10/21/2010

News / California-based Mailing Firms to Pay $4.2 Million to Resolve False Claims Act Allegations for Underpayment of Postage

WASHINGTON – California-based companies Quicksort Inc., Quicksort LA Inc. and Quicksort Sacramento Inc. have agreed to pay the United States $4.2 million to settle allegations that Quicksort violated the False Claims Act by falsely representing the level to which it had pre-sorted mailings in order to obtain discounted postage rates from the U.S. Postal Service, the Justice Department announced today.

The U.S. Postal Service offers lower postage rates to mailers who automate and sort their mail by zip code because these steps save the Postal Service time and money. Mailers use the services of businesses such as Quicksort that combine the mail of many customers and pre-sort it in order to qualify for the pre-sort discounts. After processing customers' mail, these pre-sort businesses present the mail to the Postal Service for mailing.

The settlement resolves allegations that the Quicksort companies misrepresented the pre-sort level of mail they submitted to the U.S. Postal Service at various times in 2008, 2009 and 2010.

"Making false claims to obtain discounted postage rates is dishonest, and such conduct interferes with the Postal Service’s effort to swiftly and accurately deliver the mail," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will hold businesses accountable for underpaying for postage and will ensure that taxpayer funds are protected from fraud and abuse."

"The Postal Service enters into mailing agreements with entities such as QuickSort to help ensure the US mail is collected, prepared, and delivered as cost effectively and efficiently as possible," said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. "When a pre-sort business overstates the level of presorting it has performed, the Postal Service not only pays for services not rendered, but then also has to incur the costs of sorting the mail to its proper ZIP Code. The False Claims Act provides a powerful remedy when this activity occurs."

"The Postal Inspection Service investigates these types of cases to not only protect the Postal Service but also protect the mailing community from those who seek to gain an unfair competitive advantage," stated Postal Inspector-in-Charge Adam P. Behnen.

The settlement was reached by the Commercial Litigation Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Eastern District of California. The U.S. Postal Inspection Service investigated the matter.

http://www.justice.gov/opa/pr/2010/October/10-civ-1175.html

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