Shipper to pay $31M to US in billing dispute 

click to enlarge The United States accused Maersk Line Limited of inflating its invoices to the Department of Defense for shipping services. - AP FILE PHOTO
  • AP File Photo
  • The United States accused Maersk Line Limited of inflating its invoices to the Department of Defense for shipping services.

An international shipping company has agreed to pay $31.9 million to the U.S. government to resolve a federal lawsuit in San Francisco alleging that the company overcharged under contracts supporting U.S. troops in Afghanistan and Iraq.

Maersk Line Limited was alleged to have inflated its invoices to the Department of Defense for the transport of thousands of containers from ports to inland destinations in Iraq and Afghanistan.

U.S. Attorney Melinda Haag announced the settlement Tuesday with the Virginia-based subsidiary of Denmark’s A.P. Moller Maersk.



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

The lawsuit was filed on behalf of the government by an industry whistle-blower, Jerry H. Brown II, who had previously made similar allegations against his former employer, the shipping company APL Limited, which resolved with a $26.3 million settlement in 2009.

The government alleged that Maersk billed excessive fees by failing to account for cargo transit times; billed for container delivery delays improperly attributed to the U.S. government; and overbilled for holding refrigerated containers of perishable cargo at a port in Karachi, Pakistan, and at U.S. military bases in Afghanistan. It also claimed the company billed for container GPS tracking and security services that were partially provided or not provided at all, and failed to credit the government for rebates of container storage fees received by a subcontractor in Kuwait.

A Maersk official said the company, after it became aware of the allegations, had done its own internal review of its contracts with the U.S. military and had voluntarily disclosed the “billing discrepancies.”

“The complex and often-uncertain nature of the landside operations in wartime conditions often resulted in poor data that led to inaccuracies in documentation, including invoices,” said Maersk general counsel James Philbin.

aburack@sfexaminer.com

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