WASHINGTON - A company that transports canceled checks for the Federal Reserve is suing the Labor Department for directing the Richmond Fed to withhold payment.

The Labor Department in March told the Richmond Fed to withhold a $45,889 contract payment for April from Pony Express Courier Corp. while it investigates the Charlotte, N.C.-based company's compensation practices.

According to the complaint filed by Pony Express, the Fed has been told not to pay the courier until a total of $262,112 has been withheld.

"The Labor Department's investigator believes Pony Express has been underpaying its employees," said Jim McAfee, general counsel for the Richmond Fed. Once accrued, the $262,112 will be handed over to 76 underpaid Pony Express workers.

The Labor Department's action is the latest chapter in a history of complaints against Pony Express.

The International Brotherhood of Teamsters, which filed the complaint that resulted in the investigation of Pony Express, has met with Fed Chairman Alan Greenspan to complain about the working conditions of the couriers.

And a year ago, former House Banking Committee Chairman Henry B. Gonzalez, D-Texas, asked the central bank to investigate alleged security problems and unfair labor practices at Pony Express.

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