By SDCN Staff
Delta Air Lines Incorporated, headquartered in Atlanta, Georgia, has agreed to pay $8,100,000 to resolve allegations that it violated the False Claims Act by awarding compensation to certain corporate officers and employees that exceeded the compensation limits Delta agreed to as part of its participation in the Department of the Treasury’s Payroll Support Program (PSP).
The PSP was established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security Act to provide payroll support to passenger and cargo air carriers and certain contractors for the continuation of payment of employee wages, salaries, and benefits. The program was administered by the Department of Treasury, and participating air carriers were required to enter into written agreements with the Treasury that imposed certain conditions in exchange for the receipt of the funds. Among other program requirements, PSP agreements included limitations on the amount of compensation that PSP participants could pay to certain corporate officers and employees earning annual compensation in excess of $425,000.
Delta entered into the agreements with Treasury in 2020 and 2021, under which Delta agreed to the PSP compensation limits. The settlement resolves allegations that, between March 2020 and April 2023, Delta awarded compensation to some corporate officers and employees that exceeded the limits set by the agreements. Delta allegedly violated the False Claims Act by inaccurately certifying compliance with PSP requirements in quarterly reports submitted to the Treasury, as well as by not notifying the Treasury of the breach once it was discovered by Delta, which would have given the government the right to demand the return of funds.
“The PSP was intended to provide critical assistance to the airline industry during the pandemic,” said Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division. “The department is committed to holding accountable those who failed to abide by the terms and conditions governing their receipt and use of federal funds.”
“When companies accept federal assistance, especially generous pandemic-relief funds like those at issue here, they owe a duty to the American people to respect the conditions placed on those funds,” said U.S. Attorney Theodore S. Hertzberg for the Northern District of Georgia. “We will continue to enforce all available laws to punish the misuse of taxpayers’ money.”
“Our criminal investigators have been at the center of this investigation as a core part of our responsibility to safeguard the integrity and efficiency of Treasury programs and operations, and we remain steadfast in our determination to hold recipients of public funds to the highest standards,” said Treasury Deputy Inspector General Loren Sciurba.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by H. Remidez LLC. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The whistleblower will receive $850,500 in connection with the settlement.
Delta to pay $8.1M over false claims in payroll aid program
