American Airlines Pays for False Claims Act Allegations Uncovered by Postal Service Inspector General

American Airlines has agreed to settle a False Claims Act allegation stating that the airline falsely reported the times it delivered certain packages. The Office of Inspector General (OIG) of the Postal Service investigated the matter alongside the Postal Service Office of General Counsel. American Airlines paid $22 million to settle the matter.

According to a Department of Justice report, the Postal Service contracted with American Airlines to take possession of receptacles at six locations in the U.S. or at various Department of Defense and State Department locations abroad and deliver that mail to international and domestic destinations.

Under the provisions of the contract, American Airlines was required to report the time the mail was delivered at specific locations. The contract also included penalties for late deliveries and deliveries to the wrong location.

In 2015, the Justice Department announced to the airline that it was investigating American’s compliance with the contracts. The reported false claims took place between 2009 and 2011.

“The U.S. Postal Service contracts with commercial airlines for the safeguarding and timely delivery of U.S. Mail to foreign posts, including the mail sent to our soldiers deployed to foreign operating bases,” said Scott Pierce, Special Agent in Charge, USPS Office of Inspector General. “The Office of Inspector General supports the Postal Service by aggressively investigating allegations of contractual non-compliance within the mail delivery process, including the falsification of delivery information.  Our special agents worked hand-in-hand with the Department of Justice’s Civil Division to help ensure a reasonable resolution and we applaud the exceptional work by the investigative and legal team.” 

American Airlines noted in a statement that the company was pleased with the settlement, which agreed to allegation but made no determination of liability.

“The allegations focused on conduct that was remedied years ago, and we have invested in new equipment and procedures to ensure that we are in full compliance with our commitments,” the statement said. It added that “the U.S. Postal Service is an important customer for American, and we are glad to have corrected these procedures and put this matter behind us.”