big role leading on many national issues. Thanks to Judge Sanchez’s ruling, more of TikTok’s shocking conduct will now be public through this unredacted complaint. And with discovery, the full extent of its culpability can be demonstrated at trial,” AG Reyes continued.

The complaint also alleges that TikTok’s algorithm favors and boosts live feeds that receive virtual currency gifts. As the complaint alleges, those feeds with a high currency exchange involve money laundering, sexual content, or both. As a result, this dangerous content is prioritized and featured at the top of user feeds and labeled as “TopLives.” Thus, new or curious children on the platform will fall into a hazardous community with no warning.

This case marked the second lawsuit against TikTok by the Division through the Utah Attorney General’s Office. In October 2023, the State filed a consumer protection case against TikTok for intentionally designing and implementing addictive features aimed at hooking young users into endless use of its app. Throughout the Division’s ongoing investigation, and after a lengthy legal battle regarding TikTok’s refusal to comply with the Division’s subpoenas, a Utah judge found TikTok in contempt for failing to produce the required documents. Once TikTok eventually submitted those court-ordered documents, it became evident that the dangers posed by the platform to children extend beyond its addictive algorithm. It also includes a significant risk, as the TikTok LIVE feature appears to create an open door for criminals to exploit users, particularly minors.

“Since the State’s first complaint against TikTok, we have had to fight tooth and nail to get this information from them, said Margaret Woolley Busse, Executive Director of the Utah Department of Commerce. “Now that the court has allowed us to make more of the Division’s complaint public, it shows just how TikTok has been lacking in any moral guardrails and how they have knowingly put our kids at risk.”

SALT LAKE CITY, UTAH—Utah Attorney General Sean D. Reyes and Texas Attorney General Ken Paxton are co-leading 15 states and the National Association of Home Builders to challenge radical energy efficiency standards that undercut affordable housing. The filing against the US Department of Housing and Development (HUD) and the US Department of Agriculture (USDA) details how both agencies are harming Americans, particularly low-income and first-time homebuyers. The standards are so cost-ineffective that the International Code Council (ICC) and the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) have already partially rolled them back, a fact that seems lost on the current administration and agencies.

“Even as our nation prepares to transition to a new administration, the outgoing HUD and USDA offices are committed to inflicting unwanted and unneeded cost increases on Americans who are already struggling to pay their bills, provide for their families, and secure a brighter future for their children,” said General Reyes. “Our multi-state action, in collaboration with the National Association of Home Builders, is urgently seeking a roll-back on the radical environmental agendas that, if not changed, will devastate the American dream of home ownership. For the last 11 years, I have fought federal overreach in nearly every aspect of our lives. As one of my last actions as AG, I am grateful for another chance to lead this fight to protect hard-working Utahns and all Americans.”

HUD and USDA concede the standards will cost up to $8,345 for each covered new home. But estimates by industry professionals show the actual costs are far higher—up to $31,000 per new home. HUD and USDA project that over 161,000 new units of single-family housing and more than 17,000 new units of multi-family housing will be affected every year. The agencies concede the new standards will drive down production of affordable housing at a time when middle-class families are finding homeownership out of reach and homelessness is at an all-time high.

The state attorneys general seek a declaration that Section 109 of the Cranston-Gonzalez Act is unconstitutional to the extent it delegates to the International Code Council or ASHRAE the authority to set energy efficiency standards for covered housing, a declaration that the 2024 Final Declaration is arbitrary, capricious, an abuse of discretion, and contrary to law, and an order enjoining Defendants from applying energy efficiency standards to covered housing where such standards are not consistent with the constitutional provisions of Section 109 of the Cranston-Gonzalez Act.

Joining Utah and Texas on this lawsuit are the States of Alabama, Arkansas, Idaho, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, South Carolina, Tennessee, and West Virginia, as well as the National Association of Home Builders.

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The case is captioned State of Utah v. Todman, 6:25-cv-1; it is pending in the Eastern District of Texas; it is pending in the Eastern District of Texas. Utah is represented by AG Reyes and designated attorney(s) within his office; the various plaintiff states are represented by their Attorneys General and designated attorneys; and NAHB is represented by Scott St. John

Read the challenge here.

Sean Reyes, Utah’s Attorney General, and our entire AG office convey sincere condolences to the family of President Jimmy Carter, recognizing the service he rendered to our nation before, during and after he served as America’s 39th President.

From his time in the U.S. Armed Forces, his work with global charities, to quiet work in his church and local community, he leaves a legacy as a champion of human rights and humanitarian service.

Ryan Goodrich was a trusted title agent who became a thief.

