UPS agrees to pay $25 million to settle allegations of false claims to US government

UPS has agreed to pay $25 million to settle allegations that it submitted false claims to the U.S. government regarding its delivery of Next Day Air overnight packages. In a statement posted on its website today (19 May), the Department of Justice commented: “UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies.  Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day.

“The settlement announced today resolves allegations that from 2004 to 2014, UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages.

“In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable ‘exception codes’ to excuse late delivery  (such as ‘security delay’,” ‘customer not in’, or ‘business closed’), and provided inaccurate ‘on-time’ performance data under the federal contracts. ”

The civil settlement resolves a lawsuit filed under the “whistleblower” provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.

The civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 million.

The Justice Department added that ‘the claims resolved by this settlement are allegations only, and there has been no determination of liability’.

Click here to view the official statement posted by the U.S. Department of Justice.