Settlement reached in FedEx delivery fraud scheme

A settlement in a whistleblower lawsuit against Federal Express with the U.S. Department of Justice will be announced Wednesday over allegations that the delivery giant covered up a decade-long fraudulent billing scheme.

Documents released Tuesday say that FedEx regularly covered up thousands of late deliveries to the federal government by blaming non-existent security delays at government agencies. The cover-ups all occurred after the Sept. 11 attacks.

The scheme allowed FedEx to fraudulently chare the government for millions of dollars in unearned fees.

The suit alleged that the company used a system of false code entries into its delivery tracking system to mask late deliveries of government packages. By this, FedEx was able to blame delays on the government, and avoided having to honor its money-back guarantee for late deliveries.

The whistleblower was employed at FedEx when they filed the complaint in 2006.