The Utah Attorney General’s Office prosecuted the case and sought justice for the victims in October.

For years, Goodrich ran Synergy Title in Syracuse and, outwardly, lived an ideal life. In truth, Goodrich stole more than $9 million from real estate buyers, sellers and lenders over two years. And, behind the scenes, Goodrich kept the money he was supposed to pay clients for selling their homes. He didn’t complete financial transactions; he kept the money. He tried to hide it but our Assistant Attorney General prosecuting the case says his scheme buried him in evidence.

Wayne Jones of our Mortgage and Financial Fraud Division joins us on this Legally Speaking podcast to share more.

Listen to the podcast here.

Powerful Middlemen Substantially Contributed to Utah Opioid Deaths 

SALT LAKE CITY – As Utah leads national strategies to fight opioid overdoses, addiction, and destruction, Attorney General Sean Reyes on behalf of the State of Utah and the Utah Division of Consumer Protection filed a complaint today in Summit County, Utah against two of the nation’s largest Pharmacy Benefit Managers (PBMs). The suit alleges that UnitedHealth Group and Express Scripts and their subsidiaries played a significant role in the opioid epidemic through powerful positions as intermediaries between manufacturers, pharmacies, insurance companies, payers, and patients.  

“Over the past decade, it has been one of my top priorities in the Attorney General’s Office to hold accountable those who unleashed the opioid epidemic upon Utah and America. For far too long, opioids were misrepresented as safe, as they ripped apart families, trapped users, and killed innocent victims,” said Utah Attorney General Sean D. Reyes. “Utah has helped lead the national fight by aggressively pursuing manufacturers, distributors, physicians, pharmacies, marketers, drug dealers and others who contributed to the carnage. Our unrelenting litigation strategies have resulted in over $540 million coming back to Utah to address the horrific effects of this public health crisis. Today, we begin to hold yet another group to account. Pharmacy Benefit Managers (PBMs) took advantage of already dangerous situations and knowingly multiplied the tragic outcomes.” 

The plaintiffs in the case are the State of Utah and its Division of Consumer Protection filed by Attorney General Sean D. Reyes and the Attorney General’s White Collar and Commercial Enforcement Division led by Douglas Crapo. The action has been filed against Express Scripts, Inc., Express Scripts Administrators, LLC, Medco Health Solutions, ESI Mail Pharmacy Service, Inc., ESI Mail Order Processing, Inc., and Express Scripts Pharmacy, Inc., (collectively, “Express Scripts” or “ESI”) and UnitedHealth Group, Inc., OptumRx, Inc., OptumInsight, Inc., and OptumInsight Life Sciences, Inc. (collectively “Optum”).   

“Pharmacy Benefit Managers have played a covert role in the opioid abuse crisis. We support efforts to unveil these hidden collaborations with pharmaceutical manufacturers, as transparency is essential for accountability and building trust within our community,” said Margaret Busse, Executive Director of the Utah Department of Commerce. “Opioid abuse has had a devastating impact on the lives of many Utahns, and they deserve justice.” 

The filing reads, “This litigation is part of Utah’s ongoing effort to combat the worst human-made epidemic in modern medical history: opioid diversion, addiction, overdose, and death caused by an oversupply of opioids flooding communities due to powerful companies who sought to profit at the expense of the public.” Director Crapo representing the AGO White Collar and Commercial Enforcement Division added, “I am grateful to represent the people of Utah and the Department of Commerce and its Division of Consumer Protection in these critical cases that are one part of the solution to decades of the cloaked corporate conduct that crushed innocent people’s lives.”  

See filing here.

Today, Utah Attorney General Sean D. Reyes announced the settlement and dismissal of a lawsuit he filed in early 2023 on behalf of the State of Utah against the National Association of Attorneys General (NAAG). The complaint asked a Utah court to determine whether NAAG’s handling of $100 million in assets on behalf of various states violated Utah’s State Money Management Act. Those funds are held by NAAG as part of a decades-old settlement between the states and large tobacco companies. In filing the lawsuit, AG Reyes expressed serious concerns over the investment of assets by NAAG in Environmental, Social, and Governance (“ESG”) funds or any other investments made contrary to the “Fiduciary Rule” or “Prudent Financial Investor Rule” which requires maximizing return to beneficiaries.

At the time of filing, AG Reyes, who formerly served on NAAG’s Executive Committee and multiple terms as a co-chair of both NAAG’s Human Trafficking Committee and Civil Rights Committee, also expressed concerns over fiscal soundness and fairness, impartiality and representation in governance between Democrat and Republican AGs as well as control over the use of funds. Many Republican AGs expressed similar concerns for years, leading to several of them withdrawing their states from membership in the organization. This unrest also led to the resignation of NAAG’s former Executive Director (“ED”) and the hiring of former Idaho Chief Deputy AG, Brian Kane, as the new ED.

