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Crimes and Courts

Walgreens, Florida settle opioid costs lawsuit for $683M

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ST. PETERSBURG, Fla. (AP) — The Walgreens pharmacy chain has reached a $683 million settlement with the state of Florida in a lawsuit accusing the company of improperly dispensing millions of painkillers that contributed to the opioid crisis, state officials said Thursday.

State Attorney General Ashley Moody said the deal was struck after four weeks of government evidence was presented at trial. Walgreens was the 12th and final defendant to settle with Florida, which will bring in more than $3 billion for the state to tackle opioid addiction and overdoses.

“We now go into battle armed and ready to fight back hard against this manmade crisis,” Moody said at a news conference in Tampa. “I am glad that we have been able to end this monumental litigation and move past the courtroom.”

Walgreens, based in Deerfield, Illinois, said in a statement the company did not admit wrongdoing in the deal, during which $620 million will be paid to the state over 18 years and a one-time sum of $63 million for attorney fees. Walgreens operates more than 9,000 stores in all 50 states, according to the company website. About 820 of those locations are in Florida.

OxyContin maker Purdue Pharma has a tentative nationwide deal that includes $6 billion in cash from members of the Sackler family who own the company. In all, settlements, civil and criminal penalties around the country since 2007 have totaled over $45 billion, according to an Associated Press tally.

The Florida case hinged on accusations that as Walgreens dispensed more than 4.3 billion total opioid pills in Florida from May 2006 to June 2021, more than half contained one or more easily recognized red flags for abuse, fraud and addiction that the company should have noticed and acted upon.

The opioid epidemic has been linked to more than 500,000 deaths in the U.S. over the past two decades, counting those from prescription painkillers such as OxyContin and generic oxycodone as well as illicit drugs such as heroin and illegally produced fentanyl.

In the same case, CVS Health Corp. and CVS Pharmacy Inc. agreed to pay the state $484 million. Teva Pharmaceuticals Industries Ltd. agreed to pay $195 million and Allergan PLC more than $134 million.

Florida has previously obtained millions of dollars in opioid settlements involving McKesson Corp., Cardinal Health Inc., Johnson & Johnson Inc. and AmerisourceBergen Corp.

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Crimes and Courts

Rep. Demings Calls for Path to Permanent Citizenship for DACA Recipients

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Orlando — Today, Rep. Val Demings (FL-10) released a statement following a federal appeals court decision against the DACA program, which protects hundreds of thousands of American residents.

Said Rep. Demings, “For most Dreamers, our nation is the only home they have ever known. As teachers, small business owners, scientists, nurses, doctors, neighbors, friends, and family, our Dreamers are a fundamental part of America. It is simply wrong to force millions of people to live in constant fear and uncertainty when they have followed the rules their whole lives after coming to America as children.

“I helped to introduce the American Dream and Promise Act because I believe that the American Dream is worth protecting, and so are our Dreamers. The current legal limbo must end. The Senate must act to remove this issue from the courts and pass permanent protections for Dreamers.”

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Crimes and Courts

Judge: ITG is liable for Florida tobacco settlement payments

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(AP Photo/Jeff Chiu, File)

DOVER, Del. (AP) — Cigarette manufacturer ITG Brands assumed liability for tobacco settlement payments to the state of Florida when it acquired four brands from Reynolds American in 2015, a Delaware judge has ruled.

Vice Chancellor Lori Will ruled Friday that, as a result, ITG must compensate Reynolds American for losses due, granting summary judgment in favor of Reynolds.

Reynolds sold the Kool, Winston, Salem and Maverick brands to ITG in 2014 to gain federal regulators’ approval of its acquisition of Lorillard Inc.

Before the sale closed, Reynolds American affiliate R.J. Reynolds Tobacco Co. was making payments under a preexisting settlement agreement with Florida for reimbursement of smoking-related health care costs. After closing, Reynolds stopped making payments for the four brands it no longer owned.

