United Airlines fined $ 49 million for fraud in postal services contracts


United Airlines agreed to pay more than $ 49 million to resolve criminal charges and civil claims related to postal service fraud for international mail transportation. This agreement relates to incidents that occurred between 2012 and 2015 when the operator charged for mail that it did not transport.

United admitted that it concealed problems related to scanning and mail movements. Photo: Getty Images

The bottom

According to the Justice DepartmentThe Office of Public Affairs (DOJ), among the aforementioned years, United “participated in a scheme to defraud the United States Postal Service (USPS) by submitting false delivery scan data to make it appear that the airline and airlines associated companies were complying with ICAIR (International Commercial Air) requirements.

The DOJ documents state that instead of providing accurate USPS delivery scans based on mail delivery, United introduced automated delivery scans “based on aspirational delivery times.” These scans did not correspond to the actual transport of the mail, as stipulated in the contracts.

Therefore, since there was no movement of the mail, the Chicago-based carrier was not entitled to payment. However, it still secured payments of millions of dollars from USPS.

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The DOJ notes that specific individuals within the airline worked to conceal the company’s automation efforts from the USPS, knowing that “the data being transmitted was fabricated.” Photo: Getty Images

The miseries

As a result of these events, United entered into a Non-Prosecution Agreement (NPA) with the Fraud Section of the Criminal Division. Under the settlement, it will pay just over $ 17.2 million in criminal penalties. Meanwhile, the carrier has reached a False Claims Law settlement with the Fraud Section of the Commercial Litigation Branch of the Civil Division. Here, you are required to pay a little over $ 32.1 million

“United was entrusted by the US. The Postal Service serves a critical government function – the transportation of mail from the US overseas, ”said Acting Assistant Attorney General Nicholas L. McQuaid of the Department of Justice’s Criminal Division, according to the DOJ public statement.

Instead of fulfilling this duty transparently, United defrauded the US Postal Service by providing falsified package delivery information over a period of years and accepting millions of dollars in payments to which the company was not entitled. . Today’s resolution emphasizes that companies that defraud the government, regardless of the context, contract or federal program, will be held accountable. “

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The DOJ adds that efforts to Covering up automation practices included attempts to revise falsified lead times to make automated scans appear less dodgy to USPS. Photo: Getty Images

Additional agreements

Together, United agreed to continue cooperating with the Criminal Division’s Fraud Section. Report any evidence or allegation of violations. The legacy operator will also strengthen its compliance program. In addition, you will meet certain reporting requirements, which will cause you to submit annual reports to the Fraud Section.

Simple Flying reached out to United to comment on the fines. An airline spokesperson told Simple Flying the following:

“The US Postal Service is a valued customer for United and we are pleased to have resolved these procedures and look forward to serving the Postal Service in the future.”

United lost more than $ 7 billion in 2020 amid the impact of the global health crisis. It’s also trying to cut another $ 2 billion in costs by 2023. Despite a hefty $ 49 million, the fare doesn’t stand out compared to the considerably high figures the airline already faces.

United is not the first major US airline to face such a fine for this type of activity in recent years. Notably, American Airlines was fined $ 22 million in 2019 for false mail registrations.

How do you feel about United Airlines agreeing to pay more than $ 49 million to settle these civil charges and claims? What do you think of the overall result? Let us know what you think of the situation in the comment section.

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