|TRENTON – Acting Attorney General John J. Hoffman announced today that New Jersey will receive approximately $589,000 as its portion of a multi-state settlement resolving allegations that Illinois-based medical waste disposal company Stericycle, Inc. committed federal and state False Claims Act violations by imposing unwarranted surcharges on government customers.
The overall, $26.75 million settlement resolves allegations brought by a former Stericycle employee in a federal whistleblower lawsuit that the company overcharged local, county and state government entities in 12 states and the District of Columbia for medical waste disposal services. Some federal government entities allegedly were overbilled as well.
In New Jersey, Stericycle has provided medical waste disposal services to such government entities as state colleges, school districts, police departments, health departments, nursing agencies, correctional and detention facilities and animal shelters.
The lawsuit filed by a former Stericycle employee alleged that Stericycle overcharged government customers by billing for fuel and energy surcharges that did not reflect actual increases in fuel and energy costs. According to the lawsuit, these increases – amounting to 18 percent every nine months – violated prices set by contract.
Acting Attorney General Hoffman said a total of 146 state and local government entities in New Jersey – many of them municipal and county agencies – were overcharged by Stericycle.
He noted that $234,000 of the settlement proceeds earmarked for New Jersey will be distributed among local entities that were overbilled, through the Division of Consumer Affairs. Those entities will be noticed shortly of their portion of the settlement and details of distribution.
“This matter involved allegations of deceptive billing by Stericycle that resulted in many public entities in New Jersey paying more than they legitimately owed for medical waste disposal services,” said Acting Attorney General Hoffman. “Such business practices are unacceptable at any time, but are particularly egregious at a time when government at every level is striving to optimize resources and keep costs down.”
In addition to the $234,000 to be distributed among local government entities in New Jersey, approximately $88,000 of the State’s settlement proceeds will be paid to Jennifer Perez, the former Stericycle employee whose lawsuit – filed in U.S. District Court in Illinois -- spawned the settlement. (Every state receiving money from the Stericycle settlement, as well as the federal government and the District of Columbia, is paying a portion of its settlement proceeds to Perez as the relator’s share.)
In addition to New Jersey, the states of Illinois, California, Delaware Florida, Indiana, Massachusetts, Nevada, North Carolina, Rhode Island, Tennessee and Virginia will receive portions of the Stericycle settlement, along with the District of Columbia and the federal government.
The Stericycle matter was handled on behalf of the State by: Deputy Attorney General Janine Matton, Section Chief of the Division of Law’s Government & Healthcare Fraud Section; Deputy Attorney General Nicholas Kant of the Division of Law’s Government & Healthcare Fraud Section; Assistant Attorney General Jessica Allen of the Division of Law’s Affirmative Civil Enforcement Practice Group, and Van Mallet, Lead Investigator of the Division of Consumer Affairs’ Case Initiation and Tracking Unit.