UPS Agrees to Settle Whistleblower Claims for $25.7 Million

Government customers of United Parcel Service Co. (UPS) overpaid the company because it falsified delivery records over a 10-year period, according to a lawsuit UPS recently settled. The whistleblower suit was filed by a former driver and manager for UPS. Now he is expected to receive $3.75 million for bringing the allegedly false claims to the attention of the federal government.

A spokesperson for UPS said the company still denies any wrongdoing, and an admission of liability is not included in the settlement. UPS has agreed to settle the complaints by paying $740,000 to the State of New Jersey and $25 million to the U.S. Department of Justice.

Specifically, the former employee claimed that UPS falsified delivery times so that packages appeared to be on schedule when they were not. UPS also made up false reasons for why packages were late, according to the suit. These and other fraudulent practices, said the whistleblower, resulted in hundreds of millions of dollars being overpaid to UPS, which should have paid refunds for the late deliveries.

In addition to New Jersey, a number of other states, including California and New York, may receive compensation from UPS. The company has not yet settled with those states.

Blowing the whistle on companies that defraud the government can result in a significant payment to the whistleblower. If you would like to learn more about the federal False Claims Act and the whistleblower protections it provides, then Shepherd, Finkelman, Miller & Shah’s qui tam claims overview is a good place to start.