DOJ fines Maersk affiliates $3.7 million

Weight tickets submitted by roll-on/roll-off carrier Farrell Lines to support their billing invoices were “recreated” by Damco employees, which constituted a failure to comply with the terms of a contract with the United States Transportation Command.    A Maersk Line Ltd. subsidiary, the U.S. flag roll-on/roll-off carrier Farrell Lines, Inc., and Maersk Group forwarder DAMCO USA Inc. have been fined a total of $3,659,500 for falsifying records under a defense contract.
   James Porter, the U.S. Attorney for the Southern District of Illinois said the two companies failed to comply with the terms of a contract with the United States Transportation Command (USTRANSCOM).
   Under Farrell’s contract with USTRANSCOM, it was required to perform international door-to-door and/or port-to-port transportation services to move Department of Defense (DoD) and other Government approved cargo into and out of Afghanistan via multiple modes of transportation (air, sea, and land).
   Farrell subcontracted its work on the contract to its affiliate, Damco. The price of the contract was based almost exclusively on the weight of the shipments, and documented cargo weights, consisting of “weight tickets” issued by a certified commercial scale for each cargo container, needed to be included with billing invoices to the government.
   USTRANSCOM discovered that 563 weight tickets submitted by Farrell to support their billing invoices were “recreated” by Damco employees as opposed to authentic weight tickets. Farrell and Damco were cooperative in the investigation.
   In a statement, Maersk Line Ltd. said, “The investigation is ongoing and Farrell Lines and Damco have and will continue to cooperate fully with the authorities to ensure legal compliance. The companies have implemented further measures to improve operations and ensure documentation is accurate, and invoices are only issued once necessary information has been verified. In addition, relevant personnel have been further empowered to ensure strict compliance.”
   “Maersk has zero tolerance to noncompliance with legal obligations. Any indication of noncompliance will be thoroughly investigated and the necessary actions will be taken,” it added.