The asset purchase agreement required ITG to use reasonable best efforts to join the Florida settlement and make annual payments to Florida for sales of the brands it acquired from Reynolds. ITG has yet to join the settlement agreement with Florida or make any payments.

Florida sued Reynolds and ITG and obtained a judgment requiring Reynolds to continue making payments based on ITG’s brands, unless and until ITG joined the Florida settlement agreement.

“That judgment on Reynolds amounts to over $170 million to date and tens of millions of dollars more each year into perpetuity,” Will noted. The “unambiguous terms” of the asset purchase agreement support Reynold’s arguments that ITG agreed to assume the liability imposed by the Florida judgment and must indemnify Reynolds, she concluded.

The ruling comes in a long-running legal battle between Reynolds and ITG, both based in North Carolina. In 2017, a different Court of Chancery judge concluded that ITG’s obligation to use its best efforts to try to reach a tobacco settlement agreement with Florida did not end when the sale closed.

Last year, Reynolds asked ITG to compensate Reynolds Tobacco for what it had paid and will pay due to the Florida judgment, but ITG refused. In subsequent litigation, ITG argued unsuccessfully that it had fulfilled its reasonable best efforts obligation and was not required to indemnify Reynolds for the payment liability to Florida.

Last year, in the settlement of a lawsuit brought by the state of Minnesota, ITG agreed that it had assumed obligations under that state’s tobacco settlement agreement to make payments for sales of the four brands it acquired from Reynolds. ITG agreed to make payments to Minnesota for 2021 and all future years, while payment liabilities for the period from 2015 to 2020 were split between ITG and Reynolds.

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Business

Secret Service Recovers $286M in Stolen Pandemic Loans

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FILE - Attorney General Merrick Garland, looks at federal prosecutor Kevin Chambers, right, after appointing him to be the Justice Department's chief pandemic fraud prosecutor, during a meeting of the coronavirus disease (COVID-19) Fraud Enforcement Task Force at the Justice Department, March 10, 2022 in Washington. The U.S. Secret Service recovered $286 million in fraudulently obtained pandemic funds to the Small Business Administration, Friday, Aug. 26. (Kevin Lamarque/Pool Photo via AP, File)

WASHINGTON (AP) — The U.S. Secret Service said Friday that it has recovered $286 million in fraudulently obtained pandemic loans and is returning the money to the Small Business Administration.

The Secret Service said an investigation initiated by its Orlando office found that alleged conspirators submitted Economic Injury Disaster Loan applications by using fake or stolen employment and personal information and used an online bank, Green Dot, to conceal and move their criminal proceeds.

The agency worked with Green Dot to identify roughly 15,000 accounts and seize $286 million connected to the accounts.

“This forfeiture effort and those to come are a direct and necessary response to the unprecedented size and scope of pandemic relief fraud,” said Kevin Chambers, director for COVID-19 fraud enforcement at the Justice Department.

Billions have been fraudulently claimed through various pandemic relief programs — including Paycheck Protection Program loans, unemployment insurance and others that were rolled out in the midst of the worldwide pandemic that shutdown global economies for months.

In March, the Government Accountability Office reported that while agencies were able to distribute COVID-19 relief funds quickly, “the tradeoff was that they did not have systems in place to prevent and identify payment errors and fraud” due in part to “financial management weaknesses.”

As a result, the GAO has recommended several measures for agencies to prevent pandemic program fraud in the future, including better reporting on their fraud risk management efforts.

Since 2020, the Secret Service initiated more than 3,850 pandemic related fraud investigations, seized over $1.4 billion in fraudulently obtained funds and helped to return $2.3 billion to state unemployment insurance programs.

The latest seizure included a collaboration of efforts between Secret Service, the SBA’s Inspector General, DOJ and other offices.

Hannibal “Mike” Ware, the Small Business Administration’s inspector general, said the joint investigations will continue “to ensure that taxpayer dollars obtained through fraudulent means will be returned to taxpayers and fraudsters involved face justice.”

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