Niagara Gazette

January 9, 2013

AG: Reimbursements coming for overcharged agencies

STAFF REPORTS
Niagara Gazette

Niagara Gazette — A medical waste disposal company has reached a settlement in which it has agreed to pay $2.4 million for overcharging nearly 1,000 New York state clients.

The Niagara County Jail will receive a refund of more than $1,700. Other area entities that will be given refunds include Niagara County Mental Health, the Niagara County Health Department and Niagara County Community College.

Victims included police and fire departments, rescue squads, schools, jails, and hospitals across the state.

Attorney General Eric T. Schneiderman announced Tuesday that Stericycle Inc. will repay “every impacted government entity” covering the full overcharged amount, totaling about $820,000.

According to Schneiderman, Stericycle in 2003 launched a plan to charge automated price increases (APIs) without giving any notice to its customers and in violation of the contract terms.

“Stericycle improperly profited by overcharging New York taxpayers,” said Schneiderman. “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.”

The agreement also requires Stericycle to permanently discontinue APIs to the New York government customers covered by the settlement and provide notice and opportunity to opt-out before any future rate increases.

The scheme was brought to the attention of federal prosecutors through a whistleblower complaint filed in federal district court in Chicago by a former Stericycle employee.

According to Schneiderman, when Stericycle customers would complain of rate increases, Stericycle employees were instructed to state that Stericycle had incurred actual increased costs due to, for example, new strict environmental regulations.