Abbott Laboratories, Lake County's largest employer, will pay almost $385 million to settle allegations it falsely certified the safety of powdered infant formula.
The U.S. Department of Justice announced the settlement on Sunday, Sept. 13. The agreement resolves claims that Abbott submitted false certifications to government nutrition programs, including the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), for formula manufactured between Jan. 1, 2018, and Dec. 31, 2022, at facilities in Sturgis, Michigan, and Casa Grande, Arizona.
The exact payout is $384,999,040. Of that, $348.7 million goes to the federal government, and $36.3 million goes to certain states to resolve Medicaid and WIC claims.
Three Abbott whistleblowers will receive $69 million as their share of the federal portion under the False Claims Act. They are Scott Millard, Kristine Cooper and Loren Cooper, who worked in Abbott's quality and maintenance operations.
Abbott, headquartered at Abbott Park in unincorporated Lake County about 40 miles north of Chicago, employs 122,000 people worldwide, according to the company's website. The settlement does not include any finding of fault or liability, and the federal government has closed its criminal investigation, according to the Chicago Tribune.
"No company should be gambling on the health and safety of our nation's infants by allowing unsanitary conditions to persist at a facility manufacturing baby formula," Associate Attorney General Stanley E. Woodward Jr. said in a DOJ statement.
The case traces to Abbott's 2022 recall of several powdered formula products, including Similac, after reports of infant illnesses and deaths linked to Cronobacter sakazakii and Salmonella Newport infections. The recall contributed to a nationwide formula shortage.
Federal prosecutors alleged that conditions at the Sturgis plant included roof leaks that sent water dripping over equipment and cracks in spray dryers used to convert liquid formula into powder. The government also alleged Abbott intentionally skipped bacterial testing to avoid positive results. In some cases, the company failed to disclose contamination evidence to the Food and Drug Administration during inspections in 2019 and 2022, according to CBS News.
Abbott has disputed a direct link between its products and the illnesses. The company said no unopened, distributed Abbott infant formulas tested positive for Cronobacter or Salmonella. The Centers for Disease Control and Prevention has said it did not identify a definitive link between Cronobacter cases and the Sturgis facility.
In a company statement, Abbott said it remains committed to product safety and to earning caregivers' trust. The company did not admit fault.
The formula settlement follows a separate $670 million agreement Abbott reached in August 2026 to resolve lawsuits alleging its specialty formula for premature infants causes necrotizing enterocolitis (NEC), a dangerous intestinal disease. About 1,700 NEC-related lawsuits remain active nationwide.
Abbott's stock rose about 1.2 percent in midday trading on Monday, Sept. 14. The company's next earnings report is scheduled for mid-October.
