Hahn Air Lines Agrees to Pay $26.8M to Resolve False Claims Act Allegations Over Unpaid Travel Fees

German travel company Hahn Air Lines GmbH and its American subsidiary Hahn Air USA Inc. have agreed to pay $26.8 million to settle claims they failed to remit millions of dollars in passenger fees owed to U.S. government agencies over a six-year period.

The settlement announced on Monday by the U.S. Justice Department resolves allegations that from 2012 to 2018, Hahn Air knowingly withheld various mandatory travel fees it collected from airline passengers when issuing tickets for flights into and within the United States.

These unpaid fees included customs and immigration user fees due to Customs and Border Protection, inspection fees for the Department of Agriculture, and aviation security charges owed to the Transportation Security Administration.

As a ticketing agent for numerous commercial airlines globally, Hahn Air's business model involves collecting the required government taxes and fees along with airfare payments from passengers. However, prosecutors alleged the company improperly kept portions of the fee revenues for itself instead of properly remitting those funds to the U.S. government agencies.

While not admitting liability, Hahn Air agreed to the multimillion-dollar settlement to resolve the accused violations of the False Claims Act, a federal law allowing whistleblower lawsuits against those defrauding the government. The whistleblower entity MGSNOVA Advisory will receive $4.8 million from the settlement proceeds.

Justice Department officials framed the settlement as an important action to ensure corporations pay their obligated shares and do not unduly profit from skirting U.S. government fees and requirements.

The allegations were investigated by the Justice Department's Civil Division working with inspectors general from the Homeland Security and Agriculture departments. Authorities did not provide an exact amount Hahn Air allegedly failed to pay over the six-year period covered by the settlement.

Hahn Air, a privately-held company founded in Germany in 1994, sells ticketing services in 190 countries through a network of travel agencies globally.

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