Maersk Pays $32 Million to Settle Gouging Claims

Maersk Shipping (via Maersk)

The Danish Maersk shipping line agreed to pay nearly $32 million for gouging the U.S. government for the cost of shipments to the military in Iraq and Afghanistan.  The case resolves allegations that grew out of whistleblower claims by Jerry H. Brown II, a former industry insider.  He is expected to receive a $3.6 million whistleblower reward.

Maersk Line limited made the payment to resolve allegations it made false claims in bills submitted to the U.S. for transport of cargo in shipping containers to support troops in the Middle East, according to U.S. Attorney Melinda Haag.

The government’s false claims act case alleged Maersk inflated invoices by billing over the contract rate for refrigerated containers held in Karachi, Pakistan and at U.S. bases in Afghanistan. 

The company also allegedly billed excessive late fees by failed to account for cargo transit times and a contractual grace period, allegedly billed for delivery delays improperly blamed on the U.S. government, billed for container GPS-tracking and security that were not provided and failed to credit the government for rebates of container storage fees.

“This settlement should send a strong signal that the government is committed to safeguarding taxpayer funds by ensuring that contractors operated ethically and responsibly,” Haag said.

This is not the first such false claims act case related to shipping.  In 2009, the U.S. resolved a whistleblower’s allegations against APL Limited shipping and its parent company for $26.3 million, according to the government.

 Case: C04-4424MEJ   (Case remains Sealed, via PACER)

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