Summary
Abbott Laboratories, an Illinois-based healthcare company that manufactures and sells infant formula and nutritional therapy products, has agreed to pay $384,999,040 to resolve allegations under the False Claims Act (FCA) concerning products manufactured at its facilities in Sturgis, Michigan, and Casa Grande, Arizona.
The allegations relate to products supplied to federal and state programs between January 1, 2018, and December 31, 2022. The United States alleged that Abbott caused government programs to purchase powdered infant formula and nutritional therapy products that did not comply with applicable statutory, regulatory, and contractual requirements.
On November 13, 2025, the United States filed a Complaint in Intervention alleging that Abbott caused government programs to purchase powdered infant formula manufactured at its Sturgis facility despite its alleged failure to meet applicable requirements. The civil settlement resolves these allegations.
Key Details of the Abbott Settlement
| Category | Details |
|---|---|
| Company | Abbott Laboratories |
| Headquarters | Illinois, United States |
| Industry | Healthcare, infant formula and nutritional products |
| Total settlement | $384,999,040 |
| Federal settlement | $348,700,868 |
| State settlement | $36,298,172 |
| Relevant period | January 1, 2018–December 31, 2022 |
| Facilities identified | Sturgis, Michigan, and Casa Grande, Arizona |
| Legal framework | False Claims Act |
| Complaint in Intervention | Filed November 13, 2025 |
| Court | U.S. District Court for the Western District of Michigan |
| Whistleblower award | $69 million |
| Whistleblowers | Scott Millard, Kristine Cooper, and Loren Cooper |
| Investigating authorities | U.S. Department of Justice and USDA Office of Inspector General |
Abbott Infant Formula Settlement: Background and Allegations
False Claims Act Allegations Against Abbott
The United States alleged that Abbott caused false claims to be submitted to federal and state programs by failing to manufacture certain powdered infant formula and nutritional therapy products in accordance with applicable legal, regulatory, and contractual requirements.
According to the complaint, Abbott knowingly manufactured infant formula purchased with taxpayer funds under conditions that exposed the products to an unacceptable risk of microorganism contamination and raised concerns about their reliability, quality, and safety.
The allegations concern the government’s payments for products that were required to comply with established manufacturing standards. The $384.99 million settlement resolves the claims without converting the allegations into a judicial finding of liability.
Facilities Identified in the Case
The case identifies two Abbott manufacturing facilities:
- Sturgis, Michigan: The facility at the center of the allegations concerning powdered infant formula, manufacturing conditions, and potential microorganism contamination.
- Casa Grande, Arizona: A facility identified in connection with the broader allegations concerning compliance in manufacturing certain powdered infant formula and nutritional therapy products.
The complaint specifically describes manufacturing and sanitation concerns at the Sturgis facility.
Alleged Manufacturing and Sanitation Failures at Sturgis
Roof Leaks and Moisture in Processing Areas
According to the complaint, roof leaks were common at Abbott’s Sturgis plant, allowing water to run and drip over equipment.
Rather than permanently addressing the underlying causes of the leaks, Abbott allegedly relied on temporary measures, including roof leak umbrellas, to divert water away from product processing areas.
The complaint further alleged that Abbott’s corporate leadership understood that the wet environment increased the risk of microorganism contamination. These conditions formed part of the government’s allegations that the facility did not meet the standards required for products purchased with taxpayer funds.
Spray Dryer Damage and Contamination Risks
The complaint also alleged that Abbott continued operating spray dryers even after documenting cracks and pits in the equipment.
Spray dryers transform liquid formula into dry powder. According to the allegations, damage to these dryers increased the risk of microorganism contamination, particularly when moisture was present.
The Department of Justice further alleged that Abbott increased the number of product batches processed through the dryers between cleaning cycles, allowing production to increase while potentially worsening the equipment’s sanitary conditions.
Alleged Testing and Disclosure Failures
The government alleged that Abbott intentionally avoided testing for bacterial growth in order to avoid obtaining positive results indicating contamination.
The complaint also stated that, in certain instances where testing identified microorganism contamination, Abbott failed to disclose the results when responding to requests from the Food and Drug Administration (FDA) during inspections of the Sturgis facility in 2019 and 2022.
These alleged practices formed part of the government’s case concerning compliance with health and safety requirements governing infant formula manufacturing.
Settlement Breakdown: Federal and State Payments
Under the civil settlement agreement, Abbott will pay a total of $384,999,040 to resolve the False Claims Act allegations.
| Settlement component | Amount |
|---|---|
| Payment to the United States | $348,700,868 |
| Payments to certain states | $36,298,172 |
| Total settlement | $384,999,040 |
The federal payment resolves False Claims Act allegations involving government program purchases. The additional state payments address claims settled by participating state Medicaid and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) programs.
