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American Airlines settles $22.1 million fine for false mail delivery reports

The Justice Department said the settlement stems from allegations that the airline falsely reported times it transferred U.S. mail to foreign postal services.

The U.S. Justice Department said American Airlines (NASDAQ: AAL) has agreed to pay a $22.1 million civil penalty to resolve allegations that it falsely reported the times it transferred U.S. mail to foreign postal services.

The Fort Worth, Texas-based airline’s failure to report accurate transfer times of U.S. mail violated the False Claims Act.

The U.S. Postal Service (USPS) contracted American to gather containers of mail from six locations around the country, as well as at various Defense and State department facilities abroad, and then deliver them to numerous international and domestic destinations.

Under the terms of the contracts, American receives payment upon submitting electronic scans of the mail containers to USPS. These electronic scans report to USPS the actual time the mail was delivered to its destination. USPS contracts specify the penalties for mail that is delivered late or to the wrong location.

The investigation was conducted by the Justice Department Civil Division’s Commercial Litigation Branch and the USPS inspector general and general counsel offices.

“The Office of Inspector General supports the Postal Service by aggressively investigating allegations of contractual noncompliance within the mail delivery process, including the falsification of delivery information,” said Scott Pierce, special agent in charge for the USPS Office of Inspector General, in a statement.

“American is pleased that a settlement agreement was reached in this civil matter concerning problems with how we reported delivery times to the U.S. Postal Service,” the airline said in a statement provided to American Shipper. “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.”

Chris Gillis

Located in the Washington, D.C. area, Chris Gillis primarily reports on regulatory and legislative topics that impact cross-border trade. He joined American Shipper in 1994, shortly after graduating from Mount St. Mary’s College in Emmitsburg, Md., with a degree in international business and economics.