Rite Aid Corporation will pay $2.99 million to resolve allegations that it violated the False Claims Act by inappropriately using gift cards as inducements.

Rite Aid was represented by Eric Sitarchuk of Morgan Lewis in Philadelphia.

The settlement resolves allegations that Rite Aid offered illegal inducements to Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies.

The government alleged that from 2008 to 2010, Rite Aid had knowingly and improperly influenced the decisions of Medicare and Medicaid beneficiaries to transfer their prescriptions to Rite Aid pharmacies by offering them gift cards in exchange for their business.

The settlement resolves allegations filed by Jack Chin under the qui tam, or whistleblower provisions of the False Claims Act, which authorizes private parties to sue for fraud on behalf of the United States and share in the recovery.

Chin will receive approximately $508,300 of the settlement.