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UPS to Pay $25 Million in False Claims Suit

Last month the United Parcel Service Inc. (UPS), a package delivery company based out of Atlanta, agreed to pay $25 million to resolve allegations that it submitted false claims to the federal government in connection with its delivery of Next Day Air overnight packages. This is just another case in the long line of recent suits being filed under the False Claims Act Whistleblower provision.

UPS holds contracts with the U.S. General Services Administration and the U.S. Transportation Command, which provides support to various Department of Defense agencies. These contracts guaranteed delivery of packages by specific times the following day. This suit was filed following 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.

It should be noted that this civil settlement resolves claims made in the lawsuit filed under the whistleblower provision of the False Claims Act. These claims are allegations only and there has been no determination of liability.

The Whistleblower Protection Act provides protection to private parties who file suit on behalf of the United States for false claims. Whistleblowers are entitled to whistleblower rewards, most often in the form of a portion of the government’s recovery resulting from the suit. The UPS civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS. He will receive $3.75 million from this settlement.