Shipping firms settle whistleblower’s case for nearly $1.1 million

by Ben Vernia | August 1st, 2016

On August 1, the Department of Justice announced that two shipping firms had agreed to pay nearly $1.1 million to settle civil charges, initially brought by a whistleblower, that the firms charged ocean carriers – and then passed on to the government – excessive costs for loading ships with humanitarian aid under a USAID contract. According to DOJ’s press release:

The Justice Department announced today that Jacintoport International LLC (Jacintoport) and Seaboard Marine Ltd. (Seaboard Marine) have agreed to pay $1.075 million to settle a lawsuit alleging that the companies violated the False Claims Act in connection with a warehousing and logistics contract for the storage and redelivery of humanitarian food aid.  Jacintoport is a cargo handling and stevedoring firm headquartered in Houston, Texas, and Seaboard Marine, an affiliate of Jacintoport, is an ocean transportation company headquartered in Miami, Florida.

In its lawsuit, the United States alleged that Jacintoport executed in 2007 a warehousing and logistics contract with the United States Agency for International Development (USAID) for the storage and redelivery of emergency humanitarian food aid.  This contract contained explicit caps on the rates Jacintoport could charge ocean carriers to load humanitarian food aid onto ships (referred to as “stevedoring” charges) bound for crisis areas around the world.  The complaint alleges that beginning around January 2008 and continuing through at least October 2009, Jacintoport, under the supervision and control of Seaboard, charged ocean carriers more for stevedoring than permitted to load over 50,000 tons of humanitarian food aid.  These inflated stevedoring charges were subsequently lumped into other costs for delivering humanitarian food aid and passed on to the United States.

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The whistleblower who brought the case will receive $215,000, the Government announced (a 20% relator’s share).

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