‘We been caught’:
United will pay $49 million to settle air mail fraud case


By DAVID KOENIG
ASSOCIATED PRESS |
FEB 26, 2021 AT 3:27 PM



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.

[Most read] Stimulus check updates: House passes $1.9 trillion COVID relief bill — with minimum wage
increase imperiled in Senate »
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.