United to pay USD49M to settle air mail fraud case

AP – United Airlines will pay more than USD49 million to avoid criminal prosecution and settle civil charges of defrauding the United States (US) Postal Service in the delivery of international mail.

The Justice Department said on 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 USD17.3 million in criminal penalties and forfeited revenue to end the criminal investigation, according to the Justice Department.

The airline will also pay USD32.2 million in related civil penalties.

United issued a one-sentence statement: “The US 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 US 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 phone 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.