On May 19, 2015, the Department of Justice (DOJ) announced that United Parcel Services (UPS), based in Atlanta, Georgia, will pay the U.S. Government $25 million to resolve allegations that it violated the False Claims Act (FCA) by overcharging U.S. Government agencies for packages that were slated to be delivered as Next Day Air packages, but instead were delivered after the guaranteed date of delivery.  The lawsuit also alleges that UPS committed further violations by intentionally changing dates and times on packages to reflect false delivery dates and times in order cover up its illegal practices.

UPS, a reputable package delivery services in the U.S., was awarded a federal government contract to deliver packages through the Office of General Services (OGS).  However, according to the lawsuit filed on behalf of the government by Robert K. Fulk, former UPS employee and the whistleblower in this case, between 2004 and 2014, UPS engaged in unlawful practices when it knowingly failed to bill the government for the exact delivery service rates based on the actually delivery service that it executed.  For example, packages that were slated to be delivered by UPS via Next Day Air, but did not reach their destinations until two or three days later, did not receive a reduced price change as required by the contract.  Instead, UPS billed the government for next day delivery prices, and forged the delivery date and time to reflect the higher cost for packages, thereby violating the FCA.

The FCA is one of the most effective tools that the government has for combating fraud by government contractors because, was was the case with UPS, the government is not able to police every company to which it awards government contracts.  Consequently, whistleblowers are an important part of combatting government fraud.  A whistleblower can file a “qui tam” lawsuit to recover damages on the government’s behalf and may receive an award of up to 30 percent of the amount recovered for the government. In this case, the qui tam whistleblower, Mr. Fulk, reportedly will receive $3.75 million for bringing UPS’s FCA violations to the attention of the government.