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UPS Ponies Up $5.3 Million Over Alleged US Postal Service Fraud

The Justice Department announced that UPS has agreed to pay approximately $5.3 million to resolve its potential 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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USPS contracted with UPS to pick up US mail at six locations in the United States and 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, UPS was required to submit electronic scans to USPS reporting the time the mail was delivered at the identified destinations. Late and incorrectly delivered mail were subject to penalties under the contracts.

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

“Companies doing business with the government must meet their contractual obligations. The Department of Justice will pursue those who knowingly fail to live up to their bargain and falsely bill the government for goods or services that they did not provide.”

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

“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 the USPS Office of Inspector General.

“The Office of Inspector General supports USPS 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.”

UPS Fifth Company to Settle for Similar Fraud Allegations

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

Other carriers that previously had to settle claims and/or pay fines include United Airlines ($49 million), American Airlines ($22.1 million), Northern Air Cargo ($4.7 million), and International Airlines Group (Holding company of British Airways and Iberia Airlines) for $5.8 million.

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