The whistleblower in a 2008 qui tam case filed against medical waste company Stericycle under the False Claims Act will receive almost $5.7 million as her share of the settlement.
Stericycle Inc, a medical waste disposal company, settled a qui tam False Claims Act suit in October 2015, for $28.5 million. The proposed allocation of the settlement was finalized on February 1, 2016, and the settlement funds can now be disbursed. The whistleblower will receive nearly $5.7 million as her portion of the recovery.
A qui tam lawsuit is a whistleblower lawsuit filed by a private citizen against an individual, company, or organization believed to have violated a contract or committed fraud against the government.
The approval of the settlement marks the end of a case that was first filed in 2008. The lawsuit alleged that Stericycle’s management had knowingly been overcharging government customers for its services through the use of illegally imposed price increases.
The Stericycle qui tam complaint.
The whistleblower is a former government customer relations specialist for Stericycle. According to the whistleblower’s complaint, Stericycle defrauded its government customers by withholding accurate pricing data, adding unallowable charges to each bill, and concealing its intent to add these increases to the bill because it knew its government clients would never agree to them.
Using these methods, the whistleblower said the company automatically increased the rate it charged its customers 18 percent every nine months, although those increases bore no relationship to the company’s actual costs.
The total amount of the alleged overcharges to the affected government customers between 2004 and 2008 were said to be $11.76 million.
In 2011, Stericycle was accused in a class action suit of using similarly deceptive pricing practices in Utah.
The recent approval finalizes the disbursement of the settlement among the qui tam relator, the United States, 14 states and Washington D.C. The states included in the settlement are Illinois, California, Delaware, Florida, Indiana, Massachusetts, Nevada, New Jersey, North Carolina, Rhode Island, Tennessee and Virginia.
The whistleblower’s attorneys will receive $1,750,000 for attorney’s fees and costs as provided under the False Claims Act.
The False Claims Act allows for up to three times the damages plus the attorney fees and costs the whistleblower plaintiff occurs during the course of the lawsuit.
Stericycle did not admit to any of the allegations made in the lawsuit.