Why WIC and Medicaid Matter
The U.S. Department of Agriculture (USDA) funds and regulates the WIC program, which provides nutritional support, including infant formula, to eligible participants.
According to the information provided in connection with the case, more than half of all infant formula purchased in the United States is paid for with USDA funds through WIC. State Medicaid programs also cover and pay for certain infant formula products.
These public funding arrangements explain why compliance with manufacturing requirements is important to government purchasing programs and why alleged failures can lead to federal and state False Claims Act claims.
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False Claims Act Whistleblower Lawsuit
Qui Tam Action Against Abbott Laboratories
The settlement resolves claims brought under the False Claims Act’s qui tam provisions. These provisions allow private individuals to file lawsuits on behalf of the United States when they allege that false claims have been submitted to federal programs.
The case was filed in the U.S. District Court for the Western District of Michigan under the caption:
United States, et al., ex rel. Scott Millard, et al., v. Abbott Laboratories, No. 1:22-cv-994 (W.D. Mich.).
The action was brought by three former Abbott employees: Scott Millard, Kristine Cooper, and Loren Cooper.
Whistleblowers to Receive $69 Million
Under the settlement, the three relators will receive $69 million as their share of the federal settlement.
The award reflects the role of the FCA’s whistleblower mechanism in allowing private individuals to bring alleged government fraud to the attention of enforcement authorities and participate in the recovery.
U.S. Department of Justice Statements on the Settlement
Acting Deputy Attorney General Trent McCotter
Acting Deputy Attorney General Trent McCotter described the settlement as a victory for American families, emphasizing that child safety is non-negotiable.
He stated that Abbott would pay a substantial amount to resolve serious allegations involving violations of federal health and safety requirements intended to protect babies. He also emphasized that the Department of Justice would act against parties whose conduct puts American families at risk.
Associate Attorney General Stanley E.
Associate Attorney General Stanley E. emphasized that companies manufacturing infant formula should not allow unsanitary conditions to persist at their facilities.
He stated that the Department would hold accountable parties alleged to have knowingly misrepresented compliance with essential health and safety standards designed to protect American families.
U.S. Attorney Timothy VerHey
U.S. Attorney Timothy VerHey for the Western District of Michigan highlighted the importance of manufacturers complying with regulatory and contractual requirements to ensure infant formula is safe for consumption.
He stated that the settlement demonstrated the government’s commitment to holding manufacturers accountable when the United States pays for products that do not comply with applicable requirements.
USDA Inspector General John Walk
USDA Inspector General John Walk emphasized that parents rely on manufacturers such as Abbott Laboratories to follow the rules and ensure their products, particularly baby formula, are safe.
He also stated that the USDA Office of Inspector General remained vigilant against conduct that compromises public health and safety by failing to comply with legal standards and putting infants at risk.
Investigation and Federal Enforcement Coordination
Agencies Involved in the Resolution
The resolution resulted from a coordinated effort involving the following authorities:
- U.S. Department of Justice, Civil Division
- Commercial Litigation Branch
- Civil Fraud Section
- U.S. Attorney’s Office for the Western District of Michigan
- U.S. Department of Agriculture, Office of Inspector General (USDA-OIG)
Their coordinated work addressed the allegations involving manufacturing compliance, government-funded purchases, and claims submitted to federal and state programs.
Broader Federal Fraud Enforcement Priorities
The settlement also falls within a broader federal focus on addressing fraud, waste, and abuse in government programs.
The administration launched the Task Force to Eliminate Fraud and the National Fraud Enforcement Division to strengthen efforts against the misuse of federal program funds.
The Department of Justice has emphasized that schemes exploiting government programs can harm taxpayers, undermine the people those programs are intended to help, and disadvantage businesses that follow the rules.
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Why the Abbott Infant Formula Case Matters
The Abbott settlement highlights the importance of compliance with manufacturing, sanitation, testing, and disclosure requirements when companies supply products purchased through government-funded healthcare and nutrition programs.
The allegations focused on whether manufacturing conditions and testing practices at the Sturgis facility exposed powdered infant formula to unacceptable contamination risks and whether relevant findings were appropriately disclosed to regulators.
The settlement also demonstrates how the False Claims Act can be used to resolve allegations involving products purchased with public funds when the government contends that applicable statutory, regulatory, or contractual requirements were not met.
With a total settlement of $384,999,040, including federal and state payments and a $69 million whistleblower share of the federal settlement, the case represents a significant enforcement action involving infant formula safety allegations.
To read the original order visit DOJ (Department of Justice).