WASHINGTON (Reuters) - The U.S. Transportation Department said Tuesday it is imposing a $4 million penalty against Lufthansa for discriminating against Jewish passengers from New York through Frankfurt to Budapest in May 2022.

USDOT said 128 Jewish passengers -- nearly all of whom wore garments generally worn by Orthodox Jewish men -- were prohibited from boarding a connecting flight in Germany on the basis of alleged misbehavior by some passengers.

Despite many of the passengers not knowing each other or traveling together, passengers interviewed by DOT investigators stated that Lufthansa treated them all as if they were a single group and denied them boarding for the alleged misbehavior of a few, DOT said.

USDOT said it will require Lufthansa to pay $2 million and credit Lufthansa with $2 million it paid in compensation to passengers. Lufthansa denied any of its employees engaged in discriminating against passengers but agreed to the settlement to avoid litigation threatened by the department, USDOT said.