DOJ fines 2 Maersk units US$3.6 million for defrauding Pentagon

MAERSK units Farrell Lines and its standalone forwarder Damco have been fined US$3,659,500 for defrauding the US Defence Department, reports American Shipper.

"Maersk has zero tolerance to noncompliance with legal obligations. Any indication of noncompliance will be thoroughly investigated and the necessary actions will be taken," said a Maersk Line Ltd statement saying it was co-operating fully with the investigation. 

Federal prosecutor James Porter 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 ro-ro transportation work to and from Afghanistan by air, sea, and land.

Farrell subcontracted the work to its sister company Damco, with charges based on the weight of the shipments, documented by "weight tickets" from a certified commercial scale for each cargo container.

USTRANSCOM discovered that 563 weight tickets submitted by Farrell to support their billing invoices were "recreated" by Damco. 

Said Maersk Line Ltd: "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."