Thought Leadership

Lessons for Dealing with Government Investigations from the United Airlines Settlement

Client Updates

On February 25, 2021, United Airlines, Inc. (“United”) agreed to pay over $49 million to resolve criminal and civil investigations related to postal service contracts for international mail transportation. The payment includes: (1) over $32 million under a False Claims Act (“FCA”) civil settlement agreement1 with the U.S. Department of Justice (“DOJ”) Civil Division’s Commercial Litigation Branch, Fraud Section; and (2) over $17 million in criminal penalties and disgorgement under a non-prosecution agreement2  ("NPA") with the DOJ Criminal Division’s Fraud Section.3

The settlement holds broad lessons for entities doing business with the federal government. For one, it underscores the need for continual vigilance in anticipating, addressing and mitigating FCA risks when dealing with the government. United paid significant monetary penalties for conduct that even DOJ acknowledged was not pervasive at the company and did not involve senior management.

Further, the settlement reinforces that a company may be able to avoid criminal liability, even if it does not self-report and even for serious conduct, where the company cooperates with the government’s investigation and undertakes significant remedial measures to prevent the conduct at issue from recurring in the future.


Beginning in 2009, United entered into contracts with the U.S. Postal Service (“USPS”) to transport mail internationally on behalf of USPS. These contracts required United to provide bar code scans upon receipt and delivery of mail items. United was entitled to full payment under the contracts only if it provided accurate bar code scans and timely delivered mail.4

According to the NPA, United admitted that between 2012 and 2015 it engaged in a scheme to defraud USPS by submitting false delivery scan data. Instead of providing accurate delivery scan data based on the actual movement of the mail, the airline provided automated delivery scan data based on aspirational delivery times that had been automatically generated by a computer system. Through this scheme, it received millions of dollars in payments from USPS to which it was not entitled. United also concealed problems related to scanning and mail movements that would have subjected it to financial penalties under the contracts.5

Further, certain individuals at United worked to conceal from USPS the efforts to transmit automated (false) data, including revising falsified delivery times to appear less suspicious.6


DOJ and United agreed to both a civil FCA settlement and an NPA.

The False Claims Act Settlement

First, the government alleged that United violated the FCA by knowingly creating, submitting, or causing to be submitted delivery scans or other delivery information material to payment that falsely conveyed information about the delivery of the mail. DOJ’s Civil Division and United entered into a “no admit, no deny” settlement regarding these allegations.7 Under the FCA settlement, United agreed to pay the government $32 million, $16 million of which was restitution.

The Non-Prosecution Agreement

Second, United and the government agreed to enter into the NPA, in lieu of criminal prosecution. As with other DOJ NPAs, the United NPA goes through a detailed analysis of why the government agreed to forego criminal prosecution.

Notably, while United did not self-disclose the conduct to the government, DOJ nonetheless credited United for its cooperation with the government, which included:

  • promptly collecting, organizing, and producing voluminous documents at DOJ’s request;
  • providing all relevant facts to the government, including information about the individuals involved in the conduct;
  • assisting in making employees available to be interviewed; and
  • making a factual presentation to DOJ.8

Further, the NPA notes United’s “extensive remedial measures” after learning of the offense conduct, which included:

  • removing and replacing the principal manager of the fraud scheme;
  • hiring outside legal and accounting advisors to review and consult on its government contracting compliance and related policies and procedures;
  • establishing an independent Government Contracts Organization that reports directly to the Legal Department;
  • establishing a training curriculum and holding a monthly training call for employees with government contracting-related responsibilities;
  • prohibiting automation and limiting access to flight configuration data to prevent manipulation by employees;
  • conducting international mail operations process reviews; and
  • enhancing its policies and procedures relating to obtaining and complying with government contracts, including assigning roles and responsibilities, ensuring accurate representations to the U.S. government, and subcontracting.9

Based, in part, on these remedial measures, DOJ did not require United to put an independent compliance monitor in place. Moreover, United avoided criminal prosecution, despite conduct described by DOJ as involving “a long-running scheme” to submit inaccurate data “to avoid contractual penalties and secure payments from USPS” and its prior history, including a 2016 non-prosecution agreement related to potential criminal bribery and corruption violations.10 DOJ did require United to pay an additional $17 million criminal monetary penalty, over and above the FCA settlement described above.

Conclusions and Takeaways 

The dual civil-criminal settlement provides important lessons for companies in the current environment.

  • First, with unprecedented levels of government spending over the last year, and FCA cases likely on the rise, FCA compliance is critical. Any representation related to receiving funds from the government confers at least potential FCA risk. Companies should have procedures in place for ensuring and monitoring the accuracy of statements and submissions to the federal government related to the receipt of federal funds, whether for services rendered or as part of a relief program like the CARES Act. United paid significant monetary penalties for conduct that appears relatively isolated.
  • Second, if a government investigation does arise, cooperation with the government is important for the entity to avoid criminal liability. This includes facilitating interviews with the government, making factual presentations, and providing the government with all relevant information about any culpable actors in the organization.
  • Third, the company’s implementation of remedial measures is similarly important, and those remedial measures should be tailored to the types of conduct that are at issue in the investigation.

1 Settlement Agreement (Feb. 25, 2021), available at (“FCA Settlement Agreement”).

2 Letter from D. Kahn, Acting Chief, Fraud Section, Criminal Division, DOJ to M. Filip, et al., Re: United Airlines, Inc. (Feb. 25, 2021), available at

3 United Airlines to Pay $49 Million to Resolve Criminal Fraud Charges and Civil Claims (Feb. 26, 2021), (“DOJ Press Release”).

4 DOJ Press Release; FCA Settlement Agreement at ¶¶ B-D; NPA, Attachment A, at ¶¶ 4-6.

5 NPA, Attachment A, at ¶¶ 10-13.

6 Id.

7 FCA Settlement Agreement at ¶ E (“This Agreement is neither an admission of liability by [United] nor a concession by the United States that its claims are not well founded.”).

8 NPA at 1-2.

9 Id. at 2.

10 Id.

Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit

Related Professionals