Indiana gets $1.36M in Stericycle whistleblower suit settlement

Indiana has received $1.36 million in the settlement of a lawsuit alleging an Illinois company overcharged governments for disposal of medical waste.

Attorney General Greg Zoeller announced Friday the state’s share of a settlement in a whistleblower suit against Lake Forest, Illinois-based Stericycle Inc. Indiana’s share is the state’s portion of a $26.75 million settlement joined by 11 other states and the federal government. The suit alleged violation of federal and state versions of the False Claims Act.

A statement from the AG’s office said the case began as a lawsuit filed in the U.S. District Court for the Northern District of Illinois by a private whistleblower, a former company employee who alleged that Stericycle had deceived federal and state government entities over a period of years by overcharging them and submitting inaccurate and inflated bills for reimbursement.

“The False Claims Act exists to expose fraud against government contracts while protecting whistleblowers, and its use it here resulted in this appropriate settlement to recover public funds and reimburse the public treasury,” Zoeller said in the statement.

Since 1989, Stericycle served governments by hauling away and disposing of medical waste that could cause infectious diseases – needles, syringes, gloves, medical supplies and blood products – as well as expired or recalled pharmaceuticals, which might be generated in an institutional setting such as a hospital or prison, the complaint said.

The company whistleblower alleged in the lawsuit that the company since 2002 had illegally overcharged various government units by adding fraudulent surcharges of up to 18 percent every nine months that were not authorized in the governments’ contracts. The suit also accused company officials of misleading government units in order to inflate reimbursement claims.

The statement said various Indiana entities were overcharged starting in 2005. These included Indiana State Prison, Wabash Valley Correctional Facility, Correctional Industrial Facility, Indiana Women’s Prison, Reception Diagnostic Center, Madison Correctional Facility, New Castle Correctional Facility, Evansville State Hospital, Richmond State Hospital and the Indiana State Department of Health.  

How the settlement funds will be utilized will be determined at a later date.

Under the state and federal versions of the False Claims Act, the whistleblower or “relator” who originally filed the lawsuit against Stericycle will receive a percentage of the overall recovery and attorney fees. The attorney general's website has more information about filing whistleblower lawsuits.