packages shipped by United Parcel Service have filed a $14 billion lawsuit accusing the world's largest package delivery company of insurance fraud. UPS will fight the allegations, a company spokesman said.

If the judge approves it as a class-action lawsuit, the amount would be tripled to $42 billion.

The lawsuit was filed on behalf of about 20 UPS customers and claims that UPS fraudulently collected fees to pay insurance for packages with values of more than $100 when the company was self-insured. It's claimed the money collected for the insurance wasn't used to buy insurance but was directed to a Bermuda business owned by UPS stockholders.

The lawsuit stems from documents obtained in the federal government's case against UPS in US Tax Court on Aug. 9. A Tax Court judge ruled that UPS set up a Bermuda-based corporation as an insurance company to avoid paying income taxes. The judge found that UPS must pay taxes on the money sent to the Bermuda company.

The suit alleges UPS used US-based National Union Fire Insurance Co. to write the insurance for UPS packages. NUFI, a co-defendant in the lawsuit, used Overseas Partners Ltd. in Bermuda to reinsure the coverage National Union Fire had written.