Shipping Subsidiary APL Settles Allegations of Defense Contractor Fraud for $9.8 Million

Defense contractor APL has agreed to settle claims it overcharged the government for GPS tracking of shipping containers. | Image Source: Flickr User

Defense contractor APL has agreed to settle claims it overcharged the government for GPS tracking of shipping containers. | Image Source: Flickr User

In yet another case of defense contractor fraud, a company known as APL, Ltd. has agreed to pay $9.8 million to the federal government amid allegations of false billing. APL is a Scottsdale, Arizona-based subsidiary of Singapore’s Neptune Orient Lines Limited, a global shipping company engaged in the transcontinental transport of shipping containers.

Details of the allegations

According to the complaint, APL entered into a contractual agreement with the Department of Defense to help ship cargo to and from areas in the Middle East during wartime and military conflict. To ensure the safety and security of the cargo, the government contract required that APL affix a GPS device to each container specifically shipped from Karachi, Pakistan to U.S. military bases in Afghanistan.[1.“APL to pay $9.8 million to settle false claims charge,” Corporate Crime Reporter, October 27, 2015, http://www.corporatecrimereporter.com/news/200/apl-to-pay-9-8-million-to-settle-false-claims-charge/.]

The company allegedly put lackluster effort into ensuring GPS equipment was properly positioned and transmitting data in accordance with the agreement. More specifically, the allegations reveal that GPS systems either were never affixed to cargo or were affixed in such a way that transmitted data was incomplete or unreadable. The company is additionally alleged to have saddled multiple containers with one tracking device, and then billed the government for separate devices on each container. APL billed the government for GPS tracking services despite having knowledge of the defects.

Prior APL defense contracting blunders

This settlement is not the first we’ve seen from APL, Ltd. In 2009, the company settled with the Department of Justice for $26 million amid allegations of inflating shipping costs to Iraq and Afghanistan. In that case, APL was limited in what it could bill by express terms of the agreement, which set forth clear cut billable rates. Despite this, the company billed in excess of these agreed-upon rates for services including refrigerated transport, maintenance of perishable cargo, and various other non-reimbursable services.

This whistleblower in the 2009 case received $5.2 million in exchange for his willingness to report the contractor fraud. In today’s case against APL, the whistleblower reward has not been publicly disclosed but is typically as much as 30 percent of the settlement amount.

Detecting defense contractor fraud

Contractor fraud and false claims against the Department of Defense are some of the most common – and costly – forms of fraud addressed by the False Claims Act. Since the act began in the 1860s, it has proven especially useful in combating overcharges, breaches of contract, and other intentional acts.

If you work for a defense contractor and suspect fraud, be sure to report your information as soon as possible to a reputable whistleblower attorney. For more information, contact Berger Montague for a consultation right away.

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By | 2018-03-26T10:11:37+00:00 October 27th, 2015|Contractor Fraud|