Delta Airlines Pays $10.5 Million to Settle USPS Fraud Allegation

The Justice Department announced that Delta Airlines has agreed to pay $10.5 million to resolve its alleged liability under the False Claims Act for falsely reporting information about the transfer of US mail to foreign posts or other intended recipients under contracts with the US Postal Service (USPS).

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“The United States expects the air carriers with which the USPS contracts to accurately report the services they provide.”

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division

“The resolution announced today reflects the department’s commitment to pursuing contractors that do not meet their contractual obligations to the United States and misrepresent their failure to perform,” added Boynton.

Delta Airlines Allegedly Provided USPS False Scan Data

USPS contracted with Delta to take possession of receptacles of US mail at six locations in the United States or at various Department of Defense and State Department locations abroad, and then deliver that mail to numerous international and domestic destinations.

To obtain payment under the contracts, Delta was required to submit electronic scans of the mail receptacles to USPS reporting the time the mail was delivered at the identified destinations. The contracts specified penalties for mail that was delivered late or to the wrong location.

The settlement resolves allegations that scans submitted by Delta falsely reported the time and fact that it transferred possession of the mail.

“The USPS contracts with commercial airlines for the safeguarding and timely delivery of US mail to foreign posts, including the mail sent to our soldiers deployed to foreign operating bases,” said Executive Special Agent in Charge Ken Cleevely of USPS, Office of Inspector General (OIG).

“The OIG supports the Postal Service by aggressively investigating allegations of contractual non-compliance within the mail delivery process, including the falsification of delivery information. Our special agents worked hand-in-hand with the Department of Justice to help ensure a reasonable resolution and we applaud the exceptional work done by the investigative and legal teams,” added Cleevely.

This is the latest civil settlement involving air carrier liability for false delivery scans under the USPS International Commercial Air Contracts.

Other carriers that previously settled similar claims include United Airlines ($49 million), American Airlines ($22.1 million), UPS (5.3 million), Northern Air Cargo ($4.7 million), and International Airlines Group (Holding company of British Airways and Iberia Airlines) for $5.8 million.