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Utah Escalates Legal Action Against Purdue Pharma

FOR IMMEDIATE RELEASE
January 30, 2019


UTAH ESCALATES LEGAL ACTION AGAINST PURDUE PHARMA BY NAMING EXECUTIVES AND EXPEDITING STATE’S CLAIMS 
State seeks administrative relief for misleading marketing practices by OxyContin producer


SALT LAKE CITY – Today, the Utah Attorney General’s Office filed an administrative action against Purdue Pharma L.P., Purdue Pharma Inc., The Purdue Frederick Company, Richard Sackler, M.D., and Kathe Sackler, M.D., as part of the State’s efforts to hold accountable the opioid companies and individuals that created and fueled the opioid epidemic throughout Utah.

In the filing, under Utah Code § 13-2-6, the Division of Consumer Protection of the Department of Commerce issued an administrative action, in the form of a citation, against the defendants alleging violations of the Utah Consumer Sales Practices Act. An administrative proceeding allows the State to seek to prove its claims and obtain a judgment, injunctive relief, and civil penalties more promptly than state district court proceedings.

Based on evidence that has emerged over the last year, this administrative action alleges that not only Purdue, but two of its owners, Richard and Kathe Sackler, participated in Purdue’s fraudulent conduct.

“We are committed to achieving the best results for the State of Utah and pursuing all legal avenues appropriate to hold the companies and individuals that created this crisis accountable,” said Utah Attorney General Sean Reyes. “After seeing multiple media reports about Purdue retaining restructuring counsel, we decided that filing an administrative action is in the best interest of the people of Utah. This action allows us to expedite legal proceedings against Purdue and the named executives, who we allege incited and participated in the deceptive sales and marketing tactics that ultimately led to an epidemic of prescription opioid abuse in our state.”

“The administrative process, which the Division of Consumer Protection regularly uses, will provide prompt and full consideration of the State’s claims,” added AG Reyes. “Our families, health care professionals, first responders, and law enforcement officers know the urgency of the opioid epidemic. As we recognized when we filed suit, and in the several months since then, we don’t have more time to lose. Meanwhile, we are continuing to investigate other potential wrongdoers.”

Concurrent with this action, the state dismissed without prejudice the civil litigation it filed against Purdue Pharma in Carbon County last May, which means the State may refile against Purdue Pharma for the same circumstance at a later day. This action will not preclude Utah from filing lawsuits in district court against other defendants.
 
In addition to today’s actions, Utah continues to participate in investigations against other entities. Attorney General Reyes and a bipartisan group of more than 40 other state attorneys general have been aggressively investigating the extent to which entire opioid industry – manufacturers, distributors and pharmacies – engaged in unlawful practices. Purdue Pharma alone faces hundreds of lawsuits by government entities while other investigations remain ongoing. The State of Utah continues to investigate further lawsuits against additional defendants.
 
In Utah, non-fatal opioid costs to the state are approximately $524 million annually, according to research from the American Enterprise Institute. From 2013 to 2015, Utah ranked 7th highest in the nation for drug overdose deaths.
 
In May 2018, Attorney General Sean Reyes said, “Purdue Pharma manufactured one of the deadliest combinations in the history of our nation—OxyContin and lies. That lethal cocktail has led to a national public health crisis of epic proportions…. While Purdue’s executives got rich, Utah was plunged into a national public health crisis.”
 


# # #

 
NOTES:
 
1. A legal briefing on background concerning this matter will be held at 1:30pm and 2:30pm today in the Utah Attorney General’s Office. Call Chief of Staff Ric Cantrell at 801-230-9890 for more information.
 
2. You can review a copy of the administrative action here. The large number of redactions in the document are information subject to a protective order in multi-district litigation which is ongoing in the United State District Court for the Northern District of Ohio. https://attorneygeneral.utah.gov/wp-content/uploads/2019/01/Utah-Admin-Citation-1-30-2019.pdf   
 
3. These administrative claims are not dependent on other counties’ or states’ lawsuits and will proceed immediately while the district court claims have been stayed.  Complex civil litigation takes years. The administrative claims should be adjudicated within 6 months.

Upcoming: National Missing Children’s Day Poster Contest

January 29, 2019

The National Missing Children’s Day Poster Contest is a nationwide contest, hosted by the Office of Juvenile Justice and Delinquency Prevention (OJJDP), designed to promote awareness among teachers, parents/guardians, and children and engage them in discussions about safety.

The Utah Attorney General’s Office invites fifth graders to participate in the contest with an annual theme of “Bringing Our Missing Children Home”. Participants must submit their poster to the State Contest Manager by February 25th, at which time a winner will be chosen to represent Utah in the national judging competition and will receive a national award certificate from the U.S. Department of Justice (DOJ).

The national winner, with his/her teacher, parents/guardians, and the state manager, will be invited to Washington, D.C. to participate in the DOJ’s National Missing Children’s Day Ceremony on May 22nd.

