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

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David Shepardson
·2 min read
FILE PHOTO: A United Airlines passenger jet takes off with New York City as a backdrop
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By David Shepardson

WASHINGTON (Reuters) - United Airlines has 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 department's acting criminal division chief, Nicholas L. McQuaid, said in the announcement.

As part of the agreement, the Justice Department agreed not to prosecute the case.

The airline said in a statement USPS "is a valued customer for United, and we are glad to have remedied these procedures and look forward to serving the Postal Service in the future."

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."

The government said United had removed the principal manager of the criminal scheme and hired outside legal and accounting advisors to review and consult on the company's government contracting compliance.

United also 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 and Columbia, South Carolina.

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

(Reporting by David Shepardson; Editing by Chizu Nomiyama, Nick Zieminski and Sonya Hepinstall)