(CN) - Medical waste disposal company Stericycle will pay $26.75 million to settle claims it improperly jacked up the prices it charged 12 states and the federal government, the Virginia Attorney General's office announced.
Virginia is one of 12 states that will share in the settlement proceeds, along with the District of Columbia and the federal government.
The other states that are parties to the settlement are California, Delaware, Florida, Illinois, Indiana, Massachusetts, Nevada, New Jersey, North Carolina, Rhode Island, and Tennessee.
The settlement grows out of a 2008 qui tam lawsuit filed by Jennifer Perez, a former Stericycle employee, who claimed the company defrauded its federal customers by withholding accurate pricing data, adding unallowable charges to each bill, and concealing its intent to add these increases to the bill because it knew its federal clients would never agree to them.
Perez said through this scheme the company increased the rate it charges its customers 18 percent every nine months.
The states and the District of Columbia joined the litigation in June 2010.
The settlement was finalized Oct. 9, and has been announced by the attorney generals of the respective states over the past week.
On Tuesday, Virginia Attorney General Mark Herring announced the state would receive $2 million of the settlement funds.
Illinois and Florida will receive the largest settlements, netting $4.03 million and $2.4 million, respectively.
Under the terms of the settlement, Stericycle denied all of the Perez's allegations, and said it is settling the matter without admitting fault or wrongdoing.
The parties said they agreed to settle the case to avoid the delay, uncertainty and expense of protracted litigation.
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