Maersk Settles False Claims Act Case with U.S. Government for Inflating Transport Costs

In January 2012, Maersk Line Limited settled a False Claims Act case with the U.S. government, agreeing to pay $31.9 million to resolve allegations that the company knowingly overcharged the Department of Defense for the transport of thousands of containers for use in the war efforts in Iraq and Afghanistan.

The False Claims Act suit was initially filed in San Francisco by a former industry insider. He will receive $3.6 million for his role in the case.

The allegations against Maersk charge that the company inflated its invoices provided to the government. For example, Maersk is alleged to have billed more than the contractual rate to maintain the operation of refrigerated containers holding perishable cargo and to have billed excessive late fees by failing to account for cargo transit times and a contractual grace period.

The company also allegedly billed for delivery delays that it wrongly attributed to the government and billed for GPS tracking and security services that were either only partially provided or were not provided at all. Finally, the company allegedly failed to credit the government for rebate of container storage fees that the company received from a subcontractor in Kuwait.

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