Contest rules and the application can be found in the information packet.

Posters and applications are due to the State Contest Manager by February 25th.


Utah State Contact:

Ms. Michelle Busch-Upwall Utah Attorney General’s Office 801-281-1245
mbusch-upwall@agutah.gov

Remembering Martin Luther King, Jr.

January 21, 2019

By Sean Reyes
Utah Attorney General

Today we honor the memory of Dr. Martin Luther King Jr., one of the most impactful leaders in our nation’s history. Beyond his role as an advocate for civil rights and a champion for the persecuted, Dr. King’s influence holds a very personal place in my own family history. For it was his wife, Coretta Scott King, who assisted my immigrant father establish himself in this country and avoid political persecution in his native land. 

Dr. King stood for the truths that many Americans hold so dear – that every man, woman, and child are endowed with certain unalienable rights and freedoms regardless of skin color or place of birth.

He once said, “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”

In these days of turbulence in our nation and the world, it is our hope that we at the Utah Attorney General’s Office follow in the spirit of Dr. King, fighting on behalf of the people in the great state of Utah to ensure that those freedoms are not diminished.

Reporting Clergy Abuse

The Utah Attorney General’s Office works tirelessly to combat clergy abuse, and child abuse of any kind, through its Child Protection Division, the statewide network of Children’s Justice Centers, the Internet Crimes Against Children Task Force, robust investigations, prosecution and victim advocacy. We do this is partnership with Child Protective Services, local law enforcement, and other agencies.

In the interest of protecting the innocent and bringing criminals to justice, we do not discuss ongoing investigations.

If you or someone you know has been sexually abused by a clergy member, or anyone else, please report this to the 24/7 Child Abuse Hotline at 855-323-3237 or call your local sheriff or police department. You may also contact our office during business hours at 801-281-1200.

For-Profit College Settlement Cancels $500M in Student Debt

The State of Utah Department of Commerce released the following after Utah and 48 Attorneys General signed a multi-state case with Career Corporation, a for-profit education company, who agreed to stop collecting student loans, bringing $493.7 million in debt relief to CEC students across the U.S.

FOR IMMEDIATE RELEASE
January 9, 2019

Career Education Corporation, a for-profit company, agrees to stop collecting student loans in agreement with Utah, 48 Attorneys General

SALT LAKE CITY, Utah – Francine A. Giani, Executive Director of the Department of Commerce, announced today that the Utah Division of Consumer Protection will receive settlement funds for students as the result of a 493.7M nationwide lawsuit against Career Education Corporation (CEC), a for-profit education company. In the court filing, CEC agreed to reform its recruiting and enrollment practices and forgo collecting about $493.7 million in debts owed by 179,529 students nationally, in a settlement with the Utah Division of Consumer Protection filed through the Utah Attorney General and 48 other attorneys general.

“This case is a triumphant win for CEC students whose for-profit school failed to deliver on empty promises. Often these institutions prey on a vulnerable population, working parents and students who are looking find careers outside traditional college degrees. Utah hopes this case sends a message to the industry that our attorneys will actively pursue cases to defend student’s consumer rights,” stated Francine A. Giani.

The Assurance of Voluntary Compliance filed January 3, 2019 caps a five-year investigation. CEC agrees to forgo any and all efforts to collect amounts owed by former students living in the states participating in the agreement. In Utah, 399 students will get relief totaling $980,547.39. Nationally, the average individual debt relief will be about $2,750. CEC has also agreed to pay $5 million to the states. Utah’s share will be $50,000 which will go to the Consumer Protection Education and Training Fund.

CEC is based in Schaumburg, Ill., and currently offers primarily online courses through American InterContinental University and Colorado Technical University.

CEC has closed or phased out many of its schools over the past 10 years. Its brands have included Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College, and Sanford-Brown.

A group of attorneys general launched an investigation into CEC in January 2014 after receiving several complaints from students and a critical report on for-profit education by the U.S. Senate’s Health, Education, Labor and Pensions Committee. That investigation revealed evidence demonstrating that:

  • CEC used emotionally charged language to pressure them into enrolling in CEC’s schools;
  • CEC deceived students about the total costs of enrollment by instructing its admissions representatives to inform prospective students only about the cost per credit hour without disclosing the total number of required credit hours;
  • CEC misled students about the transferability of credits into CEC from other institutions and out of CEC to other institutions by promising on some occasions that credits would transfer;
  • CEC misrepresented the potential for students to obtain employment in the field by failing to adequately disclose the fact that certain programs lacked the necessary programmatic accreditation; and,
  • CEC deceived prospective students about the rate that graduates of CEC programs got a job in their field of study, thereby giving prospective students a distorted and inaccurate impression of CEC graduates’ employment outcomes. For instance, CEC inaccurately claimed that its graduates were “placed” who worked only temporarily or who were working in unrelated jobs.

