Arizona Attorney General Terry Goddard 2006 Annual Report

2005-2006 Highlights Consumer Protection Cases
Average Wholesale Price Lawsuit. In
The complaint also alleges that drug
Ameriquest Mortgage Company. In
Civil Investigative Demands (CIDs) to
December 2005, the Attorney General’s
manufacturers provided financial
January 2006, Attorney General Terry
Arizona gasoline wholesalers and retailers
Office sued 42 pharmaceutical
incentives to physicians and suppliers to
Goddard announced a settlement
to determine whether anticompetitive or
companies for using a drug pricing
stimulate drug sales, such as volume
with Ameriquest Mortgage Company
fraudulent activity played a part in
scheme that has cost consumers and
discounts, rebates, off-invoice pricing
that made sweeping reforms of its
Arizona's high gasoline prices.
Medicare tens of millions of dollars. The
lawsuit seeks restitution and charges the
drug companies with violation of the
state’s consumer protection and
racketeering laws. The complaint
charges that the drug companies
engaged in deceptive trade practices by
manipulating or misstating the average
wholesale price of their prescription
drugs, causing the government and
consumers to overpay.
and free goods, at the expense of the
Medicaid and Medicare programs.
The incentives were not offered to
government or consumers. Drug
reimbursement rates are based on
pricing data supplied by drug
manufacturers. The lawsuit alleges that
the drug makers manipulated the prices,
resulting in inflated costs to elderly
citizens taking chemotherapy and other
drugs for serious illnesses.
lending practices and required the
company to pay $325 million to
consumers and states.
The $325 million settlement was the
second-largest state or federal consumer
protection settlement in history. The only
one larger was the $484 million predatory
lending agreement reached in 2002
between most states (including Arizona)
and Household Finance Corporation.
Ameriquest made 14,180 loans in
Arizona between 1999 and 2005.
Arizona consumers who obtained
Ameriquest loans are expected to receive
Through the post-Katrina period, profit
margins realized by every segment of the
oil industry were two to three times
higher than normal. This Office’s
investigation, however, uncovered no
violation of the antitrust laws. The fact
that these businesses were able to legally
multiply their profits while Arizona
consumers and small business struggled
to pay the high gas prices underscored
the need for national and state laws
against price-gouging. Arizona is among
a minority of states without an anti-pricegouging
law.
more than $5 million in compensation.
In November 2005, Attorney General
Gasoline Price Investigation. Gasoline
prices soared in Arizona after Hurricane
Katrina hit in August 2005. The Attorney
General’s Office opened an investigation,
issuing 45 antitrust and consumer fraud
Terry Goddard was invited to testify
before the U.S. Senate Commerce,
Science and Transportation and the
Energy and Natural Resources
committees. He was one of three
attorneys general invited to testify on
energy prices, price gouging and the
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