NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced a $2.4 million settlement Tuesday with a medical waste disposal company that allegedly overcharged close to 1,000 government entities in New York.
Stericycle Inc. allegedly engaged in improper overcharging of fire departments, police departments, rescue squads, jails, hospitals and schools throughout the state. Since 2003, Stericycle allegedly put a plan into place to charge automated price increases without informing customers in violation of contract terms.
"Stericycle improperly profited by overcharging New York taxpayers," Schneiderman said. "In these times of harsh budget cuts to education, public health, and public safety, local governments and agencies need every available dollar and we will hold accountable corporations like Stericycle that use cynical schemes to rip off New York taxpayers."
Stericycle allegedly programmed an 18 percent annual increase into its billing system and blamed the increases on strict environmental regulations and other false costs. The company allegedly instituted the APIs to increase revenue and avoid detection by customers.
Under the terms of the settlement, each impacted government entity will receive a check from Stericycle that covers 100 percent of the overcharged amount. The New York entities will receive more than $820,000 in all. Additionally, Stericycle must permanently discontinue APIs to government customers in New York and provide notice and opportunity to opt-out prior to any future rate increases.
The initial lawsuit was a whistleblower complaint filed in Federal District Court in Chicago by Jennifer Perez, a former Stericycle employee. Perez will receive a portion of the recovery pursuant to the New York False Claims Act.
The Fraud Enforcement and Recovery Act allowed the state to collect triple damages and between $6,000 and $12,000 per violation for defrauding the government. Schneiderman authored the act as an amendment to the New York False Claims Act when he was a state senator.