As a result of the unfair and deceptive practices described above, students enrolled in CEC who would not have otherwise enrolled, could not obtain professional licensure, and were saddled with substantial debts that they could not repay nor discharge. CEC denied the allegations of the attorneys general but agreed to resolve the claims through this multistate settlement.

Robert McKenna, former Washington state attorney general and current partner at the San Francisco-based law firm of Orrick, Herrington & Sutcliffe, will independently monitor the company’s settlement compliance for three years and issue annual reports.

Highlights of the agreement

Under the agreement, CEC must:

  • Make no misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, or licensure requirements.
  • Not enroll students in programs that do not lead to state licensure when required for employment, or that due to their lack of accreditation, will not prepare graduates for jobs in their field. For certain programs that will prepare graduates for some but not all jobs, CEC will be required to disclose such to incoming students.
  • Provide a single-page disclosure to each student that includes: a) anticipated total direct cost; b) median debt for completers; c) programmatic cohort default rate; d) program completion rate; e) notice concerning transferability of credits; f) median earnings for completers; and g) the job placement rated.
  • Require students before enrolling to complete an Electronic Financial Impact Platform Disclosure, which provides specific information about debt burden and expected post-graduation income. CEC is working with the states to develop this platform.
  • Not engage in deceptive or abusive recruiting practices and record online chats and telephone calls with prospective students. CEC shall analyze these recordings to ensure compliance. CEC shall not contact students who indicate that they no longer wish to be contacted.
  • Require incoming undergraduate students with fewer than 24 credits to complete an orientation program before their first class that covers study skills, organization, literacy, financial skills, and computer competency. During the orientation period, students may withdraw at no cost.
  • Establish a risk-free trial period. All undergraduates who enter an online CEC program with fewer than 24 online credits shall be permitted to withdraw within 21 days of the beginning of the term without incurring any cost. All undergraduates who enter an on-ground CEC program shall be permitted to withdraw within seven days of the first day of class without incurring any cost.

Relief Eligibility

CEC has agreed to forgo collection of debts owed by students who either attended a CEC institution that closed before Jan. 1, 2019, or whose final day of attendance at AIU or CTU occurred on or before Dec. 31, 2013.

Former students with debt relief eligibility questions can contact CEC here; Toll Free Number: 844-783-8629

Local Number: 847-783-8629

The email is CECquestions@careered.com

The CEC investigation was led by Iowa, Connecticut, Illinois, Kentucky, Maryland, Oregon, and Pennsylvania. The agreement also covers the District of Columbia and  the following states: Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Photo by Nathan Dumlao

Scam artists abound: Don’t fall for it.

Did someone contact you from the AG’s Office asking for money? 

It probably wasn’t us. It was a scam.

Don’t send them anything.  Call us instead: 801-281-1200.

Scam #1: Bogus Grant Program
Recently, scammers impersonating the attorney general have contacted victims through Facebook Messenger offering a grant worth thousands of dollars — for a small fee (see the screenshot, below). The scammer directed the victim to a bogus personal page where they went through a series of grant application questions. Once the application was “approved”, the victims sent payment and received a grant check in return. The check bounced, of course, but by then the scammer had disappeared, along with the victim’s money.

Scam #2: Arrest Warrant 
Just this week, someone impersonated the Utah Solicitor General and told a victim he had a warrant for his arrest.  The scammer said the victim would go to jail unless they sent personal information and a payment.  The scammer then used this information to drain the rest of the victim’s accounts. 

These are just two recent examples of many creative scams out there.  The goal in each case is the same: to fool you into sending money. Don’t do it. 

You can beat the scammers. Here’s how. 

1. Don’t wire money.
True lotteries, sweepstakes, or grants awarded do not ask for money – not for shipping and handling, taxes, or customs. State officials and agencies do not typically ask people to send money for prizes, grants, unpaid loans, or to keep from being thrown in jail. When they do, they follow a very formal process that you would recognize as legit.

2. Take a moment and think before you do anything.
Check with a trusted friend, family member, or your local Better Business Bureau. If the offer references a state agency or official, contact the respective office to verify its validity before moving forward. Do not let anyone bully you. If that starts, hang up. Report scams to law enforcement.

3. Do not share your financial or personal information. Ever. 
If you receive a call about a debt that you believe may be legitimate, call that company directly.

4. Don’t trust a name or number. 
No matter what name they use or how official an offer may sound, scammers lie. Also, scammers can disguise their number to look more legit. Often, calling the number back results in a message of “this number is not in use”. 

No matter what, don’t send money. You won’t get the grant. You will not be thrown in jail. You won’t get it back. 

5. Contact us.  If you receive a message, call, or email from someone claiming to be someone from our office or any other official, please contact our office to report and verify whether or not it is real.  We sometimes collect money following a court decision but we rarely do it by phone. We don’t do it via social media. You can contact us at 801-281-1200 or uag@agutah.gov. 

 

Screenshot of a bogus grant program. Report this to us. Do not send money. 

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