APL to pay US$263m to settle fraud case

By on Feb 17, 2009

APL has agreed to pay the US government $263 million to resolve allegations of fraud in connection with contracts to transport containers in Iraq and Afghanistan

The Neptune Orient Lines subsidiary is alleged to have knowingly overcharged and double-billed the Dept of Defence to transport thousands of containers from ports to inland delivery destinations in Iraq and Afghanistan

The government alleges that APL inflated its invoices by:

  • Billing in excess of the rate it paid to plug refrigerated containers holding perishable cargo into a source of electricity at a port in Karachi, Pakistan
  • Billing in excess of the contractual rate to maintain the operation of refrigerated containers at a port in Karachi and at US military bases in Afghanistan
  • Billing for various non-reimbursable services performed by APL's subcontractor at a Kuwaiti port

The allegations against APL were filed in San Francisco, California by company employee Jerry Brown II According to the terms of the ‘whistleblower' provisions of the federal False Claims Act, Brown will receive $52 million as his statutory share of the proceeds of this settlement

The Dept of Defence is going after any company that tries to cheat it

Last year, seven freight forwarding companies - all of whom were contracted by the US Dept of Defence to transport household goods belonging to military and civilian personnel between Europe and the US - agreed to pay more than half a million dollars to resolve allegations of bid rigging