UNITED AIRLINES FINED $49 MILLION FOR MAIL FRAUD
March 22, 2021
On February 26, 2021, the U.S. Department of Justice (DOJ) announced that United Airlines has agreed to pay more than $49 million in fines to settle civil and criminal claims related to defrauding the United States Postal Service (USPS). According to the criminal and civil settlement agreements, United entered into International Commercial Air (ICAIR) contracts with USPS, by which United transported U.S. mail internationally on behalf of USPS. Under these contracts United provided bar code scans of mail receptacles to USPS when United took possession of the mail receptacles and when the receptacles were delivered. United was only entitled to full payment under these ICAIR contracts if mail was delivered on time and United provided accurate mail scans. Between 2012 and 2015, former employees of United’s Cargo Division allegedly submitted false cargo scan data under the ICAIR contracts, submitting data based on “aspirational delivery times” instead of the actual delivery time data. United further admitted that it concealed problems related to scanning and mail movements that, if known, would have subjected United to financial penalties under the ICAIR contracts. Beyond the monetary penalties, United has agreed to other remedial measures, including removing managers involved in the scheme, hiring outside legal counsel to review United’s government contracting compliance, and establishing training curriculum for government contracting compliance.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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