California mail firms settle False Claims Act charges for $4.2 million

by Ben Vernia | October 20th, 2010

The Department of Justice announced on October 20 that three mailing firms have agreed to pay $4.2 million to settle charges that they defrauded the Postal Service. According to DOJ’s press release:

California-based companies Quicksort Inc., Quicksort LA Inc. and Quicksort Sacramento Inc. have agreed to pay the United States $4.2 million to settle allegations that Quicksort violated the False Claims Act by falsely representing the level to which it had pre-sorted mailings in order to obtain discounted postage rates from the U.S. Postal Service, the Justice Department announced today.

The U.S. Postal Service offers lower postage rates to mailers who automate and sort their mail by zip code because these steps save the Postal Service time and money. Mailers use the services of businesses such as Quicksort that combine the mail of many customers and pre-sort it in order to qualify for the pre-sort discounts. After processing customers’ mail, these pre-sort businesses present the mail to the Postal Service for mailing.

The settlement resolves allegations that the Quicksort companies misrepresented the pre-sort level of mail they submitted to the U.S. Postal Service at various times in 2008, 2009 and 2010.

The case was apparently begun as an investigation by the U.S. Postal Inspection Service, and not as a whistleblower case.

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