Delta Airlines has agreed to pay $8.1 million to the United States to settle allegations of misusing pandemic-relief funds provided under the Payroll Support Program (PSP). The PSP was established by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to assist airlines and other businesses financially. Companies accepting these funds were required to impose compensation caps on highly paid executives. The U.S. government claims that Delta violated these conditions and falsely certified compliance.
“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. “We will continue to enforce all available laws to punish the misuse of taxpayers’ money.”
The investigation began with a whistleblower lawsuit filed under the False Claims Act, which holds individuals liable for submitting false claims to the federal government or its contractors. This law allows whistleblowers, known as relators, to share in any recovery obtained by the government.
In this case, a whistleblower alleged that Delta violated PSP terms. Created in early 2020 as part of the CARES Act, PSP offered grants and low-interest loans administered by the Treasury Department. Businesses receiving these funds had to limit executive compensation for those earning more than $425,000 in 2019.
Delta received about $11.9 billion in PSP funds, including over $8 billion in non-repayable grants. To obtain this money, Delta agreed to adhere to compensation caps until April 2023. However, it is alleged that between March 2020 and April 2023, Delta paid some corporate officers beyond these limits and falsely certified compliance.
This settlement resolves a qui tam lawsuit filed in the U.S. District Court for the Northern District of Georgia: United States ex rel. H. Remidez, LLC v. Delta Airlines, Inc., No. 1:23-CV-1116. The relator will receive $825,000 from this settlement plus attorney’s fees.
The investigation was conducted by the U.S. Attorney’s Office for the Northern District of Georgia alongside other federal agencies.
Assistant U.S. Attorney Anthony DeCinque and Trial Attorney James Nealon were involved in reaching this civil settlement.
The allegations resolved by this settlement are not an admission of liability.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6185.
