United Airlines to pay $49.5 million to settle U.S. international mail contract probe

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WASHINGTON (Reuters) – United Airlines agreed to pay $49.5 million to resolve criminal charges and civil claims relating to fraud on Postal Service contracts for transportation of international mail, the U.S. Justice Department said Friday.

“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,” the Justice Department’s acting criminal division chief Nicholas L. McQuaid said.

United did not immediately comment.

The Justice Department said between 2012 and 2015, United defrauded the U.S. Postal Service (USPS) by submitting false delivery scan data. The government said United submitted automated delivery scans based on aspirational delivery times. The government said some individuals at United sought “to hide the automation practices included efforts to revise the falsified delivery times to make the automated scans appear less suspicious to USPS.”

United agreed to strengthen its compliance program and to submit yearly reports to the Justice Department detailing the status of remediation and implementation of United’s compliance program and internal controls.

The government cited United’s prior history, including a 2016 non-prosecution agreement relating to potential criminal bribery violations arising out of United’s establishment and operation of a non-stop route between Newark Liberty International Airport and Columbia Metropolitan Airport in South Carolina.

In 2019, American Airlines (NASDAQ:AAL) paid $22.1 million to settle claims it falsely reported the times it transferred possession of U.S. mail to foreign postal administrations or other intended recipients, the U.S. Justice Department said.

USPS contracted with American to take possession of receptacles of U.S. mail at six locations and then deliver it to numerous international and domestic destinations. The settlement resolves claims American Airlines falsely reported the times it transferred possession of the mail. American did not immediately comment Tuesday.