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DOJ Catch of the Week: Hahn Air Lines GmbH

Posted  May 8, 2024

This week’s Department of Justice (DOJ) Catch of the Week goes to German-based airline ticketing company Hahn Air Lines GmbH.  Yesterday (May 2), the company and its U.S. subsidiary agreed to pay $26.8 million to settle charges it violated the False Claims Act by failing to remit travel fees Hahn Air collected from passengers flying into or within the United States.

Hahn Air provides an electronic ticketing database for travel agencies to issue tickets for air carriers around the world.  As part of the arrangement, Hahn Air collects mandatory travel fees, including passenger fees owed to the United States.  According to DOJ, Hahn Air intentionally avoided paying the United States certain travel fees that Hahn Air had collected from airline passengers purchasing Hahn Air tickets.  These included (i) Animal and Plant Health Inspection Fees owed the Department of Agriculture, (ii) Customs and Immigration Fees owed Customs and Border Protection, and (iii) Passenger Security Service Fees owed the Transportation Security Administration.

In announcing the settlement, the government stressed its commitment to go after companies that fail to pay taxes and fees owed the United States:

  • Companies that benefit from air travel in the United States must pay their fair share of the costs associated with that such travel. . . .  Today’s settlement demonstrates that we will protect the taxpayers by ensuring that those who are obligated to pay money to the United States, whether in the form of travel fees or other types of payments, are held accountable for what they owe.  [DOJ Civil Chief Brian Boynton]
  • Companies cannot pocket, for their own benefit, government taxes and fees that they collect from their customers. . . .  This settlement shows that companies that intentionally do so will face stiff penalties.  [District of Columbia U.S. Attorney Matthew Graves]
  • Participation in Government travel business programs is a privilege and should not involve actors who seek to circumvent paying travel costs to the U.S. Government. . . .  This resolution demonstrates that we are committed to holding businesses accountable when they choose to abuse the integrity of vital government programs.  [USDA OIG Special Agent Charmeka Parker]

Like most False Claims Act actions, this one originated with a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allows private individuals to bring lawsuits against those defrauding the government.  In return, successful whistleblowers are entitled to up to 30% of the government’s recovery.  Over the past 25 years, whistleblowers have recovered billions of dollars in whistleblower rewards under the False Claims Act and have been responsible for tens of billions of dollars in government recoveries.  The whistleblower in this case was MGSNOVA Advisory, which will receive a whistleblower award of roughly $4.8 million from the government’s recovery.

If you have potential information on fraud against the government and would like more information on what it means to be a whistleblower, please feel free to contact us so we can connect you with a member of the Constantine Cannon whistleblower lawyer team for a free and confidential consultation.