DOJ: United To Pay $49 Million In USPS Fraud Case

Via press release from the Justice Department:

United Airlines Inc. (United), the world’s third largest airline, has agreed to pay over $49 million to resolve criminal charges and civil claims relating to fraud on postal service contracts for transportation of international mail.

United entered into a non-prosecution agreement (NPA) with the Criminal Division’s Fraud Section and agreed to pay $17,271,415 in criminal penalties and disgorgement to resolve a criminal investigation into a fraud scheme perpetrated by former employees of United’s Cargo Division in connection with United’s execution of contracts to deliver mail internationally on behalf of the U.S. Postal Service (USPS).

Separately, United has entered into a False Claims Act settlement with the Civil Division’s Commercial Litigation Branch, Fraud Section, for related conduct, under which it is obligated to pay $32,186,687.

“United was entrusted by the U.S. Postal Service with fulfilling a critical government function – the transportation of U.S. mail abroad,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division.

“Instead of performing this duty with transparency, United defrauded the U.S. Postal Service by providing falsified parcel delivery information over a period of years and accepting millions of dollars of payments to which the company was not entitled. Today’s resolution emphasizes that companies that defraud the government – no matter the context, contract, or federal program – will be held accountable.”

Between 2012 and 2015, United engaged in a scheme to defraud USPS by submitting false delivery scan data to make it appear that United and partner airlines with which it worked were complying with the ICAIR requirements, when in fact they were not.

Instead of providing USPS accurate delivery scans based on the movement of the mail, United submitted automated delivery scans based on aspirational delivery times. These automated scans did not correspond to the actual movement of the mail, as mandated by the contracts.