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NJ Freight Forwarder Pays $1.9M on Charges of Fraud and Overbilling

Overbilling the U.S.
Freight forwarder admitted a former employee billed the U.S. military for services not provided

Published Jan 13, 2023 10:04 AM by The Maritime Executive

Update: An earlier version of the story incorrectly identified the company involved in the Department of Justice settlement. The Maritime Executive apologizes for any confusion that might have occurred. The company involved is based in New Jersey and is not a similarly named company that was inadvertently mentioned in the prior article. The original details of the case are also contained in a Department of Justice press release

 

Blue Water Shipping, a freight company based in New Jersey, agreed to pay $1.89 million to resolve allegations that it overbilled the United States for freight services that were never performed and for improper markups.

The U.S. Attorney’s Office in New Jersey announced the settlement with the company which it said had contracts for freight forwarding services for foreign military sales that were reimbursed by the U.S. government.

According to the agreement, a former employee of the company, who has since been terminated, created a fake company called Summit Transportation that was used to ultimately bill the United States for shipping services that were never actually performed. The former employee also improperly charged unallowable markups on the contract for inland transportation, importing ocean and/or air freight, and exporting ocean and/or air freight.

Blue Water cooperated with the investigation, voluntarily disclosed facts to the investigators, and with the prosecution of the former employee. The company admitted that the former employee created the fake company that was used to bill the United States for shipping services that were never performed under the contract.

U.S. Attorney Philip R. Sellinger announced that Blue Water of New Jersey had agreed to settle the matter by paying $1.89 million as restitution to resolve allegations that it violated the False Claims Act. They noted that the claims settled by this agreement are allegations only, and there has been no determination of liability.