Search Site

K-Mart to Settle Drug Overcharge Whistleblower Case for $32 Million

K-Mart Corp. agreed to pay $32.3 million to the federal government to settle lawsuit in which it was alleged that K-Mart’s pharmacies overcharged federal healthcare programs.

The Department of Justice announced the settlement agreement, which was part of a larger $59 million settlement that included resolution of insurance and Medicaid claims against the retail corporation.

According to information from the Justice Department, K-Mart allegedly violated the False Claims Act by providing customers with discounted, generic drug prices so long as they paid in cash. However, the corporation did not disclose its offering of these cheaper prices when reporting the typical prices under Medicare Part D, Medicaid and Tricare (the health program for service members of the armed forces and their families).

Recovery in the case

This particular case dates back to July 2008, when whistleblower James Garbe initially filed the suit under the False Claims Act. Garbe worked for years as a pharmacist, and specifically with K-Mart in Defiance, Indiana since May 2007.

For his role in bringing about a successful enforcement action, Garbe will receive $9.3 million, demonstrating once again the benefit that exists to whistleblowers who bring claims under the False Claims Act on behalf of the federal government.

A representative for Sears Holdings, which owns K-Mart, did not issue immediate comments. According to the Justice Department, Sears Holdings did not have to admit any liability in the case.

For more information and advice on how to bring forth a False Claims Act lawsuit, contact an experienced Dallas attorney at Whistleblower Law for Managers.

Awards & Honors
Our Office
  • Dallas Office
    4514 Cole Ave
    Dallas, Texas 75205
    Phone: 214-306-8045
    Fax: 469-729-9926
As Seen In
In his new book, "Standing Up to China: How a Whistleblower Risked Everything for His Country," former client & Author, Ashley Yablon, quotes Attorney Steve Kardell about Whistelblower Law.
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Incredible knowledge of employee related concerns and equally brilliant knowledge of health care regulations, standards of practice. I would recommend this firm to anyone."  -V.B.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.