The opioid epidemic in the United States has claimed victims from all walks of life, from Hollywood to Appalachia and everywhere in between. Between 2013 and 2017, there was an 800% rise in opioid-related deaths, leading President Trump to deem the epidemic a national public health emergency in October 2017. Almost 400,000 people died from an overdose involving an opioid, including prescription and illicit opioids, between 1999 and 2017, according to the Centers for Disease Control and Prevention (CDC). While this tragedy persists, those who profit – whether they be pharmaceutical companies, organized crime, domestic pharmacists and doctors, or foreign suppliers in China or Mexico – generate billions of dollars in illicit drug proceeds that flow through the U.S. financial system in an attempt to “clean” the funds.
In response to the opioid epidemic and President Trump’s declared national emergency, a number of actions were taken by public officials. In one of these actions, the U.S. Department of Justice (DOJ) Fraud Section – specifically the Health Care Fraud Strike Force – in conjunction with local Offices of the United States Attorneys, have aggressively prosecuted individuals involved in the illegal distribution of opioids. Charges include unlawful distribution of controlled substances, health care fraud, violation of anti-kickback statutes, and money laundering. In 2019 alone, the DOJ Fraud Section’s Health Care Fraud Strike Force charged 344 individuals in cases involving 73 million opioid pills allegedly illegally prescribed. In another action, on August 21, 2019, the Financial Crimes Enforcement Network (FinCEN) released the “Advisory to Financial Institutions on Illicit Financial Schemes and Methods Related to the Trafficking of Fentanyl and Other Synthetic Opioids” (the advisory). The advisory was an attempt by law enforcement to inform financial institutions about fentanyl- and opioid-related schemes and typologies; to solicit their assistance with better identifying actors and perpetrators in the distribution channels; and, to encourage them to be more vigilant about monitoring for and reporting related potentially suspicious activities.
This article discusses the rise of opioids – its use and abuse; provides an overview of anti-money laundering related regulations and practices; discusses common trafficking methods and schemes highlighted in the advisory; and presents a series of red flags and practice tips that practitioners can use to better detect, investigate, and report potential opioid use and abuse and distribution. Additionally, throughout the article, there are recent and relevant case studies that demonstrate how perpetrators are using and abusing the U.S. financial system, and how prosecutors and forensic professionals are helping to bring them to justice.
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