The federal False Claims Act (“FCA”) prohibits any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to the federal government.  The FCA prohibits any person from knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim.  Chilivis Grubman has cautioned that the FCA, while commonly associated with the health care industry due to large newsworthy settlements, has been used as an enforcement tool in other industries, like finance, education, military contracting, and as evidenced by a recent press release, the airline industry.  The FCA governs any individual or company doing business with the government, including large companies. 

A recent press release demonstrates the U.S. Department of Justice’s willingness to use the FCA as an enforcement tool against two large companies outside of the health care industry.  On July 1, 2022, the DOJ announced a settlement involving mail-carrier services and two large international airlines – Air France and KLM Airlines.  According to the press release, Air France and KLM Airlines agreed to pay $3.9 million to resolve FCA allegations.  

According to the Executive Special Agent in Charge Ken Cleevely of the USPS, Office of Inspector General (OIG), the United States Postal Service contract with commercial airlines – like Air France and KLM – for safeguarding and timely delivery of U.S. mail to foreign posts.  Such was the case for Air France and KLM Airlines.  The USPS contracted with the airlines to take possession of U.S. mail at six locations and then deliver the mail to numerous international and domestic locations, according to the press release.  There were contractual penalties for mail delivered late or at the wrong location, according to the press release.  To track this information, the airlines had to submit electronic scans to USPS reporting the time the mail was delivered. According to the DOJ, the airlines allegedly submitted scans that “falsely reported the time and fact that they transferred possession of the mail.”

Like many FCA investigations and cases, the government used multiple resources and coordination between several agencies.  The DOJ credits this resolution to the coordination between several agencies, including the USPS Office of the Inspector General and the USPS Office of General Counsel.  According to Executive Special Agent in Charge Ken Cleevely “[t]he OIG supports the Postal Service by aggressively investigating allegations of contractual non-compliance within the mail delivery process, including the falsification of delivery information….”  

The press release also notes that the Air France and KLM settlement is not the first settlement of its kind.  Delta Airlines also agreed to pay $10.5 million to settle similar FCA allegations, according to a June 30, 2022 press release, which Chilivis Grubman wrote about separately.  Overall, the Air France and KLM settlement “is the seventh settlement involving air carrier liability for false delivery scans under the USPS ICAIR Contracts, and collectively the United States has recovered more than $84 million as a result of its investigation of such misconduct,” according to the press release.  

Any entity doing business with the federal government – in any industry – must comply with contractual obligations to avoid running afoul of fraud, waste, and abuse laws like the FCA.  The attorneys at Chilivis Grubman represent both companies and individuals in connection with government investigations, both criminal and civil, and in False Claims Act litigation.  If you have any questions related to such matters, please contact us today.