Leading the Nation in Legal Shakedowns

Gary ignores the fine print... (4.00 / 1)

Where did the bulk of the $8.8 billion come from?

"• US v GlaxoSmithKline LLC - GSK's payment of over $3 billion made it the largest healthcare fraud settlement in U.S. history. The settlement arose from the company's unlawful promotion of certain prescription drugs, its failure to report certain safety data and alleged false price reporting practices.

• US v. Merck, Sharp & Dohme Corp - Merck pleaded guilty and agreed to pay over $959 million for illegally promoting and marketing the painkiller Vioxx® (rofecoxib).

The U.S. Attorneys' Offices, along with the department's litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. Statistics indicate that the total amount collected in criminal actions totaled $3.035 billion in restitution, criminal fines, and felony assessments. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid directly to the victim, criminal fines and felony assessments are paid to the department's Crime Victims' Fund, which distributes the funds to state victim compensation and victim assistance programs.

In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, and Small Business Administration."

I don't have an opinion about the motel (that has been discussed at BMG for a week or so), the US Attorney acts as a conduit for restitution paid to victims in both civil and criminal cases, and this results in a distorted amount of "forfeiture" money being collected.  

It also plays well in the the hands of demagogues trying paint a meme of out-of-control government power.

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by: Simple J. Malarkey @ Sun Dec 09, 2012 at 16:08:58 PM UTC

Follow the money (0.00 / 0)

Then let's look at the fine print:

GSK.  This from the US Justice press release,

As part of the news release said, "The civil settlement reached with the Government does not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent Valtrex, Avandia or Advair products, nor in its nominal pricing practices."

Justice ($$) done or a shakedown as in if you don't settle this, then we'll prosecute individuals.  Company comes up with billions.  Cost of business.

What we do know is that the case started in Colorado, then Massachusetts took the lead.

US v. Merck, Sharp & Dohme Corp.  Merck was selling Vioxx for rheumatoid arthritis.  Mass brought criminal charges. The settlement reads:

This Agreement is neither an admission of facts or liability by Merck nor a concession by the United States that its claims are not well-founded. Merck expressly denies the contentions and allegations ofthe United States as set forth herein and denies that it engaged in any wrongful conduct, except as to such admissions that Merck makes in connection with the Plea Agreement.

Justice ($$) done or a shakedown as in if you don't settle this, then we'll prosecute individuals.  Company comes up with millions.  Cost of business, raise the price of pills.

On a smaller scale, Dr. Friedman. Physician writing bad scripts for B and C narcotics.  Settlement was i) $200K ii) give up license iii) probation.  Know how much time some non-monied individual would get for distributing Class B and C narcotics. years, not probation

Justice ($$) done or a shakedown as in if you don't settle this, then put you in jail. Cost of business, raise the price of pills.

Both cases, justice done?  Maybe.  But all this justice predominately happening in Massachusetts, why is that?  

And, if I, an individual, were to threaten a criminal suit against an individual if he didn't settle a civl one, I'd be charged with Extortion.  But the government?  Just part of the playbook.

You can cloud this issue by saying that civil penalties dwarf the forfeitures, but in this state, judging by the size relative to other states, it's looking like orchestrated shakedowns, either a tax on businesses or extortion for cash in lieu of individual jail time.

Elizabeth Warren: a bankruptcy professor, bankrupt of ideas

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by: gary @ Sun Dec 09, 2012 at 17:27:46 PM UTC

[ Parent ]

come-on, you know I'd rather criminal prosecution vs... (0.00 / 1)

...weaselly civil settlements that allow guilty parties claim the fine print that you point out.  You can say the DOJ has their thump on the scale by leveraging civil fines with the threat of criminal action as unfair, but I would suggest that corporations have their thumb on the scale when they are given the accommodation of a civil fine instead of facing criminal action.  Have you ever heard of an individual given the option of a civil fine--of armed robbery or domestic assault for example--without a criminal finding and ADMISSION OF GUILT?  

Given the businesses never have to admit wrong doing (and often get confidentiality agreements with "regular" civil plaintiffs that forever hide wrongdoing) in civil agreements, it is clear that these big corporations get the superior end of these deals, instead of the prospect of criminal guilt that would forever stain their brand.  Yet your heart bleeds for them.  

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by: Simple J. Malarkey @ Sun Dec 09, 2012 at 23:07:53 PM UTC

[ Parent ]

Again, follow the money (0.00 / 0)

First, you ignore the principal argument which is: Massachusetts leads the nation in civil forfeitures.  Your response: Read the fine print.  Aren't you a bit curious why Mass is the big collector?

Having "read the fine print", we find large civil fines from large corporations.  You are aware that the other 49 states too are docicile to corporations.  Why is it that Massachusetts leads the way is civil fines from them?

Coincidence, aggressive prosecutors, extortion on the part of prosecutors, something else?

Second, my "heart bleeds for [corporations]"?  You apparently share the view that corporations have an untapped big room full of money.  In fact, a civil fine simply means the cost of the product has to be raised.  

In effect, the civil fine is nothing more than a tax levied by the Executive branch and the method to collect the $$ is to threaten the individuals with criminal prosecution.  Would work on me: give us money or we put you in jail.

The crime of Extortion if you or I did it.  Standard operating procedure  to the government.

Elizabeth Warren: a bankruptcy professor, bankrupt of ideas

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by: gary @ Mon Dec 10, 2012 at 13:28:56 PM UTC

[ Parent ]

Vioxx is an NSAID (0.00 / 0)

Which was used for arthritis and such. It's not a painkiller as most people would associate with as a "painkiller", like OxyContin or Percocet.

That being said, no one should criticize what the US Attorney did with Merck on Vioxx. Merck cooked the books, and 60,000 people worldwide died from its cardiac adverse effects which were not reported by the investigators.  

(R)- Outside 495

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by: MerrimackMan @ Sun Dec 09, 2012 at 18:34:15 PM UTC

[ Parent ]

Sounds bad (0.00 / 0)

Sounds like someone should have gone to prison.

Elizabeth Warren: a bankruptcy professor, bankrupt of ideas

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by: gary @ Sun Dec 09, 2012 at 18:37:27 PM UTC

[ Parent ]