Clearwater, Fla. – Locally based Eckerd Corp., a division of Plano, Texas-based J.C. Penney, plead guilty to over billing the government for Medicaid prescriptions. The company will now pay $1.7 million in fines as part of a plea agreement. The drugstore chain also admitted to keeping poor records and falsely showing that full prescriptions were given to customers when they only received partial doses.

The inquiry began in December 1995 when a former employee of the company filed a whistleblower lawsuit, claiming that Eckerd was fraudulent in its practices.

Eckerd admitted that when stores ran low on inventory, its pharmacists gave customers whatever medication they had in stock and asked them to return for the remainder while billing Medicaid for the full amount. The discrepancies occurred when customers did not return to pick up the remainder of their pills.

Eckerd pointed out that the practice has long been discontinued. The company also stated that it would install new computer systems to properly record partially filled prescriptions.