January 9, 2013

Overbilling suit settled


RAY BROOK — A lawsuit brought by the State Attorney General’s Office against a medical-waste-disposal company that overcharged two local prisons and the State Police has been settled.

Stericycle Inc. will pay $820,000 out of a $2.4 million settlement agreement to several New York customers in a lawsuit that involved government agencies all across the United States.

Locally, that includes Clinton Correctional Facility in Dannemora, Adirondack Correctional Facility at Ray Brook and the Troop B State Police headquarters in Ray Brook, according to a news release from Attorney General Eric Schneiderman.

Clinton Correctional had the third-highest amount in New York’s cases, as it was overcharged $21,094, the release states.

Adirondack Correctional was overcharged $833; and the State Police, $1,804.

Among the items the company would have picked up from the correctional facilities were routine supplies from the infirmaries “when they might change a dressing or material from a minor procedure, needles and syringes,” said Linda Foglia of the State Department of Corrections and Community Supervision.

A whistleblower complaint filed in federal district court in Chicago by a former company employee revealed that Stericycle overcharged by programming its billing system to increase its bills to customers by 18 percent.

“Since 2003, Stericycle implemented a plan to charge automated-price increases without giving any notice to these customers and in violation of the contract terms,” Schneiderman said.


When customers complained, employees were told to say the company “had incurred actual increased costs due to, for example, new strict environmental regulations,” the release states.

“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 probe was conducted by the Attorney General’s Office’s Taxpayer Protection Bureau, established in 2011 to combat fraud and the abuse of taxpayer dollars.

Other regional entities expecting reimbursement are the St. Lawrence County Public Health Department in Canton ($1,902) and SUNY Potsdam ($1,408).