by Ben Vernia | January 3rd, 2012
On January 3, the Department of Justice announced that Maersk Line Limited had agreed to pay nearly $32 million to resolve allegations that the company overbilled the government for shipping goods and equipment to Iraq and Afghanistan. The government announced:
Maersk Line Limited has agreed to pay the government $31.9 million to resolve allegations that it submitted false claims to the United States in connection with contracts to transport cargo in shipping containers to support U.S. troops in Afghanistan and Iraq, the Justice Department announced today. The government alleges that Maersk, a wholly-owned American subsidiary of Denmark-based A.P. Moller Maersk, knowingly overcharged the Department of Defense to transport thousands of containers from ports to inland delivery destinations in Iraq and Afghanistan.
The government contends that Maersk inflated its invoices in various ways. For example, Maersk allegedly billed in excess of the contractual rate to maintain the operation of refrigerated containers holding perishable cargo at a port in Karachi, Pakistan, and at U.S. military bases in Afghanistan; allegedly billed excessive detention charges (or late fees) by failing to account for cargo transit times and a contractual grace period; allegedly billed for container delivery delays improperly attributed to the U.S. government; allegedly billed for container GPS-tracking and security services that were not provided or only partially provided; and allegedly failed to credit the government for rebates of container storage fees received by Maersk’s subcontractor at a Kuwaiti port.
The case was originally brought by a whistleblower, a former employee of APL Ltd., which paid the government $26.3 million in 2009 to settle similar allegations he raised in a qui tam suit. For that case, the whistleblower received $5.2 million; he will receive $3.6 million of the Maersk settlement. (The 11.2% relator’s share is below the usual range of 15-25% in intervened cases, suggesting that some of the settlement was for allegations developed independently of the relator’s qui tam suit.)
