TRENTON -- Acting Attorney General John J. Hoffman announced today that United Parcel Service (UPS) will pay the State $740,000 to resolve allegations that over a period of five years, UPS concealed late deliveries, thereby avoiding payment of contractually-promised refunds for failing to deliver State government agency packages on time.

A global package delivery company with its headquarters in Georgia, UPS allegedly violated the New Jersey False Claims Act between 2008 and 2013 by inaccurately logging in delivery times on Next Day Air (NDA) packages charged to State of New Jersey accounts. The result was that NDA packages appeared in UPS’ tracking system to have been delivered on time when they were not.

UPS employees also allegedly used inapplicable or inappropriate “exception codes” to excuse the late arrival of NDA packages charged to State of New Jersey accounts. Among the false reasons for delay entered into the UPS tracking system were security-related procedures, and that the customer requested the package be delivered late.

“This is a significant settlement,” said Acting Attorney General Hoffman. “Through this action, we have recovered hundreds of thousands of dollars on behalf of New Jersey taxpayers, and we are sending an important message -- vendors who do business with the State of New Jersey must act with integrity, fairness and honesty, or they will be held accountable.”

The settlement announced today flows from an investigation of New-Jersey-specific UPS practices conducted by the Division of Law’s Government and Healthcare Fraud Section.
The investigation began after a UPS employee filed a federal qui tam or “whistle-blower” lawsuit in Virginia alleging that the practice of falsifying NDA package arrival times and logging in phony reasons for late arrivals went on company-wide.

The UPS employee alleged that, in some cases, bogus exception codes excusing late deliveries were entered into the tracking system before UPS drivers had even arrived at locations where cumbersome security procedures and other delays had purportedly occurred. 

The UPS employee’s whistleblower lawsuit -- filed on behalf of the United States, the State of New Jersey and 21 other states and cities -- was filed in U.S. District Court in the Eastern District of Virginia. The settlement agreement announced today is filed in the same court as well. Under the agreement, UPS admits no wrongdoing or liability.

The $740,000 settlement with UPS is the largest non-Medicaid-related False Claims Act settlement by New Jersey since the New Jersey False Claims Act took effect in March 2008.

Deputy Attorney General Joan E. Karn, assigned to the Division of Law’s Government and Healthcare Fraud section, handled the UPS matter on behalf of the State. 

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