Oct. 30--Stericycle, a Lake Forest-based medical waste disposal firm, agreed to pay $26.75 million to settle a lawsuit claiming it engaged in years of fraudulent price increases to school districts, police departments and municipalities in 12 states, including Illinois.
Under the settlement, announced Friday, Illinois will receive $3 million, with $1.6 million of that to be distributed to more than 350 state and local entities.
Stericycle representatives were not immediately available for comment Friday afternoon. In the settlement agreement, Stericycle denied all allegations of wrongdoing.
The lawsuit alleged that since 2003 Stericycle charged automated price increases without giving any notice to its governmental customers, in violation of state and federal laws. The automated increases ostensibly were for fuel and energy surcharges but did not reflect actual costs, according to the lawsuit, which was filed in 2008 by a former Stericycle employee.
The fraudulent increases, which amounted to 18 percent every nine months, cost the Illinois Veterans' Home in downstate Anna more than $43,000 and Maine Township High School District 207 in Park Ridge more than $50,000, among others, according to the Illinois attorney general's office.
"Companies that increase their profits by defrauding governments out of scarce taxpayer dollars must be held accountable," Illinois Attorney General Lisa Madigan said in a statement. "This company used fraudulent price increases to force local governments to pay more at a time when those resources were needed for critical government services."
Other states included in the settlement are California, Delaware, Florida, Indiana, Massachusetts, Nevada, New Jersey, North Carolina, Rhode Island, Tennessee and Virginia. The District of Columbia and the federal government will also receive proceeds from the settlement.
Stericycle also agreed to pay $1.75 million in attorneys' fees, according to the settlement.
rchannick@tribpub.com
