A former United Parcel Service employee who alleged the company submitted false claims to the federal government for delivery of Next Day Air overnight packages will collect $3.75 million as part of a False Claims Act settlement, the DOJ said Tuesday.
UPS, a package delivery company based in Atlanta, agreed to pay $25 million to resolve the allegations.
The whistleblower, Robert K. Fulk, had filed a qui tam lawsuit on behalf of the U.S. government in the Eastern District of Virginia under the False Claims Act. The law permits private citizens to sue on behalf of the government and share in any recovery.
Fulk’s share of the settlement is $3.75 million, the DOJ said.
Under contracts with the federal government, 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,” the DOJ said.
The government took over the whistleblower lawsuit and alleged that UPS “knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time.” The company also excused late delivery with inapplicable exception codes — such as “security delay,” “customer not in,” or “business closed”). UPS also gave government customers inaccurate on-time performance data.
“The United States should get what it pays for, nothing less,” Acting Inspector General Robert C. Erickson of the GSA said.
In a statement emailed to the FCPA Blog, UPS said it “entered into a negotiated settlement . . . while continuing to disagree with the government’s position, in order to avoid lengthy and costly litigation.”
The DOJ said the claims resolved by Tuesday’s settlement were allegations only and there has been no determination of liability. UPS also said it hadn’t acknowledged liability.
“UPS values its relationships with all of its customers and continues to be a valued supplier in good standing with the U.S. government,” the company said.
The lawsuit is United States ex rel. Fulk v. United Parcel Service, Inc., et al., No. 1:11cv890 (E.D. Va.).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.