American Airlines (AA, Dallas/Fort Worth) has agreed to pay USD22.1 million to settle claims that it falsely reported the times it transferred United States mail to foreign postal administrations and other recipients under contracts with the United States Postal Service (USPS), the US Justice Department said on August 20.
The USPS contracted American to carry mail from six locations to numerous domestic and international destinations. The settlement was over claims that it falsely reported the times it transferred possession of the mail.
“We expect companies doing business with the government to comply with their contractual obligations,” said Assistant Attorney General Jody Hunt. “The Department of Justice vigorously pursues all manner of fraudulent conduct that undermines the benefits that the government has bargained for.”
American responded in a statement that it was pleased to reach a settlement.
“The allegations focussed 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, adding that the USPS “is an important customer for American, and we are glad to have corrected these procedures and put this matter behind us.”
American Airlines was required to submit electronic scans of the mail receptacles to USPS reporting the time it was delivered, and the contracts specified penalties for mail that was delivered late or to the wrong location. The settlement resolves allegations that scans submitted by the carrier had falsely reported these times.
American said in a securities filing that the Justice Department had been investigating its 2009 and 2011 contracts with the USPS for transportation to international destinations, Reuters reported.
