By D.C. Denison, Globe Staff
Rhode Island state and local agencies will receive the lion's share of $500 million dollars that Google Inc. forfeited last year for accepting advertisements from online Canadian pharmacies that targeted US consumers, Peter F. Neronha, the state's US attorney, revealed on Monday.
Approximately $230 million, or 46 percent of the settlement, will go to local and state law enforcement agencies in Rhode Island, with the remainder going to federal agencies. Neronha's office led an investigation of Google's role in the online pharmacy ads that began in 2009 and involved the Food and Drug Administration and the Internal Revenue Service, as well as Rhode Island authorities.
The investigation revealed that as early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to its users in the US through the search giant's AdWords advertising program. Although Google took steps to block pharmacies in countries other than Canada from advertising in the US through AdWords, it continued to allow Canadian pharmacy advertisers to target consumers in the United States. Further, from 2003 through 2009, Google provided customer support to some of these Canadian online pharmacy advertisers to help them place the ads and improve their websites.
At a press conference Monday, US Attorney Peter F. Neronha and Kathleen Martin-Weis, acting director of the US Food and Drug Administration's Office of Criminal Investigations, said the sharing of funds was based on the time and resources each agency provided to the investigation.
Five Rhode Island agencies will receive funds: the East Providence and North Providence police departments and the Rhode Island attorney general's office will each receive 12 percent of the forfeiture, or $60 million; the Rhode Island state police will receive 9 percent, or $45 million; and the Rhode Island National Guard will get 1 percent, or $5 million.
Four federal agencies that worked on the investigation will also get percentages of the settlement: the US Postal Service will receive 8 percent, or $40 million; the Internal Revenue Service will receive 7 percent, or $35 million; the US Secret Service will get 3 percent, or $15 million; and ICE (Homeland Security Investigations) will receive 2 percent, or $10 million.
The remaining $170 million will be deposited into the US Department of Justice's Assets Forfeiture Fund, a national account used to pay any necessary expenses associated with forfeiture operations such as property seizure, detention, and disposal.
In a statement Monday, Neronha said, "It is my hope and expectation that these monies will be used for the benefit of all Rhode Islanders, by enhancing our overall ability to fight crime and keeping our residents safe."
"This distribution sets the right incentive by rewarding the offices that pursued this important and challenging case. It also invites further scrutiny of unlawful advertisements at Google -- a problem that remains strikingly widespread," Benjamin G. Edelman, an assistant professor of business administration at the Harvard Business School who has researched online advertising fraud, wrote in an email. "Now, finally, the DOJ [Department of Justice] has appropriately held Google accountable for a portion of the intentionally-deceptive and unlawful ads that have yielded, by all indications, literally billions of dollars of revenue."
Google did not respond to a request for a comment.
D.C. Denison can be reached at denison@globe.com.This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Donate to Wikileaks.
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