Shipping Companies Fined for Falsifying Records Under Defense Contract - Global Trade Magazine
  March 20th, 2016 | Written by

Shipping Companies Fined for Falsifying Records Under Defense Contract

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  • False records for Afghanistan shipments lead to heavy fines for these two logistics companies.
  • Federal investigators work to recover public dollars overpaid to global logistics companies.
  • Global logistics companies submit 563 invoices with false container weight info to U.S. government

Farrell Lines and Damco USA have paid the United States government $3,659,500 in civil penalties regarding Farrell and Damco’s failure to comply with certain terms of its 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 cargo into and out of Afghanistan via 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.

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 and Damco were cooperative in the investigation.

“The determined federal investigators and the attorneys in my office will continue to strive to ensure that dollars paid from the public fund are properly accounted for and that value is received,” said James L. Porter the acting United States attorney for the Southern District of Illinois. “The United States Attorney’s Office stands ready to bring proper relief, either criminal or civil, whenever necessary, to make that a fact.”

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