Articulating his concern in 2023, AG Reyes stated, “For decades NAAG has been caretaker of significant funds for the states, and no one has dared ask a court whether the use of such funds complies with state laws or if it’s time for NAAG to divest such funds. I am asking it now. Unless NAAG changes some fundamental policies, it will be up to a court to determine the answer.”

In dismissing the case this week, AG Reyes stated: “I don’t believe the lawsuit is necessary any longer. NAAG has made significant changes and now appears to comply with Utah law on handling funds—whether those assets belong directly to the state or Utah is solely a beneficiary. I give great credit to NAAG ED Brian Kane. Without his leadership and our trust in him, I don’t think this settlement would have happened. I also commend the AGs leading NAAG for being responsive. They listened to the concerns that I and other AGs have long held. But, more importantly, NAAG did something about it. The many new bylaw and organizational changes give me more confidence and hope for less partisanship in governance, investments and use of funds, and in balancing leadership power. And I’m pleased we were able to suspend the dues requirement for at least another year.”

The following significant governance and financial management changes are just some that have been adopted by NAAG following the filing of Utah’s lawsuit:

• The president of the Association rotates every year by political party (“party”);
• The Executive Committee has a majority that is different than the party of the president of the Association;
• The Finance Committee is chaired by a member that is different than the party of the president;
• All Association committees with access to funds have an even party split including co-chair positions;
• Only Attorneys General or their designated staff can make funding decisions, or set the budget for the Association;
• Multistate efforts must be bipartisan with at least two members of each party as sponsors, or the effort must be approved by the Executive Committee;

In addition, the following financial oversight changes have been made:

• The Finance Committee is evenly balanced between the parties;
• NAAG’s financial advisors have been reviewed and replaced following a transparent RFP process led by a special bipartisan committee of Attorneys General;
• An Audit Committee has been established that includes party balance as well as a committee member from outside the Association to ensure transparency and objective oversight;
• The Association’s auditors have been replaced following a transparent review and RFP process led by the Audit Committee;
• All investment policies are currently under review and revision in consultation with the Association’s new investment advisors;
• Any investments not meeting the requirements of the Attorneys General are subject to review and replacement through the Finance Committee, the Executive Committee and Investment Advisors;
• No investments are currently made for any ESG purposes or in any other type of investment that is motivated by a partisan political purpose;
• All funds are invested according to the Fiduciary Rule or the Prudent Financial Investor Rule;
• In the NAAG 2025 budget, there is a suspension of state dues requirements for another year. A request for a further extension or permanent suspension can be brought by any AG before the NAAG Executive Committee for consideration;
• A Dues Committee will be convened to assess the needs of the Association as well as its member Attorneys General individually and collectively.

Finally, the Association has undergone other important operational and governance changes following the hiring of Director Kane making NAAG leaner, more responsive and accountable to its members. For example, Mr. Kane significantly reduced the total number of employees while increasing the output and offerings of the Association.

Recognizing the significant changes adopted through the Association, as well as the receptivity of the current Executive Director and membership to address the concerns of Attorney General Reyes and his fellow AGs, the most prudent course forward was to dismiss this lawsuit and continue to work within the Association.

Attorney General Reyes would like to extend thanks to his fellow Attorneys General, the members of his team who worked so diligently on this effort, and the NAAG team and outside counsel. In conclusion, he stated, “I am pleased we could settle this matter, remedy substantial issues and strengthen the organization. Again, if not for the leadership of Brian Kane and support of the Executive Committee, we could not have resolved this without full blown litigation. Any ideas for further improvements can be brought forward by me or any other member to the Executive Committee of NAAG.”

SALT LAKE CITY—Attorney General Sean D. Reyes today warned four voice service providers that they have been transmitting suspected illegal robocall traffic on their networks on behalf of one or more of their customers.

Attorney General Reyes is a member of the 51-attorney general Anti-Robocall Multistate Litigation Task Force, which has been investigating these providers. In the warning letters, the task force informs the providers that it has shared the findings of its investigations with the Federal Communications Commission (FCC), which will consider appropriate next steps.

The task force sent warning letters to the following companies:

KWK Communications, Inc.: KWK Communications received at least 129 traceback notices from the industry traceback group between 2020 and 2022, which included high volumes of calls associated with IRS and Social Security Administration scams, auto warranty scams, and utilities scams. In just one month in 2022, KWK allegedly routed more than 20,000 calls with illegally spoofed telephone numbers and more than 8.7 million calls made using invalid Caller ID numbers.

