Delta Airlines settles lawsuit over misuse of pandemic-relief funds

Delta Airlines has agreed to pay $8.1 million to the United States to settle allegations of misusing federal relief funds provided under the Payroll Support Program (PSP). The PSP was established by the CARES Act to aid airlines and other businesses during the pandemic. The settlement addresses claims that Delta violated compensation caps for executives, a condition set by Congress for receiving such funds.

U.S. Attorney Theodore S. Hertzberg stated, "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." He emphasized ongoing efforts to enforce laws against misuse of taxpayer money.

The investigation began with a whistleblower lawsuit filed under the False Claims Act, which allows individuals who report fraud against the government to share in any recovery obtained. The whistleblower alleged that Delta exceeded compensation limits for some corporate officers between March 2020 and April 2023 and falsely certified compliance with these limits.

Delta received about $11.9 billion in PSP funds, including over $8 billion in grants not requiring repayment. To receive this funding, Delta had agreed to adhere to executive compensation caps until April 2023 but allegedly breached this agreement without notifying the Treasury Department.

The settlement also resolves a qui tam lawsuit filed in U.S. District Court for the Northern District of Georgia. The relator will receive $825,000 from this settlement along with attorney's fees.

The case was investigated by multiple entities including the U.S. Attorney’s Office for the Northern District of Georgia and involved Assistant U.S. Attorney Anthony DeCinque among others from various divisions.

It is important to note that while these claims have been settled, there has been no determination of liability against Delta Airlines.

For further details or inquiries, contact can be made through USAGAN.PressEmails@usdoj.gov or (404) 581-6185.