Freight Forwarder to Pay $375,000 to Settle U.S. Military Kickback Allegations
The Department of Justice announces that Swiss-based freight forwarder Panalpina Inc. has agreed to pay the U.S. $375,000 to settle allegations that the company paid kickbacks related to shipping orders issued in connection with a contract with the U.S. Army to provide logistical support to the U.S. military in Iraq and elsewhere.
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Panalpina Alleged to Violate False Claims Act, Anti-Kickback Act
The settlement resolves allegations that Panalpina provided kickbacks in the form of meals, drinks, tickets to sports events and golf outings to employees in Kellogg Brown & Root Inc.'s (KBR’s) transportation department in order to gain favorable treatment on subcontracts under the U.S. military’s Logistics Civil Augmentation Program (LOGCAP III). Under the LOGCAP III contract, KBR was to provide logistical support for U.S. military operations abroad.
Under the terms of the settlement agreement, Panalpina will pay the U.S. $375,000 to resolve its potential liability under the False Claims Act, the Anti-Kickback Act and common law theories.
U.S. Previously Settled With EGL in Related Lawsuit, KBR Claims Continue to be Pursued
The U.S. previously settled claims with Eagle Global Logistics (EGL) (now CEVA) related to the same lawsuit for a total of $5,050,000. The government is continuing to pursue claims against KBR based on its employees taking kickbacks from Panalpina and EGL.
(See ITT's Online Archives or 05/07/10 news, 10050718, for BP summary of DOJ's decision to intervene in this whistleblower lawsuit.)
(Press release dated 07/30/10)