Inbound Communications, Inc. formerly Inbound Inc. Inbound received at least 63 traceback notices between 2021 and 2022, including many about calls that involved imposter scams. Inbound is also estimated to have allegedly routed more than 28.4 million DirecTV and cable discount scam robocalls in a single month in 2022. The FTC previously issued a cease-and-desist demand to Inbound over these scam calls.

AKA Management, Inc. AKA received at least 129 traceback notices between 2020 and 2022, including about calls that were government imposter scams and tech support scams. AKA is also estimated to have allegedly routed about 12.1 million Amazon and Apple imposter robocalls to consumers in a single month in 2022.

CallVox LLC: CallVox received more than 47 traceback notices between 2020 and 2022 warning of unlawful or suspicious robocalls that it helped move into and through the U.S. telephone network, including thousands of calls to people who were registered on the Do Not Call list and calls placed using illegally spoofed telephone numbers.

The letters warned that if these providers continue to transmit robocalls and violate state and federal laws, the task force may pursue further legal actions against these companies and their owners.

The Anti-Robocall Multistate Litigation Task Force of 51 bipartisan attorneys general investigates and takes legal action against those responsible for routing significant volumes of illegal robocall traffic into and across the United States.

Copies of the warning letters are available here.

On November 21-23, 2024, the Utah AG’s CASE Strike Force conducted retail blitz operations in the cities of Taylorsville, West Valley, and West Jordan in conjunction with local law enforcement, AP&P, Immigration and Customs Enforcement (ICE) and various retailers (listed below). Over the three days, participating agencies made over 33 arrests and recovered over $5k in property.

These operations are designed to bring law enforcement and retailers together to combat retail theft through a focused and coordinated approach. During the operation, retail asset protection professionals, who are trained to identify theft perpetrators, maintain watch in their stores and report any thefts in progress to law enforcement in real time. Participating law enforcement then strategically respond to stop the suspected thieves and take them into custody. These suspects are then transported to a nearby location for processing, including questioning to generate further information on organized retail crime in the area, to determine charges, and whether or not transport to jail is appropriate.

On November 21, 2024, Taylorsville Police Department was the lead agency for the operation in the area of the Crossroads of Taylorsville shopping center with West Valley Police, AP&P, and ICE assisting. Also assisting was an Ogden Police detective primarily observing and a State Fire Marshal providing drone observation. For the day, eight suspects were arrested, with one having a significant history of organized retail theft. In addition, one suspect was an AP&P fugitive utilizing a magnet tool to remove items from security containers.

On November 22, 2024, the West Valley Police Department was the lead agency for the operation in multiple areas primarily near 5600 West. Taylorsville Police, AP&P and ICE assisted, along with two detectives from Provo Police who were primarily observing and a State Fire Marshal who provided drone observation. On the second day of the operation, 16 suspects were arrested, with one being a suspect we were looking for related to a Utah AG case and another suspect who was wanted for obstruction of justice related to a homicide in Tooele County.

On November 23, 2024, the West Jordan Police Department was the lead agency for the operation in the Jordan Landing area. Taylorsville Police, West Valley Police, AP&P, and ICE assisted. On the final day of the operation seven were arrested, with three of the suspects possessing narcotics.

PARTICIPATING AGENCIES

Taylorsville Police Department, West Valley Police Department, West Jordan Police Department, Provo Police Department, Ogden Police Department, Adult Probation and Parole, Immigration and Customs Enforcement, State Fire Marshall Office.

Retailers

Home Depot, Lowe’s, Target, TJ Maxx, Sierra Trading, Home Goods, Kohl’s, Burlington, Old Navy, Nike, Ulta Beauty, Ross, Marshalls, Victoria Secret, Sprouts.

C.A.S.E. Task Force

The Crimes Against Statewide Economy (C.A.S.E.) Task Force has been in operation since September 2020. C.A.S.E. was created due to the serious rise in massive retail theft in neighborhood stores across the state. C.A.S.E. is responsible for the following cases as well as supporting local, state, and federal law enforcement partners. The C.A.S.E. Task Force is made up of officers from multiple agencies across Salt Lake County: Attorney General’s Office, Utah Department of Public Safety – State Bureau of Investigation, West Jordan Police Department and Taylorsville City Police Department.

Majority of cases that C.A.S.E. investigates is Organized Retail Crime Cases (ORC) – Involves two or more persons cooperating to illegally obtain retail merchandise in substantial quantities through both theft and fraud as part of an unlawful commercial enterprise.