Maersk hit with massive fine for overcharging US military

Shipping company reaches 180 million kroner settlement with US Department of Justice

The United States government has hit a subsidiary of shipping giant AP Moller Maersk with a 180 million kroner ($31.9 million) damages claim, the US Department of Justice has announced.

Maersk Line Limited has agreed to pay the compensation, which stems from having “knowingly overcharged” the US Defense Department to transport cargo to the US military in Afghanistan and Iraq, according to a release from the US Justice Department.

The US government claims that Maersk overcharged in various ways, including over-billing for the operation of refrigerated containers at a port in Karachi, Pakistan; failing to account for cargo transit times and contractual grace periods when charging late fees; and billing for delivery delays improperly attributed to the United States.

“This settlement should send a strong signal that the government is committed to safeguarding taxpayer funds by ensuring that contractors operate ethically and responsibly,” Melinda Haag, the US attorney for the northern district of California, said.

The allegations against Maersk were filed by Jerry H Brown II, who is described by the US Department of Justice as “a former industry insider”. The settlement with Maersk was co-ordinated among several US justice and military agencies.

“Our men and women in uniform overseas deserve the highest level of support provided by fair and honest contractors,” said Tony West, a Department of Justice spokesperson. “As the Justice Department’s continuing efforts to fight procurement fraud demonstrate, those who put profits over the welfare of members of our military will pay a hefty price.”

Maersk’s chief legal adviser, Christian Kledal, confirmed to news service Ritzau that the company had “made a mistake” but denied that the false claims amounted to “intentional fraud”. Kledal also said that Maersk did not anticipate the company’s relationship with the US military to be overly affected by the settlement.

Maersk Line Limited is a wholly-owned US subsidiary of AP Moller Maersk.

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