Friday, February 26, 2021

United Airlines will pay $49 million to settle air mail fraud case

United Airlines will pay more than $49 million to avoid criminal prosecution and settle civil charges of defrauding the U.S. Postal Service in the delivery of international mail. 

The Justice Department said Friday that former employees of United’s cargo division falsified parcel-delivery information between 2012 and 2015. Prosecutors said that as a result, United collected millions of dollars in payments that it should not have received.

Chicago-based United agreed to pay nearly $17.3 million in criminal penalties and forfeited revenue to end the criminal investigation, according to the Justice Department. The airline will also pay $32.2 million in related civil penalties.

United issued a one-sentence statement: “The U.S. Postal Service 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.”

United’s contracts required it to scan mail when it was received, loaded on a plane, and delivered to a foreign country’s postal agency. The scans were transmitted back to the U.S. Postal Service. United faced penalties if mail was delivered late, damaged, or sent to the wrong destination.

According to settlement documents, two United managers and two other employees fabricated automated data to make it look like mail was delivered on time. Others, including employees of an IT contractor hired by United, were aware of the scheme.

When post office representatives raised questions about the automated data, the manager running the scheme emailed colleagues “we been caught” and changed the group’s methods to make the phony information about scans appear less suspicious, according to the documents.

The Justice Department said United cooperated after getting requests from the department’s fraud section. Prosecutors gave United credit for collecting “voluminous documents” and helping make employees available for interviews.

According to the documents, United removed the main manager involved in the scheme, the cargo division’s postal-sales manager. The airline also improved internal controls designed to detect misconduct, including limiting access to data to guard against employees manipulating information transmitted to the Postal Service.

In 2019, American Airlines agreed to pay $22.1 million to settle similar allegations that it falsified information about international mail deliveries.

United, American and other U.S. airlines trace their roots to air mail delivery contracts in the early part of the last century, and mail remains a source of revenue for them.

Justice Department had accused the carrier of submitting false data showing it delivered mail in a timely manner

United Airlines Holdings Inc. agreed to pay more than $49 million to settle criminal charges and civil claims related to the transportation of international mail, the Justice Department said Friday.

United was accused of submitting false delivery-scan data between 2012 and 2015 to make it appear that the airline and its partners had transported mail in a timely manner to the intended recipient, the DOJ said. Under the agreements, United was entitled to full payment when scans were provided and the mail was timely delivered, the agency said.

The DOJ said United admitted to concealing problems related to scanning and mail movements that, if known, would have subjected the carrier to financial penalties under the international contracts.

United said it was “glad to have remedied these procedures” and called the United States Postal Service a valued customer. The carrier transports United States mail internationally on behalf of the USPS.

United agreed to pay about $17.3 million in criminal penalties and $32.2 million under a false claims settlement, the DOJ said. United also agreed to continue to cooperate with the DOJ, the agency said, and strengthen its compliance program.


  1. Let’s see in any UAL management gets fired for this.

    1. Manager was "removed"....

  2. Not just UAL, AA did it too.