The Justice Department alleged that between January 2018 and December 2022, Abbott caused state and federal programs to purchase formula that carried a heightened risk of contamination. Investigators focused on manufacturing plants in Sturgis, Michigan, and Casa Grande, Arizona, noting that processes at these sites consistently fell short of contractual and statutory requirements.

Specific complaints highlighted a systemic lack of facility maintenance, including persistent roof leaks at the Sturgis location. Abbott reportedly attempted to mitigate water dripping over production equipment by deploying temporary umbrellas. Furthermore, the use of damaged spray dryers—used to convert liquid formula into powder—reportedly increased the risk of microbial contamination. While the government has closed its criminal investigation into the matter, the settlement requires Abbott to pay $348.7 million to the U.S. government and an additional $36.3 million to resolve claims from state Medicaid and WIC programs.

Abbott maintains that no unopened, distributed products ever tested positive for Cronobacter sakazakii, the bacterium linked to severe illnesses in infants. The company emphasized that the agreement includes no admission of fault or liability regarding the 2022 recalls of its powdered formula brands.