UPS is latest to settle fraud allegations over international mail; pays $5.3 million

by Ben Vernia | March 22nd, 2022

On March 21, the Department of Justice announced that the package delivery service UPS had agreed to pay $5.3 million to settle allegations that the company the delivery dates of international mail it had contracted with the Postal Service to deliver. According to DOJ’s press release:

The Justice Department announced that United Parcel Service Inc. (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 U.S. mail to foreign posts or other intended recipients under contracts with the U.S. Postal Service (USPS). UPS is an international package delivery company incorporated in Delaware with headquarters in Atlanta, Georgia.

USPS contracted with UPS to pick up U.S. 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. The contracts specified penalties for mail that was delivered late or to the wrong location. 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,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “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.” 

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This is the fifth civil settlement involving air carrier liability for false delivery scans under the USPS International Commercial Air Contracts, and collectively the United States has recovered more than $70 million as a result of its investigation of such misconduct.

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The case apparently arose from the government’s own investigation, and not from a whistleblower’s lawsuit.

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