May 22, 2015

DOJ Catch Of The Week — United Parcel Service

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to United Parcel Service.  On Tuesday, the Atlanta-based world-wide package delivery service agreed to pay $25 million to resolve allegations it violated the False Claims Act by submitting false claims to the federal government in connection with its delivery of Next Day Air overnight packages.  See DOJ Press Release.

UPS provides delivery services to hundreds of federal agencies through contracts with the US General Services Administration and US Transportation Command (which provides support to Department of Defense agencies).  Under these contracts, UPS guarantees delivery of packages by certain specified times the following day.  But for the past decade, according to the government, UPS engaged in multiple practices to conceal its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for late deliveries.  Specifically, UPS allegedly recorded inaccurate delivery times on packages to make it appear they 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.

In announcing the settlement, US Attorney Dana J. Boente of the Eastern District of Virginia, said: “We place high importance on the integrity of companies that provide services to the government.  Combating all manners of fraud on the government is a high priority in the Eastern District of Virginia.”  Acting Inspector General of the GSA Robert C. Erickson put it even more bluntly: “The United States should get what it pays for, nothing less.”  The government’s allegations arose out of whistleblower lawsuit filed by former UPS employee Robert K. Fulk under the qui tam provisions of the False Claims Act.  Mr. Fulk will receive a whistleblower award of $3.75 million.

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