Two Maersk Units Fined For "Recreated" Billing Records

File image courtesy Farrell Lines

By MarEx 2016-03-14 17:22:32

Ro/ro carrier Farrell Lines and affiliated subcontractor Damco have paid civil fines of $3.66 million on charges that their employees “recreated” cargo weight tickets used to determine billing amounts for military shipments to and from Afghanistan, the U.S. Department of Justice said in an announcement Thursday.

The DoJ said that the fines resulted from Farrell and Damco’s failure to comply with the terms of their contract with the United States Transportation Command (USTRANSCOM). The contract was for provision of multi-modal transportation of military supplies by air, sea and land.

“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,” DoJ said. “With respect to the shipments at issue in this matter, USTRANSCOM discovered that 563 weight tickets submitted by Farrell to support their billing invoices were 'recreated' by Damco employees and not authentic weight tickets.”

Farrell Lines is a U.S. flag roll-on, roll-off carrier, part of Maersk Line, Limited, a division of Maersk Group. Farrell had subcontracted the transportation work on this contract to freight forwarder and logistics firm Damco USA, a subsidiary of Netherlands-based Damco, also part of Maersk Group.

Farrell and Damco cooperated in the investigation, which involved the combined efforts of the criminal investigative agencies of all three military services, two DoD agencies, the office of the Special Inspector General for Afghanistan Reconstruction and the offices of the U.S. Attorney for the Southern District of Illinois, James Porter.

An attorney for Farrell Lines declined to comment on the settlement, but a spokeswoman gave the following statement:

Farrell Lines (wholly-owned subsidiary of Maersk Line, Limited) and Damco have reached a financial settlement with the United States Department of Justice. The settlement concerns the submission of improper invoices for cargo containers transported under a contract with the United States Transportation Command.

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.