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Guaranteed next-day on-time delivery was a false claim and now United Parcel Service is paying. UPS workers illegally recorded inaccurate delivery times on packages sent by government customers, prompting a $4 million settlement, the New York State Attorney General announced yesterday.
The shipping giant violated the false claims acts of 14 states and three major US cities. NY AG Eric Schneiderman stated, "Corporations that improperly profit at the expense of taxpayers will be held to account."
Blame It on the Rain
UPS employees did more than falsify delivery times to ensure delivery seemed to be on time. The AG alleged that some workers also applied inappropriate "exception codes" to excuse late next-day packages.
On sunny days workers claimed adverse weather interfered with deliveries. As a result, government customers were allegedly unable to claim or receive refunds for the late deliveries under the terms of their contracts. That is fraud on the public coffers.
17 Places Demand Payback
The settlement covers allegations of wrongdoing over a 10-year period, from 2004 to 2014, against tens of thousands of government agencies. These localities were involved, three cities -- New York City, Washington DC, and Chicago -- and the following 14 states:
Schneiderman's office led the multi-jurisdictional group in investigating these allegations against the shipping company. The investigation leading to this settlement was conducted by the Taxpayer Protection Bureau, established to combat fraud and abuse of taxpayer dollars.
Thanks Owed to a Whistleblower
The AG thanked Robert K. Fulk, a former UPS employee, for coming forward. Fulk initially filed a lawsuit in Federal District Court. New York investigated the whistleblower's allegations under its False Claims Act and will reward the whistleblower with a portion of the recovery.
According to the AG, "UPS improperly profited from charging New York State government entities -- and ultimately our taxpayers -- when its employees failed to meet its guaranteed delivery times for overnight deliveries."